HUMAN RESOURCE MANAGEMENT

TABLE OF CONTENTS

CONTENT PAGE

CHAPTER ONE: ORGANIZATIONAL ASSESSMENT AND HUMAN RESOURCE

MANAGEMENT ................................................................................................................ 1

1.0 INTRODUCTION ......................................................................................................... 1

1.1 ORGANIZATION ASSESSMENT .............................................................................. 1

1.1.1 Reasons For Organizational Assessment ............................................................... 1

1.1.2 Approaches to Organizational Assessment ............................................................ 2

1.2 HUMAN RESOURCE MANAGEMENT .................................................................... 4

1.3 FUNCTIONS OF HUMAN RESOURCE MANAGER ............................................... 4

1.3.1 Management Functions Of HR Manager............................................................... 4

1.3.2 Operative Functions................................................................................................ 6

1.4 CHALLENGES OF MODERN HUMAN RESOURCE MANAGEMENT ................ 7

CHAPTER TWO: HUMAN RESOURCE PLANNING ................................................. 11

2.0 INTRODUCTION ....................................................................................................... 11

2.1 DEFINITION .............................................................................................................. 11

2.2 NEED AND OBJECTIVE OF HUMAN RESOURCE PLANNING......................... 13

2.3 PURPOSE OF HUMAN RESOURCE PLANNING .................................................. 14

2.3.1 Benefits Of Human Resource Planning ................................................................ 14

2.4 THE PROCESS OF HUMAN RESOURCE PLANNING ......................................... 15

2.5 DETERMINATION OF HR REQUIREMENTS ...................................................... 16

2.5.1 Demand Forecasting ............................................................................................. 17

2.5.2 Forecasting Labour Demand ................................................................................ 19

2.5.3 Forecasting Labour Supply .................................................................................. 23

2.5.4 Reconciling Demand and Supply for Labour ...................................................... 25

2.6 COMMON PITFALLS OF HUMAN RESOURCE PLANNING ............................. 26

2.7 HUMAN RESOURCE PLANNING LIMITING FACTORS .................................... 27

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CHAPTER THREE: EMPLOYEE RECRUITMENT AND SELECTION ................... 29

3.0 INTRODUCTION ....................................................................................................... 29

3.1 DEFINITIONS ............................................................................................................ 29

3.2 THE PROCESS OF RECRUITMENT ...................................................................... 30

3.2.1 Significance of The Recruitment Process ............................................................. 30

3.3 SOURCES OF RECRUITMENT ............................................................................... 32

3.3.1 Internal Sources .................................................................................................... 32

3.3.2 External Sources ................................................................................................... 33

3.4 RECRUITMENT METHODS .................................................................................... 35

3.4.1 Internal Recruitment Methods ............................................................................. 35

3.4.2 External Recruitment Methods ............................................................................ 36

3.5 EMPLOYEE SELECTION ........................................................................................ 38

3.5.1 Selection Procedure .............................................................................................. 38

3.5.2 Methods of Selection ............................................................................................. 39

3.6 EVALUATION IN EMPLOYEE SELECTION ........................................................ 45

3.6.1 Reference Checks .................................................................................................. 46

3.6.2 Final Decision and Placement ............................................................................... 47

3.6.3 Induction and Orientation .................................................................................... 47

CHAPTER FOUR: COMPENSATION AND STAFF MOTIVATION ......................... 49

4.0 INTRODUCTION ....................................................................................................... 49

4.1 TOTAL REWARD APPROACH ............................................................................... 49

4.1.1 Elements of Reward Management ....................................................................... 49

4.2 THE PROCESS OF SALARY & WAGE ADMINISTRATION............................... 52

4.2.3 PROBLEMS IN SALARY ADMINISTRATION ................................................... 53

4.2.1 Factors Determining Remuneration Packages .................................................... 53

4.2.4 Element of Good Compensation Policy ................................................................ 54

4.2.5 Methods of Wage Payment ................................................................................... 55

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4.3 INCENTIVE SCHEMES AND FRINGE BENEFITS ............................................... 55

4.3.1 Fringe Benefits ...................................................................................................... 56

4.4 MOTIVATION OF EMPLOYEES ............................................................................ 57

4.4.1 Motivating In Changing Times Pay for The Performance .................................. 58

4.5 TYPES OF INCENTIVE PROGRAMS ..................................................................... 59

4.6 MOTIVATION THEORIES....................................................................................... 63

CHAPTER FIVE: JOB EVALUATION .......................................................................... 66

5.0 INTRODUCTION ....................................................................................................... 66

5.1 DEFINITION .............................................................................................................. 66

5.2 METHODS OF JOB EVALUATION ........................................................................ 67

5.2.1 Non-Analytical Methods ....................................................................................... 67

5.2.2 Analytical Methods................................................................................................... 70

CHAPTER SIX: TRAINING AND DEVELOPMENT ................................................... 75

6.0 INTRODUCTION ....................................................................................................... 75

6.1 NEED FOR STAFF DEVELOPMENT ...................................................................... 76

6.1.1 TRAINING ............................................................................................................ 76

6.1.2 DEVELOPMENT ................................................................................................. 76

6.2 EMPLOYEE TRAINING ........................................................................................... 77

6.2.1 The Training Process ............................................................................................ 78

6.3 TRAINING METHODS ............................................................................................. 80

6.3.1 Internal Or On-The Job Training ........................................................................ 80

6.3.2 External Training Or Off-The-Job Training ....................................................... 82

6.4 MANAGEMENT DEVELOPMENT.......................................................................... 83

6.4.1. Need for Management Development ................................................................... 83

6.4.2 Methods of Management Development ................................................................ 84

6.6 CAREER DEVELOPMENT PROGRAMMES ......................................................... 86

6.7 CAREER DEVELOPMENT INTERVENTIONS ..................................................... 87

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6.8 LEARNING ORGANIZATIONS ............................................................................... 91

6.9 SELF-MANAGED LEARNING ................................................................................. 94

CHAPTER SEVEN: JOB DESIGN ................................................................................. 98

7.0 INTRODUCTION ....................................................................................................... 98

7.1 CONCEPT OF JOB DESIGN .................................................................................... 98

7.1.1 Approaches to Job Design .................................................................................... 99

7.1.2 Advantages of IT in Office Systems ................................................................... 101

7.1.3 Disadvantages Of IT in Office Systems .............................................................. 101

CHAPTER EIGHT: LABOUR RELATIONS ............................................................... 103

8.0 INTRODUCTION ..................................................................................................... 103

8.1 THE ELEMENTS OF EMPLOYEE RELATIONS ................................................ 103

8.1.1 Industrial Relations as a System of Rules .......................................................... 104

8.2 COLLECTIVE BARGAINING ................................................................................ 106

8.2.1 Forms of Collective Bargaining .......................................................................... 107

8.3 THE HRM APPROACH TO EMPLOYEE RELATIONS ..................................... 107

8.3.1 The Parties to Industrial Relations .................................................................... 108

8.3.2 The Trade Union ................................................................................................. 108

8.3.3 International Union Organizations .................................................................... 110

8.4 EMPLOYERS ORGANIZATIONS ......................................................................... 111

8.4.1 Institutions, Agencies and Officers ..................................................................... 111

8.4.2 Role of The HR Function In Employee Relations .............................................. 112

8.5 EMPLOYEE RELATIONS POLICIES ................................................................... 113

8.5.1 Policy Areas ......................................................................................................... 114

8.5.2 Third Party dispute resolution ........................................................................... 114

CHAPTER NINE: DIVERSITY AND GENDER ISSSUES IN THE WORK PLACE 116

9.0 INTRODUCTION ..................................................................................................... 116

9.1 FORMS OF PAYMENTS AT WORKPLACE ........................................................ 116

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 9.1.1 The Issue of Equal Pay or Comparable Worth.................................................. 116

9.1.2 Two Tier Pay ....................................................................................................... 117

9.1.3 Fair and Square .................................................................................................. 117

9.1.4 Variable Pay ........................................................................................................ 117

CHAPTER TEN: GOVERNMENT INVOLVEMENT IN HUMAN RESOURCE

ISSUES ............................................................................................................................ 120

10. INTRODUCTION ..................................................................................................... 120

10.1 HUMAN RESOURCE DEVELOPMENT POLICY.............................................. 120

10.1.1 Government Institutions Involved In Human Resource Issues ....................... 121

CHAPTYER ELEVEN: JOB SATISFACTION AND MOTIVATION TO WORK ... 123

11.0 INTRODUCTION ................................................................................................... 123

11.1 MOTIVATION ........................................................................................................ 123

11.1.1 Reasons for Pay Performance Plans ................................................................. 124

11.2 TYPES OF INCENTIVE PROGRAMS ................................................................. 125

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 CHAPTER ONE

ORGANIZATIONAL ASSESSMENT AND HUMAN RESOURCE MANAGEMENT

1.0 INTRODUCTION

Learning Objectives for the Lesson

At the end of the lesion, the learner should be able to;

a. Explain reasons for organization assessment

b. Outline the challenges to organizational assessment

c. Discuss managerial and operational functions of human resource manager

d. Explain the challenges of modern human resource management

1.1 ORGANIZATION ASSESSMENT

Assessment has long been an integral tool in business transformation. By performing assessment,
businesses can understand their current state and use the results to help chart out a
transformational path. During the transformation process, assessment provides feedback and a
measurement of progress in achieving the desired transformation. Assessment has often been done
at several levels of business ranging from specific programs, projects or teams to international
enterprises.

Successful business executives constantly monitor financial, operational and customer satisfaction
metrics in order to gauge the performance of their business. Based on these metrics, they take
appropriate action to anticipate and correct problems before they negatively affect business
performance. Likewise, it is important to understand how various organizational dynamics may be
affecting the overall performance of the business.

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1.1.1 Reasons For Organizational Assessment
1. Business and operations management. Assessing can act as a leading indicator for shifting
performance and for identifying program strengths and/or weaknesses.
2. To create cross industry comparisons or assist in benchmarking against competitors and
standards.
3. To motivate the organization, boost morale, help complete sales (by sharing assessment
results with customers) and even receive recognition or awards. When an enterprise
assessment is shared with suppliers, it can be used to align and motivate all companies and
players throughout a supply chain to drive a smooth production process and boost output.
4. Process and departmental improvement, and new tools offer organization-wide
assessments that provide a holistic vantage for identifying the complex interactions across
a broad enterprise.
5. To design, execute and measure an enterprise transformation strategy, having assessments
that evaluate multiple dimensions of performance is crucial, both in terms of understanding
the current state and charting out the transformation plan.
6. Early stage assessment helps to identify performance gaps and prioritize points of focus,
and plays a role in helping to generate a future-state vision for the organization as well as
investment precedence.
7. Determining the organization's readiness for a planned change
8. Evaluating potential barriers to improved organizational performance
9. Establishing a baseline for understanding the current culture vs. what's needed to excel
10. Identifying ways to improve customer satisfaction
11. Improving the alignment of the organization to strategic objectives

1.1.2 Approaches to Organizational Assessment

There are several organizational assessment tools that can be used. Of these, an organization survey is an

excellent way to assess what is working and not working, and how well aligned the organization is to

effectively achieve its strategic objectives. But there are several important considerations that executives

should make prior to launching a survey. The most important is

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how to achieve lasting and measurable improvements in organizational performance while increasing
employee commitment to the organization‟s goals and objectives. Selecting the right approach to
conduct organizational assessment depends on several factors, including:

1. Organization‟s resources - time and financial

2. What speed/time requirements the organization desires
3. What level of understanding and experience the organization has with systemic assessment
and improvement
4. The level of evaluation the organization desires
5. Whether public recognition is important to the organization, to celebrate strengths with the
stakeholders and to motivate continuous improvement

Challenges to Assessment

1. Organizational assessment is faced with great variability, both in structure and in values
(what should be measured). As a result of this variability, it is significantly more difficult
to create a one-size-fits-all tool for assessment.
2. The needs and values of a manufacturing business are quite different than those of a
service-oriented business. As a result, organizational assessments have to make a tradeoff
between industry or sector granularity and broad applicability.
3. There are conflicts between leadership and assessment tools. Organizational assessment
may highlight different foci than the leadership intends, or may be tailored or executed in a
way that simply reflects the leadership‟s desired outcome.
4. Just as with transformation, assessments must be used to complement leadership (rather
than undermine or blindly support leadership values), and require commitment to accurate
and on-going usage from those implementing the tool.
5. There is the cost or resource allocation required during the assessment process. Either the
organization must invest in an outside assessment service or key internal personnel must be
recruited to participate in the assessment process.

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1.2 HUMAN RESOURCE MANAGEMENT
Human resource management (HRM) can be defined as strategic and coherent approach of most
valued resource or assets. Most valued assets are the people working in an organization who
individually and collectively contribute to the achievements of its goals. According to Gary
(2008), HRM is the policies and practices involved in carrying out the people or the human
resource aspect of management position, including recruiting, screening, training, rewarding and
appraising. It can be concluded that HRM is the process of acquiring the right number and type of
workers, training, appraising and compensating them, while attending to their labour relations,
health and safety.

HRM approach meets the need for a strategic approach to Human Resource Management which achieves

the “fit” between the business and human resource strategy. It brings harmony in the rationalization of

system involved in either business or human Resource functions

1.3 FUNCTIONS OF HUMAN RESOURCE MANAGER

The HR manager of a firm executes both managerial and operative functions. A manager is
one who exercises authority and leadership over other personnel; the president of a firm is
certainly a manager, and so also is the department head or supervisor. On the other hand, an
operative is one who has no authority over others but has been given a specific task or duty to
perform under managerial supervision. Thus, the human resource manager is a manager and as
such must perform the basic function. Yet a comprehensive definition of human resource
management much include also the operative functions.

1.3.1 Management Functions Of HR Manager

The managerial functions include Planning, Organizing, Directing and Controlling while the
operative functions include Procurement, Development, Integration, Maintenance and
Separation. Human resource management therefore can be defined as the planning, organizing,
directing and controlling of the procurement, development, compensation, maintenance and
separation of human resources to the end that individual, organizational and societal objectives
are accomplished. A brief elaboration of the component parts of this definition follows.
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Managerial Functions
1. Planning: Effective managers realize that a substantial portion of their time should be devoted
to planning. For the human resource manager, planning means the determination in advance of a
human resource program that will contribute to goals establishment will involve the active and
enlightened participation of the human resource manager, with his or her expertise in the area of
human resources.

2. Organizing: After a course of action has been determined, an organization must be established to carry
it out. An organization is a means to an end. Once it has been determined that certain human resource
functions contribute toward the firm‟s objectives, the human resource manager must form an organization
by designing the structure of relationships among jobs, human resource and physical and physical factors.
One must be aware of the complex relationship that exists between the specialized unit and the rest of the
organization. Because of increasing expertise in this function, much top management are looking to the
human resource manager for advice in the general organization of the enterprise.

3. Directing: At least in theory, we now have a plan and an organization to execute that plan. It
might appear that the next logical function would be that of operation, doing the job. But it has
been found that a “starter” function is becoming increasingly necessary. In our above definition
this function was labeled “direction”, but it may be called by other names, such as “motivation”,
“actuation”, or “command”. At any rate a considerable number of difficulties are involved in
getting people to go to work willingly and effectively.

4. Controlling: Now, at last, the human resource functions are being performed. But what is the
management duty at this point? It is logical that its functions should be that of control that is the
observation of action and its comparison with plans and the correction of any deviations that may
occur, or at times, the realignment of plans and their adjustment to unchangeable deviations.
Control is the managerial function concerned with regulating activities in accordance with the
personnel plan, which in turn was formulated on the basis of an analysis of fundamental
organization goals.

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1.3.2 Operative Functions
1. Procurement: This first operative function of human resource management is concerned with
obtaining of the proper kind and number of personnel necessary to accomplish organization goals.
It deals specifically with such subjects as the determination of human resources requirements and
their recruitment, selection and placements. The determination of human resource required must
rest upon a prior design of job duties, a decision that is increasingly being affected by the human
resource manager‟s objective of meeting human society‟s requirements often affects procurement
programs in the forms of affirmative action and equal opportunity. The actual hiring process
entails a multitude of activities designed to screen personnel, such as reviewing application forms,
psychological testing, checking references and conducting interviews.

2. Development: After personnel have been obtained, they must be to some degree developed.
Development has to do with the increase of skill, through training, that is necessary for proper job
performance. This is an activity of very great importance and will continue to grow because of the
changes in technology, the realignment of jobs and the increasing complexity of the managerial
task.

3. Compensation: This function is defined as the adequate and equitable remuneration of personnel for
their contributions to organization objectives. Though some recent morale surveys have tended to minimize
the importance of monetary income to employees, we nevertheless contend that compensation is one of the
most important resource management. In dealing with this subject, we shall only economic compensation.
Psychic income is classified elsewhere. The basic elements of a compensation program have emphasis upon
such subjects as job evaluation, wage policies, wages systems and come of the recently devised extra
compensation plans.

4. Integration: With the employee procured, developed and reasonably compensated, there follows one of
the most difficult and frustrating challenges to management. The definition labels this problem
“integration”. It is concerned with the attempt to effect a reasonable reconciliation of individual, societal
and organizational interest. It rests upon a foundation of belief that
significant overlapping of interests so exist in our society. Consequently, we must deal with the
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feelings and attitudes of personnel in conjunction with the principles and policies of
organizations.

5. Maintenance: If we have executed the foregoing functions well, we now have a wiling and
able work force. Maintenance is concerned with the perpetuation of this state. The maintenance of
willingness is heavily affected by communications with employees. The physical condition of the
employees should also be maintained.

6. Separation: If the first function of human resource management is to secure the employee, it is logical
that the last should be the separation and return of that person to society. Most people so not die on the job.
The organization is responsible for meeting certain requirements of due process in separation, as well as
assuring that the returned citizen is in good shape as possible. Types of separation are as retirement, layoff,
out-placement and discharge.

The purpose of all the activity outlined above, both managerial and operative, is to assist in the
accomplishment of basic objectives. Consequently, the starting point of human resource
management, as of all management, must be a specification of those objectives and a
determination of the sub-objectives of the human resource function. The expenditure of all funds
in the personnel area can be justified only insofar as there is a net contribution toward basic goals.
For the most part these are goals of the particular organization concerned. But as suggested earlier,
society is tending to impose human goals upon the private business enterprise, goals that may or
may not make an immediate contribution to an organization‟s particular objective.

1.4 CHALLENGES OF MODERN HUMAN RESOURCE MANAGEMENT

We need not look far to discover challenging problems in the field of human resource management.

Managers may ignore or attempt to bury human resource problems, but these will not lie dormant because

of the very nature of the problem component. Many problems are caused by constant changes that occur

both within and without the firm. Among the many major

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changes that are occurring, the following will illustrate the nature of the human resource
challenges.

1. Changing mix of the work force

Through each person is unique and consequently presents a challenge to our general
understanding. One can also appreciate broader problems by categorizing personnel to delineate
and highlight trends. Among the major changes in the mix of personnel entering the work force
are:

Increased numbers of minority members entering occupations requiring greater skills.

Increasing levels of formal education for the entire work force.
More female employees.

More married female employees.

More working mothers
A steady increasing majority of white-collar employees in place of the blue-collar.
The challenge has had much to do with many of the above-listed changes. Prohibition of
discrimination and requirements for positive action to redress imbalances in work force mix have
led to greater numbers of minority personnel being hired for all types of jobs.

2. Changing personal values of the work force

The changing mix of the work force inevitably leads to introduction of new values to organizations. In the
past and continuing into the present, the work force has been heavily imbued with a set of values generally
characterized by the term “work ethic”. Work is regarded as having spiritual meaning, buttressed by such
behavioural norms as punctuality, honesty, diligence and frugality. One‟s job is a central life interest and
provides the dominant clue I interpersonal assessment. A work force with this set of values is highly
adapted to use by business organizations in their pursuit of the values of productivity, efficiency and
effectiveness.

There is growing evidence that the work is declining in favor of a more existential view of life.
Instead of organizations providing the basic guides to living persons are responsible for exploring
and determining for themselves what they want to do and become. With this

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philosophy, work becomes only one alternative among many as a means for becoming a whole person
in order to do one‟s own thing”. Family activities, leisure, avocations and assignments in government
churches and schools are equally viable means through which a person can find meaning and become
self-actualized. The absolute worth of the individual is a value which is merged with the concept that
all people are members of the great human family. Concerning specifics, full employment gives way to
the full life. Climbing the organization ladder of success for its accompanying materialistic symbols
becomes less important than self-expression through a creative accomplishment. Private lives outside
the job and firm are relatively autonomous, accompanied by an increasing reluctance to sacrifice
oneself or one‟s family for the good of the organization. Quality of life is preferred to quantity, equity
to efficiency, diversity to conformity and the individual to the organization.

With respect to an increasing emphasis upon the individual as compared with the organization, a
number of changes in personnel programs have been tried. Attempts have been made to redesign jobs
to provide challenging activities that needs of the human ego.

3. Changing expectations of Citizen-employees.

There are increasing signs that external rights of citizenship are penetrating the boundaries of business
enterprises in the interest of improving the quality of work life. Two prominent illustrations are
freedom of speech and the right to privacy. Should employees be allowed to speak up and criticize the
organization‟s management and its products without jeopardizing their job security? In public
organizations, this right of “whistle blowing” is fairly well protected.

4. Changing levels of productivity

Perhaps the most serious current problem facing all mangers, not just human resource managers, is
the declining productivity of the economy. Up until the 1960‟s the typical annual increase in
production was approximately 3 percent. This figure was even placed as a guaranteed base for
increasing employee income. In the last two decades, the level of productivity has fallen markedly.

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 Review Questions
i. Explain reasons for organization assessment

ii. Outline the challenges to organizational assessment

iii. Discuss managerial and operational functions of human resource manager

iv. Explain the challenges of modern human resource management

REFERENCES
th
Dessler, G. (2002): Human Resource Management (9 Edition ).NJ,Prentice Hall
th
Flippo,E.B. (1984): Personnel management (6 edition ). Ny, Mcgraw hill

Harriman, A. (1985): Women/ men Management, NY, Praeger

Matthewman J. (2006): Human Resources Effectiveness; Jaico Publishing House

th
Michael Armstrong (2001): A handbook of Human Resource Management (8 Edition),
Millennium edition.

Wayne F. Casco (2006): Managing Human Resources: Tata Mcgraw Hill

Mamoria C.B and Gankar S.V (2003): A text book of Human Resource Management, Himalayan
Publishing House.

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 CHAPTER TWO

HUMAN RESOURCE PLANNING

2.0 INTRODUCTION

Learning Objectives for the Lesson

At the end of the lesion, the learner should be able to;

a. Describe the objectives of Human Resource Development (HRP)

b. Outline process of HRP.

c. Discuss the factors influencing demand and supply of labour.

d. Explain the limitations of HRP.

2.1 DEFINITION
Human resource planning is the process of ensuring that the organization has the right number of
people, the right type of people at the right time doing the right job. There are many definition of
manpower planning as there are authors of human resource books. Let us now look at some of the
definitions from various authors.
1. Michael Armstrong (2001) defines human recourse planning as the process „determines the human
recourse required by the organization to achieve its strategic goals.
2. Saleemi N.A (1997)” human recourse planning involves an accurate determination of the
present and the future manpower needs of the enterprise and exploration of the source to meet
the same.”
3. Gary Dessler(2005)” personnel planning is the process of deciding what position the firm will
have to fill, and how to fill them.”

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From the above definitions, we can therefore make a conclusion that human recourse planning is
concerned with making sure that the organization balances the demand for labor and supply of
labor to achieve the organization effectively and efficiently. The question that the human resource
manager tries to answer is how many people? And sort of people does the organization require.

It involves the comparison of organizations current human recourses with likely future needs and
consequently the establishment of programmes for hiring, training, redeploying and possible
discarding employees. Effective HRP should result in the right people doing the right things in the
right place at precisely the right time

HRP is seen as a strategy for the acquisition, utilization improvement and retention 'of an
enterprise's human resources. HRP is therefore a strategic process.

HRP is the processes for ensuring that the HR requirements of an organization are identified an.
plans are made for satisfying those requirements. It addresses HR needs in both qualitative and
quantitative terms i.e., how many people and what sort of people.

HRP is also known as work force planning or personnel planning. HRP is the process of matching
the supply of people: internally (existing employees) - and externally (those to be hired or
searched for) - with the openings the organization expects to have over a given period time frame.

The context of HRP is dominated by:-

The state of demand for the organization‟s goods or services

The supply of people in the labour market
The timescale involved.

Human resource planning should be an integral part of business planning. This is because the business

strategic plans should define projected changes in the scale and types of activities

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carried out by the organization. The core competences the organization needs to achieve its
goals, skills, knowledge and ability requirements.
1. Human resource planning involves forecasts or projection of the future manpower needs so that
adequate and timely provisions may be made to meet those need3. It is future (oriented.
2. The basic purpose of human resource planning is to determine th% right number and the right type
of people for effectively accomplishing the tasks and goals of the organization.
3. Planning for human resource is the primary responsibility of the management to ensure
proper utilization of the present and the future manpower. Human resource planning is
complementary to organization planning.
4. Human resource planning is a continuing or never-ending process because the demand and supply
of manpower are subject to frequent change. It is a dynamic activity.
5. It represents a system approach to personnel in which the emphasis is on the
interrelationships among various personnel policies and programmes.
6. Human resource planning includes an inventory of the current manpower in order to
determine its status and to identify untapped talents available in the programmes.
7. Human resource planning has two aspects; qualitative and quantitative.
8. It results in the development of policies, programmes and procedures for the acquisition,
development, preservation and utilization of the organization human assets.
9. Human resource planning is an integral part of corporate planning

2.2 NEED AND OBJECTIVE OF HUMAN RESOURCE PLANNING

Organization need human resource planning so has to avoid both surpluses and shortages thereby
operating effectively and efficiently. Human resource planning ensures growth and expansion and
growth of the organization. It is not possible to do away with human resource planning because it
is the integral part of the organization corporate plan. It forms a sound basis for the selection and
training of manpower. Human resource planning is important for both the" organization and the
economy. At the national level human resource planning ensures than the country human resource
are properly utilized
The, objective of human resource planning includes the following:
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 a. To ensure the necessary personnel are available for performing different tasks in the
organization efficiently
b. To ensure optimum use of the current manpower
c. To forecast future knowledge, skills and ability requirement
d. To provide control measures so that human resources are available they are required
e. To promote the development of existing personnel.

2.3 PURPOSE OF HUMAN RESOURCE PLANNING

HRP can help management in making decisions in the following areas:
Recruitment
Avoidance of redundancies

Training – numbers and category

Management development

Estimates of labour costs

Productivity bargaining

Accommodation requirements

2.3.1 Benefits Of Human Resource Planning

1. Reduces labor costs.
2. Facilitates internal succession of managerial personnel in the event of unforeseen turnover.
,
3. Enables personnel to be developed so as to make the optimum utilization of the current
manpower
4. Possible to formulate management succession plans.
5. Enables the management to identify the gap and. Fill it in time.,
6. Helps in growth and diversification of business.
7. it is useful for economic development

We can therefore conclude that, systematic planning for human resource requirements is an

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essential part of the overall business planning and no organization can do without it. Human resource

forms the intellectual capital of the organization. It is the human in the organization who thinks and

manipulates all other resources to achieve the organizational goals.

2.4 THE PROCESS OF HUMAN RESOURCE PLANNING

The Process of human resource planning is one of the crucial, complex and continuing managerial
functions. This is because it embraces organization development, management development,
career planning and succession planning of an organization. The steps of human resource planning
include:

[Link] Assessment
For an existing organization, it is only logical to begin human resource planning by assessing the current
manpower in the organization. This you do by preparing a human resource inventory using the information
from the application forms filled by the employees at the time of recruitment into the organization. This
inventory will allow you as a manager, to know the talents and skills that are currently available in the
organization. You are also required to look at the job analysis so that you would determine what human
behavior each job requires. After this you compare the skills available and the skills required to see if there
is any gap to be filled. As a manager you should look at job specification and job description and see if the
manpower you have in the organization has the requisite skills to handle the responsibilities successfully

[Link] Assessment
You remember we said that human resource planning is an integral part of strategic corporate
plans. Corporate plans are strategic such that they spell out future activities. Therefore, human
resource planning also estimates the future personnel requirements. The estimate depends on the
nature and the type of growth of the organizational unit, nature of the product produced the rate of
growth of the organization. Further, budgets and financial statements also help the personnel
department in establishing the workload in the organization. This workload determines the demand
for future employees.

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[Link] of Future Programme
After assessing the future requirement for human resource, you are required to development plans for
that future. For example if the assessment shows that you you are likely to have shortage of manpower
in future, plans are made to make sure that in that future adequate human resource are available. This
can be done by highlighting the major areas where is overstaffing and plans are made to transfer them
in the shortage areas. However, they may require some training to have the required skills. Or on a
sharp contrast, if you estimate surplus in almost all the departments, its solution might include attrition,
early retirement, demotions, layoffs, termination of employees, or opening up new branches or
diversification of production. The most difficult situation that may face a manger is surplus of
employees

[Link] Development
Career development is part and parcel of the organization plans. No organization can afford to ignore
this. Career development is important because it prepares managers to deal with the dynamic
environment. The job the employees usually perform may require advanced techniques. This is very
common which uses technology more. If career development is not done, the employees‟ capability
may become obsolete. Career development is of value to the organization because it ensures that the
needed capabilities are available now and in the future. This in turn enables the organization to attract
and retain talented employees. Carrier development does not necessarily mean that one has to be taken
for training, but one can also be developed by being assigned challenging tasks.

2.5 DETERMINATION OF HR REQUIREMENTS

A critical decision facing organizations before procurement is done is the determination of the
number and type of personnel that should be provided to the organization. HRP seeks to. ensure
that a certain desired number of people with the required skills will be available at some specified
time in future:

16
2.5.1 Demand Forecasting
Manpower forecasting may have three ranges i.e. short range, intermediate range and long range.
A short range forecast usually grows out of normal budgetary processes, covering two year period
whereas intermediate range forecasts range between 2-5 years. Long range forecasts goes beyond
5 years.

The demand for services and products in terms of authorized expansion, technological changes, and
new legislation necessitates short range manpower forecasting internal changes in terms of expansion
or contraction coupled with the working budget and modified efficiently or productivity force the
personnel department to go in to short range manpower forecasting. Essentially there are 3
organizational approaches to manpower forecasting. This can be labeled under top-down approaches or
bottom-up approaches. When the headquarters can forecast the demand for the entire market, it is
called top-down approach. On the other hand, where the units can forecast their own demand, it is
called bottom-up approach. There are three top-down approaches and one bottom-up approach.

Though specific numbers are difficult to develop in forecasts, encompassing 2-5 years or more,
those responsible for HRP, must consider the following: -

Long Range Factors

The firms long range business plans

Demographic trends
Economic factors

Technological trends
Social trends
Such plans may be to expand the firms operations by moving into new product lines. This would require
estimate of the needed number of employees and skills of the anticipated growth
If plans call for more efforts in the international markets in future, then decisions must be made regarding

the utilization of the host country‟s nationals. Long- range plans may also call for reduction in labour due to

elimination or product lines or plants. Relocations of company may

17
also have HRP implications.

1. Demographic trends
Demographic trends in a country can determine future demand patterns of labor by organizations.
Fluctuation in population affect the labor supply available in various categories-education, size, age
characteristics, gender characteristics, diseases, birth and death rates.

2. Economic Trends
Movement from prosperity to recession and back to prosperity possess considerable problems for
HR managers. During prosperity demand for jobs by firms is likely to increase. The reverse
happens during a recession.

3. Technological Trends
Advances in technology have definite effect on the nature and mixture of jobs available. For instance,
advances in I.T, resulted in a decrease in the number of bookkeepers and an increase demand for
computer programmers. It has been noted that the current level of technology for building robots will
enable the replacement of 2/3 of the factory workforce.

4. Social Trends.
Changes in custom and civil rights would influence labor projections. Mobility of personnel due to
family commitments also affects demand for labor.

Short Range Factors

The short factors to be considered in demand forecasting include:-
1. Production Schedules/Budget.
Specific sales forecasts for the coming year must be translated into a work programme for the various
sections of an enterprise. Some plans must be made concerning the amount of work that each segment
of the organization is expected to accomplish during some coming period.

18
 2. Affirmative Action Planning
An organization may be forced to hire certain categories of employees-minority tribes or

3. Relocation/Plant closing
Recession in the economy may lead to temporary closures or relocation. This may lead reduction
in the labor force. Poor company development and expansion strategy also may lead to relocation
and closures.

2.5.2 Forecasting Labour Demand

Demand forecasting is the process of estimating the future numbers of people and the likely skills
and competence the will need. The ideal basis of the forecast is an annual budget and a long term
business plans, translated into activity level of each function and departments or decisions on
down-sizing. Details are required of any plans or projects which would result in the demand for
additional employees or different skills.

Projected turnover – resignations/ terminations

Quality and skills of your employees – in relation to the changing needs of the organization Decision
to upgrade the quality of products or services that enter into the market.

Technological and other changes resulting in increased productivity

The financial resources available to the department.
Whenever method one uses, managerial judgment will play a big role. Judgment is thus needed to
modify the forecast based on factors – such as projected turnover, or a desire to enter new markets.

a. The Scatter Plot

A scatter plots shows graphically how two variables such as a measure of business activity and your
firms staffing levels are related. If they are, then you can forecast the level of business activity. You
should also be able to estimate your personnel requirements
However there are several limitations associated with this technique. They include:-

19
1. They focus exclusively on projected sales volume and historical sales/ personnel relationships,
and generally assume that the firm‟s existing structure and activities will continue into the
future.
2. They generally do not consider the impact the company‟s initiative may have on future
staffing levels.
3. They tend to support outdated compensation plans that reward mangers for managing ever
larger staff, and will not uncover managers who will continue to expand their staff irrespective
of the company‟s strategic needs
4. They tend to “bake in” the nonproductive ideas that increases the staffs are investable
5. They tend to validate and institutionalize the existing planning processes and ways of doing
things, even in the face of rapid change.

b. Use of Computer
This is the determination of future staff needs by projecting sales, volume of production, and personnel
required to maintain this volume of output, using software package. Typical data needed include direct
labor hours required to produce one unit of product (a measure of productivity), and three sales
projections, minimum, maximum and probable – for the product line in question. Based on such date,
atypical program generates figure on average staff levels required to meet product demands, as well
separate computerization forecasts for direct labor (such as assembly workers), indirect staff (such as
secretaries), and exempt staff (such as executives)Whichever methods you use, managerial judgment
will play a big role. It is rare that nay historical trends, ratio, or relationship will simply continue
unchanged into the future. You therefore have to modify the forecast based on the factor such as
projected turnover or a desire to enter new markets you believe would be important.

c. Ratio - Trend Analysis

This is carried out by studying past ratios between the number of direct workers and indirect workers
(support) in a manufacturing plant and forecasting future ratios. The number of direct workers needed
can be used to determine the number of indirect workers need.

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This means making forecast based on the ratio between (i) same casual factor (e.g. sales volume
and ii) number of employees required. Ratio analysis assumes that productivity remains about the
same

d. Work Study Technique

These can be used when it is possible to apply work measurement to culture how long operations
should take and the number of people required. This starts from a company‟s production budget.
Work – study techniques for direct workers can be combined with ratio- trend analysis to calculate
the number of indirect workers needed.

e. Modeling
Mathematical modeling techniques using computers and spreadsheets can help in the preparation
of demand and supply forecasts.
Employers also use computer programs to forecast personnel requirement. Typically data needed
include direct labour hours needed to produce one unit of product and three sales projections-
minimum, maximum and probable. Based on such data a typical programme generated figures on
average staff levels required to meet production demands, as well as separate computerized
forecasts for direct labour and indirect staff, plus the exempt staff method also known as modeling.

f. Time Series and Analysis

Past staffing (instead of workload indicators) is used to project future HR requirements. Past
staffing levels are examined to isolate seasonal and cyclical variations, long- trend and random
movements. Long- term trends are then extrapolated or projected.

Here are studies a company‟s employment level over the last 5 years or so to predict future need.
Trend analysis is valuable as an initial estimate, but employment levels rarely depend solely on the
passage of time.

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 g. Productivity Ratio
Historical date are used to examine past levels of a productivity index
P= workload
Number of people

Where constant, or systematic, relationships are found human resource requirements could be
computed by diving predicted workloads by P.

h. Existing staff
Numbers, categories, skills, performance, flexibility, and promo ability
A-detailed -analysis is needed to provide inventories of skills and potential,-and-knowledge of the
number of promotable people available. An analysis of employees by age helps to identify
problems arising from a sudden rush of retirements, a block in promotion prospects or a
preponderance of older employees.

Length of service analysis will provide survival rates, which are a necessary tool for use by
planners in predicting future resources.

The analysis of current resources should look at the existing ratios between different categories of
employees - mangers and tam leaders, skilled to semi-skilled, direct to indirect, office staff to
production. Recent movements in these ratios should be studies to provide guidance on trends and to
highlight areas where raid changes may result in supply problems.

Potential staff:
Location, categories, skills, trainability, attitudes and competition

Less Leavers:
Retirement, wastage rates, redundancies and dismissals
Internal labour market sources include the output from established schemes or management development

programmes and the reservoirs of skill and potential that already exists within the

22
organization. But the availability people from the local and national labor markets are also a vital
factor when preparing plans.

It is necessary to identify at an early stage any categories of employees where there might be
difficulties in recruiting the numbers required so that action can be taken in good time to prepare a
recruiting campaign, or to develop training or re-training programmes to convert available staff to
meet the company's needs.

i. Regression Analysis
Past levels of various workloads indicators, such as sales, production levels and value added are examined

for statically relationships with staffing levels. Where sufficiently strong relationships are found, a

registration model is derived. Forecasted levels of the related, indicators are entered into the resulting model

and used to calculate the associated level of HR requirements

j. Delpi Technique
With this method, each member of a panel of experts makes an independent estimate of what the future
demand will be, along with any underlying assumptions. An intermediary then presents each experts
forecast and assumptions to the others and allows the experts to revise their positions if they desire.
This continues until some consensus is reached.

2.5.3 Forecasting Labour Supply

In assessing the supply of labour available to the organization there are two major areas to be
reviewed.
The existing workforce (the internal labour market)
The supply of potential employees (the external labour market)

Supply forecasting measures the number of people to be available from within and from outside the
organization, having allowed for absenteeism, internal movements and promotions, wastage and changes in
hours and other conditions of work. The supply analysis is done in order for the organization to correctly
forecast labour supply by considering the following factors;
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 Existing human resources
Potential losses to existing resources through employee wastage

Potential changes to existing resources through internal promotions Effect

of changing conditions of work and absenteeism
Sources of supply from the organization
Sources of supply from outside the organization- national and local labour markets

The factors Influencing supply of Labour

1. Local Labour Market
Population destinies within reach of the company

Current and future competition for employees from other employers

Local unemployment levels

Traditional pattern of employment locally, and the availability of people with the
required qualifications and skills

The output from the local educational system and training establishments
The attractiveness of the area as a place to work
The availability of part- time employees
Local housing, shopping and transport facilities
2. National Labour Supply

Demographic trend in the number of school- leavers and the size of the working
population.

National demands for special categories of employees- graduates, professional

staff, technologists, technicians and skilled workers

The output of the universities, professional institutions and other educational and
training establishments

The effect of national changing educational patterns

The impact of national training initiatives
The impact of government employment regulations

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2.5.3 Reconciling Demand and Supply for Labour
Internal labour market sources include the output from established schemes or management
development programmes and the reservouirs of skill and potential that already exists within the
organization. But the availability people from the local and national labour markets are also a vital
factor when preparing plans.

It is necessary to identify at an early stage any categories of employees where there might be
difficulties in recruiting the numbers required so that action can be taken in good time to prepare a
recruiting campaign, or to develop training or re-training programmes to convert available staff to
meet the company's needs.

Below are different scenarios and the action that can be taken to balance demand for, and supply
of manpower
a. Increase external supply by altering recruitment and selection criteria, altering recruitment and
selection practices, and change terms and conditions of employments.
b. Increase internal supply by training and developing existing employees, altering internal
movement patterns, improve retention, as well as reducing absenteeism.
c. Reduce demand by redesigning work, using existing staff differently, subcontracting work,
relocate work and automating work processes
d. Decrease supply by encouraging early retirement, compulsory or voluntary redundancy, assisting
career change and alternative employment an well as encouraging sabbaticals.
e. Discourage Retention by offering short-term and par-time contracts.
f. Increase demand by increasing market for products and services as well as diversification.

Action plans are derived from the broad resourcing strategies and the more detailed analysis of demand
and supply factors. Action pans should be made in the following areas: -

An overall plan as required to deal with shortages arising if there are demographic
pressures

Human resource development plan

A recruitment plan

25
 A retention plan

A plan to achieve greater flexibility

A productivity plan
A downsizing plan

2.6 COMMON PITFALLS OF HUMAN RESOURCE PLANNING

Unfortunately HRP is not always successful the following are some of the common pitfalls

The identity crisis- HR planners‟ work in an environment characterized by ambiguous

regulations, company politics and diverse management style, HR planners spend so much
time looking for something meaningful to do while the organization questions the reason for
their existence.

Sponsorship of top Management – for HRP to work, it must have the support of at least one
influential senior executive. If this is missing the process may fail.

Size of the initial effort- many HRP programmes fail because of an overcomplicated initial
effort. A good programmer should start slow and gradually expand. An accurate skills
inventory and replacement chart is a good place to start.

Coordination within the Management and HR functions- HRP must be coordinated with the
other management and GR functions, unfortunately, HRP tends to become absorbed in their
own function and fail to interact with others.

Integration with organizational plans- HRP must be derived from organization plans. If this
does not happen, the process is doomed to fail.

Quantitative Vs Qualitative approaches- a strictly quantitative approach HRP is numbers

new, in , out up and across, while a strictly qualitative approach focuses on concerns for
promotability and for career development. A balanced approach is one that may yield better
resulted

26
 Non- involvement of operating managers- HRP is strictly not a HR department function.
Successful HRP requires a coordinated effort on the parts of operating mangers and the HR
personnel

The techniques trap- there is sometimes a tendency to adopt one or more of the HRP methods
not for what they can do, but rather because everyone is using them. Pre-occupation with the
„in thing‟ can be a major shortage.

2.7 HUMAN RESOURCE PLANNING LIMITING FACTORS

Human Resource Planning can be difficult and often in accurate. The chief reasons are;
1. Type of industry - some depend on new product development in an extremely competitive
environment; others may depend on political decisions which are impossible-to forecast,.--
while others work on a tendering „basis.
2. Opposition or skepticism among members of management; all must be convinced of the
value of HRP if it is to be a success
3. Resistance to the changes expressed in the plan. Forecasts of labour structure, with their
effects on skills and status, may be regarded as a threat
4. The difficulty of forecasting social and economic changes accurately, especially in an era of
high unemployment
5. The need to have very complete and accurate employee records, to be used to detect trends in
employee movement. Such maybe unreliable in times of high unemployment
6. Rapid growth of new technologies
7. The plan may indicate recruitment and training, which although desirable, may not be
possible due to cash flow constraints
8. Human resource planning involves forecasting the demand for and supply of human
resource; therefore it cannot be an accurate process.
9. Labour absenteeism, labor turnover, seasonal employment, technological changes an d
market fluctuations are the uncertainties which serve as constraints to human resource
planning.
10. In some companies, human resource planning is used as a numbers game. There is much

27
 focus on the quantitative aspect to ensure the plow of people in and out of the organization. Such

exclusive focus overlooks the important dimension that is the quality of manpower.

Review Questions

i. What are the objectives of Human Resource Planning (HRP)?

ii. Discuss the process of HRP.

iii. Explain the factors that influence supply of labour.

iv. HRP has several limitations, discuss.

REFERENCES

th
Dessler, G. (2002): Human Resource Management (9 Edition ).NJ,Prentice Hall

th
Flippo,E.B. (1984): Personnel management (6 edition ). New York, Mcgraw hill

Harriman, A. (1985): Women/ men Management, New York, Praeger

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 CHAPTER THREE

EMPLOYEE RECRUITMENT AND SELECTION

3.0 INTRODUCTION

Learning Objectives for the Lesson

At the end of the lesion, the learner should be able to;

a. Describe the factors influencing recruitment and selection.

b. Outline the internal and external sources of labour and the advantages and
disadvantages.

c. Explain various methods of recruitment and selection.

This chapter focuses on one of the most important activities of human resource specialists in the
organization, that of securing the organization‟s human resource. The principal purpose of recruitment
activities is to attract sufficient and suitable potential employees to apply for vacancies in the
organization. The principal purpose for selection activities is to identify the most suitable applicants
and persuade them to accept a position in the organization.

3.1 DEFINITIONS
a) Recruitment
This means discovering applicants for the present or future jobs in an enterprise. This process
brings the job seekers and job givers in contact with one another. The organization tends to attract
a pool of potential employees and inducing them to apply for the vacant position in the
organization.

b) Selection
Selection is the process of examining the applicants with regard to their suitability to the given job or jobs,

and choosing the best from the suitable candidates and rejecting the others. Thus you

29
will notice that this process is negative in nature in the sense that rejection of candidates is
involved.

c) Placement
Placement is the determination of the job for which a selected candidate is best suited and
assigning that job to him. The ideal situation is the right man for the right job. A proper placement
of a worker reduces employee turnover, absenteeism, accident rates etc and improves moral
motivation work etc.

d) Induction
Induction is introducing employees to the job and to the organization. The primary purpose of
induction is to sell the company to the new employee so that he may feel proud of his association with
the company. This is also known as orientation or indoctrination.

Their Interrelationship

The above four steps are taken in the order given before a person starts the training for the job
which he is assigned. First, there is the recruitment, the selection through scrutiny of all applicants,
then a particular job is assigned to a particular person who has passed all selection tests and
interviews and finally the person is introduced to his job and his new organization so that he may
understand the working environment.

3.2 THE PROCESS OF RECRUITMENT

Before you think to invite people to apply for the job you have to decide which types of persons
are to be invited and what their characteristics should be. This calls for the careful analysis which
gives job specifications and job descriptions. You recall we have tackled job analysis in detail in
the previous chapter. Therefore, I would recommend that you go through the same if at all you
may have forgotten.

3.2.1 Significance Of The Recruitment Process

Recruitment enables organizations to receive a large pool of job applicants from where short listing
and selection of the right candidates can be done. Recruitment is an activity used by organization to fill
job vacancies with qualified individuals and hence the attainment of
organizational goals.
30
Failure to generate adequate numbers of reasonably job candidates can be costly to an
organization in the following ways:-

It may greatly complicate the selection process e.g. by leading in extreme cases, to the lowering of
the set hiring standards. Lower qualities hires mean an extra expenditure on employee development
and supervision to attain satisfactory levels of performance.

When recruitment fails to meet organizational needs for talent, a typical response is to rise
the pay level but this may however distort the traditional wage and salary relationships in
the organization. A rise in pay level will be needed to attract highly skilled manpower that
will be stimulated and encouraged to apply for an organization‟s vacant position.
Lack of qualified candidates may lead to added costs through re-advertisement.

Factors influencing recruitment process

1. Size of organization
2. Location
3. Labour market
4. Compromising labour force
5. Legal laws
6. Economic trends
7. Technology changes
8. Ability to recruit
9. Seasonability of organization operations
Factors influencing the need for recruitment

1. Expansion and growth of organizations

2. Separations; voluntary quits, death, retirement, retrenchment
3. Mergers and take over – this may call for a need for critical skills absent in the
organization especially the top position.
4. Setting up a new enterprise

31
 5. Changes in technology and methods of operation – new computers, machines etc
6. Restructuring or re-engineering
7. Introduction of new products or services

3.3 SOURCES OF RECRUITMENT

The sources of recruitment can be broadly classified as follows:

3.3.1 Internal Sources

This includes personnel already on the payroll of an organization – its workforce. It is the best
place to source someone to fill a vacancy but only for organizations that have been effective in
recruiting and selecting employees in the past.

Recruitment is a costly business. If the position can be filled in any other way apart from direct

recruitment, then it will be worthwhile for the organization to pursue such possibilities.

Instead of spending lots of money recruiting a candidate externally, a company can fill a vacancy
from within itself. Whenever a vacancy occurs, someone from within the organization is upgraded,
transferred, promoted or sometimes even demoted.

Advantages

1. Better motivation of employees because their capabilities are considered and opportunities
offered for promotions.
2. Better utilization of employees because the company can often make better use of their
abilities in a different job.
3. The employer is in a better position to evaluate those presently employed than the outside
candidates.
4. It is more reliable because a present employee is known more thoroughly than an external
candidate.
5. It promotes loyalty among employees for it gives them a sense of job security and
opportunities for advancement.
6. A present employee is more likely to stay with the company than an external candidate.

7. It is quicker and cheaper than external sources.

32
 8. Since those employed are fully aware of and well acquainted with the organizations policies
and operating procedures, they require little training and even induction.
9. More accurate data is available concerning current employees thus reducing the chances of
making a wrong decision.
10. Full utilization of the abilities of the organization‟s employees improves the organization‟s
return on its investments – this takes into consideration that organizations have a sizeable
investment in their workforce.

Disadvantages

1. Leads to inbreeding and discourages new blood from joining an organization.

2. Infighting for promotions can become overly intense and have a negative effect on the
morale and performance of people who are not promoted.
3. There are possibilities that internal sources may “dry up” and it may be difficult to find the
required person from within an organization.
4. As promotion is mostly based on seniority , the danger is that really capable people may
not be chosen for promotion, the likes and dislikes of the management may also play an
important role in selection of personnel.
5. It seldom contributes new ideas or innovations that may be very important for progress in a
competitive economy.
6. Internal sources should only be used if the vacancy to be filled is within the capacity of present
employees and if adequate employee records have been maintained and an opportunity is provided
in advance for employees to prepare themselves for promotion.
7. If an organization promotions from within, it needs a strong employee and management

development programme to ensure its people can handle larger responsibilities.

3.3.2 External Sources

External sources of personnel include:

New entrants – to the labour market e.g. fresh college graduates, school leavers.

33
 The unemployed already in the labour market with a wide range of skills and abilities
Retired experienced persons
Employed persons from other organizations.
Advantages

The pool of talents is much larger than from internal sources. The best selection can be
made.
External sources provide personnel having skills and training and education as required by
the hiring organization.
Employees hired from outside can bring new insights and perspectives to the organization.
It is cheaper to hire technical, skilled or managerial people from outside rather than training
and developing them internally – in case of immediate demand for the talent.
Disadvantages

Attracting, contacting and evaluating potential employees is more difficult.

Employees hired from outside need a longer adjustment and orientation period.
Recruiting externally may cause morale problems among employees within the
organization and who feel qualified to do the job.
Method may be expensive and time consuming.
There is uncertainty due to demand and supply of labour in the labour market.

Difficulties of recruitment

1. Image of company
2. Nature of job
3. Policy of enterprise
4. Union demand
5. Government policies
6. Labour market.

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3.4 RECRUITMENT METHODS

3.4.1 Internal Recruitment Methods

Job posting and bidding: This is an internal method of recruitment in which notices of available

jobs are posted in central locations throughout the organization and employees are given a specified

length of time ot apply for the available jobs. Other methods used in publicizing jobs include

memos to supervisors and listings in employee publications.

Normally the job notice specifies the job title, rate of pay and necessary qualifications. A
successful job posting and bidding programme requires the development of specific
implementation policies.

Job Sharing: The job can be arranged so that tasks are shared among two or maybe three
people. This is done on a part-time/job sharing basis. This pattern is suitable for mothers
who have returned to work after having a family and who want to combine looking after
their families with career.

Overtime: This is a method used to resource peaks in production or demand. Employees

work a set amount of hours over their usual contractual hours and usually get paid a higher
premium than their normal hourly rate- sometimes “time and a half or double time.”

Secondment: This operates by staff being temporarily transferred to work in other sections
or departments. This can be on both a full time or part time basis.

Sub-contract: By sub-contracting certain jobs and duties, employers avoid on-costs like
national insurance contributions, tax and sick pay. Many large employers use sub-contracting
on a regular basis,. Sub-contracting is also known as outsourcing.

Use of recruitment agency: This is an option, which many companies use to fill temporary
or permanent positions. It is also used by companies to cover maternity or long term sick
leave.
35
3.4.2 External Recruitment Methods
External recruitment is needed in organizations that are growing rapidly or have a large demand
for technical, skilled or managerial employees. The pool of talent in the external sources is much
larger than anywhere else.

The following are some of the methods used for external recruitment.

i. Recommendations by present employees also termed, employee referrals are used

especially to fill low cadre vacancies – the semi-skilled and unskilled jobs.

ii. Unsolicited applications – these are job applications received from candidates without a
vacancy existing in the company. The candidates may send their details to the company as
a general enquiry.

iii. Direct link – Happens where an organization has an established relationship with a training
school or university. The institutions liaise with the recruiting organization and provide details
of suitable candidates. The organization may be involved with the institution through provision
of education material or even scholarships.

iv. Campus recruiting- Such activities are co-ordinated by the university placement centre.
Organizations send some recruiters to the campus and the most promising recruits are then
invited to visit the office or plant before a final employment decision is made. A related
method of tapping the products of institution of higher learning is through co-operating
programmes.

v. Co-operative Work Programmes – Through these programmes, students may work part-
time and go to school part time, or they may go to school and work at different times of the
year. Such programmes are attractive since they offer opportunities for both a formal
education and work experience.

vi. Internet – This newest recruitment source offers an inexpensive way to advertise
available positions to a national and global audience. The internet has various advantages,
36
 including a vast pool of potential candidates; extensive search capabilities, reduced paper

work and the ability o update information as often as necessary.

vii. Retiree job banks- Company retirees who are already familiar with the company‟s culture
are a great resource for filling short term and part time positions.

viii. Professional Recruiting Firms- These are Human Resource Consultants who provide
employee recruitment services. They include Manpower services, Hawkins and Associates
and so on.

ix. Temporary Help Agencies & Employee Leasing Companies – One of the fastest growing areas
of recruitment is temporary help hired through employment agencies. The agency pays the
salary and benefits of the temporary help; the organizations pays the employment agency an
agreed upon figure for the services of the temporary help.

x. Government Employment Agencies – These recruit on behalf of the government and

include the TSC and the Public Service Commission.

xi. Employment Agencies: These are brokers who bring employers and employees together. They

specialize in specific e.g. accountants, technicians etc Professional bodies may also be found here

offering placement services for its members e.g ICPAK, IPM etc

xii. Executive Search Firms/Head Hunters: These employment agencies seek candidates for high
salaried positions e.g CEO‟s. They believe that the best candidates are not those who respond
to adverts or look for new jobs in other ways but those who are successful in their present jobs
and are not thinking of moving elsewhere.

xiii. Hiring at the gate: This is suitable when employing casual labourers who present
themselves at the firm‟s gates waiting for an employment opportunity.

37
xiv. Advertising: This is one of the most widely used methods of recruitment. Person
specification and job descriptions form the basis of every job advert. Advertising is a
crucial part of the recruitment process.

3.5 EMPLOYEE SELECTION

Selection of employees begin after the completion of recruitment process after an adequate number of
applications have been secured through sources of recruitment. Selection involves a careful selection and
testing and candidates who have put in their applications for any job in the enterprise. This is because not all
applicants are suitable for employment and also not all people can actually be employed. Selection is a
negative function, unlike recruitment,, because it tries to weed out the applicants whom it is not able to
employ due to lack of suitability or otherwise.

3.5.1 Selection Procedure

There can be no standard to select different kinds of personnel. Selection differs from job to job
and from enterprise to enterprise. Broadly the selection procedure consists of several steps,
important among which are as follows:

1. Receipt and scrutiny of applications

2. Preliminary interview
3. Filling in of blank application forms
4. Tests
5. Interviews
6. Check of references
7. Preliminary and find selection
8. Medical examination
9. Placement
Factors Influencing Selection Method

1. Time
2. Cost
3. Appropriateness and accessibility

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 4. Accuracy
5. Reliability
6. Ability of staff involved

3.5.2 Methods Of Selection

There are two main methods of employee selection; the selection tests and the interviews.

1. Selection Tests

A test is a sample of an aspect of an individual‟s behavior, performance or attitudes. It can also be

a systematic procedure for comparing the behavior of two or more persons. The basic assumption
underlying the use of tests in personnel selection is that the individuals are different in their job
related abilities and that these skills can be accurately and adequately measured. Tests seem to
eliminate the possibility of prejudice on the part of the interviewers or supervisor. Potential ability
only will govern selection decisions. The other major advantage is that the tests may uncover
qualifications and talents that would not be detected by interviews or by listing of education and
job experiences.

Types of selection tests

The various tests used in selection can be put in four categories:

1) Achievement or intelligence tests

These are also called proficiency tests. These measure the knowledge and skills which is acquired
as a result of training program and on the job experience. These measures what the applicants can
do. They are of two types; a) tests for measuring job knowledge and b) work sample tests

2) Aptitude or potential ability tests

These tests measure the talent ability of a candidate to learn a new job or skills. Through these tests you can

detect peculiarity or defect in a person‟s sensory or intellectual capacity. These focus attention on particular

types of talent such as leaning, reasoning and mechanical or musical

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aptitude. They are of three types; a) mental tests, b) Mechanical aptitude tests and c) psychomotor
or skills tests.

3) Personality tests
These discover clues to an individual‟s value system, his emotion reactions, maturity and his
characteristic mood. The tests help in assessing the person‟s motivation, his ability to adjust himself to
the stresses of everyday life and his capacity to interpersonal relations and for projecting an impressive
image of himself. They are expressed in terms of the relative significance of such traits of a person as
self-confidence, ambition, tact, emotional, optimism, decisiveness, sociability, impulsiveness,
sympathy, integrity and stability. They are basically of three types; a) Objective tests, b) Projective
tests and c) situation tests.

4) Interest Tests
These tests are done to discover a person‟s areas of interest and to identify the kind of work that
will satisfy him. The interest tests are used for vocational guidance, and are assessed in form of
answers to a well prepared questionnaire.

Limitation of Selection tests

You should not conclude that 100% prediction of an individual‟s on-the-job success can be made
through the above tests. These tests, at best, reveal those candidates who have scored above the pre-
determined cut off points are likely to be more successful than those who have scored below the cut-
off points. Tests are useful when the numbers of candidates to be selected is large. If the tests are not
properly constructed they serve no purpose.

Precautions when using selection tests

The following precautions should be taken if tests are to be useful in selecting the best candidates.

a) Norms should be developed as a source of reference on all tests used in selection and on a
representative sample of people on a given job in the same organization. Norms developed
elsewhere should not be blindly used because companies differ in their requirements,
organization, culture, structure and philosophy.

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 b) Some warm-up should be provided to candidates either by giving samples of tests and/or
answering queries before the tests begin.
c) Tests should be first validated for a given organization and then administered for selection
of personnel to the organization.
d) Each tests should be assigned a weightage in the selection.
e) Test scoring, administration and interpretation should be done by persons having technical
competence and training in testing.

Characteristics of a good test

a) Relevance
b) Consistence
c) Suitability
d) Standardization
Advantages of selection tests

a) They assess the suitability of a candidate.

b) Facts of able to be verified. (i.e what he claims, he knows)
c) Objective assessed (reason for your judgment)
d) Establishment of standards ( for job performance)
Disadvantages of selection tests

a) Unreliable
b) Liable to use
c) Unfair to some
d) Fear of exposure – good people may keep away from interviews.

2. The Interviews

What we are going to discuss now is the post application interview and not the preliminary
interview.

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Meaning and purpose of interviews

An interview is a formal consultation to evaluate the aptitude, training etc of a prospective employee. It
is to face observation and personal appraisal method to evaluate a candidate for any job. An
employment interview should serve three purposes; obtained information, giving information and
motivation. It should provide an appraisal of personality by obtained relevant information about the
prospective employee‟s background, training work history, education and interests. The candidate
should be given information about the company, the specific jobs and the personnel policies. It should
also help in establishing a friendly relationship between the employer and the applicant and motivate
the satisfactory applicant to want to work for the company or the organization.

Kind of interviews

1. Informal interview:
This may take place anywhere. The employer or a manager in a personnel department, may ask a few
question, such as name, place of birth, previous experience, etc, It is not planned and is used widely
when the labor market is tight and the organization needs workers badly. It is conducted in an informal
setting which includes the house of the manager.

2. Formal interview
This is held in a more formal atmosphere in the employment office by the employment officer
with the help of well-structured questions. The time and place of the interview are stipulated by
the employment office.

3. Patterned interview
This is a formal interview carefully planned. The interview has a plan of action worked out in
relation to time to be devoted to each candidate, types of information to be sought, information to
be given, the modality of interview and so on. He may use the plan with some amount of
flexibility.

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 4. Stress interview
This is designed to test the candidate and his conduct and behavior by putting him under
conditions of stress and strain. This is very useful to test the behavior of individual under
disagreeable and trying situations.

5. Systematic, in-depth interview

This is designed to intensively examine the candidate‟s background and thinking and to go into
considerable details in a particular subject of special interest the candidate. The theory behind this
is that if the candidate is found good in his area of special interest, the chances are high if given
job he would take serious interest in it.

6. Board or panel interview

This is done by members of interview board or a selection committee. It is done usually for
supervisory or managerial positions. It pools the collective judgment and wisdom of the members
of the panel. The candidate may ask to meet the panel individually for a fairly lengthy interview.

7. Group interview
This is designed to see how the candidates react to and against each other. All the candidate may
be brought together and they may be interviewed. The candidate may, alternatively, be given a
topic for discussion and to be observed as to who will lead the discussion, and how they will
participate in the discussion, how each will make his presentation and how they will react to each
other‟s views and presentation.

Interview Rating

Importance aspect of personality can be categorized under the following seven main heading

Physical make up: Health, physique, age, appearance, bearing, speech.

Attachment: Education, occupational training and experience.
Intelligence: Basic and effective
Special Altitude: Written or oral fluency of expression, numeracy, organizational ability
and administrative skills.
Interest: Intellectual, physical active, practical, social, artistic
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 Disposition: Self-reliance, nature motivation, acceptability.
Circumstances: Domestic, social background and experience, future prospects.
On the basis of the information gathered through an interview, each candidate should be rated in
respect of each point given as (i) outstanding (ii) good (iii) above average (iv) below average (v)
unsatisfactory. Marks should be allocated to each of these, and the score for each point is arrived
at by weights and the total of all these will determine the final position of the candidate at the
interview.

Procedure for an interview

1. Review of background information

2. Preparation of question plan ( a system to follow)
3. Putting a candidate to ease
4. Drawing out the best in a candidate.
5. Concluding the interview
Limitations of interview

Interviews have their own limitations of which some of them are given below:

Subjective judgment of the interviewers may be based on his prejudices, like, dislikes,
biases etc
One prominent characteristic of a candidate may be allowed to dominate appraisal of the
entire personality.
The interviewer‟s experience may have created a close association between some
particular traits and a distinctive type of personality.
Some managers believe that they are good at a character analysis based on some pseudo-
scientific methods and are guided by their own abilities at it.

Guidelines for improving Interviews

The effectiveness of the interviews can be improved if the following points can be kept in mind
buy the interviewers.

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 An interview should have a definite time schedule with ample time for the interview.
The impersonal approach should be avoided.
Interview should have the necessary element of privacy.
The interviewer should listen carefully to what the applicant says and the information
collected should be carefully recorded either while the interview is going on or
immediately thereafter.
Attention should be paid not only to the words spoken, but also to the facial expressions
and mannerisms of the interviewee.
The interview should end when sufficient information has been gathered.
The interviewee should be told he/she stands, whether he/she will be contacted later,
whether he/she is to visit another person or it appears that the organization may not be able
to use his/her abilities.

3.6 EVALUATION IN EMPLOYEE SELECTION

The various steps involved in a candidate are meant to ascertain his /her competence or sustainability
for the job in question. The objective is to employ the best person form among the many applicants,
based on the information gathered through objective and standardized tests. The following are among
the important advantages of selection procedure.

1. Objectivity – they are not subjective.

2. Economy – elimination of unsuccessful employees helps to cut costs and time to go
through everybody.
3. Talent search – looks at those who have the potential of being developed in future.
Physical examination

Job applicants who get over one or more of the preliminary hurdles are sent for a physical examination

either to the organization‟s physician or a medical officer approved for the purpose.

The following are the purposes served by physical examination:

1. It gives an indication regarding fitness of the candidate for the job concerned.

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 2. It discovers existing disabilities and obtains a record thereof which may be helpful later in deciding
the company‟s responsibility in the events of workers compensation claim.

3. It helps in preventing employment of those suffering from some type of contagious

diseases.
4. It helps in placing those who are otherwise employable but whose physical handicaps may
necessitate assignment only to specified tasks.

Content of Physical Examination

1. The applicant‟s medical history

2. His physical measurement – height, weight
3. General examination – skin , musculature and joints
4. Special senses – visual, auditory activity
5. Clinical examination – eyes , ears, nose, throat and teeth
6. Checkup of blood pressure and heart
7. Pathological tests of urine, blood etc
8. X-ray examination of the chest and other parts of the body.
9. Neuro-psychiatric examination, particularly when medical history or a physicians
observation indicates adjustments problems.
You would realize that the importance of these characteristics varies from job to job and therefore,
different weightages have to be given to each for an overall examination.

3.6.1 Reference Checks

The applicant is asked to mention in his application the names and addresses of, usually, three
such persons who knows him well. This may be in his previous employers, friends or professional
colleagues. These people are approached by mail and are asked to give truthful information about
the job candidates. The information given should be treated with the confidence it deserves.

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3.6.2 Final Decision and Placement
Applicants who cross all the hurdles are finally considered. If there are more persons than the number
required for the best job the ones with the highest score are then selected. Sometimes a particular
person is selected for a given job. Often more than one person may be selected for the job of similar
nature. In the second case, individual employees have to be put under individual supervisors with the
approval of the latter. A proper placement reduces employee turnover, absenteeism and accident rates
and improves morals.

3.6.3 Induction and Orientation

This is the last activity in relation to a newly employed person before he is trained for his job. This
is the introduction of employees to the job and the organization. The primary purpose is to sell the
company to the new employee so that he may feel proud of his association with the company.

Purpose and need

An employee has to work with fellow employees and his supervisor. For this he must know them, the
way they work and also the practices and the policies of the organization so that he may integrate
himself with the enterprise. Any neglect in the area of induction and orientation may lead to high
labour turnover, confusion, wasted time and expenditure.

Induction Programmes

A good induction program should cover the following:

The company, its history and products, process of production and major operations
involved in his job.
The significance of the job with all the necessary information about it including job
training and job hazards.
Structure of the organization and the various functions of other departments.
Employee‟s own department and job, and how he fits in the organization.
Personnel policy and sources of information.
Company policies, practices, objective and regulations.
Terms and conditions of service, amenities and welfare facilities.
47
 Grievances procedures and discipline handling.
Social benefits and recreational services.
Opportunities, promotion, transfer, suggestion schemes and job satisfaction.
Rules and regulations governing hours of work and overtime, safety and accident
prevention, holidays and vacations, methods of reporting, tardiness and absenteeism.
An induction program basically consists of three steps:

1. General orientation by the staff.

2. Specific orientation by the job supervisor.
3. Follow-up orientation by either the personnel department or the supervisor.

Review Questions
i. Outline the factors that influence recruitment process.

ii. What are the advantages and disadvantages of internal and extern sources of

labour?

iii. Discuss how a firm can recruit manpower from internal and external sources.

iv. Explain employee selection methods.

REFERENCES

Matthewman J. (2006): Human Resources Effectiveness; Jaico Publishing House

th
Michael Armstrong (2001): A handbook of Human Resource Management (8 Edition),
Millennium edition.

Wayne F. Casco (2006): Managing Human Resources: Tata Mcgraw Hill

Mamoria C.B and Gankar S.V (2003): A text book of Human Resource Management, Himalayan
Publishing House.

Flippo, E.B. (1984 ): Personnel Management (6 th Edition). New York, McGraw-Hill

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 CHAPTER FOUR

COMPENSATION AND STAFF MOTIVATION

4.0 INTRODUCTION

Learning Objectives for the Lesson

At the end of the lesson, the learner should be able to;

A) Describe total reward approach.

B) Outline elements of reward management.
C) Discuss the problems of salary and wages administration.
D) Explain types of employee incentives

4.1 TOTAL REWARD APPROACH

The total reward concept emphasizes the importance of considering all aspects of reward as an integrated
and coherent whole. It emerged during the late 1990s as a means of maximizing the combined impact of the

whole range of reward initiatives on motivation, commitment and job engagement. It addresses the crucial

issues of recruitment, retention and talent management.

Companies consider role of non-financial rewards, including recognition schemes, and to rely less on
money as the sole motivator. Also considers leadership style and environmental factors such as
location and workplace facilities. In concert with this more holistic approach to employee motivation is
an increasing realization that reward systems must be flexible if they are to motivate effectively the
diverse workforce of the 21st century.

4.1.1 Elements Of Reward Management

1. Business Strategy
The starting point of the reward system is the business strategy of the organization. This identifies the
business drivers and sets out the business goals. The drivers are unique to any
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organization but will often include items such as high performance, profitability, productivity, innovation,

customer service, quality, price/cost leadership and the need to satisfy stakeholders – investors,

shareholders, employees and, in local authorities, elected representatives.

2. Reward Strategy and Policy

The reward strategy flows from an analysis of the business drivers. The question is: 'How can these be
supported by reward in order to achieve the goals of the business?' The reward strategy will define longer-
term intentions in such areas as pay structures, contingent pay, employee benefits, steps to increase
engagement and commitment and adopting a total reward approach. Reward policy will cover such matters
as levels of pay, achieving equal pay, approaches to contingent pay, the use of job evaluation and market
surveys and flexing benefits.

3. Base or Basic Pay

The base rate is the amount of pay (the fixed salary or wage) that constitutes the rate for the job. It may
be varied according to the grade of the job or, for shop floor workers, the level of skill required. Base
pay will be influenced by internal and external relativities. The internal relativities may be measured by
some form of job evaluation. External relativities (going rates) are assessed by tracking market rates.
Alternatively, levels of pay may be agreed through collective bargaining with trade unions or by
reaching individual agreements. Base pay may be expressed as an annual, weekly or hourly rate. This
is sometimes referred to as a time rate system of payment. The rate may be adjusted to reflect increases
in the cost of living or market rates by the organization unilaterally or by agreement with a trade union.

4. Contingent Pay
Additional financial rewards may be provided that are related to performance, competence,
contribution, skill or experience. These are referred to as 'contingent pay'. Contingent payments
may be added to base pay, ie 'consolidated'. If such payments are not consolidated (ie paid as cash
bonuses) they are described as 'variable pay'.

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 5. Employee Benefits
Employee benefits include pensions, sick pay, insurance cover, company cars and a number of
other 'perks'. They consist of elements of remuneration additional to the various forms of cash pay
and also include provisions for employees that are not strictly remuneration, such as annual
holidays.

6. Allowances
Allowances are paid in addition to basic pay for special circumstances (eg staying away from
home) or features of employment (eg working unsocial hours). They may be determined
unilaterally by the organization but they are often the subject of negotiation. The main types of
allowances are location allowances, overtime payments, shift payments, working conditions
allowances and stand-by or call-out allowances made to those who have to be available to come in
to work when required.

7. Total Earnings
Total earnings (financial rewards) consist of the value of all cash payments (base pay, contingent
pay and allowances, ie total earnings).

8. Total Remuneration
Total remuneration consists of the financial rewards represented by total earnings plus the value of
the benefits received by employees.

9. Non-Financial Rewards
Non-financial rewards do not involve any direct payments and often arise from the work itself, for
example achievement, autonomy, recognition, scope to use and develop skills, training, career
development opportunities and high-quality leadership.

10. Total Reward

Total reward is the combination of financial and non-financial rewards available to employees

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4.2 THE PROCESS OF SALARY & WAGE ADMINISTRATION
The process of salary and wage administration encompasses five main components;
1. Job Evaluation
Job evaluation is a systematic process for defining the relative worth or size of jobs within an organization
in order to establish internal relativities and provide the basis for designing an equitable grade structure,

grading jobs in the structure and managing relativities. It does not determine the level of pay directly. Job
evaluation can be analytical or non-analytical. It is based on the analysis of jobs or roles, which leads to the
production of job descriptions or role profiles.

2. Conducting Salary/Way Surveys - Market Rate Analysis

Market rate analysis is the process of identifying the rates of pay in the labour market for
comparable jobs to inform decisions on levels of pay within the organization and on pay
structures. A policy decision may be made on how internal rates of pay should compare with
external rates – an organization's market stance.

3. Development & Maintenance of Salary/Wage Structures

Jobs may be placed in a graded structure according to their relative size. In such a structure, pay is
influenced by market rates, and the pay ranges attached to grades provide scope for pay
progression based on performance, competence, contribution or service. Alternatively, a 'spot rate'
structure may be used for all or some jobs in which no provision is made for pay progression in a
job.

4. Sharing Information with Others - Performance Management

Performance management provides for regular constructive feedback, and result in agreed plans
for performance improvement, learning and personal development. They are a means of providing
non-financial motivation and may also inform contingent pay decisions. Information is shared.

5. Development and Maintenance of Payroll

The organization relies on historical pay levels from the pay roll data

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4.2.3 PROBLEMS IN SALARY ADMINISTRATION
1. Payment of widely varied wages and salaries for the same or closely related jobs and
positions.
2. Dynamic external relativities and market pressures – especially where companies fight for
good employees in same industry.
3. Payment of high wages and salaries to persons who hold jobs and positions not requiring
great skill, effort and responsibility.
4. Paying beginners less than that they are entitled to receive in terms of what is required of
them.
5. Giving a raise to persons whose performance does not justify the raise.
6. Deciding rates of pay on the basis of seniority rather than ability
7. Payment of unequal wages and salaries on the basis of race, sex, religion,or political
differences.

4.2.1 Factors Determining Remuneration Packages

External Factors
1. Labour market – the trends of demand and supply of labour, the availability of skilled and
unskilled workforce and minimum wage requirements by the law.
2. Cost of living – The rate of consumer price index, the cost of consumer goods may
determine whether wages will be high or not.
3. Government legislation – labour laws and minimum wage
4. The society – social-ethical considerations like what the society expects to reasonable pay.
5. The economy – Growing economy increases cost of living therefore high pay expectations.
6. External relativity – what other organizations are paying their employees in the same
industry.

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Internal Factors
7. Company‟s Strategy – if the company‟s strategy is for rapid growth, then it will engage
people at high pay to achieve this.
8. Job evaluation – The jobs are evaluated to determine their pay levels
9. Internal Relativity – How the other employees of same qualification are paid, this is done
through performance appraisal.
10. Personal /Team Value – Personal performance, employee seniority, employee experience,
employee potential and employee‟s sheer luck.
11. Business performance – if the company is making profit, the salary is likely to be high.

4.2.4 Element Of Good Compensation Policy

The following are key elements of a sound compensation policy:

Levels and adequacy of wage payment (depends on wage level etc)

Equity in wage payment.
Recognition of efficiency performance ( old vs inexperienced workers)
Incentive payment.
Factors influencing wages and salaries structure.

The firm capacity to pay.

Demand for and supply of labour.
The exciting market wage rate.
The cost of hiring.
Job requirement.
Productivity of labour ( per man hour)
Managerial attitude.
Psychological and special factors.
Trade union bargaining power.

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4.2.5 Methods Of Wage Payment
1) Time rate method
Under this method, payment is made on the basis of time that may be an hour, a day, a week or a month. A
certain sum of money is set for each of the above unit of time. Mostly, the workers are paid according to
number of hours worked in a particular week or month. Hourly rate is decided in advance at the time a
worker is employed. This hourly rate is multiplied by the number of hours worked during a particular month
and the resultant figure is the wage for that month.

Question: What are the advantages and disadvantages of time rate method?

2) Price rate method

Under this method, an employee is paid per unit of product, article or per job completed. This
method is used only if the work can be divided into uniform pieces as is often possible for factory
jobs.

Question: What are the advantages and disadvantages of time rate method?

3) High time rate for over time

4) Price rate with guaranteed time rate ( if output exceeds)
5) Differential piece rate (rate varies at different levels of output).

4.3 INCENTIVE SCHEMES AND FRINGE BENEFITS

Incentive pay may be regarded as extra pay that is provided for extra performance in addition to
regular pay.

Objectives

1) To motivate workers to perform effectively.

2) To improve the profits of an enterprise though a reduction in the cost of labour and
material or both.
3) To secure a better utilization of manpower, better promotion scheduling and performance
control, and a more effective personnel policy.
4) To increase workers earning without dragging the firm to a higher wage structure.

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 5) To induce the effective employees to stick to the enterprise.
6) To attract effective workers from inside to join this firm.
N/B: Incentives can be offered to a group of individuals depending on the nature of job being
done.

Non-financial motivation

Status
Promotion
Responsibility
Recognition of workers
Job security
Praise

4.3.1 Fringe Benefits

Every organization provides some benefits and services to its employees in order to attract and
retain them, and to maintain loyalty towards the enterprise.

Fringe benefits are the supplements to wages received by wages at a cost to employers. The term
fringe benefits encompass a number of benefits such as:

Paid variation
Pension
Health and insurance
Why an employer should provide fringe benefits to employees

1) Inflation has brought about great demand for provision of extra benefits to the employees.
2) When it is not possible for employees to negotiate higher wages and salaries, they remain
contented with fringe benefits.
3) When some big organization announces fringe benefits to their employees. The competing
organizations may also be forced to offer those benefits in order to retain their own staff.

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 4) The growth and strength of trade union then exerts a profound influence on the company
benefits and services to employees.
5) The contemporary management scientists believe that the benefits of increase in productivity
resulting from increased industrialization should go to employees who are
primarily responsible for it.
Objectives of fringe benefits

1) To keep in tune with the prevailing practices of offering fringe benefits and services
provided by the competing firms.
2) To increase and improve employee‟s morale and create a helpful and positive attitude on
the part of the employees towards the enterprise.
3) To create and maintain a good image of the company in the minds of the employees and
the customers.
4) To recruit and retain better personnel in the enterprise.
5) To protect the employees against the hazards of life.
6) To acknowledge the trade union bargaining power.
Fringe benefits includes:

Payment for non-working time

Profit and bonus
Legally sanctioned payment on social security sciences
Workmen compensation
Post-retirement, medical, educational, cultural and recreational needs of employees.
Subsided Housing, food and other related activities.

4.4 MOTIVATION OF EMPLOYEES

Motivation is the complex of forces inspiring a person at work to use his capacities for the
compliment of certain objectives. It is something that impels a person into action and continues
him in action with enthusiasm.

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Characteristics of motivation

1) It is a psychological concept i.e internal feelings

2) It is a dynamic and continuous process
3) Motivation is a complex and difficult function.( What do I do fully to motivate my
workers?)
4) Motivation is a circular process. (unsatisfied need-tension-drive (action) to reduce tension)
5) Motivation is different from satisfaction.
Significance of motivation

1) High efficiency-exploitation of full potential

2) Better image
3) Facilities change
4) Job satisfaction

4.4.1 Motivating In Changing Times Pay For The Performance

Motivation is a process in which people choose between alternative forms of behaviour in order to
achieve personal goals. The goals sought by individuals can be relatively tangible, such as
monetary reward or promotion, or intangible such as self-esteem or job satisfaction. The rewards
available to an individual are generally classified under
(a) Intrinsic rewards – Those that derive from the individuals own experience e.g. sense of
achievement or a feeling of self-esteem.
(b) Extrinsic rewards – Those conferred on a person from outside e.g. a pay rise or
promotion.
Managers find reliable links between individual motivation and effective performance. There are many

theories of motivation. The human relations school believes employees want to do a good job. Although

their individual may differ, they would be motivated to achieve their potential.

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Reasons for Pay Performance Plans
Many organizations have implemented incentive plans for a variety of reasons: increasing labour
costs, more global competitive markets, faster technological advances and greater needs for
productivity quality. In the twenty first century, incentives plans and focusing on pay-for-
performance, improved quality and productivity. By using pay for performance managers are
finding employees improve their job performance.

The success of pay for performance system mainly depends on the organization. If the
organization has a strong corporate culture, high morale, and employees trust the management,
then there is a stronger probability of success.

Incentive plans may not always lead to organization improvement for two main reasons. First some
companies feel that incentive plans are in conflict with a team-oriented approach. Second management may
have to give sufficient attention to the design and implementation of incentive programs. Team incentives
should not be used in situations where a few individuals are likely to maximize their output at the expenses
of their coworkers. Group incentives should reduce rivalry and promote cooperation and concern for all
members in the units overall performance.

4.5 TYPES OF INCENTIVE PROGRAMS

There are three important point related to the effective administration of incentive plans:
1. Incentives. Incentives systems are effective only when management is willing to pay
incentives based on differences in individual or team performance.
2. Motivation. Incentives must be large enough to motivate and reinforce exceptional
performance.
3. Standards. Incentive systems must be based on clearly defined and accepted
performance standards effectively communicated to employees.
There are a number of types in incentive programs, which are described as follows;

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1. Individual Incentives
Many factors are involved in the design of an individual incentives plan. For example, most incentive
plans are designed to set production rates according to the technology used. Incentive payments for
hourly employees are based upon the number of units produced, by the achievement of specific
performance goals, or by productivity improvements in the organization. Who would be including in
incentives? The incentives system should be designed with a focus on specific employees in mind,
such as production middle managers, sales people, engineering, or senior executives. Most
organizations are different incentives systems for different levels. How will performance be measured?
The decision whether to use an individual, team or organization wide incentive is critical. The major
factor is the extent to which results can be measured at the individual or team level, whether the
individual‟s contribution is measured, and the effect on teamwork among unit members.

2. Piecework
One of the oldest most commonly used incentives plans is piecework. In a straight piecework plan, the
employee receives a certain amount of pay for each unit produced. Compensation is then determined by the
number of units produced during a specific time period. Employees often earn as much as 55 per cent more
than their base pay in a piecework system. The differential piece plan enables employees whose production
exceeds the standard output to receive a higher rate of all of their work than the rate rapid to those who
perform below the standard.

The piecework systems are more like succeed in repetitive jobs where units of output can be
reliably measured, when quality is less critical, and with a continuous flow of work.
Unfortunately, it is not effective in jobs that do not have reliable standards of performance. One of
the weaknesses of piecework is that it may not always be an effective motivator. If workers find
that increases in output bring disapproval their fellow workers, then the need for friendship and
approval may outweigh the incentive to produce more. Secondly, the standards for piece rates
often tend to change, because employees discover ways to do the work in less than standard time.

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3. Individual Bonuses
Individual bonuses are an incentive payment that supplements the basic wage. It has the advantage
of reward workers with more pay for higher performance effort, yet still providing a basic
paycheck.

4. Team Bonuses
Team bonuses are usually used when the contribution of an individual employee is either not
measurable or when performance depends on team cooperation. Which work process requiring
more teamwork and coordination among workers, team bonuses are very popular. Most team
bonus plans are tied to such measurable outputs as company profit, improvements in quality, or
cost reductions. Team bonuses, like individual incentives plans, often improve employee
motivation. This allows the organization to:
a. Reward team productivity.
b. Compensate team members for new skills.
c. Increase overall performance

5. Sales Incentives
Sales incentive plans are often based on the same factors as individual incentive programs. The
drive needed in selling demand highly motivated sales personnel. The competitive nature of
selling underlines the widespread use of sales incentives.

Sales incentive plans often share many of the characteristics of individual incentives, but there are also
unique requirements. Sales output measures can usually be establishes as the level of sales (in shillings
or units), but sales people are not paid just on sales volume. They often provided other services, such
as customer training, product development, consultation and new accounts, which involve complex
measures of performance. A critical first step for a sales incentive program then is to determine the
most important performance factors. In general, sales performance maybe measured by the total sales
volume and by their ability to generate new accounts. If measures are used such as promoting new
products and providing customer service, then more complex measures may be used.

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6. Managerial and Executive Incentives
There is research to support the use of incentive systems for executives, which are usually related to
the strategic goals of the organization. Incentives for managerial and executives are believed to have an
impact upon organizational performance although there is little data to support this belief. In most
cases executive incentive plans are linked to net income, return on investment, stock price, or total
dividend paid. These incentives are usually paid in the form of bonuses and stock options. CEO‟s often
receive over half of their compensation from incentives resulting in criticism of what they actually
contribute to the corporation.

Pros and Cons of Executive Bonuses

Are top executives really worth the exorbitant salaries and bonuses they receive? The answer
usually depends on whom you ask. Corporate compensation committees feel that big bonuses are
necessary as a way to reward superior performance as a „fact of business life‟ reflecting market
trends for CEO compensation.

However, as previously noted, strong criticism is being voiced regarding the high salaries and
bonuses being paid to senior executives. Others point out that some critics often find executive
may receive record bonuses even though their organizations are performing poorly and employees
are being asked to take wage and salary cuts or layoffs.

7. Executive Perquisites
In order to recruit and attract top people executives usually receive special benefits termed perquisites.
Perquisites or perks are recognized by executives as important in the organization, the extras used to
supplement basic compensation. Perks also serve as status symbol to both insiders and outsiders. Perquisites
also provide tax savings to executives, because most perks are not taxable as income (although this is
constantly changing). The more common perks range from company care special parking expenses
accounts, plush offices chauffeurs, country club memberships, special vacations, physical exams an
executive dining room, and liability insurance. Perks are an entrenched feature of executive compensation.

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8. Team profit Sharing Plans
There has been an increase in the number and type of team or group incentive plans. Team
incentive plans are becoming preferable to individual incentives as a result of the increasing use of
team-based approaches. An effective team incentive plan is based on the same factors an
individual plan is based on the same factors as individual plans.

The measures differ in that a team plan is based on some measure of team productivity. Team plans are
particularly effective when team work is essential and when the essential system is trying to involve
the level of participation. Team plans are used when jobs are so interested that it is difficult (or
impossible) to identify individual output measures. The size of a team usually ranges from 5 to 20
people, depending upon the task and the required coordination between team members. The smaller the
team, the higher the identification on team performance. There is increasingly evidence that team
incentives increase productivity.

9. Gain sharing Plans

Gain sharing plans try to reduce the amount of labour required for a given level of output (cost
saving) or increase the output for a given amount of labour (productivity increase). The method for
determining the standard production rate and the incentives rate must be clearly defined. Gain
sharing plans are based on the assumption that better cooperation among workers and between
workers and manages will result in greater effectiveness.

4.6 MOTIVATION THEORIES

a) Maslow hierarchy of need theory (five levels of human need)
Dr. Abraham Maslow developed a simplified model of human needs in 1954 that suggested that
human needs are arranged in a hierarchy. The basic or lower level needs are strongest (biological
and security). As those needs are satisfied a person is free to move towards satisfaction of higher
level needs.

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 Maslow’s Hierarchy of Human Needs

Self-actualization

Esteem needs (self-

esteem & of others)

Affection & belonging needs

(family, friends, community)

Safety & security needs

Physiological (Biological) needs eg food, shelter, clothing, rest, sex

The key point in Maslow‟s Theory is that any time a lower level need asserts itself, a person cycles
back though the hierarchy to satisfy that need. Maslow theorized that the most basic and strongest
needs are physical i.e. hunger, thirst, sex and rest. These are closely followed by the need for self –
protection and when human feel safe, they become gregarious seeking companionship and
acceptance among others. This level of need is the basic reason for the formation of families,
tribes; nations etc Group acceptance allows the individual to seek self – respect and status. Once
all these needs are met, humans can achieve their potential, develop philosophy, philanthropy and
aesthetics and continue to search for understanding and knowledge.

b) Herzberg two factor theory

i. Hygiene factors
Company policy
Technical s/v

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 Salaries
Job security
Working condition
Personal life
Status etc
ii. Motivation factors
Achievement
Recognition
Advancement
Increased responsibilities.

Review Questions
i. Explain the elements of reward management

ii. Salary administration faces various forms of problems, discuss.

iii. Explain the various types of incentive programmes used in staff compensation.

iv. Discuss the Maslow’s hierarchy of human needs as a motivation theory

REFERENCES
th
Dessler, G. (2002): Human Resource Management (9 Edition ).New Jersy, Prentice Hall
th
Flippo, E.B. (1984): Personnel management (6 edition ). New York, Mcgraw hill
Harriman, A. (1985): Women/ men Management, New York, Praeger
Pell, A (1969): Recruiting and selecting personnel. New York, regents

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 CHAPTER FIVE

JOB EVALUATION

5.0 INTRODUCTION

Learning Objectives for the Lesson

At the end of the lesion, the learner should be able to;

a. Describe the purposes of job evaluation

b. Explain methods of job evaluation

5.1 DEFINITION
Job evaluation is the activity of carrying out systematic comparison between jobs to assess their
relative worth, for the purpose of establishing a rational pay structure. In essence, job evaluation aims
at reducing reliance on arbitrary methods of pay determination by introducing an element of objectivity
in the ways jobs are compared. Every job evaluation method requires at least some basic job analysis in
order to provide factual information about the jobs concerned. Nevertheless, as with many other
aspects of personnel management, judgment has to be exercised in the final analysis. As Kempner
(1980) points out: “Job evaluation methods depend to some extent on a series of subjective judgments
made in the light of concepts like logic, justice and equity and the progressive refinement of job
evaluation techniques is an attempt to minimize the subjective element.”

Purpose of Job Evaluation

The purpose of job evaluation is to produce a defensible ranking of jobs on which a rational and
acceptable pay structure can be built. There are a number of important features of job evaluation
which need to be recognized at the outset. These are:

1. Job evaluation attempts to assess jobs, not people.

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 2. The standards of job evaluation are relative, not absolute.
3. The basic information on which jobs evaluation are made is obtained from job analysis.
4. Job evaluations are carried out by groups, not by individuals.
5. Job evaluation committees utilize concepts such as logic, fairness and consistency in their
assessment of jobs.
6. There is always some elements of subjective judgment in job evaluation.
7. Job evaluation does not determine pay scales, but merely provides the evidence on which
they may be devised.

5.2 METHODS OF JOB EVALUATION

Job evaluation methods can be divided into two basic categories of analytical and non-analytical
methods. The primary difference between these two categories is that the non-analytical methods take
whole jobs and rank them, whereas the analytical methods break jobs down into their component parts
and then compare them factor by factor. The implication is that analytical methods provide a more
refined means of measurement than non-analytical methods. This point is particularly relevant for
equal pay legislation, since only analytical schemes are considered to provide an acceptable means of
identifying “work of equal value”.

5.2.1 Non-Analytical Methods

The two most widely-used non-analytical methods are job ranking and job grading or job
classification.
1. Job Ranking - The basic process in job ranking is to select a representative sample of jobs (so
called benchmarks), prepare basic job description for them, compare them on the basis of the
information in the job descriptions and rank them in order of their perceived importance. Each
evaluator‟s ranking is discussed job evaluation committee, compared with the results obtained by
other evaluators, and eventually a final rank order is drawn up. The remaining jobs in the
organization are then slotted in to the evaluated rank order on a like-for-like basis. The advantage of
this form of evaluation is that it is relatively simple and cheap to operate. Its main disadvantage is
that it relies heavily on the

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 subjective assessments of the evaluators, and in particular on their personal knowledge of
the benchmark jobs.
In essence, the paired comparisons approach is an attempt to reduce the subjective element to a limited

extent by at least forcing judges to make comparisons in a systematic way. Nevertheless, in the final

analysis, such a system of evaluation relies considerably on personal judgment.

2. Job Grading - This form of evaluation, also known as job classification, attempts to
distinguish between work levels by establishing a small number of general criteria against
which specific jobs may be compared. The most well-known, and widely used, system of
job grading is the scheme developed by the Institute of Administrative Management
(IAM). This scheme now has eight grades, each with their statement of general criteria,
into which almost 1000 typical office tasks can be slotted. The grades A and B contain jobs
at the elementary level of office work, while Grade F, G and H contain work of high
professional level.

Summary of I.A.M. Job Grading Scheme

Grade A – Tasks requiring no previous clerical experience; each individual task is either very simple or

closely supervised. Examples include: simple sorting and filling, and messenger work.

Grade B – Simple tasks carried out in accordance with limited number of well-defined rules; fairly
short period of training; tasks closely directed and checked. Examples include: simple copying
work, and straightforward adding operations and using machine.

Grade C – Tasks of routine nature and following well-defined rules, but requiring some experience
or special aptitude. Examples include: simple calculating machine operations preparing routine
invoices, and shorthand –typing of routine work.

Grade D – Tasks requiring considerable experience, but only a limited degree of initiative, and which are

carried out within existing procedure. Work is not subject to same amount of direction

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as in lower grades. Examples include; shorthand typing of non-routine work, routine
administrative of a group of sales or purchase accounts.

Grade E – Tasks of requiring a basic level of professional knowledge or the performance of

clerical/administrative work requiring the occasional use of discretion and initiative, or the
supervision of two to six clerical staff. Examples include: routine computer programming,
supervision of a section of typists.

Grade F – Tasks requiring intermediate professional or specialized knowledge, or the performance

or control of complex clerical or routine administrative work requiring occasional non-routine
decisions and some use of judgment on routine matters, or the supervision of five to twelve
clerical staff. Examples include supervision of a print room, conducting routine O&M or systems
analysis surveys, complex computer programming, and full secretarial service to chief executive.

Grade G – Tasks requiring professional or specialized knowledge to first degree standard or

advanced professional qualification, or the performance or control of work of wide complexity or
importance requiring regular non- routine decisions and exercise of discretion, or supervision of
nine to twenty clerical staff. Examples include: supervision of large wages office, computer
programming of complex sets of programs, and tutoring on clerical training courses for staff in
grades A-F.

Grade H – Tasks requiring professional or specialized knowledge to degree or final qualification

level, or performance or control of complex arid important work, requiring extensive use of
judgment or initiative and some contribution to policy-making, or supervision of twenty or more
clerical staff together with their supervisors. Examples include: supervision of a customer accounts
office with responsibility to credit control within agreed policy, leading complex O & M or
systems analysis projects, and control of complex computer programming projects and their staff.

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As well as being given the broad parameters described above, users of the I.A.M. system have
access to some 1000 task definitions against which they can compare practically every office task
they are likely to incorporate in their business. Any management using this system will be able to
work out appropriate salary scales for each of the grades identified, and thus devise a reasonable
structure of pay differentials. The main advantage of job grading is its relative simplicity and
cheapness.

5.2.2 Analytical Methods

Analytical methods of job evaluation examine jobs in terms of their principal components, and not
as whole entities. The most widely-used analytical methods are the Points Rating Method and the
Hay-MSL Guide Chart System. In both of these methods differences between jobs in an
organization can be described, distinguished and measured in relative terms, with a fair degree of
credibility, such methods require much more time and effort than non-analytical methods, and are
therefore more costly to operate, but many organizations prefer them because they provide a
sounder and more defensible basis for wage and salary administration than non-analytical
methods.

The basic procedure for introducing an analytical method is as follows:

1. The aims/objectives of the exercise are agreed

2. the organization appoints its own job evaluation team from amongst its own staff, or hires
consultants; employee representatives are elected to the team, as appropriate
3. Relevant job factors are agreed upon
4. Each factor is subdivided by „degrees‟ or „levels‟
5. Each factor (and its sub-divisions) is given a weighting
6. points are then allocated to each factor and subdivisions
7. Benchmark jobs are identified
8. detailed job description are written for these jobs
9. Each benchmark job is evaluated in accordance with the points system
10. Benchmark jobs are ranked according to its score
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11. The initial ranking of benchmarks is reviewed to identify any anomalies
12. The final benchmark ranking is agreed
13. The remaining jobs are slotted into the benchmark ranking
14. Jobs are grouped within the ranking to isolate possible salary grades, or may be allocated
as salary scale on the basis of their individual points total

1. Points Rating Methods - The most frequent factors employed in points systems are as
follows:
a. Skill
Education and training required

Breadth/depth of experience required

Social skills required
Problems-solving skills

Degree of discretion/use of judgment

Creative thinking
b. Responsibility/accountability

Breadth of responsibility
Specialized responsibility
Complexity of the work
Degree of freedom to act
Number and nature of subordinate staff

Extent of accountability for equipment/plant

Extent of accountability for product/materials

c. Effort

Mental demands of job

Physical demands of job
Degree of potential stress

d. Working conditions
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 Timescale of operations
Turbulent or steady- state

Amount of necessary traveling

Diversity of subordinates
Pressures from other groups
Difficulty or hazardous surroundings

Most point‟s methods incorporate the above factors in one form or another. When devising an “in-
house” system, the inclusion of particular factors and decisions about their weightings will be the
subject of negotiation between various interested parties. Where trade unions are involved, they will
want to be consulted about these matters and to have some influence over the choice of factors in their
weightings. Additionally, a significant numbers of women are employed care needs to be taken to
ensure that the job factors selected do not implicitly favor ones sex against another, for example by
giving higher weightings to length of service and physical demands (which favor men) in comparison
to mental complexity and accountability for others (which may be considered as neutral). In a leaflet
on the amended Equal Pay Act, the Equal Opportunities Commission provides examples of such
“neutral” factors. Neutral factors provide a fairer basis for ensuring “equal pay for work of equal
value”.

Different management groups also have their preferred weightings. Line managers tend to stress
the importance, and therefore weighting, of responsibility, whereas specialists managers tend to
emphasize skills. Ideally, whatever the eventual choice of factors/weightings, one standardized set
of criteria should emerge to be applied consistently to all the jobs in the population concerned.
2. Guide Chart Method
A variation of the usual point‟s method is widely-used Hay-MSL Guide Chart method. In this method the

basic point‟s matrix is a standard one, which is applicable across organizational and indeed national

boundaries. This is an important future for organizations that wish to adopt a unified approach that can be
applied company-wide, and who are prepared to make full use of

72
Hay consultants in setting up the exercise and seeing through to its to its conclusion. The basic
structure of the Hay system is as follows:

1. Three broad factors are employed for the analysis: Know-how, Problem-solving
and Accountability, each scored on a Guide-Chart.
2. Each factor is considered by breadth and depth.
3. Know-how refers to the knowledge and skills required to attain “average
acceptable performance”.
4. Problem solving refers to the analytical and evaluation aspects of the job, and is
seen in two dimensions the extent to which thinking is prescribed and the nature of
the thinking challenge (variability creativity, etc).
5. Accountability refers to “the answerability for actions and the consequences of that
action”. It has three dimensions: (a) the extent of freedom to act, (b) the job impact
on end-results, and (c) the magnitude of the job primarily seen in terms of
responsibility for financial results.

The Hay system, as with any other points rating system cannot measure jobs with complete and
objective assurance. What it can do is to reduce the subjective and arbitrary elements by a
substantial margin, and thus achieve a fairer result with a Non-analytical method. After evaluation,
the Hay system ranks benchmarks jobs in accordance with point‟s totals. The final rank order is
agreed after any Red-circling anomalies have been put right, and salaries are then derived from the
application of a tailor-made formula agreed between the individual organization and the Hay
consultants.

Job evaluation plays an important role in the development of systematical and equitable pay systems.
Analytical systems, in particular, provide a means of identifying key job factors, weighting them as
appropriate, and the comparing jobs against them, and eventually arriving at an understanding of
relative value of all the jobs in a particular population. On the basis of this evidence of relative worth,
pay differential can be worked out in way that is demonstrably fairer than arbitrary decision of
individuals or powerful section groups.

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To the extent that job evaluation bureaucratizes the formulation of pay scales, it reduces the
negotiation power of both trade unions and other influential groups by lobbying them of the
possibility of appearing to emotional consideration, which has very little to do with the nature,
scope and contribution of jobs in the organizational hierarchy.

Non-analytical methods, popular though they may be, lack the credibility of Analytical methods.
No employer, for example, can resist an equal pay demand with any confidence if he is employing
Non-analytical methods of job evaluation. The Equal Opportunity legislation will not consider
such methods as “proper job evaluations”

Review Questions

i. Describe the purposes of job evaluation

ii. Explain methods of job evaluation

REFERENCES
1. Cole G.A. (1991): Personnel Management; Theory and Practice (Second Edition)
Guernsey Press
th
2. Dessler, G. (2002): Human Resource Management (9 Edition ).NJ,Prentice Hall
th
3. Filippo, E.B. (1984): Personnel management (6 edition). Ny, Mcgraw hill
4. Harriman, A. (1985): Women/ men Management, NY, Praeger

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 CHAPTER SIX

TRAINING AND DEVELOPMENT

6.0 INTRODUCTION

Learning Objectives for the Lesson

At the end of the lesion, the learner should be able to;

a. Describe the On-Job and Off-Job training methods.

b. Outline how management can be developed.

c. Discuss ways of identifying training needs.

d. Explain self-managed learning, learning organization and personal

development programmes

6.1 NEED FOR STAFF DEVELOPMENT

After the employee has been recruited, selected and inducted, he or she must next be developed to
better fit the job and the organization. No one is perfect fit at the time of hiring, and some training and
education must take place. No organization has a choice of whether to develop employees or not; the
only choice is that of method. If no organized program exists, then development will largely be self-
development while learning on the job. Development would include both the training to increase skill
in performing a specific job and education to increase general knowledge and understanding of our
total environment.

In the future, the only winning companies will be those that quickly to changing conditions, increasing
workforce diversity, and the critical issue of training- related problems. Preparing employees to function in
high performing system is an important HR activity and is the focus of this lesson. The modern HR manager
must not only be flexible and adaptive in changing environment but must also be able to develop a system

approach to training. Rapidly changing

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technology necessitates employees who have the skills, abilities and knowledge to keep up with
new complex production and techniques.

6.1.1 TRAINING
Training may be defined as an attempt to improve performance by the attainment of specific skills
such as typing, welding, running a computer and so forth, to do the current job the goal of training
is to ensure that a number of job skills will be performed at prescribed quality levels by trained
employees.

Training is a process that begins with the orientation of the new employee and continues
throughout an employees‟ career. Therefore, it is important that the HR manager develop labor
force.

Training is critical because it provides the skills needed both now and in the future. The
underlying assumption is; if an individual employee becomes more productive and more involved,
the total organization will also be improved. An overlooked benefit of training is when it is a
continuing process rather than occasional. It has been found that when companies train their
employees continually, not as a high level of performance, but it also helps to eliminate a negative
work place.

6.1.2 DEVELOPMENT
Development is more general than training and refers to learning opportunities designed to help employees
grow this provides employees with less detailed information but provides broader learning, which may be
utilized in a variety of settings and for future jobs. Some examples would include learning computer
programming so one could write programs, understanding human behavior as it relates to motivation,
understanding total quality development is to broaden the employees‟ comprehension of generalized
situations that may overlap into specific events. In essence, development is macro, not micro. It results in
comprehension of processes and through this in understanding results in better job performance.

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Combination programs
Training programs may combine both training and development. In fact, development is becoming
merely a factor in training programs as the business world begins to experience the serious
deterioration of the education system in grades K through 12. As global competition increases, training
programs for management are becoming more educational in scope with instruction in such fields as
ethnic and cultural development in the world marketplace.

An example of development is the problem of technical versus managerial expertise allowing for
promotion of both and not creating dead-end jobs. One answer is to develop dual careers paths
allowing both groups promotional and development opportunities. Many industries have used this
procedure and is now quiet common in information technology (IT) departments. By creating two
career development paths- one by the traditional route of assuming management responsibilities
and other by moving up a technical route of assuming management responsibilities and other by
moving up a technical ladder- this helps to cut turnover while building more efficient IT groups.

6.2 EMPLOYEE TRAINING

Training is the process of increasing the knowledge and skills of an employee for doing particular
jobs. It is an organized activity designed to create a change in the thinking and behavior of people
and to enable them to do their jobs in a more efficient manner.

The purpose of training is to enable the employees to get acquainted with their prospective or
present jobs and also increase their knowledge and skills. Training makes new employees more
productive and efficient.

Need Of Training

1. Non-availability of trained personnel.

2. Suitability for enterprise needs.
3. Proficiency in the latest technology

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Advantages Of Training

1. Job satisfaction
2. High output of quality goods.
3. Fewer accidents
4. Low spoilage rate
5. Reduction in number of complaints
6. Mastery in new methods
7. Better use of resources
8. Introduction of latest methods
9. Healthy interpersonal relations
10. Management by exception
11. Personal growth
12. Reduction in manpower obsolescence
Enabling the organization to provide increased financial incentives, opportunity for internal
promotion and raising pay rates.

6.2.1 The Training Process

Without proper planning of the training process, a lot of money will end up being wasted on
unnecessary or obsolete training programs. To ensure that training money is invested wisely
requires the same logic used in all management decisions. The manager must:
1) Identify training needs and establish specific objectives and evaluation criteria
2) Design the appropriate training methods and conduct the training
3) Evaluate the results of the training

Identification Of Training Needs

Training is a means to increase the effectiveness of employees both managers and workers. In their present

jobs and to prepare them for promotion to positions with greater responsibility. It .

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It should therefore be related to the needs of the organization and that of the employee concerned.

How you analyze training needs depends on whether you are training new or current employees. The main

task is analyzing the new employees‟ is to determine what the job entails and to break it down into subtasks,
each of which you teach to the new employees. The following three step approaches may be adopted to

identify the training needs of any organization.

1. Organization analysis
Every organization exists to accomplish certain goals. These are expressed in the organizations
mission statement. Therefore the management should ask themselves what the organization goals
are and how well they are being achieved? This will give an indication on what needs to be done
for them to be achieved.

2. Task analysis
This is a detailed study of jobs to determine what specific skills the job requires. Job description
and job specification are also helpful here. This lists down the job specific duties and skills and
thus provide the basic reference point in determining the training required. You can also uncover
the training needs by reviewing performance standards, performing the job and questioning current
job holders and their supervisors.

3. Worker analysis
Having known the behavior required to perform a particular task, the next step is to find out whether
your employees have those behaviours. The first step is to compare the person‟s actual performance
and the set standards. Distinguishing between can‟t do and can won‟t do problems is the heart of
performance analysis. Once you are certain that the employees are not performing due to lack of skill,
knowledge and ability, the desired training is organized. However the interest of the worker should be
taken into consideration.

6.2.2 Training For Different Employees

The employees who are to be trained are of different type and each type requires different type of
training.

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Unskilled workers: These are given training in improved methods of handling machines and
materials. The objective here is to secure reduction in production and waste. Training is given on
the job itself by immediate superior officers.

Semi-skilled workers: they require training to cope with requirements arising out of adoption of
mechanization, rationalization and technical processes. Training is given by more proficient
workers, bosses or inspectors. It may be given either in section or department of workers of
segregated training shops.

Skilled workers: They are given training through apprenticeship in training centre or in the
industry itself.

Salesmen: They are trained in the art of salesmanship, in handling customers, planning their work,
and facing challenges of market place.

Supervisory staff: This constitutes a very important link in the chain of administration. They have
to cope with the increasing demands of the enterprise in which they are employed and to develop
team spirit among people under their charge. A training program, for them should aim at helping
the supervisors to improve their performance, and to prepare them for assuming greater
responsibility at higher level of management.

6.3 TRAINING METHODS

When we talk about training methods we are essentially discussing the means by which we intend to
communicate information, ideas, skills, attitudes and feeling to learners. Thus methods are a crucial
element in the trainer‟s success. It is common to have methods categorized according to whether they
are employed in on-the job or off-the job situations.

6.3.1 Internal Or On-The Job Training

a. Demonstration
Here the trainer describes and demonstrates how to do a certain work. He performs the activity himself,

going through a step by step explanation of the why, how and what of what he is doing. Demonstrations are

often used in combination with lectures, pictures, text material, discussion

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etc the emphasis on this method is on know-how. The principle and the theory of a job must be
thought by some other method.

b. Apprenticeship training
A major part of training time is spent on the job productive work. Each apprentice is given a
program of assignments according to a predetermined schedule which provides for efficient
training for the trade skills. This method is appropriate for the training of crafts, trades and
technical areas, especially when proficiency in a job is as a result of craftsman, a machinist, a
printer, a tool maker, a pattern designer, a mechanic etc.

c. Vestibule training
It involves classroom training imparted with the help of equipment and machines identical to those
in use at the place of work. Theoretical training is given in the classroom, while practical work is
conducted in the production line. It is often used to train clerks, bank tellers, inspectors, machine
operators, typists etc.

d. Simulation
It is an extension of vestibule training. The trainee works in closely duplicate real job conditions.
This is essentially in cases in which actual on the job practice is expensive, might result into
serious injuries, a costly error or destruction of valuable material or resources e.g in aeronautical
industry.

e. Coaching
f. Mentoring
Other methods include:

1. An assistance position
2. Committee or board membership
3. Delegation
4. Refresher training
5. Orientation or induction.

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6.3.2 External Training Or Off-The-Job Training
On the job training methods include:

a. Lectures
These are formally organized talks by an instructor on specific topics. This method is useful when
philosophy, concepts, theories and problem solving have to be discussed. The lecture can be used
for very large groups to be trained in a very short time. These are when technical or special
information of a complex nature is to be imparted. The lectures are supplemented with discussion,
case study, films and role playing.

b. Case studies
In this case account of a real, or fictional situation is given and the trainees are asked to suggest answer to a

number of practical and theoretical issues raised by the account. The method is useful for giving participants

an opportunity to experience problem solving in a relevant context.

c. Role playing
The aim of role playing is to create a realistic situation and then have the trainees assume the parts
(or role the specific persons so that a situation). The aim is to develop trainees‟ skills in areas like
leadership and delegation. The trainees may get a written description of an organizational problem
and present his/her findings and recommendations in a discussion with other trainees.

d. Managerial games
Web computerized management games, trainees are divided into five or six person groups, each of
which competes with the others in a simulated market place. Each group must decide, for example
(1) how much to spend on advertisement (2) how much to produce (3) how much inventory to
maintain (4) how many of which product to produce.

Others include:

a. Brainstorming
b. Sensitivity
c. Assertiveness training
d. Transactional analysis
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6.4 MANAGEMENT DEVELOPMENT
Management development is futuristic and is concerned more with educative activities that help an
employee to improve their reasoning to enhance their ability to understand and interpret knowledge. It
focuses on employee‟s personal growth. It is an attempt to improve managerial performance by
imparting knowledge, changing attitudes or increasing skills. The ultimate aim is to enhance the future
performance of the company itself.

The general management development process consists of (1) assessing the company strategic
needs, (2) appraising the managers‟ current performance and then, (3) developing the managers.
Some development program aims to fill specific positions such as the CEO. This usually involves
the succession planning. Succession planning refers to the process through which a company for
and fill senior level openings. The typical succession planning process involves several steps:

a. Anticipate management needs based on strategic factor such as planned expansion.

b. Review your firms‟ management skills inventory.
c. Create replacement charts
d. Management development can then begin

6.4.1. Need For Management Development

For a business organization to remain competitive and successful, it has to develop the potential of
all those who are in the managerial position or all those who have the potential of becoming
managers. The following are some of the reasons as to why management department is necessary:

Society is facing a rapid change of technology and social change. Management personnel
have to be developed as they have to tackle problems arising out of introduction of
automation, intense market competition, growth of new markets, enlarged labour
participation in management and greater interest being taken by the public and the
government in various activities of the business.
Business and industrial leaders are increasingly recognizing their social and public
responsibilities which call for a much broader outlook on the part of management,.
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 Managers have to be developed for handling problems arising out of increasing size and
complexity of the organization.
Management labour relations are becoming increasingly complex.
To understand and adjust to changes in social-economic forces, including changes in the
public policy and concept of social justice, industrial democracy, problem of ecology,
ekistics and culture.
Objectives of Management Development

The following are the objectives of management development:

1. To assure the organization of availability of required number of managers with the required
skills to meet the present and anticipated future needs of the organization.
2. To sustain good performance of managers throughout their career.
3. To improve the performance of managers at all levels in the jobs that they hold now.
4. To encourage managers to grow as persons and in their capacity to handle greater
responsibility.

6.4.2 Methods Of Management Development

There are many methods of developing employees:

1. Formal education
The employee goes through formal education which enables them to acquire academic certificate
e.g. diploma, degree, masters etc. On the other hand employees can be taken through educational
institutions where they can be able to acquire vocational certificate.

2. Consultants
Sometimes organizations make use of consultants who provide training on the latest Development
in areas of work. Consultancy training usually takes a few days because of the cost involved.

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 3. In-house
Sometimes organizations develop in-house training facilities so that they can train their workers on
specific functions which are relevant to the jobs they are doing. It is common in banking sector.

4. Outdoor training
This involves taking the workers outside the organization or picnic where they learn leadership
and team building.

5. Job rotation
In this, workers move from one job to another so that they can develop a variety of skills. Job
rotation also reduces boredom of workers.

6. Role playing
A role means the pattern of actions of a person during his interactions with others. Role playing is a
training method under which participants assume certain roles and enact them spontaneously under
classroom conditions. It tends to emphasize feelings and relationships between people. In a role
playing session, participants are assigned the role by turns while two or more trainees enact the role
assigned to do them, others act as observers and critics.

7. Case study
This was developed by Harvard Business School of the U.S.A. A case is a written account of an
actual organization situation in its historical environmental, operational, financial and human
aspects. It enables the employee to pinpoint the problems, to identify and analyze the causes
thereof, to suggest alternative solutions and to indicate which of the alternatives would be the best
under the prevailing conditions.

8. Committee assignment
A committee is a specific type of meeting in which members as a group are delegated authority with
regard to any particular problem. The authority is I n terms of the right to vote which is granted to each
member irrespective of his subordinate are both made members of the committee, they will have equal
authority in the deliberation of the committee.

Other methods include:

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 1. Understudy methods ( learn to succeed his boss)
2. Planned progression (following a clear career path)
3. In basket
4. Business games
5. Creating of an assistance
6. Committee assignment
7. Syndicate methods ( different members of different departments discuss)
8. Sensitivity training ( managers discuss one another in an open informal forum)

6.6 CAREER DEVELOPMENT PROGRAMMES

There are five career development programmes that companies and individual employees can use

to develop themselves;
1. Personal Career Planning Programmes - Do personal SWOT analysis for elf
understanding. Setting of smart goals. Description of how one will achieve career goals.
Doing self-assessment and learning about one-self.

2. Corporate Universities - Companies develop in-house development centres. Setting of

corporate campuses. Developing special programmes to support employees.
Establishment of virtual universities and doing web based learning.

3. Action Planning - Employees develop the action plans to accomplish various goals.
Employees are engaged on full time bases to analyze and solve problems in departments
other than their own. When they work in teams, the results are best.
4. Planned learning - Company sets aside budget for employee learning. Employees can use own

resources. Employees choose career courses and then they pursue them.

5. Outdoor Learning - Employees learn in seminars, conferences or from web based

programmes.

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6.7 CAREER DEVELOPMENT INTERVENTIONS
The following description of several, widely used career development interventions can be used
to stimulate discussion on various career development practices.

Alternative Career Paths

One approach to alternative career pathing involves incorporating the skills employees already have with
what their hearts want to do. It can involve changing career and lifestyles for more meaningful and fulfilling
work arrangements. Creating alternative career paths often involves incorporating other career development
interventions, such as flexi-time or job enrichment. Alternative career paths should not be confused with
dual career paths, which is described later.

Career Pathing
Career pathing, also called career tracking, is a process of outlining an individual career plan,
usually within an organization. Career pathing is most often used as a part of management training
and development, although individuals may develop their own career track, either alone, or in
conjunction with a career coach.

Employees follow pre-determined steps along the career path to develop expertise in managing
different types of organizational situations and to reach their career goal. Periodic checks evaluate
progress, as well as determining what further training or experience is needed to move to the next
step. Career pathing often uses several other career development interventions as part of the
process. These include cross-training, job rotation, job enrichment or enlargement, and temporary
assignments.

Dual Career Tracks

Dual career tracks should not be confused with alternative career paths. Creating dual career paths
involves preparing employees to succeed and be rewarded without necessarily being on a management
or vertical organization career path. In other words, ``up'' is not considered the only way employees
can grow and advance within the company. The establishment of dual or multiple career tracks has
proven to be an effective way to retain and motivate valued
employees.
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Management can be an attractive career alternative for many employees, but it is not for everyone.
This may be particularly true for many technical or creative workers. The number of people
managed often distinguishes managerial levels, but under the dual career track plan, individuals
apply their expertise (like managers) to tasks of greater complexity and impact within their
specialty field.

For example, they may make recommendations in a wide range of business areas, participate in
high level decisions, and act as mentors to other employees. The interest in dual or multiple career
tracks is likely to grow as more organizations do away with formal management titles and
establish team structures.

Career Coaching/Counseling
Career coaching frequently involves helping individuals prepare for a career change or helping
employees advance in their existing jobs. From the employee's view, career coaching consists of
evaluating interests, values, work styles, and skills. From the organization's view, it consists of
matching employee talents with organizational needs, recruiting and retaining talent in the company,
identifying training and development needs, and assisting employees in specifying and locating new
employment opportunities within the organization.

Cross-Training
Cross-trained workers are taught skills outside their current job assignment so they can be called
upon to perform a variety of tasks as the need arises. Many workers and supervisors find
themselves cross-training each other, just to make the day-to-day work life manageable. As a
career development intervention, however, companies put into place a formal program of cross-
training.

Cross-training helps organizations to balance workloads so everyone is busy, and allows the company to

respond quickly to employee absences. It also allows employees and departments within an organization to

gain a better understanding of the ``big picture'', and to improve

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communications and relations. Employees who are cross-trained are more valuable to the
company, and more marketable in the work world overall.

Flexitime
Flextime is one of the most popular and most widely known career development interventions. Flexitime
gives employees the opportunity to balance their work and personal lives by restructuring the typical
workday to accommodate individual employee schedules. Employers who offer flexitime often report
decreased use of paid leave, decreased tardiness and increased productivity. Other benefits for the employer
include a low-cost method of providing personal time off and extending service hours without overtime pay.
This career development intervention is popular with employees who have extended families or young
children, who may be facing ``burn-out'', and those seeking further education or pursuing second careers.

Flexitime allows employees to set their own schedules, within limitations set by management. For
example, workers may adjust their starting and ending times, but are required to be at the office during
management specified core or peak hours. Working four ten-hour days is an example of a compressed
workweek form of flexitime. Flexitime may also be combined with other interventions, such as job
sharing, job rotation, and phased retirement.

Job Rotation
Job rotation is the systematic movement of employees from job to job within an organization, as a
way to achieve many different human resources objectives : for simply staffing jobs, for orienting
new employees, for preventing job boredom, and, finally, for training employees and enhancing
their career development.

Job rotation is often used by employers who place employees on a certain career path or track,
usually for a management position, where they are expected to perform a variety of duties, and
have a variety of skills and competencies.

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Job rotation is often confused with crosstraining. While both interventions perform essentially the
same service of providing employees with a varied set of skills, job rotation goes beyond this.
Besides being used as a means of management training, job rotation can also be used as a form of
job enrichment, by adding increased responsibilities, increasing challenge, and reducing boredom
or burnout.

Job Enlargement
Job enlargement is defined as increasing the number of tasks a worker performs, with all of the
tasks at the same level of responsibility, and is also sometimes referred to as ``horizontal job
loading'' . Be careful not to confuse job enlargement with job enrichment, which will be discussed
later.

Job enlargement and job enrichment can both be used with plateaued workers or workers who are
experiencing burnout, and with especially high achievers. These two interventions may be used in
conjunction with each other, or with other career development interventions such as job rotation and
temporary assignments. Both interventions provide the employee with increased skills, making him or her
more valuable to the company, or more marketable in the job search.

Job Enrichment
Job enrichment involves increasing a worker's responsibility and control over his or her work, and
is also called ``vertical job loading''. Job enrichment allows you to expand your responsibilities or
change your role to develop new competencies without leaving your current position or the
organization altogether.

Job enrichment is also used as an effective motivational technique. According to this perspective, if a
job provides a sense of responsibility, a sense of significance and information concerning performance,
the employees will be internally motivated to high levels of performance. The key to creating this
situation is to enrich jobs so they provide five core characteristics: task variety, task significance, task
identity, autonomy and feedback.

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Job Sharing
With job sharing, a full-time job is split between two employees. The two employees share the
duties and responsibilities, as well as the salary and benefits of the job. These two employees must
also work closely together, and with management, to co-ordinate hours, duties, and
communication among themselves and other departments in the organization. Most often, job
sharing is used by parents or adults caring for their parents, and affords employees a better balance
between their work and personal lives.

Employees pursuing further education or a second career may also use job sharing. Job sharing
offers advantages over part-time work in that employees are able to maintain their professional
status as well as some of their job benefits. One example of the advantage over flexitime situations
is that with flexitime, parents may still require extended day care hours. Benefits to the employer
include having ``two heads instead of one'', retaining valued and experienced employees, and
down time due to vacation or sickness is reduced, because the job share partners cover for each
other.

Phased Retirement
Organizations typically devote far more energy to recruiting and retraining than to phasing out
workers. Phased retirement is one intervention that workers and employers can use at the latter end of
the career cycle. During phased retirement, workers gradually taper their work schedules until they
reach full retirement. Other career development interventions such as flextime and job sharing are
typically incorporated into phased retirement arrangements. Retirees may work part time and serve as
mentors or trainers to their successors. Benefits to employees include a greater sense of control over
the transition from work to retirement, lowering the risk of economic insecurity, and more social
support. The employer benefits by retaining valued talent and minimizing labor shortages.

6.8 LEARNING ORGANIZATIONS

Learning is at the heart of a company‟s ability to adapt to rapidly changing environment.

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What Is a Learning Organization?
Learning organizations are those that have in place systems, mechanisms and processes, that are used to

continually enhance their capabilities and those who work with it or for it, to achieve sustainable objectives

- for themselves and the communities in which they participate.

The Features of learning organizations:

1. Are adaptive to their external environment
2. Continually enhance their capability to change/adapt
3. Develop collective as well as individual learning
4. Use the results of learning to achieve better results

Main Activities at Learning Organization

Learning organizations have to accomplish five main activities:
Systematic problem solving
Experimentation with new approaches
Learning from their own experience and past history

Learning from the experiences and best practices of others

Transferring knowledge quickly and
Efficiently throughout the organization

Components That Constitute a Learning Organization

1. Systems Thinking
The underlying structure and the interlinking components of each of our work systems, shape a
great deal of the behavior of the individuals who work inside of the work system. When something
goes wrong, rather than seeking someone to blame, ask, what about the work system caused that
individual to fail?
2. Personal Mastery
Personal mastery is the discipline of continually clarifying and deepening our personal vision, of

focusing our energies, of developing patience, and of seeing reality objectively. An

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organization‟s learning can only be as great as that of each of its individual members.
Consequently, personal mastery and the desire for continuous learning integrated deeply in the
belief system of each person is critical for competitive advantage in the future.

3. Mental Models
These are the deeply held pictures each of us holds in our mind about how the world, work, our
families, and so on work. Mental models influence our vision of how things happen at work, why
things happen at work, and what we are able to do about them.

4. Building Shared Vision

By shared vision is a process in which the original vision for an organization, probably determined
by the leader, is translated into shared pictures around which the rest of the organization finds
meaning, direction, and reasons for existing.

5. Team Learning
Teams, not individuals, are the fundamental learning unit in modern organizations. It is the
dialogue among the members of the team which results in stretching the ability of the organization
to grow and develop.

Why Organizations Fail To Learn?

Organizational learning failures may be caused, not by resistance to change, human nature, or poor
leadership, but by the following;
1. Lack of communication among three “cultures”.
a) Culture of Operators
b) Engineering Culture
c) Executive Culture
2. Defensive Routines
3. The Complexity Of Systems

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6.9 SELF-MANAGED LEARNING
What Is Self-Directed Learning?
Self- managed learning has been described as a process in which individuals take the initiative,
with or without the help of others, to diagnose their learning needs, formulate learning goals,
identify resources for learning, select and implement learning strategies, and evaluate learning
outcomes.

Model of Self-Managed Learning (By Mocker And Spear, 1982)

The model is a two-by-two matrix of learner and institution. The self-directed learning situation
occurs when learners--not the institution--control both the learning objectives and the means of
learning. They argued that learning can take place in three ways;

Formal learning, in which institutions, not learners, control objectives and the means of
learning.

Non-formal learning, in which learners control the objectives and institutions control the
means.

Informal learning, in which institutions control the objectives but learners control the
means of learning.

Thus, whether or not learning is self-managed depends not on the subject matter to be learned or on the
instructional methods used. Instead, self-managed learning depends on who is in charge-- who decides
what should be learned, who should learn it, what methods and resources should be used, and how the
success of the effort should be measured. To the extent the learner makes those decisions, the learning
is generally considered to be self-managed. Some self-managed learning takes place in comparative
isolation in secluded libraries. Other self-managed learners engage in more interpersonal
communication (with experts and peers) than is typically available in conventional classroom
education.

The Resources Available To Self-Managed Learners Include

Printed and audiovisual materials;
Experts interviewed by letter, telephone,

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 In person; cultural institutions such as museums, zoos, and arboretums; and associations of
all types.

Reasons for Self-Managed Learning

To gain new skills, knowledge, and attitudes to improve work performance
Due to ever changing workplace environment
Due to changes in technology

Due to stiff employment & business competition.

To improve family life and health,

To enjoy the arts and physical recreation

To participate in a hobby,
To increase their intellectual capital.

Role of Instructors/Educators In Support of Self-Managed Learning

Help the learner identify the starting point for a learning project and discern relevant
modes of examination and reporting.

Encourage adult learners to view knowledge and truth as contextual, to see value
frameworks as cultural constructs, and to appreciate that they can act on their world
individually or collectively to transform it.

Create a partnership with the learner by negotiating a learning contract for goals,
strategies, and evaluation criteria.
Be a manager of the learning experience rather than an information provider.

Help learners acquire the needs assessment techniques necessary to discover what
objectives they should set.

Encourage the setting of objectives that can be met in several ways and offer a variety of
options for evidence of successful performance.
Provide examples of previously acceptable work.

Make sure that learners are aware of the objectives, learning strategies, resources, and
evaluation criteria once they are decided upon.

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 Teach inquiry skills, decision making, personal development, and self-evaluation of work.

Act as advocates for educationally underserved populations to facilitate their access to

resources.

Help match resources to the needs of learners.

Help learners locate resources.

Help learners develop positive attitudes and feelings of independence relative to learning.
Recognize learner personality types and learning styles.

Use techniques such as field experience and problem solving that take advantage of adults'
rich experience base.
Develop high-quality learning guides, including programmed learning kits.

Encourage critical thinking skills by incorporating such activities as seminars. Create

an atmosphere of openness and trust to promote better performance.
Help protect learners against manipulation by promoting a code of ethics.

Behave ethically, which includes not recommending a self-directed learning approach if it

is not congruent with the learners' needs.

Role of Institutions And Employers In Supporting Self-Managed Learning

Have the faculty meet regularly with panels of experts who can suggest curricula and
evaluation criteria.
Conduct research on trends and learners' interests.

Obtain the necessary tools to assess learners' current performance and to evaluate their
expected performance.

Provide opportunities for self-directed learners to reflect on what they are learning.
Recognize and reward learners when they have met their learning objectives.
Promote learning networks, study circles, and learning exchanges.

Provide staff training on self-directed learning and broaden the opportunities for its
implementation.

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 Review Questions
i. How can a manager identify employee training needs?

ii. An organization can use both On -Job and Off-Job training methods, explain

further.

iii. How can an organization develop its managers?

iv. Discuss reasons for self-managed learning.

REFERENCES

Matthewman J. (2006): Human Resources Effectiveness; Jaico Publishing House

th
Michael Armstrong (2001): A handbook of Human Resource Management (8 Edition),
Millennium edition.

Wayne F. Casco (2006): Managing Human Resources: Tata Mcgraw Hill

Mamoria C.B and Gankar S.V (2003): A text book of Human Resource Management, Himalayan
Publishing House.

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 CHAPTER SEVEN

JOB DESIGN

7.0 INTRODUCTION

Learning Objectives for the Lesson

At the end of the lesion, the learner should be able to;

a. Describe the approaches to job design

b. Explain advantages and disadvantages of IT in office systems

Jobs are very important to organizations because they are the principal vehicles for the allocation of
tasks, duties and roles to the various personnel employed by the organization. Most organizations are
faced by change in one form or another. Adapting the organization to respond adequately to change, is
a growing focus of attention in business and public services. Job design is therefore a key element in
responding to changing conditions.

7.1 CONCEPT OF JOB DESIGN

The concept of job design is ascribed to Davis and Canter (1955), who saw job design as the
organization or structuring of a job to satisfy the technical organization requirements of the work and
the human requirements of the person performing the work. Their work led him to identify a number of
design problems relating to the structuring of jobs. These were:
1. Identifying job boundaries
2. Identifying the factors of work in jobs
3. Determining methods of estimating and controlling these factors
4. Developing systematic design methods
5. Developing criteria for evaluating designs

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A conclusion was drawn that in order to achieve more effective performance and greater job
satisfaction on the part of the employee, it was necessary for jobs to be meaningful to the
individual concerned.

7.1.1 Approaches to Job Design

There are five approaches to job design. These include the following;
1. Job Design and Scientific Management
The rationale of Scientific Management is where human work and effort is seen in terms of its
relationship to machines and the systems created for them. The hallmarks of job design according
to scientific management approach are as follows:
a. Maximum degree of job specialization
b. Minimal level of skill
c. Minimal level of completion of tasks
d. Minimal learning time
e. Maximum use of machines
f. Minimal degree of flexibility or discretion in the job
g. Measurability of job tasks

2. Socio –Technical Systems

Jobs are seen as arising from, and dependent on, the way in which the management approached the

technical and social features of their organization. The social system embraces both formal and informal
groups, for example, official work-teams and unofficial groupings based on friendships and other informal
relationships. The technical system encompasses tasks and production processes as well as visible features
such as plant and equipment.

3. The Quality of Working Life

The aim of quality of working life is geared towards creating conditions in which employee needs
are given a high priority compared with the requirements of technology.
In relation to tasks;
Tasks should form a coherent job
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 Tasks should provide some variety of peace, method , location and skill
Tasks should provide feedback on performance
Tasks should provide for some degree of discretion by the person concerned

In relation to job and work organization:

There should be opportunities for learning and development Some

sort of desirable future should be available

People should be able to contribute towards decisions affecting their job

Work goals should be clear and provide a degree of challenge
Adequate resources should be available to the job holders

In relation to the work context;

Industrial relations procedures should be jointly agreed between management and

employees.

Payments systems should be seen to be fair and should be related to contribution made.
Personnel policies should be fair and adequate
Physical surroundings should be reasonable

4. Job Enrichment and Job Enlargement

The term job enrichment was coined by Hertzberg (1968) to denote the vertical enlargement of a job
by adding responsibility and opportunity for personal growth. Job enlargement generally involves only
the horizontal extension of the job i.e. more of the same thing.

Hertzberg (1968) puts it thus: Job enrichment provides the opportunity for the employee‟s
psychological growth while job enlargement merely makes a job structurally bigger. In job
enrichment the emphasis in redesigning jobs is directed towards individual job satisfaction rather
than towards increased efficiency.

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 5. Autonomous Work Groups
The idea of autonomous work groups is an extension of job enrichment to a collection of jobs.
Such groups tend possess the following characteristics:
They permit full labour flexibility by job rotation

They have a considerable degree of autonomy in the allocation of work between

members

Changing Technology in Office Systems

Microelectronic technology has a number of distinctive features. It is flexible. Instantaneous and
can be rapidly modified. It is reliable, available and cheap. The new technology poses a challenge
to trade union representatives. If questions of job content, skills, training and grading are neglected
(by the union) there is a danger that a large portion of the office workforce will find itself in more
routine and less satisfying jobs. Information Technology (IT) presents opportunities as well as
threats to employees.

7.1.2 Advantages Of IT in Office Systems

i. Learning new skills
ii. Tedious jobs can be relegated to machines
iii. Possibility of upgrading
iv. Easier and quicker access to information
v. Easier means of remedying typing errors/ amending text
vi. More jobs for those who are skilled in maintenance of electronic equipment
vii. More jobs for programmers and software designers
viii. Opportunities for shorter working day/week

7.1.3 Disadvantages Of IT in Office Systems

i. Fewer jobs will be required
ii. Office workers might become machine minders
iii. Individuals might be tied to their work stations

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 iv. Health problems associated with Visual Display Units/printers, etc
v. Difficulties of learning to operate electronic machines
vi. Strong competition between employees for available jobs
vii. Loss of personal contact as information is passed by machine instead of mouth

Review Questions

a. Describe the approaches to job design

b. Explain advantages and disadvantages of IT in office systems

REFERENCES
1. Cole G.A. (1991): Personnel Management; Theory and Practice (Second Edition)
Guernsey Press
th
2. Dessler, G. (2002): Human Resource Management (9 Edition ).NJ,Prentice Hall
th
3. Filippo, E.B. (1984): Personnel management (6 edition). Ny, Mcgraw hill
4. Harriman, A. (1985): Women/ men Management, NY, Praeger

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 CHAPTER EIGHT

LABOUR RELATIONS

8.0 INTRODUCTION

Learning Objectives for the Lesson

At the end of the lesion, the learner should be able to;

a. Explain elements of employee relations

b. Discuss the forms of collective bargaining

c. Highlight institutions concerned with employee relations

d. Discuss the third party disputes resolution methods

This chapter provides a review of labour relations, also called employee relations. It deals with a summary

of the elements of employee relations and the developments in industrial relations. The chapter also looks at

the various types of third party dispute resolution in industrial relations.

8.1 THE ELEMENTS OF EMPLOYEE RELATIONS

The elements of employee relations consist of:
i. The formal and informal employment policies and practices of the organization.
ii. The development, negotiation and application of formal systems, rules and procedures
for collective bargaining, handling disputes and regulating employment. These serve to
determine the reward for effort and other conditions of employment, to protect the
interests of both employees and how the latter are expected to behave at work.
iii. Policies and practices for employee voice and communications.

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 iv. The informal as well as the formal processes that take place in the shape of continuous
interactions between managers and team leaders or supervisors on the one hand and employee
representatives and individuals on the other. These may happen within the framework of formal
agreements but are often governed by custom and practice and the climate of relationships that
has been built up over the years.

v. The philosophies and policies of the major players in the industrial relations scene; the
government of the day, management and the trade unions.
vi. A number of parties each with different roles. These consist of the state, management,
employer‟s organizations, the trade unions, individual managers and supervisors, HR managers,
employee representatives or shop stewards and employees.
vii. The legal framework
viii. A number of institutions such as the Advisory, Conciliation and Arbitration Service
(ACAS) and the employment tribunals.
ix. The bargaining structures, recognition and procedural agreements and practice which
have enrolled to enable the formal system to operate.

8.1.1 Industrial Relations as a System of Rules

Industrial relations can be regarded as a system or web of rules regulating employment and the
ways in which people behave at work. The systems theory of industrial relations, as propounded
by Dunlop (1958), states that the role of the system is to produce the regulations and procedural
rules that govern how much is distributed in the bargaining process and how the parties involved,
or the „actors‟ in the industrial relations scene, relate to one another. According to Dunlop, the
output of the system takes the form of:

The regulation and policies of the management hierarchy;

The laws of any worker hierarchy;
The regulations, degrees, decisions, awards or order of governmental agencies:

The rules and decisions of specialized agencies created by the management and worker
hierarchies;
Collective bargaining arrangement and
The customs and traditions of the work place.
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The system is expressed in many more formal or informal terms:

In legislation and statutory orders, In

trade union regulations,

In collective agreements and arbitration awards,

In social conventions,
In managerial decisions, and
In accepted „custom and practice‟.
The rules may be defined and coherence, or ill-defined and incoherent. Within a plant the rules
may mainly be concerned with doing no more than defining the status quo which both parties
recognize as the norm from which deviations may be made only by agreement. In this sense,
therefore, as industrial relations system is a normative system where a norm can be seen as a rule,
a standard, or a patter for action which is generally accepted or agreed as the basis upon which the
parties concerned should operate.

Systems theory, however, does not sufficiently take into account the distribution of power between
management and trade unions, nor the impact of the state. Neither does id adequately explain the
role of the individual in industrial relations.

Types of Regulations and Rules

Job regulation aims to provide a framework of minimum rights and rules. Internal regulation is
concerned with procedures for dealing with grievances, redundancies of disciplinary problems and
rules concerning the operation of the pay system and the rights of shop stewards. External
regulation is carried out by means of employment legislation, the rules of trade unions and
employer‟s associations, and the regulative content of procedural or substantial rules and
agreements.

Procedural rules are intended to regulate conflict between the parties to collective
bargaining, and when their importance is emphasized, a premium is being placed on
industrial peace.

Substantial rules settle the rights and obligations attached to jobs. It should be noted that in some
countries, the parties to collective agreements have tended to concentrate more

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 on procedural than on substantive rules. In countries where there is greater emphasis on fixed-

term agreements, the tendency has been to rely on substantive rules.

8.2 COLLECTIVE BARGAINING

The Industrial relations system is regulated by the process of collective bargaining, defined by
Flanders (1970) as a social process that „continually turns disagreements into agreements in an
orderly fashion‟. Collective bargaining aims to establish by negotiation and discussion agreed
rules and decisions on matters of mutual concern to employers and unions as well as methods of
regulating the conditions governing employment.

It therefore provides a framework, often in the form of a collective agreement, within which the
views of management and unions about disputed matters that could lead to industrial disorder can
be considered with the aim of eliminating the causes of the disorder. Collective bargaining is a
joint regulating process, dealing with the regulation of employment. It has a political as well as an
economic basis – both sides are interested in the distribution of power between them as well as the
distribution of income.

Collective bargaining can be regarded as an exchange relationship in which wage-work bargains take place

between employers and employees through the agency of a trade union. Traditionally, the role of trade unions as

bargaining agents has been perceived as being to offset the inequalities of individual bargaining power between

employers and employees in the labour market.

Collective bargaining can also be seen as a political relationship in which trade unions, as
Chamberlain and Kuhn (1965) noted, share industrial sovereignty or power over those who are
governed, the employees. The sovereignty is held jointly by management and union in the
collective bargaining process.

Above all, collective bargaining is a power relationship that takes the form of measure of power
sharing between management and trade unions (although recently the balance of power has shifted
markedly in the direction of management).
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Bargaining power
The extent to which industrial sovereignty is shared by management with its trade unions (if at all) depends
upon the relative bargaining powers of the two parties. Bargaining power can be defined as the ability to
induce the other side to make a decision that it would otherwise not make. Bargaining power is inherent in
any situation where differences have to be reconciled. It is, however, not an end in itself and negotiations
must not rely solely on bargaining power. One side may have enormous bargaining power, but to use it to
the point where the other side feels that it is impossible to deal with such a party is to defeat the purpose of
negations.

8.2.1 Forms Of Collective Bargaining

Collective bargaining takes two basic forms;

Conjunctive bargaining, which „arises from the absolute requirement that some agreement any
agreement may be, reached so that the operations on which both are dependent many continue‟,
and results in a „working relationship in which each party agrees, explicitly or implicitly, to
provide certain requisite services, to recognize certain responsibilities in respect of each other‟.
This form is also called distributive bargaining. It refers to the „complex system of activities
instrumental to the attainment of ones party‟s goals when they are in basic conflict with those of
the other party.

Cooperative bargaining, in which it is recognized that each party is dependent on the other and can
achieve it objectives more effectively if it wins the support of the other. Also referred to as integrate
bargaining, which is a system of activities which are not in fundamental conflict with those of the
other party and which therefore can be integrated to some degree. Such objectives are said to define
„an area of common concern, a purpose.

8.3 THE HRM APPROACH TO EMPLOYEE RELATIONS

The philosophy HRM has been translated into the following prescriptions, which constitute the
HRM model for employee relations:

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 A drive for commitment – Wining the „hearts and minds‟ of employees to get them to
identify with the organization, to exert themselves more on its behalf and to remain in it,
thus ensuring a return on their training and development;

An emphasis on mutuality – Getting the message across that „we are all in this together‟
and that the interests of management and employees coincide

The organization of complementary forms of communication, such as team briefing,

alongside traditional collective bargaining – Approaching employees directly as individuals
or in groups rather than through their representatives.
A shift from collective bargaining to individual contracts.

The use of employee involvement techniques such as quality circles or improvement

groups.
Emphasis on teamwork;
Harmonization of terms and conditions for all employees.

8.3.1 The Parties to Industrial Relations

The parties to industrial relations are
The trade unions

Shop stewards or employee representatives The

Trade Union Congress (the TUC)
Management
Employer‟s Organizations
The Confederation of British Industry
Various institutions, agencies and officers

8.3.2 The Trade Union

Traditionally the fundamental purpose of trade unions is to promote and protect the interests of their

members. They are there to redress the balance of power between employers and employees. The basis of

the employment relationship is the contract of employment. But this is

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not a contract between equals. Employers are almost always in a stronger position to dictate the
terms of the contract than individual employees.

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 applies not only to
terms of employment such as pay, working hours and holidays, but also to the way in which
individuals are treated in such aspects of employment as the redress of grievances, discipline and
redundancy. Trade Unions also exist to let management know what there will be time to time, an
alternative view on key issues affecting employees. More broadly, unions may see their role as
that of participating with management on decision making on matters affecting their members‟
interests.

Within this overall role, trade unions have had two specific roles, namely to secure, through
collective bargaining, improved terms and conditions for their members, and to provide protection,
support and advice to their members as individual employees. An additional role that of providing
legal, financial and other services to their members, has come into prominence more recently.

Trade Union Structure

Trade unions are run by full-time central and usually district officials. There may be local
committees of members. National officials may conduct industry-wide or major employer pay
negotiations while local officials may not be involved in plant negotiations unless there is a
„failure to agree‟ and the second stage of a negotiation procedure is invoked. Major employers
who want to introduce significant changes in agreements or working arrangements may deal direct
with national officials. The trade union movement is now dominated by the large general unions
and the merged craft and public service unions.

Shop Stewards
Shop stewards or employee representative may initial be responsible for plant negotiations, probably

with the advice of full-time officials. They will certainly be involved in settling

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disputes and resolving collective grievances and in representing individual employees with
grievances or disciplinary matters. They may be members of joint consultative committees, which
could be wholly or partly composed of trade union representatives.

At one time, shop stewards were the ogres of the industrial relations scene. Undoubtedly there
were cases of militant shop stewards, but where there are recognized trade unions, managements
have generally recognized the value of shop stewards as points of contact and channels of
communication.

8.3.3 International Union Organizations

The two main international union organizations are the European Trade Union Confederation and
the International Trade Union Confederation. At present neither of these makes much impact on
the UK, but this could change.

Staff Associations
Staff association may sometimes have negotiating and /or representational rights but they seldom have
anything like the real power possessed by a well-organized and supported trade union. They are often
suspected by employees as being no more than management‟s poodle. Managements have sometimes
encouraged the development of staff association as an alternative to trade unions but this strategy has
not always worked.

In some organizations the existence of an unsatisfactory staff association has provided an

opportunity for a trade union to gain membership and recognition. Staff association have their uses
as channels of communication, and representatives can play a role in consultative processes and in
representing colleagues who want to take up grievances or who are being subjected to disciplinary
proceedings.

The Role of Management

The balance of power has undoubtedly shifted to management who now have more choice over how they

conduct relationships with their employees. But the evidence is that there has been no

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concerted drive by managements to de-recognize unions. If managers in large establishments and
companies wanted to make changes they looked at ways of doing so within the existing arrangements and if
they could produce the goods they used them. Because managers found that the unions did not stand in their
way they saw no reason for getting rid of them. They argued that management‟s industrial relations
objectives are now generally to:

Control the work progress

Secure cost-effectiveness
Reassert managerial authority
Move towards a more unitary and individualistic approach

8.4 EMPLOYERS ORGANIZATIONS

Traditionally, employer‟s organizations have bargained collectively for their members with trade
unions and have in general aimed to protect the interests of those members in their dealings with
unions. Multi-employers or industry-wide bargaining, it was believed, allowed companies to compete
in product markets without undercutting their competitors‟ employment costs and prevented the trade
unions „picking off‟ individual employers in a dispute.

The trend towards decentralizing bargaining to plant level has reduced the extent to which employers‟

organizations fulfill this traditional role, although some industries such as building and electrical contracting
with large numbers of small companies in competitive markets have retained their central bargaining

function, setting a floor of terms and conditions for the industry.

8.4.1 Institutions, Agencies and Officers

There are a number of bodies and people with a role in employee relations, as described below
a. The Advisory Conciliation and Arbitration Service (ACAS)
ACAS was created by the government but function independently. It has three main statutory
duties:
i. To resolve disputes

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 ii. To provide conciliatory services for individuals in, for example, unfair dismissal
cases
iii. To give advice, help and information on industrial relations and employment
issues.
ACAS helps to resolve disputes in three ways: collective conciliation, arbitration and arbitration
services declined considerably. But the individual conciliation case load has been very heavy and
the ACAS advisory work has flourished. These are aimed at encouraging non adversarial
approaches to preventing and resolving problems at work by facilitating joint working groups of
employers, employees and their representatives.

b. The central arbitration committee (CAC)

The CAC is an independent arbitration body that deals with disputes. It arbitrates at the request of
one party but with the agreement of the other. It does not handle many arbitrations but it deals
more frequently with claims by trade unions for disclosure of information for collective bargaining
purposes.

c. Employment Tribunals
Employment tribunals are independent judicial bodies that deal with disputes on employment
matters such as unfair dismissal, equal pay, sex and race discrimination and employment
protection provisions. They have a legally qualified chair and two other members, one an
employer, the other a trade unionist.

The Employment Appeal Tribunal (EAT) - The EAT hears appeals from the decisions of industrial
tribunals on questions of law only.

8.4.2 Role Of The HR Function In Employee Relations

The HR function provides guidance and training and will develop and help to introduce and maintain
formal processes; but it does not do line manager‟s jobs for them. However, it is their role as industrial
relations specialists. They are also likely to have a measure of responsibility for maintaining participation
and involvement processes and for managing employee

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communications. They can and should play a major part in developing employee relations
strategies and policies that aim to:
Achieve satisfactory employment relationships, taking particular account of the
importance of psychological contracts.
Build stable and cooperative relationships with employees which recognizes that they are
stakeholders in the organization and minimize conflict
Achieve commitment through employee involvement and communications processes.
Develop mutuality – a common interest in achieving the organization‟s goals through the
development of organizational cultures based on shared values between management and
employees.
Clarify industrial relations processes with trade unions and build harmonious
relationships with them on a partnership basis.
In these capacities HR practitioners can make a major contribution to the creation and
maintenance of a good employee relations climate.

8.5 EMPLOYEE RELATIONS POLICIES

There are four approaches to employee relations policies have been identified by Industrial
Relations Services (1994);

Adversarial - The organization decides that what it wants to do, and employees are
expected to fit in. employees only exercise power by refusing to cooperate.

Traditional – A good day-to-day working relationship but management proposes and the
workforce reacts through its elected representatives.

Partnership - The organization involves employees in the drawing up and execution of

organization policies, but retains the right to manage.
Power Sharing - Employee are involved in both day-to-day and strategic decision
making.
Adversarial approaches are much less common than in the 1960s and 1970s. The traditional
approach is still the most typical but more interest is being expressed in partnership, as discussed
later. Power sharing is rare.

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8.5.1 Policy Areas
The areas covered by employee relations policies are:

Trade union recognition - whether trade unions should be recognized or derecognized,

which union or unions the organization would prefer to deal with, and whether or not it is
desirable to recognize only one union for collective bargaining and/or employee
representational purposes.

Collection bargaining – the extent to which it should be centralized or decentralized and

the scope of areas to be covered by collective bargaining.

Employee relations procedures – the nature and scope of procedures for redundancy,
grievance handling and discipline.

Participation and involvement – the extent to which the organization is prepared to give
employees a voice on matters that concern them.
Partnership – the extent to which a partnership approach is thought to be desirable.

The employment relationship – the extent to which terms and conditions of employment
should be governed by collective agreements or based on individual contracts of
employment (i.e. collectivism versus individualism).
Harmonization – terms and conditions of employment for staff and manual workers.

Working arrangements – the degree to which management has the prerogative to determine
working arrangements without reference to trade unions or employee (this includes job-
based or functional flexibility).

8.5.2 Third Party dispute resolution

The aim of collective bargaining is, of course, to reach agreement, preferably to the satisfaction of both
parties. Negotiating procedures, as described in the next section of this chapter, provide for various stages of
„failure to agree‟ and often include a clause providing for some form of third-party dispute resolution in the
event of the procedure being exhausted. The processes of dispute resolution as identified by IRS (2004) are
conciliation, arbitration and mediation.

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 1. Conciliation
It is an attempt, through informal discussions, to help parties in a dispute to reach their own
agreement. The third party does not recommend or decide on a settlement. One advantage of this
process is that it helps the parties to retain ownership of the resolution of the problem, which can,
in turn, engender greater commitment to its implementation. Conciliation is the most frequently
used form of third party involvement.
2. Arbitration
The parties put the issue to an independent third party for determination. The parties agree in
advance to accept the arbitrator‟s decision as a means of finally resolving the matter. There is
sometimes a reluctance to use this method as it removes control over the final outcome from
employers, employees or trade unions.
3. Mediation
Formal but non-binding recommendations or proposals are put forward for further consideration
by the parties. The use of dispute mediation is rare, partly because it is seen as a halfway house.
There is sometimes a feeling that if conciliation cannot succeed, it may be best simply to go all the
way to arbitration.

Review Questions
i. Explain elements of employee relations

ii. Discuss the forms of collective bargaining

iii. Highlight institutions concerned with employee relations

iv. Discuss the third party disputes resolution methods

REFERENCES
1. Michael Armstrong (2001), A Handbook of Human Resource Management (8th Edition),
Millennium Edition
2. Wayne F. Cascio (2006), Managing Human Resources; Tata Mgraw Hill

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 CHAPTER NINE

DIVERSITY AND GENDER ISSSUES IN THE WORK PLACE

9.0 INTRODUCTION

Learning Objectives for the Lesson

At the end of the lesion, the learner should be able to

describe the following as used in the work place;

a. Equal pay/ comparable worth

b. Two tier pay

c. Fair and square

d. Variable pay

9.1 FORMS OF PAYMENTS AT WORKPLACE 9.1.1

The Issue of Equal Pay or Comparable Worth

One of the important compensation issues of the twenty-first century is equal pay for comparable work. The

issue stems from the fact that jobs performed pre-dominantly by women receiving less pay for jobs that are

different from, but comparably worth to, those performed by men.

The issue of comparable worth goes beyond providing equal pay for jobs that involve the same duties for
women as for men. It is not only concerned with whether a female secretary should receive the same pay a
male secretary. Rather the argument for comparable worth is that jobs held by women should be
compensated the same as those held by men, if both job types contributes equally to organizational success.
However, this is continuing problem and will continue be an active issue as the percentage of women in the
workforce continues to climb.

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9.1.2 Two Tier Pay
Two-tier pay rates are recent innovation as businesses attempt to cut their labor costs. There are actually

two different pay systems for the employees. Some plans continue this difference for long time periods and

others set a limit – such 90 days or longer before they become equal.

9.1.3 Fair and Square

What can HRM professionals do to make their compensation program achieve wage parity while
avoiding federal scrutiny for a defective gender-neutral system? Although employee‟s use different
techniques to keep salaries fair and square, equitable compensations have several common features
such as salaries based primarily on the industry market pay rates, not on some employee‟s value to the
firm based on an arbitrary evaluation system.

Another common feature is system in which skills, performance, and tenure are objectively evaluated
and measured. This allows HRM to monitor the process and control adherence to the approved
procedures. The results should be accepted as not deviating from the process. The last common feature
of a gender-neutral compensation system is a regular review for any irregularities caused by cutbacks,
transfers, mergers, or sudden increases in recruiting. When irregularities are uncovered, they are
immediately corrected.

The corners of all companies fair and square compensation system requires continuous
adjustments. The gender system goal is to be able to highlight any unfair treatment for all
employees, even between two white male employees.

9.1.4 Variable Pay

The twenty-first century is witnessing the hottest trends in HRM. It is the redesign of compensation,
packages to support organizational goals and objectives. This is the result of haphazard compensation plans
with not coherence policies. The answer to these problems is the total compensation plan. In such a plan,
employees receive a base pay for core duties, individual and small group achievement pay, and variable pay
that is based on the company‟s success.

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Total compensation plans are not uniformly successful. The reason is poor implementation of the
variable pay segment of the plan. The correct implementation requires careful attainable performance
goals and techniques to objectively measure those goals. This requires knowledge of the company‟s
rent performance results in key areas and comparative industry data. The variable pay program success
requires establishing employee‟s trust. If employees don‟t trust their management to tell them the truth
or fairly considered their suggestions without ridicule or punishment, variable any programs will not
work.

To make variable pay work, companies should do the following:-

a. Do not make the program complicated. Goals must clear and straightforward. One way to
accomplish is follow the example of a major national food manufacture. Employees were
asked to set specific variable pay goals for each plant. Representative group developed
very specific goals for manufacturing have the final approval employees were told the
implementation would be immediate.
b. Never underestimate the ability of employee to understand. They are at least as sharp as
the managers who created the original compensation program. When the subject is pay-
related, they listen carefully and are away of inequities, which will then share with other
employees.
c. Avoid compensation legal terms and unnecessary details. All employee communications
containing excessive financial and legal terms are very ineffective. A more effective
method is quarterly posters to update employees on the two main goals of variable pay;
operating margins and customer satisfaction. An effective poster tells what is needed and is
understood in seconds.
d. Management must acknowledge present deficiencies in the current compensation plan. The
current deficiencies are the reason for implementing variable plan. The real success is
whether margins and customer satisfaction improves as a result of employee
recommending improvement strategies.
e. The variable pay program is whether the employees perceive it a being fair and equitable.
The employees must buy-it that the variable pay plan is in their and the company‟s best
interest.

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 Review Questions
Describe the following as used in the work place;

a. Equal pay/ comparable worth

b. Two tier pay

c. Fair and square

d. Variable pay

REFERENCES
1. Flippo, E.B. (1984 ): Personnel Management (6 th Edition). NY, McGraw-Hill
2. Harriman, A. (1985): Women/ Men Management. NY, Praeger
3. Pell, A (1969): recruiting and selecting personnel. Ny, regents

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 CHAPTER TEN

GOVERNMENT INVOLVEMENT IN HUMAN RESOURCE ISSUES

10. INTRODUCTION

Learning Objectives for the Lesson

At the end of the lesion, the learner should be able to;

a. Explain the government’s HRD policy

b. Highlight the government’s role in HRD

c. Outline the government institutions involved in HR issues

The government of Kenya has been involved in human resource issues in both the private sector and
the public sector. For instance, the development of the Human Resource Development (HRD) Policy
for Public Service of Kenya was necessitated by the challenges that were faced in training and capacity
building processes in the Kenya Public Service since independence. Training was hitherto guided by
administrative circulars, human resource General letters and various guidelines issued to the Service
from time to time.

10.1 HUMAN RESOURCE DEVELOPMENT POLICY

The formulation of a comprehensive HRD Policy was therefore part of the Government efforts to improve
efficiency and effectiveness in service delivery. In the past Kenyan Public Service had paid scanty attention
to Performance Management. As part of the reform initiatives undertaken by the Government, Performance
Management has taken centre stage as a priority area for the Government in its efforts to respond to the

needs of the Public in terms of service delivery.

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Role of the government in human resource development
The government provides funding of training and capacity building programmes in the Public Service.
It also ensures optimal staffing levels in the service, recruiting human resource on the basis of
knowledge, skills and experience, and providing the cases for succession management. It emphasizes
demand driven and cost effective training that responds to service delivery requirements and seeks to
facilitate career growth in the Public Service.

10.1.1 Government Institutions Involved In Human Resource Issues

The government is involved in the HR issues through the Ministry of Labour. Its Core functions
include:

1. Promotion of harmonious industrial relations in the country.

2. To ensure compliance with labour laws, international labour standards and codes of
practice
3. as well as review of labour standards and domestication of international conventions
and
4. recommendations
5. Promotion of best practices of occupational safety and health in all workplaces
6. To plan, development and promotion of effective utilization of human resources
7. Judicial determination of trade disputes and registration of Collective Bargaining
Agreements
8. (CBAs)
9. Facilitation of the development of micro and small enterprises.
10. Provision of labour market information
11. To ensure availability of skilled manpower for the industry
12. Promotion of productivity improvement
13. Provision of social security through National Social Security Fund (NSSF)

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Industrial Court of Kenya

The Industrial Court of Kenya has been one of the country's pillars for maintenance of industrial
peace. It was established under the Trade Dispute Act, Cap. 234, (Repealed) and Laws of Kenya
and implement the following mandate:

1. To hear and determine industrial disputes that are referred to it by the Minister for Labour;

2. To register Collective Bargaining Agreements (CBAs) between employers and workers;

3. To promote the spirit of tripartism between Government, employers and employees.

Review Questions

i. Explain the government’s HRD policy

ii. Highlight the government’s role in HRD

iii. Outline the government institutions involved in HR issues

REFERENCES
Matthewman J. (2006): Human Resources Effectiveness; Jaico Publishing House
th
Michael Armstrong (2001): A handbook of Human Resource Management (8 Edition),
Millennium edition.

Wayne F. Casco (2006): Managing Human Resources: Tata Mcgraw Hill

Mamoria C.B and Gankar S.V (2003): A text book of Human Resource Management, Himalayan
Publishing House.

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 CHAPTYER ELEVEN

JOB SATISFACTION AND MOTIVATION TO WORK

11.0 INTRODUCTION

Learning Objectives for the Lesson

At the end of the lesion, the learner should be able to;

a. Explain reasons for pay performance plans

b. Discuss types of incentive plans

c. Elaborate on various incentives for senior managers

Today‟s businesses are forced to undergo constant restructuring due to increased competition. The
empowerment of employees to work faster and smarter has become increasingly important. However, the
success of employee empowerment depends upon organization‟s ability to motivate this extra effort.
Motivation may be defined in terms of some performance behaviour. Motivation is an emotive state causing
persons to want or need something intensely enough to put forth the necessary effort to achieve it. This
drive to achieve is usually goal-directed, and becomes more complex when dealing with groups or teams.
What drives us as individuals to achieve is often difficult to decipher, as our needs and desires will vary
over time.

11.1 MOTIVATION
Motivation is a process in which people choose between alternative forms of behaviour in order to
achieve personal goals. The goals sought by individuals can be relatively tangible, such as
monetary reward or promotion, or intangible such as self-esteem or job satisfaction. The rewards
available to an individual are generally classified under;

Intrinsic rewards – those that derive from the individuals own experience e.g. sense of
achievement or a feeling of self-esteem.

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 Extrinsic rewards – those conferred on a person from outside e.g. a pay rise or
promotion.
Managers find reliable links between individual motivation and effective performance.
There are many theories of motivation. The human relations school believes employees want to do
a good job. Although their individual may differ, they would be motivated to achieve their
potential.

Hygiene factors include working conditions, pay, company policies, and interpersonal relations.
When hygiene factors are only factors present in the job, they do not motive employees, they only
satisfy them. However, if they are not present, the work then becomes dissatisfying. To
motivation, the employee needs the presence of the hygiene factors plus the motivators. The
motivators are higher-level employee needs of achievement, recognition, responsibility and
opportunity.

However individuals act to obtain these goals, they must believe their behaviour will lead to their
attainment. A crucial element is how valuable the goal is to the individual. The more value the individual
attaches to the goal, the more effort the individual will expend to achieve the goal.
The three basic needs are achievement, affiliation, and power. The need for power is defined as

controlling others, assuming responsibility for others and having authority over other.

Employee Organization Individual

11.1.1 Reasons for Pay Performance Plans

Many organizations have implemented incentive plans for a variety of reasons: increasing labour
costs, more global competitive markets, faster technological advances and greater needs for
productivity quality. In the twenty first century, incentives plans and focusing on pay-for-
performance, improved quality and productivity. By using pay for performance managers are
finding employees improve their job performance.

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Incentive plans may not always lead to organization improvement for two main reasons. First
some companies feel that incentive plans are in conflict with a team-oriented approach. Second
management may have to give sufficient attention to the design and implementation of incentive
programs.

The success of pay for performance system mainly depends on the organization. If the
organization has a strong corporate culture, high morale, and employees trust the management,
then there is a stronger probability of success. Team incentives should not be used in situations
where a few individuals are likely to maximize their output at the expenses of their coworkers.
Group incentives should reduce rivalry and promote cooperation and concern for all members in
the units overall performance.

11.2 TYPES OF INCENTIVE PROGRAMS

There are three important point related to the effective administration of incentive plans:
a. Incentives. Incentives systems are effective only when management is willing to pay
incentives based on differences in individual or team performance.
b. Motivation. Incentives must be large enough to motivate and reinforce exceptional
performance.
c. Standards. Incentive systems must be based on clearly defined and accepted performance
standards effectively communicated to employees.
There are a number of types in incentive programs, which are described in the following sections.
1. Individual Incentives
Many factors are involved in the design of an individual incentives plan. For example, most incentive plans
are designed to set production rates according to the technology used. Incentive payments for hourly
employees are based upon the number of units produced, by the achievement of specific performance goals,
or by productivity improvements in the organization. Who would be including in incentives? The incentives
system should be designed with a focus on specific employees in mind such as production middle managers,
sales people, engineering, or senior executives. Most organizations are different incentives systems for
different levels.
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How will performance be measured? The decision whether to use an individual, team or
organization wide incentive is critical. The major factor is the extent to which results can be
measured at the individual or team level, whether the individual‟s contribution is measured, and
the effect on teamwork among unit members.

2. Piecework
One of the oldest most commonly used incentives plans is piecework. In a straight piecework plan, the
employee receives a certain amount of pay for each unit produced. Compensation is then determined by the
number of units produced during a specific time period. Employees often earn as much as 55 per cent more
than their base pay in a piecework system. The differential piece plan enables employees whose production
exceeds the standard output to receive a higher rate of all of their work than the rate rapid to those who
perform below the standard.

The piecework systems are more like succeed in repetitive jobs where units of output can be
reliably measured, when quality is less critical, and with a continuous flow of work.
Unfortunately, it is not effective in jobs that do not have reliable standards of performance. One of
the weaknesses of piecework is that it may not always be an effective motivator. If workers find
that increases in output bring disapproval their fellow workers, then the need for friendship and
approval may outweigh the incentive to produce more. Secondly, the standards for piece rates
often tend to change, because employees discover ways to do the work in less than standard time.

3. Individual Bonuses
Individual bonuses are an incentive payment that supplements the basic wage. It has the advantage
of reward workers with more pay for higher performance effort, yet still providing a basic
paycheck.

4. Team Bonuses
Team bonuses are usually used when the contribution of an individual employee is either not measurable or

when performance depends on team cooperation. Which work process requiring

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more teamwork and coordination among workers, team bonuses are very popular. Most team
bonus plans are tied to such measurable outputs as company profit, improvements in quality, or
cost reductions. Team bonuses, like individual incentives plans, often improve employee
motivation. This allows the organization to:
Reward team productivity.

Compensate team members for new skills.

Increase overall performance

Incentives for Management Employees

Merit raises represent one of the most commonly used incentives systems for managerial level
employees. They are used to motivate managerial, sales and professional employees where raises
can be directly related to performance. Merit increases are usually separate from the person‟s base
pay.

1. Sales Incentives
Sales incentive plans are often based on the same factors as individual incentive programs. The
drive needed in selling demand highly motivated sales personnel. The competitive nature of
selling underlines the widespread use of sales incentives. Sales incentive plans often share many of
the characteristics of individual incentives, but there are also unique requirements. Sales output
measures can usually be establishes as the level of sales (in shillings or units), but sales people are
not paid just on sales volume. They often provided other services, such as customer training,
product development, consultation and new accounts, which involve complex measures of
performance.

A critical first step for a sales incentive program then is to determine the most important performance

factors. In general, sales performance maybe measured by the total sales volume and by their ability to
generate new accounts. If measures are used such as promoting new products and providing customer

service, then more complex measures may be used.

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Setting performance standards for sales are not without problems because sales performance is often
affected by external factors beyond the control of the salesperson. There are economic and seasonal
fluctuation, differing levels of competition, changes in demand, and more lucrative sales territories
which can all affect an individual‟s sales level. Because sales volume along not be an accurate an
indicator of the effort salespeople have expanded many organizations set quotas based on sales
potential. In designing an incentive plan for sales people, there are also the problems of rewarding
extra sales effort and compensating for promotional activities that may not impact directly on sales.

2. Managerial and Executive Incentives

There is research to support the use of incentive systems for executives, which are usually related to
the strategic goals of the organization. Incentives for managerial and executives are believed to have an
impact upon organizational performance although there is little data to support this belief. In most
cases executive incentive plans are linked to net income, return on investment, stock price, or total
dividend paid. These incentives are usually paid in the form of bonuses and stock options. CEO‟s often
receive over half of their compensation from incentives resulting in criticism of what they actually
contribute to the corporation.

Pros and Cons of Executive Bonuses

Are top executives really worth the exorbitant salaries and bonuses they receive? The answer
usually depends on whom you ask. Corporate compensation committees feel that big bonuses are
necessary as a way to reward superior performance as a „fact of business life‟ reflecting market
trends for CEO compensation.

However, as previously noted, strong criticism is being voiced regarding the high salaries and
bonuses being paid to senior executives. Others point out that some critics often find executive
may receive record bonuses even though their organizations are performing poorly and employees
are being asked to take wage and salary cuts or layoffs.

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 3. Executive Perquisites
In order to recruit and attract top people executives usually receive special benefits termed perquisites.
Perquisites or perks are recognized by executives as important in the organization, the extras used to
supplement basic compensation. Perks also serve as status symbol to both insiders and outsiders. Perquisites
also provide tax savings to executives, because most perks are not taxable as income (although this is
constantly changing). The more common perks range from company care special parking expenses
accounts, plush offices chauffeurs, country club memberships, special vacations, physical exams an
executive dining room, and liability insurance. Perks are an entrenched feature of executive compensation.

4. Team profit Sharing Plans

There has been an increase in the number and type of team or group incentive plans. Team
incentive plans are becoming preferable to individual incentives as a result of the increasing use of
team-based approaches. An effective team incentive plan is based on the same factors an
individual plan is based on the same factors as individual plans.

The measures differ in that a team plan is based on some measure of team productivity. Team plans are
particularly effective when team work is essential and when the essential system is trying to involve
the level of participation. Team plans are used when jobs are so interested that it is difficult (or
impossible) to identify individual output measures. The size of a team usually ranges from 5 to 20
people, depending upon the task and the required coordination between team members. The smaller the
team, „the higher the identification on team performance‟. There is increasingly evidence that team
incentives increase productivity.

5. Gain sharing Plans

Gain sharing plans try to reduce the amount of labour required for a given level of output (cost
saving) or increase the output for a given amount of labour (productivity increase). The method for
determining the standard production rate and the incentives rate must be clearly defined. Gain
sharing plans are based on the assumption that better cooperation among workers and between
workers and manages will result in greater effectiveness.

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 Review Questions

a. Explain reasons for pay performance plans

b. Discuss types of incentive plans

c. Elaborate on various incentives for senior managers

REFERENCES
Matthewman J. (2006): Human Resources Effectiveness; Jaico Publishing House
th
Michael Armstrong (2001): A handbook of Human Resource Management (8 Edition),
Millennium edition.

Wayne F. Casco (2006): Managing Human Resources: Tata Mcgraw Hill

Mamoria C.B and Gankar S.V (2003): A text book of Human Resource Management, Himalayan
Publishing House.

th
Dessler, G. (2002): Human Resource Management (9 Edition ).NJ,Prentice Hall

th
Flippo,E.B. (1984): Personnel management (6 edition ). NewYork, Mcgraw hill

Pell, A (1969): recruiting and selecting personnel. Ny, regents

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