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HUMAN RESOURCE MANAGEMENT: An integrative approach

BENJAMIN MWANZIA MULILI

DEDICATION

To My wife Emily Ndinda And my children Stephen Ndua Judah Kiilu & Esther Ndanu

ACKNOWLEDGEMENTS
The process of writing this book was an uphill task. However, several parties assisted me in different ways. It is therefore my great pleasure to acknowledge their assistance. Nevertheless time and space do not allow me to mention all of them. First and foremost, I thank God for His blessings towards my life. The fear of the Lord has been the source of my strength, knowledge, motivation, and the hope for achieving my goals. Secondly, I wish to acknowledge the Catholic University of Eastern Africa for being a caring employer and for providing me with the opportunities to excel in my career. Numerous individuals participated in the process of reviewing this book. I wish to thank the many students of Catholic University of Eastern Africa who provided useful suggestions and examples. Specifically, I would like to acknowledge the contributions of the following MBA students. Christine Mulili, Felistus Chepchirchir, Teresa Kariuki, Wekesa Isabella, Mark Karobia, Benard Gitangi, Mumbua Kioko-Ngalukya and Peter Kamau However, any mistakes in this first edition are entirely my own and blame cannot be projected to any other person. My family members, especially my dear wife Emilly Ndinda, were there for me all the time. Thank you for being unconditionally supportive to me. To other parties that assisted me in one way or another, thank you so much and God Bless!

TABLE OF CONTENTS
Dedication.. Acknowledgements. UNIT 1: Ch. 1. Ch. 2. Ch. 3. Ch. 4. Ch. 5. UNIT 2: Ch. 6: Ch. 7: Ch.8; UNIT 3: Ch. 9: Ch. 10: Ch. 11: UNIT 4: Ch. 12: Ch. 13: UNIT 5: Ch. 14: Ch. 15; Ch. 16: UNIT 6: Ch. 17: Ch. 18 Ch. 19 UNIT 7: CH. 18: Ch. 19 UNIT 8: Ch. 19: Ch. 20: Ch. 21: NATURE AND SCOPE OF HUMAN RESOURCES MANAGEMENT. Role and functions of human resources management.1 Challenges of modern human resource management. Creation and management of a HR unit.. Human resource policies. Human resource information systems. PROCUREMENT Fair employment practices Human resource planning.. Recruitment and selection. EMPLOYEE TRAINING AND MANAGEMENT DEVELOPMENT Employee training.. Management development. Career Development.. COMPENSATION ADMINISTRATION Job evaluation techniques. Compensation of employees and managers. INTEGRATION Directing employees Management of conflicts.. Labour relations. MAINTENANCE Employee health and safety. Human resource productivity. Performance appraisal SEPERATION Employee separation Employee counselling. HR RESEARCH, DEVELOPMENTS AND THE FUTURE Emerging issues in human resource management.. Global human resource operations Organisational development and change--------

CHAPTER ONE:

NATURE & SCOPE OF HUMAN RESOURCES MANAGEMENT


Chapter objectives This chapter introduces learners to the: Definitions of management and human resource management. Functions of human resource managers. Importance of human resource management. The shift from personnel management to human resource management. Differences between personnel management and human resource management. INTRODUCTION The discipline of human resources management is a part of the broader field of management. Therefore, for one to fully understand and appreciate the study of human resources management, it is necessary to have a good understanding of the field of management. DEFINITION OF TERMS Management There is no universally accepted definition of management hence different authors and practitioners have put forward different definitions. Many of the definitions emphasise one or a few aspects of the discipline. Some of the definitions, which have received wide acceptance in academic and professional circles, include the following. Management is a branch of social sciences that deals with establishing and achieving various objectives (Kaila, 2003). Peter Drucker (1955), a widely read writer on general management says that management is the organ of society specifically charged with making resources productive. Management is the planning, organizing, leading, and controlling of human and other resources to achieve organizational goals effectively and efficiently. An organizations resources include assets such as people and their skills and knowledge; machinery, raw materials, computers and information technology, and financial capital (Jones & George, 2003). Harrold Koontz & ODonnel (1984) define management as the creation and maintenance of an internal environment in an enterprise where individuals, working together in groups, can perform efficiently and effectively towards the 5

attainment of group goals. The five essential managerial functions are planning, organizing, staffing, directing and leading and controlling. The existence of so many different definitions of management implies that the field of management is too pervasive for any one definition to suffice. Any definition of management must include three common factors namely goals, limited resources, and people Thus management is the process of achieving organisational goals using limited resources and by working with and through people. Human Resources Management According to Mathis and Jackson (2000) Human Resources Management deals with the design of formal systems in an organization to ensure the effective and efficient use of human talent to accomplish organizational goals. In an organization, the management of human resources means that they must be recruited, compensated, trained, and developed. Flippo B.E. (1976) uses the term Human Resources Management synonymously with Personnel Management. He defines Personnel management as the planning, organising, directing, and controlling of the procurement, development, compensation, integration, maintenance, and separation of human resources to the end that individual, organisational, and societal objectives are accomplished. This definition emphasises the functions performed by human resource managers. In less academic terms, one would define human resource management as an activity that deals with getting people, preparing them, activating them, and keeping them. The weakness of this definition is that it does not realise that the same people who get into an organisation will need to leave it in one way or another. Human resource management is concerned with the "people" dimension of management. Indeed every organisation is made up of people, and therefore acquiring their services, developing their skills, motivating them to high levels of performance, and ensuring that they continue to maintain their commitment to the organisation are essential elements for achieving organisational objectives. Every manager or team leader is concerned with the way in which people are employed as well as with what they need to be doing, and how well. The success of any organisation- whether it is the government or it is involved in business, education, health, recreation or social action- depends heavily on its ability to attract and keep good people. Organisations that are able to acquire, develop, stimulate, and keep outstanding workers will be both effective (able to achieve their goals) and efficient (using the least amount of resources necessary). Those organisations that are ineffective or inefficient risk the hazards of either stagnating or going out of business.

FUNCTIONS OF HUMAN RESOURCES MANAGERS Human Resources Managers perform two (2) major functions, namely: 1. General Management functions which include Planning, Organising, Directing and Controlling 2. Specific Human Resource Management functions. These are Procurement, Development, Compensation, Integration, Maintenance, and Separation

1.

GENERAL MANAGEMENT FUNCTIONS

A)

PLANNING

Planning is the process of formulating future courses of action. It is like taking a walk into the future and deciding; what will be done; when it will done; who will do it; how it will be done; How to measure the results; An illustration is as below: What will be done: Introduction of a new product When this will be done: By December 2007 Who will do it: Research & Development Department How: Through continuous Research How to measure Results: By evaluating whether the product will have been introduced by December 2007 The need for planning derives from the fact that organisations are goal-seeking entities; planning is a tool for identifying these goals and finding ways to achieve them. Planning is important because it provides employees with a sense of direction, shows the kinds of tasks they will be performing and explains how their activities are related to the overall goals of the organisation. Without this information, organisational members would not know how to utilise their time and energies effectively. Managers develop short term, medium term, and long term plans at the various levels of management. Planning is also a pre-requisite for the other managerial functions of organising, directing and controlling. It allows managers to co-ordinate the activities of their employees towards pre- determined goals. It also becomes the basis for monitoring and evaluating actual performance. Effective managers spend a substantial portion of their time planning. The process of establishing goals for the entire organisation should include the active and enlightened participation of the human resource manager with his/her expertise in the area of human resources. The human resource manager should 7

translate the strategic plans of the organisation into the number of people needed to accomplish them. Whenever functional heads participate in the strategic planning process, they should translate the plans in relation to the requirements from their departments. This applies to the heads of finance, marketing, engineering and so on.

B)

ORGANISING

Once workable plans are developed, managers should organise their people and other resources in some logical manner so as to carry out the plans. Organising involves: Acquiring the necessary resources Dividing organisational activities into groups /departments such as the Purchasing department, Production department, Marketing department, Accounting department, Human Resource department, and General administration department among others. Assigning people to various groups Defining working relationship among various groups. Organisational activities are often divided into various groups/ departments and people with specialised knowledge and interest are assigned these tasks. Formal and informal relationships among group members are specified to facilitate effective communication and working relationships.

C)

DIRECTING

Most managers spent a great deal of their time directing the efforts of organisational members. These functions includes: Motivation Leadership Communication Co-ordination

MOTIVATION
Motivating employees is an important task for managers because they rely on employees to get the work done. People join and work in organisations to satisfy their needs; organisations lead people to carry out the activities needed to achieve their goals. Motivation involves finding the incentives that satisfy the needs of employees. Different people are motivated by different things such as: Money Job security Good working conditions Appropriate supervision Friendly co-workers Recognition An interesting job Growth opportunities

LEADERSHIP
Leadership means the ability to influence the behaviour of other people in a certain direction. Managers need this ability to get employees to accomplish organisational tasks. Often managers acquire leadership skills through expert knowledge, respect, and personal charisma or by other means.

COMMUNICATION
Communication is the transmission of information from and to all levels of the organisation. Since communication is so purposive, managers should learn to communicate effectively.

CO-ORDINATION
Co-ordination is the process by which the activities of the organisational members are integrated to achieve organisational goals most sufficiently. Since most organisational activities are divided and performed by different individuals or groups, they need to be co-ordinated by managers at different levels to achieve the goals in a concerted manner.

D) CONTROL FUNCTION
This is the final stage of the managerial process and involves ensuring organisational activities are carried out as planned. There are 4 steps in controlling namely: 1) Establishing performance goals or standards e.g. profits of $20m to be achieved in the year 2007 2) Measuring Actual performance e.g. profits achieved for the year 2007 are $15m 3) Comparing actual performance with goals or standards e.g. Planned performance $ 20m Actual performance $ 15m Variance/ Deviation $ 5m 4. Rewarding excellent performance or taking corrective action such as lowering the profit expectations and training the workers. Performance standards are the yardsticks (measuring units) against which actual performance is measured. To be effective the standards must be attainable and specific. Actual performance is then compared to standards to see if the work has been done successfully. Human resource auditing is an evaluation of the Human Resource activities to find out if they are in line with the objectives of the organisation.

2.

SPECIFIC HUMAN RESOURCE MANAGEMENT FUNCTIONS i. PROCUREMENT/ACQUISITION This is concerned with obtaining the proper quality and quantity of employees that are necessary to accomplish an organisation's goals. Acquisition deals specifically with subjects such as strategic human resource planning, determining sources of recruitment, communicating with potential candidates, inviting and receiving job applications, reviewing application forms, short-listing 9

the candidates for interviews, selection through interviews, conducting pre employment tests, checking referees, giving job offers or letters of regret, and inducting and placing selected employees. In order to determine the human resource requirements of an organisation, it is necessary to establish the duties to be done so as to meet organisational objectives. The establishment of duties becomes a basis for the recruitment. Procurement must not violate laws such as Affirmative Action and Equal Employment Opportunity Act that seek to offer equal employment chances to all people irrespective of gender, race, tribe, and so on. ii. DEVELOPMENT Many managers have realised that employees do not learn new skills through trial and error or simply by watching other employees. Thus the training of employees is extremely important to every pragmatic organisation. Training has to do with the increase of skills and it is necessary for proper job performance. The importance of this activity will continue to grow because of changes in technology, the realignment of jobs, and the increasing complexity of the managerial tasks. While training emphasises skill development and the changing of attitudes among workers, development is directed to the managers of the organisation. Development concerns itself primarily with knowledge acquisition and the enhancement of executives conceptual, diagnostic and human abilities. Career development, which is the continual effort to match long-term individual and organisational needs, is also an important area of training and development. iii. COMPENSATION Employees exchange their work for rewards and money is probably the most important reward. Compensation administration is concerned with the adequate and equitable remuneration of employees for their contributions to organisational objectives. It is one of the most important functions of the human resource manager. iv. INTEGRATION The need for integration arises from the realisation that employees have many differences among themselves and which may affect their work performance. Conflicts often arise between employees, work groups, employees and the management, or even between the organisation and other organisations. The essence of integration is to attempt to effect a reasonable reconciliation of the conflicting interests. In this case, the human resource manger would deal with issues such grievances, disciplinary action, and labour unions.

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v. MAINTENANCE The aim of maintenance is to ensure that employees are happy with their jobs, the organisation, relationships with colleagues and so on. Through maintenance one will be able to perpetuate a willing and able workforce. The maintenance of willingness is heavily affected by communication with employees, good physical condition of the employees, and health and safety of the workers. vi. SEPARATION Separation involves returning the employees to the society from which they came and ensuring that the returned employees are in as good shape as possible. Separation may take the form of retirement, lay offs, outplacement, and discharge. In some cases employees die while they are still in active employment. The organisation, led by social responsibility principles, should assist the family of the affected person in a variety of ways. The table below summarises the major functions involved in human resources management. Table 1: Major functions of HRM

Major function

Activities involved

HR planning & analysis

HR planning; job analysis; HR Information and assessment systems Equal Employment Opportunity Compliance; Diversity; Affirmative Action. Staffing Recruiting, selection, induction, promotions, transfers. HR Development Employee training, management development; employee assistance programs, career planning; performance management, counselling, diversity programs. Compensation and benefits Wages/ salary administration; incentives; benefits. Health, safety, and security Health and wellness; safety; security, handling terminal sickness like AIDS and Cancer. Employee and labour/management HR policies; employee rights and relations privacy; union-management relations. Performance Management Performance contracts, balanced score card and performance appraisal. Directing Motivation, leadership and communication. Separation Voluntary retirement, retrenchment, redundancy, summary dismissal, handling death of employees 11

The purpose of the activities outlined above, both managerial and operative is to assist in the accomplishment of basic objectives. Consequently, the starting point of personnel management, as of all management, must be a specification of those objectives and a determination of the sub-objectives of the personnel function.

IMPORTANCE OF PERSONNEL/ HUMAN RESOURCE MANAGEMENT TO ALL MANAGERS It helps managers not to commit the following personnel mistakes i.e. Hiring the wrong person for the job The organization having a high labour turnover People not doing their best Managers wasting time with useless interviews Having the company taken to court because of discriminatory actions Having some of the employees think their salaries are unfair and inequitable relative to others in the organisation The lack of training that may undermine a departments effectiveness Committing any unfair labour practices Treating employees unfairly because of their cultural orientations

THE SHIFT FROM PERSONNEL TO HUMAN RESOURCE MANAGEMENT Personnel departments were once called "Health and Happiness departments. The people assigned to deal with personnel issues were often individuals who were past their prime. The personnel department was seen as a place where lessproductive employees could be placed with minimal damage to the organisations on going operations. Individuals in the personnel department were perceived as those responsible for planning company picnics, vacation schedules, and retirement parties. Personnel, as an activity, were seen as a necessary, but unimportant part of the organisation. As the field of management began to mature, more emphasis was being placed on the workers. Various studies have revealed that by recognising workers for the work they had done could influence their productivity (see Hawthorne studies - in the Human Relations movement). Due to these changes, the personnel department could not be treated as a by the way on the road to success. Organisations had to hire the best-qualified candidate without regard to race, religion, colour, sex etc. Further, workers were becoming more demanding in terms of what they wanted from a job; and society by means of law and legislation was placing new demands on employers. A number of events mandated changes in personnel practices e.g. the rise of a modern labour union, the increasing educational level of societal members, the increasing size and complexity of the organisation and its technology, and the insistent and sometimes violent demands of less privileged segments of our society.

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The figure below shows how the role of the personnel manager has changed over the years.

Fig. 1:

The Changing Roles in Personnel Management (1930-1996)


Welfare Officer (1930s)

Recruitment Specialist (1950s)

Industrial Relations Negotiator (1970s)

Human Resources Supplier (1980s)

Visionary/ Corporate Philosopher (1990s)

All round business manager (2000s)

Time has moved the Personnel Manager from a Welfare Officer in the 1930s to a Visionary/ Corporate Philosopher in the 1990s. In the years of expanding economic activity in the 1950s and 1960s, the emphasis moved away from welfare to recruitment and human resource planning since all organisations faced intense competition for labour. In the 1960s and 1970s the problems of increasing trade union power, backed by a flood of labour legislation called for industrial relations and legal skills. It was a time for personnel managers to show their loyalty to the enterprise by fighting off what employers regarded as excessive claims for improved terms and conditions of employment. A weakening of the general economic conditions and unemployment in labour markets all over the world marked the 1980s. This forced business markets to carry out intensive cost cutting measures, especially labour. Moreover, unemployment laws began to reflect the new economic priorities, consequently the protective framework of legislation for trade unions and their members was 13

drastically reduced, and thus freeing business organisations to make substantial changes to their workforce in the light of business priorities. In the 1990's the Personnel Manager assumed both the functions of supplying personnel services and being a Visionary/ Corporate Philosopher for the organisation. In the new millennium the human resource manager is expected to be an all round manager able to handle all kinds of business problems. DIFFERENCES BETWEEN HUMAN PERSONNEL MANAGEMENT RESOURCE MANAGEMENT AND

Personnel management can be defined as activities directed at the organisations employees and finding and training them, arranging for them to be paid, explaining managements expectations, justifying managements actions, satisfying their needs, dealing with their problems, and seeking to modify managements actions that could produce an unfavourable response (Storey, 1992:6). The above definition shows that personnel management occupies a middle position between management and employees. Personnel management places a high priority on employees attitudes, interests, and responses (Guest, 1987). In some cases, personnel management identifies more with the employees than with the management. Human resource management, on the other hand, is directed not just to the needs of the employees but emphasis is placed on the planning, monitoring and commitment than problem solving and mediation (Torrington 1995). Human Resource Management is concerned with the entire life of the employees at work; from entry to exit. It enables goals and values of the individual and those of the organization to be integrated and achieved (Handy 1985). Personnel Management has thus evolved to become human resource management. Armstrong (1998) argues that Human Resource Management adopts a more strategic and far-reaching approach as opposed to the Personnel Management, which is characterised by a less dynamic and Short- term view of the organisation and its needs. The major areas of differences are as below: Personnel Management is about administration and procedures while Human Resource Management is about a strategic approach to the acquisition, motivation, and management of an organisations human resources. Human resource management adopts the executive roles and transfers the personnel management aspects to the level of line management. Human resource managers often adopt advisory roles as opposed to purely functional and implementation roles. Personnel management is pre-occupied with the day to day running of the organisation while human resource management adopts an advisory role and attempts to ensure that the organisations activities are closely linked with its corporate strategy and that they fit into the culture of the organisation (Handy, 1985) 14

Guest (1987) in his article Relations drew a model illustrating the stereotypes of Personnel Management and Human resource management To him, human resource management adopts an open system and long-term approach unlike Personnel Management. STEREOTYPES OF PERSONNEL MANAGEMENT AND HRM PERSONNEL HUMAN RESOURCE MANAGEMENT MANAGEMENT Time & planning perspective Psychological contract Control systems Employee-relations perspectives Preferred structures/systems Roles Evaluation criteria Short-term, reactive, ad hoc, marginal. compliance External controls Pluralists, collective, low trust Long term, proactive, strategic, integrated. Commitment Self control Unitarist, individual, high trust

Bureaucratic, Organic, devolved, mechanistic, centralised, flexible roles. formal defined roles Specialist/ professional Cost minimization Largely integrated into line management Maximum utilization (human asset accounting).

CH. 2: CHALLENGES OF MODERN HUMAN RESOURCE MANAGEMENT


Chapter objectives. After reading this chapter, it is expected that the reader will be able to: Explain the challenges faced by a contemporary human resource manager. Discuss the appropriate responses to each challenge. Appreciate the relevance of job redesign especially the concept of flexitimes.

Introduction.
Many problems are caused by constant changes that occur both within and without the firm. Among the many major changes that are occurring in the field of human resource management include the following:

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1. Changing Mix of the Workforce i. Increased number of minority members entering occupations requiring greater skills. ii. Increasing levels of formal education for the entire workforce iii. More female employees iv. More married female employees v. More working mothers vi. Steadily increasing majority of white-collar employees in place of the blue collar ones. vii. Culturally diverse workforce Prohibition of discrimination 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. In the USA the proportion of blacks, for example, has increased significantly in professional, technical, managerial, clerical, sales, and artisan-type jobs. Steady increases in the level of formal education would seem to bode well-continued change. In Kenya, minorities include the Ogiek, Teso, Pokot, Marakwet, and Tugen. There has been a long-term trend towards mass education in many countries. Increased educational levels create human capital that adds value to an organization. This higher educational attainment has contributed to better jobs and higher income for the people involved. This also calls for redesigning and reorganising, jobs to effect a match with the better-qualified personnel of frustration, absenteeism, grievances, and turnover. Laws, as well as activist groups, have contributed to greater numbers of female employees entering the workforce. Several forces have operated to increase both the number and percentage of women in the labour force in recent years. These forces include the steady decline in the fertility rate since the late 1950's, fewer children being born or expected by women, increasing availability of household labour saving appliances, equal opportunity efforts being made by governments in different parts of the world, and an increase in women's liberation movements. Further distinctions between men's occupations and women's occupations are disappearing. Women now hold jobs such as jockeys, telephone line women, sailors on ships engineers, executives, and university professors. Also, of significance to the manager is that increasing proportions of employees are married and/or have children under the age of 6 years. This makes it difficult for them to become regular members of an organisation, and human resource managers should seriously consider practices such as flexible working hours, sharing of one job by two or more workers, and providing child care during working hours. Chemilil Sugar Company has been in the forefront in the provision of childcare services. There has been a trend towards the professional jobs as opposed to the manual jobs requiring fewer skills. Professionals are typically less inclined to join labour unions, but they have greater expectations in terms of individual treatment by 16

management. Moreover, the performance of jobs tends to be more difficult to evaluate objectively. More and more tasks formerly performed by unskilled labourers have been taken over by machines. One implication of this fact is that high schools dropouts will find it more difficult to get good jobs. 2. Changing Values of the Workforce The changing mix of the workforce inevitably leads to introduction of new values to organisations. In the past most workers had a set of values generally characterised by the term "work ethic". Work was regarded as having a spiritual meaning, and it was emphasized by such behavioural norms as punctuality, honest, diligence, and frugality. Employees took their jobs very seriously. Contemporary employees have less of the work ethic mentality in them. Family activities, leisure, avocations, and assignments in government, churches, and schools are all equally viable means through which a person can find meaning and become self-actualised. Yet in some countries the population is aging and hence there are fewer workers than the demand for them. Consequently organisations have had to introduce a number of changes in their human resource so as to attract the scarce resources. For example, attempts have been made to redesign jobs to make them more challenging so as to meet the needs of the human ego. Concerning pay, a few firms have moved to pay the employee for skills possessed rather than for skills demanded by the job. As far as fringe benefits are concerned, a cafeteria arrangement has been proposed where the employee can periodically choose what particular benefits he/she desires while remaining within an overall schedule are being reorganised Perhaps one of the most relevant work redesigning strategy is the use of flexible working arrangements. These include the flexible working day (flexitime), compressed workweek and the flexible working year (flexi year). Flexitime is a program that allows flexible starting and quitting times for the employee. An illustration is: 1. 2. 3. 4. 5. 7.00 a.m. - 9.00 a.m. Flexible band for reporting 9.00 a.m. - 11.30 a.m. Core time - all employees must be present 11.30 a.m. - 1.00 p.m. Flexible time for taking a 30 min lunch 1.00 p.m. - 4.00 p.m. Core time where all employees must be present 4.00 p.m. - 6.00 p.m. Flexitime for quitting depending on the arrival time.

Ideally everyone is expected to work a fixed daily schedule known as the "core time". This period, centred in the regular workday, typically spans four to six hours. A "flexible band" of up to several hours replaces the specific starting and quitting times. Workers can elect to start and finish work within the flexible band intervals. 17

Explanations for this include: Flexitimes often lead to productivity improvements because of the following reasons. Better fit of work time to the employees "body clock" Improved handling of fluctuating workloads Increased customer service because the establishment is open for more hours in any one working day. Less "killing time" until quitting time because of reluctance to begin a new task Less labour turnover Employees are treated substantially in the same way as managers and professional personnel. The result is an increased ability to schedule leisure activities, family responsibilities and personal chores. Less time in commuting to and from work and reduction of traffic congestion and air pollution. Moreover, it becomes easier to access retail and services outlets during their free times. Improved employee morale, elimination of tardiness, and reduced absenteeism and sick leave. Improved public relations as an edge in recruiting employees.

Disadvantages of Flexitime Some of the limitations of flexitime working arrangements include the following. Utility costs are increased since the plant is open for longer periods of time Not all the necessary employees may be present when a particular problem arises, thereby forcing the problem to be postponed until the core period when all the employees are present. There are difficulties in recording hours actually worked, and a lot of paperwork may be involved. There may also be conflicts with certain laws that require the payment of overtime for hours worked in excess of eight per day or work done before eight oclock in the morning or past five oclock in the evenings. Supervision may become a problem since a single supervisor cannot be present for the full eleven or twelve hours of the authorised day There may be some confusion for customers and suppliers who are not familiar with the varying attendance of personnel under flexitime arrangements

Indeed, some employees put in extra hours under flexitime systems because they feel more freedom and interest in their work. Hours worked tend to be more productive because employees are likely to leave at a 'stopping point' instead of slowing down towards the end of the work day.

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Shorter workweeks/compressed workweeks are schedules with fewer than the traditional five workdays a week for forty hours, or 5/40. The hours are increased so that the hours worked per week still total forty. There are several ways to compress the workweek and day. These include working fewer hours in a regular five day week, three-day, 12 hour shift; and four day, 40 hour week. The 4/40-week permits non-work time scheduling, so that people with a strong leisure orientation can be expected to react positively to it. It leads to an increase in job satisfaction, morale and productivity, and reduced turn over and absenteeism. Nevertheless, the traditional 5/40 is more popular among organizations. 3. Changing Expectations of Citizen-Employees Modern employees have greater expectations from their employers. Through working, they expect to buy good homes, cars, food, and clothing. They also expect to make enough money to educate their children in excellent schools and to buy luxurious goods. Employees are also resisting the traditional master servant relationships that simplified the relationship between the employer and the employees. Instead, employees want to contribute in decisions that affect them. Some employees are joining labour unions in an effort to pressurize management for material things such as higher wages and more fringe benefits, and also to demand for fair treatment, freedom from discrimination, and a say in matters affecting them. Managers also forced to involve employees in decision-making. Issues such as freedom of speech and the right to privacy are also gaining prominence. Employees often question some of the information they are required to provide in order to obtain and hold jobs. To them some questions such as those relating to pregnancy, drinking habits, kinds of friends, type of neighbourhood in which one lives, records of arrests, ability to pay bills, and whether the job applicant has ever received psychiatric counselling are considered an invasion of privacy,. 4. Changing Levels of Productivity In many countries, the human resource manager is faced with the acute problem of declining productivity. The reasons for this decline in productivity include various government regulations which have added to the cost of doing business without enhancing productivity in the short run, such as laws relating to environmental protection, health and safety, affirmative action and so on. Affirmative action laws have also led to more females and minorities being employed. Initially such employees may be less productive. The short-term orientation of many business managers is also to blame for the reduced productivity. The managers may act from the pressures of financial institutions and other stakeholders to present profits over a very short time period. Consequently, they may ignore the much needed long term investment which leads to profits over the longer term.

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There is also a trend towards service businesses. Productivity gains are harder to achieve in service businesses compared to goods manufacturing businesses. And when the relationship between the workers and the management is poor, it is even more difficult to improve productivity. This is especially the case where the employees perceive high job insecurity, narrow and meaningless jobs and autocratic managers who deny employees the opportunity to participate in decisions that affect their work. 5. Changing Demands of Government Human resource managers must also adhere to the various government laws that relate to employees. The laws govern activities related to the procurement, development, compensation, integration, maintenance, and separation of the workers. An example is the minimum wages Act that specifies the minimum wages an employee can be paid. In many situations, organizations may need the services of a lawyer to interpret the labour laws. 6. Epidemics- modern employees are exposed to a wide range of epidemics which include HIV/ AIDS, Ebola, Asian Bird Fu and Tsars. These epidemics often affect many people and results to numerous losses of life. The end result is fewer workers and the loss of valuable skills which take a long time period to develop. 7. Regional Conflicts- these are also a major challenge especially in third world countries. Political disagreements often result to conflicts, loss of life, and the displacement of numerous others. Somalia, Southern Sudan, and even Kenya have experienced these conflicts and their effects have been very painful. 8. Natural Disasters- these include floods, droughts, earthquakes, and mudslides among others. Examples are El-Nino, La-Nina, Tsunami, and Katrina. These natural disasters often lead to massive loss of lives and property. 9. Leaner Workforce- the human resource manager is faced with the challenge of having to maintain a leaner workforce in an effort to cut costs. The result is an overburdened workforce which is prone to stress and burnout. 10. Technological Changes- rapid changes in technology are forcing organizations to spend more on acquiring the technologies and on training the workers on the use of these technologies. 11. Discrimination it is difficult to get rid of all forms of discrimination in the workplace. The human resource manager often has an uphill task trying to eliminate discrimination based on race, gender, religion, and so on.

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CH. 3: CREATION AND MANAGEMENT OF THE HUMAN RESOURCE DEPARTMENT


Chapter objectives. This chapter introduces learners to: The differences between staff and line functions. The bases of departmentalization for HR departments.

Introduction:
In many small organisations, the human resource function may be handled by the managing director or other functional specialists. However, as the organisation grows larger and larger, the human resource needs increase and there may be need for a separate department to handle personnel issues. The human resource department is expected to assist the organization to achieve its objectives by taking initiatives and providing guidance and support on all matters relating to the employees. This implies that the department takes an active role in managing and facilitating change, prepares its budget, out sources those services that it can, and employees people to do the work required by the organization. The effective performance of all these functions is only possible where the HR department is properly constituted. BASES OF DEPARTMENTALIZATION HR departments are considered to perform a staff function. Staff functions provide advisory, control, or support services to the line functions. The human resource specialists are expected to provide their services to internal customers such as top management, line managers, team leaders and employees. They also provide guidance and counselling to these groups of customers. And since they are business experts, they assist the functional managers in making relevant long run and short run business decisions. Effective human resource specialists should have personal drive and effectiveness, people management and leadership skills, professional competence, ability to add value through people, continuously learning, having a customer focus, influencing and interpersonal skills, strategic capability, and resourcefulness as well as use of initiative in dealing with issues in the organization ( Brockbank et al, 1999). Line functions are those whose operations are concerned with the production of goods and services. The main line functions are Research and Development, Production, Marketing and Accounting. In situations where the organisation desires a human resource department, then managers should choose the most optimal method of creating the department. There are several basis of departmentalisation, which include the ones discussed below. 21

1. Functional Base Perhaps this is the most common method of creating human resource departments. It is based on the functions performed by the human resource department. In many organisations, the basic grouping of functions revolve around procurement (employment), development (training), compensation (wage and salary administration), integration (labour relations), maintenance (health, safety and welfare services), and separation (employee services related to separation whether it is through retirement, death etc.). The exact breakdown would vary from enterprise to enterprise and it may be affected by variables as the size of the organization, abilities of the employees in the department, and the top management philosophy regarding the role of the unit. The structure of the unit would resemble the figure below: Fig. : HR department- functional structure.

Human Resource Director

Employment Services officer

Training &develop ment services

Wage and salary administ ration services

Labour Relations

Health and Safety services

Employee Separation Services

Fig. The functional basis of creating the HR department. 2. Clientele/ Customer Base Organisations serve different types of both internal and external customers. Each set of customers has its unique needs. The human resource department should be structured in such a way that the different clients are addressed. The main internal clients include scientific and technical personnel, workers who are new to industry, the hard cores who had been unemployed for long periods, managers, women, and labour organised into unions. Thus instead of a "total market" approach to all the employees in organisation, market or personnel segmentation would be more likely to lead to differentiation 22

in the treatment of personnel. As a result, there would be higher levels of satisfaction in dealing with the employees. Fig. : Human resource department- customer basis of departmentalization.

Human Resource Director

Scientific & Technical Personnel

Integration of workers

Culturally disadvanta ged

Manageme nt developme nt & Compensa tion

Labour Relations

Women workers

3.

Service Base

This is borrowed from Herzbergs two factor theory of motivation. Herzberg proposed the 2-factor theory of motivation where we have motivators and hygiene factors. According to Herzberg, hygiene factors are those factors that, if present, don't cause motivation; instead they bring motivation to level zero. In situations whereby those factors are absent, they cause dissatisfaction leading to demotivation. Examples of these factors are in the areas of: Physical working conditions- if the working conditions are good, motivation goes to level zero. Job security- insecurity in the workplace is a source of dissatisfaction. Management styles- dictatorial styles of management may de-motivate workers. Salary- fair salaries do not necessarily motivate workers; unfair wages and salaries are a source of de-motivation. Interpersonal relations- poor interpersonal relations dissatisfies employees.

Herzberg also proposed the concept of motivators. These are the factors that, if present, bring about positive motivation. He proposed the following to be the main motivators for employees: A work which allows a person to make some concrete achievement Recognition of the achievement Responsibility exercised by the person Opportunities for job growth The interest value of the work itself 23

If one considers the reasoning advanced by Fredrick Herzberg, then the human resource department can be structured in such a way as to take care of both the hygiene and motivation factors. This can be done by: i. Preventing dissatisfaction through hygienic maintenance ii. Promoting satisfaction through motivators The functional breakdown of the motivator division would include: a. An educational function to convince all managers that satisfaction comes basically from the job content and not the surrounding environment. b. A job design function to enhance interest and pride in work c. A remedial function involving training and education to overcome technological obsolescence and poor performance of specific individuals and groups. In most instances, the particular personnel department organisation that is adopted is a combination of bases, rather than any single one.

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CH.4: HUMAN RESOURCE POLICIES


Chapter objectives
This chapter entails a detailed explanation of: What human resource policies are; Why organizations adopt human resource policies; The importance of writing down policies; The procedure for formulating policies; The process of communicating policies; The critical human resource policy areas.

Introduction.
A policy is a plan of action. It is a statement of intention committing management to a general course of action. A policy statement is specific. It commits management to a rather definite course of action. An example of a policy is stated below. "Our policy is to institute every practical method for engineering safety into our processes and equipment, to provide protective clothing where necessary, to train employees in safe operating procedures, and to vigorously enforce established safety rules. Our policy is to provide a healthful plant by giving adequate attention to cleanliness, temperature, ventilation, light, and sanitation". A policy is a statement of intended conduct, or a rule of behaviour, which is intended to apply across the organisation. It is an expression of the organisations values and beliefs concerning all the major functions of the enterprise. Ideally policies tell us how the organisation intends to go about achieving its objectives. A policy does not spell out the detailed procedures by which it is to be implemented. That is the role of a procedure. A procedure is really a method for carrying out a policy. A policy should be stated in terms broad enough for it to be applicable to varying situations. Lower level managers who apply policy must be allowed some discretion in carrying out the policy. The circumstances in one department may differ from those in another hence a rigid, excessively detailed policy statement might cause injustice if supervisors were not granted some latitude or freedom of application. 25

Why should organizations adopt definite Policies? It is important to understand why an organisation should have clearly established policies. Some of the reasons include the following: 1. The work involved in formulating human resource policies requires that the managers give deep thought to the basic needs of both the organisation and the employees. Management must examine its basic convictions as well as give full consideration to prevailing practice in other organisations. 2. Established policies assure consistent treatment of all personnel throughout the organisation. Favouritism and discrimination are minimised. 3. Continuity of action is assured even though top management personnel change. The tenure of office of any manager is finite but the organisation continues. Policies promote stability. 4. Policies serve as a standard of performance. Actual results can be compared with policy to determine how well the members of the organisation are living up to professed intentions. 5. Sound policies help to build employee enthusiasm and loyalty. This is especially true where the policies reflect established principles of fair play and justice and where they help people grow within the organisation. 6. Policies protect the employees from unfair practices in the organisation and vice versa. POLICIES SHOULD BE IN WRITING Written policies let everyone know just what kind of treatment they can expect to receive from management. It lets them to know where they stand in relation to any circumstance that occurs. Only when policies are reduced to writing can they be communicated to all employees. In large organisations containing many dispersed plants, written policies are almost a necessity. They ensure reasonably consistent treatment throughout the company on matters such as pay, promotion, transfer, lay off, pension rights, insurance benefits, training opportunities, and grievance handling. FORMULATING HUMAN RESOURCE POLICIES Policies are not created in a vacuum. There are five principal sources for determining the content and meaning of policies. These are: 1. Past practice in the organisation 2. Prevailing practice among other companies in the community and throughout the nation in the same industry 3. The attitudes and philosophy of middle and lower management 4. The attitudes and philosophy of the board of directors and top management 5. The knowledge and experience gained form handling countless personnel problems on a day-to-day basis. 6. The law of the country is a major consideration when formulating policies. The Human resource (or industrial relations) director will do the actual work of formulating the written expressions of company personnel policies. They will study existing documents, survey industry and community practices, and interview other executives within the organisation to collect appropriate information. The president and the board of directors make the actual and final decision on the substantive content of the policies. 26

The following steps should be taken when formulating or revising personnel polices. It is very important to gain an understanding of the corporate culture of the organisation and how this affects work patterns. Nevertheless the steps below can be an appropriate guide for establishing policies. 1. Analyse existing policies both written and unwritten 2. Analyse external influences e.g. employment laws, health and safety laws etc. 3. Assess any areas where new policies are needed or existing policies are inadequate 4. Check with managers, preferably starting from the top, on their views about personnel policies and where they think could be improved 5. Seek the views of employees about personnel policies, especially the extent to which they are inherently fair and equitable and are implemented fairly and consistently. Consider doing this through an attitude survey. 6. Seek the views of union representatives 7. Analyse the information obtained in the first seven steps and prepare draft policies 8. Consult, discuss, representatives and agree policies with management and union

9. Communicate the policies with guidance notes on their implementation as required. Supplement these communications with training COMMUNICATING POLICIES Human resource policies must be communicated to everyone within the organisation. A real education program should be set up to teach all management personnel how to handle various personnel problems in the light of the newly created policy. The most common way of informing non-supervisory employees is by means of the employee handbook. But to achieve real understanding this should be followed up with an oral explanation and interpretation generally by first-line supervision. CRITICAL POLICY ISSUES Most of the critical HR management issues are included in 4 broad areas: 1. Employee Influence With the increasing popularity of reengineering, Total Quality Management, co-operative labour- management relationships, and other forms of worker participation, more and more organisations are developing policies that define the scope and breadth of employee influence in managing the organisation. Such policies specify the degree of authority and responsibility that are delegated to employees and employee groups, and the way in which those relationships (e.g. Quality circles Vs self managed work groups) may be institutionalised most effectively. 27

2. Personnel Flow Policies may be set in the areas of selection, promotion, job security, career development and advancement, fair treatment and terminations. 3. Reward Systems The objectives of reward systems include the attraction, motivation, and retention of employees at all organisational levels. The accomplishment of these objectives forces management to consider a number of critical policy issues e.g. a. Should pay incentives reward individual or group behaviour? b. Should employees share profits or reductions in operating costs? c. What is the most effective mix of pay and non-pay rewards to motivate performance? 4. Work Systems Policy decisions that affect work systems include the kind of manufacturing and office technologies implemented and the way in which labour is divided. HUMAN RESOURCE POLICY AREAS Examples of the specific policy areas, which may be contained in the overall statement or issued as separate documents are as follows. a. b. c. d. e. f. g. h. i. j. k. l. m. Employment Equal opportunity Managing diversity Reward Development and training Employee involvement Technology Health and safety Sexual harassment Reward Work-life balance Discipline Grievances

OVERALL POLICY Organizations normally have an overall policy which states what the organization stands for. This is normally a brief statement just the mission statement. The overall policy defines how the organisation fulfils its social responsibilities of its employees and other stakeholders; it sets out its attitudes towards them. This statement is an expression of the organizations values or beliefs about how people should be treated. The contents of the overall policy vary from firm to firm but the main items included are: a. Equity the policy should state that the organization advocates for treating employees fairly and justly without any discrimination. The organization should commit itself to protect individuals from any unfair decisions made by their managers, to provide equal opportunities for employment and promotion and to operate an equitable payment system. 28

b. Consideration it is a commitment to ensure individual circumstances are taken into account when making decisions which affect the employees. c. Quality of Working Life it commits the organization to consciously and continually improve the quality of working life as a means of increasing motivation and improving results. Employees will also be expected to fulfil their personal obligations even when they are working for the organization. d. Working Conditions the organization may state that it will endeavour to provide healthy, safe, and pleasant working conditions. EMPLOYMENT POLICIES Policies are normally laid out in all areas of the organization. The human resource department should have policies relating to the following areas of its operations. 1. Human Resource Planning this is a commitment by the company to planning ahead in order to maximise the opportunities for employees to develop their careers within the organisation and to minimise the possibility of compulsory redundancy. 2. Quality of Employees - an organisation may deliberately set out in its policy statement that, as a company dedicated to the pursuit of excellence and professionalism, it believes in recruiting people who have the ability or potential to meet the high standards of performance that will be expected of them. The policy here can be: The company will conform to the spirit as well as to the letter of the law in employment matters 3. Promotion - The policy should state the company's wish to promote from within whenever this is appropriate as a means of satisfying its requirements for high quality staff. The policy should, however, recognise that there will be occasions when the organisations present and future needs can only be met by recruitment from outside. A firm can have a policy such as: All vacancies will be first advertised within the organisation before being made public 4. Equal Opportunity - A reference should be made in the general employment policy statement to the effect that the firm is an equal opportunity company. The Equal Employment Opportunity policy should spell out the company's determination to give equal opportunities to all, irrespective of sex, race, creed, disability, age, or marital status. It could also state that the company would use its best endeavours to provide equal opportunities to disabled people. in this regard a policy can read like: All posts will be filled on grounds of merit only, and no one will be discriminated against in terms of sex, ethnic origin, age or any factor other than ability to fulfil the job competently The policy should also deal with the extent to which the organisation wants to take affirmative action to redress imbalances between the numbers employed according to sex or race or to differences.

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5. Managing Diversity Policy this is concerned with how the organisation manages the diverse people it employs. Such a policy would recognize that there are differences among employees and that these differences, if properly managed, will enable work to be done more efficiently, and effectively. Managing diversity policy will acknowledge cultural and individual differences in the work place, state that the organisation values the different qualities which people bring to their jobs, emphasise the need to eliminate bias in all areas related to human resource, and focus attention on individual differences rather than group differences 6. Ethnic Monitoring this policy states how the company deals with monitoring the employment of ethnic minorities. 7. Age and Employment - The policy would define the approach the company adopts to engage, train and promote all employees especially the older employees. 8. Redundancy - The redundancy policy, could state the organization will do its best to avoid declaring employees redundant. However, if redundancy is unavoidable then it will be done in the best way possible. 9. Discipline - The disciplinary policy should state that employees have the right to know the rules of the organization and what would happen when a certain rule is disobeyed. A good example of a policy in this area is: Every employee will have the right to fair treatment in matters of discipline. 10. Grievances - the policy should state how employees can go about solving their grievances. 11. Sexual harassment - the policy would express the company's strong disapproval of sexual harassment and the measures taken to eliminate it. These policies can: Define sexual harassment State unequivocally that sexual harassment at work is not tolerated and is regarded as a matter of gross misconduct Define the role of managers in preventing harassment, and dealing with complaints Provide for counselling services for those concerned about harassment Set out the procedure for dealing with harassment

11. Smoking - the policy would define no-smoking rules. Smoking policies will spell out whether or not there is a complete ban on smoking and, if not, the arrangements for restricting smoking to designated smoking areas 12. Substance Abuse policies here concern how the company treats employees with drinking or drug abuse problems. 13. Health and Safety Policy it is concerned with how the company approaches the employment of people who have health problems including those who are HIV positive or actually suffering from AIDS. Such policies cover how the company intends to provide health and safe places and systems of work 14. Pay Policy - a pay policy could cover matters such as paying market rates; Paying for performance; Gain sharing - sharing in the gains (added value) or 30

profits of the company; providing an equitable pay system; equal pay for work of equal value, subject to overriding market considerations. An example of a policy here would be: Pay levels will be maintained so as to compete with the best in the industry 15. Employee Development Policy - This policy should express the company's commitment to the continuous development of the skills and abilities of employees in order to maximise their contribution and give them the opportunity to enhance their skills, realise their full potential and advance their careers. A development policy includes: Employees will be expected to participate in training and development activities in order to develop their skills 16. Involvement and Participation Policy - this policy should spell out the company's belief in involvement and participation as a means of generating the commitment of all employees to the success of the enterprise. The policy could also refer to the basis upon which the company intends to communicate information to employees. An example of a policy here is: No organisational changes will be implemented without thorough consultation with all those directly affected by the changes 17. Employee Relations Policy - this policy will state the company's commitment to allowing employees to represent their interests to management through trade unions, staff associations or some other form of representative system. It will also state the terms under which the company works with trade unions. The policy may emphasise that the organisation perceives Trade Unions as partners. The policy may read like: The firm will always negotiate in good faith with trade union representatives 18. New Technology Policy - such a statement would refer to consultation about the introduction of new technology and to the steps that would be taken by the company to minimise the risks of compulsory redundancy. The above areas are not conclusive. As the organization and its environment evolve, then new areas of policy may need to be formulated. For example, policies may be needed in the areas of e-mails and bullying in the work place.

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UNIT 2:
Ch.5

ACQUISITION OF HUMAN RESOURCES

FAIR EMPLOYMENT PRACTICES

Chapter objectives. The objectives of this chapter are to enable the reader to: Understand the need for fair employment practices; Examine and understand some of the different forms of discrimination that can occur in the process of employing and managing workers.

INTRODUCTION.
Various components of government have decreed that certain employment practices must be followed. These cover the areas of discrimination. Generally speaking, discrimination refers to employment decision making that or working conditions that are advantageous or disadvantageous to members of one group compared to members of another group. Discrimination can take different forms. Disparate Treatment occurs when persons of one race, sex or ethnic group receive different treatment from persons of another group who are otherwise similarly situated. Consider the case for blacks and whites. Disparate effect occurs when any particular practice has an adverse impact upon a protected group such as women or minorities. Negative present effects of past discriminatory practices may also be construed to imply discrimination.. FORMS OF DISCRIMINATION: 1. Minority Races (Ogiek, Tesso, Elgon Maasai, Njemps, Asians) The Equal Employment Opportunities Act (EEO) requires that employment records be maintained for so that as many communities as possible are included in the register of employees. This ensures that minority races are not discriminated against. Female Employees Many factors should be considered in relation to the employment of females. Among the illegalities are the refusal to hire women, but not men, with young children; refusal to hire married women; refusal to hire a female because she might become pregnant; discharging an unmarried pregnant female; requiring pregnant employees to take leave without regard to ability to perform the job; refusal to hire females because heavy weights must be lifted and taking away seniority rights after pregnancy leave. it is also an unfair employment practice to discriminate on the basis of pregnancy, childbirth, or related medical conditions in hiring, promotion, suspension, discharge, or any other term of employment. Moreover, pregnant employees 32

2.

should be treated the same as other employees on the basis of their ability or inability to work. The Equal Employment Opportunities Act (EEO) Requires That: a. An employer cannot refuse to hire a pregnant applicant so long as she is able to perform the major functions of the job. b. If employers accommodate other temporarily disabled workers, they must make similar accommodations for pregnant workers, e.g. temporary relief from having to lift heavy materials. c. The employer cannot require female employees to take leave arbitrarily at a set time in their pregnancy. Leave times are to be determined by the ability of the employee to do the job. d. Full reinstatement rights must be given to female employees on leave for pregnancy related reasons, including credit for previous service, seniority and accrued retirement benefits. e. Fringe benefits or insurance programs, if such exist, must include coverage for pregnancy of employees in the same manner as for other employee disability or sick benefits. f. Employers providing extended medical insurance benefits to husbands of female employees must cover equally the medical expenses of male employees, including pregnancy. 3. Sexual Harassment Sexual harassment is defined as unwelcome sexual advances, requests for sexual favours, and other verbal or physical conduct of a sexual nature". The protection against sexual harassment extends to both male and female employees. Sexual harassment is prohibited especially where: a) It is made an employment Condition when submission to or rejection of such conduct is used as a basis for employee decisions, such as promotion, retention, so on. b) If it creates Job interference when such a conduct has the effect of interfering with job performance or creating an intimidating, hostile, or offensive working environment. Such conduct/ condition creates an employment consequence

c) 4.

The Older Employee The retirement ages vary from country to country. In the case for the Kenyan public service, most employees are expected to retire after attaining 55 years of age. In the USA the law prohibits discrimination on the basis of age for anybody between 40-70 years except in high risk jobs (police officers, fire fighter) and high-paid private employees who could retire with very liberal pensions. An example would be the top CEOs. It is Ronald Reagan, one of USAs oldest CEOs in the history of USA who worked hard to see that such a law was passed on a national basis. Older employees are often stereotyped/considered to be inflexible, resistant to change, less creative, and unable to deal with crisis situations. This is only a 33

perception which can end up being the reality. Nevertheless, they are the equals of the younger in terms of quantity and quality of out put. In addition, they offer maturity derived from experience; they are less prone to accidents than the younger employees. Ideally the older employees should not be discriminated against as long as they are capable of performing the work. 5. Religions Discrimination based on religious beliefs, religious observances, and practices is forbidden. Further employers are required to "accommodate the religious needs of employees" when such accommodation can be made without serious inconvenience to the firm. Nationalities The EEO guidelines prohibit its discrimination on the basis of language requirements, height and weight requirements, membership to organisations promoting rights of particular groups, and having a surname indicative of a particular national origin. The Handicapped A handicapped person is one who has a physical or mental impairment that substantially limits one or more of life's major activities, or one who has a record of such impairment or is regarded as having an impairment. Thus, one who had been in a mental hospital, but is now mentally sound might still be regarded by some employers as physically disabled because of the record of mental illness. Moreover, Affirmative action requires that employers should: Take positive steps to recruit qualified handicapped workers. Modify human resource practices to meet the needs of the handicapped. Make reasonable accommodation to the physical and/or mental limitations of an handicapped applicant. Train supervisors on how to handle the handicapped employees. Require all employees to provide strong internal support to the fellow employees who are handicapped. 8. Health conditions- Medical conditions such as being HIV positive or having the AIDS sickness, epilepsy, TB, Diabetes, and so on are in many cases not legal basis for discrimination.

6.

7.

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CH.6: STRATEGIC HUMAN RESOURCE PLANNING


Chapter objectives. After going through this chapter the reader is expected to be able to: Define human resource planning. Distinguish between human resource planning and strategic planning. Discuss the strategic human resource planning process. Understand the outcomes of the strategic human resource planning process including the need for peripheral employees. Introduction: All organisations require resources in order to accomplish their goals. The main resources required include the following: Financial resources such as money and credit. Physical resources which include buildings and equipment. machines People - this is one of the most valuable resources to any organisation. The supply of human resources must be sufficient to ensure the healthy operation of the organisation. Thus every organisation needs proper human resource planning.

DEFINITION OF HUMAN RESOURCE PLANNING Human resource planning is the process by which an organisation ensures that it has the right number and kinds of people, at the right places, at the right time, capable of effectively and efficiently completing those tasks that will help the organisation achieve its overall objectives. Human Resource planning translates the organisations objectives and plans into the number of workers needed to meet those objectives. Without clear-cut planning, estimation of an organisations human resource need is reduced to mere guesswork. The purpose of human resource planning is to assess where the organisation is, where it is going, and what implications these assessments have on future supplies and demands for human resources. Attempts must be made to match human resource supply and demand, making it compatible with the achievement of the organisations future objectives. Human resource planning seeks to determine the number and kinds of people the organisation needs now and may need in the foreseeable future and seeks ways to satisfy those needs - perhaps even to anticipate them (Ferris, G.R; 2001: 16) Human resource planning is the process by which an organisation ensures that it has the right number and kinds of people at the right time, in the right places

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capable of performing the tasks necessary to achieve the organisations objectives (Armstrong M: 2001; 357) Human resource planning is the process for ensuring that the human resource requirements of an organisation are identified and plans are made for satisfying those requirements. Human resource planning is based on the belief that people are an organisations most important strategic resource and matches resources to business needs (Bulla and Scott: 1994) The aims of human resource planning are to ensure that the organisation: Obtains and retains the number of people it needs with the skills, expertise and competencies required. Makes the best use of its resources Anticipates the problems of potential surpluses or deficits of people. Develops a well-trained and flexible workforce. Reduces its dependence on external recruitment when key skills are in short supply by having a reservoir of its own employees. HUMAN RESOURCE PLANNING AND STRATEGIC PLANNING Human resource planning is a product of strategic planning. It determines the human resources required by the organisation to achieve its strategic goals. The link between human resource planning and strategic business planning is important because, in the development of an informal forecast of the firms human resources needs, it is necessary to have input concerning the direction the organisation will be taking in the future; information such as whether growth or decline is projected and the type of skills that will be required. It is important to consider the current and potential availability or supply of human resources skills in the organisation and the marketplace. Timely and accurate human resources information may, for example, enable an organisation to postpone or implement a variety of recruitment and training activities or to capitalise on the availability of a given mix of skills to pursue a new venture. FRAMEWORK FOR STRATEGIC HUMAN RESOURCE PLANNING The strategic human resource planning process can be captured in a conceptual model such as the one shown below.

36

Organizational Strategic Planning Process

Business Unit Strategic Planning Process HR Supply and Demand Analysis Environmental Scanning Forecasting Succession Planning

HR function Strategic Planning Process

Human Resource Plan

Implementation

Within a broader, more integrated view of the human resource function, career planning and development activities in organisations represent a logical component of human resources planning. Making sure that the right people with the right skills are at the right place at the right time is quite consistent with helping people plan their careers in organisations and establishing routes to take and time frames to meet. HUMAN RESOURCE STRATEGY A strategy is a game plan that is used to interact with the environment and make the firm achieve a competitive advantage. Due to the changing dynamics of the human resource function, there is greater need for human resource strategy. Companies that are successful are those that begin as early as possible to define and include in their activities a unique competitive position including the human resources. Human resource strategy enables an organisation to remain effective and efficient in managing people in line with the changing business and environment. It is a comprehensive approach covering the vital issues such as change management, competence building, and cultural change and so on. 37

The list of personnel strategies is endless. They range from tightly controlling labour costs, encouraging sales and production performance, to enhancing employee creativity. Ultimately each is designed to help the organisation fulfil its mission and objectives. Examples of the range of personnel/human resource strategies include: 1. Recruitment and selection strategies some firms wish to promote from within by looking first at their current employees when filling managerial positions. Other companies seek managers from outside the company. 2. Personnel planning strategies some companies do little planning for future personnel needs. Others use succession planning and computer simulations to determine the type and number of employees needed 3. Training and development strategies some companies allow employees to learn their skills on the job. Others spend thousands of dollars carefully training employees before they are allowed to assume job responsibilities 4. Performance appraisal strategies some companies use very informal performance appraisal systems such as occasionally telling an employee how he/she is doing over a cup of coffee. Others use carefully developed appraisals and formal appraisal interviews 5. Compensation strategies some companies pay below the market rate, whereas others pay above. A number of companies offer liberal medical, dental, and hospitalisation insurance plans whereas others do not. Some companies use incentive pay, sales commissions, and profit sharing; others pay a flat hourly rate or salary regardless of individual productivity 6. Employment relations strategies some companies adapt an antagonistic posture toward unions; others do not. A Company may use a well-defined progressive discipline system or leave disciplinary actions entirely up to the supervisor

38

THE STRAGEGIC HUMAN RESOURCE PLANNING PROCESS Human resource planning involves matching the available employees with the jobs to be performed and taking care of the shortages and overloads that might be detected. This can be shown in a figure as below.

Strategic Planning

Human Resource Planning Find out what is available Compare Forecast the HR Requirement

Demand = Supply (No action) (Action)

Demand > Supply (Action).

Demand < Supply (Action)

Steps in Human Resource Planning 1. Assessing the current human resources of the organisation 2. Assessing where the organization is going (objectives) 3. Forecasting the supply and demand for human resources 4. Matching demand and supply 5. Dealing with overloads 6. Outplacement services 7. Dealing with Shortages 1 Assessing the current human resources in the organization. The human resource manager begins by developing a profile of the current human resources in the organisation (auditing skills) and the jobs that exist in the organisation (auditing jobs). This will be done after the human resource manager is clear of the human resources available in the organisation. This is done by scanning the internal environment to know what has been happening to human resource for instance the labour turnover, training levels, absenteeism and death of employees. Assessing the current human resources can be done by auditing skills and jobs as detailed below:

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a. Auditing skills Once planners obtain an understanding of current jobs and the new jobs that will be necessary to carry out the organisations plans, they can make a detailed audit of current employees and their skills. The basic source of data on employees and their skills is the human resource records of the organisation. This auditing of skills would include developing and analyzing a databank containing the following information. A list of names of the employees. Their level of education and training Prior employment and time in each job Current position Performance ratings Salary level Languages spoken Capabilities Specialised skills for each employee in the organisation

From a human resource planning viewpoint, this input is valuable in determining what skills are currently available in the organisation. It can act as a guide for considering new pursuits for the organisation and can take advantage of opportunities to expand or alter the organisations strategies. This report also has value in other personnel activities, such as selecting individuals for training and executive development, promotion and also for transfers. This analysis also helps an organisation to take advantage of opportunities and take decisions such as: Training of employees. Development of managers. Employment of more workers. Separation of unwanted staff. b. Auditing jobs The current jobs in the organisation are analysed in terms of the following The jobs that exist currently. The number of individuals performing each job. The reporting relationships of jobs. How essential each job is. The jobs that will be needed to implement the organisational strategy. The characteristics of anticipated jobs.

2. Assessing where the organisation is going The organisations objectives and strategies for the future determine future human resource needs. 40

Demand for human resources is a result of demand for the organisations products or services. Based on estimates of total revenue, the organisation can attempt to establish the number and mix of resources needed to reach these revenues. In some situations, however, particular skills may be necessary and these skills may be scarce. The satisfactory availability of such skills can determine revenue e.g. in a data processing consulting firm that finds it has more business opportunities that it can handle. Thus, in order to forecast future human needs, it is necessary to forecast the sales or revenues.

3. Forecasting the supply of human resources in the future. The human resource manager should forecast the future supply of human resources from both internal and external sources. The internal supply of human resource will depend on the training and development, transfer, promotion, retirement policies among other factors. The external supply of human resource will depend on: Net migration into or out of an area. Where the net migration is into a certain area the implication is that there will be plenty of workers to employ in the future. The opposite also holds. Individuals entering or leaving the workforce. In many developing countries, there are many individuals entering the workforce. Individuals graduating from schools, colleges and universities. Changing workforce compensation patterns. Economic forecasts for next few years. Technological developments. Actions of competing employees. Government regulations and pressures. Factors affecting people entering or leaving workforce.

Demand forecasting is the process of estimating the future numbers of people required and the likely skills and competencies they will need. The demand forecasting techniques that can be used to produce quantitative estimates of future requirements are: Managerial or Expert Judgement This method simply requires managers to sit down, think about future workloads, and decide how many people will be needed to efficiently undertake the workloads. This can be no more than guesswork unless there is reliable evidence

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available of forecast increases in activity levels or new demands for skills. Either a top down or bottom up approach can be used. Ratio-trend Analysis This is carried out by studying past ratios between, say, the number of direct (production) workers and indirect(support) workers in a manufacturing plant, and forecasting future ratios, having made some allowance for changes in organisation or methods. Activity level forecasts are then used to determine direct labour requirements, and the forecast ratio of indirect to direct would be used to calculate the number of indirect workers needed. Work Study Techniques Work study techniques can be used when it is possible to apply work measurement to calculate how long operations should take and the number of people required. Work-study techniques for direct workers can be combined with ratio-trend analysis to calculate the number of indirect workers needed. 4. Matching demand and supply of human resources The objective of human resource planning is to bring together the forecast of the future demand and supply. The result of this effort will be to pinpoint shortages both in number and kind; to highlight areas where overstaffing may exist (now or in the future); and to keep informed of the opportunities that exist in the labour market to hire good people, either to satisfy current needs or to stock pile for the future. The most important concern must be given to the determination of shortages which forces organisations to hire additional staff or to transfer people within the organisation. Thus comparisons are done on what is available and what is required. This comparison assists the human resource manager to identify any gaps that may exist and to come up with the necessary plans to fill in the gaps. Ideally the demand for human resource is equal to supply. If the demand is equal to supply then no action needs to be taken. However, there are cases where the demand is greater than the supply. The organisation should employ more people if the demand is greater than the supply. However, if the supply is greater than demand, the organisation should reduce its workforce. 5. Dealing with overloads or surplus A surplus means that the organisation has more people than it requires. An organisation with more people than it needs could do the following in order to downsize: 42

a) Attrition and hiring Freeze through attrition, individuals who quit, die, or retire are not replaced. Those who remain must handle the same workload with fewer people. Unless turn over is high, attrition will eliminate only a relatively small number of employees. Attrition may therefore need to be supplemented by freezing hiring. b) Early Retirement/ Buyouts Early retirement is a means of encouraging more senior workers to leave the organisation early. To provide this voluntary incentive, employers make additional payments to employees so that they will not be penalised too much economically until their pensions and social security benefits take effect. Such voluntary termination programs or buyouts entice an employee to quit with financial incentives and it is better than layoffs and individual firings. c) Lay offs these can be temporary or permanent. A temporary layoff (like in Tourism, Agriculture and seasonal industries) occurs where workers are recalled during the peak periods and laid off occurs during slack periods when the demand is low. Lay offs may be an appropriate down sizing strategy if there is a temporary down turn in an industry. Companies have no legal obligation to provide a financial cushion to laid-off employees. c) Leaves of Absence without Pay this gives workers the opportunity to take leaves of absence without pay. This may provide time for an employee who is financially capable to leave the organisation temporarily in pursuit of personal interests such as attending college so as to increase marketability and mobility. Individuals offered this leave are usually employees whose jobs may be eliminated in the future. Other methods of getting rid of excess workers, although subject to ethical tests, include: Requiring employees to have certain academic qualifications. Sacking employees for minor mistakes Terminating contracts of employment after expiry of the contracts. Retrenchment This is when an organisation reduces its workforce because they do not need them. Setting unrealistic work targets. 6. Outplacement Services. These can be referred to a group of services offered to displaced workers especially those who lost their jobs involuntarily due reasons such as plant closures. The range of outplacement services include: Personal career guidance and counselling Resume preparation Typing services 43

Training on interviewing workshops. Referral assistance

Reasons for Outplacement 1. Cost helping workers find jobs more quickly can cut down on unemployment benefits. This is especially the case in situations where the law requires displaced workers to be paid until they get other jobs. 2. Company image outplacement efforts typically project the image of the company as a caring employer. Such a firm may not experience a lot of difficulties in future when it wants to get new employees. 3. Legal issues the longer employees are out of work, the more likely they are to consider suing for damages. 4. Social responsibility some believe that employers have a moral or ethical obligation to former employees. Typically, outplacement is done using outside firms that specialise in providing such assistance. 7 Dealing with Shortages If the results of human resource planning indicate a shortage the following steps should be taken: Outsourcing Use of temporary employees Careful use of overtime Part-time employees Recruitment- this should be the last resort because it has serious consequences. Thus before an organisation commits itself to employing people on long term basis, it should consider all alternatives to full time employment.

Alternatives to full time employment


Organisations normally employ full time, permanent or core employees and the peripheral employees. The core employees are essential for the direction, coordination, and development of the firms activities. They include: Managers Team leaders Professional staffs in fields such as finance, legal, and personnel. Knowledge workers involved in the development and management of new technologies. Technicians and highly skilled workers in laboratories, design offices, and manufacturing departments who play key roles in projects or work teams. Peripheral or contingent employees can be categorised into temporary workers, part- time workers, job sharing, new technology (home working & teleworking), and sub contracting. 44

Temporary workers, also known as temps are used to reduce the cost of employing people on permanent basis. Besides providing cover for staff shortages, sicknesses, or holidays, they can be used to match fluctuations in the level of business activity. Part-time workers are paid for the period they are engaged. Advantages associated with their use include: More scope for flexing the hours worked. Better and longer utilisation of the plant and equipment. Lower unit labour costs Higher productivity. Some of the disadvantages of part- time workers are: They may be less willing to work at certain times and they may be less mobile. High rates of employee turnover. Less commitment compared to full time workers. Job sharing occurs where two or more employees share the work, pay and benefits of one full time position. Advantages of this include reduced employee turnover and absenteeism. Greater continuity of work occurs because even if one person is absent, the other(s) will be present. Those who cannot occupy full time positions will also fit into the organisation. Disadvantages include the administrative costs involved and the risk of responsibility being divided. New technology (teleworking and home working) involves people working at home with a terminal linked to the main company and possibly networked with other outworkers. It enables an organisation to achieve greater flexibility, rapid access to skills and the retention of skilled employees who would otherwise be lost to the company. Teleworkers can be used in functions such as marketing, finance, personnel, and management services. Telecommuting enables a firm to have its work done in low labour cost areas and to have its employees located anywhere on the globe. Subcontracting is advantageous since it enables an organisation to concentrate its resources on the core business activities. Employment costs are also reduced while flexibility and productivity is increased. Job security for the core employees is enhanced. The drawbacks include clarifying the legal status of subcontractors for income tax, National Insurance, and employment legislation purposes. It may be difficulty to control the quality and delivery of the goods and services of subcontractors. At the same time, some employees and trade unions may react negatively to the use of subcontractors since they may want all the work to be kept within the company.

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CONCLUSION Human resource planning is a key element for the success of any organisation. The environment and customer needs keep on changing. When this happens, the whole business set up in an organisation has to change. This makes management of human resource challenging and more complex. The human resource manager should make human resource planning a continuous process for the organisation to achieve its goals.

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CH. 7: RECRUITMENT AND SELECTION


Chapter objectives. Following the completion of this chapter the reader should be able to: Examine and analyse the process involved in the recruitment and selection of employees. Understand the different sources of internal and external recruitment Explain how to deal with shortages of managers both in the short run and in the long run. Analyse and discuss a wide range of pre-employment test that can be used to screen potential employees.

Introduction The human resources of most organisations are viewed as their most important asset. The successes and failures of organisations are largely determined by the calibre of its work force (starting with the organisations management) and by the efforts it exerts. The employees a firm has can create a major difference for the firm. Therefore the policies and programs the enterprise adopts to meet its work force needs are of vital significance. The employment function of a human resource department comprises the areas of: Manpower Planning Recruitment Selection Placement Performance Appraisal The changes of personnel status such as transfers, promotions, lay-offs, discharges. In administering these activities the personnel managers work closely with operating/functional management RECRUITMENT This is the development and maintenance of adequate manpower sources. It involves the creation of a pool of available labour from which the organisation can draw when it needs additional employees. Recruitment can also be described as those activities in human resource management which are undertaken in order to attract sufficient job candidates who have the necessary potential, competencies and traits to fill job needs and to assist the organisation in achieving its objectives. Through recruitment an organisation will be able to attract and retain the interest of suitable applicants and to project a positive image of the organisation to outsiders. The recruitment exercise should be done very carefully because employees are very costly to maintain. Therefore, employing the wrong person means paying for poor services. People have different performance levels and the success of 47

other activities such as training may heavily depend on the kind of people recruited. When there is an opening in an organisation, the department concerned fills the personnel requisition form whose contents are a job description and a person specification. Openings often arise from resignations, promotions, or transfers among other methods.

Human resource requisition form


This form contains both a job description (job profile) and a person specification (person profile or a job specification). The job description describes a job in terms of: The title of the job. Duties and responsibilities involved in the job. Reporting relationships (below and above the position). Technical requirements of the job. Geographical location and coverage of the job. Degree of autonomy expected of the job.

The personnel specification includes details in the lines of: Attainments i.e. the standards of education and qualifications, experiences and successes. Physical requirements including appearance, speech and so on. Aptitudes and qualities such as ability to communicate and self-motivation. Dispositions in the line of sense of maturity and responsibility. Interests outside the job. Personal circumstances such as marital status.

The personnel requisition form is then forwarded to the human resource department so that the right person can be acquired.

Sources of recruitment
There are basically two (2) sources of recruitment namely: Inside sources External/ Outside sources INSIDE/ INTERNAL SOURCES: In filling vacancies from inside the firm, it is necessary to match job recruitment with the workers qualifications. The selection process must still be employed. Internal recruitment means that present employees are given the first chance for any better or more attractive jobs that arise before outsiders are considered. Three methods can be used to recruit from among present employees. 48

The personnel director and members of the operating management can review personnel records and appraisals forms to find qualified candidates. This is used especially for lower level employees. Employees under consideration may be totally in the dark about the goings-on until the selection is formally announced. There is also the possibility that fully qualified potential candidates will be overlooked due to an oversight. This is the procedure followed in most businesses and industries. The vacancy can be announced in the firms notice boards for any person who is interested to apply (job posting). This grants the employees just as much right to apply for the job as the employer would grant to outsiders who answered an advertisement in the newspaper. The bulletin board notice specifies the job title, rate of pay, qualifications that the employee must possess among other things. Employers quite logically seek to have the job assignments go to the most qualified persons as decided by the management. Inside moonlighting is an internal recruitment source used for short-term needs or small jobs, which do not involve a lot of additional work. The organisation offers to pay bonuses of various types to people who would like to perform the additional tasks. Advantages of internal recruitment: Most people expect to advance to positions of higher pay and status during their working careers. An opportunity to achieve these hopes fosters high morale. One opening in the higher level may cause a succession of individual advancements as people each in turn move up. Management can more accurately appraise the skills, knowledge and personality characteristics of present employees than it can for job applicants who are interviewed in the employment office. Therefore, there is less risk of error in the selection and placement process. The recruitment and selection problem is simplified because there are only a few entry jobs to recruit for and the formal education, skills and knowledge requirements for these entry-level jobs are relatively low. It also promotes the culture of the organisation. Further, there will be less induction time since the employee is already used to the organisation. The whole process of recruitment is less costly in terms of time and financial requirements. Internal recruitment is not only good public relations but it also encourages good individuals who are ambitious. When planned properly, it can also act as a training device for developing middle and top level managers. Limitations of Internal Recruitment: In order for the company to fill its job openings from within it must have in operation training programmes by which people in lower level jobs can learn new skills in order to qualify for upgrading to more demanding work. Small organisations often feel that they cannot afford the expense of comprehensive employee training programs. A policy of upgrading from within requires that the persons hired have the aptitudes and potential for moving ahead to the next higher level jobs. Sometimes this leads to the Peter Principle whereby one is promoted from their highest 49

levels of competence to their highest levels of incompetence. External recruitment will be limited to lower level positions and the new recruits may be overqualified for the lower level jobs. If the purported promotions for the overqualified persons recruited externally do not actually materialise, these over qualified persons may be disappointed at their lack of progress; consequently, the rate of labour turnover may be high. An exclusive promotion from within policy prevents the infusion of new ideas and knowledge at upper levels. This in effect may be referred to as organisational inbreeding. Subordinates having been taught and modelled by their bosses may not know other ways of doing things. When promoted to position of power and influence, they tend to perpetuate possibly outdated practices. As a generalisation, the most fruitful policy is that of filling the majority of vacancies from within but going to the outside when fully qualified talent is not available inside the organisation. It is also probably wise to fill a moderate percentage of the higher-level managerial and professional positions by going to the outside labour market to inject new ideas to the organisation. EXTERNAL/ OUTSIDE SOURCES There are many sources of employees outside the organisation. The particular sources and means by which workers are recruited vary greatly. It depends upon the management policy, the type of job involved, the supply of labour relative to demand and the nature of the existing labour market institutions such as employment agencies, trade unions, and so on. The principal sources and methods for recruiting manpower include: Employment agencies These may be public or private. For a fee collected usually from the employee (after he/she is hired) but sometimes from the employer they help to meet employer requests for people from their files of job seekers who have registered with them. Many agencies do a careful job of interviewing, testing, counselling, and screening to match the employers specification and demands and the abilities and needs of the job applicant. Many agencies concentrate on whitecollar office and retail sales personnel, because demand is generally high and turnover is great. However, many top status people especially sales people don't look for employment through employment agencies. In Kenya employment agencies include "My jobs Eye, Manpower Services, Federation of Kenya Employers (FKE), Deloitte & Touch, Price Waterhouse Coopers, Preferred Personnel, Sheer Logic, Hawkins & Associates, Career Connections, and a variety of advertising agencies. Labour unions This source of employees is used primarily in those occupations in which the employees are represented by trade unions. Some of the industries and occupations, which tend to obtain some or most of their labour force through unions, are construction, clothing, and popular dance bands among others. 50

Generally, those union members who have been unemployed for the longest time are given the first opportunity to fill the job opening. This ensures that unemployed workers will get jobs in their rightful turns. Examples of labour unions in Kenya include Central Organisation of Trade Unions (COTU), Federation of Kenyan Employers ( FKE), Kenya Union of Post Primary Education Teachers( KUPPET), and Kenya National Union of Teachers (KNUT). Unsolicited applicants at the employment office For jobs requiring only routine abilities and skills, many employers are able to fill their labour needs largely by directly hiring at the gate. It is used to obtain many manual workers and sales people. At other times prospective employees apply directly to the organisation in the hope that a vacancy exists or they can complete application forms and send them to the enterprise concerned. This method is cheap and improves the image of the organisation. An organization which treats its employees well, pays adequate wages, and which has enlightened personnel practices will easily attract potential employees. However, the applicants may get jobs else where before being engaged by the organisation. Employee recruiting

It is also known as employee referrals or employee recommendations. Some organisations announce to their own employees that they wish to hire additional people possessing certain type of skills. The employees would then pass the word to their friends and relatives who may be seeking work. The principal advantage of employee recruiting is that it is selective. An employee would not recommend grossly unqualified persons because he/she feels that these will reflect adversely upon his/her own reputation. Ideally those recommended are individuals who are likely to make an excellent contribution to the organisation. This method is inexpensive and very effective in finding candidates with specific skills quickly. Nevertheless, recommenders may confuse friendship with job performance or competencies. Individuals often like to have their friends join them at their place of employment for social and economic reasons such as rides to and fro work yet the friend may lack job-related competences. Employee recruiting may lead to nepotism whereby individuals hired are related to those already working in the organisation. Sometimes it leads to racial imbalance through, for example, whites recommending whites only. At other times, it prevents the infusion of better blood by preventing a wider pool of applicants that would have applied if the position had been advertised. Advertising Advertising can be done in newspapers, magazines, professional society journals, Televisions, radio, and public notice boards among other places. This is a widely used method of recruiting. With some exceptions, employers who advertise for applicants should reveal their own identity rather than use a blind advertisement. This is sound ethically because the employer also expects the candidates to supply detailed autobiographical information. Likewise this 51

prevents the possibility of the employers own employees (those who are dissatisfied and seeking to make a change) unknowingly applying for a job at their own company. In some cases, firms hide their identity. This occurs in situations where the firm has a poor reputation which may prevent it from getting applicants or where the firms reputation is so good that it will have numerous applicants. Although this approach is costly, it avails a wide choice of applicants and there is some equity in using it. Competitors this source of recruitment avails persons who are already used to the industry dynamics and who have their own customers with whom they may move. Nevertheless it can result to bad blood among the competitors. Hardcore unemployed General Motors used this approach at one time in Detroit City, USA, to prevent riots in the streets. Care should be exercised when using this source. Internet- through the Internet one is able to attract many recruits from different parts of the world. Other Industries- a firm in the media industry may recruit from, say, the pharmaceutical industry. New perspectives are then brought into the organization.

Educational institutions ( i.e. Schools, Colleges, and Universities) This recruitment practice tends to be utilised by large companies. Such firms usually send their recruitment teams to the educational institutions to make presentations. In other cases, the firms invite prospective students to visit their plant where the final employment decision is usually made. Schools, colleges, and universities avail intelligent and wise employees but sometimes they may lack the experience required. This problem can be arrested by arranging for internships of students. Further, the rate of labour turnover is very high especially among younger school or college leavers. They quickly take advantage of opportunities for greener pastures unlike elderly employees whose rate of job mobility is lower. Professional bodies

Accounting, engineering, and scientific institutes look after the interests of their members by allowing vacancy advertisements in their publications. Opportunities for networking are also afforded through conventions. Examples are Institute of Certified Public Accountants of Kenya (ICPAK).

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Head hunting

Top professional people are hunted through specialised agencies. The persons are approached personally with an offer to fill a vacancy. Alternatively, an advertisement is written with the specific persons CV in mind. Those hunted are highly effective executives who have the skills to do the job, can effectively adjust to the organisation, and who are willing to consider new challenges and opportunities. Consultants

Recruitment consultants or placement agencies have a broad network base and are exposed to management in action. They often offer a placement service to client companies. Temporary help services- certain organisations provide employees to meet short-term fluctuations in personnel needs in areas such as nursing, computer programming, library services, secretarial among others. Factors that constrain the process of recruitment. Some of the factors that may make the human resource manger not to recruit the best employees include: Poor image of the organisation; Unattractive jobs or job descriptions; Internal organisational policies that mainly promote internal recruitment; Pressure form the trade unions on who should be recruited; Government laws and regulations such as the Equal Employment Opportunity Act; Where the costs of recruitment are too high;

SPECIAL PROBLEM OF PROFESSIONAL PERSONNEL AND MANAGERS Normally employers don't have difficulty in obtaining adequate employees for manual, clerical, sales and general administration type of works. But they have a problem in obtaining the professional and managerial talent they require. In the short run, the individual firm faced with the shortage of qualified talent must result to an aggressive recruitment campaign. Among the more prominent advertising techniques are; Advertising in newspapers, college papers, trade journals and professional journals College recruitment and contacts with university career offices Management consulting firms Executive recruiters and agencies (Head Hunters) Professional association meetings

The long-term solution to this problem would be for organisations to invest more in training managerial talent. 53

SELECTION Once recruitment is done the candidates are selected. Selection is a process whereby out of the many job applicants the best are taken to fill the vacancy. To assist the selection process the potential candidates fill in job application forms whose contests are: Personal Information This includes their name, address, telephone number, marital status, date of birth, age, gender, nationality, languages spoken, tribe, weight & height (body mass index), and next of kin Educational Background Schools passed through (primary and secondary) Further and higher education institutions attended Qualifications attained Special training Membership to professional bodies Employment History Companies worked for Dates of employment Positions, duties and responsibilities Military service Other Interests Sports Hobbies Membership to societies/clubs Referees Academic referees Work related referees. This form gives a common basis for drawing up a shortlist and provides a foundation of knowledge, which can be used as a starting point for the interview. The information can also assist the post-interview decision making stage. It is from the application forms that the first group of candidates will be shortlisted for the first interview, which in many cases, is the aptitude test. The information gives an indication of an applicants suitability for a job. Past behaviours can be used as an indicator of future performance potentials and the length of service expected from the potential employee The accuracy of the information given in the application form may need to be ascertained. This can be done by using reference checking and requiring the applicant to sign a statement confirming its accuracy and stating the potential effects of false information.

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THE INTERVIEW Most companies pass potential employees through several interviews depending on the requirements of the job. The interviews can be administered by the human resource department alone or in conjunction with the departmental management. In some cases, the departmental management holds the initial interview. In most cases, the personnel management and departmental management make the final choice. Yet in a few cases, the departmental management makes the final decision without consulting the human resource department. INTERVIEW SETTING The human resource manager should prepare the interviewing panel by setting time, date, and venue. Moreover, all the people who will participate should be informed and the roles or questions they will ask determined in advance. Effective interviews can be held in the following setting: The room where it's held should be free from interruptions by colleagues, telephone calls, visitors and so on. A very large room with a few people occupying it makes it lack the intimacy required for a free and natural discussion. Large desks or tables separating the parties increase their psychological differences. Consequently, less information may be acquired. . CONDUCTING THE INTERVIEW When candidates come into the interview room many of them are anxious. The anxiety may stem from a strong desire to get the job or from other reasons. The personnel manager has the duty of reducing anxiety. There are a number of guidelines, which if followed should reduce anxiety and establish rapport. These include: One of the interviewers (preferably the departmental manager or even the human resource manager) should bring the candidate to the room, rather than the candidate being sent for through a secretary or a junior administrator. Secondly, the conversation should be opened with a few easy to answer questions, which, although not directly related to the job, allow the candidate to talk to the interviewer and gain confidence. The questions here range from introducing oneself to a brief history of oneself, or they may even touch on a recent happening that is causing concern in the town or in the country. Continuing in this vein of easy questions, questions early in the interview should be open-ended rather than closed ended. Open-ended questions allow the applicant scope for talking at some length on a particular topic. However, some closed-ended questions may be inevitable. The panel of interviewers should be courteous and appear interested in what the applicant says, even when it is not what they were expecting to hear. Interviewers should not engage in activities such as making phone calls, smoking, and discussing among themselves when the candidate is expressing himself or herself. The interviewers must also be relaxed and friendly. To encourage candidates to talk about themselves and their experiences the following techniques can be used: 55

Play Back Technique- This involves repeating the last few words of the candidates last sentence in order to find out the reason for the answer that was given. Use of Rewards - The interview can reward the candidate for their achievements by using: Encouraging sounds such as Uh!, I see!, Mmmh! Eye behaviour -narrowing of the eyes together with a slight nod of the head can convey the messages "Uh!, I see!, Mmmh!" Body language such as the interviewer sitting posture when it is upright and the candidate is being given attention. Use of Silence -It is used where the candidate has stated a point which is not clear, he/she should be given time to explain it. This should be used with care otherwise rapport may be lost. Use of Probes/ Research- Where a candidate has given a statement, which is unclear, the interviewer should ask questions to find out why the statement was given. Summarising- The interviewer can summarize the points raised by the candidate in order to gain agreement before proceeding to the next point. Use of Neutral Questions- Interviewers should ask questions which are neutral and which don't elicit 'yes' or 'no' responses. OTHER CONSIDERATIONS The interviewer shouldn't talk too much The human resource manager should also sell the job to the candidate The interviewer must control the interview The interviewer should close the interview when sufficient information has been obtained. In closing the interview, the candidate may be asked to raise any questions which they may have.

At the end of the interview, the interviewers explain when the decision will be made and how it will be communicated to the candidates. Thereafter, the candidate is thanked and escorted out of the interview room. After the interview, unsuccessful candidates are sent regret letters. Successful candidates may be sent letters of job offer. However, additional tests (psychological tests, medical tests etc) may be required before the candidate is fully given the job. PRE-EMPLOYMENT TESTS Attracting qualified applicants for a job through the recruitment process is only the first step in the process of acquiring new employees. The organisation must develop techniques for selecting the right person from among the many applicants for the particular position. It is essential that management should avoid employing a person who may well soon or later resign because the job he was selected for does not meet his/her expectations, bearing in mind that recruiting, selecting, and training costs are 56

necessarily high. Further, there is normally a time lag between the time an employee leaves the firm and the time a qualified replacement is found. There are various selection techniques used in Kenya such as the interviews and the application forms. The interview enables the person responsible for engaging new employees to view the total individual and so evaluate the person and his/her demeanour directly. The application forms main value is in recording information on the personal history of the applicant. Among other things the application form records age, marital status, number of dependants, education, training, work experience and so on. The application form as a selection technique may also have elements of a formal selection test. Tests have been used in an effort to find more objective means of measuring the qualifications and liabilities of potential employees. Tests can also be used on employees earmarked for transfer or promotion. An employment test is an instrument that is used to obtain information about personal characteristics. The main benefit of tests is that they may uncover qualifications and abilities that would not be discovered by the interview and application form. Tests will also eliminate the prejudices and biases of the interviewer and selection panels. In Kenya, formal tests can pre empty nepotism and favouritism in the selection of employees. However, formal tests tend to continuously favour those who have had certain educational and familiar backgrounds given the very badly skewed distribution of educational and economic resources in the country. Thus the pre-employment test can be given for the following reasons: 1. To recruit the best candidate for the job. 2. To reduce staff turnover by not recruiting unsuitable employees. 3. Limit recruitment costs. 4. To help employers by providing them with objective data 5. To recruit those who are likely to be most productive 6. To minimise expensive mistakes in selection decisions.

Characteristics of good tests


A good test has the following characteristics: It is a sensitive measuring instrument that discriminates well between subjects. It has been standardized on a representative and sizable sample of the population for which it is intended so that any individuals score can be interpreted in relation to that of others. 57

It is reliable in the sense that it always measures the same thing. A test aimed at measuring intelligence should measure the same characteristic when applied to different people at the same or at different times, or to the same person at different times. It is valid in the sense that it measures the characteristic which the test intended to measure. A test intended to measure intelligence should measure intelligence and not simply verbal facility.

Type of tests The main types of tests are: Aptitude tests Personality tests Psychometric tests Skills tests Work sample tests Work styles or traits tests Specific knowledge tests Medical tests Some of the tests are briefly discussed below.

1. Aptitude Tests
These measure the general intellectual ability of a person. The main types of aptitude tests are the: mechanical reasoning tests numerical reasoning tests abstract reasoning tests spatial relations tests verbal reasoning tests language usage tests Spelling tests. The mechanical reasoning tests measure ones ability to understand the underlying principles behind machines. High scores in these tests indicate proficiency in engineering and mechanical work. The test is concerned with whether one can reason through mechanical problems in a logical way. It is a useful way of measuring a persons mechanical aptitudes.

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Numerical ability tests measure the ability of a person to add, subtract,


multiply, and divide. These tests are useful in careers such as accounting, banking, insurance, and the engineering disciplines. Typical questions would include calculation of measures of central tendency or measures of dispersion or even the comparison of performance of several firms over a given period of time. Other issues may also be tested. Examples would be: a) What number comes next in the following sequence? 16,8, 4, 2, 1, 0.5, 0.25, ------, --------. b) A car travels 40 metres in 0.2 seconds. If it continues at the same speed, how many kilometres will it have covered in 6 hours?

The information in numerical tests is usually presented in texts, graphs, charts, and so on followed by statements. A person is asked to indicate whether the statements are true or false, or choose among the given choices.

Abstract reasoning tests measure the ability of someone to reason with


visual configurations. Questions here would contain patterns and series to be completed. They are a non-verbal measure of reasoning ability and are useful in architecture, design, draughting, and computerisation (such as Computer Aided Designs).

Language usage tests are to measure the ability to communicate in good,


accurate grammatical English. It is a measure of how well one can distinguish between correct and incorrect grammar, punctuation, and wording of sentences. These tests are useful for careers such as writing, teaching, and journalism. The spatial relations tests are probably the most difficult aptitude tests. They are combined with mechanical reasoning tests and applied to people wishing to pursue technological and scientific careers. Space relations involves the ability to visualise and think in three dimensions or picture mentally the shape, the size, and positions of objects when shown only a picture or pattern.

Spelling tests are important for school or college work and for many other
jobs such as accounting, banking, insurance, and engineering. Poor spellings are not necessarily an indicator of poor levels of education.

Verbal reasoning refers to the ability of a person to reason logically in verbal


terms. It is the ability to comprehend verbal concepts or ideas and see the relationships between them. They are particularly useful for careers such as law, psychology, personnel, and different types of management.

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2. Personality tests
These tests are designed to reveal the candidates personal characteristics and the way candidates may interact with others, thereby giving a measure of leadership potential. These are to identify the candidates personality types. Personality concepts of importance to the human resource manager include whether one is an extrovert or introvert, sensate or intuitive, thinking or feelings led, etc. other aspects of personality tests are stress, simulation, novelty, dominance, and achievement.

3. Psychometric tests
A psychometric test is a way of assessing a persons ability or personality in a measured and structured way. The main psychometric tests are personality, ability, and interest tests.

4. skills tests
These are job specific and tests ones ability to perform a relevant task. A typing test is a skills test just like headline writing.

5. Work sample tests


The candidate is asked to produce a sample of their work. A typist may be asked to type some work.

6. Work styles or traits tests


These are intended to find out how one likes to work. An individual can like working alone or with others, as a leader or as a follower. Some individuals like to be praised while others prefer freedom. These tests are administered through a series of questions to be answered with a yes or no, or choosing the response from a number of choices. In these tests, there are no right and wrong answers.

7. Specific knowledge tests


These tests measure how much one knows of a particular subject- such as knowledge of sports.

8. Medical tests
The aim of medical tests are to determine any major medical conditions of the potential workers that may affect their performance. Some of the diseases for which potential job seekers may need to be diagnosed include HIV/AIDS, tuberculosis, asthma, and epilepsy among others. Discrimination based on 60

medical condition may be illegal unless the condition will affect the performance of the individual. Some of the diseases for which potential job seekers may need to be diagnosed include HIV/AIDS, tuberculosis, asthma, and epilepsy among others. Discrimination based on medical condition may be illegal unless the condition will affect the performance of the individual.

Reference checks
These are conducted after the employment interview to find out more about an applicants employment record, education and training, and behavioural patterns. Through reference checking, input is obtained from a number of people and there is useful feedback on the strengths and weaknesses, achievements and failures of individually. The organisation receives a verbal report on an individual' performance. References are most useful if the person providing the reference has observed the candidate in a relevant situation. The person providing the reference must be capable of assessing the candidates performance and he or she must be prepared to express his or her forthright opinion. Moreover, the person must express himself or herself in such a way that his or her opinion is not misinterpreted. Referees have no legal obligation to provide positive feedback on a person. It is strongly recommended that one chooses referees who know him/her very well and who can give accurate information. The referees may also be educators who had the opportunity to interact with the person in a classroom setting. INDUCTION AND PLACEMENT Induction is the socialisation or orientation programme aimed at gradually introducing the new employee to the organisation, the work unit in which he or she will be working, the particular work and the people and things which he or she will be working with. Through induction the new comer will feel at ease much quickly. Induction introduces the new employee to the organisation. The letter of job offer specifies where, when and to who the candidate is to report. Once they report to the human resource office, the human resource manager takes them to the departmental head and the employee is taken round the organisation and introduced to the different departments, facilities, offices and so on. The length of time taken on the induction exercise will depend on the size and complexity of the organization as well as on the level in the organization at which the employee is entering among other factors.

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Induction is important because: It gives a positive first impression of the organisation. It ensures the new employee is familiar with the operations, departments and procedures in the organisation. It reduces the time taken by the new person to familiarise themselves with their work and to know how their work relates to other functions in the organisation It enables the firm to socialise its management trainees It enables the employee to gain confidence and perform their duties effectively and efficiently Some of the details covered in induction include: A brief history of the organisation Conditions of employment and benefits Remuneration policy; Work rules and standard procedures; Disciplinary code and procedure Grievance procedure Relationships between the employer and other organisations; Trade union related matters; Training and development policy & facilities; Employee wellness policy; Medical and first and infrastructure; Restaurant facilities; Social responsibility policy; Community involvement policy; Issues relating to confidentiality of certain company information. It helps the new employee to understand what goes on in the firm and what is expected of them.

Once the employee is inducted they are then placed into their workstations.

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Ch. 8: EMPLOYEE TRAINING.


Chapter objectives
At the end of this chapter one should be able to understand and appreciate: The principles of learning and how they relate to training. The major differences between pedagogy and andragogy. The training process for employees. Training programs for non-managers that are designed to develop their skills to perform jobs. Training and educational programs for executives which enable them to develop the ability to manage. The process of designing effective management development programs. Programs designed to improve organizational units as entities.

INTRODUCTION
Recruiting, selecting, and inducting an employee are not an end in themselves. The employee must be trained and developed to fit into the organization. In fact, all employees require some element of training. Definition of Training Training consists of planned programs designed to improve performance at the individual, group, and/or organisational levels. Improved performance, in turn, implies that there are measurable changes in knowledge, skills, attitudes, and/or social behaviour. Training is a learning process whereby people acquire skills or knowledge to aid in the achievement of goals. In a limited sense, training employees provides them with specific, identifiable knowledge and skills for use on their present jobs. Development is broader than training in that the individuals gain new knowledge and skills useful for both present and future jobs ( Mathis $ Jackson, 2000). Training seeks a relatively permanent change in an individual which change will improve his/her ability to perform on the job. Training typically involves the changing of skills, knowledge, attitudes, or social behaviour. It can involve changing what employees know, how they work, their attitudes towards their work, or their interactions with their co-workers and their supervisors. Ideally training is job related learning that employers provide to their employees. The main aim is to improve employees skills, knowledge and attitudes so that they can perform their duties according to set standards. In contrast to training (which is job related) and education (which is the preparation of an employee for a different job), employee development is a broad term which relates to training, education, and other intentional or non intentional learning and which refers to general growth through learning.

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Reasons for training


Training is necessary for the following reasons: Employment of inexperienced and new labour requires detailed instructions for effective performance on the job. Older employees need refresher training to enable them keep abreast of changing techniques and the use of sophisticated tools and equipment; Training is necessary when a person has to move from one job to another because of transfers, promotion or demotion. Increasing use of fast changing techniques in production and other operations requires training in newer methods of operation. Training enables people to work effectively with minimum supervision. It also reduces work related accidents. Training leads to increased productivity, heightened morale, low wastage, reduced spoilage of materials, reduced costs and better quality goods and services all of which enable an organization to achieve greater stability. TRAINING AND LEARNING In order to understand what training techniques can do to improve an employee's job performance it is necessary to understand the concept of learning. Ideally learning is the process of knowing what was previously not known. PRINCIPLES OF LEARNING 1. Learning is enhanced when the learner is motivated. An individual must want to learn. When the desire exists, the learner will exert a high level of effort. People are more willing to learn when the material is important to them and will help them to achieve the goals they have set for themselves. Some of the goals that may encourage intention to learn in certain people include the desire for achievement, advancement, authority, co-workers influence, comprehension, creativity, curiosity, fear of failure, recognition, responsibility, status, and a variety of other reasons. Further, trainees must perceive the organisation and their immediate work environment as supporting participation in training and using what has been learned. If they perceive the organization as not supportive then they will not be motivated to learn. 2. Learning requires feedback. Feedback, or knowledge of results, is necessary so that the learner can correct his/her mistakes. Feedback, or knowledge of results, is best when it is immediate rather than delayed. Immediate feedback can come from observers, the performer, or the task itself. The sooner individuals have some knowledge of how well they are performing, the easier it is for them to correct their erroneous actions. When individuals obtain feedback on their performance, the task becomes more intrinsically interesting and acts to motivate them.

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3.

Reinforcement increases an individuals likelihood of repeating a learned behaviour.

Reinforcement can be positive (to encouraged or sustain a desired behaviour) or it can be negative (to suppress unwanted behaviour). Punishment (negative reinforcement) tells learners that they are doing something wrong. When workers are verbally praised upon properly performing a task, it encourages learning and they are likely to continue doing the task in that way; they will even be motivated to strive toward performing better work. Thus, positive reinforcement encourages learning. 4. Practice increases a learner's performance.

Anyone learning a new skill or acquiring factual knowledge must have an opportunity to practice what he/she is learning. When learners actually practice what they have read, heard, or seen, they gain confidence and are less likely to make errors or to forget what they have learned. Active involvement through practice must be made part of the learning process. 5. Learning curves. Learning begins rapidly, and then levels off. The rate of learning can be expressed as a curve that usually begins with a sharp rise, and then increases at a decreasing rate until a plateau is reached. Learning takes place very fast at the beginning, but then levels off as opportunities for improvement are reduced.

Amoun t of learnin g.

Common learning curve.

Time

6.

Transfer of learning.

Transfer refers to the extent to which competencies learned in training can be applied on the job. Positive transfer occurs when job performance is improved as 65

a result of the training. Zero transfer occurs when there is no change in job performance as a result of the training. Negative transfer occurs when job performance is worse as a result of the training. Near transfer occurs when the material learned can be directly applied on the job with little adjustment or modification, while far transfer occurs where the material learned must be modified or expanded upon before it is used. 7. Split the material into meaningful chunks rather than presenting it all at once. Trainees can absorb only a limited amount of information at a time. In situations where the subtasks learned are relatively easy to perform and are inter-related, all the material can be learned at once. An example is learning how to operate a power saw. Otherwise the material must be broken down into reasonable chunks and presented at different times. 8. Try to use terms and concepts that are already familiar to trainees. The use of jargons and unfamiliar terms should be discouraged. Where new concepts and terms are to be used, then the familiar terms and concepts should precede them. 9. Maximise the similarity between the training situation and the work situation. The principle of identical elements suggests that the more similar the training and the performance situations are in terms of the stimuli present and the responses required, the more likely it is that training transfer will occur. Customer care experts who are expected to work with angry, impatient customers should practice with role models of such customers. The similarity can be in terms of physical elements such as equipment, tasks, and surroundings; it can also be psychological. 10. Label or identify important features of the task. Where the training relates to the use of machines then important operations must be labelled. Examples are the "starter switch" or the stop switch. 11. Trainees learn best when they learn at their pace. This is because some are slow learners while others are fast learners.

TRAINING ADULT AND OLDER WORKERS


The ageing population in many countries implies the need to train elderly workers. Pedagogy is the process of educating children and teenagers through high school while andragogy is adult oriented learning. Andragogy is based on four assumptions about differences between adults and children: Adults are self directed Adults have acquired a large amount of knowledge and experience that can be tapped as a resource for learning 66

Adults show a greater readiness to learn tasks that are relevant to the roles they have assumed in life. Adults are motivated to learn in order to solve problems or address needs, and they expect to immediately apply what they learn to these problems and needs.

Other differences between adult learners and the younger learners (mainly those learners who are below the age of majority) are summarised in the table below. Table 3: Differences between pedagogy and andragogy.

Young learners ( pedagogy)


They need motivation since they may not be sure why they are in training. Raise few questions since they have few real world experiences to draw from. They have developed a tolerance for bureaucracy. Resist participation and expect to be told what to do and when to do it. Future oriented since they expect to apply the material learned in the future. Their major focus is on grades

Adult learners ( andragogy).


Highly motivated and want to learn. Raise many questions as they try to connect class material with real life experiences. Low tolerance for bureaucracy Want to participate. Concerned with immediate problems and their solutions

Primarily concerned in content and its relevance to career and personal life. Tend to be idealistic Tend to be practical Have a restricted world view Have considerable knowledge to bring to training. Want to know the answer and tend Look at problems as having several to see things in one way possible alternatives worth evaluating Impatient and want things to happen Have patience with the world and overnight. understand that change takes time. Likely to accept the information they Can and will verify the information are given. given in the training. Have few specific expectations They have preconceived expectations about the training.

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THE TRAINING AND DEVELOPMENT PROCESS The process of training and developing employees can be shown in a simple diagram as below.

Fig 1: The training and development process. Conduct a training needs analysis Establish the training objectives. Select the training methods and Conduct the training Evaluate the training

1. TRAINING NEEDS ANALYSIS: a. In order to know what to train workers on, it is necessary to carry out a Training Needs Analysis. The training needs analysis finds out what training or development employees actually need and want to acquire, and the conditions which are necessary for ensuring that training or development will be practically useful to the organisation. To know that employees need training the manager can get a clue from: a. Decreased productivity. b. More grievances reported. c. Complaints from customers. d. Equipment utilization figures. e. Training committee observations. f. A high reject rate. g. Greater than usual scrape or wastage of materials. h. A rise in the number of accidents reported. i. Changes imposed on the employees as a result of job redesigns or a technological breakthrough. Nevertheless, it should be known that employees might not excel in their performance because of other reasons such as: Low managerial authority Ambiguous job descriptions Red tape Haphazard personnel management activities Low motivation, morale and job description.

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Some of the methods used for assessing training needs include: 1. Observation and analysis of performance 2. Management and staff conferences and recommendations 3. Analysis of job requirements 4. Consideration of current and projected changes 5. Surveys, reports, and inventories of current employees 6. Interviews with incumbents, supervisors and clients; 7. Assessment centres; 8. questionnaires 9. diaries 10. coaching 11. Work planning and review systems. 12. Delphi technique; 13. Collection of critical incidents; Managers should be able to differentiate between competence and performance. Competence refers to the ability to do certain jobs while performance is the achievement of practical results in a work situation. For training to be conducted there has to be a performance gap between the desired or optimum level of performance and the actual or real level of performance. Some organisations do not conduct a training needs assessment because of reasons such as: The needs assessment exercise can be a difficult, time consuming process. Managers may decide to use the limited resources available to develop, acquire, and deliver the training rather than to do the preliminary activities. Incorrect assumptions are made that a needs assessment is unnecessary because available information already specifies what an organisations needs are. There may be lack of support from the top management. Some of the trainees may resist the needs assessment exercise because of the benefits they get from their current positions or where they dont trust their supervisors. This is sometimes the case in public service positions. Needs assessment should be done at the organisational level to determine where training is needed and in what conditions the training will be conducted. It is also done at the task level to determine what must be done to perform the jobs more effectively. At the personal level needs assessment helps us to know who should be trained and the kind of training they need. 2. ESTABLISH TRAINING GOALS Management must explicitly state what changes or results are sought from each employee. These goals should be tangible, verifiable, and measurable (as far as this is possible). They should be clear to both management and the employee. The clarity of goals is influenced by how they are communicated. The goals should be in line with the problems that gave rise to the training. An example would be improved productivity of the workers. The objectives should be written down as concisely as possible using a language that can be easily understood by all the interested parties. 69

Examples of training objectives would be to increase the productivity of the firm within one year, to reduce the rate of wastage or scrappage or even to reduce customer complaints. 3. SELECTING THE TRAINING METHOD: Appropriate training methods should be able to: Motivate the employees to improve their performance Explicitly illustrate the skills desired by the employee Make employees to participate effectively in their work assignments Provide the trainee with the opportunity to apply the skills in the practical work situation. Provide immediate feedback on employee performance during training. Human resource managers must make the decision as to whether the training will be provided by the firms staff or by external parties. This decision is made considering the following factors. a) Expertise- when the firm lacks the knowledge, skills, and experience to design and implement a training program, then it must rely on external parties. b) Timelines- sometimes it is timelier to hire outsiders to undertake the training. c) Number of trainees- where there are many trainees then it may be more cost effective to offer the training using the firms personnel. d) Subject matter- in cases where the subject matter is sensitive, then the firms employees become the trainers. e) Cost- this factor should be considered together with the other factors. f) Size of the human resource department- smaller departments may lack the capacity to train employees. g) Other factors- these include personal contacts or past experiences with an outside vendor, geographical proximity to the vendor, local economic conditions, and the presence of the government incentives to conduct training. Each external party wishing to provide the training would need to be evaluated in terms of their cost, credentials, experience, background, delivery method, topics they wish to cover, and expected results among other factors. It is also necessary to select the trainer(s) and train them before they embark on the training. Lesson plans should be prepared in which issues such as topics to be covered, sequence of the activities, and timing of each activity among others are discussed.

CLASSIFICATION OF TRAINING METHODS

Training methods can be classified as either on the job, off the job or self paced. a. On The Job Training (OJT): This is one of the widely used methods of training. The employee is physically in the work environment and appears to be immediately productive. It is learning while doing. This is known in some industries as Sitting with Nelly implying 70

that one person sits under another in order for the learner to learn from the experienced person. Advantages of On the Job Training The transfer of training to the job is maximised; The costs of a full time trainer and training facilities is eliminated; The employees are more motivated because they know that what they are learning is relevant to their job. Theory is put into practice immediately and its relevance is obvious. Much of the learning takes place naturally as part of the performance management process and through day to day contacts. Employees are assimilated more quickly into the organisation. The disadvantages of On the Job Training include: Low productivity while employees develop their skills Costly errors made by the trainees while they learn The effectiveness of the learning is strongly influenced by the quality of the guidance and coaching provided on the job. Many managers and team leaders are unskilled at training and may not carry it out or encourage it. The environment may distract the instructions.

On the Job Training methods include: 1. Induction training- it enables a new recruit to become productive as quickly as possible. The length of induction training will vary from job to job and will depend on the complexity of the job, the size of the business and the level or position of the job within the business. The following areas may be included in induction training: Duties of the job; How to meet new challenges; Information concerning the layout of the premises; Values and aims of the business; Internal working and policies of the business; The history of the firm including the former and current leadership regimes. The goods and services of the firm. 2. Coaching- here experienced managers guide the actions of less experienced managers to help them develop their service delivery. It is one of the most effective training techniques. The teaching is individualized and one learns by doing. This method provides immediate feedback on performance. Nevertheless, it tends to propagate the ideas of current managers and some of the ideas may not be progressive. The superior may also neglect the person being coached in terms of time and of the quality of teaching efforts. Sometimes, coaches are hired from outside the organisation, but increasingly some organisations expect all line managers to operate as coaches, and it is often true that a young manager will learn more from senior colleagues than from any other source or formal learning intervention. Coaching focuses on skills and is 71

different from counselling which is about helping people with personal concerns such as motivation and self-confidence.

3. Mentoring- a senior manager is paired with a more junior employee for the purpose of giving support, helping the employee learn the job, and preparing the employee for increasing responsibility. Mentoring actually refers to a developmental relationship between a more experienced mentor and a less experienced partner referred to as a mentee or protg. There are two types of mentoring relationships: formal and informal. Informal relationships develop on their own between partners. Formal mentoring, on the other hand, refers to assigned relationships, often associated with organizational mentoring programs designed to promote employee development. In other cases, mentoring is used to groom up-and-coming employees deemed to have the potential to move up into leadership roles. Here the employee is paired with a senior level leader (or leaders) for a series of career-coaching interactions. A similar method of high-potential mentoring is to place the employee in a series of jobs in different areas of an organization, all for small periods of time, in anticipation of learning the organization's structure, culture, and methods. A mentor does not have to be a manager or supervisor to facilitate the process. 4. Apprenticeship programs this is the oldest training method commonly found in industrial organisations. The apprentice works alongside and under the supervision of a skilled supervisor for a particular duration of time. A major part of the training time is spent on the job doing productive work and assignments. It is used for skilled trades such as plumbing, electronics, mechanics, iron working and carpentry. 5. Job rotation- it is also called position rotation and involves training by periodically assigning employees to alternative jobs or tasks on some planned basis or a rotation schedule. It may take a period ranging from four months to two years. During this period, the trainee is supervised by a department employee, usually a supervisor, who is responsible for orienting, training, and evaluating the trainee. The aim is to broaden the knowledge, skills, and outlook of trainees although it can be used to stimulate new ideas and to kill boredom for new or experienced employees. At higher levels of the organisation it can be used to develop managerial generalists by exposing them to different operations. Through job rotation, employees are prepared to assume greater responsibility in the higher levels. Nevertheless, it can de-motivate intelligent and aggressive employees who seek specific responsibilities. It can also eventually produce a number of employees with limited job knowledge.

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At the senior management levels, job rotation - frequently referred to as management rotation, is tightly linked with succession planning - developing a pool of people capable of stepping into an existing job. Here the goal is to provide learning experiences which facilitate changes in thinking and perspective equivalent to the "horizon" of the level of the succession planning.

6. Understudy assignments- understudying is similar to coaching but it is a full time mentor- understudy arrangement while coaching is only periodic. The understudy works with the mentor on a daily basis to learn how the job is done. In this way the understudy will be able to replace the manager during absences caused by illnesses, retirement, study leave, transfer, promotion, or death. The manager discusses with the understudy about problems, assigns him or her duties, allows him or her to participate in decision-making, and attend executive meetings on behalf of the manager. Sometimes, managers may feel threatened by understudies and may not assist them as they should. Further, the understudy cannot move into the position until it is vacated and he or she may learn inappropriate skills from the supervisor. 7. Committee assignments- it is where a number of junior executives are assigned to committees. Through discussions in the committees they get acquainted with different viewpoints and alternative methods of problem solving. They also learn interpersonal skills. The role of the trainer would be to observe the proceedings, for example, the interpersonal processes, negotiations, and successes or failures of the committees. Experienced managers may also participate in the committees. 8. Project assignment- this is where a number of executive trainees are put together to work on a particular project related to their functional areas. The project team studies the problem and finds the appropriate solution. 9. Job instruction Training (JIT) - consists of 4 basic steps: a. Preparing the trainees, by telling them about the job and overcoming their uncertainties. Put the trainees at ease, find out what he or she knows, arouse interest, and place the employee in the correct psychological position. Thereafter, set up the task b. Presenting the instructions, giving essential information in a clear manner. Tell, show, explain, and demonstrate the operations or procedures involved in performing the job. c. Practice- it involves having the trainees try out the job to demonstrate their understanding. Have them explain the steps. Give feedback on performance. Reinforce the correct behaviour. d. Follow up- this is placing the workers into the job on their own, with a designated resource person to call upon should they need assistance. Encourage questioning and check on their performance periodically. Gradually reduce the training. 10. Multiple management- this method provides a junior board of young executives that analyses the major problems and makes recommendations to the Board of Directors. The young executives learn decision-making skills and the board of directors receives the collective wisdom of the team. Vacancies 73

in the senior board of directors can be filled from the junior board members, who have received considerable exposure to the problems and issues dealt with by the senior board of directors. b. Off The Job Training Off the job training is offered outside the firm. In many cases, the training is organized to take place in an institution some distance away from the firm. The beauty with off the job training is that it enables employees to break the monotony of being in the organization every day. In fact, it is also an opportunity to visit places that were not initially known. The main methods used to conduct off the job training include the following: 1. Classroom Lectures, talks and discussions- the participants are sent to attend formalised organised talks by instructors or experts on specific topics useful to develop philosophy, concepts, attitudes, theories and problem solving skills. This is the best means for conveying specific information such as rules, procedures, or methods. It can be supplemented with audiovisuals or demonstrations. Feedback and active involvement of trainees must be encouraged. 2. The conference method- it involves sending the employees to attend and participate in professional conferences where mutual professional plans are developed. 3. Seminar or team discussion workshops- participants are sent for seminars or workshops in various skills or professional courses where they learn through discussing a paper written by one of the trainees. They are also provided with professional knowledge on various topics from expert resource persons. 4. Vestibule school- it is a situation whereby an expert provides training in a classroom with the help of machines and equipment identical to those in use at the place of work. The aim is to provide specific job skills with theoretical training taking place in the classroom and practical work being done in the production line. Some of the organisations in Kenya that have successfully used this approach include Kenya Ports Authority ( Bandari college), Kenya Railways Corporation ( Railway Training Institute), Telkom Kenya ( Kenya College Of Telecommunications Technolgy, Mbagathi), Kenya Power and Lighting Company, and Kenya Breweries Limited. 5. Audiovisual media films can be purchased from standard film distributors or produced internally by the organisation, they can provide information and explicitly demonstrate skills that are not easily presented by other techniques. Video shows demonstrating excellent performance can also be shown. 6. Case studies- these present an in-depth description of a particular problem that an employee might encounter on the job. The employee attempts to find and analyse the problem, evaluate alternative courses of action, and decide the course of action that would be most satisfactory. The purposes of a case study are to: 74

Show trainees that there is usually no easy solution to complex organisational problems. Demonstrate that business problems are multifaceted and they can only be solved by borrowing from different disciplines. Make trainees realise that different perspectives and solutions to the same case may be equally valid. Help managerial trainees develop their problem solving skills.

7. Role playing: Learning takes place by letting the trainee assume the role of, say, a salesperson. Afterwards the trainee is corrected by the trainer and by other trainees. It is learning by acting. 8. Special training programs- certain employees may be taken for further professional or educational studies to improve their competencies. Examples are the undergraduate or postgraduate degrees, advanced professional courses in Finance, marketing, human resource and so on. The same can be done either locally or abroad depending on the organisations training policies and availability of funds. 9. In tray exercises- the managers are given a basketful or assortment of invoices, requests, memoranda, and such like data in respect to a particular organisation, so that they can make sense of the paperwork by applying appropriate management skills within a limited time. The aim is to find out how someone reacts when they are under pressure and how they go about solving the many problems that are the source of the pressure. c. Self paced method of training. It is also possible for employees to train themselves. This can be achieved through studying manuals or work books, using non classroom computer based methods, and accessing information from the internet/intranet among other methods. This method realizes that employees learn at different rates. 4. EVALUATING THE TRAINING PROGRAM: After a training exposure, it is necessary to evaluate the participants. The aim of the evaluation is to determine: Whether the program achieved its objectives or it failed The strengths and weaknesses of the program The cost-benefit ratio of the program Who should participate in future training programs. Which participants benefited most from the training. How future programs shall be marketed. There are many models that have been designed to explain the evaluation of training programs. These include the works of Kirk Patricks (1994), Galvins CIPP (1983), Brinkerhoff (1987), Kraiger, Ford, & Salas (1993), Holton (1996), and Philips (1996). Kirk Patricks model is easy to understand and to use. According to Kirkpatrick (1994) training programs can be evaluated by measuring changes at four levels as discussed below. 75

1. Reaction level it is the most basic level of evaluation. This level measures how well the participants liked or disliked the training program, whether it was worth the time and whether it was presented in a meaningful and interesting manner. Reaction can be obtained by having the participants complete a questionnaire or participant evaluation form. If trainees enjoyed a programme it does not imply that the programme was very useful to the organisation, but unpopular programmes may be cancelled due to lack of interest. At this stage, it is not possible to establish whether the program achieved its objectives. 2. Learning level it measures the extent to which the trainee or participant learnt and retained the material (i.e. the concepts, ideas, and principles) and intellectually assimilated it. This is done by evaluating the skills or knowledge gained at the end of the program. Alternatively the evaluation can be done on a continuous basis by using tests or quizzes. The trainees should be informed in advance about this assessment so as to increase their alertness and retention. The assessment can be done by using paper and pencil tests, performance tests and examinations. 3. Behaviourial level ideally, training is supposed to modify the behaviour of employees towards a given direction. At this level of evaluation, the concern is whether the modified behaviour causes positive results such as better reaction to customer complaints. Behaviour ratings can be collected from the superiors, peers, subordinates, or clients of the trained employees. 4. Results this is the ultimate value of training. It measures the extent to which the training produces cost-related behavioural outcomes such as productivity or quality improvements; reduction in turnover, accidents, customer complaints, reject rates, scrappage costs, labour turnover; meeting the production quotas; more profitability among other evaluations. Ethical issues in training & development evaluation Some of the ethical issues that should be considered when evaluating the training programs include: Confidentiality wherever possible, steps should be taken to ensure the confidentiality of the information collected. This can be done by using code numbers rather than names, collecting only the necessary demographic information, and reporting group rather than individual results among other methods. Informed consent- participants should be aware that they are participating in a study. Moreover, they should know what they are expected to do and the potential hazards and benefits of participating in the study. Withholding training- experimental research designs usually involve a control group and an experimental group. Since the experiment is only done on the experimental group, the control group may raise issues especially where the training is believed to improve the performance of employees leading to organizational benefits such as promotion and pay 76

rises. In other cases the training could increase the physical well-being of the employees; an example is in health related programs. Use of deception- sometimes researchers feel that better results will be produced when the employees dont realize that they are in an evaluation study, or if they are given some false or misleading information during the study. Nevertheless the use of deception should be discouraged because it may lead to distrust of the party that deceived the others. In situations where deception must be used, the trainees should be informed as soon as possible after the exercise. Pressure to produce positive results- training and development professionals may be under pressure to produce positive results so as to justify their activities. There is often the possibility of doctoring results, reporting partial results, or setting up biased studies.

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Ch. 9: MANAGEMENT DEVELOPMENT


Chapter objectives.
Following the completion of this chapter, you should be able to: Define management development and differentiate it from employee training. Understand the historical development of the field of management development. Explain the procedure involved in management development. Discuss the importance of designing an effective management development program.

Definition of terms:
Management development is more future oriented, and more concerned with education than employee training. Education means that management development activities attempt to instil sound reasoning processes - to enhance one's ability to understand and interpret knowledge. It therefore focuses more on the employee's personal growth. Management development is an organisations conscious effort to provide its managers (and potential managers) with opportunities to learn, grow, and change, in the hope of producing, over the long term, a cadre of managers with the skills necessary to function effectively in that organization (Warner & DeSimone, 2006). Successful managers have analytical, human, conceptual and specialised skills. They are able to think and understand problems facing the organizations that they manage. Management development is thus any attempt to improve current or future managerial performance by imparting knowledge, changing attitudes, or increasing skills. Armstrong (2006) says that management development is the process through which managers learn, improve their skills in their present roles and prepares them for greater responsibilities in the future.

History of Management Development


Early 1900s Organisations developed managers by recognizing an individuals strong occupational knowledge about the organisations products and services. The individual was promoted to a first-level position that included work direction i.e. telling workers what to do. Such individuals often had little training on supervisory skills. 1950s -1980s 78

Management training focused on covering certain standard topics or types of activities in the organisation such as planning, organising, finances, sales, and so on. There was no integrated approach to train the managers on all facets of management concurrently. 1990s onwards With the Human Relations movement, training programs recognised the need to cultivate supervisory skills. Management schools or programs now cover a wide range of management topics. They also incorporate real-world activities as part of the training program. Importance of Management Development Management development contributes to the success of the organisation by ensuring that the organisation has the managers it requires to meet its present and future needs. Todays managers require a wider range of skills than ever before. These include: Ability to manage people and systems Ability to work in cross-cultural settings, working with teams Being able to develop relationships, focusing on customers and building partnerships Being able to draw the right balance between technical and soft skills.

Probably the main reason for management development is that, in many organizations, promotion from within is a major source of management talent. Management development prepares internal managers for their new or prospective jobs. Management development facilitates organisational continuity by preparing employees and current managers to smoothly assume higher-level positions. The life of an individual is finite but organizations are assumed to have an undefined lifespan. It also helps to socialise management trainees by developing in them the right values and attitudes for working in the firm. Only managers with the right attitudes can steer an organization to greater heights. Management development should be linked to the organisations strategy and structure for accomplishing its goals. This can be done by ensuring that business issues drive management development. THE MANAGEMENT DEVELOPMENT PROCESS The Management Development Process is carried out through 6 stages as shown below. Specify the organisations objectives. Objectives tell us where the organisation is going and provides a framework from which managerial needs can be determined. Firms set objectives in the areas of sales, profitability, return on investments, new product development, expansion into foreign markets and so on. 79

2. Carry out an appraisal of current management resources. The aim of assessment is to determine the existing competences of managers and identify the gaps. This can be achieved by use performance assessment tools such as the 360-degree appraisals.

3. Ascertaining the development activities necessary to ensure the organisation has adequate managerial talent to fulfil future managerial needs 4. Determine individual development needs the emphasis can be skill development, changing attitudes, or even knowledge acquisition. Most management development centres focus on the changing of attitudes and the acquisition of knowledge in specific areas. 5. Assess the types of development programs that can meet these needs. This is because no development program can be adequate for all managers. Instead, programs must be uniquely tailored to the strengths and weaknesses of the individual manager. According to Flippo (1984:206) and Okumbe (2001:90), most management programs are to enable the managers to improve on their decision-making skills, interpersonal skills, job knowledge skills, general knowledge and specific individual skills.

Decision making skills.


These can be improved through the use of: In basket exercises- these are also used to train employees and involve giving the managers a basketful or assortment of invoices, requests, memoranda, and such like data in respect to a particular organisation, so that they can make sense of the paperwork by applying appropriate management skills within a limited time. Business games- these are simulations in which teams of individuals compete against each other or against an environment to achieve given objectives. The aim is to develop the need for team work. Case studies- from each case the trainee is required to identify the problem, analyse the relevant issues and come up with an optimum means towards solution of the problem.

Interpersonal skills.
Methods of improving interpersonal skills include: Role playing- the trainee plays a part in a simulated problem situation where he or she interacts with others who may be subordinates or co-ordinates. Behaviour modelling- it is observing the behaviours of other successful managers and emulating it. 80

Sensitivity training- the basic goal of sensitivity training is to increase managerial sensitivity and respect for others and their contributions no matter their positions.

Job knowledge skills.


Job knowledge can be acquired through on the job experience, coaching or understudies.

Organisational knowledge
This is improved through the use of position rotation and multiple management

General knowledge skills.


This knowledge is acquired from educational organisations through exposure to special courses, special meetings and selective reading assignments. An example is requiring the trainees to read the concepts of organisation development and the balanced scorecard as proposed by Kaplan and Norton (1996). Management development programs can also be classified as work- based, education and training, as well as the e-learning approaches.

Work-based methods
These include Coaching, mentoring, and job rotation. Other work based methods include a) Action learning

Most people learn best by doing. It is therefore better if that process can be structured. Action learning programs help to achieve this by making trainees focus on solving live issues in their normal working environments by trying out different approaches, with discussion and support from colleagues to help them reflect on their impact. b) Project working

This involves getting managers to work in cross-functional teams, exposing them to different functions and enabling them to learn about different aspects of the organization and ways of doing things. Putting people on such teams is one way of broadening their experience and effectiveness. c) Secondments

Taking a role in another organization through secondments for a year or two - or sometimes, in the case of senior people, non-executive directorships - is another way of broadening experience. 81

d)

Competency-based

This uses competency frameworks as a means of identifying and expressing development needs and pointing the way to self-managed learning programmes or the provision of learning opportunities by the organisation. Using this approach, management development may choose to focus on a limited number of core organisational competences. e) Development centres

Such centres help participants build up an awareness of the competences their job requires and to construct their own personal development plans to improve their performance in the present job and to enhance their careers. Development centres focus on the competencies needed in the future. They are not a physical location. Participants are put in a position of practising behaviour in conditions very similar to those they will meet in the course of their everyday work. An important part of the centres activities will be feedback reviews, counselling and coaching sessions. Education and training (a) Formal training courses Formal training is given in the shape of courses, particularly at key transition points such as first management jobs and as preludes to promotion. Their content will vary according to the organization and the role the individual is to fill, but in the private sector, finance and business strategy is a key component. Change management appears to be increasingly popular.

These courses are increasingly being delivered in the form of modules, with work-based projects and maybe coaching and mentoring in between. Outdoor development is sometimes used for team building purposes, while inhouse providers or external deliverers can provide 'one-off' training to fill particular gaps which might be identified because of organisational needs or through the review and one-to-one processes mentioned above. An important aspect of getting people together away from the workplace is that they can exchange ideas outside the classroom, while meeting people from elsewhere in the organisation helps in corporate networking. (b) Executive Education This is often offered at graduate-level business schools that aim to give classes for chief executives and other top managers and entrepreneurs. These programs do not usually end in a degree, although there is an ever-growing number of 82

Executive MBA programs that are very similar and offer a Master of Business Administration upon completion of the coursework.

E-learning and blended learning Organisations are seeking to supplement traditional courses by e-learning, which is the use of computers to deliver training, often delivered through corporate intranets. It provides large populations with the same material, and access is flexible so that people can learn in their own time. 6. Evaluate the management development program: Look for changes in behaviour and managerial performance.

3.0. DESIGNING AN EFFECTIVE MANAGEMENT DEVELOPMENT PROGRAM In designing an effective management development program, the following guidelines are recommended. 1. Define the purpose of the program and behaviours to be developed. A management development program should be able to demonstrate how it will meet or contribute to organisational objectives. 2. Find and use organisational support for creating a process not an event. Activities that lack the support of the total organization, especially the top management, may not succeed. 3. The program should be designed to ensure that the individuals to be developed are motivated to participate in the activities of the program. 4. Provide feedback on effectiveness of program as well as the progress of the managers. It is important to evaluate learning in order to assess its effectiveness in producing the outcomes specified and/or indicate where improvements or changes are required to make the training even more effective. REFERENCES 1. ARMSTRONG, M.(2006) A Handbook of Human Resource Management Practice 10th Ed. Kogan Page, London 2. BERNTHAL, P.R. and WELLINS, R.S. (2005) UK global comparisons leadership forecast 2005-2006: best practices for tomorrow's global leaders. Survey report. London: Chartered Institute of Personnel and Development.

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3. DESSLER, G.(2004) Human Resource Management 10th Ed. Prentice Hall 4. WERNER, J.M. and DESIMONE, R.L. (2006) Human Resource Development 4th Ed. Thomson South-Western, US 5. http://www.managementhelp.org/mgmt_dev/ Planning Management Development

6. http://en.wikipedia.org/wiki/Management_development

CH. 10:

CAREER MANAGEMENT AND DEVELOPMENT

Chapter objectives. After reading this chapter, it is expected that the reader will be able to: Explain the concept of career management and development from a historical perspective. Define concepts related to careers Discuss models that relate careers to the stages of human life. Explain the role of individuals and managers in managing careers.

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INTRODUCTION
Many people in different fields including educators, psychologists, sociologists, economists and management scholars are all trying to understand how people select and work within certain careers. Most people spend a lot of time working, and the career choices they make will determine to a large degree their success, happiness, and financial well-being. Human Resource Development (HRD) managers should therefore understand how employees make career choices. It is also wise to find ways to influence the careers of their employees. By so doing, the human resource managers will do a better job of human resource planning and preparing employees for longer term responsibilities.

A Historical perspective.
Traditionally people were not future oriented and they believed if they joined an organisation, worked hard and stayed out of trouble they would have the job as long as they wanted. This can also be called the entitlement mentality towards jobs where the employer owed the employee benefits and all the other things that go with work. The employee would then have to be loyal to the employer. Career development was seen as the concern of the employer so as to train and develop managers for the future. For many years, the demand for skilled employees was greater than their supply. Consequently, life time or long term employment was the order of the day. Since the 1980s the business environment has been turbulent. Geographical boundaries no longer limit the operations of multinational or global firms. External trade liberalization has exposed firms to greater competition. This has forced organizations to respond through business practices such as downsizing, shrinking hierarchies, cost cutting, outsourcing, mergers and acquisitions, technological innovations and more performance-oriented HRD programs. The employment relationship is now an exchange relationship for the mutual benefit of both parties; the employees have the primary responsibility of developing themselves in order to remain employable. Consequently, the new relationship is one in which there is no assurance of long term employment. Nowadays, employees are now expected to assume responsibility for developing and maintaining their own skills, add demonstrable value to the organisation and to understand the nature of their employers business. Employers on the other hand are expected to provide opportunities for skill development, training, and education. They are also expected to involve the employees in making decisions concerning their careers and performance based compensation. DEFINING CAREER CONCEPTS The word career means many things to many people. It also has different meaning among researchers. When used in the property of an occupation or organisations it describes the occupation itself. When used for advancement it 85

denotes ones progression and increasing success within an occupation or organisation. Definition of Career A career is the pattern of work-related experiences that span the course of a persons life (Werner & Desimone, 2006). An example is the movement from an accounts assistant to an accountant, then a senior accountant and then to a financial manager before becoming the chief executive officer. A career can also be defined as the occupational position a person has had over many years. It is also the individually perceived sequence of attitudes and behaviours associated with work-related activities and experiences over the span of a persons life (Bernadin, 2003). Examples of careers are medicine, banking, teaching, military and plumbing. Careers can determine where one lives, the kind of friends one makes, the amount of money one earns, how one feels about themselves, and the way others behave towards the person. Career Development It is important to understand how careers develop over the life time of an individual. This is because there seems to be a relationship between the stages of an individuals life and the career choices that have to be made. Thus career development refers to an ongoing process by which individuals progress through a series of stages, each of which is characterised by a relatively unique set of issues, themes and tasks (Greanhaus et al. 2000). Career development comprises of career planning and career management (Storey, 1996). Career planning is a deliberate process of becoming aware of self, opportunities, constraints, choices and consequences; identifying career-related goals; and programming work, education and related developmental experiences to provide the direction, timing and sequence of steps to attain a specific career goal. Dessler (2005) describes career planning as a deliberate process through which one becomes aware of personal skills, interests, knowledge, motivations and other characteristics; acquires information about opportunities and choices; identifies career-related goals; and establishes action plans to attain specific goals. Bernadin (2003) says that career planning is a deliberate attempt by an individual to become more aware of his or her own skills, interests, values, opportunities, constraints, choices and consequences; identifying career-related goals and establishing plans for achieving those goals. 1 Career management is a process for enabling employees to better understand and develop their career skills and interests and to use these skills and interests
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Bernardin, H. J., (2003), Human Resource Management: an experiential approach, 3rd Ed. Pg 194

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most effectively both within the company and after they leave the firm. It is also an organisational process that involves preparing, implementing and monitoring career plans undertaken by an individual alone or within the organisations career systems.2 4.0 STAGES OF LIFE AND CAREER DEVELOPMENT There are many theories that explain how careers develop. Some of the popular ones are: Erick Ericksons model Daniel Levinsons ERAS approach to adult development. John Hollands theory of vocational choice Donald Supers theory of career development. Eriksons Model Erikson proposed that people progress through eight (8) stages during the course of their life. In each stage model a person is faced with a challenge that he or she must resolve in order to develop. The stages and accompanying age ranges are shown below. Stage of Development (issue) 1. basic trust vs. mistrust 2. autonomy vs. shame and doubt 3. initiative vs. guilt 4. industry vs. infirmity 5. identity vs. role confusion 6. intimacy vs. isolation 7. generativity vs. stagnation 8. ego integrity vs. despair Age Range (years) infancy 1-3 4-5 6-11 puberty and adolescent young adulthood middle adulthood maturity

Erickson says that each stage has a challenge to be overcome. Where the challenge is overcome, the individual enters the next stage with a clear vision; otherwise they enter the next stage with confusion. An infant who is below one year may have the challenge of trusting or not trusting other people. Although the infant may not express themselves verbally, he or she may cry as a sign of distrust. An adolescent may have the conflict between identity and role confusion. If individuals successfully resolve this issue, they will enter adulthood with a clear sense of who they are in relation to others in the world. If they do not successfully resolve this issue, they will enter adulthood with confusion over who they are and what their role in the world is to be. A young adult may be faced with the challenge of developing meaningful relations with others or intimacy. If the individual successfully resolves this stage he/she will be able to make a commitment to other individuals and groups; otherwise the individual is likely to experience feelings of isolation.
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Bernardin, H. J., (2003), Human Resource Management: an experiential approach, 3rd Ed. Pg 194

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In middle adulthood, the challenge is to develop the capacity to focus on the generations that will follow i.e.generativity. This takes the form of becoming more involved in the lives of children, social issues affecting future generations or serving as mentor for young colleagues The ego integrity stage involves developing, understanding and accepting the choices one has made in life. This can lead to being at peace with ones life as one faces death otherwise one can experience despair over the meaningless of ones existence. It should be known that organisations often serve as places where individuals can resolve some of these challenges. Human resource managers should assist the employees to overcome the challenges. An example would be providing preretirement counselling.

Levinsons Eras Approach to Adult Development Levinson and his colleagues argue that there is an underlying order of life development called seasons or life cycle or ERAS. These ERAS are: pre-adulthood (0-22years) Early adulthood (17- 45 years) Middle adulthood ( 40- 65 year) Late adulthood (60 year and above)

The transitional periods are known as cross-era transitions and may last up to five years. Pre Adulthood (0- 22 years) This is where individuals work to develop a sense of who they are. It is a self identification stage. Early Adulthood (ages 17 45) This is a period of great energy and great stress. This is the era where the person is at a biological peak and is striving to attain the goals and desires of youth which include finding a place in society, obtaining meaningful work, realizing a lifestyle, establishing meaningful relations (marriage) and raising a family. It is at this stage that many people experience occupational advancement. The most meaningful age is age 30 which is a critical age of questioning and re-appraisal the Dream that one has been pursuing in life. Middle adulthood (ages 40-65)

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At this stage a persons life changes significantly between early and middle adulthood. There is a major questioning of the life structure (goals, ambitions) and the Dream that was vigorously pursued in early adulthood. The answers to questions such as What have I done with my life?, What is it I want to accomplish before I die?, What do I want to leave behind for my family? can lead one to accept themselves or to become bitter and stagnate. Late adulthood (age 60 Death) The individual faces further major life challenges such as declining health, retirement, loss of family and loved ones. The major challenge of this stage is to come to terms with ones life and accept things as they are instead of dwelling on what might have been. The above models are an oversimplification of reality but they reflect, to a certain degree, an individuals developmental stages throughout ones career life. JOHN HOLLANDS THEORY OF VOCATIONAL CHOICE This theory proposes that people are motivated to find occupational environments consistent with their personalities. Thus vocational satisfaction, stability, and achievement depend on the congruence between one's personality and the environment in which one works. Congruence is defined as the relative proximity between the client's personality and his or her occupational environment. According to this theory, both personality and environment are grouped into six major categories: Realistic (R), Investigative (I), Artistic (A), Social (S), Enterprising (E), and Conventional (C) as shown in the diagram below.

Diag.1. Hollands six personality types Thus an individual will be comfortable with those careers that are in line with their personality. A person whose personality is investigative would be happy with careers such as criminal investigations. 89

SUPERS THEORY OF CAREER DEVELOPMENT Super describes lifes stages of development as establishment, maintenance, and decline. growth, exploration,

The growth stage represents psychological as well as physical growth. During this stage, self-concept is developed while experiences simultaneously provide knowledge of the world of work. The exploratory stage begins with a fantasy period where an individual realizes that an occupation will be a part of one's life even though the desired occupation is often unrealistic. During this tentative phase, the individual chooses several possibilities and then the number of alternatives is gradually reduced to include goals that the individual feels can be reached and in which opportunities exist. During the establishment stage, the individual tries to discover whether or not choices and decisions made during the exploratory stage are realistic. This period involves "trying on" a job. The person may actually get into the desired career and evaluate their capabilities and suitability for the job. The maintenance phase involves adjustment and improvement while the preretirement period occurs in the decline phase during which the individual's emphasis is on retaining the job rather than enhancing it. The period ends when the individual leaves the workforce. CAREER MANAGEMENT These are the activities individuals and organisation use to actively manage the careers of employees. It involves planning for career activities and putting those plans into action. Career management for individuals involves the following activities. Career exploration- This Involves gathering information about ones self and the environment. Awareness of self and environment- An individual will understand both opportunities and constraints present in the environment. This will lead individuals to set or revise career goals or strategy development. Goal setting- This is a specific and realistic statement of the career goals that a person may wish to pursue. It is based on an awareness of self and the environment. Strategy development- This is an action plan for accomplishing the career goal. It includes actions that should be carried out and a timetable for performing them. Strategy implementation- This involves carrying out the strategy the individual has developed. It is easier to get where you are going if you have a plan. 90

Progress towards the goal- it is the e extend to which the individual is nearing the career goal. Feedback from work and non-work sources- This is valuable information about the progress towards the career goal. Career appraisal-Feedback and information progress towards the career goal permit the individual to appraise his/her career. Appraisal leads to rearrangement in career exploration and career management process. ROLES IN CAREER DEVELOPMENT There are three roles in career development namely:8.1 The Individuals role

A person bears the primary responsibility of his/her own career. The best way to approach career managements through careful information gathering, planning and goal setting, decision making, action and follow-up. Individuals should make decision and take assignments that provide them with opportunity to learn and continuously develop news and existing skills. An individual can develop himself or herself through: Consulting mentors, coaches etc Taking a study leave Enrolling for part-time classes or by correspondence Observing and interacting with others who form success stories. 8.2 Managers Responsibility There are several roles that managers and supervisor can perform in order to fulfil their responsibility as career developers. These include the following: Provide timely performance feedback Provide development assignments and support Participate in career development discussions with employees so to know the employees career goals and how to achieve them. Support employee development plans Asking employees to be mentors to other staff members. Allocate time and money for classes, training and workshops.

REFERENCES Werner, M. J. & Randy, L. D., (2006), Human Resource Development, 4th Edition, Thomson Corporation, United Kingdom. Dessler G., (2005) Human Resource Management, Pearson Education Inc., Upper Saddle River, New Jersey, United States of America. 91

Bernardin, H. J., (2003), Human Resource Management: an experiential approach, 3rd Edition, McGraw-Hill/Irwin, New York, United States of America. A document written by Carter Mac Namara MBA PhD www.managementhelp.ort/mggt-development/history The Adult Development of Career Army Officer http://Amazon.com www.Careers.state.gov/civil-service/department Benefits of career management and Development a document of the University of Liverpool, http://findarticles.com/p/articles/mi

CH. 11: JOB ANALYSIS


Chapter objectives.
This chapter contains information that will enable the reader to: Explain the importance of job analysis. Understand the main methods used to undertake job analysis. Examine and analyse the contents of the job analysis exercise.

Introduction.
Before an individual can be hired to perform a job, the requirements of that job must be identified. Before the level of pay for a job can be established, the qualifications required in performing the job must be determined. Similarly before the performance of an employee can be evaluated or a decision can be made as to whether or not an employee is doing what he/she should be doing, then what the employee should be doing must be identified. Therefore, before any of these human resource functions can be performed, there must a thorough understanding of the domain of the job. To do this, human resource professional use a job analysis, which is a means of collecting information about various aspects of a job. Results from a job analysis serve as the foundation for many of the human resource function including selection, compensation, performance evaluation, and training. Definition of terms 1. JOB this is defined as a collection or aggregation of tasks, duties, and responsibilities that, as a whole, are regarded as the reasonable assignment to an individual employee. Consider the job of a driver 2. POSITION - This refers to one or more duties performed by one person in an organisation. There are at least as many positions as there are workers in the organisation; vacancies may create more positions. 92

3. TASK it is a distinct work activity carried out for a distinct purpose. Examples are typing a letter, preparing a lecture, making a sales call. 4. DUTY - A duty is a number of tasks that are done by a job holder. The duty of an accountant may include preparing monthly payments for the employees. 5. JOB ELEMENT - this is the smallest unit into which work can be divided. Signing a document is an example of a job element in the job of the General Manager. 6. OCCUPATION - This is a job that is common to many firms and areas. Electricians and accountants are examples of occupations. 7. JOB FAMILIES OR OCCUPATIONAL FAMILIES - These are groups of jobs or occupations having similar personnel requirements .Marketing executives and customer service executives are in a job family. 8. A CAREER - It represents a sequence of positions, jobs, or occupations that a person has over his/her working life. 9. JOB ANALYSIS- It is a systematic exploration of the activities within a job. This analysis involves compiling a detailed description of tasks, determining the relationships of the job to technology and to other jobs and examining the knowledge, qualifications or employment standards, accountabilities and other incumbent requirement. The job analysis indicates what activities and accountabilities the job entails; it is an accurate recording of the activities involved. The Job Analysis involves studying jobs to determine what tasks and responsibilities they include, their relationships to other jobs, and the conditions under which work is performed, and the personal capabilities required for satisfactory performance. It is sometimes called "Job Study' suggesting the care with which tasks, processes, responsibilities, and personal requirements are investigated. Purpose of A Job Analysis Although the Job Analysis is an essential foundation for staffing, it may be used for many other purposes such as: 1. 2. 3. 4. 5. 6. 7. 8. 9. Determining qualifications required of jobholders Providing guidance in recruitment and selection Evaluating current employees for transfer or promotion Establishing requirements for training programs Setting wage and salary levels and maintaining fairness in wage and salary administration Judging the merits of grievances that question assignments and compensation Establishing responsibility, accountability, and authority Providing essential guides in the establishment of productions standards Providing clues for work simplification and methods improvement 93

Job Analysis is the study of jobs within an organisation so as to determine the activities employees perform, the tools and equipment used. It also looks at the working conditions under which the activities are performed and the minimum required qualifications one should possess to adequately perform a given job. Steps in Conducting a Job Analysis 1. Determine the purpose for conducting a Job Analysis 2. Identify the job to be analysed 3. Explain the process to employees and determine their level of involvement 4. Determine the data collection method and collect job analysis information 5. Process the Job Analysis information 6. Review and update frequently Areas of Job Information Job Analysis seeks to find a lot of information about a job. The exact type and scope of information procured will depend on both the intended use of the Job analysis information and the time and budget constraints imposed on the organisation. The Job Analysis study seeks to provide information in 7 major areas: 1. The job identification - its title 2. Distinctive or significant characteristics of the job - its location; physical setting; supervision; union jurisdiction, if any; hazards and discomforts 3. What the typical workers does - specific operations and tasks that make up the assignment; their relative timing and importance; the simplicity, routine, or complexity of tasks; responsibilities for others, property, or for funds 4. What materials and equipment the worker uses- metals, plastics, grain, yarns, or lathes, milling machines, etc. 5. How the job is performed - emphasis here is on the nature of operations and may specify such operations as handling, feeding, removing, drilling, driving, setting up and many others 6. Required personal attributes - experience, apprenticeship, physical strength, co-ordination or dexterity, physical demands, mental capabilities, aptitudes, social skills etc. 7. Job relationships - experience required, opportunities for advancement, patterns of promotion to and from, essential co-operation, directions or leadership from and other jobs, usual sources of employees When Job Analysis is Carried Out A Job Analysis can be conducted at 3 different times: 1. When an organisation is started 2. When changes occur which require new methods and procedures in performing the job. An example would be when new technology is introduced into the organization. 3. When a new job is created The information provided by the Job Analysis process is written into the record in the form of job descriptions and job specifications.

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JOB DESCRIPTION It provides information on the duties and responsibilities of a particular job. Included in the information are accurate and concise statements, which show what the jobholder will do, how the jobholder will perform, the conditions under which the activities will be performed, standards and time required in performing the activities. Contents of a job description: 1. Major duties to be performed 2. Percentage of time to be devoted to each duty 3. Performance standards to be achieved 4. Working conditions and potential health hazards 5. Supervisory responsibilities, if any 6. Number of persons required to work on the same job 7. Reporting relationships-who reports to who and how many people report to one position 8. The tools used to perform the job e.g. machines and equipment A job description requires periodic, systematic information gathering and review. It should be in line with the organisations objectives and mission. Job descriptions are used during recruitment, induction of new employees, when deciding who should be promoted/demoted/transferred, and performance appraisals; they are also useful in making decisions related to training and development, discipline of the workers and compensation administration. JOB SPECIFICATION It identifies the minimum acceptable qualifications that a jobholder should possess to perform a given job adequately with minimum supervision i.e. experience, training, education (primary, secondary or university), knowledge, skills or abilities. The information needed required to accomplish a job analysis include: 1. Employee oriented activities, 2. Job demands 3. The form of communication patterns 4. Knowledge of type of tools 5. Machines and equipment 6. Job related tangibles and intangibles as well as standards METHODS OF JOB ANALYSIS Since organisations are different, the method used is based on the goals the information will serve and the suitability of the method to the organisation. The data for job analysis must be collected from people who are directly or indirectly involved with the job using any of the following methods: 1. Observations An individual at work can be observed to record a brief description of the activities performed, how they are performed, and the time taken to perform each activity. 95

However, when an individual is aware that he or she is being observed or recorded s/he behaves differently from normal. Therefore, efforts should be made to make sure that individuals who are likely to behave differently from normal are not aware that they are being observed. This method is most suitable where physical skills are required but is limited where mental skills are required. 2. Questionnaires It involves administering a structured questionnaire to employees so that one can identify the activities they perform in accomplishing their jobs. The questionnaire must capture the job title, reporting relationships, purpose of the job, and the main tasks and duties.

3.

Interviews

Sometimes a good understanding of the activities involved can be obtained by talking to the employee and to their immediate supervisor to confirm whether both view the job in the same perspective. Interviewing can be a rather time consuming and costly method of data collection especially where many employees are involved because the interviewers must be trained to perform the interviews. Nevertheless, interviews are flexible and they can avail very important information from the employees. 3.

Employee Recordings

The employees can be told to maintain written records of what they do and how they do it on a daily basis. The activities should be recorded in order of priority immediately after they have occurred including any specific problems or weaknesses encountered. 4. Functional job analysis This is a worker-oriented method of describing jobs, which defines what a person actually does rather than for what he is responsible. It concentrates on the interactions among the work, the worker and the work organisation. Ideally, the concern is on the proportional involvement of the job on data, people and things. Jobs involve various measures of these variables. 5. Position analysis questionnaire This questionnaire analyses a job in terms of information input, mental processes, work output, and relationships/interactions with other workers Each factor is then evaluated on a specified scale such as extent of use. Afterwards, it would be possible to rank the jobs in relation to these variables. 6. Management position description questionnaire This questionnaire is designed for management positions and uses a checklist method to analyse the job of a manager. The job of many managers has elements of product, market and financial planning; co-ordination of other organisational units and human resources; internal business control; products and services responsibility; and public and customer relations among others. 96

These factors can be used to determine training needs of those individuals who are about to move into managerial positions as well as for setting compensation rates for managerial positions. JOB DESIGN This is the process of determining how specific tasks are combined to form complete jobs. It also establishes how a particular job relates to other jobs or work in an organisation. Due to changes in the nature of organisations, economic and technological factors, jobs have to be redesigned. Two approaches used in job redesign are job enlargement and job enrichment Job Enlargement involves expanding a particular job's content horizontally so as to create a wider variety of duties for the jobholder and so as to reduce boredom. Since the increased duties and responsibilities are not accompanied by corresponding benefits (e.g. increased pay or other fringe benefits) it can affect the employees morale negatively. Job Enrichment involves expanding a job vertically i.e. the jobholder is given greater control over his work, more independence and responsibility. This is actually promotion since it increases the corresponding compensation and authority.

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Ch.12 Job evaluation


Chapter objectives
After reading this chapter, the reader will be expected to be able to: Define job evaluation Explain the importance of job evaluation Discuss the systematic process of conducting job evaluation including the relevant methods. INTRODUCTION Definition of job evaluation. Job evaluation can be defined as a systematic procedure designed to aid in establishing pay differentials among jobs. It is also a systematic process of defining the relative worth or size of jobs within an organization in order to establish internal relativities ( Armstrong, 2006). The aim of job evaluation is to provide a systematic and consistent approach to defining the relative worth of jobs within a work place, single plant or multiple size organizations. It is a process whereby jobs are placed in a rank according to overall demands placed upon the job holder. It therefore provides a basis for a fair and orderly grading structure. A job evaluation system is composed of compensable factors and a weighting scheme based on the importance of each compensable factor to the organization. A compensable factor is a job characteristic that the organization values and chooses to pay for. These characteristics include job characteristics may include job complexity, working conditions, required education, required experience, and responsibility. Job evaluation does not determine actual pay. That is a separate operation, normally the subject of negotiation between management and employees or their trade union representatives. In addition, only the job is evaluated, not the person doing it. It is a technique of job analysis, assessment and comparison and it is concerned with the demands of the job, such as the experience and the responsibility required to carryout the job. Furthermore, it is not concerned with the total volume of work, the number of people required to it, the scheduling of work, or the ability of the job holder. Moreover, techniques of job evaluation have developed, varying in approach. Some involve an examination of jobs according to criteria such as skill, responsibility and working conditions. Others are less complex. Methods of job evaluation discussed in this chapter include ranking, classification, point plan factor comparison and Hay system among others. Scholars of global human resource management may need to understand the legal considerations of job evaluation. Legal consideration could include aspects such as : 98

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The right to equal pay Employees that operate dangerous equipment Executives and specialists of transport companies, among others. PURPOSES/IMPOTANCE OF JOB EVALUATION

Purpose The purpose of job evaluation is to identify and determine in detail the particular duties, requirements and the relative importance of these duties for a given job. It is a process where judgments are made about data collected on a job, not a description of the person. Job evaluation is designed as the methods and practices of ordering jobs or positioning with respect to their value or worth to the organization and applying the appropriate remuneration accordingly. These practical courses allow one to establish and document the relatedness of employment procedures such as training, selection and compensation. A firms management will then be able to evaluate what might work in their organization and also have an opportunity to examine the direction that job analysis and evaluation are moving in and their role in the future. Importance Job evaluation can be beneficial when the existing grading system/structure in an organization is in need of review. Job evaluation helps or maintains the credibility and acceptability of a grading system. Job evaluation facilitates the accommodation of new or revised jobs into the grading structure. Job evaluation can be used by organizations as a basis for job matching and external pay comparisons. It ensures the organization meets equal pay for work of equal value obligations. Methods of Job Evaluation The major methods of job evaluation include the following. Job ranking Job classification Factor comparison Point factor evaluations Proprietary brands Market pricing Internal benchmarking Analytical matching. Ranking 99

Ranking simply orders the job done in the organization from the smallest to largest based on the evaluators perception of relative value or contribution to an organizations success. Jobs are compared with each other and arranged according to their perceived size or value to the organization. The comparison may be based on a single factor such as the level of responsibility. Moreover, ranking method is suitable and only workable for small organizations, with very few different jobs. The ranking is based on the whole job and the jobs are not broken down into factors or elements. The method is simple and easy to implement, less costly to the organization and requires little training. Job classification or pay grades. Job descriptions are slotted into a series of classes that cover the range of jobs. Each class has a description of the characteristics such as the skill, decision making and responsibility that relate to jobs in that category. It is used a lot for public service jobs. The class descriptions are the standards against which the jobs are compared. Job classification is a very common job evaluation method which involves slotting jobs into the pre-described grades. For each job grade, there is the minimum, midpoint and maximum pay. As long as the grades exist, there is less difficult in setting the pay for employees. The disadvantage with using grades is that some jobs will be underpaid while others are overpaid. Just like ranking, grading is simple to administer, cheap to the organization, and requires little training. However, the grades are general and abstract, and compensable factors are not clearly defined. Factor Comparison This is a very complex method of job evaluation. Nevertheless, it can perpetuate equity because it takes into consideration what is happening in the market. The factor comparison method involves comparing jobs against other jobs on the basis of how much of some desired factor they possess. Each jobs factors are ranked against each other jobs factors. Finally, the market pay rate for each job is then allocated among the factors based upon a market pay rate scale. Some of the factors considered include the level of responsibility, the risks involved in the job, amount of decision making involved and the number of subordinates supervised. Point- factor method This method involves breaking down jobs into factors or key elements representing the demands made by the job on the job holders, the competences required, and the impact made by the job. The point factor method addresses three major aspects namely: defining the compensable elements Assigning a numerical scale of the factor degrees. Assigning weights to the factors which reflect the relative importance of each factor. 100

Compensable elements are these characteristics in the job (not the position) that the organization values and will help it to pursue its strategy and achieve its objectives. Some of the compensable factors include job knowledge, problem solving abilities and accountability.

Proprietary brands
These are job evaluation methods offered by management consultants. Perhaps, the most common method here is the Hay Guide Chart which in essence is an administrative, professional and technical job evaluation method. Using the Hay System, jobs are evaluated as follows. Job description questionnaires are completed and signed by the jobholder, the supervisor and other managerial staff who have responsibility for the position. The job description questionnaire is given to each member of the job evaluation committee for his/her initial evaluation. The committee meets with the jobholders and supervisors to explore questions and clarify content. The committee members then compare their individual evaluations and resolve differences that might exist. The hay system considers three major variables in job evaluation. These are know-how, problem solving and accountability. Know how is the sum total of every kind of skill, however acquired, needed for acceptable job performance. Know-how involves integrating and harmonizing the diversified functions involved in managerial situations (operating, supporting and administrative). This know-how may be exercised consultatively as well as executively and involves in some combination the areas of organizing, planning, executing, controlling and evaluating. Problem solving is the original self starting thinking required by the job in analyzing, evaluating, creating, reasoning, arriving at and making conclusions. Accountability is the answerability for an action and for the consequences thereof; it is the measured effect of the job on end results. Conclusion Job evaluation will involve change even though the change may only affect same jobs. Commitment to change will be essential, with both management and employee representatives agreeing from the outset that they will act upon the results. Job evaluation may result on same existing employees jobs being placed in a lower grade which does not equate with other current pay-rate. It is recommended that a policy on how to deal with such situations be considered and, if possible, agreement reached before embarking on job evaluation. 101

References: http://www.ares.org.uk/publications/BOI.html http://www.petersburrycitg.com/business/expert/staff/ http://www4semo.edu/human resources/jobeval/hay,ppt

Ch. 12: COMPENSATION OF EMPLOYEES AND MANAGERS


Chapter objectives
The objectives of this chapter are to: Understand the components of a compensation system. Distinguish executive compensation from the compensation of ordinary employees. Understand the factors that should be considered when designing compensation systems. Appreciate the role of compensation policies.

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Introduction Employees exchange their inputs (physical and mental work behaviour) for outputs (rewards). The employees use the rewards to satisfy their needs. Human beings have many needs ranging form the most basic (i.e. physiological needs for food, water and clothing), to safety, social, esteem, and self-actualisation needs. Employers can use rewards to shape the behaviour of employees in the workplace. Wages can provide a source of motivation for employees to perform effectively. Money is probably the most important reward. The perplexing question to employers is how much employees should be paid. The goals of compensation administration are to design the lowest - cost pay structure that will attract, motivate, and retain competent employees, and that also will be perceived as fair by employees. The compensation should be fair to the organisation and to the employees. Organisations generally seek to pay the least that they have to in order to minimise costs so fairness means a wage or salary that is adequate for the demands and requirements for the job. Indeed, employee remuneration is often the single largest cost item to an organisation. The total cost of the overall remuneration and reward system can have a decisive bearing on an organisations competitive position; effective management of cost, nature and distribution of rewards therefore demand careful attention. The employees perceive fairness in terms of the input-out come ratio. Where the employees perceive an imbalance in this ratio, they may seek to change the status quo. Strategies for changing the status quo include looking for other jobs, working for fewer hours, negative word of mouth advertising, and misuse of company assets. Employees also compare what they earn with what their counterparts in other organizations earn. This is according to the equity theory. The comparison can reveal that the employee is paid better, at the same level, or worse than employees in other organizations. Perceptions of inequity will make the employee dissatisfied with the current employer. Remuneration may be defined as the financial and non financial extrinsic rewards provided by an employer for the time, skills and effort made available by the employee in fulfilling job requirements aimed at achieving organisational objectives (Swanepoel et al 2000:526). Words commonly used for remuneration include reward management, remuneration management, salary and wage administration or pay administration. Rewards can be classified either as intrinsic or extrinsic. The intrinsic rewards include: More responsibility Opportunities for personal growth Participation in decision making 103

More interesting work

Below is a summary of the extrinsic rewards. Table : Extrinsic rewards. Performance related Commission Performance bonuses Merit pay Incentive schemes Achievement awards Stock ownership Membership related Basic salary Retirement benefits Car allowance Medical aid Subsidised canteen Vacation Profit sharing COMPENSATION POLICIES Firms should formulate compensation policies. Specific issues to be included in the policy include the following: Pay level- the policy should state whether the pay level will be above, below, or the same as the prevailing market rate. Equity-it should be stated how the organisation would strive to achieve equity in its remuneration. Performance related rewards- this is the question of how achievement would be rewarded and the role incentives and bonus schemes would play. Market rate policy-here one states the extent to which market rate pressures should be allowed to affect or possibly distort the salary structure. Control- a policy statement in this regard answers the question of how much freedom is given to individual managers to influence the salaries of their staff. Communication- how much information about remuneration should be made freely available to employees and their representatives and what degree of pay secrecy should be enforced The minimum level at which new employees should be engaged needs also to be stated. Pay differential/intervals within a job grade and between consecutive job grades should be reflected. The extent to which individuals/groups can negotiate their pay and allowances within the established rates is also supposed to be covered. 104 Status rewards Location of office Office Office furnishings Assigned parking Own secretary Public recognition Social rewards praise Friendly greetings Friendly greetings Dinner invitation Pat on the back Social gatherings

The rate and intervals at which pay rises can be granted forms part of the policy. The pay increases can be fixed or variable amounts and can be granted at a variable interval or fixed intervals. Flexibility of the pay structure due to environmental changes is also to be included.

TYPES OF COMPENSATION: There are 3 forms of compensation namely: 1. Pay- this is the basic compensation that an employee receives, usually as a wage or salary. Employees who are paid on hourly basis are said to receive wages. People who are paid salaries receive payments that are consistent from time to time despite the number of hours worked. 2. Incentives This is the compensation that rewards employees for efforts beyond normal performance expectations. It takes the form of bonuses, commissions, and profit sharing plans among others. 3. Benefits - These are indirect rewards such as health insurance, vacation pay, or retirement pensions, given to an employee or group of employees as a part of organisational membership. THE PAY COMPONENT OF COMPENSATION. For an organisation to have an effective pay system, it must: Identify prevailing market wages and salaries and ensure that its pay system is competitively favourable. Pay competitive wages and salaries, considering organisational financial constraints Administer pay within legal constraints Minimise turnover, grievances, and perceptions of inequity as a result of dissatisfaction with the compensation package. Control labour costs with carefully designed programs that identify a job's value and an employee's value to the organisation. Identify the appropriate frequency and size of raises, and restrain an individual manager's ability to give unwarranted raises. Induce and reward higher levels of performance. The compensation should be able to attract, retain and motivate the right quality of staff. It must be flexible to adapt to environmental changes such as income and inflation It should be socially acceptable to the organisations publics who include the shareholders, customers, government, trade unions, and civil rights bodies BASES FOR COMPENSATION There are 3 bases namely: 1. Time - Employees may be paid for the amount of time they are on the job. The most common means of payment based on time is hourly pay; employees who are paid hourly are said to receive wages, which are payments directly calculated on the amount of time worked. The people can also be paid a salary, which is consistent from period to period despite the number of hours worked. Being 105

salaried typically carries higher status, greater loyalty and more organisational commitment than being paid wages. 2. Performance and Productivity - A direct productivity - based system, called piece-rate system, is one in which an employee is paid for each unit of production. In a merit or pay-for-performance systems, employee performance is used to make pay increase decisions. 3. Task or Skill-Based Pay - Nowadays, a growing number of organisations are paying employees, particularly hourly ones, for the skills or competencies they have, rather than for the specific tasks being performed. The pay can also consider the knowledge, skills and behaviours possessed by the employees. Leadership, problem solving skills, decision making abilities, and ability to participate in strategic planning are some of the behaviours compensated for. Paying for skills rewards employees who are more versatile and have continued to develop their skills through continuous cross-functional training. Usually an organisation ends up using a combination of approaches to compensation, depending upon its culture, philosophy, life cycle, and financial constraints. Whatever specific systems and programs are used, it is important that the impact of compensation on behaviour of employees and managers be recognised. CHARACTERISTICS OF A GOOD COMPENSATION SYSTEM Factors that would make a good compensation package include the following: 1. It should attract, motivate and retain the right quality of staff 2. It should compete favourably within the job market and within the job sector of the economy 3. It should be flexible to adapt to environmental changes e.g. income, inflation 4. It should be socially acceptable to the organisation's public; the shareholders, customers, government, trade unions, civil rights bodies 5. It should be perceived as reasonable within the framework of impartiality and equity (affirmative action) In making the pay level decisions then the following factors should be considered. 1. Minimum wages Governments specify or set legislations in relation to the minimum wages that can be paid to employees. In Kenya, the minimum wage in 2002 was Ksh. 3,700 per month, Ksh. 4,800 in 2005 and Ksh. 6,500 in 2006. 2. Compensation levels in other organisations Organisations can conduct their own wage and salary surveys in order to assess the pay levels within a particular industry, segment of an industry, or local area. Theoretically high quality labour (in terms skills, education, experience and other personal attributes of the employees) is more likely to migrate to those organisations where the pay level is higher, assuming that working conditions, location, and other personnel practices are about the same. 3. Union influences Labour unions generally attempt to standardise wages among unionised firms in a particular industry. 106

4. Labour market and Economic conditions Organisations raise wages and salaries when inflation is high, unemployment is low, or a specific type of employee or occupational group is in short supply. Conversely, pay levels rise much more slowly during periods of high unemployment when labour is abundant. Organisations increase the pay level of their employees in order to attract employees with scarce and high demand job skill e.g. chemical engineers. Increases in the cost of living also have a substantial impact on pay levels. Periodic increases in wages and salaries are often tied directly to changes in the Consumer Price Index (CPI) and Cost-of-Living Adjustments (COLA). 5. Organisational ability to pay and strategy In making pay level increases, firms need to look beyond the immediate profit picture and forecast the financial condition of the company in the future. It is generally easier to avoid large pay increases than it is to cut pay levels later because of financial hardships. 1. Motivation theories especially equity and expectancy theory. According to these theories employees compare what they earn with what their counterparts earn in other organizations. The employees will either be demotivated or motivated based on the outcome of the comparison. 7. The bargaining power of stakeholders such as individuals, unions, governments, civic organisations, private consultants and so on should also be considered. INCENTIVE COMPENSATION PLANS Incentives are given in addition to the wages. They can be for individuals, groups, or organisation-wide performance. 1. Individual Incentives These are for individual performance. They include: a. Piecework - the employee could be paid a salary for a certain output. Any output above that is paid on a per unit basis. b. Time saved - where an employee saves time in generating a certain output, he/she can be paid a bonus for the time saved (e.g. 50% of the time saved). c. Commissions - sales personnel can earn a commission over and above the basic pay. d. Merit pay- this is where employees who perform very well have a sum of money added to their base pay. Individual incentives work best where clear performance objectives have been set and where tasks are independent. However, the employees may stop performing those tasks for which they are not rewarded. 2. Group Incentives Each of the individual incentives can also be used on a group basis. This is especially where employees' tasks are interdependent and thus require cooperation. Organisation wide incentives are to direct the efforts of all employees towards achieving overall organisational, effectiveness. These types of incentives 107

produce rewards for all employees based on organisation wide cost reduction or profit sharing plan. They include: a. Group piece-rates b. Profit sharing plans. c. Gain sharing/ Scanlon Plan/ Rucker Plan Whereby any resulting gains obtained from implemented suggestions from employees are shared between the organisation and the group d. Employee Stock Ownership Plans (ESOPS)- these give the employees the opportunity to buy shares of the company thereby changing their status to be owners of the firm. 3. Plant wide incentives Plant wide incentives are intended to direct the efforts of all employees towards achieving overall organizational effectiveness. They include the: Scanlon plan. Improveshare- this is an acronym for Improving Productivity through Sharing. It is a mathematical formula for determining employees benefits. Profit sharing plans- here part of the profit made by the firm is redistributed to the employees.

4. Incentive Plans for Executives a. Cash bonuses b. Incentive Stock Options c. Performance Objectives

SUPPLEMENTARY BENEFITS: An employees benefit program should be guided by the following principles: 1. The benefits should satisfy the actual or perceived personal needs of the employees 2. The benefits should convince the employees that the Organisation for which they work cares for their needs 3. The employees benefits should provide a tax efficient mechanism in remuneration 4. The benefits should be consistent with the strategic plans and compensation objectives of the Organisation 5. The costs of the benefits should be calculable and provision should be made for sound financing Types of Supplementary Benefits are: 1. Payment for Time Not Worked e.g. Annual leave, Holidays, Sabbatical leave, Sick leave, Public holidays, Weekends, Compassionate leave, Maternity/ Paternity leave, Casualty, Study leave, Other personal excusable absences, and Lunch, tea and rest breaks, etc. 2. Security & Health Benefits 108

Life insurance Worker compensation due to Disability, Death, Rehabilitation Medical Coverage Health Insurance Disability Insurance Pension Plans Social Security Hardship & Risk Allowances Co-operative Savings and Credit Unions & Societies, and; Severance Pay

3. Employee Services Benefits Social/ Recreational Facilities & Health Programs Subsidised Catering Facilities Relocation Assistance Family Planning/ Maternal Clinics/ Child Care Purchase Discounts for the Organisations products Transport allowance Funeral Expenses Legal Representation Telephone credit services Wardrobe allowance Entertainment allowance Educational Grants for Employees and/or for their children Interest free/ Lower Interest/ Subsidised Loans and Mortgages 4. Retirement Benefits Mandatory pensions Private pensions Gratuity benefits (for those working on contracts) EXECUTIVE COMPENSATION The compensation of Executives deserves special attention because: 1. The basic salaries for executives are higher than the salaries of low-level managers or operational personnel due to economics and motivation reasons. In economic terms, top managers are expected to demonstrate good decisionmaking abilities. This skill is not widely held in the society. As a result, the supply of qualified senior executives is scarce, and organisations have bid up the price for this talent for competitive reasons. 2. High pay motivates/encourages top level managers to perform well in order to keep their jobs and also stimulates the lower level managers to work hard so that they move up the ladder to the "big money". 3. Executives receive perquisites or special benefits that others don't. This is done to attract and keep good managers and to motivate them to work hard in the organisations interest e.g. a. Annual physical examinations b. Interest free loans of millions of dollars 109

c. Payment of life insurance premiums d. Club memberships e. Company automobiles f. Liberal expense accounts g. Supplementary disability insurance h. Supplementary retirement accounts i. Personal financial, tax, and legal counselling The bonus and stock option plans can dramatically increase their compensation. In 1999, many top executives in USA were paid huge sums of money. The CEO of Computer Associates international was paid $650 million in salary, bonuses, and stock based incentives. The CEOs of Citicorp, Bank of America, Compuware, and IBM earned an average of $165 million in total compensation for the same year. Are Executives Worth their Salaries? If we compare the executives total compensation with their performance, we get mixed results. Some highly paid executives perform better than others. Lee Iacocca is an example of a highly paid manager who successfully revitalized Chrysler Motors in the USA.

Ch. 7: DIRECTING
Chapter objectives.
Following the completion of this chapter, the reader should be able to: Explain the relevance of the different theories of motivation to the motivation of employees including the practical methods of motivating workers. Discuss the importance of the communication process in the management of human resources. Appreciate the importance of leadership in the management of workers.

INTRODUCTION.
Directing is influencing peoples behaviour through motivation, communication, group dynamics, leadership and discipline. The purpose of directing is to channel the behaviour of all personnel to accomplish the organizations mission and objectives while simultaneously helping them accomplish their own career objectives. It also includes setting long term aims, communicating a vision and motivating people to achieve them Human resource managers spent a lot of time directing the efforts of organizational members. This chapter will examine the concepts of motivation, communication and leadership because of their importance in directing employees. It will also examine other more practical approaches of motivating the workers. 1. MOTIVATION.

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Motivation is the driving force that propels human action. It explains why people do what they do and continue to do it even when they face difficulties. It is the why of human behaviour. Human resource managers should understand the concept of motivation thoroughly because it affects the performance of workers. Motivated workers will be both effective and efficient. Workers can have self motivation in which they do not need external parties to push them. Self motivation is also known as intrinsic motivation. The opposite of self motivation is a situation where something has to be done for the person to motivate them. This is called extrinsic motivation and involves the use of rewards such as increased pay or promotion. MOTIVATION THEORIES The approaches to understanding motivation differ because many individual theorists have developed their own views and theories. They approach motivation from different starting points, with different ideas in mind, and from different backgrounds. No one approach is considered to be the ultimate. Each approach has contributed to the understanding of human motivation. There are numerous theories of motivation but all the theories can be summarized under any of the three theories. Instrumentality theory- It ties motivation to rewards and punishments. According to this theory, rewards or punishments dictate how people behave. The use of rewards can increase motivation while punishment can make workers less willing to work. Rewards are often known as carrots while the punishments are referred to as sticks. Content theory- this theory holds that human behaviour is related to the needs that people have. Simply put, human beings have many needs and most behaviour is directed towards the satisfaction of the needs and wants. The main contributors here were Abraham Maslow (1954) and Herzberg et al (1957). Process theory- it holds that motivation is a process. The theories here focus on the psychological processes which affect motivation; these are expectations, goals and perceptions of equity. Victor Vroom (1964) and Stacy Adams (1965) were some of the major contributors of the process theory.

1. INSTRUMENTALITY THEORY Instrumentality is the belief that there is always a reaction for every action. It is based on the strong belief that money is the strongest reason for working and that to motivate workers it may be necessary to pay them more money. Less income is a source of de-motivation. This theory was first contained by Fredrick Winslow Taylor in his scientific management theory.

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2. CONTENT (NEEDS) THEORY This theory is based on the premise that human beings have a wide variety of needs and that whenever a need reaches the threshold level, the person strives to satisfy it. Needs range from the most basic to very high level needs such as the need for self actualization. The importance of a need depends on an individuals background and present situation. To an hungry person, the main focus is on food - man lives on bread alone when there is no bread! Nevertheless, there is no simple relationship between needs and goals and a need can be satisfied through different approaches. It was Abraham Maslow( 1970) who first introduced the concept of needs. Other contributors were Clayton Alderfer with the Existence, Relatedness, and Growth (ERG) needs theory, and the Herzbergs two factor theory.

a) Maslows Hierarchy of Needs theory Abraham Harold Maslow was born April, 1908 in New York to an uneducated Jewish couple which had migrated from Russia. The family of nine was actually needy based on the low income of the parents. His parents encouraged him to work hard in school. Consequently, he received his Bachelor of Arts degree in 1930, his Master of Arts degree in 1931, and his PhD in 1934, all in psychology, all from the University of Wisconsin. Thereafter, Maslow became interested in research on human sexuality. Abraham Harold Maslow classified the needs that people have into five major categories which the basic, safety, social, esteem and self actualization needs. 1. Physiological needs this is the first and possibly the most important level of needs. These are the needs for oxygen, food, water, warmth, shelter, and sleep. They are also known as basic needs. These needs can be met by giving employees housing allowances, having company cafeterias possibly with subsidized meals, giving employees company uniforms, provision of clean drinking water to the employees and paying them wages that can afford the basic necessities among other approaches. Safety needs they relate to the needs for protection against danger or against any unpredictable happenings in life. They include protection from the fear of accidents, ill health, or even losing a job, property, food, or shelter. This need can be met by providing insurance (health, accident, disability etc) to the employees, having body guards or security personnel for the senior managers, engaging security services and so on. Social needs these are the needs for love, affection and acceptance by others especially those of the same group. The family is a very special 112

2.

3.

group. This need includes a striving to be accepted by those to whom we feel close and to be an important person to them. Employees should have the freedom to join formal and informal groups. They should also have time for recreation and to socialize with other members of the society. 4. Esteem needs these are the needs to have a high evaluation of oneself (self esteem) and to have the respect of others (prestige) as well as a high reputation in the society. It is this kind of need that produces strivings for power, prestige, status, and self confidence. Company cars and good job titles can be a source of esteem for employees.

5. Self-fulfilment (self-actualization) needs they are the needs to develop potentialities and skills, to become what one believes one is capable of becoming. These are the highest level of needs. Many individuals rarely achieve these needs unless they have set very low goals in their lives. Some of the people who often self actualize include musicians and authors. Employees should be allowed to pursue education if it helps them to self actualize. The freedom to change careers should also be availed. The needs hierarchy of needs theory can be portrayed in a figure as below. Self Actualization Esteem (Self and others) Belonging and Love Safety and Security Basic (physiological) Needs According to Maslow, whenever a lower level need such as food is satisfied, the next higher level need (such as safety needs) becomes dominant and the individuals attention is turned to satisfying it. The self actualization need is the most difficult need to satisfy. And because needs recur or takes different forms, they can never be fully satisfied. Workers are more motivated if what they do satisfies their needs especially the higher level needs. Routine and repetitive jobs may not go far in motivating employees. As such, human resource managers should be able to redesign jobs to make them more challenging. Some of the criticisms advanced against Maslows theory are outlined as below. The most common criticism concerns his methodology. His sample size was too small to make generalizations from. The hierarchy assumes human needs can be met in a hierarchical pattern which is not true because one can seek self actualization even if the basic needs 113

have not been fully met. People have different priorities of what they consider to be needs. It is common for some people to emphasize self esteem needs even when they have not properly satisfied the basic needs of food, shelter and clothing. The hierarchy assumes individuals can be motivated in relative isolation of needs. This might not be true because the dividing line between one need and another may be very thin. The theory also assumes that once a need is satisfied, it no longer acts as a motivator. This is not totally true because needs recur. The need for food seems to recur many times in a day. This theory seems to simply point the way. He hoped that others would take up the cause and complete what he had begun in a more rigorous fashion Clay Alderfer (1977) refined the idea of Abraham Maslow by categorizing needs into three levels namely existence, relatedness, and growth needs. Like Maslow, Alderfer proposed that satisfied needs become dormant unless a dramatic shift in circumstances increases their salience. The problem with hierarchial needs theories is that although they help us to understand general developmental processes, from child to adult, they are not very useful for understanding the dayto-day motivation levels of adult employees. b) Herzbergs two- factor model of motivation Herzberg et al (1975) formulated this theory after investigating the sources of job satisfaction and dissatisfaction among accountants and engineers. The subjects were asked to tell their interviewers about the times during which they felt exceptionally good and exceptionally bad about their jobs and how long their feelings persisted. The study found that the accounts of good periods most frequently concerned the content of the job, particularly achievement, recognition, advancement, responsibility, and the work itself while accounts of bad periods most frequently concerned the context of the job. Company policy and administration, supervision, salary and working conditions were quoted category of bad times. The conclusions of Herzberg et al were that there are some factors which if present do not motivate but bring motivation to level zero. These are the hygiene factors and they are such that if they are absent they cause de-motivation among workers. The term hygiene is medical and implies the preventive and environmental impact of these factors. The other factors are the motivators because they cause positive motivation among the workers. 3 PROCESS THEORIES Here the emphasis is on the psychological processes or forces that affect motivation, as well as on basic needs. It is also known as cognitive theory because it is concerned with peoples perceptions of their working environment and the ways in which they interpret and understand it. The process theories provide a much more relevant approach to motivation that replaces the very simplistic theories of Maslow and Herzberg. 114

The process or cognitive theories can certainly be more useful to managers than needs theory because they provide a more realistic guidance on motivation techniques. The process theories include the: Expectations (expectancy theory) Goal achievement (goal theory) Feeling about equity (equity theory) a) Expectancy Theory The concept of expectancy was originally contained in the ValenceInstrumentality-Expectancy (VIE) theory which was formulated by Victor Vroom (1964) Valence stands for value placed upon a particular reward by a person. Some individuals value promotion highly. Instrumentality is the perception of the relationship between performance and rewards. Higher performance can lead to promotion. Expectancy is the probability that an action or effort will lead to an outcome. It is actually the perceived relationship between effort and performance. A salesperson who believes that by working more hours in a day he or she will make more sales and the more sales will lead to a higher income where the person appreciates a high income, and then the sales person will be more motivated. Where one of the variables in the relationship does not hold, this will negatively affect motivation. b) Goal theory Goal theory was developed by Latham and Locke (1979). It states that motivation and performance are higher when the goals set for individuals are specific, difficult but acceptable, and when there is a feedback on performance. Participation in goal setting is important as a means of getting agreement to the setting of higher goals. Difficult goals must be agreed and their achievement reinforced by guidance and advice. Finally, feedback is vital in maintaining motivation, particularly towards the achievement of even higher goals. Maslow (1954) also emphasized the need for acceptance of and commitment to goals. He found that, as long as they are agreed, demanding goals lead to better performance than easy ones. He also emphasized the importance of feedback. c) Equity theory The Equity or Inequity theory is the work of J Stacy Adams (1965). This theory is concerned with the perception people have about how they are being treated as compared with others. To be dealt with equitably is to be treated fairly in comparison with another group of people (a reference group) or a relevant other person. Equity involves feelings and perceptions and is always comparative since this would be inequitable if they deserve to be treated differently. Equity theory states, in effect, that people will be better motivated if they are treated equitably and de-motivated if they are treated inequitably. It 115

explains only one aspect of the process of motivation and job satisfaction, although it may be significant in terms of morale. The theory can be shown as below. Outcomes by a person Inputs by a person = Outcomes by another person Inputs by another person.

Outcomes are what workers are getting out of the work relationship and they include items such as pay, fringe benefits, increased responsibility, and prestige. The inputs refer to what the employees are putting into the work relationship. Inputs include hours worked, work quality, education and experience. Areas that may lead to feelings of inequity include monetary rewards, workload, promotion, degree of recognition, supervisory behaviour, targets and assigned tasks. Ideally, there are two forms of equity: distributive equity which is concerned with the fairness with which people feel they are rewarded in accordance with their contribution and in comparison with others: and procedural equity or procedural justice, which is concerned with the perceptions employees have about the fairness with which company procedures in such areas as performance appraisal, promotion and discipline are being operated. Interpersonal factors are closely linked to feelings about procedural fairness. Five factors that contribute to perceptions of procedural fairness have been identified. These are: Adequate considerations of an employees viewpoint: Suppression of personal bias towards the employee; Applying criteria consistently across employees; Providing early feedback to employees concerning the outcome of decisions; Providing employees with an adequate explanation of the decision made 4 Other theories Chris Argyris Argyriss research interests were in the relationship between peoples needs and the needs of organizations. He suggested that the reason for so much employees apathy is not so much of laziness, but rather because of people being treated like children. This led to his so-called Immaturity theory which suggests that the human personality develops from immaturity to maturity in a continuum, in which a number of changes take place. These are as follows: Immaturity-Maturity Theory Immaturity Passivity Dependence

Maturity Activity Relative independence 116

Behave in few ways Behave in many ways Erratic, shallow interests Deeper interest Short time perspective Long time perspective Subordinate position independence Equal or superior position Lack of awareness of self Awareness and control over self Source: G.A. Cole Management Theory and Practice The main reasoning behind this theory is that when human resource managers perceive employees as being immature, then they expect the employees to exhibit the behaviours of immaturity a shown in the table above. The best management practice would be to perceive the employees as being mature. Douglas MC Gregor Theory X & Theory Y Douglas Mc Gregor (196) proposed the concept of Theory X and Theory Y. He maintained that there are two fundamental approaches to managing people. The approaches depend on the managers perception of the employees. Theory X assumptions are negative perceptions of employees. Many managers who lean towards theory X generally get poor results. Enlightened managers use theory Y, which produces better performance and results, and allows people to grow and develop. Theory X (authoritarian management style) assumptions include: The average person dislike work and will avoid it Therefore most people must be forced/ coerced, controlled, directed, and threatened with punishment in order for them to work towards organizational objectives The average person prefers to be directed, to avoid responsibility, relatively lacks ambition, and wants security above all else. Theory Y (participative management style) assumptions are that: Effort in work is as natural as work and play People will apply self control and self-direction in the pursuit of organizational objectives because of the importance of the rewards associated with the achievement. The degree of commitment to objectives is in proportion to the size of the rewards associated with their achievement. People usually accept and often seek responsibility. The capacity to use a high degree of imagination, ingenuity and creativity in solving organizational problems is widely, not narrowly, distributed in the population. In modern industrial life, the intellectual potential of the average person is only partly utilized. Skinners reinforcement theory. The psychologist B.F Skinner developed the positive reinforcement or behaviour modification. The theory holds that individuals can be motivated by proper design of their work environment and praise for their performance while punishment for poor performance produces negative results.

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David McClelland (1971) advocated for motivation by satisfying the overriding need in the individual. Some individuals have a high need for power (n/PWR), others have a high need for affiliation (n/AFF), while others have very high needs for achievement (n/ACH). Individuals with high needs for achievement are characterized by a tendency to set moderately difficult goals, a strong desire to assume personal responsibility for work activities, a single minded focus on accomplishing a task, and a strong desire for detailed feedback on task performance. The need for affiliation involves a strong attraction to other individuals in order to feel reassured and acceptable. Individuals with a high need for affiliation are characterized by a sincere interest in the feelings of others, a tendency to conform to the expectations of other especially those whose affiliations they value, and a strong desire for reassurance and approval from others. The need for power manifests itself in the desire to influence others and to control ones environment. Individuals with a high need for power seek leadership positions and tend to influence others in a fairly open, direct manner. PRACTICAL METHODS OF MOTIVATING WORKERS The theories outlined above provide a sound basis for understanding motivation. Nevertheless, the human resource managers must devise more practical approaches to motivating the workers. Some of the approaches are briefly listed below. The use of participative or consultative management styles. Adopting an open door policy. Having managers who are available, understanding, and able to assist employees through activities such as counselling. Availing recreational facilities for employees. Collective goal setting. Good working conditions. Promotion from within Employees made to feel valued. Interest free loans or loans with low interest rates. Status enhancement Positive communication Recognition of individuals and their contributions to the firm.

COMMUNICATION Communication is a very important subject to any manager. Managing is getting things done through others, a task that requires the manager to communicate with other people. To communicate is to make known, to impact or to transmit information. Communication forms the bridge between managers and employees. Managers must receive and give ideas, reports, and instructions; explain problems; give demonstrations; and also keep in touch with its relevant environments (customers, suppliers, dealers, regulations etc). Talking, listening, attending meetings, reading and writing occupies most of the managers time. 118

Communication is needed to establish and disseminate goals of an enterprise, develop plans for their achievement, organize human and non human resources, select, develop and appraise staff, control performance, and direct, lead and motivate employees. For communication to be effective the message sender must have a good knowledge of the receiver. Overestimation of the capability of the receiver ( e.g. his/her intelligence) will lead to misunderstanding of the message. Income, social status, responsibilities and position of the receiver all affect and influence the way a message is perceived.

A SIMPLE COMMUNICATION MODEL NOISE SENDER

MESSAGE
FEEDBACK

CHANNEL

RECEIVER

Types of Communication Communication in an organization is either external or internal. Internal communication takes place between people in the organization and others outside the organization. All organizations generate internal communication and the communication flow is multidirectional. It could either be: a) b) c) d) e) Vertically upward from lower to higher level through the chain of command. Vertically downward from higher to lower levels. Direct horizontal when an individual from one department communicates to another in another department but at the same organizational level. Indirect horizontal occurs between people of different organizational levels and in different departments. Depending on the nature of the firm zigzagging or diagnosing of messages cannot be ruled out.

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The firm also invites communication with groups outside and as the organization grows external communication grows. These groups include customers, suppliers, government, competitors etc.

Forms of communication
Written communication is in form of letters, memos, manuals or minutes. It has the advantage of providing records and references. Most communication in organizations is oral. It provides immediate feedback and unclear issues can be classified immediately. It can easily be altered or adjusted to suit the receiver. Non Verbal Communication includes facial expressions, body gestures, eye movements, and distance maintained among many others. Communication barriers can arise from sender, channel, receiver or from the surroundings. They include: Lack of planning to communicate Semantic distortion (language) Poor expression (language) Loss of transmission Poor retention Poor listening Hasty (premature) evaluation Distrust, threat and fear Insufficient period to make adjustments for change Noisy environment.

Upward communication
This is communication of subordinates with the managers and it continues up the organizational hierarchy. It can be effected through: Face to face contacts Meetings with supervisors Special organisation wide elected councils that meet with top management periodically Speak up programs where employees are given a telephone number to call Anonymous complaint boxes Annual employee meetings Grievance procedures Morale questionnaires Exit interviews Open door policy The labour union Grapevine The ombudsperson. Employee counselling programs

Downward communication
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This is communication flows from people at higher levels to those at lower levels in the organizational hierarchy. It can be done using oral or written means. In an organizational setting, managers can communicate to subordinates through: The chain of command Posters and the bulletin boards Company periodicals Letters to employees Employee handbooks Information racks A loudspeaker system Pay inserts The grapevine Annual reports Group meetings The labour union

LEADERSHIP
Leadership is an important aspect of human resource management. It is the art or process of influencing people so that they will strive willingly and enthusiastically toward the achievement of group goals. Leaders should not just push people but they should cultivate the free willingness among the people. Good leaders use their power effectively and in a responsible manner. They are also aware that human beings have different motivations at different times and at different situations. Moreover, leaders should have the ability to inspire and to act in a manner that will develop a climate conducive to responding to and arousing motivations. There are five sources of power for leaders. Legitimate power is associated with the leaders position in the organization. Such power could be held by the human resource manager, marketing manager, managing director and so on; it is based purely on position and not necessarily on the ability to influence. Reward power stems from the perception that the leader is able to reward another individual. Examples of rewards are pay rises and favourable job assignments. Coercive power is the opposite of reward power; it is where the leader can coerce subordinates through demotion, firing, or silent treatment among other methods. Referent/charismatic power is derived from the desire to be like the power holder while expert power is the power of knowledge. There are a number of approaches to leadership. The great man theory advocates for leaders being born. The traits theory holds that effective leaders are associated with the ability to supervise others, decisiveness, ability to manage change, natural energy and enthusiasm, being assertive and confident, as well as intelligence and the ability to conceptualize the activities of the whole organization The functional or group approach focuses on the functions of the leader. It holds that the skills of leadership can be learnt, developed and perfected. Krech et al identified 14 functions performed by leaders whereby the leader can be an executive, planner, policy-maker, expert, an external group representative, 121

controller of internal relations, giver of rewards and punishment, an arbitrator and mediator, setting examples, a symbol of the group, substitute for individual responsibility, an ideologist, a father figure, and as a scapegoat to accept blame in the case of failure.

According to the situational approach, leadership is affected by the situation from which the leader emerges and in which he or she operates. It is also known as the contingency approach. The path goal theory says that the main function of a leader is to clarify and set goals with subordinates, help them achieve the goals, and remove obstacles.

Broad classification of leadership styles


There are many dimensions to leadership and many possible ways of describing leadership style, such as, for example, dictatorial, unitary, bureaucratic, benevolent, charismatic, consultative, participative and abdicatorial. The style of managerial leadership towards subordinate staff and the focus of power can be classified within a broad three-fold heading. The authoritarian (or autocratic). This is where the focus of power is with the manager, and all interactions within the group move towards the manager. The manager alone exercises decision-making and authority for determining policy, procedures for achieving goals, work tasks and relationships, control rewards or punishments. The democratic style is where the focus of power is more with the group as a whole and there is greater interaction within the group. The leadership functions are shared with members of the group and the manager is more part of a team. The group members have a greater say in decision-making, determination of policy, implementation of systems and procedures. A genuine laissez-faire style is where the manager observes that members of the group are working well on their own. The manager consciously makes a decision to pass the focus of power to members, to allow them freedom of action and not to interfere; but is readily available if help is needed. Futrell (2000) suggests that leaders have a strong, defined sense of purpose; are effective communicators, persistent and hardworking; they also are learners who are aware of themselves; they love their work and inspire others; leaders are risk takers who establish human relationships based on trust, respect and care; leaders are keen to motivate and inspire other people to achieve their goals. BIBIOGRAPHY 1. Armstrong, M.A. Handbook of Human Resource Management Practice (8th edition) The Bath Press Ltd Great Britain. 2. Dr. Robert L. Mathis and Dr. John H. Jackson, HR Management Strategies and Environment (9th edition) University of Nebraska Lincoln. 122

3. Scarpello & Ledvinka, Personnel /Human Resource management (2nd Edition) PWS-Kent Publishing Co, Boston. 4. G. A. Cole Management Theory and Practice, (2nd Edition), Guensey Press Co. Ltd., Channels Islands 5. Decenzo, D.A. and Robbin, S. P. Personnel Management and Human Resource Management (3rd Edition), London, Prentice Hall. 6. Abraham Maslow Toward a Psychology of Being Motivation and Personality (1st & 2nd Edition), and The Further Reaches of Human Nature 7. Maslow, A.H. (1943) A theory of human motivation, Psychological Review, July, pp.121-125. 8. Vroom, V.H (1964), Work and Motivation, Wiley, New York. 9. Adams, J.S (1965), Inequity in social exchange, in Berkowitz, L. (ed.), Advances in Experimental Social Psychology, 2, Academic Press, New York. 10. Futrell, C.F (2000), Sales Management, Dryden Press, Orlando.

Ch.14

CONLICT MANAGEMENT

Chapter objectives
The objectives of this chapter are to: Differentiate the negative and positive impacts of conflicts Understand the sources of conflicts among employees in the organization. Explain the strategies that can be used to resolve conflicts among employees in the firm.

Introduction
Conflicts are common features of many organisations. Conflicts occur when individuals or groups feel that other individuals or groups have frustrated or are about to frustrate their plans, ideas, proposals, interests, resources, goals, beliefs, or activities. The consequences of conflict and failed negotiations, whether it is between labour and management, groups, individuals or nations can be costly to individuals and to organisations. 123

Conflict is a behaviour intended to obstruct the achievement of some other persons goals. It is based on the incompatibility of goals and arises from opposing behaviour. It can be viewed from the individual, group, or organizational level. It should be understood that conflicts are not necessary bad in an organizational setting. The consequences of conflicts can be better ideas generated for the way forward, long standing problems unveiled, and clarification of individual views. Nevertheless, extreme levels of conflicts can make some people feel defeated or demeaned; a climate of mistrust and suspicion can also be developed and even some employees may decide to eliminate others. The rate of labour turnover can increase as other employees avoid teamwork and concentrate on their narrow interests.

Sources of conflicts
The sources of conflicts are as varied as the types of conflicts that exist. Generally speaking there are four broad sources of conflicts namely personal differences, informational deficiencies, role incompatibility, and environmental stress. Personal differences imply that individuals are different in terms of their cultural and family traditions, level of education, breadth of experience, and so on. This often leads to a cognitive conflict which is a situation when a person or a group holds ideas or opinions that are inconsistent with those of others. Differences in perceptions and expectations result in different people attaching different meanings to the same stimuli. Personal differences can also lead to affective conflicts which occur when one groups emotions, feelings or attitudes are incompatible with those of others. It is common to find individuals with acute and almost irreconcilable personality differences. Informational deficiencies can also be a source of conflicts. Conflicts based on misinformation or misunderstandings tend to be factual hence clarifying previous messages or obtaining additional information generally resolves the dispute. Role incompatibility conflicts are similar to conflicts arising from personal differences or information deficiencies. Incompatibility can lead to goal conflicts which occur when a person or a group desires a different outcome. Inter-group discussions should be encouraged. When the conflict occurs, avoid a win-lose approach to solving it. Behavioural conflict occurs when one group or person does something which is unacceptable to others. It is also known as role conflict and occurs when a person occupying a certain office exhibits behaviour which is contrary to what is expected. Role ambiguity is also a significant source of conflict. Related to role incompatibility are departmentalization, specialization, performance standards, and violation of territory. Sometimes the activities of one department depend on the activities of another department. For example, the marketing department relies on the production department for the goods to be produced before they are passed over to the customers. Many departments tend to concentrate on the achievement of their own particular objectives. This creates potential for conflicts. Similarly, if reward and punishment systems are perceived 124

to be based on keeping up with performance levels especially when the performance expectations are very high, then the potential for conflict is high. In other cases, the treatment of workers by management is biased or inequitable; this can lead to tension and conflict. And people tend to become attached to their own territories within the work organization. Examples of territories are the area of working, the type of clients dealt with, parking slots, the chair sat on and the room worked in. if violated, then a conflict could arise. Environmentally induced stress can also be a major source of conflicts. The stress can be induced by resource scarcity and uncertainty. Scarcity tends to lower trust, increase ethnocentrism, and reduce participation in decision making. The greater the limitation of organizational resources, the greater the potential for conflict.

Strategies for resolving conflicts in organizations.


The strategy used to manage or resolve the conflict will depend on the nature and source of conflict. The main strategies used include forcing, accommodating, avoiding, compromising, and collaborating. The forcing strategy seeks to satisfy ones own needs at the expense of the needs of other individuals. This can be achieved through the use of formal authority, physical threats, manipulation ploys, and ignoring the claims of the other party. The problem with this conflict resolution approach is that it breeds hostility and resentment. It can also take the form of Character assassination in which attempts are made to discredit the person concerned and to distance him or her from others in the group. The person affected can respond by taking legal action or damaging the image of the organization. The accommodating approach satisfies the other partys concerns while neglecting ones own. The problem with this approach is that others may take advantage of you which also lowers your self esteem. The avoiding response neglects the interests of both parties by sidestepping the conflict or postponing a solution. It can take the form of non action whereby a manager strongly believes that by ignoring the problem it will eventually disappear. It can also take the form of administrative orbiting in which the management adapts the policy of requiring more information in order to solve the conflict. This should be used carefully because the anger of the employees can build up. In due process non-action, the conflict resolution procedure is made long, costly, complicated, and risky for the affected employees. The aim is to wear down the dissatisfied employees while at the same time claiming that the resolution procedures are open and available. Some managers keep some of the organizational information secret (such as pay) as a way of reducing conflict. The compromising response is an attempt to obtain partial satisfaction for both parties. In resource distribution, managers should use their imaginations and 125

initiative to help overcome conflict situations. And in situations where financial resources are limited, greater attention should be given to non monetary rewards such as job design, more challenging work, increased delegation or empowerment, flexible working hours and attending courses or conferences. Personnel policies and procedures should also be just and equitable especially in the areas of job analysis, recruitment and selection, job evaluation, and reward and punishment systems. Moreover, a more participative and supportive style of leadership and managerial behaviour is likely to assist in conflict resolution. The collaborative approach is an attempt to address fully the concerns of both parties. It is a win-win strategy and it can take the form of clarification of goals and objectives, role definitions, and performance standards which helps to avoid misunderstandings and conflict. It is recommended that managers emphasize organization- wide goals.

Strategies for minimizing conflicts in organizations


Prevention is always better than cure. The implication is that managers should seek to prevent conflicts from occurring. This may be difficult but it is possible. Suggestions for preventing the occurrence of conflicts include the following ( Okumbe, 2001). Physical separation of the affected employees; Ensuring that rules and regulations are enforced and followed; Limiting inter-group interactions especially when the groups dont depend on each other directly or when they are likely to conflict; Encouraging team building exercises that involve all the departments so that each department can learn to appreciate the other departments. Use of integrators which perform the boundary spanning role between groups; Confrontation of the affected persons and negotiation of the conflict; Third party consultation through people who understand human behaviour; Rotation of members; Counselling employees so that they learn to control issues that could lead to conflicts. Involving employees in decisions that affect them and which may bring a change on the status quo. By so doing they will not resist the change strongly and probability of conflicts will be minimized.

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CH. 15: EMPLOYEE RELATIONS


Chapter objectives.
After reading this chapter, it is expected that the reader will be able to: Explain the grievance settling procedure Understand why employees join labour unions Discuss the collective bargaining process Analyse the different types of strikes and the conditions under which they occur. Appreciate the importance of managing employment relationships.

Introduction
Working with other people in an organisation has many challenges. Often disagreements occur between or among people. An employee may then have grievances against another employee, a supervisor, team leader or even the whole organisation. Sometimes the problem or grievance may be affecting many employees who then opt to join labour unions.

Grievance settling Procedure:


This is a formal communications channel designed to settle a grievance as soon as possible or immediately they arise. The procedure is: The employee should discuss the grievance with the immediate supervisor The employee then discusses the grievance with the shop/union steward. If the problem is not solved at this level, the union steward discusses the grievance with the supervisor's manager. Where the problem still persists, the shop steward informs the union grievance committee which discusses the grievance with the unit plant manager or the employers human resource department 127

The representative of the national union discusses the issue with the company general manager The final step may be the use of an impartial umpire or arbitrator for ultimate disposition of the grievance Where an individual feels that a union is not doing enough, he/she can take legal action.

Labour/ Trade Unions Employees may highly appreciate their jobs for quite sometimes. However, as times go by, they may experience some dissatisfaction that may make them to join labour unions. The aim of joining the labour union is to correct a gap which the employees feel that the management is not ready to correct under normal circumstances. A trade union is an organisation that represents employees' interests to management on issues such as wages, working hours, and working conditions. A labour union or trade union may also be defined as an organisation of workers formed to promote, protect, and improve through collective action, the social, economic, and political interests of its members. The dominant interest with which the union is concerned is economic. In this area desires and demands for improved wages, hours, and working conditions are foremost. Why Employees Organise Labour or Trade Unions: Employees join trade unions for a variety of reasons. Some of them are briefly discussed below. a. Job Security - Employees want to be confident that the jobs they have today will definitely exist in the future and that they will be treated fairly and will not be discharged without just cause. b. Good Working Conditions a safe and healthy place to work coupled with high quality standards in both product and job environment is important to workers. c. Opportunity to Advance employees want to be certain that their organisations will consider them for promotion to higher paying, more responsible jobs. d. Importance of the Work work itself is important to employees. The employees want to feel that their efforts are making a relevant contribution to the organisation. Where an employee does repetitive, routine tasks, she/he may become bored and feel they have no identity hence they seek unionisation. Human resource managers should continually adopt job enrichment programs to ensure the jobs of employees are challenging. e. Opportunity to be heard a union provides a vehicle for employees to express their dissatisfactions and disagreements with a particular job matter. f. Need to be recognised jobs well done deserve recognition, and exemplary performance calls for an occasional word of thanks. Workers who do not receive recognition so as to reinforce positive behaviour may join unions. g. Need To be respected in some cases supervisors may be treating employees in too harsh and authoritative ways leading them to seek refuge in trade unions. h. Need to belong people need to associate with other human beings and feel they belong. Unions meet these needs by offering an organisation of people with common interests. Through meetings, educational programs, social events, and other activities designed to involve members, unions build a strong bond 128

brotherhood. Many workers join a union because it gives them a means of expressing their leadership aspirations. i. Money Unions negotiate for the employees to receive a fair day's pay for a fair day's work. Indeed financial incentives are probably the greatest motivation for employees when considering entering into trade unions j. Political Gains- many individuals use the trade union movement to gain political mileage. COLLECTIVE BARGAINING Whenever there are disagreements or conflicts between union members and a firms management, these are solved through the collective bargaining process. Collective bargaining is thus the process whereby representatives of management and those of workers negotiate over wages, hours and other terms and conditions of employment. It is a give-and-take process between representatives of the two sides. The Issues Discussed Include: Discharge of Employees Job Security Grievances Work Schedules Retirement and Person Coverage Vacations Christmas Bonuses Safety Rules Profit Sharing Plans The attitude of management toward unions is one major factor in determining the relationship between union and management. Where management and union see each other as enemies, the collective bargaining process can lead to conflicts while in a situation where both parties view each other as friends, the process may lead to collusion

THE PROCESS OF COLLECTIVE BARGAINING:


The representatives of the management as well as those of the trade union go through 4 steps in the collective bargaining process. These are listed below. 1. Preparation 2. Initial demands 3. Continued negotiations. These may lead to a bargaining disagreement or impasse 4. Settlement and contract signing. Preparation: Both parties must prepare themselves for the negotiation. The management must especially prepare itself by: a. Approve the plan for negotiations with top management 129

b. c. d. e. f. g. h.

Conduct an audit and analysis of grievances Review the contracts made with the workers Conduct wage and benefit surveys of competitors Designate a bargaining team Plan for contingencies e.g. strikes etc Brief directors Designate date and time for bargaining with workers

2. Initial Demands: Typical bargaining includes an initial proposal of expectations by both sides. The way initial demands are presented will determine the direction of the negotiations to follow. 3. Continuing Negotiations: After opening positions have been taken, each side attempts to determine what the other values highly so that the best bargain can be struck. It is important to determine who has the stronger bargaining power. This depends on economic factors, socio-demographic factors such as how easy it is to get other workers, and the legal environment. There are a number of bargaining tactics to use, for example: Game playing - here a few representatives from each side hold a secret meeting prior to the official opening of the negotiations, and they reach an agreement on the essential issues. When the negotiations begin these individuals put on a sham battle including table thumping, and name-calling before they all settle for common agreements. Bluffing - here the negotiators attempt to gain a little more than they are willing to finally settle for. An example is a case where a 50% salary increase has been awarded and the union tries to negotiate for at least 80% salary increase. Bargaining Impasse: Where the labour and management do not reach agreement on issues, then strikes and lockouts may occur. During a strike, union members refuse to work in order to put pressure on an employer. Often the striking union members picket or demonstrate against the employer outside the place of business. In a lockout, management shuts down company operations to prevent union members from working. This action may also avoid possible damage or sabotage to company facilities or injury to employees who continue to work. Both strikes and lockouts are forms of pressure on the other party. By striking the union attempts to pressurise management into making some concessions and signing a contract. However, management may respond by hiring replacement workers or may operate the company by using supervisors and managers to fill in for striking workers. By locking out workers, an employer put economics pressure on union members in the hope that they will make concessions and support a contract agreement.

Types of Strikes:
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Economic Strikes - occur when the parties fail to reach agreement during collective bargaining. Unfair Labour Practice Strikes - occur when union members walk away from their jobs over what they feel are illegal employer actions such as refusal to bargain. Wildcat Strikes - occur during the life of the collective bargaining agreement without approval of union leadership and violate a no-strike clause in a labour contract. Strikers can be discharged or disciplined. Jurisdictional Strikes - occur when one Unions member walks out to force an employer to assign work to them instead of to another union. Sympathy Strikes - express one Union's support for another involved in a dispute, even though the first union has no disagreement with the employer During times of strikes the employer should take safety precautions by: Making sure the plant is left in good physical condition Explaining the employers side of the issue to the employees Giving a press statement Notifying suppliers and customers Notifying the appropriate mediation services Determining to what extent non-union personnel will be maintained on the working staff Paying off striking workers for work completed in the past Conciliation or Mediation: Conciliation or mediation occurs when an outside individual attempts to help two deadlocked parties continue the negotiations and arrive at a solution. In conciliation a third party attempts to keep the union and management negotiators talking so that they voluntarily can reach a settlement. In mediation a third party assists the negotiators in their discussions and also suggests settlement proposals. Arbitration: This is a means of deciding a dispute in which negotiating parties submit the dispute to a third party to make a decision. Either an individual or a panel of individuals can conduct Arbitration. 4. Settlement & Contract Agreement after an initial agreement is made, the two sides usually return to their respective members to determine if what they have informally agreed on is acceptable to them. If approval is voted, the agreement is then formalised into a contract. The agreement also contains language on the duration of the contract.

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CH. 16: EMPLOYEE HEALTH AND SAFETY


Chapter objectives
A reader who has successfully read this chapter will be able to: Differentiate employee health from employee safety Explain the differentiate sources of accidents in the workplace Analyse the critical health issues that human resource managers have to deal with Appreciate the importance of employee health and safety.

Introduction
The management of every organisation has a responsibility to ensure that the workplace is free from unnecessary hazards and that conditions surrounding the workplace are not hazardous to the physical and/or mental health of employees. The managers must also ensure that the employees are safety conscious and are encouraged to maintain good health.

Definition of Terms:
Health refers to a general state of physical, mental and emotional well being. A healthy person is one who is free from illness, injury, or mental and emotional problems that impair normal human activity. Health management practices in organisations strive to maintain the overall well being of individuals. Safety refers to protection of the physical well being of people. The main purpose of effective safety programs in organisations is to prevent work-related injuries and accidents. Health & Safety Policies focus on the safe interaction between people and the work environment. In many organizations, the management and the employees neglect the health and safety aspect. Nevertheless, ignoring this element can lead to a lot of pain and suffering to organizational members and to their dependants. Its importance cannot be overemphasized.

REASONS FOR SAFETY PROGRAMS:


Safety programs are undertaken for three fundamental reasons: Moral - managers undertake to prevent accidents so as to minimise the pain and suffering the injured worker and his family are exposed to as a result of the accident. Legal - Organisations are subject to fines, and supervisors can receive jail sentences if found responsible for fatal accidents. Moreover, the image of the organization can be damaged following an unfortunate event. Financial - the cost to the company of even a small accident can be quite high. These include: Payment for settlements of injury or death claims Legal fees for defence against claims 132

Costs of rescue operations Loss of function and operations income Training costs for replacements Increased insurance costs

BENEFITS OF SAFETY PROGRAMS:


Tangible benefits of a well-managed safety program include: Reduction of insurance premiums Lower absences Savings of accident and litigation costs Fewer wages paid for lost time Less expenses in training new workers Less overtime Meeting the demands of clients Higher productivity More motivated workforce

CAUSES OF ACCIDENTS:
Unsafe conditions (of one sort or another) are one main cause of accidents. They include: Improperly guarded equipment Defective equipment Hazardous arrangement or procedure in, on or around machines or equipment Unsafe storage - congestion, overloading Improper illumination - glare, insufficient light Improper ventilation - insufficient air change, impure air source Unsafe conditions refer to the mechanical and physical conditions that cause accidents.

Human Causes:
People cause accidents by unsafe acts such as: Failing to secure equipment Failing to use safe attire or personal protective equipment Throwing materials Operating or working at unsafe speeds - either too fast or too slow Making safety devices in operative by removing, adjusting, disconnecting them Using unsafe equipment or unsafe use of equipment Using unsafe procedures in loading, placing, mixing, combining Taking unsafe positions under suspended loads Lifting improperly Distracting, teasing, abusing, startling, quarrelling, horseplay Carelessness, intoxication, daydreaming, inability to do the job, or other human deficiency PREVENTIVE MEASURES FOR ACCIDENTS: 133

Education Safety education is aimed at inducing people to 'think safety' and is necessary to create safety awareness. Popular methods for creating safety awareness include: Exhibiting easily visible signs that proclaim safety slogans Placing articles on accident prevention in organisation newsletters Exhibiting signs e.g. "we have a zero tolerance for accidents". Skill Training When employees undergo training, safety issues and preventive techniques should be discussed especially for new employees. Protection People should be provided with protective equipment where necessary. Examples are safety shoes, gloves, hard hats, safety glasses, and noise mufflers. Protective maintenance of machinery can avoid fires, explosions, and oil leakage.

Engineering
Engineering methods can be used to prevent accidents through both the design of the equipment and the design of the jobs themselves. When equipment is being ordered, the type that will best minimise accidents rates should selected e.g. one, which has specific lighting features. Equipment design can also consider those elements about the process than can reduce operator fatigue, boredom, and daydreaming, similarly the position of the operators relative to the control devices will affect the amount of stooping, twisting, tension etc - factors that can do increase accident rates Regulation Enforcement The safety rules and regulations should be enforced. No smoking signs should be obeyed; safety helmets always worn in the plant. if the policies are not enforced, the employer may be liable for any injuries that occur Reducing Unsafe Conditions Reducing unsafe conditions is primarily in the domain of safety engineers. Their task is to remove or reduce physical hazards. This can be done through methods such as use of better alternatives, use of barriers, warning systems, and personal protective clothing. Regularly conducting safety and health inspections risk assessments are concerned with the identification of hazards and the analysis of the risks attached to them. A hazard is anything that can cause harm (e.g. working on roofs, lifting heavy objects, chemicals, electricity, etc) while a risk is the chance, whether large or small, of harm actually being being done by the hazard. Selection and Placement Screening out accident-prone persons can reduce accidents before they are hired e.g. People who are visually impaired Emotional stability and personality tests Measures of muscular co-ordination

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HEALTH PROGRAMS 1. Alcoholism and Drug Abuse:


Alcoholism is a situation whereby employees have excessive drinking habits while common drugs abused by some employees include Marijuana and Cocaine. Human resource managers are also expected to deal with these issues. The effects of alcoholism on the worker and the work can be severe and include the following. The quality and quantity of the employees work can decline sharply "On the job absenteeism" occurs as efficiency declines Accidents on and off the job increase The morale of other workers is affected, as they have to do the work of their alcoholic workmate. These problems can be solved by: Disciplinary measures which include oral and written warnings. Discharging the affected person. This should be done as the last result. In house counselling Referral to an outside counselling agency

2.

Stress:

In order to manage stress effectively, it is important to understand what it is. stress can be defined as a strain experienced by an individual over a period of time, which impairs the ability of the individual to perform his/her role effectively. Stress is not intrinsically bad. In the absence of any stress, people feel completely bored and lack any inclination to act. A certain level of stress is manageable as it prepares individuals to deal with difficult situations, which threaten their well being. But when the stress level rises to the point where an individual cannot cope with it, there are harmful results. It important to manage the stress before it reaches the harmful level. Normally stress progresses through three stages before it becomes harmful. The first stage is when the individual is first exposed to the stressful event. It is called the alarm stage. The individual may experience shock or confusion and his/her body responds by mobilizing the energy resources including the heart rate, blood pressure, and alertness. Where the stress does not end immediately, the individual moves to the second stage which is the resistance stage. This involves developing defence mechanisms which include aggression (attacking the stressor directly), regression (adopting a behaviour that was successful at some earlier time), repression (denying that the stressor exists), withdrawing physically or psychologically from the stressor, and fixation (persisting in a response regardless of its effectiveness). When the stress is prolonged, then exhaustion may result leading to negative effects such as high blood pressure, anxiety, and mental disorders. Thus stress can produce severe physical or mental symptoms such as tiredness, headache, irritability and so on. These can lead people to other problems like 135

heavy drinking or excessive smoking which set up a vicious cycle by creating even worse physical problems. Ideally there are two types of stress namely psychological stress and physiological stress. Psychological stress manifests itself into feelings of emotional distress such as anxiety, excessive worry, and depression. Physiological stress manifests itself in pain or physical discomforts like headaches, muscular tension, fatigue, and hypertension and so on. All these discomforts can be detected early and treated. Effects of stress to managers According to Whetten and Cameron (2005) when managers experience stress, they tend to: Selectively perceive information and see only that which confirms their previous biases Become very intolerant of ambiguity and demanding of right answers Fixate on a single approach to a problem. Overestimate how fast time is passing (hence they often feel rushed). Adopt a short-term perspective or crisis mentality and cease to consider long term implications. Have less ability to make fine distinctions in problems, so that complexity and nuisances are missed. Consult and listen to others less Rely on old habits to cope with current situations. Have less ability to generate creative thoughts and unique solutions to problems. The manager becomes less effective in dealing with employees and is also inefficient at listening, making good decisions, solving problems effectively, planning, and generating new ideas. Easily agitated by others. Victimize employees easily Become trivial on issues. Get withdrawn from other people.

Causes of Stress:
Different authors have tried to establish what causes stress in individuals. Nevertheless, the main causes of stress can be categorized into four namely anticipatory, encounters, time, and situational causes. Anticipatory stressors are unpleasant things that have not happened but may happen. They are actually FEARS (false evidences appearing real!). People may fear losing their jobs or their friends losing their jobs, or they may fear changes that may arise from organizational changes such as restructuring, or downsizing. These types of stressors can be reduced or eliminated through the use of the small wins strategy and goal setting. The small wins strategy is the work of Weick (1984). It means a series of tiny but definite changes made in a desired direction. Although each individual success may be relatively modest when considered alone, the multiple small gains eventually mount up, generating a sense of 136

momentum towards the desired goals. Goal setting implies that an individual must set long term and short term goals. Encounter stressors result from interpersonal interactions. These interactions could lead to role conflicts (where roles being performed by group members are incompatible), issue conflicts (differences that exist over how to define or solve a problem), and interaction conflicts (where individuals fail to get along because of antagonism). Encounter conflicts can be minimized by collaboration and team building as well as emotional intelligence which is the ability to manage ones emotions and to manage his/her relationship with others. Time stressors arise from having too much to do in too little time. They can be eliminated through efficient and effective time management as well as by delegating. Managing time effectively means that individuals spend their time on important matters, not just urgent matters and that people are able to distinguish clearly between what they view as important and what they view as urgent. It also means that results rather than methods are the focus of time management strategies and people have a reason not to feel guilty when they must say no. By managing time effectively, one is able to accomplish more in a typical workday; it also eliminates feelings of stress and overload that can destroy personal accomplishments and satisfaction. All individuals, whether managers or ordinary employees, must learn to manage their time properly. Some rules that can help someone to manage their time more effectively include the following: Read selectively. This applies mainly to individuals who find themselves with too much material they must read such as mail, magazines, newspapers, books, brochures, instructions etc. Make a list of things to accomplish each day. Thus there is need for advance planning each day so that one does not just rely on memory. Have a place for everything and keep everything in its place. This is because when this is not the case, more time is required to find something when it is needed, and one may be tempted to interrupt the current task to do something else. Prioritize your tasks. Each day you should focus on important tasks and then deal with urgent tasks. Do one important thing at a time but several trivial things simultaneously. Make a list of things that are to be done within 5 or 10 minutes which time would otherwise be spent doing nothing as it may be falling between meetings, events, talking on the phone and so on. To avoid feeling overwhelmed by large, important, and urgent tasks, it is advisable to divide up large projects. Determine the critical 20% of your tasks which produces 80% of your desired results. Save your best time for important matters. Use the rest of the time to do routine work. Reserve some time during the day when others dont have access to you and spend this time either thinking, or to accomplish important/nonurgent tasks. 137

Dont procrastinate. By doing certain tasks promptly, it takes less time and effort than if they had been put off. Keep track of your time by dividing your activities into time logs to be accomplished within specified time periods. Set deadlines because work always expands to fill the available time. Do something productive while waiting. It is estimated that up to 20% of an average persons time is spent in waiting. During such a time, one can try reading, planning, preparing, rehearsing, reviewing, outlining, or something else that could help you accomplish your work. Specify a certain period of time during the day to do busy work. Reach closure on at least one thing every day. Schedule some personal time which can be used to plan, prioritize, take stock, pray, meditate, or just to relax. Dont worry about anything on a continuous basis. This ensures that one does not focus on one thing for too long. It also keeps the mind free and energy is focused on the present task. Write down long term objectives. This helps to maintain consistency in activities and tasks and serves as a constant reminder. Be alert for new ways to improve on your management of time.

Managers can become more efficient at time management by following the rules below: 1. Hold routine meetings at the end of the day when energy and creativity levels are low and when the quitting time ensures that the meetings are brief. 2. Hold short meetings while standing up to ensure the meeting is short. 3. Set a time limit for every activity. 4. Cancel meetings once in a while especially where the meetings are unnecessary. 5. Have agendas, stick to them, and keep track of time during meetings. 6. Start meetings on time. 7. Prepare minutes of the meetings and follow up. 8. Insist that subordinates suggest solutions to problems so that the subordinates do not delegate to the manager. 9. Meet visitors in the doorway in order to control your time and the use of the office space. 10. Go to subordinates offices for brief meetings. 11. Dont overschedule the day. 12. Have someone else answer telephone calls and scan e-mail. 13. Have a place to work uninterrupted in order to meet deadlines. 14. Do something definite with every piece of paperwork handled. 15. Keep the workplace clean. 16. Delegate work; identify the amount of initiative recipients should take with the tasks they are assigned, and give others credit for their success. Situational stressors arise from the environment in which a person lives or from an individuals circumstances. An example would be an unfavourable working 138

environment. These stressors can be reduced through work redesign techniques such as job enrichment, combining tasks, establishing customer relationships, and open feedback channels. Other scholars have tried to classify the sources of stress using the following approaches: Working conditions - pressure of time at work and high work demands with a low level of influence and control over the work situation can contribute to high stress levels. Work overload - individuals are at risk from stress if they are unable to cope with the work targets set for them. Good targets should be challenging but achievable. Work under load- when employees have very little work to do, they may be stressed because they may fear the closure of the business. They sometimes spend the idle time talking and analysing problem after problem. This gives them more chances to be stressed. Work role problem - stress may arise where there is role conflict (i.e. when the individual is called upon to perform different roles at the same time) or role ambiguity (where a person does not know what is expected of him/her in the work situation) Excessive demands of work - some jobs take so much out of the jobholders such that the job holder is drained of their physical energy and exhausted Interpersonal conflicts - personal and emotional conflicts with fellow workers can lead to stress Poor communications - a lack of good communication can give arise to frustration and feelings of isolation at work and this can cause stress Fear of change job insecurity or fear of the effects of new technology can give rise to stress. Also the fears of feeling trapped in a dead end job with little hope of career development can be stressing. Conflicting loyalties - if an individual has too many bosses all calling for attention for their instructions, this can give rise to stress Commuting or travelling through heavy traffic or using overcrowded trains to and from work can be stressful Personal circumstances - outside work circumstances/conditions like divorce, domestic problems, financial problems and so on can interact to make work conditions more stressful.

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Boredom - underemployment or retirement can cause depression, apathy, and stress which is contrary to the general perception of overwork being the prime cause. In situations where the stress cannot be eliminated, it may be necessary to develop resiliency which is the ability to withstand the negative effects of stress. An individual should strive to achieve a fair balance among lifes activities which can be categorized into physical, spiritual, family, social, intellectual, work and cultural activities. Such a balance ensures that an individual does not concentrate on just a single or few aspects of life. There are three major aspects of resiliency namely physical, psychological and social resiliencies. The physical resiliency is achieved through cardiovascular conditioning regular physical exercises and proper dieting that includes eating a variety of foods and maintaining optimum weight among others. The psychological resiliency can be achieved by developing hardy personalities, the small wins strategy, and deep relation techniques. Generally people can be categorized into personality types A and personality types B. The personality class in which one falls can determine their response to stressful situations.

Personality Type A refers to those people that set prestigious and high
personal goals and career objectives; they also expect their subordinates and superiors to behave in this way. In pursuit of these standards, they are aggressively competitive and extremely hardworking. Because of their high personal standards, they don't trust subordinates to do the job properly hence they find it difficult to delegate. This throws extra work pressure on them. They tend to be inflexible both in their way of working and their view for the structure and functions of the organisation. Type A people are work oriented (workaholics) and have few interests outside the work environment itself. The characteristics of Type A people are likely to exhibit or precipitate the very situation, which leads to stress. Such people are likely to conflict with other managers and are impatient with subordinates who criticize superiors.

Personality Type B people are able to relax; they are flexible and more

adaptable. They have empathy in that they can put themselves in other people's shoes and take account of how others feel. They prefer co-operation to conflict. They are not so openly ambitious but they achieve the development of their careers through proper use of their talents. They don't create stress-inducing situations and so they are less likely to suffer from stress. Deep relaxation techniques include meditation, yoga, autogenic training or selfhypnosis, and biofeedback among others. These approaches are also good at reducing stress among individuals. Social resiliency involves developing close social relationships with family members, friends, relatives and other social groups that can cushion an individual against some negative eventualities.

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Thus generally speaking stress can be managed at the personal level by using methods such as: Managing time effectively poor time management significantly impacts on stress levels of people. Techniques of time management can be effective in coping with work overloads. This includes setting realistic goals, deciding on priorities, finishing one task before starting another, organising work so that you can find things when they are needed, allowing time for urgent problems and contingencies. Taking regular breaks this enables the employee to refresh their minds and bodies. Talking about the problems employees are often advised to share their problems with colleagues/friends whom they trust. This will enable them to get advice and opinions concerning their situations. Perhaps, somebody has gone through a worse situation than the one being faced by the employee Relaxing and exercising - exercise helps to release the stress of the day. Relaxation may take the form of reading a good book, meditation, yoga, or even engaging in physical exercises. All these approaches help someone to control their stress Doing other things the employees can establish outside interests (such as joining social clubs, religious groups etc), which will help to keep them fresh and creative.

ORGANIZATIONAL LEVEL MEANS TO MANAGE STRESS


Organisations can reduce stress at work by organising the conditions and requirement s of the work place and the job in such a way as to minimise those situations which are likely to cause stress. This can include job redesign ( e.g. job rotation). Moreover, the organization should set realistic targets for the employees, offer the appropriate training to the employees, carefully select and place the workers, give the necessary counselling to the employees, and adopt policies that enable the employees to balance between work life and personal life. Organisations are expected to be accountable for the damage caused by stress and other aspects of the health and safety of employees.

3.

BURN OUT

Excessive stress leads to burnout. Burnout is the total depletion of a persons physical and mental resources caused by excessive striving to reach some unrealistic work related goal. Burnout is often the end result of too much job stress, especially when that stress is combined with becoming preoccupied with attaining unattainable work-related goals. the signs of burnout are inability to relax, identifying so closely with an individuals activities such that when the activities fail, the individual falls apart, getting no meaning in the activities that someone worked so hard to achieve, working more but enjoying the work less, being constantly irritable with family and friends often commenting that the person looks sickly, and having an increasing affinity for smoking, liquor, or tranquillisers.

REDUCING BURNOUT
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Prevention the burnout should be prevented before it begins Identification the organisation should set in place techniques for the analysis of the incidence, prevalence, and characteristics of burnout in individuals, work groups, sub units or organisations Mediation these are procedures for slowing, halting, or reversing the burnout process Remediation these are techniques for individuals who already burned out or are rapidly, approaching the end of the stages of this process

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CH. 17: HUMAN RESOURCE PRODUCTIVITY


Learning objectives
At the end of this chapter one should be able to: clearly define productivity; discuss the factors affecting productivity; elaborate on productivity measures in service and goods producing organisations; State the benefits of improved productivity. Understand and analyse the various approaches that can be used to improve on the firms productivity and competitiveness.

Introduction
Human resource professionals frequently implement strategies for improving productivity and quality in their organisations. Most of these strategies depend on employees seeing a link between what they produce and what the firm is attempting to achieve. Without this relationship, work may be less meaningful, and ultimately the employee will be less motivated to perform it. DEFINITIONS OF PRODUCTIVITY Productivity is the quantity or volume of the major product or service that an organisation provides. In other words, it is the amount of work that is being produced in the organisation, in terms of how much and how well. For most workers, productivity can be determined by calculating a ratio where by: Productivity = Output Input

The most widely used measure of input is worker hours, i.e. the hours compensated by the employer rather than hours spent at the work place. The numerator changes according to the work being accomplished i.e. the numerator can be the number of units that employees produce per hour, the customers served per day, or the clients contacted per week. This definition of productivity is particularly appropriate for the private, goods producing sector because the output can be fairly accurately determined. Thus the focus of the definition is on efficiency of production. Managers often rely on measures of productivity to gauge the efficiency of their departments. It may be more appropriate to use a broader definition of productivity for services. This would consider both output efficiency and how effectively a service accomplishes its goals. 143

Generally speaking, productivity is a measure for the output of goods and services relative to the input of labour, materials, and equipment. Productivity is defined as measures or indicators of output of an individual, group or, organisation in relation to inputs or resources used by the individual, group, or organisation for the creation of the outputs. FACTORS AFFECTING PRODUCTIVITY High productivity is what makes an organisation thrive. Common productivity measures Include the number of calls per day, the number of completed projects, the number of customs handled each day, and the sales cycle time. An organisation without a good product or service to sell will have many problems. Productivity is affected by five major factors namely: 1. Capital investment 2. Innovation 3. Learning 4. Motivation 5. Readiness to change 1. Capital Investment It includes having the best possible machinery available that will help to improve the efficiency of the workers. The machinery or equipment can be in many forms, from robots to word processors. The concept behind capital investment is to provide the latest technologically advanced equipment that will help the workers to work smarter, not harder. 2. Innovation It is a process whereby new and creative ideas are welcomed, studied for their feasibility, and, it feasible, implemented. The idea for an innovation can come from a number of sources such as the employees, among customer complaints and suggestions among others. 3. Learning Learning looks at training issues. The aim is to make individuals to work effectively (doing the right things) and efficiently (doing the things right). To be effective and efficient in their work, employees must have the proper skills; and in many cases, these skills have to be taught - especially the skills needed to use a new piece of equipment. 4. Motivation A best trained employee with the ability and access to the most advanced piece of equipment will not be productive If he/she is unwilling to be so. Attitude plays an important role as to whether an individual has the propensity to work. Thus it is necessary to increase the employees motivation as one way of increasing productivity. Productivity improvements can be achieved through a series of events as shown above. Besides the workers' ability to accept and implement changes is an important consideration. 144

5. Readiness to change Change is a fact of life whether the individuals private or work life. In some cases, change may be resisted. A secretary who has been used t a typewriter may resist changing from the typewriter to a word processor. Indeed the fear associated with a possible threat to job security could negate any advantage that might accrue by automating an office because this fear might manifest itself as decreased morale. Employers must make changes to remain competitive. They must identify why changes are necessary and lend their total support in ensuring that the change takes place. The support can be in the form of time allowed to introduce a new system, time allowed for training, and decreased production allowed while the employees are being trained, as well as supporting the change by budgeting monies so that the complete change can be made. All these will create a work atmosphere that views change as a positive and progressive endeavour.

PRODUCTIVITY FOR SERVICE ORGANIZATIONS Defining productivity for service organisations is not easy because while out put per hour could be measured by the number of customers served, the output in service organizations may be influenced by other non quantitative variables. Productivity naturally increases when more output is derived from the same input or when the same output is derived from decreased input. In practice, the goals of most service organisations is to provide the fastest, most efficient, and friendliest service possible to any and all customers. In terms of productivity, this may mean that minimising errors, eliminating reworking, smiling and offering to go the extra mile for a customer is stressed. In any, case, the idea is to make the service industry more productive by having better-serviced customers. BENEFITS OF IMPROVED PRODUCTIVITY Improving productivity simply means getting more out of what is put in, not increasing production through the addition of resources like time, money, materials or people. It is doing better with what you have. Improving productivity is not working harder; it is working smarter. In fact, today's world demands that we do more with less - fewer people, less money, less time, less space, and fewer resources in general. More productive organisations get more goods and service out of a given amount of labour, capital, and equipment than do less productive organisations. Enhanced productivity is a goal in plans for employee training, more participative styles of administration, changes in organisation, personnel appraisal systems, and programs to improve morale and communications, and revised systems of compensation. Productivity increases make it possible for wages to be increased without raising unit labour costs and the prices of goods and services i.e. businesses can pay higher wages without boosting inflation. This improves the standards of living for the workers. The more productive an industry is, the better its competitive position because its unit costs are lower. 145

APPROACHES OF IMPROVING PRODUCTIVITY AND COMPETITIVENESS a. Employee Involvement: It provides employees with greater amounts of four key components namely power, information, knowledge, and rewards Power is shared downward by various mechanisms for obtaining employee in put into decisions. These may include quality circles or other forms of work improvement teams; suggestion systems, job enrichment and even self managed work teams. Information about the business is widely shared with employees, so that they have the understanding and background to contribute to decision making in the organisation, and information about the company's competition. Knowledge is enhanced by additional job skills training, cross-training on related jobs, and teamwork training to allow employees to handle more complex jobs, decision making responsibilities, and team-oriented work. Reward systems are modified to provide incentives for becoming skilled and committed to the company's overall effectiveness. Pay for skills systems are common, to reward learning additional jobs within the team, and a focus on the company's success is achieved with profit sharing, gains sharing, or employee stock ownership programs. Organisations vary in the level of involvement of employees. b. Lean Production systems This involves making use of small teams of multi-skilled workers who are rotated and enriched/empowered to find better ways of doing their job. This idea is used in Japan by Toyota and Mazda Corporations but the idea originated from Henry Ford of the famous Ford Motor Company (USA). c. Total Quality Management Total Quality Management has been clearly enunciated by experts such as Philip Crosby, Joseph Juran, W. Edward Deming, Armand Feigenbaum, and Genichi Taguchi These ideas were adopted and mastered by the Japanese and later spread to American Companies. Some of the common principles underlying Total Quality Control approaches are: Customer-first orientation (both internal and external customers) Top management leadership Commitment to the quality improvement process Focus on continuous improvement Respect for employees and their knowledge; employees are actively involved in the improvement process Reduction of product and process variations Provision of on- going education and training to employees Familiarity with a statistical way of thinking and the use of statistical methods throughout the organisation Emphasis on prevention rather than detection View of vendors as long term partners Performance measures that are consistent with the goals of the organisation 146

Product or service quality that begins with its definition and design Co-operation and involvement of all functions within an organisation Awareness of the needs of internal customers Substantial cultural change

d. Business Process Improvement Generally attributed to IBM, Business Process Improvement is a set of practices for regularly examining and improving the processes that go on in an organisation. A process is a repeated set of activities, often carried out in sequence by several departments that adds value and produces measurable outputs e.g. billing, distribution, materials management, and procurement. In a traditional approach to quality, each department involved in a process would try to do its portion of the activity more quickly and accurately, but the entire process from start to finish is unlikely to be critically evaluated or redesigned. Business process improvement is also called "re-engineering" and may involve benchmarking whereby an organization compares itself with other organization in the same or in different industries. After a benchmarking exercise, the firm may need to adopt some of the best practices of the leading firms. e. Work Improvement Teams (Quality Circles) Quality control circles consist of 7-10 volunteers from the same work area who meet regularly to define, analyse and solve quality related problems in their areas such as conditions under which people do their jobs, efficiency at work, job satisfaction, and influence of technology among other factors. Membership to the quality circle is voluntary and there are no payments for being a member of the group. An organisation may have several quality circles operating simultaneously, each dealing with a particular work area. The members of the quality circle should be trained on problem solving techniques. Quality circles are very effective in the short run. However, they are less effective at creating more permanent changes. They do not alter the nature of the employees jobs and only provide the opportunity to make suggestions and decisions on how to improve the job. f. Self Directed Work-Teams: These are also called "self managed work teams or autonomous work groups". The team is given responsibility to produce a product or service. The team makes most of the production decisions such as scheduling, assigning work, deciding on methods, selecting new members, doing performance evaluations, and allocating pay increases. The team is such that there is no supervisor, but there may be an elected team leader. Management is responsible for providing information to the group on costs, quality, output requirements, and any other technical assistance that is requested. When this concept is used throughout much of the organisation, the result is called a "high involvement organisation". 147

g. Financial Incentives: Examples of incentive systems are Commissions and pay for skills possessed rather than skills required. h. Suggestion Systems these systems enable employees to raise valuable suggestions for improvement or even to make complaints. An example is the suggestion box. i. Behaviour Modification: Positive reinforcements can be used to improve needed behaviour. Possible on the job rein forcers include social reinforces ( e.g. verbal praise, special job title, recognition in front of co workers, notes of thanks, picture in company paper, pats on the back and greetings from boss); Material rein forcers ( awards, fringe benefits, special badges or insignias, pay raises and bonuses, large offices and free tickets to sporting events); Special Privileges ( own parking space, longer lunch breaks, birthday off, longer coffee breaks, flexible work schedules, training for better jobs and earned time off); token reinforces include telephone credit cards, points backed by prizes, coupons redeemable at local stores, and chances to win prizes (lottery). i. Goal setting: This is a proven technique, which is highly successful for improving motivation and job performance. It is effective with employees as diverse as managers and professionals, sales people and hourly workers like tree planters and truck drivers. Effective goals have four characteristics The goal must be difficult but not impossible to accomplish The goals must be specific and measurable The employee who then must strive to meet them must accept the goals Feedback is necessary for goals setting to be effective over time. Setting specific goals clarifies what behaviours are desired hence ambiguity in ones role is removed. Specific and difficult goals with feedback allow people to receive motivational respect for meeting their goals.

j.

Quality of work life programs

Quality of work Life (QWL) is defined as a process buy which all members of the organisation have some say in decisions that affect their jobs in particular and the work environment in general, resulting in greater job involvement and satisfaction and reduced levels of stress. They have the following characteristics. 1. Sustained commitment by management to participation by employees at all levels in the organisation in the design, implementation, and regards of their work. 2. Encouraging continuous learning and training toward development of personal skills and knowledge. 3. Restructuring jobs to make them most challenging. 148

4. Training supervisors toward a more participative, supportive and collaborative style. 5. Promoting an atmosphere of open communication and trust between management and the workforce. 6. Providing feedback on and recognition for results achieved.

k.

Job Rotation This is a technique used to enhance employee motivation and productivity. It involves periodically assigning employees to alternating jobs or tasks The rationale behind job rotation is that since different jobs require different skills the intrinsic reward potential of the job will increase. Job rotation does not, however, solve the problem of boringly repetitious jobs. This is because the depth of the job does not change, as the jobs are similar. Nevertheless, it gives managers a means of copying with frequent absenteeism and high turnover. Job rotation is often effectively used as a training technique for new, inexperienced employees. At higher organisational levels, rotation also helps develop managerial generalists because it exposes them to several different operations.

l.

Job Enrichment

This is mainly used by organisations with employees who have high levels of knowledge and skills. Employees love their jobs if the work is meaningful, the worker has knowledge of operating results, and the worker is personally responsible for the results. Meaning can be placed into a job by providing for skill variety, task identity, and task significance. Opening feedback channels to the worker can affect knowledge of operating results, and if the employee is granted some degree of discretion and autonomy over the job, that workers sense of responsibility is increased. Typically the worker decides how the job is performed, planned and controlled and makes decisions concerning the entire process. The overall purpose is to improve a job by making it more exciting and challenging. Job enrichment requires a lot of commitment and planning by top level management, retraining of employees, and substantial changes in leadership styles of the supervisors and managers. m. Job Enlargement It involves expanding the number of tasks or duties assigned to a given job. However, the additional tasks or duties typically require no new skills and are very similar to the previous ones Through job enlargement, a previously monotonous job remains monotonous (only a larger scale before). It has achieved little success in motivating employees. n. Flexi-Times 149

This is a German innovation. Under a flexitime system, employees are allowed to vary their daily work schedules as long as the required number of hours is worked each week. Other approaches of improving productivity and competitiveness include collective goal setting, redesigning jobs, telecommuting, and using status symbols such as the design of the office, the type of car driven, and the kind of house lived in.

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CH.18: PERFORMANCE APPRAISAL


Introduction
Performance appraisals are part of the broader field of performance management. It is therefore necessary to understand performance management in order to fully understand performance appraisal Performance management can be defined as a strategic and integrated approach to delivering sustained success to organisations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors (Armstrong and Baron, 1998). The purpose of Performance management is to get better results from the organisation, teams and individuals by understanding and managing performance within an agreed framework of planned goals, standards and competence requirements. It is a process for establishing shared understanding about what is to be achieved, and an approach to managing and developing people in a way that increases the probability that the goals of the organisation will be achieved in the short run and also in the long run. There are many tools that are used to improve performance and which are the subjects of the performance management process. Some of them include the use of the Balanced Score Card, performance contracts and performance appraisals. 1. Definition of Performance Appraisal (PA): Performance Appraisal (PA) has been defined variously by different authors. Gleck (1978) defines PA as a personal activity by means of which the enterprise determines the extent to which the employee is performing his/her job effectively. Jeffrey Gold (2003) defines PA as a process that provides an analysis of a persons overall capabilities and potential allowing informed decisions to be made for particular purposes. Graham (1999) defines PA as the judgement of an employees performance in a job, based on considerations other than productivity alone. It is sometimes called merit rating, especially when it is to discriminate between employees in granting increases in wages or salaries. Fisher (1996) says PA is the process by which an employees contribution to the organisation during a specified time is assessed. It lets the employees know how well they have performed in relation to the standards of the organisation. Performance appraisal refers to the systematic description of the job-related strengths and weaknesses of an individual or group (Gerald R. 2002: 19-20). 151

It has also been defined as the systematic evaluation of the individual with respect to his performance on the job and his potential for development (Beach, 1975). Different firms use various terms to describe this process. Some of the commonly used terms include performance review, annual appraisal, performance evaluation, employee evaluation, and merit evaluations. Benefits of performance appraisals Performance Appraisal is normally done for some or all of the following reasons: a. Performance evaluations assist decision-makers to determine who should receive pay increases, transfers, promotions, demotions or retrenchment. Often, promotions are a reward for past performance. Many firms actually grant part or all of their pay increases and bonuses based upon merit, which is determined mostly through Performance Appraisal b. The performance feedback allows the employee, manager, and personnel specialists to intervene with appropriate actions to improve performance. Poor performance may indicate the need for retraining while good performance may indicate untapped potential that should be developed c. The performance feedback also guides career decisions about specific career paths that one should investigate d. Performance appraisal assists the personnel department in evaluating its activities. Good or bad performance implies strengths or weaknesses in the personnel departments staffing procedures. Similarly poor performance may indicate errors in job analysis information, Human Resource plans, or other parts of the Personnel Management's information system. Reliance on inaccurate information may have led to inappropriate hiring, training or counselling decisions. Appraisals help diagnose errors in job designs e. Sometimes performance is influenced by factors outside the work environment. These factors may include the family, financial, health or other personal matters. If uncovered through appraisals the personnel department may be able to provide assistance. f. Performance Appraisal provides the basis for validation of prediction used in internal and external selection as well as placement. g. Performance Appraisal may be used to weed out marginal or low performing managers and to serve as a basis for modifying behaviour toward more effective performance. Performance appraisals should be held regularly. Holding regular informal oneto-one review meetings greatly reduces the pressure and time required for the annual formal appraisal meeting. Holding informal reviews every month is ideal for all staff. There are several benefits of reviewing frequently and informally:

The manager is better informed and more up-to-date with his or her people's activities (and more in touch with what lies beyond such as the customers, suppliers, competitors, markets, etc). 152

Difficult issues can be identified, discussed and resolved quickly, before they become more serious. Help can be given more readily. People rarely ask unless they see a good opportunity to do so. The regular informal review provides just this opportunity. Assignments, tasks and objectives can be agreed completed and reviewed quickly. Leaving actions more than a few weeks reduces completion rates significantly for all but the most senior and experienced people. Objectives, direction, and purpose is more up-to-date. Modern organizations demand more flexibility than a single annual review allows. Priorities often change through the year, so people need to be re-directed and re-focused. Training and development actions can be broken down into smaller more digestible chunks, increasing success rates and motivational effect as a result. The 'fear factor', often associated by many with formal appraisals is greatly reduced because people become more comfortable with the review process. Relationships and mutual understanding develops more quickly with greater frequency of meetings between managers and staff members. Staff members can be better prepared for the formal appraisal, giving better results, and saving management time. Much of the review has already been covered throughout the year by the time the formal appraisal comes. Frequent review meetings increase the reliability of notes and performance data, and reduces the chances of overlooking things at the formal appraisal.

Performance appraisals process

Prepare - prepare all materials, notes agreed tasks and records of performance, achievements, incidents, reports etc - anything pertaining to performance and achievement. This includes the previous performance appraisal documents and a current job description. A good appraisal form will provide a good natural order for proceedings. Organize your paperwork to reflect the order of the appraisal and write down the sequence of items to be covered. If the appraisal form includes a self assessment section and/or feedback section (good ones do) ensure this is passed to the appraisee suitably in advance of the appraisal with relevant guidance for completion. Inform - inform the appraisee. Ensure the appraisee is informed of a suitable time and place (change it if necessary), and clarify purpose and type of appraisal. Give the appraisee the chance to assemble data and relevant performance and achievement records and materials. If the appraisal form does not imply a natural order for the discussion then provide an agenda of items to be covered. 153

Venue - ensure a suitable venue is planned and available which is private and free from interruptions Layout - room layout and seating are important elements to prepare also. Layout has a huge influence on atmosphere and mood. irrespective of content, the atmosphere and mood must be relaxed and informal. It is therefore necessary to remove barriers. Sitting at an angle to each other, 90 degrees ideally, is recommended in order to avoid face to face contacts which are confrontational. Introduction - relax the appraisee. Open with a positive statement, smile, and be warm and friendly. The appraisee may well be terrified; it's your responsibility to create a calm and non-threatening atmosphere. Review and measure - review the activities, tasks, objectives and achievements one by one, keeping to distinct separate items one by one. Avoid going off on tangents or vague unspecific views. Agree an action plan - An overall plan should be agreed with the appraisee, which should take account of the job responsibilities, the appraisee's career aspirations, the departmental and whole organization's priorities, and the reviewed strengths and weaknesses. The plan can be staged if necessary with short, medium and long term aspects, but importantly it must be agreed and realistic. Agree specific objectives - These are the specific actions and targets that together form the action plan. As with any delegated task or agreed objectives these must adhere to the SMARTER rules - specific, measurable, agreed, realistic, time-bound, enjoyable, recorded. Agree necessary support - This is the support required for the appraisee to achieve the objectives, and can include training of various sorts (external courses and seminars, internal courses, coaching, mentoring, secondment, shadowing, distance-learning, reading, watching videos, attending meetings and workshops, workbooks, manuals and guides; anything relevant and helpful that will help the person develop towards the standard and agreed task). Invite any other points or questions - make sure you capture any other concerns. Close positively - Thank the appraisee for their contribution to the meeting and their effort through the year, and commit to helping in any way you can. Record main points, agreed actions and follow-up - Swiftly follow-up the meeting with all necessary copies and confirmations, and ensure documents are filed and copied to relevant departments, (HR, and your own line manager typically).

The following theoretical framework also summarises the performance appraisal process. THE PERFORMANCE APPRAISAL PROCESS:

Establish performance standards with employees e.g. target sales of $500,000

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Set mutually measurable goals

Measure actual performance e.g. actual sales achieved $300,000

Compare actual performance with standards and note deviations

Discuss the appraisal with the employee

Initiate corrective action, if necessary

Who Conducts the Performance Appraisal Process? 1. The Supervisor (or Person In Charge) The rating of employees by supervisors is based on the assumption that the supervisor is the most qualified person to evaluate the employees performance realistically, objectively, and fairly. The supervisor is normally the best person to observe the employees behaviour and determine whether the employee has reached specified goals and objectives or not. This is because the supervisor has direct contact with the employee. To ensure that the judgement is objective and based on actual performance the supervisor should keep records of each employees performance. The supervisors appraisal should be reviewed by his/her manager to make sure the supervisor has done a proper job of appraisal, and that any rewards recommended are justified. Supervisors often prefer to avoid the appraisal process because of uncomfortable face to face confrontations that often result. Policy makers should however ensure that performance appraisals are conducted in a professional manner because appraisals of subordinates are a legitimate and critical part of supervision. 2. Peer Evaluations These are often called buddy ratings and are used where an employee is working with other employees in a non-competitive work group environment. Quite often peers provide information that the organisation cannot get from the supervisor. Each group member rates every other group member on a recognisable quality like leadership. The group members either assigns the 155

others a score or they nominate a specified number of fellow workers whom they consider high or low in the quality being measured. Peer evaluations work best when: They are limited to people who see themselves as similar/ equals The peer rates work best when fellow workers have had the opportunity to see the other person perform tasks, and know who is good at what job Peer rates work best when more objective sources of feedback are lacking, and Peer rates work best where there is no probability of retaliation However, peers will often not give objective, honest appraisals because of fear of possible retaliation. Further, researches indicate that factors such as race may have more of a biasing effect when co-workers rate an employee than when a supervisor does the rating. 3. Customer/ Client Evaluations Client/ Customer Evaluations are commonly used in service-related jobs, where the customer evaluates the employee. Specialised customer questionnaires, telephone follow up surveys, and other techniques are used in addition to comment cards to try to get the customer's evaluations of the employees performance. However, Client/ Customer Evaluations are usually incomplete because they only give a part of the employees performance, because the client is usually with the employee for a short period of time (unlike the supervisor). 4. The Group Summary Appraisal Here a committee of managers is invited to assess a subordinate's performance and possible means of improvement. The points on which all agree constitute the appraisal. Disadvantages: a. It can be a cumbersome and time consuming process b. The Committee Chairperson can influence the outcome of the appraisal exercise. c. Employees may perceive the Committee as being unfair d. The Committee members may not realise that the performance appraisal is not meant to crucify employees, but rather, help in developing them e. The results can be compromised. unfortunately, groups dont always come up with the best appraisals. 5. Self Ratings Self-ratings are not to judge the person but to encourage employee development, build genuine teamwork, and to connect job performance with company goals especially for white-collar employees. Self-Rating is a self-development tool that forces employees to think of their strengths and weaknesses and set goals for improvement. It is also used where an employee is working in isolation or possesses unique skills, etc. 6. Reverse Appraisals 156

These are also called upward evaluations, where the employees/ subordinates rate the supervisor. Employees are given the opportunity to give a direct, formal feedback to their supervisors on their managerial performance; e.g. students may rate professors in Universities or Colleges. The results are used to help superiors improve themselves or organisations to assess the managerial leadership potential. Advantages: a. Where the subordinate/ executive relationship is crucial for success, the subordinates can be used to identify competent supervisors. An example is in combat situations that may lead to life or death of the members. b. The rating can also help the superior become more responsive to employees as long as the superior does not become nice because nice people may not be effective. Disadvantages: a. Fears of Retaliation many supervisors/eExecutives have negative reactions to being appraised by their employees/ subordinates. This fear may be too great for employees to give realistic ratings b. Employee Resistance many employees may resist rating their bosses because they may not perceive it as a proper part of their job. c. The workers may rate the superior only on the way the superior treats them, and not on critical job requirements. It should be noted that most organisations dont use reverse ratings except for self-improvement purposes. In order to be meaningful, such evaluations must identify particular strengths and weaknesses, rather than consist of vague comments. Anonymity is necessary unless there is a high level of trust at the work place. Finally, the fear of retaliation must be eliminated for this employee voice mechanism to be effective. 7. Outside Raters Outside experts may be called to review the work of say, the Chief Executive Officer or a College President. Outside reviewers provide managers with professional assistance in making appraisals. However, the outsider may not know all the important contingencies in the organisation. The process is also time consuming and expensive.

8. The Multiple Rating System This merely requires several superiors to separately fill-out forms on the same employee. The results are then tabulated. Such rating of employees is especially appealing when the preservation of organisation is important. 9. The 360 Degree Feedback/ Appraisal System Also called the all-round appraisal system, since ratings are collected all around from employees to superiors to subordinates, peers, internal or external customers, etc. Internal customers refer to one department being the customer of the other, e.g. the purchasing department is a customer of the marketing department. 157

Performance appraisal Methods The appraisal method will depend or vary from organisation to organisation and the people to be appraised. The appraisal can be targeted to executives, managers, professionals, technical personnel, clerical staff etc. The following factors should be considered when selecting the PA method: 1. The costs of developing and implementing the method 2. The beneficial effects of the method on personnel research and test validation 3. The effectiveness of the method in facilitating decision making on promotions, transfers, discipline, training and compensation 4. The usefulness of the method in conveying the organisations' goals and expectations to the employees as well as for employee development The performance itself may be objectively or subjectively appraised. Objective measures of performance may include production figures whereby a production standard is first established and the employees measure of output is judged against the standard. This is an attractive and straightforward measure of performance. The number of accidents and the number of times one is late or absent are other objective measures of performance. Judgmental methods are subjective in that they rely on individual assessments - usually by supervisors and include rating systems, ranking systems and paired comparisons.

The Steps in Developing a Performance Appraisal System:


Determine Performance Requirements

Choose an Appropriate Appraisal Method

Train Supervisors

Discuss Methods with Employees

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Appraise According To Job Standards

Discuss Appraisal with Employees

Determine Future Performance Goals

THE METHODS OF PERFORMANCE APPRAISAL The diagram below shows some of the Appraisal methods commonly used:
Performance Appraisal Systems

Rating Scales

Comparative Methods

Critical Incidents

Essay

MBO

Check List Methods

Combination methods

Each of these methods has its own combination of strengths and weaknesses, and none is able to achieve all the purposes for which management institutes performance appraisal systems. Nor is any one technique able to evade all of the pitfalls. The best approach is to match an appropriate appraisal method to a particular performance appraisal goal. The most commonly used appraisal techniques include: 1. Essay appraisal In its simplest form, this technique asks the rater to write a paragraph or more covering an individual's strengths, weaknesses, potential, and so on. In most selection situations, particularly those involving professional, sales, or managerial positions, essay appraisals from former employers, teachers, or associates carry significant weight. The assumption seems to be that an honest and informed statement -either by word of mouth or in writing- from someone who knows a person well, is fully as valid as more formal and more complicated methods. 159

The biggest drawback to essay appraisals is their variability in length and content. Moreover, since different essays touch on different aspects of a man's performance or personal qualifications, essay ratings are difficult to combine or compare. For comparability, some type of more formal method, like the graphic rating scale, is desirable. The essay method reduces supervisory bias, halo effect, central tendency and leniency problems. However, the supervisor may spend formidable time writing separate essays about each employee. Further essays are not very useful for evaluative purposes as no common standard exists. Another drawback is the appraisers ability to write. A good writer will earn the appraisee more marks while a poor writer who may be appraising a good worker may make the employee to earn low marks due the inability to write.

2. RATING SCALES
Rating scales are satisfactory for most evaluation purposes because they provide a mathematical evaluation of the employees' performance, which can be used to justify compensation or job changes and to validate selection instruments. a. The Graphic Rating Scale: This involves using a scale to measure or gauge an employees relation to a certain attribute such as using initiative, punctuality, reliability, ability to meet targets. Questions are formulated and each question would then have a numerical scale alongside it, similar to the one below: Never (0%) Rarely/ Seldom (25%) Half the Usually Time/ (75%) Sometimes (50%) Always (100%)

For operative staff, typical qualities rated are: Quality and quantity of work Job knowledge Cooperativeness Dependability Initiative Industriousness Attitude For management personnel, typical factors are analytical ability, decisiveness, creative ability, leadership, initiative, job performance, co-ordination, and emotional stability. The assessor gives the employee a score which most closely approximates his degree in relation to the question(s) and a total score is arrived at by adding together all of the individual item scores on the appraisal form. Although this method is quick and requires little training, it is prone to rater errors. This technique may not yield the depth of an essay appraisal, but it is more consistent and reliable. Typically, a graphic scale assesses a person on the 160

quality and quantity of his/her work (is he outstanding, above average, average, or unsatisfactory?) and on a variety of other factors that vary with the job but usually include personal traits like reliability and cooperation. It may also include specific performance items like oral and written communication. The graphic scale has come under frequent attack, but remains the most widely used rating method. It is cheaper to develop and more acceptable to raters than the forced-choice form. For many purposes there is no need to use anything more complicated than a graphic scale supplemented by a few essay questions.

b. Non-Graphic Rating Scales Non-graphic scales may be used when an explanation may need to be given to justify the point raised, e.g. with regard to punctuality Never (0%) Rarely/ Seldom (25%) Half the Usually Time/ (75%) Sometimes (50%) Always (100%)

Comment on your response with regard to punctuality _______________________________________ ___________________________________________________________________________ ___ Non-graphic scales are more valid than graphic rating scales as they contain a brief description of each point on the scale rather than simply high and low points of a scale. The rater can give a more accurate description of the employees behaviour on a particular attribute because a description clarifies each level of the rating scale. It is a quick and less difficult method for supervisors to use.

c. Bars or Behaviorally Anchored Rating Scales This method is designed to assess behaviour required to successfully perform a job. The assumption is that personal behaviour will result in required performance. Most bars use the term job dimension to mean those broad categories of behaviour that make up a job. Each job will have several bars. Bars are developed through the active participation of both managers and job holders therefore increasing the likelihood of the method being accepted. However, it takes time and commitment to develop different bars for different jobs.

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3. Field review When there is reason to suspect rater bias, or when some raters appear to be using higher standards than others, or when comparability of ratings is essential, essay or graphic ratings are often combined with a systematic review process. The field review is one of several techniques for doing this. A member of the personnel or central administrative staff meets with small groups of raters from each supervisory unit and goes over each employee's rating with them to (a) identify areas of inter-rater disagreement, (b) help the group arrive at a consensus, and (c) determine that each rater conceives the standards similarly. This group-judgement technique tends to be fairer and more valid than individual ratings and permits the central staff to develop an awareness of the varying degrees of leniency or severity -as well as bias- exhibited by raters in different departments. On the negative side, the process is very time consuming.

4.

Comparative Methods

They avoid the problem of central tendency or crowding employees in some groups. They include: a. Ranking (Individuals) Employees are ranked on a certain attribute e.g. leadership skills, or on their sales performance.It involves rating individuals by arranging them according to merit, from the best to the poorest in terms of a specific characteristic or of overall performance. No ties or balanced scores are allowed. Advantages: 1. It is fast and easy to complete where few employees exist 2. A numerical evaluation given to the employees can be directly related to and used to make other decisions such as compensation changes or staffing considerations

Disadvantages: 1. It is not developmental because employees do not receive feedback about their performance with regard to strengths, weaknesses or future direction 2. It assumes all employees in the organisation can be ranked from the best to the worst 3. There is no common standard of performance by which to compare employees from various departments

For comparative purposes, particularly when it is necessary to compare people who work for different supervisors, individual statements, ratings, or appraisal forms are not particularly useful. Instead, it is necessary to recognize that comparisons involve an overall subjective judgment to which a host of additional 162

facts and impressions must somehow be added. There is no single form or way to do this. Comparing people in different units for the purpose of, say, choosing a service supervisor or determining the relative size of salary increases for different supervisors, requires subjective judgment, not statistics. The best approach appears to be a ranking technique involving pooled judgment. The two most effective methods are alternation ranking and paired comparison ranking. Alternation ranking: In this method, the names of employees are listed on the left-hand side of a sheet of paper - preferably in random order. If the rankings are for salary purposes, a supervisor is asked to choose the "most valuable" employee on the list, cross his/her name off, and put it at the top of the column on the right-hand side of the sheet. Next, he/she selects the "least valuable" employee on the list, crosses his/her name off, and puts it at the bottom of the right-hand column. The ranker then selects the "most valuable" person from the remaining list, crosses his/her name off and enters it below the top name on the right-hand list, and so on. b. Paired-comparison ranking: Raters here pair employees and choose one as superior in overall job performance. The employee is given a positive comparison total and a certain percentage of the total positive evaluation as follows: The No. of comparisons will be = N (N-1) 2 (where N = population)

While the method is quick and easy where few (2 at a time) employees are being rated, it is time consuming where many employees are being rated. Moreover, employees are compared to each other on overall performance rather than on specific job criteria. Both ranking techniques, particularly when combined with multiple rankings (i.e., when two or more people are asked to make independent rankings of the same work group and their lists are averaged), are among the best available for generating valid order-of-merit rankings for salary administration purposes.

c. Forced Distribution: The supervisor is forced to distribute the employees to pre-determined groups like 10% should be excellent, 20% good, 40% average, 20% below average and 10% very poor. Like the field review, this technique was developed to reduce bias and establish objective standards of comparison between individuals, but it does not involve the intervention of a third party. Although there are many variations of this method, the most common one asks raters to choose from among groups of statements those which best fit the individual being rated and those which least fit 163

him/her. People with high scores are, by definition, the better employees; those with low scores are the poorer ones. Since the rater does not know what the scoring weights for each statement are, s/he cannot play favorites. He simply describes his people, and someone in the personnel department applies the scoring weights to determine who gets the best rating. The rationale behind this technique is difficult to fault. In practice, however, the forced-choice method tends to irritate raters, who feel they are not being trusted. An additional drawback is the difficulty and cost of developing forms. Consequently, the technique is usually limited to middle and lower management levels where the jobs are sufficiently similar to make standard or common forms feasible. Finally, forced-choice forms tend to be of little value- and probably have a negative effect- when used in performance appraisal interviews. The practice of forced distribution is that job performance is the basic factor in determining an employees value to an organisation and that other elements like co-operation and personality are worth considering only in so far as they contribute to performance.

5.

The Critical Incidents Method:

Supervisors first collect critical incidents that reflect especially favourable job performance (such as completing a major assignment a head of schedule) and then they scale the incidents. Lastly they construct the checklist scale. Scaling incidents involves presenting the incidents to a group of people who are familiar with the job in question who then assign scale values to each incident according to its assessed desirability. The checklist scale is drawn up containing only those items judged to indicate 'good' or 'poor' performance on the job. Workers are rated according to whether or not they have shown any of the incidents/behaviours listed and a total score calculated. Advantages: 1. The method does not involve complicated statistical procedures. It is concerned with actual on the job behaviours, which have been observed in particular organisational circumstances 2. Supervisors are only required to indicate whether or not workers have or have not been observed to behave in a particular way as opposed to being forced to make judgements/rankings of the personal characteristics f their subordinates. Here the evaluator uses the most memorable incidence associated with the employee whether they happened recently or sometimes ago. For instance: always reporting to work in time, finishing a major assignment ahead of time etc. 164

There are, however, several drawbacks to this approach. It requires that supervisors jot down incidents on a daily or, at the very least, a weekly basis. This can become a chore. Furthermore, the critical incident rating technique need not, but may, cause a supervisor to delay feedback to employees. Finally, the supervisor sets the standards. If they seem unfair to a subordinate, might he not be more motivated if he at least has some say in setting, or at least agreeing to, the standards against which s/he is judged.

6.

Management by objectives (MBO)

Management by Objectives (MBO) is a developmental approach to performance appraisal. Developmental approaches offer specific, goal oriented, jobs related guidelines and behaviour for performance improvement. MBO Involves the Following Steps: Performance planning: The employee and supervisor mutually establish a list of goals designed to accomplish the needs of the business, further develop the employee and broaden his/her basic responsibilities. The objective should be quantifiable and measurable, challenging yet achievable, expressed in writing and in clear, concise and unambiguous language, and the employees should participate in the setting them. The objectives and action plans must serve as a basis for regular discussions between the manager and the employee. Developing an action plan indicating how these objectives are to be achieved Allowing the employee to implement the action plan Review: Periodically the supervisor and employee should conduct a formal appraisal interview to review the employees actual performance against objectives Taking corrective action whenever necessary Personal development plan (PDP). It is prepared jointly by an employee and supervisor for the purpose of improving proficiency and preparing for additional responsibility. Personal development plans include methods of overcoming deficiencies and building on strengths through specific training measures during a particular time period. Establishing objectives for the future MBO is both advantageous and disadvantageous. For instance while it focuses on performance results rather than personal characteristics, the time and effort required implementing it is extensive. High standards set may be difficult and unrealistic to achieve. Objectives for new jobs are difficult to set.

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7. Work-standards approach The work-standards approach is set by the managers. This is used mostly for production workers and is a form of goal setting for the employees. It involves setting a standard or expected level of output and then comparing each employees performance to the standards. The work standards should reflect average output of a typical employee. Standards technique establishes work and staffing targets aimed at improving productivity. When realistically used, it can make possible an objective and accurate appraisal of the work of employees and supervisors. To be effective, the standards must be visible and fair. Hence a good deal of time is spent observing employees on the job, simplifying and improving the job where possible, and attempting to arrive at realistic output standards. Methods used to set standards include: Average production of work groups Performance of specially selected employees Time study Work sampling Expert opinion

The advantage of this method is that the review is based on timely objective factors. The most serious drawback appears to be the problem of comparability. If people are evaluated on different standards, how can the ratings be brought together for comparison purposes when decisions have to be made on promotions or on salary increases? For these purposes some form of ranking is necessary. 8. 360 degree appraisals.

360 degree appraisals involve the appraisee receiving feedback from people (named or anonymous) whose views are considered helpful and relevant. The feedback is typically provided on a form showing job skills/abilities/attitudinal/behavioural criteria and some sort of scoring or value judgement system. The appraisee should also assess themselves using the same feedback instrument or form. 360 degree respondents can be the appraisee's peers, up-line managers/execs, subordinate staff, team members, other staff, customers, suppliers - anyone who comes into contact with the appraisee and has opinions/views/reactions of and to the appraisee. 11. The checklist Method A checklist for completion by job holders is similar to a questionnaire but response requires fewer subjective judgements and tends to be the YES and NO 166

variety. Checklists cover as many as 100 activities; job holders tick those tasks that are included in their jobs. The advantages of this method are that it is flexible, can provide in-depth information and is easy to organize and prepare. The disadvantage is that it can be time consuming and the results are not easy to analyze. CHALLENGES OF PERFORMANCE APPRAISAL Important challenges include legal constraints, rater biases, and appraisal acceptance. 1. LEGAL CONSTRAINTS: Performance Appraisals must be free from discrimination and should not violate laws such as the Equal Employment Opportunity or any laws such as wrongful dismissal (discharge), lay offs, demotions or failure to promote. An appraisal system should be fair to all irrespective of race, sex, national origin, disability, minorities, age, etc. 2. RATER BIASES: a. The Halo Error this takes place when the rater allows one aspect of a persons character or performance to influence the entire evaluation. It is expected that one cannot be very good or very poor in all aspects. This error can be minimized by educating the raters to make them aware of the problem. The supervisors can also be asked to judge all the subordinates on a single factor or trait before going on to the next factor. b. The Error of Central Tendency this refers to the reluctance to give extreme ratings (either very poor or excellent). Instead the rater marks each employee near the centre of the rating sheet, showing an inability to distinguish between or among them (a form of range restriction). For instance, on a rating scale of 1-5, a rater may rate all employees as 3 distorting the score to make each employee appear average. c. The Leniency and Strictness Bias: i. The Leniency Bias results when evaluators tend to be positively lenient in their appraisal of an individual, causing the performance of employees to be overstated and rated higher than they should be. ii. Similarly, the Strictness Bias is just the opposite it results from raters being too harsh in their evaluations, sometimes to be seen as tough judges. This tendency underrates performance, giving the individual a lower appraisal standard than they deserve.

If all individuals in an organisation were appraisal by the same person, there would be no problem. Difficulty arises when we have different evaluators, some lenient and others strict, making judgements on the same set of employees. d. Cross-cultural Biases: 167

When people are expected to evaluate others from different cultures, they may apply their cultural expectations to someone who has a different set of beliefs e.g. Arabic culture expects women to play a very subservient role especially in public. Similarly, Eastern cultures award more respect and esteem to the elderly compared to western cultures. e. Personal Prejudice: A rater's dislike for a group or class of people may distort the ratings those people receive e.g. male supervisors often give undeservedly low ratings to women who hold traditionally male jobs. Such prejudice prevents effective evaluations and may even violate anti-discrimination laws. f. Similarity Error (similar-to-me mistake). Occurs when evaluators rate other people in the same way that the evaluators perceive themselves, e.g. the evaluator who perceives himself as aggressive may evaluate others looking for aggressiveness. Those who demonstrate this characteristic tend to benefit, while others who may lack it may be penalised. g. The Recency Effect Subjective performance ratings are affected strongly by the employees most recent actions - either good or bad - as they are more likely to be remembered by the evaluator. Where subjective performance measures must be used, biases can be reduced through training, feedback, and the proper selection of PA techniques. 3. LOW APPRAISER MOTIVATION: If an evaluator knows that a poor appraisal could significantly hurt the employees future (e.g. opportunities for promotion, salary increases, etc) the evaluator may be reluctant to give a realistic appraisal. 4. APPRAISAL ACCEPTANCE: The employees may not accept the appraisal result and evaluators may have difficulties selling the results to the ratees. 5. LACK OF ORGANISATIONAL SUPPORT This happens when the organisation does not act on feedback received from the evaluation. CONCLUSION None of these methods is mutually exclusive. All of these performance assessment methods can be used in conjunction with others in the list, depending on situation and organizational policy. Where any of these processes is used, the manager must keep a written record, and must ensure agreed actions are followed up. To achieve the best results, employees will be motivated by providing feedback on how they are doing.

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CH. 19: DESPATCH OR SEPERATION OF EMPLOYEES


Chapter objectives.
Following the completion of this chapter, the reader will be able to: Explain the importance of proper separation procedures Understand the different approaches of separating workers from the firm Appreciate the need for planning the separation of workers.

Introduction
Despite all efforts to maintain employees in an organisation, the employment relationship between individuals and the employing organisation will inevitably break down from time to time. In some cases, the employees terminate the relationship by resigning in order to take up positions elsewhere. The management of an organisation may also terminate the contract. Employee separation occurs when an employee ceases to be a member of an organization. Managers must develop skills for helping employees who leave the organization either voluntarily or involuntarily. A poor separation can damage a firms reputation in its industry or community and limit its ability to attract the scarce, talented employees that it may need in the future. In some cases, the retention of employees may be directly related to the retention of major customers and investors. This occurs where the employees have contacts with the customers or where the investors have confidence in the particular employees. Service industries may be more affected because in such industries it is the employees who provide the services. The customers may have learned to trust certain employees. The reasons that make employees to separate from organisations range from retirement to layoffs, downsizing, retrenchment, resignations, discharge, dismissal and death. Employees who enter an organisation will at one time leave that organisation hence there is always a movement of employees into and out of every organisation. This movement is referred to as labour turnover. Managers need to recognise that a high turnover can be a very costly experience to an organisation. Turnover costs include recruitment costs, selection costs, training costs, accident costs, loss of production costs, overtime costs and replacement costs. Consider the case for replacement of pilots or information technology specialists especially when they are in short supply. While separation has many costs, it also has many benefits. Some of the benefits include the following: When turnover rates are too low, few employees will be hired and opportunities for promotion are reduced. Low turnover may affect productivity negatively especially where the workforce is complacent and does not generate innovative ideas. Thus separation enables poor performers to be replaced, innovation is increased, and opportunities for greater diversity are enhanced. 169

Separations enable an organization to reduce its labour costs. The firm may be incurring unnecessary expenses on marginal performers.

TYPES OF EMPLOYEE SEPERATION


Separations can be either voluntary or involuntary. Involuntary separation occurs when the turnover is initiated by the organization especially among employees who would prefer to stay while voluntary separation is initiated by the employees whom the organization would prefer to keep. The main types of voluntarily separation are quits and early retirement.

1.

QUITS (JOB WITHDRAWALS)

An employee may withdraw from a job because they are dissatisfied with the job or the job environment. Some of the issues which lead to dissatisfactions include perceived or real poor pay and benefits, difficulties with supervisors and coworkers, inability to reconcile with the tasks and roles and other personal predisposition issues such as joining a spouse who is elsewhere or the desire to perform other family obligations. Other reasons include poor health, poor working conditions and poor management. Employees who are dissatisfied may seek to change the undesired behaviour but where they cannot do so, they may opt to quit the job. In situations where the employees cannot change their situation or remove themselves from their jobs, they may psychologically disengage themselves from the jobs. This can be done by showing less commitment to the job or to the organization and identifying less with both items. Sometimes, employers encourage employees to quit by using pay incentives such as severance pay or buyouts. An example is the use of golden handshakes. This method of separation should be avoided at all cost since they not only place a heavy financial burden on an organization but they may be a manifestation of poor worker management 2. VOLUNTARY RETIREMENTS (EARLY RETIREMENT) Early retirement is initiated by the employee. It occurs at the end of a certain period and results in the employee getting certain benefits. The organization must plan for the early retirement of employees. In all organisations there must be stipulated retirement regulations, including mandatory and voluntary retirement schedules. Since retirement is a major stage in ones life progression, an organisation has an important role to play in the facilitation of this transition. In determining retirement regulations, it is important for managers to consider the pros and cons of both mandatory and voluntary retirement. Mandatory retirement may be advantageous because it is simple to administer; it creates opportunities for younger employees to exploit their potential; it aids human resource forecasts and plans; it enables employee to plan for their exit in 170

advance and that it reduces inequities in decision making in regard to separation. However, mandatory retirement does not recognize the fact that employees depreciate at different rates and that crucial talent may be lost due to a rigid regulation. It is also likely that a mandatory retirement age may be lost due to a rigid regulation. It is also likely that a mandatory retirement age may induce some workers to retire while they still holding on to the jobs during their twilight years! Some sociologists have come up with several phases through which employees may experience the retirement process. These phases are: Remote phase. This begins many years before the actual retirement date. Awareness of an impending retirement is important so that provision can be made for financial and social security; Near phase. Provides the reality of an imminent retirement. An employee begins to see and be seen in short term. The engagement of employees in major organizational activities begins to wane. Retirement ceremonies and long service awards are held at this stage. Honeymoon phase. This is the stage where retirees experience unlimited freedom away from employment. The retirees engage themselves in a number of social activities such as visit, travel, games and picnics. It is a spending spree; Disenchantment phase. This is the stage when the honeymoon is over. Those retirees who did not plan for retirement will find it difficult fitting into new communities and changed roles in the society. They, therefore, feel bored and disenchanted after the honeymoon; Reorientation phase. At this stage the retirees reorient themselves into new lifestyles. Counselling programmes are useful here in providing the retirees with the much-needed assistance programmes. This is the time to face realities and develop appropriate interests and capabilities necessary for survival; Stability phase. This is the stage when the retirement programmes and lifestyles have been fully developed. A retiree can lead a predictable and satisfying lifestyle because he or she has now acquired a gainful position in society; Termination phase. This is when the retiree is no longer self-sufficient because he or she has exhausted both the financial and physical resources. This is the stage when the retiree ceases to be retired and becomes dependent upon family, relatives, friends or home for the aged. It marks the end of retirement.

INVOLUNTARY SEPERATIONS
These are initiated by the employer on those employees that are considered undesirable either due to failing to meet performance expectations are the inability to comply to the employers policies. 171

The main types of involuntary separations are discharges and lay offs.

1.

DISCHARGES

Discharges are instituted on those employees that are unable to meet performance requirements or those who violate company policies on the job. Failure to change some unacceptable behaviour is a very good ground for dismissal. Employees who engage in serious misconduct, such as theft or dishonesty, may also be discharged. Other reasons for summary dismissal include absenting oneself from the place of work without a just cause, inability to perform jobs because of drunkenness, use of abusive language, being arrested for an offence that can lead to imprisonment, and committing an offence to the detriment of the employer. Discharges, also known as dismissals, can be defined as any one of the following: An employer has terminated a contract of employment with or without notice; An employee reasonably expected an employer to renew a fixed term contract of employment on the same or similar terms, but the employer offered to renew it on less favourable terms, or did not renew it; An employer refused to allow an employee to assume work after she took maternity leave in terms of any law, collective agreement or her contract of employment; An employer who dismissed a number of employees for the same or similar reasons has offered to re-employ one or more, but has refused to re-employ another; An employee terminated a contract of employment with or without notice because the employer made continued employment intolerable for the employee. Discharging employees can be a very difficult task that needs to be handled with a lot of care and attention to the affected employees. Where the exercise is poorly conducted, it can lead to long court battles in which employers can be fined huge sums of money. In situations where the discharged employee wins the court case and the employer is forced to accept the person back, uncomfortable relations can arise with some employees being violent to the employer. Thus an organization should have a standardized systematic approach to discipline and discharge. Dismissal can have serious impacts on the affected persons. They can experience trauma arising from shattered egos. Moreover, discharges can bring financial, social and family problems. And those who survive in the organization may also experience the trauma and reduced motivation as a result of losing a colleague or a dear friend. Some organizations rank their employees from the best to the worst in terms of a performance variable such as the amount of sales made. Consequently, some of the employees at the bottom are then discharged. Those who remain know that the next performance appraisal exercise may affect them negatively.

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Employers should be entitled to and given the opportunity to make the appropriate justification for terminations and, having followed fair procedure, to dismiss employees. However, all dismissals should be done fairly. Established disciplinary procedures must be exhausted before an employee is discharged. In the first instance the employee should be given an unofficial verbal warning with a witness present. The second offence warrants an official written warning. The third offence is responded to with a second official warning with a threat of temporary suspension. Where the employee repeats the offence a fourth time, s/he is temporarily suspended and given a last chance notification. It is only when the employee repeats the offence that s/he is terminated but with a right to seek arbitration. Employees should be given the opportunity to change those behaviours that are deemed to be undesirable. After all, who knows, they could change and become good performers.

2.

REDUNDANCY

Redundancy has been variously referred to as layoffs, downsizing, rightsizing, reduction-in-force, or retrenchment. It occurs where some change forces the firm to reduce its workforce. The changes include increased global competition, reductions in product demand, changing technologies that reduce the need for workers, and mergers and acquisitions. Dealing with redundancy is a painful exercise for human resources managers. This is because it involves an abrupt loss of earning, separation from colleagues, loss of personality and many uncertainties ( Okumbe, 2001). Due to the many negative effects of redundancies, it should be done systematically. The following steps provide a good guidance on the process. The organization must engage in proper human resource planning to avoid ending up in a situation where some employees are declared redundant. Employees who are likely to be declared redundant should be warned in advance and encouraged to resign voluntarily through the use of monetary incentives. The organization should use contingency measures such as terminating part-time services, eliminating over-time, removing out-sourced contracts, job sharing, and applying temporary layoffs. Affected employees should be assisted to get jobs elsewhere as soon as possible. In situations where the redundancy exercise must be carried out, then it should be done as fairly as possible.

Death ( natural attrition).


Sometimes employees die while they are still in active employment organizations should put mechanisms in place that ensure that employees dont die from work related injuries while they are still in active employment. The death of an employee needs to be handled with care and concern so that those who remain 173

perceive the organization even better and continue to maintain their commitment to it.

Outplacement counselling
Some organizations provide outplacement counselling to help employees make the transition from one job to another. This occurs mainly where the employee lost the job involuntarily and needs to get another job as soon as possible. The counselling seeks to help the former employees deal with the psychological issues of associated with losing ones job (grief, depression, fear). It also seeks to convince them that losing one job is not the end of the world; in fact it may be the beginning of a better engagement in life.

Ch. 20:

EMPLOYEE COUNSELLING

Learning objectives
After reading this chapter, you should be able to: Explain the need for employee counselling. Discuss the characteristics of a successful counselling program Characteristics of a good counsellor. Examine and understand the counselling process.

Introduction.
Human beings have many problems. The problems could be personal or work related. Stress, alcohol, drug abuse, cardiovascular disease, HIV/AIDS, obesity, mental illness, and emotional problems are common occurrences in our society. These problems may contribute to accidents, absenteeism and turnover, poor decisions, decreases in productivity, and increased costs. Managers often try to reduce the impact of such problems through the concepts of employee counselling, training and development, as well as motivational programs. Counselling is a part of the broader concept of employee assistance programs (EAPs). These are job based programs operating within a work organization for 174

the purposes of identifying troubled employees, motivating them to resolve their troubles, and providing access to counselling or treatment for such employees. EAPs attempt to ameliorate problems encountered by workers who are drug pendent, alcoholic, or psychologically (mentally) troubled.

Definitions of counselling
The term counselling refers to a variety of activities ranging from informal discussions with a supervisor to intensive one-on-one discussions with a trained professional. It is also defined as a discussion of a problem that usually has emotional content with an employee in order to help the employee to cope with it better. Dale Masi (1984) defines counselling as consisting of four activities namely: Establishing a relationship between a trained counsellor and an employee; Careful discussion of personal problems experienced by the employee; Having an appropriate referral that secures the necessary assistance; The provision of short-term counselling when a referral is not necessary. Employee counselling existed since time immemorial but proper employee counselling programmes are said to have began at the Western Electric Company in Chicago in 1936. Characteristics of an effective counselling program. A successful counselling program should have the support and commitment of the top management. Such support will ensure that the top management formulates policies and procedures to govern the process. Specifically the policy on confidentiality should be emphasized. The local union representatives should also be involved. A wide range of services should be included in the program. Proper records should be kept so that the program can be evaluated afterwards.

Functions of counselling
Counselling serves the following functions to employees( Davis & Newstrom, 1986). Advice. Through counselling, the counsellor will be able to provide advice the counsellee on how to come out of the present problems. Reassurance. Counsellors seek to reassure the employees that all is not lost and that there is abetter future. Communication. Counselling sessions provide excellent opportunities to communicate upwards, downwards, or even horizontally.

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Release of emotional tension. The employee may have in-built emotional tension that has piled up over some time period. Through counselling, emotional tension is released. Clarified thinking. It is through counselling and open communication that counselee may understand a problem from different perspectives. Perhaps, some of the perspectives are positive yet they had been ignored. Reorientation. perspectives. Counselling helps employees to change their attitudes and

Counselling needs
Counselling is provided because of the following problems that may be experienced by employees. Substance abuse-common drugs abused by employees include marijuana and cocaine. Users of such substances are at greater risks for accidents, injuries, disciplinary problems, and involuntary turnover. Counselling is supposed to assist such people to change their behaviour for the better. Mental health- poor mental health can interfere with lifes major activities such as eating, managing money, and functioning in social, family, work and educational settings. Poor emotional and mental health can manifest itself in the form of inability to adjust to problems; battering, incest, rape, or crime; sexual problems such as impotence; divorce and marital problems; depression and suicide attempts; difficulties with family or children; sexual harassment in the workplace; pathological gambling; and legal and financial difficulties. Retirement-. For many employees retirement presents serious challenges which may require the employee to be counselled Redundancies. There are numerous difficulties that may result from redundancies. These include loss of earning opportunities and reduced self esteem. Counselling can be very beneficial in such cases. Other reasons for counselling include poor performance; discrimination in the workplace; alcoholism, stress and burnout; bereavement; marital problems and other social problems (poverty, female genital mutilation, low levels of education etc).

The counselling process


Trained counsellors are better than supervisors in providing counselling. The counselling process can be divided into six distinct steps, namely, problem identification, education, counselling, referral, treatment, and follow up. 1. Problem identification. 176

At this stage the problem that warrants counselling is identified. The problem could be medical or even emotional. The employee may volunteer to undertake the medical tests or the supervisor may use a questionnaire to identify those behaviours that indicate the need for counselling. 2. Education This is the stage where the counsellor provides information about the nature, prevalence, likely causes and consequences of the problem, and ways in which the problem can be prevented. Consider the case of obesity. 3. Counselling The employee and the counsellor discuss the problems and work out an action plan. Ideally there are three types of counselling namely directive, non-directive, and participative/cooperative counselling. Directive counselling- this type of counselling assumes that the counsellor has the solution to the problem facing the employee. The counsellor seeks to motivate the employee to implement the solution. The two parties discuss the problem in details but the assumption of a superior-inferior relationship is a major weakness of this approach. Non-directive counselling. Here, the employee is assumed to be the best source of solutions to the problems he/she is encountering. The work of the counsellor is to encourage the employee, through skilful listening, to explain the conflict and issues surrounding it. The counsellor would then help the employee to develop insights into the problem. It provides a coordinate relationship between the counsellor and employee. Participative and cooperative counselling. It integrates aspects of both the directive and non directive counselling in that both the counsellor and the employee assist each other in solving the problem. Thus there is a cooperative exchange of ideas in order to find an amicable solution to the problem. 4. Referral At this stage the employee may be referred to an appropriate source of assistance. Examples are medical practitioners and specialized counselling units. 6. Treatment/ Intervention The employee would then receive the necessary treatment. Cases of mental illnesses can be treated in a mental health hospital. 7. Follow up Some form of monitoring is needed to ensure that the employee is carrying out the treatment and obtain information on the employee progress. It is also necessary to evaluate the effectiveness or the efficacy of the counselling programme implemented and to make adjustments where necessary.

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CH. 21

New Trends in Human Resource Management


Chapter objectives
The learning objectives for this chapter are to: Explain new trends in the business and the effects of these trends on human resource management. Understand how managers respond to these changes.

1. Introduction
The modern business world is experiencing various trends which are affecting how employees are expected to perform their duties. A trend is a general move in a particular direction. In the past, trading patterns and markets were stable, technology was static, customers were passive, speed in getting to the market was secondary, competition was limited to sectors and regions, and hierarchies were generally accepted. Since the 1960s, however, much of the world has been almost continually changing. Customers demand businesses that are better, faster, and cheaper; employees want more pay; globalisation has opened up new economic opportunities and knowledge workers have created a new digital economy. 178

Recruiting, managing, maintaining, and retaining workers in the new business environment has become more challenging. The emerging trends have led to the need to re-envision and clarify the human resource role and to articulate its expectations to the individuals serving in this role. Employers must be keen to identify these trends and to ensure that the employees are well taken care of in line with the trends. Workers, commonly referred to as human capital, are assets to an organisation, since they contribute to the organisations objectives. An organisation must, therefore, invest in its people, so that they can generate worthwhile returns.

2. The changing role of human resource management: A historical perspective


The field of human resource management has undergone tremendous changes since the 1930s. In those earlier days, human resource departments were called health and happiness departments and the people assigned to deal with personnel issues were often those who were past their prime. The human resource department was seen as a place where less-productive employees could be placed with minimal damage to the organisations ongoing operations. Individuals in the HR department were perceived as those responsible for planning company picnics, vacation schedules, and retirement parties. Human resource management, as an activity, was seen as a necessary, but unimportant part of the organisation. The role changed in the 1950s, when the human resource manager was viewed as the recruitment specialist. The 1950s and 1960s were years of expanding economic activity hence the focus changed from welfare to recruitment and human resource planning since all organisations faced intense competition for labour. Trade unions, backed by a flood of labour legislation, came in handy in the 1960s and 1970s, bringing up the need for human resource officers to become industrial relations negotiators. The human resource manager manager, therefore, needed to possess industrial relations and negotiation skills, as well as legal knowledge, in order to survive in those murky waters. A weakening of general economic conditions and unemployment in labour markets all over the world marked the 1980s and 1990s. This forced businesses to carry out extensive cost-cutting measures, especially in the areas of labour. Many governments all over the world, including the government in Kenya, adjusted their legal frameworks to reflect the new economic realities and allowed businesses to make substantial changes in their labour in the light of the new business priorities. The human resource manager had to evolve to become a visionary and corporate philosopher in the late 1990s, as the business environment became more challenging. The role of the contemporary human resource manager has become more important in the face of business competition. The manager needs to have a vision for the company, which vision should be in line with the organisations vision and mission statement. The manager also needs to know the 179

changing environmental conditions that occur in the marketplace.

3. Emerging Trends in Human Resource Management


Emerging trends in the management of human resources can be analysed by looking at the following aspects. 3.1 Employee Health and Safety With the rising cost of healthcare, employees are choosing not to be insured and treated, and are also bringing their physical and mental illnesses and injuries to the workplace. Work intensification is also leading to stress and stress- related illnesses. Although this problem can be addressed through adding more workers and automation, it can easily lead to more people suffering from mental health conditions or using medication. Further it can lead to increased workplace violence and absenteeism or a growing number of errors causing accidents with the resulting business costs. Therefore, the human resource manager has to be knowledgeable in stress management. The human resource manager will need to look into the issue of employee health to ensure that it is covered, so that the employees do not continually bring their illnesses to the workplace. The rising cases of terrorism in the world have also affected the mobility of labour across the world. Human resource managers have to look into the issue of security to ensure that expatriates are safe wherever they are posted for work; otherwise the foreign branches may lack qualified staff. Examples of cases of terrorism are the 1998 bombing of the USA embassy in Nairobi, followed by the bombing of the Paradise Hotel in Kikambala, Mombasa in the same year. Epidemics, such as HIV/AIDS, Ebola, Tsars, Asian Bird Flu and malaria, have brought in a new challenge to human resource management. The challenge goes all the way to the functions performed by the human resource manager, right from planning, recruitment, employment, maintenance, compensation, integration and separation. Discrimination due to sicknesses such as HIV/AIDS has led to businesses being sued by aggrieved employees. These epidemics have also affected employee output and, therefore, business performance. The cost of medical cover for such employees has also risen tremendously, therefore, affecting the companys profitability. These epidemics have also affected the recruitment and maintenance of employees, with an increase of death rates of employees at their prime, thus making the costs of training and retention high. The human resource manager will need to look into the issue of recruitment, retention, development, and other areas of management in view of the changing scenario. He/she will need to know the companys legal position in relation to such epidemics. Many organisations are also striving to enhance the quality of work life and personal lives of their employees and of the employees families. In-house health clubs, yoga, and meditation centres to relief stress, sports and cultural activities, employee get-togethers with invitations for the whole family, and day care centres are being provided by organisations. 3.2 Employee Relations The relationship between the employee and the employer has been changing, with the employee becoming a partner in the business through measures such as 180

employee stock ownership schemes. The implication is that the master-slave relationship is doomed to die a natural death. The human resource manager will, therefore, need to master ways of dealing with the employee cum employer in the workplace. These relationships also being encouraged by the quotation of companies in the stock exchange markets. As the employee-employer relationship evolves, employees are demanding more information concerning their contribution to the firms financial performance. Many firms are also faced with the challenge of retaining competent workers in the face of increased competition for top performers. Developed countries such as the United States of America will need to cope up with increased numbers of older workers, minorities and immigrants into their labour force. This may not be the case in developing countries such as Kenya where majority of the workers are relatively younger. Corporate governance is now a common issue of concern for human resource managers. The recruitment, selection and role played by a firms board of directors and senior leadership are being continuously reviewed to ensure that all organs of an organisation are working towards the common good for all stakeholders. Human resource managers are also concerned with ethical issues. The news media has been quick to report unethical business practices towards customers, employees, and any other stakeholders. More expectation is placed on managers concerning the activities of businesses. The aim is to ensure that business firms demonstrate good corporate social responsibility practices. 3.3 Globalisation Globalisation of trade and economy are taking deep roots in all countries. This refers to the tendency of firms to expand their sales, ownership and/or manufacturing to new markets abroad. For example, Toyota produces the Toyota Camry in Kentucky, while Dell produces and sells its personal computers in China. According to the World Bank, by 2025 India and China will provide 27% of the worlds GNP. All types of firms, whether small, medium or large sized in many parts of the world are trying to expand their investments into China and India so as to benefit form their large populations and resources. The world has thus become a global village. Free trade area agreements that reduce tariffs and barriers among trading partners (such as North America Free Trade Area, Common Market for East and Southern Africa, and European Union) further encourage this trend. More globalisation means more competition and more competition means more pressure to be world class, to lower costs, to make employees more productive and to do things better and less expensively. Quality human resources have, therefore, become an important base with which to respond to the emerging environment. Due to globalisation, human resource management processes have had to change. Employees have to be trained on how to sell or buy products and services from different parts of the world. They have to learn about international trade, since they can be sent to work in different parts of the world. Globalisation has made it easy for businesses to trade with one another without 181

much physical movement of staff. This means that employees can work in the locality of their companies, without having to move and be far away from the place of work and their families. The family and social life of employees is not interrupted very much. Some companies even sponsor their senior staff to go on holidays in foreign lands. This enhances motivation and productivity in the organisation. Globalisation has had major implications for human resource management. The continued expansion of businesses and the increased interdependence of countries have brought issues of outsourcing and off-shoring of resources, especially labour-related resources. This may take the form of outsourcing to new supplies or changing employment contracts to hire individuals as consultants rather than as employees, or to hire only highly skilled professionals. Outsourcing creates savings in investments, training, time, and other resources. It also creates a shift toward greater intimacy with contractors, the sharing of plans and capabilities, agreement on the level of quality in components and questions about how to deal with points of conflicts. This leaves the core employees to concentrate on the core activities of the organisation. The result is a change in the corporate culture, which also affects the output of businesses. As people intermingle with each other from different countries, they encounter different languages, laws, skills, and culture, among other things. The challenge here is to train people to know international laws, to have sensitivity skills, to learn foreign languages, and also to expand their level of understanding through education. Human resource managers will themselves need to be conversant with international labour laws and cultures. They may also need special skills to handle these changes. With continued globalisation, ethical and corporate social responsibility issues are arising in order to maintain the high visibility of the business in the eyes of the public. The pure profit motive no longer stands alone as the unitary focus of business. Issues such as consumer satisfaction, pollution caused by firms and exploitation of employees and of customers are gaining prominence. Employers must ensure that their work policies protect the environment and that employees combine business with ecology. Businesses may also be required to provide social amenities such as schools, hospitals, and infrastructures to the communities in which their businesses are based. Indeed, some organisations are often involved in unethical practices such as price gouging, falsifying data, and misleading adverts, among many others. Employees often require ethical treatment, especially in the areas of confidentiality of information, the rights to privacy, sexual orientation and harassment, exposure to safety and health hazards, equal employment opportunities, and employee honesty. Addressing these issues is necessary in order to create a conducive work environment in which employees are satisfied and retained. In the twenty first century, there is an increase in the concern for the natural environment due to the fast depletion of the ozone layer and global warming. Governments have enforced strict laws and regulations, in order to control the activities of their citizens and industries against pollution of the environment. 182

Firms have undertaken pollution control activities such as proper drainage of wastewater and avoiding burning of coal, which emits dioxide into the atmosphere. There are also regulations regarding how employees should be treated in the workplace and firms to provide safe work environments. Human resource managers have the obligation to ensure organisational compliance with these laws and governmental rules concerning the hiring, training and compensation of employees. In addition, the human resource manager has a significant role to play in the design and execution of a social audit, providing internal information to management and the external public on how the firm is socially responsible. Human resource managers should also educate the employees on environmental issues and activities that affect the environment. The human resource manager, therefore, together with the other managers, may have the responsibility of fostering good corporate citizenship on the part of the organisation. Companies will be called upon to provide more frequent statements of social responsibility in their communications with employees and other stakeholders, and the human resource department may have to play a very significant role in this process.

3.4 Technology
More and more businesses, large and small, are trying to incorporate the latest technology into their operations. Indeed, many of the improvements that make firms world class involve technology. Today, human resource professionals face the challenge of quickly applying technology to the task of improving their operations. The introduction of tea-picking machines in the Kenyan tea industry, though much resisted, has led to many employees being declared redundant. Other technological developments, such as the use of robots in some organisations, computerisation of operations (e.g. e-ticketing, e-banking, e-learning, etc.), electronic communication systems (e.g. audio systems, chat systems, teleconferencing, electronic mail systems, video conferencing), and information technological advances (e.g. computing, electronics, biotechnology, engineering, and transport) all have human resource implications. For example, the use of telephone and video conferencing provides low-cost alternatives for interviewing, by reducing the nagging costs of travel, accommodation, and incidentals. Electronic communication ensures that more ideas are availed for developing new products. Remote sites for video conferencing, computer managed games and simulations, videotaped lectures and interactive video training are relevant in providing just in time training. New softwares, such as Computer Aided Design, have been developed to assist the design of new products or modification of existing products. It is, therefore, evident that the increase in technological advancement has greatly affected the trend of human resource management. Technology has made it such that employees can work from the comfort of their homes and deliver results within deadlines. Telecommuting enables employees to balance their work and home lives. Companies are also employing skilled workers from all over the world. These global workers need not relocate, because they can work 183

virtually through wireless technologies and videoconferences. The evolution of the web-based employee means that human resource managers must learn to work with the away from office employee; they must also initiate telecommuting training. Managers need not meet face-to-face with the staff, as they can hold conferences over the Internet via videophones. The human resource manager must devise ways of managing communication changes. Technology has also brought new methods of surveillance via the high-speed Internet. The technology has become cheap and affordable, even to the smallest companies. It is, therefore, easier and more effective to monitor employees activities, health and safety, as well as to prevent theft. Human resource managers, therefore, need these technologies to assist in avoiding costly lawsuits arising from criminal acts in the workplace and also to debunk false workers compensation claims. Workers may also file lawsuits against employers, claiming invasion of privacy; hence the need for legislation to limit intrusion of privacy. The use of robots and machines has greatly reduced the role of human resources in industries and firms. This has resulted in personnel layoffs, redundancies and retrenchments. Human resource managers are, therefore, required to prepare separation packages. The composition of technical or professional employees in organisations is increasing as work becomes more technical. Workers in non-technical areas are being downsized, because machines are taking over most of the work. Examples are found in banks where Automatic Teller Machines (ATMs) have taken over most of the tellers work, and industries where most of the assembly lines are automated and robots are used to do most of the manual work, especially in developed countries. Due to this business trend, workers are forced to learn new skills, especially in technical areas, and to look for employment in the relevant areas. In labour-intensive countries, mostly in the Third World, there has been resistance to introducing technology, for fear of people losing their jobs. Although technological advancement may result in job redundancies, it cannot be resisted and human resource managers must prepare programmes to cope with the new developments.

3.5 Changing Values and Expectations of Employees


Employees are not content with merely earning a good salary, but are also looking for personal satisfaction and meaning in their work. Employees expect to be recognised for the contributions they make on the job. They expect to receive opportunities for lifelong learning that is beneficial for any career changes. Some employees have young children or aged parents to care for; hence they juggle work and family obligations. Consequently, there is a need to balance the demands of their work and non-work lives. Moreover, there is a tendency for employees to value leisure, family activities, and avocation assignments more than work. This means, therefore, that the human resource manager must find ways of motivating employees to work. Employees are looking for employers who offer flexible and family-friendly workplaces. Virtual offices, flexitime, family leave, telecommuting and other innovative work arrangements are steps that employers can take to create this necessary balance. Companies like Unilever, Kenya Breweries, and Kenyatta 184

National Hospital have cafeteria systems to cater for the workers. To meet these changing values and expectations and to become employers of choice, organisations must have the flexibility to implement new compensation and benefits concepts tailored to their business environments and strategic workforce requirements. They should offer a broad range of benefits and quality of work flexibilities that are tailored to the unique and changing needs of employees. They should strengthen the leadership competencies of their managers, in order to motivate and inspire employees and attract new diverse workers.

3.6 Politics
The department of human resource management has to contend with politics ranging from parliamentary legislation, trade union politics, societal politics, interested parties and lobby groups such as animal rights groups and environmental concerns, among others. Employment legislation will continue to be of great concern to human resource managers, especially in the national and international arena. Trade union politics is also another area that affects the trend of human resource management. The changing mode of trade unions and activism needs a new outlook towards the operation of human resource departments. A flexible workforce is needed, if an organisation is able to respond to economic and political changes effectively. This may call for redeployment of workers, and special retirement incentive programs.

3.7 Non-Compete Contracts


Organisations have come up with non-compete contracts, in which they bind the employees not to do certain things, such as seeking for employment with client or competitor companies for a certain period of time. These contracts may also require the employees not to start similar businesses within given areas for certain periods of time after leaving the employment. The human resource manager will need to develop ways of protecting the company, using methods such as non-compete contracts.

3.8 Demographics
Demographic trends of concern to the human resource manager include an aging workforce in some developed countries and the growing diversity of the coming generations. This will bring about issues such as the outsourcing of labour, immigration, succession planning, emphasis on language and cultural diversities. This will affect the output at work, employee replacement, and recruitment. The human resource manager will, therefore, need to come up with measures to counter this. There has also been an increase in the recruitment of minorities and women in the workplace arising from legislation and affirmative action in the society. Managers must grapple with this new trend in business.

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3.9 Productivity
Productivity refers to the output of goods/services produced per unit of output. Labour productivity specifically refers to the output per hour. Ceteris paribus, organisations with high productivity are more responsive. Many firms, local and foreign, have experienced productivity crisis. The extreme effects of this have been layoffs, plant closings, mergers and divestitures. Business firms are faced with the challenge of increasing productivity growth rates in general, including labour productivity. Strategies used to achieve this include gain-sharing programmes, in which employees receive monetary bonuses for productivity increases. Nowadays, firms are competing not only on the price dimension, but also on product quality. The automobile industry is a classic example, where Japanese automakers (such as Toyota, Nissan, Honda, and Mazda) are offering cars that are more affordable and superior relative to US automakers (such as General Motors). Human resource managers must make changes, such as employee quality circles, increased employee participation in decision-making and selfmanaging work teams. New compensation programs such as profit sharing are also being implemented. There has also been a trend of many organisations moving into service businesses, such as banking, financial planning, healthcare, retailing, day care, and mail delivery. Jobs may, therefore, need to be restructured and performance appraisal systems must gauge how well employees are providing services and satisfaction to the customer. Controlling labour costs has become a key strategy in the private sector for improving the organisations competitive posture and in the public sector for maintaining taxes at levels acceptable to the public. To implement this, numerous human resource initiatives and activities have been put in place. These include institutionalising pay freeze or reduction programmes, tying pay more closely to organisation success through profit-sharing schemes, and requiring employees to pay a greater percentage of their benefit costs, especially for health insurance premiums and pensions.

3.10 Increased Competition


There is a critical shortage of skilled workers in some occupations and geographic areas. Recruiting for highly technical occupations is becoming difficult. Employees with high demand skills often choose from multiple employment offers and take advantage of their marketability to negotiate for flexibility and desirable benefits. To curb the increased competition for skilled workers, organisations must continue to rely on workforce planning and forecasting to ensure they have the right people with the right skills in the right jobs. Human resource managers must use innovative recruitment and hiring strategies to identify and quickly select the high-quality, diverse workforce they need for the present and future purposes. They will also concentrate on succession planning and leadership development programmes, so as to pool highly-qualified replacements when experienced leaders leave. There is also a need to create and sustain knowledge management systems to preserve expertise within the organisation. Organisations should also 186

be agile in the delivery of just-in-time training to meet rapidly changing responsibilities and/or assignments.

3.11 A Shift in Roles


Human resource management is becoming a strategic function, where line managers are increasingly held accountable for directly delivering some human resource management services. As line managers assume more hands-on responsibility for managing all aspects of the workforce, human capital practitioners will also shift to complex roles, such as business strategic partnerships and acting as change agents. This shift in roles requires line managers to be prepared to assume increasing responsibility and accountability for human resource management. The human resource manager must operate with fewer rules, expanded delegation of authority, and line management accountability for results. Human resource managers have to develop a new set of human resource management competencies, while also maintaining a strong knowledge of national human resources. This will enable them to apply human resource management principles to solve organisational problems and support line managers.

3.12 The Business Alliance


As new relationships are set up with customers, suppliers, competitors and other outsiders, the structure of business changes and innovation occurs in the management and organisation of work. Therefore, these changes must be reflected in shifting missions, roles and responsibilities for human resources. New models for doing business have developed, which have implications for human resources. These alliances involve two or more organisations coming together in a joint, cooperative venture on either a long-term or a short-term basis. The alliance is aimed to attain goals in a timely and effective way at low risk. Each participant in the alliance enjoys the benefit of greater speed, timeliness, complementary skills and reduced risks. The alliance has overtaken the traditional top-down control model of business (hierarchy) and is much more organic, intimate and cooperative. It involves exchange of workers, sharing of plans, and joint work in business activity from planning, manufacturing, and marketing to maintenance. The alliance calls for management to change its attitude and facilitate and promote cooperation and new training on how to embrace and deal with organisations within the alliance. Organisations in the alliance may decide to continue their relationships or terminate them once they have achieved their goals. Flexibility is one advantage of the alliance. For the benefit of the company, human resource managers must explore the many forms of business alliances, staff requirements, joint activities, shared resources such as space, training and preparation and new rules and guidelines that have to be passed out to the companys participants in order to make the alliance work. 187

3.13 Virtual Corporation


The success of business alliances and other business-to-business relationships has enhanced the emergence of the virtual business or virtual corporation. This is common in the movie industry, where the long lists of credits at the end of most films include writers, directors, producers, and actors, who come together to put the financing and other capabilities together and, once the task is over, disperse to new ventures. Virtuality produces many human resource issues in terms of labour relations, unions, worker expectations, time and performance, qualifications, location of worksites, and the quality of the people engaged in various tasks. All these issues have brought new challenges to the human resource work.

3.14 Performance Contracting


Performance contracting is a new trend in the business world, where employment is pegged to the performance of the worker. Traditionally, workers would be employed on permanent and pensionable terms. In recent times, most businesses and organisations are focusing on performance contracting, where employees are paid according to their performance and attainment of set targets. Most companies are employing workers on contracts of specified periods and their performance is appraised regularly, to determine whether their contracts should be renewed. Performance contracting is also being adopted by governments such as Kenyan government, where civil servants are being placed on performance contracts. This new trend has led to job competition, with workers striving to improve their performance and skills in order to retain their jobs. In Kenya, this new development has resulted in more workers seeking additional knowledge and skills by pursuing further studies in universities and colleges. More employees are enrolling in evening classes and part-time learning. This has resulted in an explosion of knowledge.

4. Conclusion
New trends in business continue and human resource managers need to be on the move in order to compete in the market effectively. Indeed, it is important to realise that change is here to stay, and that all the practices that are working today may not necessarily work tomorrow. The human asset will need to be managed prudently, considering customer expectations, market changes, and the strategic decisions of organisations. Human resource managers must cope with the new models of business by anticipating them, advocating systematic change, and recruiting, rewarding, and retaining people who will be effective in the new business organisations and relations.

Bibliography
Ben Swanepoel et. Al (2000), South African Human Resource Management, Theory and Practice, 2nd edition, Zebra Publications, Cape Town.

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Beach, S.Dale (1975), Personnel: The management of people at work (3rd edition), MacMillan Publishers Inc., New York. Ferris G.R.(2001) Human Resource Management (4th edition) Pearson Education Publishers, New Jersey
Flippo, E.B. (1984). Personnel Management (6th Ed). Mc Graw Hill Book Co. Drucker, Peter (1955), The practice of Management, Heinemann. Gary Dessler, 1994), Human Resource Management, Pearson Education International.

Heinemann, G., Schwab, D.P., Fossum, J.A., Dyer,L.D., Personnel/ Human Resource Management, 4th edition, Richard D Irwin, inc.; New Delhi, 1998. Jones, R. G & George, M.J (2003), Contemporary Management (3 rd edition), McGraw-Hill, Boston. Kaila, H.L, ( 2003), Organizational Behaviour & HRM, 1st edition, A.I.T.B.S. Publishers & Distributors, New Delhi. Koontz, H. & ODonnel, C. (1984), Management (8th edition), McGraw-Hill. Luis R. Gomez-Mejia et al, (2001), Managing Human Resources, 3rd edition, prentice Hall, New Jersey. Kotler, P. (2003) Marketing Management (11th Ed.) New Jersey: Pearson Education International. Mathis, L.M.; & Jackson, J.H., (2000) Human Resource Management, 9th edition, south-western college publishing, Ohio. Michael Amstrong (2001) Human Resource Management Practice (8th edition) Kogan Page limited Publishers, London Nzuve, S.N. ( 1997), Management of Human Resources: A Kenyan Perspective, revised edition, Basic Modern Management Consultants, Nairobi.

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CH. 22 GLOBAL HUMAN MANAGEMENT


Chapter objectives

RESOURCE

Following the completion of this chapter you should be able to: Understand the motivations for global operations Discuss significant global trends Explain the different levels of global participation Analyse how globalization affects the recruitment, selection, training and development, compensation administration, maintenance, integration, and separation of employees.

INTRODUCTION
A business is an independent activity formed to produce goods and services to be sold to people and other businesses at a profit. It can be performed at a domestic, international or global level. Domestic business means marketing goods and services within the home country. This is how many businesses begin. International business means crossing many nations and international marketing therefore involves developing and performing marketing activities across national boundaries. For example, the USA Supermarket chain known as WalMart serves more than 90 million customers weekly in the USA, Canada, China, Mexico, Brazil and Argentina. Global business means developing marketing strategies for major regions or for the entire would. Nike, Apple computers, Delloite and Touche, and Coca Cola gain a lot from global operations (Pride and Ferrel, 2000: 109).

Motivation for global operations


There is a wide variety of reasons that make firms to start global operations. Some of the reasons are briefly discussed below. Accessing the Global markets promotes innovation while intensifying global competition. The desire to make better, less expensive products has led General Motors to develop products such as the Opel, Chevrolet, Cardillac, and Saturn for use by customers all over the world. When a firm engages in international marketing it becomes less exposed to the dangers of economic fluctuations particularly in the domestic market. Thus the firm may be faced with a declining domestic economy but the sales of its products may be increasing in another part of the world. Increased competition at the domestic level may lead to the loss of market share. Consequently, the firm may be forced to go international or global. 190

Occasionally firms may follow competitors who internationally. This is known as the me too concept.

decide

to

operate

A firm may wish to take advantage of the faster rates of growth in demand for its goods and services in the foreign markets. Some firms may wish to dispose surplus commodities to increase their production capacities. The products sold by the firm may have reached the decline stage in the domestic market. This creates a need for them to be introduced into the other markets. A firm may have special expertise/knowledge in the production of a product. Such expertise or knowledge may not available in the foreign market. In some countries the cost of labour is low hence setting up production facilities in those countries ensures that the products are produced at lower costs. With the advent of telecommunications and information technology, work can be done more efficiently and effectively by engaging the best talent all over the world.

Many companies, small and big, are finding that success depends on their ability to market and manage oversees operation. This fact presents some interesting management challenges. The market, products, and production processes must be co-ordinated on a world wide basis and organisational structures capable of balancing centralised home office control with adequate local autonomy must be created. Firms must also make many decisions regarding the workforce. This chapter will discuss all these issues.

Significant Global Changes


Global marketing is a strategy in which essentially the same marketing program is employed around the world. Probably the most re-known company around the world associated with a globalized strategy is Coca-Cola. However, even Cocacola adapts its strategy to local markets. For instance, sizes of the bottles and cans must conform to local regulations and costs. One of the Global changes taking place is the formation of regional trade alliances, markets and agreements. Examples of these are: East African Community (EAC) Economic Community for West African States (ECOWAS) North Atlantic Free Trade Agreement (NAFTA) European Union (EU) Pacific Rim Nations General Agreement on Tariffs and Trade (GATT) Some of these trends and their human resource implications are discussed below.

a) North Atlantic Free Trade Agreement (NAFTA)


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NAFTA came to be in 1994 and effectively merged Canada, USA and Mexico into one market of about 374 million customers. The USA and Canada already had a free trade agreement since 1989 but NAFTA brought Mexico into the consortium. The agreement was prompted by Mexicos increasing willingness to open its market and facilities in an effort to promote economic growth. Some efforts have been made to expand the membership of NAFTA to other Latin American countries such as Chile and Brazil. The aim of NAFTA was to eliminate all tariffs on goods produced and traded between Canada, Mexico and the USA and to create a free trade area by 2009. NAFTA has increased USA investments in Mexico because of Mexicos substantially lower costs for lower skilled employees. For USA, this means that: Many low skilled jobs went south decreasing employment opportunity for US citizens who lack high level skills. It increased employment opportunities for highly skilled US citizens because they could now work in any of those countries. There was a greater pool for human resource managers to tap from.

b) European Union (EU)


Also called European Economic Community or European Common Market, the EU was formed in 1958 to promote trade among its members which initially included Belgium, France, Italy, West Germany, Luxembourg and Netherlands. In 1991, East and West Germany united and the Berlin wall was torn apart. By 1995, the UK, Spain, Denmark, Greece, Portugal, Ireland, Austria, Finland and Sweden had joined the union. In 1992, most of the EU members agreed to transform themselves to the European Economic Community (EEC). The EEC members engage in free trading with one another and the European Commission regulates their business activities. To facilitate free trade, the EU is working towards the standardisation of business requirements, import duty and VAT; the elimination of custom checks and the creation of a standardised currency for all members. The common currency, Euro, which began circulating in 1999 required business people to modify their pricing strategies and subjected many firms to increased competition. Companies selling goods and services among the European countries have been saved the nuisance of dealing with many complex exchange rates. The long-term goals are to eliminate all trade barriers among EU nations, improve efficiency, and stimulate economic growth thereby making the union economy very strong in the global market particularly against Japan and other Asian nations.

c) Pacific Rim Nations


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Despite the economic turmoil and a recession in Asia in the 1990s, companies of the Pacific Rim nations Japan, China, South Korea, Thailand, Singapore, Hong Kong, Malaysia and Vietnam among others have become increasingly competitive and sophisticated in global business in the last three decades. The Japanese in particular have made tremendous in-roads into the world markets for automobiles, motorcycles, watches, cameras, audio and video equipment among other products. For instance, Sony, Sanyo, Toyota, Mitsubishi, Canon, Suzuki, and Toshiba products are sold all over the world and have set standards of quality by which other products are often judged. The Peoples Republic of China, a Country of more than 1.2 billion people has launched a program of economic reform to stimulate its economy by privatising many industries, re-structuring its banking systems and increasing public spending on infrastructure. The potential of the Chinese market is immense but doing business in China has many risks which include political and economic instability (especially inflation), corruption and erratic policy shifts. Moreover, piracy is a major issue and protecting a brand name in China is hard. South Korea has been very successful in the global market with brand names such as Samsung, Daewoo and Hyundai becoming household names. Korean companies are now grabbing market shares in Japanese markets for videocassette recorders, colour T.V. and computers although the Korean market for these products is limited. Less visible and less stable Pacific Rim nations such as Singapore, Thailand, Taiwan, Malaysia, Vietnam and Hong Kong have become major manufacturing and financial centres.

d) General Agreement on Trade and Tariffs (GATT).


This was signed by 23 nations in 1947 and provides a forum for tariff negotiations and a place where international trade problems can be discussed and resolved. Currently it has over 100 member nations. One of the outcomes of GATT was the formation of the World Trade Organisation (WTO) whose aim is to resolve any disputes or conflicts between member countries. In the recent past, GATT negotiations resulted in agreements to cut tariffs (taxes on imports) by 40%, reduction of government subsidies to businesses, expansion of the protection of intellectual property rights such as copyrights and patents, and the establishment of rules for trading and investing in services. The changes taking place all over the world the formation of trading blocks, the growth of Asia, among others- are all examples of events that are pushing companies to compete in the global economy. As a result of these developments, new markets and new sources of technology are opening up very rapidly. Firms must then be effectively managed so as to gain competitive advantages in the 193

global market place. And because the success of every firm depends on the calibre of the workers it has, then human resource management for a firm that operates globally becomes a very important issue.

LEVELS OF GLOBAL PARTICIPATION


It is important to understand the stages through which firms pass through from being local firms to global operators ( Adler and Ghadar, 1990). In many cases firms go through four distinct stages or levels of operation namely: Domestic level International level Multinational level Global level

Domestic level
Most firms start by operating within a domestic market place. An entrepreneur in Kenya may have an idea to satisfy a certain need within a small area. He/she sets production facilities in that area and the capital needed may be little. At this point recruiting, selection, training and compensation of workers are done at the local level. The focus of selection and training programs is on the employees technical competency to perform job related duties and to some extend on interpersonal skills. Since the firm is involved in only one labour market, determining the market rate of pay for various jobs is relatively easy. As the product grows in popularity, the owner may choose to build additional units in different parts of the country to reduce the cost of transporting the product over long distances. The entrepreneur who started operations in Nairobi may expand to Mombasa, Kisumu, or Nakuru. In deciding where to locate these facilities the owner might consider: The availability of workers with the necessary skills The political stability in the area Proximity of raw materials Cost of labour in that area Educational level of people in that area Firms operating at the domestic level face challenges in relation to the political legal cultural, human capital and economic areas but these challenges are less than those faced by firms operating on a larger scale. A firm whose domestic country is the US maybe faced with the challenge of an increasing number of minorities and women in the labour force. This has to be dealt with by providing facilities such as day-care facilities or even redesigning the jobs.

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International level of operation


Increased competition at the global level may make the firm to lose market share in which case the firm responds by seeking alternative markets for its goods and services. The firm may opt to enter the international market gradually, beginning with exporting the products but ultimately by building production facilities in the other country. A firm which decides to engage in international competition must make many decisions such as the ones below. In deciding where to allocate production facilities, one must consider whether a particular location provides an environment where human resources can be successfully acquired and managed. The countrys legal system may also present other problems. For instance, France has a relatively high minimum wage which drives labour costs up and the laws in Germany allows employees to participate in the firms board of directors , a concept known as co-determination. Thus there may be a need to adapt to practices in the other country and to conform to their labour laws. In some countries the law requires you to employ a certain percentage of the local people ( i.e. the host country nationals) as a way of ploughing become the profits of the firm into the society from which the profits came. Cultural differences may present conflicts, communication and morale problems. At this phase international HRM becomes manifest as managers are assigned to posts in the foreign markets to provide general management, technical expertise and financial control. Further, selection criteria such as technical competence, language skills, cross cultural adaptability and sensitivity are also important. Host country nationals are frequently recruited in the areas of sales, marketing and personnel because they have a better understanding of the local circumstances.

Multi-national level
Multinational companies build one or more facilities in another country or in a number of countries. The South Korean firm, Samsung, has facilities in UK, Germany, Portugal and Slovakia among other countries. Other multinational firms include Mitsubishi, Mitsui, Itochu, General motors, Sumitomo, Marubeni, Ford Motor Company, Toyota Motor, Exxon, and the Royal Dutch/Shell Group. Firms locate in many countries so as to take advantage of lower costs of production in the other country. Many firms from US have shifted to Mexico where the cost of labour is low; General Motors has a production facility in UK. This enables it to produce for the European market. The production and distribution cost is lower if the production is done in Europe. The Human Resource manager of multinational companies must understand the definitions used in these firms: Home country/parent country/Domestic Country - it is the country in which the firm has its headquarters. The USA is the home country for General Motors; Japan is the home for Mitsubishi and Toyota motor 195

corporations; Germany is the domestic country for the Mercedes Benz brand of motor vehicles Host country - This is the country in which the firm has located its operations. The UK is a host country for General Motor Corporation. Third country - it is any other country the firm has or doesnt have operations but with which it interacts eg as a source of raw materials. Home country nationals - these are people born and living in the domestic country; some may be working for the company. Host country nationals these are the employees who were born and raised in the host country and not the parent country. Examples are the Kenyans working for General Motors in Kenya. Third country nationals - they are the employees working for the company but who are not from the parent or host company. An example would be a Tanzanian working for General Motors in Kenya. Expatriates - these are employees of the firm who operate in many nations. The HR Manager has the challenge of selecting expatriates, who are capable of operating in different settings, train them, and provide them with flexible compensation systems that take into account the different marker rates, tax systems and cost of living.

Multinational companies should employ many in-patriates- managers from different countries working in the corporate headquarters. These are mainly highly knowledgeable and competent staff who are to spearhead the firms strategy. The different managers may have different cultures therefore there may be a need to integrate the people from the different cultures who are working in the corporate headquarters into the culture of the company. Multinational enterprises also take managers from other countries and place them in facilities in other countries. An example would be a manager from Kenya working for a USA firm in Nigeria being transferred to head operations of the same firm in South Africa. This practise creates the need for cross-cultural training to provide managerial skills for interaction with individuals from different cultures. Firms operating at the multinational level seek to recruit the best managers regardless of their country of origin. The human resource manager is also interested in ensuring that all members share the same organizational norms and values, irrespective of the fact that they come from different countries. Other HR activities involved include management development, career counselling and periodic transfers to different assignments (after a specified number of years).

Global level of operation.


Global organisations compete on the state of the art (latest, top quality) products and services and gain competitive advantage by achieving the lowest costs possible. Multinational enterprises normally develop identical products and distribute them on a large scale while global companies produce products to meet the needs of particular clients. The products are customised, produced in masses but 196

adapted to different geographical areas. For example, Nokia has different fashions, Coca-Cola packages vary from country to country- these goods cannot be easily moved from one country to another without being noticed. Multinational companies locate their facilities in a country as a means of reaching that country sufficiently and effectively; Global companies locate its production in a country as a means of serving that region. The global firm may need to create synergy in its operations by integrating different cultures. As a firm enters the global market place, the HR manager must encourage flexible systems in HRM such as the following: Since global companies have many corporate headquarters the employees should be selected, trained and compensated in such a way that they can operate trans-nationally. The trans-national scope of the global HR manager refers to the fact that HR manager decisions must be made from a global rather than a national or regional perspective. There should be uniformity/fairness in the treatment of all employees with minor variations to accommodate for differences in taxation, cost of living, security and so on since every country is different from the other. The employees and managers of the global company must have a transnational representation. This implies that every country is represented either by a manager or employees or in the employment practices. The trans-national process refers to the extent to which the companys planning and decision making process includes ideas and representatives from different cultures. The human resource manager should see the strength of diversity in the different cultures and consider the best practices in each culture in decision making. Trans-national representation reflects the multinational composition of a companys managers. Global participation does not mean that every country is providing managers to the companys branches. Successful organizations need HR managers who will treat employees and managers from different cultures equally. This can be accomplished through combining selection, training, appraisal and compensation systems in such a way that managers have a trans-national, rather than a local orientation.

GLOBAL RECRUITMENT AND SELECTION


Introduction There are four approaches to managing and staffing international subsidiaries. These are: Ethnocentric approach Polycentric approach Regiocentric approach Geocentric approach

Ethnocentric approach
This is a situation whereby top management and key positions are occupied by people from the home country. This applies to those firms where the top 197

management believes that home country attitudes, management styles, knowledge, evaluation criteria, and managers are superior to anything the host country may have to offer. At Royal Dutch Shell, for example, most financial officers around the world are Dutch nationals. Japanese firms are also famous for being ethnocentric. The ethnocentric approach is used where there is no qualified host country senior management talent, where there is a desire to maintain a unified corporate culture and tighter control, and where there is a desire to transfer the parent firms core competences to the foreign subsidiary more expeditiously.

Polycentric approach
International subsidiaries are managed and staffed by personnel from the host country while the home office is run by parent country nationals. Examples are: General Electrics operations in Hungary include 8 factories and more than 8,000 employees most of whom are Hungarians. Coca-Cola operates in over 160 countries and employs half a million people world-wide. In the polycentric corporation, there is a subconscious belief that only host country managers can ever really understand the culture and behaviour of the host country market; therefore the foreign subsidiary should be managed by local people. This approach reduces the cultural misunderstandings that would arise if expatriates were used. The locals may also be less costly to hire.

Regiocentric approach
This occurs where the staffing of the foreign subsidiaries is done on a regional basis. An example is a situation where a European subsidiary is staffed by Europeans from Britain, France, Germany and so on. A firm in Kenya may be staffed by employees from the East African Region. The catholic University of Eastern Africa draws the majority of its employees from Kenya, Uganda, Tanzania, Rwanda, Burundi, Malawi, Ethiopia, and Eritrea.

Geocentric approach
The firm ignores nationality deliberately and it searches on a world-wide basis for the best employees to fill its positions. This is because of the assumption that the best manager for a specific position anywhere may be in any of the countries in which the firm operates. This approach is used by global trans-national firms such as: - Bosch ( for handsets, iron boxes, car spark plugs) - Electrolux ( vacuum cleaners) - Ford motor company. The geocentric approach ensures a global culture is built. The human resource department is also able to use its resources more efficiently by being able to transfer its managers any where in the world.

Local and expatriate staff


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The human resource manager makes a careful decision whether to use locals or expatriates. Expatriate staffs are very costly. In the year 2000, the average cost of an expatriate in Japan was $473,390 per person per year; in the US it was approximately $88,000- $253,000 per person per annum. Due to the high cost of expatriates their use should be limited to situations where the local talent is not available. The use of locals and expatriates has both advantages and disadvantages ( Hamil, 1989).

Use of locals Advantages


Lower labour costs It demonstrates trust of the company in the local citizens. Locals then perceive the company as a better citizen. In some cases, the host country government may press for the nativization of local management. Maximises the number of options available in the local environment

Disadvantages
It makes it difficult to balance local demands with global priorities It makes it difficult to take decisions that affect locals negatively examples of which are lay offs.

It is difficult to recruit qualified personnel because the recruitment pool is limited. It leads to recognition of the company as It reduces the amount of control a legitimate participant in the local exercised by the head office. economy It effectively represents local considerations and constraints in making decisions specifically the culture of the country is easily incorporated. They are familiar with local markets, the local communities, the local setting and the local economy. They speak the local language and they are culturally assimilated. They can have a longer term perspective of the operations of the firm as opposed to expatriates.

Use of Expatriates
Advantages i. Since they come from the parent country, it is easier for them to transfer business and management practices from their country to the other. They are assumed to be well versed with the firms policies and cultures. ii. It is easier for the headquarters to control them because they have been sent by the headquarters. 199

iii. iv. v. vi.

The employees are given a multinational orientation since they are rotated in different countries. In fact multinationals view a successful stint abroad as a required step in developing managers. The use of expatriates creates a pool of experienced employees who can be taken to any part of the world to head operations. They possess unique skills which are not available at the local level. Thus they should have more technical competences than local employees. They have a broader global perspective in decision making.

Disadvantages i. They make the firm look Foreign ii. They may have difficulties in adapting to the cultures of the host country. iii. They are very costly e.g. high transfer costs, high salaries and other costs. iv. It may result in personal and family problems for the affected employees. v. It may discourage the local people when employment positions in the firms are taken by foreigners. vi. The expatriates may be subject to government restrictions in areas such as salaries earned. When to use Expatriates Although expatriates are very expensive sometimes a firm may be forced to use them. Firms rely on expatriates when: i. Local talent is not available - this occurs mainly in developing countries (in Africa, Latin America, etc). ii. Where the firm wants to develop a global corporation -wide vision. Some firms want their subsidiaries to have the same vision as the headquarters. This can be achieved using expatriates from the headquarters. When the operations at each subsidiary are highly interdependent. In some cases the output of one subsidiary is the input of another subsidiary. To ensure quality each subsidiary is staffed by expatriates. Examples are IBM, Hewlett Packard and Xerox which have specialized manufacturing facilities in different parts of the world. The output of these facilities (computer chips, software) must be integrated to produce highly sophisticated products such as computers, medical equipment and photocopying machines. Linking production processes generally calls for greater reliance on expatriate managers and specialties which can bridge the gaps and tie the units of the entire organization together. When the political climate is unstable - corporations tend to rely on expatriates for top management when the risk of government interventions is high, when actual or potential turmoil within the country is serious, when the threat of terrorism exists and when there has been a recent history of social and political upheavals in the country. Generally, expatriates are less prone to the demands of local political parties. The expatriates provide reassurance to the home office that its activities are well taken care of.

iii.

iv.

Off shoring
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This is using local employees abroad to do jobs that the firms domestic employees previously did in -house. This trend is growing especially in US because it provides cheap labour which substantially reduces the costs of operation. Off shoring can be done electronically through the use of call centres e.g. Kencall. Nevertheless, off shoring remains a controversial topic. Off shoring is a HR dependent activity because employers expect the HR directors to help identify high quality, low cost talent abroad and to provide the necessary background data on things like wage rates, working conditions, and productivity. The HR challenges of off shoring are: Identifying the source of low paid, high quality, technically competent workers. Establishing an effective supervisory and management structure to manage the workers. Ensuring that all the employees receive the careful selection and training they require. Ensuring that the compensation policies and working conditions are satisfactory.

Failure of expatriate assignments


Despite the many advantages associated with expatriates, many expatriates assignments end up in failure. Failure may be indicated by an early return, increased operation costs, lower productivity, low morale and poisoned customer and staff relations. Some of the reasons why expatriate assignments fail are: i. Career Blockage Initially many employees are excited about the opportunities for travelling abroad. Afterwards they may feel that their home office has forgotten them and that their careers have been side tracked as they get reports of their counter parts at home climbing the corporate ladder. Women face additional difficulties in international assignments especially where the majority of male managers believe that women are less likely to succeed overseas. Japan, Arabic and other Asian countries are examples of places where women are rarely promoted to management positions. Nevertheless it should be noted that what matters most is core competences, not gender. Cultural shock Many people who take international assignments may not be able to adjust to a different cultural environment. This leads them to impose their own countrys culture on host countrys employees, a practice which may lead to cultural clashes and misunderstandings. Occasionally the clashes may escalate until the expatriate decides to return home after being frustrated and frustrating others.

ii.

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iii.

Lack of pre-departure cross cultural training Few multinational enterprises provide crosscultural training and those who do so provide limited training. Often expatriates and their families pack their bags and travel to their destination with only their passports and legal documents and limited information gained from maps, tourist brochures, and the library. Over emphasis on technical qualifications A person chosen to go abroad may have impressive credentials and an excellent reputation in home office for getting things done. Nevertheless, it should be noted that the traits needed to succeed in another country may be different from those needed at the domestic country. Getting Rid of a troublesome employee Sometimes firms may send an employee on an international assignment as a way of getting rid of them. This may look very good in the short run but it will lead to the manager failing and by extension the firm failing. Thus the wrong intentions can lead to failure. Family problems In some cases, the expatriates spouse or children may be unable or unwilling to adapt to life in another country. This is one of the most important reasons for failure. To ensure success, the spouse could be provided with language training. Couples chosen for international assignments should be those with preschool age children; it is easier for them to adjust. The family should also have a strong bond of closeness and mutual sharing. Other approaches to achieve success include shortening the length of the assignment, providing realistic views of what to expect, careful screening, improved orientation, improved benefit packages and treating the expatriate with dignity.

iv.

v.

vi.

vii)

Personality Expatriate employees who are extroverted, agreeable, and emotionally stable are less likely to fail.

Difficulties experienced on return Often, expatriates returning home may have many difficulties. These difficulties may force the repatriates to leave the organization shortly after returning home. Ideally some of the difficulties that may be experienced on return include Lack of respect for acquired skills, Loss of status, Poor planning for return position, and reverse cultural shock. Failures can be very expensive - some of the more tangible costs of failure include business interruptions, lost business opportunities, negative impact of the firms reputation, and personal hardships on the people involved and their families. These hardships can take the form of 202

diminished self-image, marital strives, destabilized children, tarnished career reputation, and lost income.

Selecting expatriate managers.


The success of an international assignment is influenced by job knowledge and motivation, relational skills, flexibility/adaptability, extra cultural openness and the family situation. An interview worksheet for international candidates will look at variables related to motivation for the assignment, health, family considerations, resourcefulness and initiative, adaptability, career planning and financial considerations. To ensure that expatriates dont fail, it is important to look at the following factors:i. Emphasize cultural sensitivity as a selection criteria The firm should assess the candidates ability to relate to people from different backgrounds. Establish a selection board of expatriates Some human resource managers/specialists strongly recommend that all international assignments be approved by a selection board consisting of managers who have worked as expatriates for a minimum of 3 5 years. This is because such managers have the experience required to detect who can fail and who can succeed. Require previous international experience In some cases, it is highly desirable to choose candidates who have already spend some time in a different country. Business schools which offer overseas internships make their students acquire some knowledge of a countrys language and customs by taking on a full blown expatriate assignment. Companies like Colgate-Palmolive therefore look for overseas candidates whose work and non-work experience, education, and language skills already demonstrate a commitment to and facility for living and working with different cultures. iv. Explore the possibility of hiring foreign born employees who can Serve as expatriates at a future date Japanese firms have been quite successful at hiring young foreign born (non-Japanese) employees immediately they are out of college so as to work in their home office in Japan. Such people can later be posted as expatriates else where. v.Screen the candidates spouses and family 203

ii.

iii.

An unhappy family can be a source of frustration and failure for an expatriate. It is therefore necessary to screen the candidates spouses and children. For example, Ford Company normally screens the spouses on qualities such as patience, flexibility and adaptability. Exxon also meets with spouses and children during the selection process.

Global Training and Development


Careful recruitment and selection is just the first step in ensuring that the foreign assignment succeeds. The trainee must be prepared for the upcoming assignment. One such preparation is through training. An example of training would be a one day pre-departure training workshop. This would emphasize language skills, nation and culture orientation, personal and family orientation, and career planning. However, many firms prefer a continuous in-country cross cultural training during the early stages of an overseas assignment. Here, the emphasis is on language skills, local mentoring, stress training, and training on business issues. The first session of the training could be orientation training. Training tends to be individually focussed with a present or near future time frame. It seeks to address particular deficiencies in individuals and to develop competences so as to improve the performance of the individual. Development is broader than training because it seeks to improve organizational performance over the long run. In fact most training is done for the managers of the organization. Training and development for global firms is constrained by the concepts of geographic dispersion and multi-culturism. This implies that the firm operates across cultures yet its workers, customers, and suppliers are from different cultural backgrounds. This is complicated by the fact that the management may need to balance between centralization (degree of tight control by the headquarters) and decentralization. Both centralization and decentralization have advantages and disadvantages. Some of the advantages of each of them are briefly listed below. The advantages of extreme centralization are: Economies of scale in areas such as in purchase of raw materials Improved value chain linkages Product/service standardization Global branding. Extreme decentralization can be strategic in that it will enable a firm to modify its products or services to fully meet local customer needs, respond to local competition, remain compliant with various government regulations in different countries, attract local employees, and penetrate local business networks. The main objective for training in global firms is to provide managers with the competencies needed for the successful transfer of technology, organizational 204

culture and organizational philosophy from the headquarters to the subsidiaries, to work effectively with and manage subsidiary staff, and for expatriates to live comfortably in the new culture (Adler and Bartholomew, 1992). Those managers who are returning home could be very instrumental in training the ones who are beginning their assignments. One major approach of developing managers is through rotating assignments. These assignments permit managers to form bonds with colleagues around the world and to make cross border decisions more expeditiously. IBM uses rotating assignments to help its managers to grow professionally. At other times, a firm may decide to have periodic seminars which bring together the managers from around the globe so that they can share their experiences with each other. The use of software and internet (including video clips) for cross cultural training is also becoming common. The table below indicates some of the main types of training and development initiatives used by global firms.

Training & development initiatives


Cross-cultural orientation ( predeparture) Cross-cultural training ( in-country) Diversity training Language training Traditional education international management Organisational Behaviour

Goals

in

Individualized coaching or mentoring on cultural experiences (Deep) Immersion experiences cultural

Cross border global teams with debriefing Global meetings with debriefing or coaching International assignment rotations with debriefing or coaching Repatriation training

Comfortably live and work in the host country. Increase cross cultural adjustment. Increase ability to understand and appreciate multiple cultural perspectives. Fluency in another language Increase international business acumen and knowledge To learn how attitudes are formed and how change is managed Build cultural awareness; work on cultural blind spots; develop competencies for becoming an effective global leader. Build extensive understanding of the local culture and increase ability to understand and appreciate multiple cultural perspectives. Learn skills to be a better leader (or team member) with multiple cultures involved in the team. Learn skills to conduct a better meeting when multiple cultures are involved in the meeting Develop a deep appreciation for the challenge of working in another culture; increase global leadership competencies. To help the employees manage their careers and finances better on return and to avoid re-entry shock. 205

From the above table, it can be summarized that oversees candidates require to be trained in four areas namely:

a.

Cultural information

This level of training focuses on the impact of cultural differences and it aims to raise the trainees awareness of such differences including how such differences impact on business outcomes. The beginning point will be to make the expatriate clear about his or her own cultural background and how their culture is perceived by the host country nationals. For example Tanzanians perceive Kenyans as always being in a hurry, Europeans perceive Kenyans as being poor time keepers and Kenyans perceive Nigerians as being aggressive, fraudsters and drug traffickers. Americans are perceived to be in a perpetual hurry (in India), to keep a distance (Kenya), always obey rules even when the rules look minor (Turkey), motivated only by work (Colombia), talk and analyze even minor issues (Indonesia), answer with a yes or a no response (Ethiopia), and ready to admit what they dont know (Iran). With an accurate cultural self awareness managers can modify their behaviours to reduce dysfunctional characteristics. It is also important for the expatriate to understand the culture of the host country and possibly adapt to it. The emphasis is on those types of behaviours and interpersonal styles that are considered acceptable in both business meetings and social gatherings. For example, Germans value promptness for meetings. An important aspect of adaptation is the ability to speak the host country language. It is rare for expatriates to speak the host country language fluently, but the ability to communicate in that language is extremely important. Training on the host countrys culture helps the expatriate to avoid costly mistakes and to adjust to the new work environment more quickly.

b.

Factors influencing behaviour

This type of training is aimed at getting participants to understand how attitudes, both positive and negative, are formed and how they influence behaviour. This relies heavily on behavioural sciences such as Organizational Behaviour and Principles of Management

c.

Information on the target country

This level of training provides factual knowledge about the target country where the expatriate is going to be based. As much information as possible should be provided at this stage. In this way, surprises can be avoided. For expatriates to adjust quickly to the new environment, it is recommended that they engage in activities such as walking around to know the neighbourhood, using public transport especially taxis to get around, doing shopping in a mall, learning the local values of currencies rather than calculating their equivalents, talking to the local people, reading local newspapers, watching local news, attending social functions including religious services, visiting the museums and go sight seeing among other activities. 206

d.

Change management

It provides skill building in areas such as adjustment and adoption of new skills. This is because accepting the global assignment is accepting change. One must then be competent in change management. Besides these special training needs managers abroad should continue to undergo additional training and development using methods such as Seminars and workshops, University and college programs like the Executive MBA among others. Business schools that have a global reputation for training managers include London Business School, INSEAD in France, Harvard Business School, and Massachusetts Institute of Technology among others. After a successful period of a global assignment, repatriation training is offered in the areas of financial management, re-entry shock, and career management. The concept of training and development varies from country to country but in many countries it is supposed to improve the technical abilities of the employees. In Asia, employees are trained for an average of 26 hours, while in Europe, they are trained an average of 49 hours per year. Classroom training is the most common method of training workers.

INTERCOUNTRY DIFFERENCES AND SIMILARITIES


Dealing with human resources on a global scale presents many complex issues especially in the areas of candidate selection, terms and conditions of service, relocation processing, immigration processing, cultural and language orientation, compensation administration, payroll processing, tax administration, career planning and development, and the handling of spouse and dependants. Besides, the human resource manager has to deal with differences that exist between one country and another. Some of the inter-country differences and similarities are explained below.

1. Cultural Differences
Countries differ widely in their culture, where culture refers to the things valued and adhered to by the citizens. There are many definitions of culture; however cultural elements include language, religion, social organisations, aesthetics, and education and so on. The main cultural factors of interest to a human resource manager are summarised as below: Language Religion (belief systems) Aesthetics (art, music, drama, dance, folklore) Cultural universals Cultural adaptations Cultural borrowing Attitude and values 207

Social organisations (education, political structure) Material culture (technology and economics) Reference groups

Culture is shared and transmitted from one generation to another. Family units, social institutions, religious organisations or even the state passes on the Culture. Moving from one culture to another is problematic and employees may need to make adjustments in order to work or even communicate in different areas. Employees who are not able to make cultural changes may be caught up in a cultural trap. Some of the cultural variables that are of interest to global human resource managers across the globe include: a.

Religion
Three quarters of the worlds population can be classified into the following religions in order of numbers: Christianity Islam Hinduism Buddhism Shintoism Animism Some of the impacts of religion on human resources and business activities are as follows: i. In most Western European countries, the work ethic is seriously encouraged. Hard work and success is a key value of the Christian teaching. Success is often measured in terms of wealth acquisition. In contrast Hinduism, as practised in India does not encourage the acquisition of wealth. Employees who embrace the Hindu religion may not be so determined to work hard since they lack the motivation to acquire wealth. ii. Certain religions prohibit certain businesses. For example, Hinduism prescribes abstinence from beef consumption; Islam prohibits pork and alcohol; and Judaism prohibits the consumption of pork and shellfish. In these markets there is a large market for non alcoholic beverages and vegetarian products. Religion also influences dress, gender roles, and social institutions. For instance, the role of the Muslim woman is mainly restricted to the household. Religious divisions can also cause instabilities in certain areas. For example, in the Middle East, clashes between Muslims and Christians have been common. Religious conflicts have also been noticed in the Indian Kashmir region. 208

iii.

iv.

v.

Religious holidays also affect working patterns. For instance, before 1996, all shops in Germany remained closed on Sundays while in the Muslim world virtually all type of work slows down during the month of Ramadan. In the Muslim world, religion is a total way of life while in the western world, religion is an aspect of life and causes minimal business interruptions.

b.

Language
It is important to understand the official and business language in every country. In some countries such as Canada, China, Switzerland, Nigeria, India, and Belgium, two or more languages are spoken. English is the official language while French is considered as the language of diplomacy. One must recruit employees who can speak the language of the area the business operations are located in. Occasionally language translators may be required. Care should be taken in the process of translating because words can lose meaning or have poor connotation. For example Body by Fisher was translated as Corpse by Fisher. In different countries, the same word may have a different substitute. For instance, in Britain petrol, biscuits, plimsolls, and pavement will be translated respectively in USA to gasoline, cookies, sneakers, and sidewalk. In the UK a large office is reserved for a very important person while in Japan offices are shared. In European countries keeping time is considered polite and reliable; in Indonesia, coming late for an important meeting is respectable. In Germany, lateness is never tolerated and senior people are always addressed formally and with their titles.

c.

Education

The educational system in a country leads to the creation of human capital. Thus human capital is the availability of skilled manpower in a country. It is determined by the educational system. In USA there is a high human capital shortage because the jobs created require more skills than are available. Germany also has a human capital shortage. In Netherlands the education system is free all through to the university, thus there is plenty of human capital; Russia has a free education system in spite of its poor infrastructure and economy. Some third world countries (e.g. Nicaragua, Haiti, Sudan, and Somalia) have relatively low levels of human capital because of little investment in education. A countrys human capital may affect a foreign companys desire to locate there or enter that market. Countries with low human capital attract facilities that require low skills and low wage levels. This explains why Japan has shifted low skilled work to some of its neighbours while maintaining high skilled work at home. Countries with high human capital have attractive opportunities for direct investment. An example is Ireland, which has 25% of all its youth attending college. This is much higher than many other European countries. 209

The combination of high educational levels, a strong work ethic, and high unemployment makes a country attractive for investors because of the resulting high productivity and low turnover.

The educational system in a country also has many other implications. Examples are: Where the educational system is poorly developed, there will be a shortage of trained people. The level of education determines how the business will be conducted. The promotion of products depends on the educational level of the citizenry.

d.

Aesthetics

This deals with perceptions of beauty and different meanings of colour. For example, In the UK, the colour black is normally worn in funerals while in Brazil funerals are attended in purple. In Japan, gift items should not have the name four in them because its pronunciation is associated with death. Similarly white flowers are associated with death in Japan while red is a good luck colour in many oriental cultures such as in China. White and green are associated with death in Muslim countries. In Kenya, green is associated with mother nature, white with purity, black with sophistication, blue with high levels of achievement, and red/yellow with fast moving, hot, trendy things.

e.

Social Organisations
This defines how people relate to each other and is expressed in: The roles of men and women in the society Social classes Family Group behaviour Marriage Rituals

The role men and women play in the society varies from culture to culture. Some cultures are feminine while others are masculine. For example, in Germany and Japan the masculine aspect is emphasised and is shown through showing off, achieving something visible and making money. The human resource manager in that culture must stress assertiveness, performance, success, and competition. Feminine cultures are found in Sweden and Norway and emphasise on putting relationships before money, helping others, and protecting the environment. The human resource manager should stress on service and care for others. In developed countries such as the USA, the women and men are competing in the work place. Gender roles are becoming invisible and less predictable. In some less developed countries, women and men compliment each other. For instance, in the Middle East it is women who purchase goods hence all promotional and selling activities should be directed towards the women. 210

Social class In every country, people are grouped into social classes using criteria such as income, occupation, education levels, religion, wealth and so on. In the UK there are three main social classes namely the Lower, Middle, and Upper social classes as determined by occupation. In some cases it is possible to move from one social class to another through say, attaining higher levels of education. In other cases such as the Indian caste system the social class is defined by purity, spiritual quality and power and these are determined at birth. In such cases, one cannot change their social class. Values and attitudes - these are beliefs about products, businesses and so on and they maybe based on real facts, opinion, or faith. They are very hard to change and managers should learn to take advantage of them. A person with appositive attitude towards Kenyan products will continue to purchase them. The family unit is a fundamental unit of social organization in many societies. In many parts of Europe, the typical household is nuclear in nature while in other countries (India, parts of Africa, the Far East), the family can be extended to even two or three generations. The family unit can determine many decisions ranging from the sizes of goods purchased to the most appropriate communication methods. F) Cultural universals These activities occur across cultures and include gestures, music, personal names, courtship, and trade among others.

Implication of Culture on Human Resource Management


Some of the effects of culture on human resource management are briefly explained below. a. Culture determines how the employees perceive managers, what motivates the employees and roles that managers are expected to play. In Germany all managers are expected to show technical competence. Employees therefore perceive managers as solutions to all their technical problems. Moreover, senior people are always addressed formally with their titles. In Netherlands, managers focus on seeking consensus among all parties and they encourage open exchange of views and a balancing of interest. In Mexico, workers expect managers to keep their distance, to be formal rather than informal; they also expect the managers to occasionally give them gifts such as food baskets. The managers selected for each region must be able to meet expectations for that region. b. Culture affects the selection, training, performance appraisal, compensation administration systems among other personnel practices. Examples are as follows: In individualistic cultures such as found in the USA and UK, people are expected to look after their own interests and those of immediate family 211

members. In these countries, every individual is analysed alone when it comes to selection, training, and performance appraisal. In collectivist cultures (e.g. Columbia, Pakistan, Taiwan) people are expected to look after the interests of society. Performance appraisals would emphasise how one fits into the larger organisation. c. Culture influences compensation systems. Individualistic cultures are such that the gaps between the highest paid and the lowest paid individual in the same organisation can be even 200 times. Collectivist cultures emphasise flat pay structures with the gap between the highest and lowest paid being less than twenty times. d. Culture affects the common systems and co-ordination system. For example, collectivist cultures promote participative decision making as opposed to individualistic decision-making.

2. Economic Systems
A country can be practising capitalism, socialism, or communism. In socialist economic systems, there are many opportunities to develop human capital because the education system is free. A case in point is Russia. However, such systems have little incentives for the developed workforce. In capitalistic systems, the cost of developing human capital is high. Consider the case for Kenya. However, those who invest in education benefit greatly. The level of education has some relationship with income levels. Additional years of schooling may result in increased income. The health of the economic system also has a bearing on human resource management practices. For example, wealthy nations have relatively high cost of labour. A 2001 study revealed the following wage rates in different capitalistic countries:

Country

Cost in $/Hour
0.47 2.12 5.48 8.91 16.56 16.60 17.98 19.20 20.89 20.94 21.58 21.83 23.56 26.18 212

Sri Lanka Mexico Portugal Greece Britain Italy France USA Japan Netherlands Sweden Austria Switzerland Germany

The economic system determines the tax systems. Socialist countries have a tax system that aims to redistribute wealth. Different countries have different tax rates;

Country
USA Germany France Britain Netherlands Sweden Japan South Korea Kenya

Highest Tax
40% 56% 54% 40% 60% 55% 46% 44% 30%

Companies must compensate their expatriates considering differences in tax rates among other factors. Per capita incomes also vary from country to country and it may be necessary to adjust for the purchasing power parity from one country to another. Other economic variables of interest to a global human resource manager are consumption patterns, infrastructure, urbanization, economic integration and trade blocs, inflation rates, and the influence of the World Bank/International Monetary Fund in each area where the firm is operating. Differences in economic systems affect human resource practices. For example, France is a capitalistic country but has put many limitations on workers. The human resource managers are legally forbidden from discharging workers and the government limits the maximum numbers of hours one can work. This contrasts the situation in other capitalistic countries (USA, UK) where workers can be laid off anytime and there are no maximum working hours. There are also other differences in labour costs that need to be considered. These include the number of hours worked per day or per year. Examples are given below: In Portugal an average worker works for 1980 hours per year A Kenyan employee puts in around 1752 hours per year In Germany an average worker works for 1648 hours per year Severance pay varies from country to country. For instance, in UK departing workers should be paid an amount equivalent to what they would earn in 2 years. In Germany, the severance pay is at least one years salary. In Kenya, the severance pay is calculated at not less than 15 days pay for every year worked. (Source: the Kenyan Employment Act 2007).

3. Political, Legal and Industrial Relations Differences


213

Each country has its own laws which have a bearing on its recruitment, training and compensation of employees. The European Economic Community legal system allows employees fundamental freedoms such as: Freedom of movement. Freedom to choose ones occupation and be fairly compensated. Social protection via social security benefits. Freedom of association and collective bargaining. Equal treatment for men and women. Safe and health working environment. In Germany, the law allows for co-determination whereby employees participate in making decisions that affect payment methods, training, transfer, and working hours among other areas. The workers representatives also sit in the Board of Directors meetings. This contrasts the situation in USA where policies, rules, and regulations are set by the employer and workers representatives never sit in the board. Similarly, in Kenya very few firms would allow employees to sit in their board of directors. In USA the laws allows for: Non-discrimination (based on age, gender, nationality etc.) in the Workplace. Equal employment opportunities (the Equal Employment Act regulates the hiring and firing practices of firms) Fair labour standards- the minimum wages Act regulates minimum wages for a variety of jobs. Regulations governing negotiations between unions and management have also been set in place. In many European countries, there are no trade unions. Workers channel their grievances through workers councils. A work council is a formally elected group of workers representatives that meet with the management every month to discuss issues affecting workers ranging from non-smoking policies to holidays, bonuses, profit sharing, lay offs and so on. Thus, every country varies in terms of its culture, human capital, legal systems, and economic systems. These variations directly influence the type of human resource management systems that must be developed to accommodate each particular situation.

Compensation of expatriates
Firms can use compensation packages to enhance the effectiveness of expatriate assignments. In compensating expatriates, some of the thorny issues considered include: What components to include in the wages (base pay, variable pay, perquisites, benefits, incentives) Where to establish the compensation basis (is it the home country, the host country, or some other variation?) Tax protection (how to protect expatriates compensation packages against the effects of additional foreign taxation) 214

Who should be paying (is it the home, host, or parent companies or should it be split among the companies?).

Compensation policies can create conflicts if local employees compare themselves with expatriates and find there is a big disparity between them. The following guidelines can assist in compensation of expatriates: i. Provide the expatriate with income which is equal to what they receive at home. This approach of equalizing income of expatriates across the countries considering the purchasing power in each country is known as the balance sheet approach. The basic idea is that each expatriate should enjoy the same standards of living he/she should have at home. The balance sheet approach focuses on the following main expenses: Income taxes ( paid to federal and local governments) Cost of housing ( for a principal residence) Cost of goods and services ( food, personal care, clothing, recreation, transportation) Discretionary expenses (child support, car expenses etc.) Reserve (savings, payments for benefits, pension contributions). Shipment and storage (costs associated with moving and/or storing personal belongings). The employer estimates what each of these expenses is, in the expatriates home country and what it is in the host country. The employer then pays any differences between the two. ii) Provide an explicit add on incentive for accepting an international assignment. These incentives take many forms. The company may provide a sign on bonus before departure or it may offer the employee a percentage increase of the home based salary. Other firms may offer a lump sum upon successful completion of the foreign assignment while others offer a combination of these incentives. The greatest incentives are normally reserved for the least desirable location such as Eastern Europe (Russia) where there is poor air quality, political instability, and unattractive housing. Avoid having expatriates fill the same jobs held by locals or lower ranking jobs. This is to prevent perceptions of inequity. Local employees tend to compare their pay and living standards to expatriates and feelings of inequity are more likely to arise if an expatriate at the same level with a local employee is paid the same level of pay.

iii)

Generally, the total pay package has four elements namely base salary, tax equalization allowances, benefits, and allowances. Expatriates are often offered a salary premium beyond that of their present salary so as to induce them to accept the assignment. Tax equalization allowances are necessary because tax rates vary all over the world. Examples of allowances given include cost of living allowances, housing allowances, hardship allowances, mobility premiums, education allowances, relocation allowances and Foreign Service premiums. 215

Employee health and safety at the global level.


The increased threat of terrorism is affecting the human resource activities both domestically and abroad. For example the USA and British governments have passed many laws that make it difficult to import and export workers since 9/11 terrorists attacks. Employers have had to institute more comprehensive safety plans including evacuation plans to get employees to safety if that becomes necessary. Other approaches include insuring the expatriates. It is important to keep travellers out of crimes way. Suggestions for include: Provide expatriates with general training about travelling, living abroad and information on the place they are going to. In the process of travelling, expatriates must resist gifts from strangers no matter how friendly the strangers look like. When the expatriates arrive in the host country, they should not use public means other than taxis. This is particularly the case where they would be unique in the vehicle or train they are travelling in. Tell them not to draw attention of their identity or nationality. Wearing flag emblems, T-shirts or shirts with their country names are some possible ways of drawing attention to identity. Have travellers arrive at airports as close to departure time as possible and waiting in areas away from the main flow of traffic where they are not easily observed. Equip the expatriates vehicles and homes with adequate security system Tell employees to vary their departure and arrival times and take different routes to and from work. Where the expatriates are housed in a hostel, discourage them from inviting strangers into the hostel. They should also not be involved in late night deals. Advise them not to take antagonistic positions against their host country governments. Expatriates should also be advised on those areas which are considered unsafe to visit. Keep employees constantly informed of crimes, threats and other problems in almost every part of the world. Advice employees to remain confident at all time. Body language can attract perpetrates and those who look like victims become victimized. Another health issue affecting workers is the spread of HIV/AIDS. This disease is ravaging Africa and spreading rapidly across other areas of the world such as Asia and Eastern Europe. It is depriving communities and nations of their people, thereby draining the human and institutional capacities that fuel sustainable development. HIV/AIDS has serious human resource implications. Organizations may be subjected to lower productivity stemming from absenteeism, skill shortages, and lower morale. According to the International Labour Office (ILO), 216

there are four focus areas in the fight against HIV/AIDS. These are prevention of the HIV/AIDS, management and mitigation of the impact of HIV/AIDS on the world of work, care and support of workers infected and affected by HIV/AIDS, and elimination of stigma and discrimination on the real or perceived HIV status.

Ch. 22

ORGANIZATIONAL CHANGE AND DEVELOPMENT

Chapter objectives After reading this chapter, it is expected that the reader will be able to: Define organizational change and development (OD). Understand the basic theories and concepts of OD Describe the planned change model Explain the roles of the change agent, manager, and people within the system in developing an intervention strategy Explain the different types of intervention strategies

Management of change
Change is making things different. It is basically a departure from the status quo. Change, whether it originates from within an organization or from the external environment, is a constant feature of organizational life and understanding change is extremely important to successful management. Managers need to be able to adapt to change themselves, create organizations that are responsive to change and assist in the introduction of specific change programs. Forces for change and innovation The pressure for change can arise from a number of sources within the organization. These include declining performance, growth of the firm, and changes in the top management. External forces for change include the need to comply with new political or legal forces, economic changes, or even changes in technology. In managing change it is necessary to understand the role played by the change manager and the change agents. These roles are briefly listed below. The role of change manager In the change process the change manager: - Oversees the design of the intervention strategy - Has the overall responsibility for assessing the need for change 217

Is responsible for determining the appropriate intervention activities The change manager is also responsible for implementing the strategy and evaluating the strategy implementation process. This manager must understand the nature of planned change as opposed to forced change He or she should be able to balance the short-term needs with the potential for the more permanent long-term benefits of planned change This manager should pay the necessary attention to the change initiative and see it through to its conclusion

Change Agents: The role of a change agent can be filled by an outside consultant, an OD specialist who is an employee of the organization, a new manager or an enlightened manager who is able to look beyond traditional approaches. This person assists the change manager in designing and implementing change strategies, facilitating all the activities surrounding the design and implementation of the strategy, advises the change manager on implementation issues and the efficacy of different intervention strategies. Such a person must have knowledge of OD theories, concepts, practices and applied research. a) Internal Change agents: These are people who work in the organization. Consequently, they posses better knowledge regarding the organizations mission, structural components, technology, internal politics, and social factors. Thus, they can easily establish a trusting relationship with the change manager and members of the organization that will undergo the change. Internal change agents are more quickly available and are less costly to the organization. It is easier for the organization to control them grant them the necessary authority for performing their duties. Nevertheless, internal change agents may be too close to the problem and they may have biased views thus lacking objectivity. In situations where they are viewed as part of the problem, this may create additional resistance. The internal change agent may not possess the specialized knowledge needed for a particular intervention strategy. Moreover, they may be reassigned to other work in the organization even when they are implementing change in a certain department. b) External change agents. These may be consultants who are hired to fulfil a specific function or role for a specified period. they work on a contract basis. As such, they may have more objective views of the organization besides having more experience in dealing with diverse problems. It is expected that they have more technical knowledge, competence and the skills needed to implement the change. Role of the change agent: Burke (1987) describes eight roles that a change agent may play. The change agent plays the roles of an advocate, technical specialist, trainer or educator, collaborator in problem solving, alternative identifier, fact finder, process specialist, and reflector: 218

MODELS OF PLANNED CHANGE The change process theory seeks to explain the dynamics through which organizational improvement and changes take place. The main theories include the work of Kurt Lewin (1958) and Edgar Schein (1987). According to Kurt Lewin (1958), a model for change would include the elements of unfreezing, changing, and refreezing. The unfreezing part seeks to make the employees aware that the status quo is not good and that a change is necessary. The change is then implemented. Afterwards it is reinforced as the accepted behaviour in the organization. Generally, the process of implementing change in any organization can have six steps namely: - Perceiving an opportunity - Diagnosing the situation and generating ideas - Presenting a proposal and adopting the change - Planning to overcome resistance - Implementing the change - Monitoring the results. RESISTANCE TO CHANGE Employees often resist change even when the change is for the better. This is an aspect of human behaviour. In organizations, there are two major reasons for resisting change. These are general reasons and change specific reasons. The general reasons for resistance include inertia where people do not want to disturb the status quo, poor timing of the change, the change being too sudden or unexpected, and at times peer pressure. The change specific reasons for resistance are as follows: - Self interest- this is resistance based on the fear of losing something ( power, resources, friendships, freedom to make decisions, quality of work, prestige or other benefits) which the person values - Misunderstandings and lack of trust in those individuals initiating change. - Different assessments of the effects of the change - Low tolerance for change METHODS OF OVERCOMING RESISTANCE TO CHANGE There are many methods of overcoming resistance to change. Some of them include education and communication with the organizational members before the change occurs, participation and involvement of all the people that are to participate in the change process, showing support to those who are likely to be negatively affected by the change, use of rewards for those who comply, negotiating and agreeing with the stakeholders, manipulation and cooptation, as well as explicit and implicit coercion. Scholars of ethics may question manipulation, cooptation and coercion as methods of overcoming resistance. ORGANIZATION DEVELOPMENT (OD). 219

Organization development is a process used to enhance both the effectiveness of an organization and the well-being of its members through planned interventions. It is also a top management supported long range effort to improve an organizations problem solving and renewal processes particularly through a more effective and collaborative diagnosis and management of organizational culture with a special emphasis on the formal work team; it borrows the assistance of a consultant or facilitator who uses behavioural sciences to implement his or her efforts. Thus it can be summarized that OD is: Planned- it is a proactive and not a reactive process It focuses on the entire organization or a large subsystem of the organization such as a division. It is managed from the top level of the organization. It is aimed at enhancing organizational health and effectiveness by ensuring the organization achieves its goals and objectives. The well-being of organizational members is a primary concern of OD. It is based on planned change or interventions made with the help of a change agent or third party who is well versed in the behavioural sciences such as psychology, sociology, anthropology and management Organizations must be ready to cope with changing environments. One way to increase their long term prospects is by using OD. OD INTERVENTION STRATEGIES There are four types of intervention strategies namely: Human process based interventions Techno-structural interventions. Socio-technical interventions. Organizational transformation strategies These types of interventions are briefly explained below. Human process-based interventions. They are directed at improving interpersonal, intra-group, and inter-group relations. The main interventions here are survey feedback and team building. a) Survey feedback: Nicholas (1982) defines survey feedback as the systematic feedback of survey data to groups with the intent of stimulating discussion of problem areas, generating potential solutions, and stimulating motivation for change. b) Team building: It is aimed at helping workgroups to become effective at task accomplishment. Techno-structural type of strategy intervention: These strategies are intended to improve work content, technology, methods and relationships among workers (Friedlander and Brown, 1974). They include: a) Job enlargement: This is an attempt to increase satisfaction and performance by consolidating work functions from a horizontal level of the work unit so as to provide greater variety and a sense of the whole task. 220

b) Job enrichment: This approach Involves varying some aspect of the job in order to increase the potential to motivate workers. There are five aspects that constitute an enriched job. These are skill variety, task identity, task significance, autonomy, and feedback. c) Alternative work schedules (AWS): These allow employees to modify their work requirements to satisfy their personal needs. The two most common AWS interventions are the compressed workweek and the flexitime. Sociotechnical Systems (STS) type of intervention: These include the following. a) Quality circles (QC): This approach seeks to get employees involved in making meaningful work decisions like solving job-related problems. The QC meets on a regular basis to discuss issues like improvement of the work procedures and product quality, working conditions and facilities. Priority is given to the problems and nearly all employees are given time off to attend the meetings. c) Total quality management (TQM): This approach seeks to sustain the organizational competitiveness by instilling quality in all its operations. d) Self-managed teams (SMTS): This is a team whose members have discretion over such things as work assignments, work methods, work schedules, training, and dealing with external customers and suppliers.

Organizational transformation (OT) strategies They focus on articulating a new vision for the organization with a purpose of redefining the desired organizational culture, mission and strategy. The main approaches here are as follows. a) Cultural changes/interventions Cultural change is a complex process of replacing an existing paradigm, way of thinking, with another. An organization that wants to become multicultural must be able to make some fundamental changes to existing organizational paradigms (value cultural differences). The organizational take on the new set of values will affect how individual workers relate to others in and outside the work setting. b) Strategic changes Lawler et al (1989) define strategic change as any fundamental change in the organizational purpose or mission requiring system-wide changes. c) Becoming a learning organization A learning organization is one in which everyone is engaged in identifying and solving problems, enabling the organization to continuously experiment, improve, and increase its capability. 221

d) High performance work systems (HPWS) These are multifaceted approaches that involve different combinations of intervention strategies such as self-managed teams, quality circles, flatter organizational structures, new flexible technologies, innovative compensation schemes, increased training and continuous improvement programs.

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