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MAASAI MARA UNIVERSITY UNIVERSITY EXAMINATIONS 2012/2013 END OF SEMESTER EXAMINATIONS SCHOOL OF BUSINESS AND ECONOMICS BACHELOR IN BUSINESS

MANAGEMENT (Marking Scheme) BBM 203 : Human Resource Management

QUESTION 1 a) Describe the process of counseling. (14 marks) The counseling process Step 1 Open the Session: In the session opening, state the purpose of the session and establish a subordinate centered setting. Establish the preferred setting early in the session by inviting the subordinate to speak. The best way to open a counseling session is to clearly state its purpose. For example, an appropriate purpose statement might be: "The purpose of this counseling is to discuss your duty performance over the past month and to create a plan to enhance performance and attain performance goals." If applicable, start the counseling session by reviewing the status of the previous plan of action if there was another counseling session before. Discuss the issues by describing the changed behavior. Let the employee know that the organization is concerned with work performance. The supervisor maintains work standards by being consistent in dealing with troubled employees. Explain in very specific terms what the employee needs to do in order to perform up to the organization's expectations. Don't moralize. Restrict the confrontation to job performance. Step 2 Assessment/Get employee comments on the changed behavior and the reason for it . Confine any negative comments to the employee's job performance. Don't diagnose; you are not an expert. Listen and protect confidentiality. Let the employee do most of the talking and use active listening; respond, and question without dominating the conversation. Step 3 Develop a Plan of Action/ Setting Goals: A plan of action identifies a method for achieving a desired result. It specifies what the subordinate must do to reach the goals set during the counseling session. The plan of action must be specific: it should show the subordinate how to modify or maintain his behavior. It should avoid vague intentions such as "Next month I want you to improve the way you do your work." The plan must use concrete and direct terms. For example, you might say: "Next week you'll complete and deliver your reports before end of Friday. I will go through them to confirm their correctness and then I will talk to you again and agree on whether there are any shortcomings." A specific and achievable plan of action sets the stage for successful development. Step 4 Record and Close the Session: Although requirements to record counseling sessions vary, a leader always benefits by documenting the main points of a counseling session. Documentation serves as a reference to the agreed upon plan of action and the employees accomplishments, improvements, personal preferences, or problems. A complete record of counseling aids in making recommendations for

professional development, promotions, and evaluation reports. Additionally, written records of counseling provide accurate counseling records. Documentation of substandard actions conveys a strong corrective message to subordinates. Step 5 Summarize and get a commitment to change. Seek commitment from the employee to meet work standards and to get help, if necessary, with the problem. Summarize its key points and ask if the subordinate understands the plan of action. Invite the subordinate to review the plan of action and what's expected of you, the leader/supervisor. With the subordinate, establish any follow-up measures necessary to support the successful implementation of the plan of action. These may include providing the subordinate with resources and time, periodically assessing the plan, and following through on referrals. Schedule any future meetings, at least tentatively, before dismissing the subordinate. Step 6 Follow up/ Interventions Once the problem is resolved and a productive relationship is established, follow up is needed. Leader's Responsibilities dictates that the counseling process doesn't end with the counseling session. It continues through implementation of the plan of action and evaluation of results. After counseling, you must support subordinates as they implement their plans of action. Support may include teaching, coaching, or providing time and resources. You must observe and assess this process and possibly modify the plan to meet its goals. Appropriate measures after counseling include follow-up counseling, making referrals, informing the chain of command, and taking corrective measures. Step 7 Termination. All counseling should have an ultimate criterion of a successful termination. It must be done without destroying the accomplishments gained and should be done with sensitivity, intention and by fading.

b) You have been hired as Human Resource Manager; your first assignment is to take reasonable steps to avoid compulsory redundancies. Give five alternatives you would consider. (5 marks) Options to consider in order to avoiding redundancies seeking applicants for voluntary redundancy or early retirement seeking applications from existing staff to work flexibly laying off self-employed contractors, freelancers, etc not using casual labor recruitment restrictions reducing or banning overtime filling vacancies elsewhere in the business with existing employees short-time working or temporary lay-offs (Any 5 points = 5 x 1=5 marks) c) Explain 3 types of promotion Methods used in organizations (6 marks) Noncompetitive and Competitive Promotions based on standard accomplishments that occur for all employees are noncompetitive. Employees are automatically eligible for promotion when they reach certain milestones and, barring any serious issues, are promoted. Competitive promotions require employees to engage in a process that

might include tests of skills or knowledge, submission of applications, interviews, and evaluation and comparison of performance. Career Ladder The career ladder is one method employers use to promote employees. The career ladder method is noncompetitive and is based on rules in effect that set forth the guidelines for promoting an employee when he has completed a predetermined length of service, such as one year, or when he has demonstrated his ability to perform the duties at the next level of his position. Often, promotion occurs following an annual employee evaluation. Career ladder promotions are usually tied to salary increases. Accretion of Duties Promotions based on accretion of duties occur when an employee is assigned and consistently performing higher-level duties. For instance, a department launches a new program that results in new duties for an existing employee. The duties require more advanced knowledge and skills. Accretion of duties promotions allow companies to promote from within and avoid competitive hiring if the current employee meets the requirements. Merit Employers make merit-based promotions from a group of qualifying employees when a vacancy occurs. Merit promotions are competitive promotions. The employer maintains a list of eligible employees who have passed examinations, been promoted or otherwise met the requirements for inclusion on the list. Hiring administrators consider the employees' performance in making decisions. Supervisors may also evaluate the qualifications, experience and examination results to select employees for promotion to vacant positions. QUESTION 2: a) You have been asked to step in at the Amazing cakes company to help management unearth the causes of high turnover. You have discovered that they dont conduct induction programmes. Explain five importances of induction to the management so that they can have it as a HRM function in their company. (10 marks)

Importance of induction Reducing the cost and inconvenience of early leaversThe costs include recruitment costs of replacement, induction/training costs, costs of agency placement and costs extra supervision. The newly employed staff when well inducted settles down at the place of work or on the work. He is fully involved leaving no room for feeling of neglect or boredom which might trigger early leaving. Increasing commitment to the organization - The employee after induction gains loyalty builds confidence, identifies with the organization and is prepared to work for it. Clarifying the psychological contract on how the employee is expected to behave and what they can expect from the employer. Psychological contract consists of implicit unwritten beliefs and assumptions about how employees are expected to behave and what responses they can expect from their employer. It is concerned with norms, values and attitudes .It provides the basis for the employment relationship, and the more this can be clarified from the outset, the better. Induction process indicates what the organization expects in terms of behavior and value to be upheld by the employee. It provides opportunity to inform people of, the way things are done around here, so that misapprehensions are reduced even if they cannot be eliminated. Accelerating progress up the learning curve and enhance superior performance . New employees will be on a learning curve, they will take time to achieve the desired level of performance. Induction will provide an opportunity for the new employee to systematically and quickly learn of the job expectations.

Facilitate socialization of new employee and ensure that s/he settles more quickly and enjoy working for the organization with colleagues.

b) Explain five factors affecting Human Resource planning (5 marks) 1. Organisation HR policies on recruitment, promotion, succession management and career planning, retirement, workforce mix etc 2. organizational values and strategies values If it values longevity of employees, then the HR plan might adopt that a strategy to recruit and promote from within Strategy - How does the organisation intend to use HR to achieve business strategy . If an organisation is pursuing a diversification strategy, then the HR plan should ensure that it is prepared with staff that can help the firm achieve its strategy, e.g. new organisation structure, recruitment and selection, training etc 3. Changing demographic - more young, more old, more educated If the markets of labour changes to more young, more old, more women or more educated people etc, then the job descriptions, compensations strategies and general way of working might have to change to suit these groups 4. Government policy. Requirement for gender balance, disability employment, mandatory retirement age 5. The type of people employed and the task they perform. An organisation may not need to plan very far in advance for unskilled labour, since they will usually be in abundant supply. Certain high skills job require planning activities that project a year or two into the future. Planning for executive replacement may need even 5 years ahead (Each point 1 mark -5p0ints 1= 5marks)

QUESTION 3: a) Describe five external sources of recruitment solicited from outside the organization (10marks) External Recruitment External sources of recruitment have to be solicited from outside the organization. External sources are external to a concern. But it involves lot of time and money .The external sources of recruitment include Employment at factory gate, advertisements, employment exchanges, employment agencies, educational institutes, labour contractors, recommendations etc. a) Employment at Factory Level This a source of external recruitment in which the applications for vacancies are presented on bulletin boards outside the Factory or at the Gate. This kind of recruitment is applicable generally where factory workers are to be appointed. There are people who keep on soliciting jobs from one place to another. These applicants are called as unsolicited applicants. These types of workers apply on their own for their job. For this kind of recruitment workers have a tendency to shift from one factory to another. b) Advertisement It is an external source which has got an important place in recruitment procedure. The biggest advantage of advertisement is that it covers a wide area of market and scattered applicants can get information from advertisements. Medium used is Newspapers and Television. c) Employment Exchanges There are certain Employment exchanges which are run by government. Most of the government undertakings and concerns employ people through

such exchanges. Now-a-days recruitment in government agencies has become compulsory through employment exchange. d) Employment Agencies There are certain professional organizations which look towards recruitment and employment of people, i.e. these private agencies run by private individuals supply required manpower to needy concerns. e) Educational Institutions There are certain professional Institutions which serve as an external source for recruiting fresh graduates from these institutes. This kind of recruitment done through such educational institutions is called as Campus Recruitment. They have special recruitment cells which help in providing jobs to fresh candidates. f) Recommendations There are certain people who have experience in a particular area. They enjoy goodwill and a stand in the company. There are certain vacancies which are filled by recommendations of such people. The biggest drawback of this source is that the company has to rely totally on such people which can later on prove to be inefficient. g) Labour Contractors These are the specialist people who supply manpower to the Factory or Manufacturing plants. Through these contractors, workers are appointed on contract basis, i.e. for a particular time period. Under conditions when these contractors leave the organization, such people who are appointed have to also leave the concern. (Any 5 points x 2marks = 10 marks) b) Give 3 Similarities and 2 Differences between HRM and Personnel Management ( 5 marks) Similarities and Differences between HRM and Personnel Management SIMILARITIES DIFFERENCES

1. Personnel management strategies, like HRM strategies, flow from the business strategy. 2. Personnel management, like HRM, recognizes that line managers are responsible for managing people. The personnel function provides the necessary advice and support services to enable managers to carry out their responsibilities. 3. The values of personnel management and at least the soft version of HRM are identical with regard to respect for the individual, balancing organizational and individual needs, and developing people to achieve their maximum level of competence both for their own satisfaction and to facilitate the achievement of organizational objectives. 4. Both personnel management and HRM recognize that one of their most essential functions is that of matching people to requirements placing and developing the right people in and for the right jobs. 5. The same range of selection, competence analysis, performance management, training, management development and reward management techniques are used both in HRM and personnel management. 6. Personnel management, like the soft version of HRM, attaches importance to the processes of communication and participation within an employee relations system.

1. HRM places more emphasis on strategic fit and integration. 2. HRM is based on a management and business orientated philosophy. HRM attaches more importance to the management of culture and the achievement of commitment (mutuality). HRM places greater emphasis on the role of line managers as the implementers of HR policies. HRM is a holistic approach concerned with the total interests of the business the interests of the members of the organization are recognized but subordinated to those of the enterprise. HR specialists are expected to be business partners rather than personnel administrators. HRM treats employees as assets not costs.

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3marks- Similarities 2marks- Differences Total marks = 5

QUESTION 4: a) You have been employed as a Human Resource Manager in a large Marketing firm. The firm has been making losses due to low sales. Research has been done and revealed that the problem is that the sales reps are not properly compensated. Explain five points you can give as advice to the management on the importance of Compensation to the individual (10 marks) Importance of compensation to the individual

Employees see money inform of what it can buy. Better houses, better education for children, better vacations, clothes, cars etc Employees are motivated when reward is related to performance or contribution, and when it is perceived as fair and equitable. Employees tend to prefer pay based on their own performance and not team or group or company performance. In one study it shows that employees who prefer individualized reward were also the highest performing employees Research also shows that employees satisfaction with pay is correlated with organizational commitment and trust in managements, while it is inversely related to absenteeism and lateness, seeking alternative employment opportunities, terminating employment with the organization, pro-union voting, and incidents of theft, and corruption. Particular components of pay have different values to different people. For example research indicates that young people tend to focus predominantly on cash compensation. As people age, however, their preference tends to shift to benefits and workplace flexibility Research also indicated that pay satisfaction is a function of comparison of an individual inputoutcome ration with his or her perception about the input- outcome ratio referent to others.

b) (i) What is retirement? (1 mark) Retirement is the point where a person stops employment completely. A person may also semi-retire and keep some sort of retirement job, out of choice rather than necessity. This usually happens upon reaching a determined age, when physical conditions don't allow the person to work anymore (by illness or accident), or even for personal choice (usually in the presence of an adequate pension or personal savings). The retirement with a pension is considered a right of the worker in many societies, and hard ideological, social, cultural and political battles have been fought over whether this is a right. In many western countries this right is mentioned in national constitutions. (ii) Describe 2 psychological challenges faced by retirees PSYCHOLOGICAL CHALLENGES OF RETIREMENT 1. Fear for loss of identity Most retirees fear the possibility of loosing their association with the respective places of work i.e. Where do you work? Is the question most Kenyans, ask each other, when they first meet. When you stop working - who are you? 2. Failure Most individual feel that they have not accumulated enough money for retirement. Also, running out of money during retirement is generally viewed as an indication of failure. 3. Change - Change can be scary to most individuals. And retirement represents a big change in peoples lives due to the challenges highlighted above. (Any 2 points x 2 = 4 marks) QUESTION 5: a) As a Human Resource consultant you have been approached by a large manufacturing company that has been experiencing losses as a result of repairs due to damages within the organization. The CEO has asked you to advise him on what he can do to ensure that the Safety rules are effective. Explain six points. (12marks) Safety rules (4marks)

The company should publish employees handbook with formal rules and regulations that stipulates what employees can and cannot do in the workplace The most effective employees safety handbook should not be too general but should have carefully described steps to be taken on the job to ensure maximum safety For each step, potential dangers are identified to alert the worker In addition to specificity in the rules, it is also critical to get workers to read and comprehend safety handbook, some companies require that employees pass a test about safety related issues before they begin work. These rules must be enforced for safety to be effective - there are numerous cases where workers ignored a safety rule and are injured, or where supervisors order the workers to ignore safety rules Consistence enforcement of safety rules with disciplinary actions sends a message to employees that the company takes safety seriously and also reduces injuries (6 well explained points x 2= 12 marks) b) Define the following terms (i) Training (1mark (ii) Development (1mark) (iii) Selection (1 mark) Training is defined as any attempt to improve employees performance on a currently held job or one related to it. It is the methods used you give new or present employees the skills they need to perform their job. It may mean job orientation, showing employees how to use new equipment or showing a sales persons how to sell It is a systematic process of altering the behavior of employees in a direction that will achieve organizational goals. This usually means changes in specific knowledge, skills, attitudes or behavior. Training is related to present job skills and abilities

Development Development refers to learning opportunities designed to help employees grow. Such opportunities are not limited to improving employees performance on their current job. The key difference between training and development emanates from the focus. The focus on development is on the long term to help employees prepare for future work demand while training often focuses on the immediate period to help fit any current deficit in employees skills. Selection This means whittling down the application pool by using the screening tools such as test, assessment centers, background and reference checks (Each definition 1 mark x 3 = 3marks)