ASSIGNMENT 1 FRONT SHEET

Qualification BTEC Level 4 HND Diploma in Business

Unit number and title Unit 3: Human resource management

Submission date December 12, 2018 Date Received 1st submission

Re-submission Date Date Received 2nd submission

Student names & codes Final scores Signatures

1. Tran Cong Thuan – GBH18202 Thuan

Group number: 2. Nguyen Lan Tu – GBH18112 Tu

3. Ho Ngoc Minh Anh – GBH18023 Minh Anh

4. Tran Duy Hung – GBH18575 Hung

Class GBH0704 Assessor name Nguyen Duy Ly

Student declaration
I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism. I understand that making a false declaration
is a form of malpractice.

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Human Resource Management
AN INSIGHT INTO THE WORLD OF WORKFORCE

Team 6 | Human Resource Management | December 12th, 2018

 Introduction
Ever since the beginning of all entrepreneurial practices, figures in the world of business have
been seizing their ultimate power over their labor force, using such to achieve the desired
objectives including the expected profit. Throughout the history of economies, no single profit-
based organization has ever succeeded unless there is an in-depth involvement of Human
Resource Management (HR Management/ HRM). The following is the revelation of all essential
HR practices needed to be concerned when carrying out such a vital task of company operation.

An Insight into the World of

Workforce
I. HRM: Definition and Objectives
HRM, as defined in “Armstrong’s Handbook of
Human Resource Management Practices” 11th
edn, “is a strategic, integrated and coherent
approach to the employment, development
and well-being of the people working in
organizations” (Armstrong, 2009). Meanwhile,
Beer et al (1984) defined HRM as a set of
practice that “involves all management
decisions and action that affect the nature of
the relationship between the organization and
its employees – its human resources”.

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 Overall, HR practices aim to ensure
the success of an organization via its
people (organizational objective).
HRM’s purpose should be to
enhance and further improve the
organization’s efficiency and
capability to achieve its goals by
utilizing the nature available
resources it could manage to seize
control over. It could be observed
that HR management is not the end
in itself; it is just a means to help
businesses achieve their goals
(Armstrong, 2009).
Moreover, HRM is a measure to empower the employee, enable the labor force to realize and
develop their deepest potentials to the ultimate (individual objective). It is the responsibilities
of an HR manager to attract the right people, put them in the right positions and make the
most of their full potentials (Armstrong, 2014). Finally, all HR practices need to be a means to
warrant that legal, ethical and socio-environmental issues in the labor force are addressed
appropriately (social objective). Human Resource Management must ensure that the
organization formally balance against as well as satisfy employees’ requirements, making sure
that all is considered and satisfied if possible. HRM should also be involved the social ethic
issues and the social responsibilities (Barton, 2015).

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 II. HRM Practices: The Must-Knows

HRM practices consists various minor but of paramount importance in the operation and
management of the workforce. In general, there are five functions of HRM namely Resourcing,
Learning & Development, Performance Management and Employee Relations. Although each
function serves a distinguished purpose, they all come together as a whole system ensuring
the existence and productivity of the labor force in an organization, whether it is for-profit or
non-profit, in order to enhance the final results (as shown in the figure below). All of them
would be taken into deep consideration to unravel the true value behind them.

Figure 1: Impact of HRM on Organizational Performance (Armstrong, 2014)

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 1. Resourcing
a. Workforce planning

In terms of definition,
workforce planning is
basically “a process of
analyzing the current
workforce, determining
future workforce needs,
identifying the gap
between the workforce
you will have available
and your future needs,
and implementing
solutions so that an
organization can
accomplish its mission,
goals, and strategic plan”
(CIPD, 2018).
In other words, HR planning could be defined as “a core process of human resource management
that is shaped by the organizational strategy and ensures the right number of people with the
right skills, in the right place at the right time to deliver short- and long-term organizational
objectives” (Armstrong, 2014).

Several factors should be well taken into consideration in HR planning including internal and
external labor market. Whether the source of labor roots from internal or external labor market,
the manager must seriously supervise the current state of internal company environment to well
adjust the positions of employees. By removing unimportant tasks and well managing the present
labor force, there might be a way out for certain issues without making any change to the
company human resource. Moreover, there need be the necessary information about the new
task including its requirements of qualification and skills as well as the method of management
for the managers to make it easier to seek for the right people with right skills at the right place
and time.

With regards to internal labor market, the manager need to pay attention to two main traits:
The current condition of the internal labor market (organization, behavior and culture) and the
employee supply (current and projected employee numbers and skills). The formal trait needs
to be focus on employee engagement, job satisfaction, motivation of employees, organizational

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culture, the way that people are managed, attitude to minority groups and equality of
opportunity, commitment to organization and reasons for this. The later one sheds lights on the
number of labor with their skills and knowledge as well as behaviors in the organization, the
possible changes in the segmented group, the turnover rate in the group, etc. These traits could
be used to evaluate the ability, knowledge, skills and many other aspects of the current labor
force in the company for better judgement and job adjustments.

Referring to the external labor market, there are six factors in PESTEL analysis that directly affect
HR planning. Armstrong (2014) stated that “Scenario planning is an assessment of the
environmental changes that are likely to affect the organization so that a prediction can be made
of the possible situations that may have to be dealt with in the future. The scenario may list a
range of predictions so that different responses can be considered. The scenario is best based on
systematic environmental scanning, possibly using the PESTLE approach (an assessment of the
political, economic, social, legal, technological and economic factors that might affect the
organization).”

In detail, the external labor market is vastly affected by six factors: political, social, legal,
technological, environmental and economic.

First and foremost, to further analyze, political factors are created under the influences of the
political situation in a country as well as the overall political vision of the world. Political factors
affect the external labor market via government policies, taxation changes, foreign trade
regulations, political risk in foreign markets, changes in trade blocks, etc. Brexit – The “divorce”
of The UK and EU, for example, has changed the way the labor force is organized in both regions.
The people of Britain can no longer work in the EU without long-term visa and vice versa, EU
workers can only work in the UK with working visa. The situation has clearly had considerable
effects on the external labor market in the UK and EU as the boundaries between the two areas
are intensified (Hunt & Wheeler, 2018).

The second to be noted is social factors. These are the ones concerning every changes in the
society such as population changes, income distribution, lifestyle changes, consumerism or
changes in culture and fashion. For instance, the demographic change of Japan and Vietnam is
making clear impacts on the external labor market of the countries. While Japan has to face up
with the aching issue named aging population, Vietnam is enjoying the benefits of “the golden
population” with the majority of the people are in working age. The external employee supplies
of Japanese and Vietnamese companies are different as Vietnamese enterprises have more
options while Japan’s do not have many to choose from (CNN,2018).

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The next factors concern the legal problems. Those laws, regulations and policies of a country, a
region, an area or a socio-economic block like competition laws, health and safety laws,
employment laws, licensing laws, IPR laws and so on could either improve or hinder the
development of external labor market. To demonstrate, in the US, it is legal for the people to get
access to weapons such as guns and electric batons. However, the manufacturing of such can
only be carried out legally by the military-based organizations. Due to this reason, these
organizations could only get their human resource from the armed force (BBC, 2018).

Another factor to be analyzed relates to the evolution of high technology. The external labor
market is tremendously affected by the development of technology. Several cases to be noticed
of could be new discoveries and technology developments, ICT innovations, rates of
obsolescence, increased spending on R&D, etc. High technology developments have enable the
external labor force to be increasingly active when approaching the desired working positions. In
fact, both employers and employees all over the world are searching for one another via the high-
tech device and Internet-based foundation. More and more people are getting access to
occupations all over the world and vice versa, a vast majority of HR Managers are seeking for
human resource on an international scale.

The fifth factor influencing the external labor market is the nature environment. It consists of all
elements in the nature world such as climate, environmental protection regulations, energy
consumption, global warming, waste disposal and re-cycling. Human beings are part of the
Mother Nature. Because of this reason, every aspect of the nature would certainly have effects
on the human activities including the external labor market – An important part of HR
Management. A significant example of this is the bad reputation of Beijing companies in the eyes
of international employees partly triggered by air pollution rate of this capital city (Li Zheng,
2018). In fact, many employees have turned away from Beijing companies due to air pollution of
the city, hindering HR practices of such companies in many ways.

Last but not least, the external labor market is under great impacts of the economic factors. Such
factors concern issues like business cycles, interest rates, personal disposable income, exchange
rates, unemployment rates, GDP trends, etc. As a matter of fact, the increasingly high
unemployment rate in Spain and Greek in recent years have smoothened the way for many
companies to get employees of high quality and low payment requirement in these countries.
The high unemployment rate is one of the big reason behind brain drain in such countries but it
benefits largely the workforce of those organizations that make the most of the opportunity.

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 b. Recruitment
By definition, recruitment is “the process of finding and attracting the potential resources for
filling up the vacant position in the organization” (Chand, 2017). According to Edwin B. Flippo
(1980), “It is a process of searching for prospective employees and stimulating and encouraging
them to apply for jobs in an organization.”

Prior to recruitment, it is important to make a job analysis – “a process of analyzing, determining

the duties, responsibilities for reporting the information of a particular job” (Flippo, 1980). Job
analysis should involve the information of location, working condition, duties, hazards and so on
in order to authorize the contents of the job. It also helps in understanding which task is
important and how to perform it. Containing the final statement of job analysis is job
descriptions, which is the first and immediate product of the job analysis, it describes the
pertinent job fact (Flippo, 1980), and the personal requirements for the job are explained in the
job specification, this task focus on the human qualification, the specification of the candidate
(Kumar, 2000, p.134)

The content of recruitment advertising should include the basic information of employing
organization, job rules and duties, key points of the personnel specification, salary, benefit from
the job, status of employment and the instruction about how to apply. Another element to be
considered is the importance of providing all characteristics of the job and recruitment process
in recruitment advertising, scope of applicants and to announce the salary or not.

There are two ways to recruit; namely, internal and external recruitment.

Internal recruitment is a process whereby the employees are recruited from within the
organization. There are two aspects of recruitment for internal sources. The first is via
transferring. Employee hired by transferring the employee from this department to the other
one, it involves shifting of people from one job to another without any promotion in their position
or grade. The second one is by promotion, which is to promote the employee from one position
to another higher position with higher responsibilities, facilities, status and pay (Surbhi, 2015).

There are two methods of recruiting qualified candidates under internal recruitment, they are
job posting and employee referrals. A job posting is an invitation to all the employees within
the company to apply for the vacant position. Employee referral is recruiting new people based
on the reference of current employees (Cameron,2017).

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External recruitment is a recruiting process in which the candidates suited for the job is selected
from external sources (outside the organization). The methodology of external recruitment
consists of a variety of recruiting ways with their effectiveness namely company website (61%),
recruitment agencies (53%), employee referral scheme (35%), commercial job boards (32%),
specialist journal and trade press (29%), local newspaper advertisements (26%), professional
networks (22%), speculative applications (20%), search consultants (20%), job center plus (20%),
apprenticeship (17%), education laison (16%), secondments (10%), national newspaper
advertising (10%), social network (8%) and alumni (7%) (Armstrong, 2014).

a. The Benefits and Drawbacks of Internal and External Recruitment

Both internal and external recruitment have their own unique benefits and distinct drawbacks.

For internal recruitment, there are some possible advantages and disadvantages. On the bright
side, internal recruitment helps to boost the promotee’s morale. This employee is further
motivated as he or she get recognized and promoted to a higher position with more challenging
tasks and better salary. As a result, he or she would be more committed and devoted to the
organization, which increases his/her productivity and engagement. Furthermore, internal
recruitment could simplify the assessing process as this could be conducted basing on the basis
of prior working performance. This provides a close insight into the true knowledge, ability and
skills of the candidates, making it less difficult and complicated to assess them. On the other
hand, internal recruitment may pose some threats. One major harm is that it could easily lead
to a “monotonous” workforce as there is no new factor. Consequently, the company may lack
new ideas and innovations; therefore, become “old-fashioned” and unable to keep up with the
forever-changing market. Another problem of inbreed recruitment is that this could well be the
cause of infighting in the organization. For promotion, employees may see each other as a threat
and go against one another for an up-lift in working position. Infighting leads to the collapse of
mutual relationships and cooperation among members of staff and reduce productivity as a
consequence (Armstrong, 2014).

In terms of external recruitment, some benefits and drawbacks could be noticed. On the one
hand, external recruitment is rather beneficial. One advantage is that new employees are more
than likely to have fewer internal political issues in the firm. This is undoubtedly true because
new hires have few relationships with those in the organization and has not set any authority or
workplace political power over any part of the organization. Regular external recruitment along
with getting rid of unproductive staff frequently would reduce the occurrence of workplace
political issues, making the working environment more comfortable. What is more, the new hires
could bring about new observation about the industry or more innovative expertise. New
employees from other firms could undeniably bring the new technology, concepts, ideas and so
on to their new firm and benefit it with their past experience. On the other hand, some negative

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effects of external recruitment could hinder the company. To start with, external recruitment
may take more time, money and efforts than internal one to find the right people at the right
time and place for the job. Unlike inbreed recruitment whose employee data is available in
company archive, external recruitment requires more information, research and observation to
evaluate the candidates. Another threat is external recruitment may cause morale issue for the
unselected internal candidates. The new employees may have a hard time trying to integrate into
the new working environment when the old ones have morale problems towards them. This
could lead to reduction in productivity as new employees cannot fit into the new working
environment and the old do not have the motivation to commit and contribute more to the firm
(Armstrong, 2014).

b. Selection
Selection is a part of resourcing aiming at choosing the right people with qualifications needed
to fit in a position in an organization (Armstrong, 2009)

Selection has a variety of stages. The first step is applicant job interest. This should provide the
candidate a correct broad view of the job, understanding the positives and negatives of the job.
If the candidate is given the wrong information, he/she may consider suing the company. The
second step is pre-employment screening. This step aims at removing all the candidates that
could not meet the minimum qualification. Usually, pre-employment screening is conducted on
technology-based methods which is called electronic assessment screening using soft-wares to
scan through the applications and resumé and wipe out the unqualified ones. The third step is
the application form. The form is used to record the desire of the applicants for the position,
allow interviewer to get access to applicant’s profile, provide a basic employee record for those
getting hired and for research to measure the effectiveness of selection. The next step is test and
interview. In this stage, the candidates will go through either a test or an interview or both. For
test, the applicants may experience ability (including work sample, situational judgement and
cognitive ability and so on test), personality (including Minnesota Multiphasic Personality
Inventory and Myers-Briggs test) or honesty/integrity test. As for interview, there are several
types of interview namely structured interview (including biographical, behavioral, competency
and situational interview) and less-structured interview (including unstructured, semi-
structured, stress and non-directive interview). The fifth step is background investigation which
provides information about the most basic and fundamental parts of a human life such as past
job record, credit history, educational and certification records, drugs test, etc. The sixth stage is
additional interview (optional, only occur when the employers need more information for
selection). The following step is conditional job offer. This is a formal job offer that depends on
employee’s passing certain tests or conditions. The eighth step is medical exam/drug test whose
purpose is to determine whether the candidate is physically or mentally capable of working in

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the organization. The final step is job placement. The job offer should be made on the phone
first, then a formal letter would be sent to the selected one. Meanwhile, a legal counsel would
review the offer document with its terms and conditions being clearly identified. The chosen one
would confirm the offer document by signing it and return it back to the employer who will place
the signed acceptance in applicant’s personel files (Armstrong 2014).

c. The Benefits and Drawbacks of Test and Interview

Test and interview are the key stages in selection process. The benefits and drawbacks of the
two would be discussed in detail in the following text.

In terms of test, there are several advantages and disadvantages. It could be noticed that test has
some following good points. First, tests provide a basis for finding out the suitability of
candidates for various jobs, it helps predict job performance for more complex positions. For a
test, there are many people could take at the same time on the same assessment. Therefore, a
test could sort out the fitted ones for the job as it bases on the core knowledge and professionals
to measure the ability of the candidates in the most time-saving way. Second, tests provide a
uniform basis for comparing the performance of candidates, same tests are given to the
candidates and their score will help selectors easier to see their performance. As being
demonstrated, many people could take a test at the same time. This makes it less difficult for
employer to spot out the potential candidates. However, there are some disadvantages of
testing. To begin with, the inferences drawn from the tests may not be correct in certain cases,
the skill and ability of a candidate may not be judged correctly by the tests. A test can usually
measure the knowledge only without any assessment of skills and ability as these requires face-
to-face communication and real-case reactions to measure. Moreover, the tests may not be
properly used by the employees, those persons who are conducting these tests may be biased
towards certain persons, it may also give unreliable results if used by incompetent persons. This
is the infamous situations in many organizations when the employers/assessors’ relative or
closed ones get to know the test and/or its answer beforehand, making the test result no longer
precise (Armstrong, 2014).

Referring to interview, it also has some major strengths and weaknesses. On the one hand,
interviewing helps to enhance the employee – employer/employee - employee relationships as
they get to know one another in person. When having face-to-face communication, these people
get to know each other more, “breaking the ice” and making it easier to cooperate in the future.
Furthermore, an interview is helpful in collecting a lot of information about the candidate which
the CV cannot have such as nature, attitude, personality, opinion, feelings, etc, which can never
be gained only through tests or via CV. Interviewing is face-to-face communication that unravels

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nearly all characteristics of the candidates, making the assessment more precise and helpful. On
the other hand, interviewing could be harmful. First, interviewing cannot be carried out with the
participations of many candidates at a time. This is because it may take up a great amount of
efforts and time by interviewers to conduct a successful interview. Second, during interviews,
several problems could possibly occur such as snap judgements, negative emphasis, biases and
stereotyping and the “halo” effect. The reason for this is interviewers – as human beings - cannot
be precise all the times like machines and computers (Armstrong, 2014)

2. Performance Management
Performance management, according to Aguinis (2005), is “a continuous process of identifying,
measuring and developing performance in organizations by linking each individual’s performance
and objectives to the organization’s overall mission and goals”.

In a business, it is essential for the employers to monitor their employees to achieve the strongest
productivity and increase the working motivation. The human resource management
department needs to practice the performance management of the staffs, which has 6 key steps:
prerequisites, performance planning, performance execution, performance assessment,
performance review, performance renewal and contracting (Aguinis, 2005).

The first step of this management is that every employee must have the knowledge of the
organization’s mission and strategic goals and knowledge of the job in question called the
prerequisites. The supervisor needs to prove they are well-trained by having the strategic plan
to know the purpose for the organization’s existence, company goals, and so on, analyzing their
job key components (activities, tasks, products, services …) equipping knowledge, skills, abilities
(KSAs) to do the job.

The second step is to have a plan for performance. This plan should include both results and
behaviors as well as the development plan (Aguinis, 2005). The most effective way to plan this is
that the supervisor and the employees should meet and discuss in the first place to guarantee
and ensure about what things should be executed. Result is the outcome that employee must
accomplish. It should include the key accountabilities that are processed from the job description,
the specific objectives in which are written in the plan and followed by the employee, and the
performance standards that are the measurement to measure how well is the employee doing
with those objectives. Behaviors mean how the job is done which have an important element of
the plan. A good behavior must include the competencies which are usually judged base on the
KSAs and determinedly rated on how results should be finished (Aguinis, 2005). Besides,
development plan needs to have area for improvements as well as goals. This plan normally

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mentions outcomes and behaviors and is united by the employees and the supervisor (Aguinis,
2005).

The third step is the performance execution that includes both responsibilities of the staffs and
the supervisor. The employees need to commit to goal achievement, permanently ask for
feedback and coaching, communicate with the supervisor, collect and share performance data,
and last prepare for the performance reviews. In the same time, the manager should also give a
hand by observing and documenting the employees, updating, giving feedbacks, sharing
resources, and adding motivations for the employees (Aguinis, 2005).

The fourth step is the performance assessment which includes subjective assessment such as
the self- evaluation, objective assessment like manager judgement, or assessment from peers,
customers. The subjective evaluation is based on facts, results of the employee such as the sales
figures, penalties, achievement, which gives employees a chance to look back what they have
not and have achieved, and incline the satisfaction and commitment about the performance
management system (Aguinis, 2005). The objective assessment includes the relative and absolute
judgements, multi-source feedback. The relative assessment is the performance similitude
between an employee and other employees with a same work. By applying this measurement, it
can clearly rank the top and under performances. However, that rank is just only based on 1 side
(the result), which leads to the subjectivity, unsatisfied, jealousy between employees, things that
will affect to the productivity of the company (Andrews, Richard & George, 2006). Meanwhile,
the absolute assessment compares employees by the specified performance standards. This
evaluation is accepted by the employees more than the relative judgement because they are
evaluated not only by result but maybe by behavior checklist, graphic rating scales, which will
give them more chance to prove their abilities for the job (Andrews, Richard & George, 2006).
Nevertheless, this evaluation is judged on the supervisor’s observation and employee’s process,
so it’s more time-consuming than other assessments and higher risk of indulgence because some
employees may have a good relationship with the supervisor, but some may not. The last
measurement is the multi-source feedbacks, which can be the 180 degree feedback that comes
from the manager, colleagues, or the 360 degree feedback which is mostly from everybody that
is simultaneously involved with that employee and their works, such as the manager,
subordinates, peers, customers (Andrews, Richard & George, 2006). The evaluation from others
especially from the supervisor helps employees to improve their listening and taking in skills so
that they can have a wider view for their performance. It also a proof that make the performance
review to proceed easier and clearer (Aguinis, 2005).

Perform review is the fifth step of the performance management. This is a meeting of the
manager and the employee to revise their evaluations (Aguinis, 2005). The main parts of this

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review session are talk about the past which is the behaviors and results, the present to exchange
any compensation has been received, and the future which is about the development plans and
new goals for the employees to work on to prepare for the further review sessions.

The last step is the performance renewal and re-contracting. This step is quite similar to
performance planning except it uses shrewdness, information from previous stages and reboots
the performance management cycle (Aguinis, 2005). To specify, the performance management
cycle starts with prerequisites and ends with performance renewal and re-contracting. In fact,
this process will never stop restarting since the market, the demands of consumers, the
competitors, the trend are changing every day, which requires the supervisor and the employees
to have a meeting for prerequisites once again, create another performance planning and the
same thing for other steps (Smither, 2009). In addition, beside rewarding for the good
performance, the enterprise should also have a strict policy to handle with the poor performance
such as regularly give feedbacks for the employee, warning, or even fire if the performance is not
getting better.

The performance management has huge impacts on the performance of the staffs as well as the
organization. First, it increases the motivation in performance by constantly receiving feedbacks
from the supervisor either it’s a compliment or a comment. In fact, there are many studies shows
that compliments decrease people motivation, while feedbacks or judgements encourage people
to work harder (Thu, 2018). Second, the more serious the supervisor take, the more responsible
and experienced they gain. To specific, a supervisor can’t do their jobs properly if they just
supervise the employees to cover their tasks such as just check on employee when report
deadline is near, or when the boss asks them to do. A good supervisor should keep an eye on
their subordinators every day to have a clear and objective feedbacks and to create a healthy
pressure for the employees that increases their productivity. Moreover, working with numerous
of employees every day gains more experience, skill, responsibility for the supervisors because
they know their job duties, know how to work with variety of characteristics, know how
important of their judgement, conclusion can effect someone’s career. Third, the performance
management significantly improves the communication in the company, especially the
relationship between subordinates and superiors. In fact, in most enterprise, employees normally
hate their boss and the boss usually tend to despise the abilities and performances of their
subordinates (Hung, 2018). Since the supervisor and the employees need to communicate, share,
give feedbacks regularly, that unsatisfied relationship is left behind or even forgotten because
they all know the job performance is prioritized. Last, this system helps the organization’s
rewards or the penalties to be fair and intelligible, which in the same time encourage the
competitiveness of employees that will maximize the productivity of them.

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 3. Learning and Development
a. Definition
Learning and Development (L&D) could be defined as “the process of ensuring that the
organization has the knowledgeable, skilled and engaged workforce it needs” (Armstrong, 2014).
Basically, it is the process of enhancing the knowledge, skills and abilities of the company’s
employees via certain practices.

b. Types of L&D
In terms of types of L&D, there are a number of ideas to be taken under analysis including
Contents, Methods, Locations, and Sources (Locations and Sources of L&D would be included in
Methods).

b.1 Content of L&D

The contents of L&D focuses on four small sections namely learning, development, training and
education. To be specific, learning is a process in which a person could gain more knowledge,
skills and techniques as well as develop more in-depth abilities in order to better his or her
performance in a particular occupation. In greater detail, development and training are different
from learning. Development could be observed as “the growth or realization of a person’s ability
and potential through the provision of learning and educational experiences” while training is
“the systematic application of formal processes to impart knowledge and help people to acquire
the skills necessary for them to perform their jobs satisfactorily”. Finally, education could be
understood as the acquirement of knowledge throughout a lifetime (Armstrong, 2014).

L&D concentrates mostly on development and training as these are the affordable and rather
practical sections of enriching the labor force. While learning and education could take years and
even a human lifetime to be well accomplished, development and training only take certain
periods of time to take effects.

b.2 Methods of L&D

There are four methods of L&D which are off-job method, learning on the job (on-job learning),
e-learning and blended learning.

First and foremost, off-job method is a training measure using the courses by external
professionals to train the employees. The process may take up half a day or weeks in length,
providing the employees with the knowledge and skills to cope with particular issues in their job.
This training method takes place in various places both inside and outside the companies
depending on the professionals, training requirements and the length of the course. The source
of off-job method is external meaning that the knowledge, ability and skills (KAS) are obtained
with the help professionals and experts outside the organization.

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Second, learning on the job is the training process that requires employees to develop certain
KAS within the workplace. It is a hand-on training method that involves four small training
measures: natural training and self – development, manager coaching and other internal and
external coaching, mentoring, peer relationships, self – development groups. This usually takes
place inside the company, under the surveillance of managers. The source of learning on the job
could be both internal and external.

The third L&D method is e-learning. E-learning is a type of training that include the involvement
of hi-tech device and other Internet-based programs. E-learning occurs online with the source
could be either internal or external. Employees could be trained by co-workers, managers or
experts via websites or social networks or app-based courses.

The final method is blended learning. E-learning can be used in combination with other methods
of L&D. This combination is “blended learning” (combination of e-learning and face-to-face
experiences). Blended-learning takes place both online (using the Internet and apps) or offline
(at the workplace or learning environment outside the company) with either internal or external
source or both.

c. Four Main Steps of Training Evaluation (Kick Patrick Model)

The main steps of training
evaluation are Reaction,
Learning, Behavior and
Results.

The first step is Reaction,

which is to acknowledge the
participant’s reactions to
have an overall
understanding about the
training program and an
insight into material quality,
educator and so on.

The second step is Learning.

This step aims at measuring the amount of information absorbed within the time lapse of the
training by the trainees and connect it to the program or the learning objectives.

The following is Behavior. In this step, the influence of the training on participants’ behaviors as
well as the application of such are measured.

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The final step is Results in which measurements and analysis of the training’s effectiveness at
business level would be carried out. This must be in parallel with the individual or program.

d. Benefits of L&D on Employers and Employees

The advantages of L&D when it comes to employers and employees are numerous. The following
is the basic and major benefits of L&D. L&D helps to improve the efficiency of individual, group
and company. This provides higher productivity for all employees in the company; therefore,
enhances the final results and profit of the whole business as well as make it less complicated for
managers to organize the workplace and tasks to be finished. Moreover, L&D could help engage
the high-quality employees and increase the commitment of the workers in general as they are
given more daunting tasks to gain more knowledge and skills. Finally, L&D manages to cope with
the changes in the organizations as well as in the market to ensure the ability of the workforce
to adapt to the alternations. This gives the company better chance of survival during periods of
crisis. One striking example of excellent L&D is the designing team of ZARA. All of them are
wonderful designers who learn from one another. Each member of the team serves as a teacher
to show the new knowledge to one another. For those needing coaching, there are always
someone there to lend a helpful hand. As a result, they all improve their skills and their
productivity is enhanced drastically, which partly leads to the success of ZARA in the ever-
changing fashion industry.

4. Reward Management
Reward Management is concerned with the techniques, approaches and processes required to
guarantee that the value of individuals and the commitment they make to accomplishing
organizational, departmental and team objectives is recognized and rewarded (Armstrong,
2009). The objective of reward management is to motivate employees so that employers can
hold them in trusts of meeting the targets and goals of the company. So, in basic terms, rewards
management is the concept of giving a motivating force so that the employees need to do their
best work and remain with the company. There are two main types of reward: Financial and non-
financial reward.

a. Financial reward: Financial rewards are cash prizes utilized to encourage employees to
meet specific objectives within a commerce or organization (McQuerrey, 2017). There are
four ways to reward the employees with financial reward: Pay Determination, Base Pay
Management, Contingent Pay and Employees Benefits and Pension.

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Pay Determination: Pay determination is the management's decision to pay the employee
monthly salaries as set by the company or the state. This amount is divided equally to the
employees depending on the position or work they do at the company, It can also contain some
bonuses for the employees who work harder than the others. This monthly salary is very fair, so
staff will feel satisfied because they feel that their work has paid off well, so they will stick with
the work and work harder.

Base Pay Management: Base pay is the starting rate of recompense an employee gets in trade
for services. It prohibits additional protuberance whole stipend such as rewards or additional
time pay, as well as benefits and raises. An employee's base pay can be communicated as an
hourly rate or as a week after week, month to month or yearly compensation, not include
bonuses or overtime payments.

Contingent Pay: Contingency pay, also known as bonuses, is a payment used to pay employees
who have made outstanding contributions to the company over a period of work, either in terms
of productivity or service. Contingent Pay can divide into 2 kinds: Individual incentives and group
incentives. Individual incentives, which is the kind of offer will be given to the employees if they
have dedicated and dedicated efforts help increase the company's revenue. The employer can
give them bonuses, merit pay or commission. Group incentives are used to reward a group or
organization for their achievements. The performance of an individual in the group also
influences the collective results. About the bonuses, the company can pay for them in many ways
like sharing the profits or goals with that group.

Employees benefits and Pension: Employee benefits (also known as fringe benefits, perquisites,
or perks) is a type of non-wage compensation that is provided directly to the employees’ income
besides their monthly salary. Pension is an amount of money/ a fund that is added during
employee’s years of working and devoting to the organization, from which a certain sum of
money is drawn to support the employee in his/her years of retirement. All of these extra
payments besides monthly salary aim at increasing employee’s job satisfaction; thereby, ensure
their commitment, loyalty and engagement for the company.

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 b. Non-financial rewards concentrate on the employee’s demands for recognition,
accomplishment, individual’s development (Saira Yousaf, Madiha Latif, Sumaira Aslam,
Anam Saddiqui, 2014). It includes recognition, job design, opportunity to develop and
work environment.

Recognition is a reward that is meaningful to employee’s moral and motivation. The purpose of
this reward is to make them feel their contributions are worthy and helpful for the company’s
success. There are a lot of ways to do recognize such as opening a monthly honor ceremony,
hanging pictures of best employees on the lobby and giving certification that is helpful for
curriculum vitae (CV). The business should do these activities regularly to motivate employee’s
performance and engagement.

Job design: The process of categories works, missions and responsibilities (Saira Yousaf, Madiha
Latif, Sumaira Aslam, Anam Saddiqui, 2014). The purpose of designing job is to give the right job
for the right person so the company will reach the highest productivity. It also encourages the
employees to work harder since it is their specialties. There are variety of ways to boost up
employee’s performance such as a comfortable schedule, job sharing and telecommuting (Saira
Yousaf, Madiha Latif, Sumaira Aslam, Anam Saddiqui, 2014). For example, a comfortable
schedule can allow them to organize their time at work and do their best during working out.

Opportunity to develop is very important for employee performance because if they have
chance to learn new things like new methods, technologies, skills, they will see it valuable and
engaging with their jobs. The more skills they take in, the more chances they will be promoted.
Companies favor at giving opportunities for their employees because they want to get the best
result with the shortest time (Saira Yousaf, Madiha Latif, Sumaira Aslam, Anam Saddiqui, 2014).

Work environment: A good working environment is where it can boost the employee’s
motivation and commitment. The better it is, the better work employee can give. If the working
condition doesn’t meet their expectation, for example lack of air conditionals in the summer or
soundproof system, they cannot concentrate one hundred percent on their works, which lead to
poor productivity. Relationship with co-workers, equality in promotion, responsibility, liberty are
also the elements of work environment (Saira Yousaf, Madiha Latif, Sumaira Aslam, Anam
Saddiqui, 2014). For instance, if 2 co-workers in the same position know that have the same
chance to be promoted without the favorites of the managers or boss involved, they will compete
to each other equally to achieve it.

The employees also get numerous of benefits in non-financial reward such as social insurance,
private group insurance, retirement, family-friendly policies, paid time-off and other benefits.
Social security includes old-age insurance, unemployment insurance, disability insurance,

Page 18
hospital insurance and health insurance and so on. The full benefits begin at age 65 of the
employee and both employers and employees are assessed payroll tax and will have tax penalty
if their earnings affect retirement decisions (Julia, 2018). Private group insurance includes
medical insurance and disability insurance that is not legally required but offered by employer.
The medical insurance is the most important benefit that mostly full-time employees get this
benefit (Needham, 2018). Meanwhile, the disability insurance includes short-term that takes 60%
to 70% base wage and long-term plans which takes 40% to 60% base wage (Marquand, 2017).
Retirement plan is the plan of setting retirement income targets and the essential ways to reach
those targets. Its steps are to identify sources of income, estimate expenses, work on a savings
program and manage assets (Julia, 2017).The family-friendly policies is every important
especially for the employee that has married, has children, or has a big family. The company’s
main policies are the adoption benefits which are the finance offers, child-care assistant which is
the day care that the company offers for the children’s employees, and elder care benefit such
as flexible schedule, care subsidy (Jamie, 2016). The time-off benefits such as vacation and
holiday pay, family and sick leave, meal breaks, are mainly concerned by employees because they
still earning even though they are not working.

The impact of reward management: Employee expects to get paid for their skills and abilities
and of course no one wants to get an unworthy payment. For financial rewards like salary and
bonus, the employee will feel motivated and belonged to the company. They would feel they are
the best fitted for the job assigned and only they can complete it with the greatest result (Saira.Y,
Madiha.L, Sumaira.A Anam.S, 2014). If they work hard enough, they should get pay by their
contributions. For non- financial reward, it is even more effective because sometimes there are
some achievements that reward by money is not satisfying enough that must reward the
employees by compliments, admiration, and appreciation that effect their feeling, and mentality.
To specify, the recognition makes the employees satisfied and proud of their efforts, the job
design supports employees to achieve their goals and commitment for the organization, the
opportunities to develop create an ideal environment for the employees to maximize their
potentials and skills for their career, and the work environment is accommodation that makes
the best effort to reduce employee’s stress and pressure. In summary, reward management is an
important HRM practices that significantly contributes to the productivity of the employee’s and
organization’s performances (Saira.Y, Madiha.L, Sumaira.A Anam.S, 2014).

Page 19
 4. Employee Relations
a. Definition and key elements
Employee relations (ER) “concerns matters of overarching employment or collective workforce
policy, particularly where it concerns broad matters of bargaining (the traditional focus of
industrial relations), the governance of the employment relationship…and arrangements for the
distillation and expression of the collective voice of employees…[the] approach in this arena is
profoundly affected by the prevailing national system of employee relations, and in particular by
the social regulation of work by unions and national and regional governments” (Brewster et al,
2011; p.95)

There are three main factors in ER: State, Capital and Labor. State could be observed as the
government (including national, regional and local government), judiciary (laws, employment
tribunals), international empowered organizations (such as European Union) and formal bodies
(such as UK Advisory, Conciliation and Arbitration Service – ACAS). Capital refers to employers,
company owners, managers and so on, bodies representing specific trades/sectors and
umbrella bodies representing managers (such as the Institute of Directors, Confederation of
British Industry in the UK). Labor could be understood as individual employee, employee
representative, trade union, trade union bodies (Armstrong, 2014).

The capital is responsible for introducing and supervising the laws and policies that require the
capital to assure the rights, benefits and responsibilities of the labor. The capital has the ability
to have its own policies (without going against the state’s laws) on the labor and is responsible
to assure the rights of the labor. The labor’s responsibility is to adhere to the laws of the state
and policies by the capital. It also has the power to adjust or even completely deny the unsuitable
laws and policies by the state and the capital. The labor could serve as advisors when building up
laws and policies for the capital and the state (Armstrong, 2009).

b. Employee Voice
Employee voice was defined by Boxall and Purcell (2003) as “a whole variety of processes and
structures which enable, and at times empower, employees, directly and indirectly, to contribute
to decision making in the firm”

There are five levels of employee voice. The first is information. In this level, employees are given
the necessary information about the decisions that are already made via managers. The second
level is communication in which the employees have the managers explain about the already-
made decisions. The next is consultation. Employees join in a dialogue with managers about the
decisions. The fourth level is co-determination. For this level, the managers and employees

Page 20
would be in a negotiation and serious consultation in order to reach the final decision prior to
any decision being made. The last level is control. This is the highest level of employee voice. In
control level, employees could join the managers in decision-making and/or worker control,
which could be found in industrial democracy (Wilton, 2011).

c. The Trade Union

By definition, trade unions are “enduring collective organizations of employees with the broad
aim of ensuring that the interests of employees and respected and furthered” (Brewster et al,
2011; p.96).

The Trade Union has several main roles in organizational performance. First and foremost, the
Trade Union is representative of the labor in general. It is the Trade Union’s responsibility to
stand by the employees and protect their legal rights from any possible harm. The Trade Union
is supposed to be a channel through which all unfairness and grievances of the employees are
thoroughly expressed and addressed. In many cases, the Trade Union is the organization that
helps employees to negotiate the salary and working conditions, the most basic and important
aspects a job. Second, the Trade Union should act as a bridge between employers and employees,
helping to promote mutual understanding through negotiation and communication as well as
reduce the possible conflict. The Trade Union makes the voice of employees heard and enhance
the employer-employee relationship. Once the conflicts are reduced in companies, the
productivity of employees would rise, leading to more effective company operation and more
profit.

d. Benefits of ER in HRM decision-making

According to Armstrong (2014), employee relations benefits HRM decision-making in several
ways. First of all, ER provides the employees with genuine channels and chances to express their
opinion and influence over the matters and decisions that directly affect them. Once the
employees got to negotiate with their employers in good faith, it is much easier for the two
parties to reach the deal – an agreement that benefit them both. This is the basic and
fundamental condition for a good and long lasting employer-employee relationship. Second, ER
helps employers have a wider range of information input with the involvement of the employees
to make more precise decisions. Having more input of information helps them to realize that the
interests of managers and employees do not have to coincide as well as have more knowledge
and information about the matters. Therefore, the policies could be made by balancing against
both sides of interests to create a supportive, effective and responsive working environment.

Page 21
 5. Employee Legislation
a. Employer obligations
Based on Article 6 of the Labor Law 2012, first, employer obligation is to implement labor
contracts, collective labor agreements and other agreements with laborers, to respect the honor
and dignity of laborers, pay the basic salary, bonus, commission as agreed. For example, the
employer has agreed with the employee to pay the salary on the 20th of the month, the employer
must pay the salary on the 20th and full salary agreement. Second, employer need to implement
and cooperate with relevant agencies or organizations in the assurance of occupational safety
and hygiene at the workplace within their responsibility to employees and relevant persons, and
pay insurance premiums for employees. For example, in the construction industry, the employer
must provide safety equipment such as helmets, shoes, safety goggles, etc. Third is to observe
other provisions of the labor legislation, the legislation on social insurance and the law on health
insurance. For example, employer must pay and preserving social insurance books of laborers
during the laborers' time. Four, employer must not treat employee in an arbitrary or vindictive
manner, for example, because of personal enmity, employer treat unfairly to the employee,
create less work opportunities for that employee than others (Luat Duong Gia, 2018).

b. Employee obligations:
Based on Article 5 of the Labor Law 2012, first, employee have to pursuant to the rules and
principles of occupational safety and health. For instance, employee must carry out the work in
a manner consistent with safety rules and regulations, ensuring proper conditions of the machine
equipment, tools, equipment and order in the workplace, immediately notify the supervisor of
the accident or other dangers that may occur to human life or health. Second, employee have to
compliance with labor regulations such as working time in the agency. For example, employee
must work on time, enough hours in the day as prescribed. Third, employee need to pay attention
to the interests and protection of property of the agency, confidentiality of information disclosed
may cause damage to the employer, comply with confidentiality as set out in separate
regulations. For example, employees may not disclose inside company information to outsiders.
Four, employees must be honest, enthusiastic about the job. For example, employees must
always try to do the job well, without delaying the work process of the company (Luạt Duong Gia,
2018).

Page 22
 c. Main Employment Legislation Content
Employment law is an area of law that deals with the legal rights and duties of employers and
employees (Collin, 2018). There are 5 essential employment laws which are discrimination law,
equal pay law, health and safety law, family-friendly employment law, national minimum wage.

c.1 Discrimination Law

Discrimination law protects characteristics about sex, belief, age, disability, pregnancy, marital
status, transsexuality. In the sex discrimination law, there are four main discriminations: direct
discrimination, indirect discrimination, harassment, victimization.

Based on Article 26 of the Constitution in 2013, male and female citizens are equal in all aspects
and the state has a policy to guarantee rights and opportunities for gender equality. State, society
and family create conditions for women to develop comprehensively and promote their role in
society, discrimination against gender is strictly prohibited (LuatVietnam, 2015).

In fact, both men and woman are aware of the fact that men are being treated more privileged
than women. In particular, men are more likely to be 'promoted', receive higher priority in the
hiring process, have higher pay increases, and are more likely to be evaluated for their ability to
work better. Research show that 63% employees said their direct boss is now male, 25% of female
workers said they were victims of discrimination (Job Street, 2017).

c.2 Equal Pay Law

Basing on Article 26 of the Constitution of the Socialist Republic of Vietnam 2013, The Vietnamese
Constitution guarantees the right to equal pay, regardless of gender, for male and female
workers doing the same job. The Labor Code of Viet Nam in 2012 provides the principle of equal
pay for equal work and requires the employer to pay equal to all workers regardless of gender
(LuatVietnam, 2015).

In fact, 61% of female workers reported that they were underpaid than their male counterparts
(same job positions), and 67% of male workers said they were underpaid than female workers
(Job Street, 2017).

c.3 Health and Safety Law

According to the Law on Occupational Safety and Health (OSH), Article 133, 137, 138 of the Labor
Code of Viet Nam in 2012, employers have the duty to formulate, implement and actively
coordinate with agencies and organizations to ensuring occupational safety and hygiene of
workplace within the scope of their responsibility to the employee and the persons concerned,
insurance for occupational accidents and diseases for laborers (LuatVietnam, 2015).

Page 23
In term of normal working hours, no more than 08 hours in one day and 48 hours in one week,
the number of hours of overtime shall not exceed 50% of normal working hours in one day, no
more than 30 hours in a month (Clause 2, Article 106).

c.4 Family-friendly Employment Law

Female laborers give birth to maternity leave before and after childbirth is 06 months. Employees
who are entitled to maternity benefits under Articles 32, 37 of the Law on Social Insurance of
Viet Nam in 2012, the monthly allowance is equal to 100% of the average monthly salary paid for
social insurance contribution of 6 months before the maternity leave, the postpartum regimen is
5-10 days during the first 30 working days, the one-day post-pregnancy benefit and health
allowance will be set at 30% of base salary (Luat Vietnam, 2015).

c.5 National minimum wage

According to Decree 72/2018 / ND-CP, the minimum wage in 2019 with area 1 (Vung Tau, Thu
Dau Mot, …) will be 4.18 million VND, up 200,000 VND; area 2 (Lao Cai, Nam Dinh, Bac Ninh, …)
is 3.71 million VND, up 180,000 VND; area 3 (Phu Tho, Sa Pa, …) is 3.25 million VND, up 160,000
VND and area 4 (Vinh Hung, An Bien, …) increased 160,000 to 2.92 million VND (Luat Vietnam,
2015).

6. HRM’s Effectiveness on Raising Organization’s Profit and

Productivity

Figure 2: Impact of HRM on Organizational Performance (Paauwe, 2004)

According to Pauuwe (2004), business strategy is used to map the direction, outline a relatively
long-time trajectory, is a tool to forecast the future steps of the business in the change of the
environment. But in order to have a good business plan, the owners of companies must also take

Page 24
into account the human resources strategies that are most appropriate and effective. After that,
the owner of the company can base on business strategies to be able to design appropriate
personnel strategies for the company to achieve the company’s goal. But in order to have a good
Human Resource strategy, the five elements of HRM practice need to work together closely. First
is the Resourcing, which will ensure the quality and quantity of the company's human resources
based on the employees' KSAs to put them in the right place. This will motivate the employees
to work harder because they are placed in the position of their ability and encourage the
engagement, commitment of them to the company. Then it will also increase the productivity
and achieve the company's goals. But to resourcing well, can’t not mention L&D, it will ensure
that the organization has the knowledgeable, skilled and engaged workforce it needs. If the
employees are provided with higher knowledge about the job and the expertise they are doing,
their motivation for work will be higher because they feel they are working in a development
environment. So, they will try to learn, so that they will advance their skills, along with the quality
and productivity of the company will also increase. Besides, they will also have more
commitment with the job. Last but not least, is the Performance Management, which is a
method of making a work environment or setting in which individuals are enabled to perform to
the finest of their abilities (Heathfield, 2018). Companies can set goals or plans for the employees
to see how they can achieve that, or the employer can have interaction with the employees
through feedback or supporting them with the work, this can increase the motivation and
engagement of the employees to the work because employer is support and care for the
employees, the employees feel safer and not alone. Moreover, the employer can base on the
performance of the employees to have suitable evaluation through some performance
assessment methods, the employees will feel more equitable and will be more attached to the
job because they are working in an equal environment. Next is the reward management, which
is used to recognize and create reward policies for the good performances of the employees that
based on the assessments in the performance management. It could be financial or non-financial
rewards, but it must show the recognition and make the employee satisfy and happy, which will
generate motivation to work harder of the employee. Reward management makes the employee
feel that their works are recognized, respected, their appearance in the company is important,
thus it will encourage them to engage and commit more to the company. The last practice is
employee relations that is a part of human resource strategy that manage the relationship
between employers and employees (Rea, 2018). The reward management is based on employee
relations because the employee relations focus on everything that affect employee’s rights such
as pay and benefits, safe working conditions, legal, psychological aspects, recruitment, hiring,
training, discipline, promotion, bonus salary, health, entertainment, accommodation, working
hours, vacation, pension, which all will increase the engagement, commitment because when
the employee’s rights are interested, they will feel that the company is not just only care about
their works, achievements, but also their rights and benefits. And sometimes, employee relations
are the attractiveness when resourcing because employees can know the rights and treatments

Page 25
if they decide to work here which make them feel secured, well-treated, and motivate them to
engage and commit for the company.
According to many proved studies in the world such as Huselid (1995), or Paauwe (2004), the
impact of HRM practices on organizational performance is significant, especially on productivity,
quality, customer satisfaction, which are the business outcomes (Huselid, 1995) (Paauwe, 2004).
To specific, in resourcing, the employer must know the content of the interview to hire the right
person, put them in the right position and skill, which gradually will create an engaged,
committed, skillful human resource because they are happy and satisfied with their job. This will
rocket the productivity since the human resources are well-trained, satisfied and engage to their
job, and profit because the customers are satisfied with the company performance that are high
quality and professional service. Elton Mayo Hawthorne, one of the fathers of human resource
management, wrote: “The change which you and your associates are working to effect will not
be mechanical but humane.” in his letter to the assistant works manager George Pennock to
emphasize the significant impact of HRM practices on people, especially their characteristics that
will improve the HRM outcomes and organizational performance (Mayo, 1929).

HRM in a Nutshell
By way of conclusion, HRM is undoubtedly an irreplaceable functional department of an
organization whether it is for-profit or non-profit. It has six functions namely Resourcing, Learning
and Development, Performance Management, Reward Management and Employee Relations.
Each serves a distinct purpose; however, they are intimately linked together. For decent or good
or even excellent HR Management, the HR manager must reign their power over HR functions so
as to bring out the best results.

Page 26
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