HRM Chapter 3

Dire Dawa University-DDU Department of Construction Technology and Management-COTM
CHAPTER THREE: PLANNING THE ORGANIZATION’S HUMAN RESOURCE

3.1 Human Resource Planning
In construction, all projects are constraint bound: a project needs to be finished within a given
time period, below a specific budget, to a given quality and standard. Thus, for the project to be
realized and labeled as success, it has got to overcome the constraints. The best way construction
managers prepare themselves against these constraints is to prepare a thorough plan for the
execution of the project. A plan prepared well before the commencement of construction is
instrumental in formulating directions, coordinating functions, setting targets, forecasting
resources, budgeting costs, controlling performance and motivating people. On the other hand,
not properly setting out the plan in the early phases of a project may have far reaching
consequences in crippling the project or its product.
Manpower planning can be defined as a management technique for forecasting and selecting the
type and number of employees required in order to achieving specific objectives. The manner in
which personnel management deals with manpower planning depends largely on analyses of the
external environment and organizational objectives and needs. Moreover, the nature of the
product delivered by the construction industry and the manner in which the building team is
formed make the selection process of people rather different from other industries. In
construction, there is a clear divide between the resourcing of operatives on site and the
appointment of professional and management staff at organizational level. This divide implies
that there is a need for long term planning at the organizational level and short-term planning at
site level.
Generally, manpower planning is the process - including forecasting, developing and controlling
- by which a firm ensures that it has the right number of people and the right kind of people at
the right places at the right time doing work for which they are economically most useful. At its
simplest, human resource planning is concerned with identifying organization’s or project’s
demand for human resource and devising means to ensure that a sufficient supply of labor is
available to meet the demand. The context of human resource planning is dominated by:
 The state of demand for the project’s end deliverables,
 The supply of people in the labor market,
 The time-scale involved
Human Resource Management [COTM 5201]Lecture Note Compiled By: Solomon A. Page 20
Objectives of human resource planning

 To have an accurate, estimate of the number of employees required with matching skill
requirements to accomplish organizational goals.
 To know about existing deployment
 To know the skill requirement
 To know the manpower requirement over a period of time
 To indicate lead time availability to select and train required additional manpower
 To keep Inventory of existing personnel
Short-term planning is concerned with the day-to-day acquisition and recruitment of manpower
at site level (e.g. bricklayers and carpenters). Site recruitment is usually decentralized and is
done by the project manager or the site manager. However, with large projects, manpower
planning is usually done in consultation with the personnel manager at organizational level.
Long-term planning is concerned with working out a strategic plan for acquiring and utilizing
human resources at organizational level (mainly skilled labor, experts, professionals and
managers). It is very much linked with organizational objectives and structure and forms part of
the firm's corporate planning. In construction, manpower planning is usually done by the
personnel manager who acts in consultation with and takes advice from line managers and
project managers. Manpower planning is a dynamic process that requires continuous review.
Pratt and Bennett (1985) listed seven interrelated areas of activity or 'steps' towards creating the
'manpower plan'.
A. Manpower objectives as part of the corporate plan. Any objective regarding the demand
or supply of manpower is influenced by issues such as capital expenditure, marketing,
reorganization, diversification and financial forecasts. The manpower demand and
supply forecasts will in turn lead to manpower polices such as recruitment, training,
transfer, promotion, redundancies, etc. These polices will be audited to ensure that the
right numbers and type of staff are employed.
B. Manpower audit (external). This is an assessment of the external environment with
regard to the supply and demand of the labor markets, etc. The national labor market is
extremely dynamic and useful statistical information concerning factors of employment
is generally available. In construction, such information is available from employment
institutions such as the Construction Industry Training Board or any other concerned
bodies.
C. Manpower audit (internal). This can be done within the framework of the corporate
plan by using management information carried within the company. Analyses need to
audit factors such as:
(i) Age
(ii) Skills
(iii) promotion and transfer possibilities
(iv) Productivity levels
(v) Costs
(vi) Turnover and wastage
D. Supply forecasting. Having established the objectives and carried out the external and
internal audits, it will then be possible to forecast future needs for manpower and assess
the sources available to meet those needs for the life of the plan.
E. Demand forecasting. Manpower demand forecasting will be based upon activity levels
indicated by the corporate plan, as well as any shortage indicated by the audits. From
this, a forecast of the numbers and types of staff required by various departments or units
should be possible. Various techniques are available to forecast manpower demand, e.g.
operational research, work study and statistical models.
F. Implementation. The objectives, audits and supply and demand forecasts that contribute
to the manpower plan should then be converted into policies that should produce in turn
concrete programs of action. The manpower policies should be formed by considering:
(i) Recruitment - the numbers and types of employees required over the period of the
plan together with details of any potential supply problems
(ii) Training - the amount and types of training required for both new recruits, and
existing staff
(iii) Employee development – Closely linked to training, this should take account of
projected promotions and transfers
(iv) Productivity - methods for maintaining or improving productivity including work
methods, incentives, productivity bargaining and other methods of improving
motivation
(v) Redundancy - specific plans regarding the number of potential redundancies and
how these will be dealt with
(vi) Accommodation - plans for expansion, contraction or re-location, including

buildings, equipment and for improving working conditions.
G. Control. Part of the manpower policy implementation will be a system of manpower
control, mainly for cost, productivity and quality.
3.2 Manpower Planning Process
There are four categories of staff that are important in human resource planning. These are as
follows:
 Existing staff,
 New recruits,
 Potential staff,
 Leavers.
Each of these categories requires different decisions to be made by the managers concerned, and some
of these are set out below:
Category Decisions required about
Performance appraisal Training
Existing Staff Productivity Remuneration
Deployment Promotion/Career
Equal opportunity dev’t/
Recruitment methods Training
New Recruits Selection procedures Terms of contract
Orientation
Recruitment methods Employee benefits
Potential Staff Wage/salary levels
Leavers Dismissals for poor Redundancy
performance procedures
Retirements Labor turnover
Assessing the demand for manpower
In order to meet the corporate objectives, managers should estimate the effective demand for
manpower. Some existing employees undoubtedly could be used for new positions, some new
recruits would also be required from amongst the local population, and some jobs could be out
sourced to third parties such as sub-contractors and professional advisors. Three other questions
can be raised at this stage:
 should we train out own staff for selected key posts?

 Should we buy an experienced people from outside?
 How much time is required to staff this operation?
Responsibility Matrix
During its development, the Work Breakdown Structure (WBS) is related to the project
organization by identifying the areas of the organization that will have functional and budgetary
responsibility for each work package. Although relationships exist between all levels of the WBS
and the project organization, the effective planning and control the accounts should be
established at the lowest levels of the WBS- the work package level and possibly lower. Once
work package responsibility has been assigned to a department, more detailed sub divisions can
be made within the work package by assigning responsibility down to still lower management
and technical levels.
The interaction of the WBS and the organizational structure is represented by a chart called a
responsibility matrix or responsibility chart. The responsibility matrix format is shown for one
functional position and one work package. Every work packed identified in the WBS should
appear on the responsibility matrix. Each row in the responsibility matrix shows all of the person
or functional positions involved in one work package and the type of involvement. Each column
shows all the work tasks or work packages for which a single person or functional position is
responsible.
An advantage of the matrix is that project personnel can easily see their responsibilities to work
packages and to other individuals on the project. When further breakdown of assignments is
necessary, those listed in the matrix can sub divide their respective tasks and make assignments
to additional individuals.
The kind of responsibility defined for each organizational positions/ work packages intersection
should be determined by mutual agreement of the workers assigned and their managers and other
affected parties. This ensures consensus about the nature of responsibilities and enables everyone
to share what they think is expected of them and what they expect from others. To prevent
confusion or conflict, the matrix can be filled in during a team building session using role
analysis or similar techniques. Because the responsibility matrix prescribes how units in the
organization should perform, it is useful for monitoring and assessing how well responsibilities
are being performed. It permits managers and others to know where responsibilities lie and helps
avoid ‘passing the back’. However, it obviously expresses only formal relationships and not
necessarily how people really interact or other aspects of informal organization. Nonetheless, it
is a useful planning device and helps reduce misunderstandings and conflict later on.
Manpower planning processes are listed below:
A. Business Plan
B. Manpower Audit
C. Job Analysis
 The job identification its title, including the code number, if any
 Distinctive characteristics of the job. Its location; setting; supervision; union
jurisdiction. If any, hazards and discomforts.
 Required personnel attribute; experience, training, apprenticeship, physical strength,
coordination or dexterity, physical demands, mental capabilities, aptitudes, social
skills.
D. Job description
E. Job Standards
F. Comparative data collection
G. Permanent employees
H. Employees on site / project site
I. Daily wage employee
J. Project manpower planning & estimation
i. Average labor output
ii. Manpower expense calculation
iii. Bar chart program
iv. “S” Curve
v. Man days requirement
Organizational
Objectives
Corporate planning
Supply for
Structure & Staffing Demand for Labor
Labor
Manpower planning
Job Analysis
Internal Employee Job description External employees
Job Redesign Advertisements
Rotation
Enlargement
Enrichment Assessing & short listing
Candidates
Interviewing & selecting a

Candidate
Induction & other
Administration
Performance Appraisal
Staff Development & Training
Fig. 3.1 The Process of manpower planning.

General Project Planning Team: Typical Manpower Planning
 Determining expected labor productivity
 Estimating workers requirement for each work package
 Scheduling date-wise, category-wise, project direct labor
 Establishing a construction teams.
 Organizing task forces
 Allocating labor during execution stage
 Monitoring workers productivity at site
 Recording productivity data

 Costing and controlling manpower costs
 Controlling manpower mobilization, distribution & demobilization
 Defining job requirement for key executive and staff appointments
 Assist in recruitment of personnel
 Assist in designing incentive system
 Assist in controlling manpower costs
 Assist in training and induction of manpower
3.3 Performance Appraisal & Reward System
 Performance means the process of carrying out a work, demonstrating capabilities, to a
specific standard, with perfection.
 Appraisal means an assessment of individual-measurable conspicuous contributions, both
qualitatively & quantitatively, in fulfilling a particular task.
 PA helps to appreciate employee’s strength and to find out the areas needs improvement
that can be supported to facilitate them to improve their performance continuously.
 The effective appraisal system is extremely important for a growing, expanding and
diversifying organization
 It envisages in a formal way the Team Leader and Team Members Relationship.
 This Relationship itself symbolizes how the individuals experience the working life and
how he/she contributes to the organizational goals.
 Every individual in the organization has certain basic needs in relation to his work. These
may be stated as:
“Agree with me, what is expected of me”
“Give me an opportunity to perform”
“Develop me to do my job perfectly”
“Reward me according to my contributions”
It attempts to focus on work and on reducing subjectivity as far as possible.
It incorporates the stating of clearly defined objectives between the Team Leader and
Team Members.
It is based on actual Performance and actual behavior on the job.
It focuses on individual potential and its development.
Staff appraisal
While the candidate is progressing with the job, the personnel manager should continuously
conduct a staff appraisal. The staff appraisal system is a mechanism for gauging the attitude and
performance of the employee at the work place. The main purposes of an appraisal are to:
(a) Create two-way communication between management and employees
(b) Establish the strengths and weaknesses of individuals and try to build on
the strengths or overcome the weaknesses
(c) Indicate the need for training and staff development
(d) Generate inputs for human resource planning, especially manpower
planning, career-path planning and succession planning
(e) Assist managers to determine the future use of an employee, e.g.
whether he/she shall remain in his/ her present job or be transferred,
promoted or dismissed.
Appraisal methods
The six main methods of appraisal are outlined in the following.
A. Rating scale. The appraiser has a scale by which he or she can judge the degree of
achievement or non-achievement of the appraisee on a particular factor or issue. The
judgments of such factors are called quantifiers: they reflect the intensity of the
particular judgment involved. For example, the performance criteria could be:
(i) Volume of work produced
(ii) Quality of work
(iii) Knowledge of job
(iv) Dependability
(v) Innovation
(vi) Staff development
(vii) Communication skill
(viii) Teamwork spirit.
The quantifiers could be: (1) high; (2) medium; (3) low; (4) not acceptable.
B. Ranking. The ranking format is used when the manager wants to place a number of
subordinates in order of merit, usually on their total ability in the job but sometimes
according to a few separate characteristics.
C. Semantic differential scale. Diagrammatic rating scale is another means of measuring

intensity of judgment and the semantic differential is the most popular form of this
type of scaling. In this method the appraiser indicates his/her judgment on a seven-
point bipolar scale defined with contrasting adjectives at each end. It can be best
applied when the performance of different groups on a particular matter needs to be
compared. Examples could be rating good-bad, strong-weak, satisfied-dissatisfied. The
seven-point bipolar scale can be presented in a numerical format, e.g.
Good _ _ _ _ _ _ _ _ _ _ _ _ _Bad
3 2 1 0 -1 -2 -3
D. The open-ended method. In this method, the appraiser creates a free discussion
environment with the employee to encourage him/her to express their feelings in their
own way. Here, the manager is expected to write a few sentences about the subordinate
rather than to make ticks in columns. This method has many varieties, a common one
being for the manager to answer the following four questions about the subordinate.
(i) What are the employee's strong points in relation to the job?
(ii) What are the employee's weak points in relation to the job?
(iii) What is the employee's promotion potential?
(iv) What are the employee's training needs?
E. Behaviorally anchored rating scale (BARS). This is a relatively recently developed
approach which requires the appraiser to select some aspect of a subordinate's
behavior considered by the assessor to be typical of the appraisee's performance in a
certain aspect of a job. For example, the superior of an employee being assessed
under the heading 'ability to cope with stress' would be asked to complete a form
which begins with the words, 'I would expect this employee to (behave in the
following way)', followed by a list of statements from which the appraiser must
choose. Alongside each statement are a certain number of points indicating the
relative desirability of the behavior. Among the statements in this example might be:
remain calm and collected 5
become frustrated 4
show irritability 3
act erratically 2
fly off the handle 1
F. Objective outcome. This approach - sometimes referred to as Management by

Objectives (MBO) - is usually associated with a sophisticated performance appraisal
scheme and rating scale. It requires the appraiser to assess a tangible outcome of the
employee, e.g. the number of units produced, number of contracts awarded, number of
projects delivered on time, etc. The MBO system may follow the process outlined
below.
(i) At the outset, the target and objectives of the task must be set clearly and agreed between
staff and management. With the MBO system, these targets are established by the
subordinates and not by the management. However, the targets must be in line with
organizational objectives and special consideration needs to be given to the manager's
contribution to improving performance.
(ii) A time span must be set to measure the outcome. Here, there will be a monitoring and
review system for appraisal of progress and performance, including self-checking and
evaluation.
(iii) At the end of the agreed period, the final outcome will be compared with the
target. If targets are achieved, rewards may be given and then new targets will be set for
the subsequent period. If targets are not achieved then a new plan should be put in place
to undertake the necessary revision.
Criteria for conducting the appraisal
The criteria of a good appraisal system were summarized by Mullins (1999) as follows.
(a) The purpose and nature of the appraisal system must be made clear to the assessor and the
employee. The system should focus on the strengths and accomplishments of staff, rather
than their faults and failures, and it should lead to a plan for the future development and
progress of the individual.
(b) The system should not be perceived as something which is the prerogative of the personnel
department or introduced for its benefit. Top management should be seen to own the system
and be fully committed to the concept of appraisal. They should ensure full consultation
with trades unions and staff representatives, and all managers and members of staff.
Adequate provision will need to be made for the proper training of appraisers and there
should be a reasonable time allowance for the activity. An effective administration system
should aim to keep form-filling and paperwork to a minimum.
(c) The appraisal system should not be viewed in isolation but in relation to the corporate
objectives of the organization, and designed to suit its culture and particular requirements.
The system should be integrated with related personnel policies and practices such as human
resource planning, and training and development programmes. A starting point is the
process of job analysis. This identifies the purpose, and main duties and responsibilities of
each job. From the job descriptive can be determined the expected outcomes of the job,
standards of performance and the criteria against which the appraisal will be based.
(d) The system needs to be monitored regularly to ensure that appraisals are being carried out
properly and to obtain feedback from managers. The system should be kept under continual
review and, where necessary, modified to meet changing environmental influences or the
needs of the organization. It is important to ensure that operation of the system and the
criteria used for assessment satisfy all legal requirements, for example those defined under
the Sex Discrimination Act and the Race Relations Act. The system must be supported by
appropriate follow-up action: for example, seeing that work plans or changes in duties and
responsibilities actually take place, and that suitable arrangements are made to meet
identified training or development needs.
(e) As the main purpose of appraisals is to help staff improve their performance, an appeals
procedure should only be used in exceptional circumstances. However, in order to help
establish the credibility of the system and to maintain goodwill, it is necessary to establish a
formal procedure which is clearly understood by all members of staff. Appeals should be
made to a manager in a more senior position than the appraiser or sometimes to a
representative committee. The appeals procedure should include provision for staff to be
assisted, if requested, by a union or staff representative.
3.4 Manpower recruitment
Recruitment is engaging people to work in an organization.
Job Analysis is the process of studying and collecting information relating to a specific job.
Job Analysis is having two parts:
A. Job Description: is an organized, factual statement of the duties and responsibilities of a
specific job.
B. Job Specification (Person Specification): is a statement of minimum acceptable human
qualities to perform a job properly.(as listed below)
Person Specification for any Right Person, at Right Time for Right Job
1. Physical Qualification - Good health and vigor.

2. Mental Qualification - Ability to understand, learn, judge, adopt and predict.
3. Moral Qualification - Energy, firmness, willingness to accept responsibility,
initiative, loyalty, tact, dignity.
4. Academic Qualification - Knowledge of one's own field and ability to work with the
techniques of other disciplines.
5. Technical Qualification - Expertise in one's own profession.
6. Experience Qualification - Performance in the past which a person is able to
analyze,
Steps in Recruitment
1. Job Advertisement
- Communication to Employment Exchanges
- Notice Board display
- Voluntary Applications
- Press Notification
- Placement Agencies
2. Applications Screening
A process of selecting a set of applications with respect to job description & job specification
3. Call Letter for written Tests and Interviews
This has to be prepared clearly mentioning – the position for which written test & interviews are
being conducted, the date, time & Venue etc.
4. Employment offer letter
It shall be mentioned clearly – The offer, the consideration (remuneration), the date of joining,
Medical fitness and the mode of acceptance required.
5. Medical Test
This has to be conducted by the authorized medical officer of the organization and the medical
fitness is with respect to the position offered in the organization.
6. Joining Report
It shall contain the location, the department in the organization, designation, the reporting
authority and the time & date of reporting.
3.5 Employment contract and Employment Relations
A contract of employment is an agreement on the employment conditions made between an

employer and an employee. The agreement can be made orally or in writing and it includes both
express and implied terms.
According to Ethiopian labour proclamation No 377/2003
 "Employer" means a person or an undertaking that employs one or more persons.
 "Worker" means a person who has an employment relationship with an employer.
Before employment begins, an employer must inform each employee clearly the conditions of
employment under which he is to be employed with regard to:
1. wages (including rate of wages, overtime rate and any allowance, whether calculated by
the piece, job, hour, day, week or otherwise);
2. wage period;
3. length of notice required to terminate the contract; and
4. if the employee is entitled to an end of year payment, the end of year payment or
proportion and the payment period.
3.2.1. Ethiopian Labour Proclamation
This Proclamation may be cited as the "Labour Proclamation No. 377/2003."
Federal Negarit Gazeta - No. 12 2611 F1ebruary 2004
Formation of Contract of Employment
1.1. Employment contract
 Element of a Contract of Employment
1) A contract of employment shall be deemed formed where a person agrees directly or
indirectly to perform work for and under the authority of an employer for a definite or
indefinite period of piece work in return for wage.
2) A contract of employment shall be stipulated clearly and in such manner as that the
parties are left with no uncertainty as to their respective rights and obligations under the
terms thereof.
3) A contract of employment shall specify the type of employment and place of work the
rate of wages, method of calculation thereof, manner and interval of payment and
duration of the contract.
4) A contract of employment shall not be concluded for the performance of unlawful or
immoral activities.
5) The contract of employment shall not lay down less favorable conditions for the
employee than those provided for by law, collective agreement or work rules.
Contract of Employment made in writing Subject to the provisions of the relevant law, a written
contract of employment shall specify the following:
1) The name and address of the employer;
2) The name, age, address and work card number, if any, of the worker;
3) The agreement of the contracting parties made in accordance with Article 4 Sub-Article
(3) of this
1) Proclamation; and
4) The signature of the contracting parties.
Contract of Employment not made in writing
1) Where the contract of employment-is not made in written form, the employer shall,
within 15 days from the conclusion of the contract, give the worker a written and signed
statement containing the requirements specified under Article 6 of this Proclamation.
2) If the written statement referred to in Sub-Article (1) of this Article is not wholly or
partly objected to by the worker within 15 days from the date of receipt, it shall be
deemed a contract of employment concluded between the worker and the employer.
Duration of Contract of Employment
Contract of Employment for an Indefinite period Any contract of employment shall be deemed to
have been concluded for an indefinite period except for those provided for hereunder.
Contract of Employment for Definite Period or Piece Work.
1) A contract of employment may be concluded for a definite period or for piecework in the
case of:
(a) the performance of specified piece work for which the employee is employed;
(b) the replacement of a worker who is temporarily absent due to leave or sickness or other
causes;
(c) the performance of work in the event of abnormal pressure of work;
(d) the performance of urgent work to prevent damage or disaster to life or property, to repair
defects or break downs in works, materials, buildings or plant of the undertaking;
(e) an irregular work which relates to permanent part of the work of an employer but
performed on an irregular intervals;
(f) seasonal works which relate to the permanent part of the works of an employer but
performed only for a specified period of the year but which are regularly repeated in the
course of the years;
(g) an occasional work which does not form part of the permanent activity of the employer but
which is done intermittently;
(h) the temporary placement of a worker who has suddenly and permanently vacated from a
post having a contract of an indefinite period;
(i) the temporary placement of a worker to fill a vacant position in the period between the
study of the organizational structure and its implementation.
2. A contract of employment under Sub-Article l(h) and (i) of this Article shall not exced 45
consecutive days and shall be done only once.
Probation Period!
1) A person may be employed for a probation period for the purpose of testing his suitability
to a post in which he is expected to be assigned.
2) A worker re-employed by the same employer for the same job shall not subject to
probation.
3) When the parties agree to have a probation period, the agreement shall be made in writing,
in such a case, the probation period shall not exceed forty-five (45) consecutive days.
4) Unless the law or work rules or collective agreement provides otherwise, the worker shall
have during the probation period, the same rights and obligations that a worker who has
completed his probation period has.
5) If the worker proves to be unfit for the job during his probation, the employer can terminate
the contract of employment without notice and being obliged to pay severance pay or
compensation;
6) A worker on probation may terminate his contract of employment without notice.
7) If the worker continues to work after the expiry of the probation period, a contract of
employment for the intended period or type of work shall be deemed to have been
concluded from the beginning of the probation period.
Obligation of the Parties
Obligations of an Employer
An employer shall in addition to special stipulations in the contract of employment have the
following obligations:
1) (a) to provide work to the worker in accordance with the contract of employment and
(b) Unless otherwise stipulated in the contract of employment, to provide him with
implements and materials necessary for the performance of the work;
2) to pay the worker wages and other emoluments in accordance with this Proclamation or
the collective agreement;
3) to respect the worker's human dignity;
4) to take all the necessary occupational safety and health measures and to abide by the
standards and directives to be given by the appropriate authorities in respect of these
measures;
5) To defray the cost of medical examination, of the worker whenever such medical
examination is required by law or the appropriate authority.
6) to keep a register containing the relevant particulars specified in Article 6, hereof weekly
rest days, public holidays and leave utilized by the worker, health conditions and
employment injury of the worker and other particulars required by the Ministry;
7) upon termination of a contract of employment or whenever the worker so requests, to
provide the worker, free of charge, with a certificate stating the type of work he
performed, the length of service and the wages he was earning;
8) to observe the provisions of this Proclamation, collective agreement, work rules,
directives and orders issued in accordance with law, and.
9) to record and keep of information as required by this Proclamation, and any other
information necessary for the Ministry to carry out its powers and duties, and submit
same within a reasonable time when requested by the Ministry.
Obligations of the Workers
Every worker shall have the following obligations:
1) to perform in person the work specified in the contract of employment;
2) to follow instructions given by the employer based on the terms of the contract and work
rules;
3) to handle with due care all instruments and tools entrusted to him for work;
4) to report for work always in fit mental and physical conditions;
5) to give all proper aid when an accident occurs or an imminent danger threatens life or
property in his place of work without endangering his safety and health;
6) to inform immediately the employer any act which endangers himself or his fellow
workers or which prejudice the interests of the undertakings;
7) to observe the provisions of this Proclamation, collective agreement, work rules and
directives issued in accordance with the law.
Unlawful Activity
1. It shall be unlawful for an employer to:
(a) impede the worker in any manner in the exercise of his rights or take any measure against
him because he exercises his right;
(b) discriminate against female workers, in matters of remuneration, on the ground of their sex;
(c) terminate a contract of employment contrary to the provisions of this Proclamation;
(d) coerce any worker by force or in any other manner to join or not to join or to cease to be a
member of a trade union or to vote for or against any given candidate in elections for trade
union offices;
(e) require any worker to execute any work which is hazardous to his life;
(f) Discriminate between workers on the basis of nationality, sex, religion, political outlook or
any other conditions.
2. It shall be unlawful for a worker to:
(a) intentionally commit in the place of work any act which endangers life and property;
(b) take away property from the work place without the express authorization of the employer;
(c) report for work in a state of intoxication;
(d) Except for HIV/AIDS test, refuse to submit "', himself for medical examination when
required by law or by the employer for good cause.
(e) refuse to observe safety and accident prevention rules and to take the necessary safety
precautions,
Modification of Contract of Employment
Conditions of Modification
Conditions of a contract of employment which are not determined under this Proclamation may
be modified by:
1) collective agreement;
2) work rules issued in accordance with this Proclamation; or
3) written agreement of the parties.
Temporary Suspension of Right and Obligation
Arising out of Contract of Employment

1) Rights and obligations arising out of a contract of employment may be temporarily
suspended in the manner provided for in this section.
2) Temporary suspension of rights and obligations arising out of a contract of employment
shall not imply termination or interruption of the contract provided, however, a contract
of employment shall interrupt the obligation of;
(a) the worker to perform the work;
(b) the employer to pay wages, other benefits and allowances unless otherwise provided for
in this Proclamation or in the collective agreement.
Grounds for Suspension
The following shall be valid grounds for the suspension, in accordance with Article 17, of this
proclamation:
1) leave without pay granted by the employer upon request by the worker;
2) leave of absence for the purpose of holding office in trade unions or other social services;
3) detention for a period not exceeding 30 days, provided that the employer is notified
within 10 days or is supposed to know of the detention;
4) national call;
5) full or partially suspension due to force majeure of the activities of the employer for a
period of not less than 10 consecutive days;
6) financial problems, not attributable to the fault of the employer, that requires the
suspension of the activities of the employer for not less than 10 consecutive days.
Termination of Employment Relations
1) A contract of employment shall only be terminated upon initiation by the employer or
worker and in accordance with the provisions of the law or a collective agreement or by
the agreement of the two parties.
2) The amalgamation or division or transfer of ownership of an undertaking shall not have
the effect of terminating a contract of employment.
Termination of Contract of Employment by Law or by Agreement
Termination of contract of Employment by Law
A contract of employment shall terminate on the following grounds:
1) on the expiry of the period or on the completion of the work where the contract of
employment is for a definite period or piece work.
2) upon the death of the worker.

3) upon the retirement of the worker in accordance with the relevant law.
4) when the undertaking ceases operation permanently for due to bankruptcy or for
any other cause.
5) when the worker is unable to work due to partial or total permanent incapacity.
Termination of contract of Employment by Agreement
1) The parties may emanate their contract of employment by agreement provided,
however, that waiver by the worker of any of his rights under the law shall have
no legal effect.
2) Termination by agreement shall be effective and binding on the worker only
where it is made in writing.
Termination of contract of Employment by the Employer
1) A contract of employment may only be terminated where there are grounds connected
with the worker's conduct or with objective circumstances arising out of his ability to do
his work or the organizational or operational requirements of the undertaking.
2) The following shall not be deemed to constitute legitimate grounds for the termination of
a contract of employment:
(a) his membership in a trade union or his participation in its lawful activities.
(b) his seeking or holding office as a worker's representative;
(c) his submission of grievance against the employer his participation in judicial or
other .proceedings;
(d) his nationality, sex, religion, political outlook, marital status, race, colour, family
responsibility, pregnancy, lineage line & descendents from.
Termination by the Worker
Termination of Contract of Employment with Notice
Without prejudice to Article 32 of this Proclamation, any worker who has completed his
probation period, may, by giving thirty days prior notice to the employer, terminate his contract
of employment.
Termination of Contract of Employment without Notice
1) The following shall be good cause to terminate a contract of employment without notice;
(a) if the employer has committed against the worker any act contrary to his
human dignity and morals or other acts punishable under the Penal
Code;
(b) if, in the case of imminent danger threatening the worker's safety or
health, the employer, having been made aware of such danger, failed to
act within the time limit in accordance with the early warning given by
the competent authority or appropriate trade union or the worker himself
to avert the danger;
(c) if the employer has repeatedly failed to fulfill his basic obligations
towards the worker as prescribed under this Proclamation, collective
agreements, work rules or other relevant laws.
Common Provisions with Respect to Termination of Contract of Employment
Notice to Terminate a Contract of Employment
Procedure for Giving Notice
1) Notice of termination required under the provisions of this Proclamation shall be
in writing. The notice shall specify the reasons for the termination of the contract
and the date on which the termination shall take effect.
2) Notice of termination by the employer or his representative shall be handed to the
worker in person. Where it is not possible to find the worker or he refuses to
receive the notice, it shall be affixed on the notice board in the work place of the
worker for 10 consecutive days.
3) Notice of termination by the worker shall be handed to the employer or his
representative or delivered to his office.
4) Notice of termination given to a worker by an employer in accordance with
Article 17 during the time in which the contract of employment is suspended shall
be null and void.
1.2. Labour Dispute
In this Proclamation:
1) "conciliation" means the activity conducted by a private person or persons appointed by
the Ministry at the joint request of the parties for the purpose of bringing the parties
together and seeking to arrange between them voluntary settlement of a labour dispute
which their own efforts alone do not produce;
2) "essential public services undertakings" means those services rendered by undertakings to

the general public and includes the following:
a) air transport;
b) undertakings supplying electric power;
c) undertakings supplying water and carrying out city cleaning and sanitation services;
d) urban bus services;
e) hospitals, clinics, dispensaries and pharmacies;
f) fire brigade services; and
g) telecommunication services;
3) "labour dispute" means any controversy arising between a worker and an employer or
trade union and employers in respect of the application of law, collective agreement,
work rules, employment contract or customary rules and also any disagreement arising
during collective bargaining or in connection with collective agreement:
4) "lock-out" means an economic pressure applied by closing a place of employment in
order to persuade workers to accept certain labour conditions in connection with a labour
dispute or to influence the outcome of the dispute;
5) "Strike" means the slow-down of work by any number of workers in reducing their
normal out-put on their normal rate of work or the temporary cessation of work by any
number of workers acting in concert in order to persuade their employer to accept certain
labour conditions in connection with a labour dispute or to influence the outcome of the
dispute.
Labours Courts
Establishment of Labour Divisions
1) There shall be set up labour divisions, as may be necessary, at each regional first instance
court, each regional court which hears appeals from regional first instance courts and at
the Central High Court.
2) The Minister shall submit the number of labour divisions to be established in accordance
with Sub- Article (1) of this Article to be determined by the appropriate authority.
Labour Division of the Regional First Instance Court
1) The labour division of the regional first instance court shall have
jurisdiction to settle and determine the following and other similar
individual labour disputes;
(a) disciplinary measures including dismissal;

(b) claims related to the termination or cancellation of employment contracts;
(c) questions related to hours of work, remuneration, leave and rest day;
(d) questions related to the issuance of certificate of employment and release;
(e) claims related to employment injury;
(f) unless otherwise provided for in this Proclamation, any criminal and petty offences under
this Proclamation.
2) The labour division of the regional first instance court shall give
decisions within 60 days from the date on which the claim is lodged.
3) The party who is not satisfied with the decision of the regional first
instance court may, within 30days from the date on which the
decision was delivered, appeal to the labour division of the regional
court which hears appeals from the regional first instance court.
The Labour Division of the Regional Appellate Court
1) The labour division of the regional court which hears appeals from
the regional first instance court shall have jurisdiction to hear and
decide on the following matters:
(b) appeals submitted from the labour division of the regional first instance courts
in accordance with Article 138 of this Proclamation;
(c) objections on question of jurisdiction;
(d) appeals submitted against the refusal of the registration of an organization by
the Ministry in accordance with Article 122 of this Proclamation;
(e) appeals submitted by an employer who is affected by the order of labour
inspector in accordance with Article 180 (1) of this Proclamation;
(f) appeals submitted against the decision of the Ministry in accordance with Sub-
Article (3) of Article 20.
(g) request submitted for the cancellation of the registration of an organization in
accordance with Sub-Article 2 of Article 121.
2. The decision of the court on appeal submitted under Sub-Article (1) of this Article shall be
final.
3. The Regional appellate labour division court shall make decision within 60 days from the
date of the appeal lodged in accordance to sub-Article 1 of this Article.
The Labour Division of the Federal High court

1) The labour division of the Federal High Court shall have jurisdiction to hear and
decide on appeals against the decision of the Board on question of law in
accordance with Article 154 of this Proclamation.
2) The decision of the court under Sub-Article (1) of this Article shall be final.
Conciliation
Assignment of Conciliator
1) When a dispute in respect of matters specified under Article 142 is reported to the
Ministry by either of the disputing parties, it shall assign a conciliator to bring about a
settlement of the case.
2) The Ministry may assign conciliators at the National and when necessary at the Wereda
level.
Duties and Responsibilities of the Conciliator
1) The conciliator appointed by the Ministry shall endeavor to bring about a settlement on
the following, and other similar matters of collective labour disputes:
(a) wages and other benefits;
(b) establishment of new conditions of work:
(c) the conclusion, amendment, duration and invalidation of collective agreements:
(d) the interpretation of any provisions of this Proclamation, collective agreements or work rules;
(e) procedure of employment and promotion of workers;
(f) matters affecting the workers in general and the existence of the undertaking;
(g) claims related to measures taken by the employer regarding promotion, transfer and training.
(h) claims relating to the reduction of workers.
1. The conciliator shall endeavor to bring about a settlement by all reasonable means as may
seem appropriate to that end.
2. Whenever the conciliator fails to settle a labour dispute within 30 days, he shall report
with detailed reason thereof to the ministry and shall serve the copy to the parties
involved. Any party involved other than those indicated under Sub-Article (1) (a) of this
Article may submit the matter to Labour Relation Board. If the dispute as per sub Article
1 (a) of this Article concerns those undertaking described under Article 136(2) of this
proclamation one of the disputing party may submit the case to ad hoc Board,
Conciliation and Arbitration
1) Notwithstanding the provisions of Article 141 of this Proclamation parties to a dispute

may agree to submit their case to arbitrators or conciliators, other than the Minister for
settlement in accordance with the appropriate law.
2) If the disputing parties fail to reach an agreement on the case submitted to arbitration or
conciliation under Sub-Article (1) of this Article the party aggrieved may take the case
to the Board or to the appropriate court.

HRM Chapter 3

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Dire Dawa University-DDU Department of Construction Technology and Management-COTM

CHAPTER THREE: PLANNING THE ORGANIZATION’S HUMAN RESOURCE

Objectives of human resource planning

(vi) Accommodation - plans for expansion, contraction or re-location, including

 should we train out own staff for selected key posts?

Internal Employee Job description External employees

Job Redesign Advertisements

Interviewing & selecting a

Induction & other

Staff Development & Training

Fig. 3.1 The Process of manpower planning.

 Recording productivity data

C. Semantic differential scale. Diagrammatic rating scale is another means of measuring

F. Objective outcome. This approach - sometimes referred to as Management by

1. Physical Qualification - Good health and vigor.

A contract of employment is an agreement on the employment conditions made between an

Arising out of Contract of Employment

2) upon the death of the worker.

2) "essential public services undertakings" means those services rendered by undertakings to

(a) disciplinary measures including dismissal;

The Labour Division of the Federal High court

1) Notwithstanding the provisions of Article 141 of this Proclamation parties to a dispute

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