10 BDPP1103 T6

Topic  Human
Resource
6 Management
(HRM)
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1. Describe the human resource management process;
2. Differentiate between job description and job specification;
3. Describe the most effective selection method for certain types of
work and the validity for each method;
4. Describe two forms of training programmes and provide relevant
examples;
5. State at least two advantages of giving compensation and benefits
to workers;
6. Explain the three current issues at the workplace; and
7. Explain seven techniques to evaluate staff performance.
 INTRODUCTION
Do you agree that the quality of an organisation depends on the quality of the
workers it employs? Well, there is a lot of evidence to support this view. As
discussed in Topic 5, organisations consist of a group of people brought together
and grouped in a specific way to achieve a particular goal. Without employees,
there is no organisation. You can argue that technological advancements, the
existence of computers and robots have replaced a substantive part of human
Copyright © Open University Malaysia (OUM)

TOPIC 6 HUMAN RESOURCE MANAGEMENT (HRM)  69
activities, but the question is who is behind the invention of this sophisticated
machinery? Therefore, it must be emphasised here that the quality of the workers
is very important to foster and sustain organisational harmony.
The decisions and methods of staffing and human resource management (HRM)
are critical to ensuring that an organisation employs and retains the right
personnel. In many organisations, HRM tasks are undertaken by HRM experts
within the organisation. Sometimes the HRM tasks are channelled to consultancy
firms which specialise in HRM activities. However, for small-sized organisations,
the managers themselves have to conduct recruitment (in other words, HRM
activities) without the assistance of HRM experts.
When you attend an interview, the team of interviewers is not just made up of
HRM managers. Have you ever wondered who they are? They are managers from
other divisions. Managers from big organisations are also involved in HRM
activities such as selection of candidates, assessment of application forms,
interview of candidates and other tasks. It does not matter if HRM experts provide
HRM support as every manager will be involved in making HRM decisions.
6.1 HRM NEGOTIATION ENVIRONMENT

Employers today must ensure that there are equal employment opportunities for
every candidate and employee of an organisation. Exemptions can be made
based on the situation. For example, a person who is dependent on a wheelchair
for mobility can be rejected by the Fire Department if he applies to be a fire-
fighter but this candidate cannot be rejected if he applies for the position of clerk
in the same department.
Whether some HRM decisions can be made or not, under this kind of legislation,
is subject to affirmative action control. Many organisations have affirmative action
programmes which ensure that HRM decisions and practices can employ and
retain workers from minority groups, including female workers. Organisations
must not only refrain from discriminative policies. In fact, they should proactively
improve the status of those classified as belonging to protected groups. In other
words, managers do not have absolute freedom to determine who can be hired,
promoted or dismissed.

70  TOPIC 6 HUMAN RESOURCE MANAGEMENT (HRM)
6.2 HUMAN RESOURCE MANAGEMENT

PROCESS
Figure 6.1 shows the main components of the HRM process. It represents eight
steps which, if implemented well, will provide the organisation with credible
workers. The eight steps are:
(a) Strategic human resource planning;
(b) Recruitment and downsizing;
(c) Selection;
(d) Orientation;
(e) Training and development;
(f) Performance management;
(g) Compensation and benefits; and
(h) Safety and health.
The first three steps represent job plans and if implemented in detail, will help to
identify and select competent workers. These steps are vital in assisting
organisations to achieve their strategic goals.
Orientation, training and development help new employees to adapt to the

organisation and obtain skills, and knowledge. Finally, the HRM process will help
organisations to achieve organisational performance, correct performance
problems and help workers to maintain their respective performance levels. The
external environment influences the overall process, as shown in Figure 6.1.

Figure 6.1: Strategic human resource management process
ACTIVITY 6.1
Explain Figure 6.1 in your own words, i.e. how do the components of the
human resource management process function? Post your answers in the
myINSPIRE online forum for sharing and comparing.

6.3 HUMAN RESOURCE PLANNING

Human resource planning is a process whereby managers will ensure the
organisation has sufficient workers and qualified workers that are placed in the
relevant sections and within an appropriate time, are capable of undertaking their
respective tasks effectively and efficiently, as well as able to help the organisation
achieve its overall objectives. The human resource plan translates organisational
mission and objectives into personnel planning.
The HRM process involves the assessment of future human resource needs and
the development of a programme that can help fulfil these needs.
6.3.1 Human Resource Evaluation

How do organisations assess their human resources? The management begins by
evaluating the current human resource status through the human resource
inventory. Input is obtained from the forms completed by the employees. This
inventory enables the management to know the kinds of talents and skills that their
employees have.
One of the current assessment techniques is job analysis. The job analysis steps are
more basic than the compilation of the human resource inventory. It involves
analysing workflow and identifying the required worker behaviour for every
division in the workflow. In short, job analysis aims to identify the skills,
knowledge and attitudes that are required to perform each task successfully.
The information that is accumulated is then used to produce job descriptions and
job specifications. A job description is a written statement that describes the scope
of work of the employee, how the job is to be done and the purpose of carrying out
the task. It contains job duties, environment and work atmosphere.
A job specification, on the other hand, lists the minimum qualifications that an
employee must have to carry out a task successfully, i.e. by identifying the
knowledge, skills and attitudes that are necessary to carry out a task efficiently and
effectively.
Both of these documents are very important in the recruitment and selection
process. Job descriptions can be used to describe the expectations of the job to
candidates, whereas job specifications can be used to draw the attention of
managers to the list of qualifications necessary for an employee to carry out a task
and candidates who are qualified for the task.

6.3.2 Future Human Resource Needs

Future human resource needs are determined by the strategic direction of the
organisation. The demand for human resources depends on the demand for the
products and services supplied by the organisation. The overall goals of the
organisation and the forecasted output provide the basis for determining the need
for human resources. After the current capacity assessment and future needs
analysis is done, only then can a programme be developed to match estimates with
labour supply forecasts.
ACTIVITY 6.2
What are the mission and objectives of your organisation? How does
management translate them into organisational plans? Share your answers
in the myINSPIRE online forum for sharing and comparing.
6.4 RECRUITMENT AND SELECTION

Where do managers recruit candidates from? The choices available to a manager
are listed in Figure 6.2.
Figure 6.2: Selection decision outcomes
Is one resource better than the other? Some resources provide quality candidates.
Many researchers find that workersÊ references provide the best candidates.
Candidates referred by the employees themselves are already screened by them
before being referred. Workers always make references when they are sure the

referred candidates are not a threat to their reputation. However, this kind of
reference does not encourage diversity.
6.4.1 Selection of Candidates

The selection process is a training exercise in predicting candidates who will be
successfully recruited. „Successful‰ in this context refers to the criteria used by the
organisation to assess the candidates. Any selection decision can bring about four
outcomes (refer to Table 6.1). A decision is correct if the candidate, who is
predicted to be successful, proves to be successful, candidates predicted to be
unsuccessful, and are proven to be incapable of undertaking the tasks.
Problems will arise if we make erroneous rejections and acceptance. Erroneous

rejection occurs when we reject a candidate who is predicted to be incapable of
performing the job and subsequently proves otherwise. This mistake puts the
organisation at the risk of being accused of job discrimination. The second mistake
is acceptance error, which occurs when we accept a candidate who is predicted to
be able to handle the job and subsequently proves otherwise. This error will be
costly for the organisation in terms of training, opportunities lost because of the
incapability of the worker and the termination salary that has to be paid.
6.4.2 Effectiveness of Tests and Interviews as

Selection Techniques
Managers can use various techniques to reduce rejection and acceptance errors.
Among the popular methods are written tests and simulation-performance tests
as well as interviews.
ACTIVITY 6.3
Have you encountered selection based on tests or interviews? What is

your view of these methods? Post your answers in the myINSPIRE
online forum.
(a) Written Tests

In general, written tests include intelligence, ability, competency and
aptitude tests. For example, intelligence tests are appropriate for the post of
supervisor. However, it must be remembered that a high intelligence test
score is not necessarily a determinant of performance.

(b) Simulation-Performance Test

This determines whether a candidate can perform a job and allows him to do
the actual task. The assessment is based more on the analysis of actual work
that has been done compared to the written test. The simulation-performance
test includes an assessment of real work behaviour. Among the well-known
simulation-performance tests are the following:
(i) Work Sample

A part of the actual work, suitable for routine work.
(ii) Assessment Centre

Simulation of problems that might be faced in a particular job.
The advantage of simulation-performance is its similarity to the actual work

content, which is a better indicator to predict short-term job performance.
(c) Interview
Interviews conducted through application forms are a universal selection
technique. Although widely encouraged, the effectiveness of this technique
is still questionable. Interviews can be a reliable and valid technique if they
are structured and conducted properly.
On the other hand, normal interviews do not avail useful information to the
company for the following reasons:
(i) Knowing the candidate beforehand will affect the assessment of the
candidate. Information about the candidate is available in the
application form or other sources. This information will create
unrealistic expectations;
(ii) The interviewers will have stereotypical perceptions of a „good‰
candidate. For example, female candidates cannot give their full
commitment to their jobs because of motherhood and marriage;
(iii) The interviewers will be more inclined towards candidates with similar
interests. Interviewers who like to play golf will prefer workers who
have the same interests;
(iv) The schedule of candidates to be interviewed will influence the
assessment. Interviewers will begin to feel tired and bored in the
evening or after several rounds of interviews;
(v) The flow of information obtained from the interview will influence the
way assessment is done. This happens when candidates give
unsatisfactory answers in the early stages of the interview;

(vi) Negative information will give a poor perception;

(vii) Candidates will be assessed in the first few minutes of the interview.
This is normally based on first impressions; and
(viii) Forgetting the content of the interview once it is over. Interviewers
cannot then provide an unbiased and accurate assessment of the
candidate.
It is also said that it is difficult to find good workers, and even if workers are good,
they will not stay for long. One of the reasons for this could be that candidates are
not given the right information during the interview.
Giving candidatesÊ only positive information during the interview will give rise to
dissatisfaction and encourage turnover. Every employee has a set of expectations
for the organisation and the job to be undertaken.
Inaccurate information will impact the organisation negatively. Firstly, selecting

the wrong candidate will lead to this candidate seeking another job more in line
with his expectations. Secondly, providing only positive information about the job
will lead to the candidate having unreasonable expectations which will eventually
lead to dissatisfaction.
When the employees eventually learn about the actual job expectations which are
not consistent with their initial aspirations, they will be disillusioned in terms of
their commitment to the organisation. This kind of employee will pose problems
for the organisation.
In view of this, to increase job satisfaction and reduce turnover, organisations must
consider using realistic job previews (RJP). RJP contains both favourable and less
favourable information about the job and the organisation. Candidates are given
realistic information which allows them to have lower and more realistic
expectations about the job. The end result is that the rate of resignation is lower
among new employees.
ACTIVITY 6.4
Did you have any initial aspirations or expectations in your workplace

which have now changed? What actually happened? Discuss with your
coursemates in the myINSPIRE online forum.

Before we explore the concept of orientation, training and development, consider

your expectations of the word „orientation‰. Is it something positive or negative?
6.5 ORIENTATION, TRAINING AND

DEVELOPMENT
How do we introduce new workers to the organisation? After being selected to join
an organisation, a new recruit must be initiated to the job and the organisation.
Among the main reasons for conducting orientation activities are to:
(a) Reduce feelings of anxiety;
(b) Fit new workers to the job, work unit and the organisation; and
(c) Help in the adjustment process among new workers and co-workers.
Three types of orientation normally conducted by an organisation are work

orientation, work unit orientation and organisational orientation.
(a) Work orientation provides more information to the employee than received
during recruitment. This is the time for the employee to correct any
unrealistic expectations and aspirations. Here, new employees are given
clarification about the job scope and responsibilities and how their
performance will be evaluated.
(b) Work unit orientation aims to familiarise the employees with the goals and
objectives of the unit. At this stage, employees also receive information about
how their work process can contribute to the goals of the unit. For example,
you, as a manager, explain to the new sales executive that the outcome of his
sales achievement will contribute to the targeted total sales output. Other
than this, new employees will be introduced to their co-workers.
(c) Organisational orientation is conducted to introduce the employee to the

organisation as a whole. It informs the employee about the objectives,
history, philosophy, procedures and rules of the organisation.
Organisational authorities have an obligation to ensure that new employees
are integrated into the organisation as smoothly as possible.

6.5.1 Training of Employees

Employee training is a learning exercise which aims to achieve a certain level of
change which, relatively, can be sustained so that the employeesÊ ability to carry
out their jobs improves. It involves the change in skills, knowledge, attitudes or
behaviour. The training needs can be identified by addressing several questions in
the process shown in Figure 6.3.
Figure 6.3: Identifying the need for training
There are several easily identifiable symptoms, which can indicate that training is
needed. Among signs which indicate the need for training is a drop in production
rates, the decline in quality of goods and services, increase in accident rates and
increase in rejection rates of products and services of the company.

6.5.2 How are Employees Trained?

Most training programmes take the form of on-the-job training (OJT). OJT may
disrupt a job if more mistakes occur during training. There are also times when a
task is too difficult to learn whilst working.
Generally, training can be divided into two forms, on-the-job training and off-the-
job training as shown in Table 6.1.
Table 6.1: Forms of On-The-Job Training and Off-The-Job Training
Forms Description
On-The-Job Job Rotation Rotation of job among employees at the same

Training level. It provides comprehensive exposure to
the workers.
Understudy Working with a veteran, mentor or coach

Assignment who provides support and encouragement
Off-The-Job Lectures in Class Lectures which provide specific technical

Training skills.
Videos and Films Using media to deliver technical skills which

are difficult to demonstrate using other
methods.
Simulation Exercises Learning a task by doing that task on a

simulation basis. It involves case analysis,
role-playing and group interaction.
Vestibule Exercises Learning a task using the equipment which

will actually be used in the real work
situation, on a simulation basis.
6.5.3 How do Managers Evaluate the Effectiveness

of Training?
Managers can assess the outcome of training based on how much knowledge is
imparted to the employees successfully, whether there is behavioural change or if
the training programme has achieved the objectives set.

SELF-CHECK 6.1
Match the forms of employee training provided below to the

explanations in the right-hand column.
Films and Videos, Vestibule Training, Job Training, Simulation

Exercises, Lectures in Class, Understudy Assignment
Forms
of Description
Training
Rotation of work among workers at the same level. It gives
comprehensive exposure to the employee.
Working with a veteran, mentor or coach who provides
support and encouragement.
Lectures which provide specific technical skills.
Using media to deliver technical skills which are difficult to
demonstrate using other methods.
Learning a task by doing that task on a simulation basis. It
involves case analysis, role-playing and group interaction.
Learning a task using the equipment which will be actually
used in the real work situation, on a simulation basis.
6.6 PERFORMANCE MANAGEMENT

In this subtopic, we will explore more about performance management systems
and employee performance.
6.6.1 What is Meant by Performance Management

Systems?
A performance management system is a process of setting performance levels and
appraisal of the performance levels so as to achieve the required human resource
objectives. It also provides documentation to support worker performance.

The following are techniques popularly used (refer to Table 6.2):
Table 6.2: Performance Level Management and Appraisal Techniques
Technique Description
Written Comment The Appraiser writes down comments about the
employeeÊs performance.
Critical Incident The appraiser focuses on critical incidents which are
a test whether the employee can carry out a task
assigned to him effectively.
Graphic Rating Scale The appraiser evaluates the employee by giving a
score to each performance trait that has been
identified, on an escalating scale.
Behaviourally Anchored This combines the techniques used in the critical
Rating Scale incident technique and graphic rating scale.
Multi-person Comparisons This involves comparisons with other employees.
Management Guidance This technique focuses on the final outcome.
Appraisal
360o Feedback Appraisal is done by the employee, supervisor,
team members, co-workers, customers, etc.
ACTIVITY 6.5
How is performance setting and appraisal carried out in your

organisation? Are you satisfied with the techniques used? Share your
answers in the myINSPIRE online forum for sharing and comparing.
6.6.2 What will Happen when an Employee’s

Performance Deteriorates?
A manager must understand the reasons for a drop in employee performance. If
this happens due to wrong job-fit, then the solution is very clear. However, if it is
related to the reluctance of the employee to carry out the task, then it poses a
disciplinary problem. A manager can overcome these problems through
counselling or disciplinary action.

Counselling can help solve problems related to job performance. It addresses

the question of the employeeÊs lack of interest to carry out a task productively.
If this method is not effective, then the organisation can probably consider
disciplinary action.
6.7 COMPENSATION AND BENEFITS

We will now look into the determination of remuneration and employee benefits
in general.
6.7.1 Determination of Remuneration Level

The administrative aim of compensation is to design a remuneration structure
which is cost-effective and which can attract and retain competent employees. It
also functions as an incentive to employees so that they can give their best in their
jobs. Finally, it aims to ensure that employees receive salary levels that are
equitable and fair.
The main determinant of salary received depends on the kind of work done by an
employee. Different levels of work require different skill levels, knowledge and
ability commensurate with the respective responsibilities and authority.
The salary level is also influenced by the kind of business venture, work
environment, location, employee performance levels and employee seniority.
Finally, it depends on the organisationÊs philosophy on compensation. Some
organisations believe that they should not pay more than the actual amount
whereas other organisations believe the actual amount should be paid.
6.7.2 Employee Benefits

When an organisation designs its overall compensation package, it also considers
one other element, i.e. fringe benefits. Fringe benefits are non-monetary
compensation designed to enrich the lives of the employee. Benefits differ greatly
from one organisation to another. Some of the employee benefits practised by
organisations in Malaysia are contributions to the EmployeesÊ Provident Fund
(EPF) or Pension Scheme; Medical Benefits; Financial Loans at minimum interest
rates, etc.

6.8 CURRENT ISSUES IN HUMAN RESOURCE

MANAGEMENT
The current issues related to human resource management that will be discussed
in the following subtopics are diversification of employees, sexual harassment and
family-friendly organisations.
6.8.1 Diversification of Employees

Employee diversification refers to the hiring of foreign workers, women, disabled
persons, etc. Organisations must ensure the recruitment process is free from
discrimination. Applicants must feel comfortable with the organisational culture
and demonstrate the willingness to compromise.
6.8.2 Sexual Harassment

Sexual harassment is a serious global problem. It represents unsolicited sexual
advances which can affect an employeeÊs job.
It can happen to a person of the opposite or same sex. Sexual harassment can take
the form of verbal or physical harassment which will lead to an uncomfortable
work environment.
The management can be made responsible for any sexual harassment charge. The
legal body will be interested in finding out whether the organisation was aware of
the case. Should the organisation be aware of such a case? What must the
organisation do to overcome this problem?
6.8.3 How can Organisations become Family-friendly?

Family-friendly benefits are external assistance given by an organisation to the
family of an employee. It includes flexible working hours, leave for parents and
aid for the elderly. It also takes into account employees who have children and
other dependents who cannot be neglected when the employee is at work.

 In this topic, you were exposed to the:
– Human resource management process;
– Human resource planning;
– Recruitment and selection;
– Orientation;
– Training and development;
– Performance management;
– Compensation and benefits; and
– Current issues in human resource management.
 Human resource planning is a process to ensure an organisation has sufficient

qualified workers who can undertake their respective tasks effectively and
efficiently.
 It translates organisational mission and objectives into personnel planning.
 The right candidates must be recruited and selected to reduce problems due to
erroneous in rejection and acceptance. This can be done using several
techniques which include tests and interviews.
 Once the right candidates have been selected, the new recruit must be initiated
to the job and the organisation. This can be done in three ways:
– Work orientation;
– Work unit orientation; and
– Organisational orientation.
 Employees training is vital in order:
– To improve their ability to perform a task;
– To increase their productivity, reduce accident rates; and
– To increase the quality of goods and services.

 Training such as the change in skills, knowledge, attitudes or behaviour can be

carried out either through on-the-job training or off-the-job training.
 A performance management system is used to measure the performance level

of employees based on human resource objectives. It provides documentation
support to support worker performance.
Human Resource Management Off-the-job training

Interview On-the-job training
Job description Simulation-performance test
Job specification Written test

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Topic  Human

Copyright © Open University Malaysia (OUM)

6.1 HRM NEGOTIATION ENVIRONMENT

Copyright © Open University Malaysia (OUM)

6.2 HUMAN RESOURCE MANAGEMENT

(a) Strategic human resource planning;

(b) Recruitment and downsizing;

(e) Training and development;

(f) Performance management;

(g) Compensation and benefits; and

(h) Safety and health.

Orientation, training and development help new employees to adapt to the

Copyright © Open University Malaysia (OUM)

Figure 6.1: Strategic human resource management process

Copyright © Open University Malaysia (OUM)

6.3 HUMAN RESOURCE PLANNING

6.3.1 Human Resource Evaluation

Copyright © Open University Malaysia (OUM)

6.3.2 Future Human Resource Needs

6.4 RECRUITMENT AND SELECTION

Figure 6.2: Selection decision outcomes

Copyright © Open University Malaysia (OUM)

6.4.1 Selection of Candidates

Problems will arise if we make erroneous rejections and acceptance. Erroneous

6.4.2 Effectiveness of Tests and Interviews as

Have you encountered selection based on tests or interviews? What is

(a) Written Tests

Copyright © Open University Malaysia (OUM)

(b) Simulation-Performance Test

(i) Work Sample

(ii) Assessment Centre

The advantage of simulation-performance is its similarity to the actual work

Copyright © Open University Malaysia (OUM)

(vi) Negative information will give a poor perception;

Inaccurate information will impact the organisation negatively. Firstly, selecting

Did you have any initial aspirations or expectations in your workplace

Copyright © Open University Malaysia (OUM)

Before we explore the concept of orientation, training and development, consider

6.5 ORIENTATION, TRAINING AND

Three types of orientation normally conducted by an organisation are work

(c) Organisational orientation is conducted to introduce the employee to the

Copyright © Open University Malaysia (OUM)

6.5.1 Training of Employees

Figure 6.3: Identifying the need for training

Copyright © Open University Malaysia (OUM)

6.5.2 How are Employees Trained?

Table 6.1: Forms of On-The-Job Training and Off-The-Job Training

On-The-Job Job Rotation Rotation of job among employees at the same

Understudy Working with a veteran, mentor or coach

Off-The-Job Lectures in Class Lectures which provide specific technical

Videos and Films Using media to deliver technical skills which

Simulation Exercises Learning a task by doing that task on a

Vestibule Exercises Learning a task using the equipment which

6.5.3 How do Managers Evaluate the Effectiveness

Copyright © Open University Malaysia (OUM)

Match the forms of employee training provided below to the

Films and Videos, Vestibule Training, Job Training, Simulation

6.6 PERFORMANCE MANAGEMENT

6.6.1 What is Meant by Performance Management

Copyright © Open University Malaysia (OUM)

The following are techniques popularly used (refer to Table 6.2):

Table 6.2: Performance Level Management and Appraisal Techniques

How is performance setting and appraisal carried out in your

6.6.2 What will Happen when an Employee’s