CHAPTER 1

THE HUMAN RESOURCE

MANAGEMENT FUNCTIONS

1
 WHAT IS HRM?
• Activities and practices to plan for, attract,
select, develop and retain human
resources, to achieve the organization’s
goals

• The objective is to determine the best use

of the talent and skills available to
accomplish the organizational goals

2
 AREAS IN HRM
• HR Utilization
– Recruitment
– Selection
– Placement
– Appraisal
– Compensation
– Workplace planning

3
 AREAS IN HRM
• HR Development
– Education
– Training
– Development

• HR Environment
– Job enrichment
– Job enlargement
– Organization development
4
 GROWTH OF HR FUNCTION
• Industrial Revolution

• Human Relations Approach

• Recent Development

5
 HRM FUNCTIONS
• Human resource planning
• Recruitment
• Selection
• Compensation & benefits
• Performance appraisal
• Training and development
• Employee relations
• Safety & health
6
 CHANGING TRENDS IN HRM
• Technological changes

• Globalization and increase competition

• Employee education and expectation

• Workforce diversity

• Useful statistics 7
 HR DEPARTMENT
• To support managers’ HR responsibilities

• Help the organization to meet its

objectives by designing HR programs

• Managers and the HR Department need to

work together

8
 FUNCTIONS OF HR DEPT.
• Employment
• Training and Development
• Payment / Reward Systems
• Health and Safety
• Employee Services / Welfare
• Productivity Improvement Schemes
• Industrial Relations

9
FACTORS INFLUENCE HR DEPT.
• Size of organization

• Unionization of the workplace

• Ownership of the company

• Philosophy of top management

10
 CHALLENGES IN HRM
• Environmental challenges

• Organizational challenges

• Individual challenges

11
ENVIRONMENTAL CHALLENGES
• Rapid change
• Work force diversity
• Globalization
• Legislation
• Evolving Work and Family Roles
• Skills shortages and the Rise of the
Service Sector

12
ORGANIZATIONAL CHALLENGES
• Competitive position: cost, quality,
distinctive capabilities
• Decentralization
• Downsizing
• Organizational restructuring
• Self-managed work teams
• Small businesses
• Organizational culture
• Technology
• Outsourcing
13
 INDIVIDUAL CHALLENGES
• Matching people and organization
• Ethical dilemmas and social responsibility
• Productivity
• Empowerment
• Brain drain
• Job insecurity

14
 LABOUR LAWS
AND ENFORCEMENT
• The Employment Act 1955
• The Sabah Labour Ordinance
• The Sarawak Labour Ordinance
• The Wages Councils Act 1947
• The Employees Provident Fund Act 1991
• The Workman’s Compensation Act 1952
• The Employees Social Security Act 1969
15
 LABOUR LAWS
AND ENFORCEMENT
• The Occupational Safety and Health Act 94
• The Factories and Machinery Act 1967
• The Children and Young Persons Act 1966
• The Employment (Restriction) Act 1968
• The Trade Unions Act 1959
• The Industrial Relations Act 1967
• Pembangunan Sumber Manusia Bhd. Act 01
• The Skills Development Fund Act 2004
• The National Skills Development Act 2006 16
 CHAPTER 2
PLANNING THE ORGANIZATION’S
HUMAN RESOURCES

17
 HR PLANNING PROCESS
• Process of reviewing and identifying future
human resource needs of an organization

• HR planning helps managers reduce

uncertainty about future

• To ensure that the required number of

qualified employees is available at the
right time
18
 HR PLANNING PROCESS
• Labour demand
– Product demand
– Labour productivity

• Labour supply
– Internal labour market
– External labour market

19
 HR PLANNING PROCESS
• Labour demand exceeds labour supply

• Labour supply exceeds labour demand

• Labour demand equals labour supply

20
HR FORECASTING TECHNIQUES
• Quantitative techniques
– Trend analysis

• Qualitative techniques
– Management forecast

21
 HR INFORMATION SYSTEM
• Systems used to collect, record, store,
analyze and retrieve data concerning an
organization’s human resources

• Contains computer hardware and software

applications that work together to help
managers make HR decisions

22
 HR INFORMATION SYSTEM
• Employees

• Applicant tracking

• Skills inventory

• Payroll

• Benefits administration 23
 HRIS SECURITY AND PRIVACY
• Limit access to HRIS by controlling access
to the computer and its data files
• Use passwords and special codes
• Grant permission to access employees
information only on a need-to-know basis
• Develop polices and guidelines
• Allow employees to examine their
personal records

24
 RECRUITMENT PROCESS
• Recruitment is the process of attracting
suitable people to apply for job vacancies

• Attracting applicants
– Internal
• Employee audit or inventory
• Job posting and bidding

25
 RECRUITMENT PROCESS

• Attracting applicants
– External
• Employment agencies and consultants
• Campus recruitment exercise
• Employee referrals
• Unsolicited applicant files
• Advertising in the mass media
• Recruitment through the internet

26
 INTERNAL RECRUITMENT
• Advantages:
– Employment record of applicant available
– No induction needed
– Little or no cost involved
– Employees’ morale and motivation increased
• Disadvantages:
– Filling a vacancy may lead to a more gap
– No suitable candidates
– Supervisors may be reluctant to release key
employees
27
 EXTERNAL RECRUITMENT
• Advantages:
– Avoid inbreeding
– Possible to widen choice of applicants by
having a pool of candidates

• Disadvantages:
– High costs of recruitment process
– Frustration amongst existing employees

28
 SELECTION PROCESS
• The process of choosing the most suitable
applicant from a group of applicants, for an
available vacancy

• Collect information of applicants

• Each applicant will be assessed

29
TECHNIQUES FOR COLLECTING
INFORMATION ON APPLICANTS
• Applicants form and CV
• Reference check
• Selection tests
– Performance tests
– Aptitude tests
– Personality tests
– Intelligence tests
– Medical tests
30
TECHNIQUES FOR COLLECTING
INFORMATION ON APPLICANTS
• Selection interviews
– Planning the interview
– Conducting the interview
– After the interview
• Assessment Centre Activities
– Exercises
– Social events

31
RECRUITMENT AND SELECTION
PROCESS
• Make decision to recruit new employee
• Conduct job analysis
• Source for applicants
• Collect information on applicants
• Select most suitable applicant
• Offer employment to successful applicant
• Hold induction once employee reports for
duty
32
ISSUES AND PROBLEMS RELATING
TO RECRUITMENT AND SELECTION
• Nepotism

• Employment of children

• Hiring older workers

• Discrimination in recruitment and selection

• Employment of foreigners 33
 MAKING A JOB OFFER
• Contract of employment
– Implied terms of a contract of employment
– Express terms in a contract of employment
– Changing the terms in a contract of
employment
– Types of employment contract

34
 INDUCTION
• Purpose of induction
• Contents of a formal induction programme
• Organizing the induction programme
• Scheduling of induction
• Duration of an induction programme
• Ensuring the effectiveness of an induction
programme
• Potential problems relating to induction
programme 35
 CHAPTER 3
JOB ANALYSIS

36
 JOB ANALYSIS
• Technique of studying a job to identify the
skills, knowledge, experience and other
requirements necessary to perform the job

• Identifies the tasks, duties and

responsibilities of a particular job

• Should be re-analyzed on a regular basis

37
 CONDUCTING JOB ANALYSIS
• Determine the desired applications of the
job analysis
• Select the jobs to be analyzed
• Gather the job information
• Verify the accuracy of the job information
• Document the job analysis by writing a job
description

38
 TYPES OF JOB ANALYSIS
• Interview

• Observation

• Diaries

• Questionnaires

39
 JOB ANALYSIS METHOD
• Task Inventory Analysis

• Critical Incident Technique

• Position Analysis Questionnaire

• Functional Job Analysis

40
 JOB DESCRIPTION
• A written profile of a job

• The process of preparing job descriptions

helps to identify unnecessary tasks,
overlapping responsibilities and even the
existence of functions for which no one
has responsibility

41
 JOB DESCRIPTION
• Job title, location and grading
• Relationships
• Brief statement on the purpose of the job
• List of duties and responsibilities
• Terms and conditions of employment to be
given to the job-holder
• Negative aspects of the job

42
 JOB SPECIFICATION
• Also known as person specification or
worker characteristics

• Describe the profile of a person who

should be able to succeed in the job and
will guide the recruitment officer to the
best candidate

43
 JOB SPECIFICATION
• Knowledge, skills and abilities required to
do the job
• Educational qualifications and work
experience required
• Physical requirements of the job
• Personality requirements
• Career path

44
 CHAPTER 4
COMPENSATION AND BENEFITS

45
 WHAT IS COMPENSATION?
• Total compensation has three
components:
– Base compensation
– Pay incentives
– Indirect compensation benefits

46
DESIGNING A COMPENSATION SYSTEM
• Internal vs External Equity
• Fixed vs Variable Pay
• Performance vs Membership
• Job vs Individual Pay
• Egalitarianism vs Elitism
• Below-market vs Above-market Compensation
• Monetary vs Nonmonetary Awards
• Open vs Secret Pay
• Centralization vs Decentralization of Pay
Decision 47
 COMPENSATION TOOLS
• Job-based compensation plans

• Skill-based compensation plans

48
 WAGE SYSTEMS
• Time-related systems

• Piece-rated systems

49
FACTORS AFFECTING LEVELS OF PAY
• Legislation and government policy

• Unions

• Selection policy

• Employment conditions

• Company profitability 50
 FACTORS AFFECTING
INDIVIDUAL LEVELS OF PAY
• Seniority

• Increase in the cost of living

• Performance

• Degree of skill

51
CONDITIONS OF EMPLOYMENT
• Working hours

• Rest days

• Public holidays

52
 WORKING HOURS SYSTEM
• Normal working hours

• Overtime working

• Shift work systems

• Alternative working hours scheduling

• Teleworking and homeworking

53
 EMPLOYEE BENEFITS
• Group membership rewards that provide
security for employees and their family
members

• Sometimes called indirect compensation

• Protect employees from risks that could

jeopardize their health and financial
security
54
 WHY PROVIDE BENEFITS?
• Statutory required

• Attract staff to join the organization

• Retain existing employees

• Increase morale of employees

55
CLASSIFICATION OF BENEFITS
• Protection programmes

• Paid time-off

• Accommodation and enhancement

benefits

56
DESIGNING A BENEFIT SCHEME

• Eligibility and waiting periods

• Kinds of benefits
• Level of benefits
• Financing of the benefits
• Fixed package or employee choice
• Communication

57
 STATUTORY BENEFITS
• Maternity protection
• Time-off payments
– A weekly rest day
– Public holidays
– Annual leave
• EPF Act
• Employees Social Security Act

58
 NON-STATUTORY BENEFITS
• Time-off payments
• Health care
• Insurance
• Financial services
• Subsidies and service
• Retirement benefits
• Allowances
• Educational fee assistance
59
TRENDS IN BENEFIT PACKAGES
• Awareness and desirability of benefits

• Align benefits to strategic objectives

• Cafeteria benefit schemes

• Issues related to benefits

60
 REWARD SYSTEMS
• Non-financial rewards
– Performance awards
– Letters of appreciation
– Sponsorship to seminars, conferences and
overseas tours
– Rewards for long service

• Financial rewards
– Salary increases
– Bonus and profit sharing
– Rewards for salespeople (commissions) 61
 CHAPTER 5
PERFORMANCE APPRAISAL

62
 DEFINITION
• Performance appraisal involves:
– Identification
• Determining what areas of work the manager should
be examining when measuring performance
– Measurement
• Making managerial judgements of how ‘good’ or ‘bad’
employee performance
– Management
• The overriding goal of any appraisal system.

63
 USES OF
PERFORMANCE APPRAISAL
• Administrative process

• Developmental process

64
 FACTORS INFLUENCE
EMPLOYEE’S PERFORMANCE
• Knowledge and skills

• Motivation

• Work environment

65
 SOURCES OF INFORMATION
IN APPRAISAL
• The employee

• Employee’s manager

• Employee’s co-workers

• Employee’s subordinates

• Customers / Clients 66
 EMPLOYEE PERFORMANCE
MANAGEMENT SYSTEM
• Objective setting

• Implementation of work and monitoring

• Appraisal of the individual workers

• Follow-up action

67
 PERFORMANCE APPRAISAL
PROCESS
• Interview
– Opening
– Begin discussion

• Counselling
– Non-directive counselling
– Advice giving
– Information giving
– Teaching and coaching 68
 BENEFITS OF
PERFORMANCE APPRAISAL
• Employer perspective
– Individual differences in performance can
make a difference to company performance
– May be needed for legal defense
– Provides a rational basis for constructing
bonus
– Can help to implement strategic goals
– Providing individual feedback
– Can include teamwork and teams
69
 BENEFITS OF
PERFORMANCE APPRAISAL
• Employee perspective
– Performance feedback is needed and desired
– Improvement in performance requires
assessment
– Differences in performance levels across
workers be measured and have an effect on
outcomes
– Can motivate workers to improve
performance
70
 PROBLEMS IN
PERFORMANCE APPRAISAL
• Rater errors and bias

• Influence of liking

• Organizational politics

• Individual or group focus

• Legal issues 71
 PROBLEMS IN
PERFORMANCE APPRAISAL
• Recent effect

• Halo effect

• Central tendency

• Prejudice and stereotype

• Fatigue 72
 EFFECTIVE
PERFORMANCE APPRAISAL
• Conduct appraisal in private
• Allow enough time for employee to discuss
issue
• Refer to performance not individual
• Provide specific not general behaviour
• Give feedback in a good manner
• Avoid loaded terms which produce
emotional reactions
73
 CHAPTER 6
TRAINING AND DEVELOPMENT

74
 DEFINITION OF TRAINING
• Organizational activity which aims to
improve an employee’s current
performance

• The attempt by an organization to change

employees through the learning process

• Training programmes are designed to

change attitudes, develop skills or impart
knowledge 75
 WHAT WILL HAPPEN IF NO
FORMAL TRAINING?
• Learning on the job will take longer
• Costs of wasted materials, sales and
customers lost
• Management time cost taken
• Lowered morale, demotivated
• Accident-related costs
• High turnover
76
 BENEFITS OF TRAINING
• Increase worker’s productivity

• Increase worker’s job satisfaction

• Keeps worker’s skills and knowledge up-

to-date

• Helps to motivate workers

77
 SYSTEMATIC TRAINING
• Identify training needs

• Set training objectives

• Design training programme

• Implement training programme

• Evaluate training programme 78

 TRAINING NEEDS AND
TRAINING PLANS
• Individual workers face difficulties in
performing job satisfactorily
• New workers are recruited
• New technology and procedures are
introduced
• Individuals are transferred or promoted
• Major change in the organization
79
 DESIGNING TRAINING PLANS
• Identify a performance problem
• Decide whether the problem is serious
enough
• Identify the cause of the problem
• Generate alternative solutions to the
problem
• Choose the best solution and implement

80
 SET TRAINING OBJECTIVES
• Purpose of training is to improve
employee’s abilities and performance on
the job

• Consists of three parts:

– Terminal behaviour
– Standards to be achieved
– Conditions of performance

81
DESIGN TRAINING PROGRAMME
• Facilitators
• Venue
• Duration and scheduling of programme
• Number of participants
• Training methods
• Logistics
• Budget

82
 EVALUATING TRAINING AND
DEVELOPMENT
• Trainees’ responses

• Trainee learning

• Application of new skill and knowledge

• Assessing the results

83
 LEARNING PRINCIPLES
• The learner must want to learn

• Active or passive learning

• Feedback or knowledge of results

• Learning is faster in teams

84
 CHAPTER 7
EMPLOYEE RELATIONS

85
 UNDERSTANDING
EMPLOYEE RELATIONS
• Good employee relations involve providing
fair and consistent treatment to all
employees

• To foster good employee relations,

managers must listen to and understand
what employees are saying and
experiencing
86
 UNDERSTANDING
EMPLOYEE RELATIONS
• Effective employee relations require
cooperation between managers and
employee relations representatives

• ERR will try to ensure that company

policies and procedures are followed and
advise both supervisors and employees on
specific employee relations problems
87
 TRADE UNIONS
• A group of seven or more workers can
form a trade union
• Application for registration with DG of
Trade Unions
• The application form must be signed by all
members
• Send together with the union’s constitution
• The important criterion for a union to be
registered is its intended member
88
 TRADE UNIONS
• All workers above 16 years have the right
to join an appropriate union

• Workers between 16 and 21 have lesser

rights to participate in union activities

• Specified groups of workers are restricted

from joining trade unions

89
 TYPES OF UNIONS
• National and regional unions

• In-house unions

• Employer’s associations

90
 ROLE OF TRADE UNIONS
• Protect their members’ right
• Will take action to stop such unfair practices
• Advise members on their right
• Encouraging government to pass legislation
• Introduce policies
• Three-pronged approach:
– Individual employers
– National issues
– Individual members
91
 COLLECTIVE BARGAINING
• The process whereby employers and
employees negotiate over the terms and
conditions on employment

• Union is required by law to gain formal

recognition from the employer before any
negotiation can be made

92
 COLLECTIVE BARGAINING
• One of the main functions of trade unions

• The best method of regulating the terms

and conditions of employment

• Once an agreement is reached between

the two parties, there will be no
discrimination between them

93
 COLLECTIVE BARGAINING
• May be carried out between an individual
employer and a trade union of employees

• Or between the union of employees and

the union of employers

• This process is regulated by the Industrial

Relation Act

94
 COLLECTIVE AGREEMENTS
• Written agreement between an employer
and a trade union relating to terms and
conditions of employment
• Agreement must specify their duration, not
less than three years
• Must be deposited with Industrial Court
• Most agreements include clauses on
wages, working hours and other benefits
to be given to the workers
95
 INDUSTRIAL ACTION
• Picket

• Strike

• Lockout

96
 SETTLEMENT OF
INDUSTRIAL DISPUTES

• Conciliation

• Arbitration

97
 EMPLOYMENT LAWS
• Employment Act

• Industrial Relations Act

98
 DISCIPLINE
• Penalties in a disciplinary system
– Oral warning
– First written warning
– Final written warning
– Suspension without pay
– Suspension of increment
– Demotion or downgrading
– Dismissal

99
 EMPLOYEE PROBLEMS
• Transfer

• Promotion of employees

• Grievance handling

• Absenteeism of workers

100
TERMINATION OF EMPLOYEE’S
CONTRACT OF EMPLOYMENT
• Role of Industrial Court

• Resignation

• Expiry of fixed-term contract

• Retirement

• Redundancy and retrenchment 101

TERMINATION OF EMPLOYEE’S
CONTRACT OF EMPLOYMENT
• Dismissal of misconduct

• Dismissal for poor performance

• Frustration of contract

• Termination of probationers

• Constructive dismissal 102

 CHAPTER 8
SAFETY AND HEALTH

103
 ACCIDENTS AT WORK
• Financial costs

• Losses of output

• Lowered morale

• Negative publicity

104
 TYPES OF ACCIDENTS

• Near miss

• Non-fatal

• Fatal

105
 CAUSES OF ACCIDENTS

• Technical causes

• Human causes

• Environmental causes

106
ENSURING A SAFE WORKPLACE
• Safety policies
– A statement of organization’s commitment
– An explanation of who’s responsible
– A description of procedures

• Safety programmes
– Commitment from all employees
– Officer in-charge of safety
107
ENSURING A SAFE WORKPLACE
• Safety programmes
– Record keeping
– Safety training
– Safety and healthy living campaigns
– Incentive and reward schemes
– Provision of personal protective equipment
– Disciplinary system

108
 OCCUPATIONAL
SAFETY AND HEALTH ACT
• Ensure the safety of all employees and
any other person at the workplace
• Draft and disseminate a safety policy
• Appoint a safety committee
• Appoint a dedicated, qualified safety and
health officer
• Provide appropriate training, supervision
and information
• Report serious accidents to DOSH 109
 SEXUAL HARASSMENT
• An unwanted conduct of a sexual nature
having the effect of verbal, non-verbal,
visual, psychological or physical
harassment

• Not acceptable behaviour and any

employee found guilty of such conduct will
be punished

110
IMPROVING EMPLOYEES’ HEALTH
• Wellness programmes

• Stress management

• Reducing drug and alcohol related

problems

111
 EMPLOYEE ASSISTANCE
PROGRAMS
• Programs designed to help employees
whose job performance is suffering
because of physical, mental or emotional
problems
• Four steps involve:
– Identify troubled employee
– EAP counseling
– Solve the problem
– Depend on the outcome of the treatment
112
 CHAPTER 9
INTERNATIONAL
HUMAN RESOURCE MANAGEMENT

113
 GLOBALIZATION
• Stage 1: Domestic Operations

• Stage 2: Export Operations

• Stage 3: Subsidiaries or Joint Ventures

• Stage 4: Multinational Operations

• Stage 5: Transnational Operations

114
 DIVERSITY OF WORK FORCE
• Demographic trends

• Diversity as an asset
– Greater creativity
– Better problem solving
– Greater system flexibility

115
 INTERNATIONAL HRM ISSUES
• Career blockage
• Culture shock
• Lack of pre-departure cross-cultural training
• Overemphasis on technical qualification
• Getting rid of a troublesome employee
• Family problems

116
 IMPROVING THE DIVERSITY
• Commitment of top management

• Diversity training programs

• Support groups

• Accommodation of family needs

– Day care
– Alternative work patterns
117
 IMPROVING THE DIVERSITY
• Senior mentoring programs

• Apprenticeships

• Communication standards

• Organized activities

118