Cambridge International Diploma in Business

Introduction
What are organizational assets??
Module Contents
Overview of the HRM: definition, purposes and HRM
approaches
The employment market: features, organization functions,
technical change in HR, legal environment
Meeting human resources requirements: HR types of
contracts, selection processes, ending contracts, organizing
different working patterns
Working together in groups “Team participation”: measuring
performance, communication, resolving problems
Motivation and training: payment methods, fringe benefits,
working conditions, training & development
Activity
Qualifications, training & skill sets for HR personnel
How to be a successful HR professional?
Organizational
Capabilities
 Talent Manager
 Organizational designer
 Culture & change steward
 Strategy architect
Systems & Processes
 Organizational Executer
 Business Ally
Relationships
 Credible Activist
I) Human Resources Overview
Objectives
Understand the meaning, purposes and organization of
the HR management.
Understand why organizations must manage people
effectively and efficiently
Understand different approaches to the management of
human resources.
HRM: Meaning / Definition

HR management is the process of creating and

maintaining relationships between
organizations and the people who work for
and with them
 Purposes of the HRM

(right skill mix)

(wages & salaries, (ensures the

support & admin organization has the
costs, social costs) ability to change)
1.Providing the right mix of skills
Different jobs require different skills
The HRM should ensure that the business has enough
employees with the appropriate skills to carry out all
its functions
This can be done by:
Determining the HR needs of the organization
Determining the current and future job needs
Recruiting and selecting employees with the right skills,
experiences
Where does the vacancy come
from?
Employee leaving e.g. retirement, going to another job
Employee promoting
Increasing workload
Departmental or organization expansion e.g. new
province, acquiring technological systems
2.Controlling employment costs
Employment of people involves cost, what are these
costs?
Salaries
The HR functions e.g. recruiting
Benefits e.g. training & development, fleet, clothing,
insurance.
Social costs
3.Reacting effectively to change
What is a change?
What are the kinds of change?
 Internal “personal, group, organizational”
 External “customer-related, environmental”
Examples:
 Change in customer perception towards a product (marketing)
 Change in the local regulations affecting the industry
 Change in organizational priorities
How could the HRM ensure employees are correctly reacting to
changes?
 Communicating with them
 Consulting them about the change
 Involving them
 Help them casting away their fears
 Gaining their commitment and support
Activity
Listing HR functions
Approaches to HR management
Centralized approach
All HR functions are
carried out by a central
personnel department
Dictatorial decisions
Top-down approach
HR
Causes confrontation
Sometimes loses
coordination between
employers and
employees
BU=Business Unit
Approaches to HR management
Decentralized approach
 Employees are involved in
the workplace
 Employee relations and
HR management is the
responsibility of all
managers
 Increased motivation, HR
commitment
 All HR functions are
managed by both
managers and HR
department
1.0 Assignment
(a) Explain the meaning of Human Resource
Management (HRM).
(b) List four purposes of HRM.
Activity
Case studies
Line Managers as HR Managers
Involved in HR & personnel matters
Motivation
Organizing work
HR planning
Recruitment
Discipline
HR Modern Central Role
Monitoring legal HR matters
Centralized HR functions; recruitment & selection,
disciplinary procedures
 Implementing company’s policies
Administering pay (compensations) and benefits
Industrial Relations
Employee Welfare
Centralized or Decentralized?
Size
Type
Span of control
Chain of command
The Employment Market
Meaning / Definition
Main features
Function of organizations
Influence of technical change on HRM
Legal Environment
What makes the employment
market?
Features of Employment Market
Employment seekers
Businesses & organizations
Change in employment market
Impact of change
Learning new skills
Adapt to new working practices / conditions
New industries
Features of Employment
Market . . (continued)
Sectors of employment
Trends in age & gender
Full time employment vs. self employment
 Full-time employment
Vs
Self employment
Full-time employment Self employment
High capital investments  Attractive growing trend for
Increased job security professionals and trade people
 Incorporates freedom of
Fixed working periods
working
Requires a defined set of  Low capital investments
skills  Supplemented with full and
Decisions are made by others part-time employment
Decreased risk  Longer working periods
Benefits package  Requires a larger set of skills
 Decisions made by yourself
 Substantial financial risk
Activity
Trends
Sectors of employment
Comparison of employment
Organizations affecting how HR
are Managed
Trade & Labour Unions
 Their strength varies from country to country
 Negotiate with employers matters as pay, working hours
 Represent employees unfairly treated
 Provide information to employees on their rights
 Services, training
Employers associations and professional bodies
 Advice & support services
 Ex Hong Kong Management Association, American Society of
Training & Development
 Local chambers of trade / commerce / industry
 Research, PR, lobbying, negotiation, maintaining professional
standards
Organizations affecting how HR
are Managed . . continued
Government Agencies
Encourages co-operation between employers &
employees
Resolve disagreements
Governmental departments responsible for
employment, industry & trade
Settling industrial disputes
Organizations influencing the way
HR are managed
Trade Union “Labor Union” - EMPLOYEES
Could represent one small industry or many different
industries
Their strength vary from country to another
Their services:
 Negotiate with employers over some matters i.e. pay, working
periods, working practices, etc.
 They represent the employee(s) in cases of unfair treatment or

discrimination. They resolve the issue either by negotiation or

by legal actions
 Source of information, benefits and training for employees
Organizations influencing the way
HR are managed
Employers’ Associations
They represent the interests of employers either in one
small industry or many different industries
Their services:
 Research
 Public relations

 Negotiation

 Lobbying
Organizations influencing the way
HR are managed
Professional Bodies or Associations
They are regarded as trade unions for it members who
belong to one profession i.e. Lawyers and doctors
syndicate
Their services:
 Public relations
 Negotiation

 Maintaining professional standards

Activity
1. Trade unions
2. Organizations
Development of new technology
Computer Aided Manufacturing – CAM
Computer controls machinery & equipment
Reduces the need of labour
Accurate
High quality product
Computer Integrated Manufacturing – CIM
Computer controls entire production line
Reducing the need of labour
Avoiding boredom of repetitive routine jobs
Development of new
technology . . . continued
Computer aided design (CAD)
 Design can be tested using computer programs
 Car and many other household repairers identify problems using
hand held computers
 Bank cashiers use computer terminals for money deposits &
withdrawals
Electronic funds transfer at point of sale (EFTPOA)
 Retailers have electronic tills linked directly to the banking system
 Avoids need for customers to carry cash
 Update stock records
Office applications
 Computers
The influence of technical change
on HRM
Reducing number of labour needed
Training
Acquiring learning new skills
Activity
3. Technological change
The Legal Environment
Terms & conditions of employment
Wages
Equal opportunities
Maternity / paternity
Health & safety
Training
Case Study
Applied Chemical Co.
III. Meeting HR Requirements
Different Types of Employment Contracts
Recruitment & Selection Process
How the contract of employment can end
The Contract of employment
Type of employment contracts: full time part time,
free lance, fixed term, service contract
Legal agreement between employer & employee
Follows an offer of employment
Includes:
Name of employer - Name of employee
Job title - Commencement date
Hours of work – remuneration level & benefits
Termination notice – grievance & disciplinary
procedures
Contract duration
Contracts
Full time vs. part time
Fixed term contracts vs. services contract
Activity
Meeting HR requirements 1
Employment vacancies are due to:
Employee resigned, retired
Business expanding
Introducing new products
Increased work load
Recruitment & Selection Process
Job description
Person specification
Job advertisement
Job application, applicants’ response
Receiving applications, closing date, sorting
Interviews
Selecting the right candidate
Employment offer & employment contract
Ending the contract of employment
Job descriptions
Definition: a detailed statement identifying what a job entails;
nature of the work, responsibilities, tasks, measurement of
performance, accountability
Importance: help in advertising for suitable applicants, only
appropriate applicants will apply, serves as guidelines for
selection process
Includes:
 Job title
 Duties
 Responsibilities
 Accountability
Prepared by HR & department managers
Personal Specifications
It describes the qualities, attributes and characteristics
required in a person to carry out a particular job
Physical and mental abilities
Skills
Academic background
Professional experience
Age, gender
Job Advertisement & Attracting
candidates
Job advertisement based on JD & job specification
Internal announcement
External announcement
Advertisement
 Attractive
 Sufficient job information

 Where & how to apply

 Closing date

Recruitment agencies
Head hunting
In depth reading
Job descriptions
Job application, applicants’
response
Employers providing more details on the job
details on the business (websites)
Details on the job, sometimes JD
Application forms
CVs / resumes
Creating a pool of candidates
Activity
Job announcement Advertisement
Application form
Resume / CV
Receiving applications, closing
date, sorting
Receiving applications until closing date
Sorting according to preset criteria, JD
Short listing
Interviews scheduling
Interviews
One to one interviews
Panel interviews
Planned / structured interview vs. unstructured
Interview tests;
Ability in specific areas
Mental abilities
Psychometric – IQ - behavioral – situational - stress
Selecting the right candidate
Matching JD & job specification
Application
Interview performance
Test results
Employment offer
Starting date
Compensation / pay
Activities
Job specification
References
Assessing candidates
Ending the contract of
employment
Resignation
Retirement
Redundancy, job/function ceases to exist
Dismissal
 Skill Inventory
Media Vacancy
 Your company has the following
vacancies: Local newspaper
 computer programmer National newspaper
 catering staff
 Accountant
 Receptionist Internet
 Cleaner Local Radio
 Senior Marketing Product Manager
 Fork-lift truck driver
TV
 General clerical assistant Professional
 Semi-skilled general labourer Journals
 Accountant Recruitment
 Regional HR Director Agencies
 Management trainee University
 Task: Advise the HR department (by Appointment Board
completing the grid) which medium
you would use for each post
Other (Specify)
Source: Charles A. Peck, Compensating Field Force Sales Representatives, Report No.828, New York Conference Board, 1982

Skill Inventory
Consequences of wrong candidate
selection
Consider a salesperson’s career, draw the possible
consequences and costs incurred in selecting the
wrong candidate
IV. Working Together
1. Different ways of organizing work
2. How organizations measure & monitor people’s
performance
3. Systems for communication & resolving problems
1. Different Patterns of Work
Day work (8-9 hours)
Shift systems (24 hours)
Strain
Antisocial
Compensated
Flexitime
Motivation
Increase productivity
In Depth
Job enrichment / enlargement
 Pattern of work
 Day work system:
 Typically most people work for a certain set of hours per day for 5 or 6 days
a week i.e. 8 hrs/day
 Breaks could be established during these working periods for a reason i.e.
Hot climate
 Shift system:
 Employees work for their normal hours per day, but different teams of
employees work at different set of hours i.e. 3 shifts * 8 hrs in a 24 hr cycle
 Considered “Antisocial” for early or late workers, thus maybe paid better
 Flexitime system:
 Organizations allow some employees to work hours which suit them, with
start and end times being at the employee’s discretion, however, a set
number of hours must be worked in a particular period.
Activities
Organizing work
2. Measuring & Monitoring
Performance at Work
Comparing performance to:
Standards; JD, person specification, job holders
Targets; sales target – production units
 Realistic
 Achievable

 Agreed with jobholder

 If not: Demotivation

Key accountabilities & competencies

2. Measuring & Monitoring
Performance at
Work . . .continued
Accountabilities: responsibilities, maximizing sales for
example
Competencies: knowledge & skills required,
communication skills
Appraisal system
Meaning
one to one - 360 degrees
Measuring and monitoring
performance at work
Appraisal systems
Appraisal is the process of assessing the progress and
effectiveness of employees
It typically involves an interview between an employee
(appraisee) and the employee’s direct manager (Appraiser)
A well-structured appraisal will:
 Help employee accept credit of being valued
 Discuss areas of concerns of both parties
 Discuss forthcoming targets
 Support the employee i.e. need for training
 May involve other people contacted with the employee (360
Degrees Appraisal)
Activity
Performance appraisal document
Measuring performance
3. Communicating & Resolving
Problems
Impact of employer – employee problems / conflicts
 Disruption / tension
 Loss of productivity & profit
 Dissatisfaction
 Uncertainty
 Unemployment
Possible systems of resolving problems include:
 Individual problem solving mechanisms
 Improvement Mechanisms
 Formal consultations & negotiations systems
Individual Problem Solving
Mechanisms
Grievance procedure: employees can seek to resolve
complaints

Disciplinary procedure: employers seek to put their

employees back on the right track
Grievance Procedure is the means by which
employees can seek to resolve complains of alleged
or real breaches of the terms and conditions of their
employment

The complain should be first discussed with the

employer’s immediate manager

If unresolved, the employee may seek discussion

with higher management level

A formal investigation of the complain should be

conducted.
Disciplinary Procedures is the process by which employees
are reprimanded, punished or even dismissed in the event of
their failure to work according to their employment contract
and/or company code of conduct

•Problem will be discussed giving the employee given date

to improve

•If there was no improvement; formal warning in writing

•Continued failure to improve; final warning in writing

•Employee’s dismissal

•Fraud, fighting at work, severe negligence = gross misconduct

= instant dismissal
Improvement Mechanisms
Aimed at avoiding problems through communicating
and involving employees in their work
Communications designed to increase employees
awareness, involvement and commitment to their
employer, including:
Company magazine / newspaper
Reports on the company to employees
Regular department or briefing sessions
Improvement Mechanisms . .
contd
Other improvement mechanisms aim to increase
employees motivation by involving them in improving
company’s overall performance:
Suggestion schemes
Attitude surveys
Quality circles
Total quality management
Customer care programs
Total quality management (TQM) is a management philosophy that seeks to
integrate all organizational functions (marketing, finance, design, engineering, and
production, customer service, etc.) to focus on meeting customer needs and other
organizational objectives.

TQM empowers an entire organization, from the most junior employee to the CEO,
with the responsibility of ensuring quality in their processes.

In particular, TQM provides management with the ability to ensure quality through
more streamlined and effective process-improvement channels.

A great range of organizations have deployed TQM, including small companies, large
companies, and government departments (e.g., NASA.

TQM is no more relevant to any one type of organization than any other; on the
contrary, it is a philosophy appropriate to any situation in which quality assurance is
important.
Improvement Mechanisms
In depth reading
Organizational Suggestion Schemes
Formal Consultation &
Negotiation Systems
These systems aim largely to seek the views of others
before coming to a decision.
Based on regular meetings and discussions between
employer & employees
Committees
Of general scope (discuss general matters between
employees and employer) i.e. Works Council, Workers
Directors
Of specific scope (discuss specific matters of interest) i.e.
Health & Safety Committee
Committees examples & dynamics
 Work councils;
 Discuss employees matters
 Consists of elected representatives of employees + representatives of
management of the company
 Objective: act as two channel of communication between employees &
management of a business
 Work directors;
 Some larger businesses appoint them in company board
 They represent the views of employees at the highest level in the company at
board meeting
 Health & safety committee
 Established to:
 Consult
 Discuss
 Take action
 Avoid and resolve problem in specific area
Activities
 Communicating & Resolving Problems
V. Motivation & Training
Motivations theories
Different methods of payment
The use of fringe benefits
 How the nature of work contributes to motivation
The main features of training & development
Why do people work??
Money
Security
Job Satisfaction
A sense of self importance
A sense of belonging
Maslow’s Hierarchy of Needs
(1935)
Physiological needs, basic; food, water, shelter,
warmth
Safety & security
Social needs; belonging to a family or a group
Needs for recognition & esteem
Self realization & achieving personal goals
 Maslow’s hierarchy of needs

Personal growth
& fulfillment

Achievement, status,
responsibility, reputation

Family, affection,
relationships,
work group, etc

Protection, security,
order, law, limits,
stability, etc
Basic life needs, air,
food, drink, shelter,
warmth, sex sleep, etc
McGregor’s Theory X & Theory Y
Theory X: Organizations
 Assume employees dislike
work & avoid it
 They must be persuaded to
work with high wages
 Controlled with strict
supervision
 Threatened with punishment
as motivation
Theory Y: People
 People enjoy work
 Will strive to meet targets &
objectives
 Commitment is increased
when they feel ownership of
their jobs; through increased
responsibility & participation
in decision making
McGregor’s Theory X and Theory Y
McGregor’s Theory X & Theory Y
Test
Implementation of Theory Y
Delegating responsibility to employee
Consulting employees about their work, problems, or
concerns
Participation in decision making
Herzberg’s Hygiene Motivator
Theory
•Hygiene factors are important
•Businesses can improve employees motivation by improving the nature
and content of the actual job

 Hygiene Factors  Motivation factors

 Pay  Relating to the job itself
 Satisfactory working conditions  Interesting job
 Helpful organizational policies  Achievement opportunities
 Management & supervision job provides
 Recognition
 Promotion
 Added responsibility
 Hygiene/motivator theory Herzberg’s

Essentially, hygiene factors are needed to ensure an employee is not dissatisfied.

Motivation factors are needed in order to motivate an employee to higher
performance
Motivation in Practice
People are individuals
Motivators vary from individual to individual
Theories can give general guidance
Businesses MUST tailor their own motivation
strategies to their workforce
Effective motivation package MUST include both
financial & non-financial incentives (fringe benefits)
Financial Incentives
 Wages: based on fixed hourly rate paid for the number of hours worked
 Incentive for employees to work longer hours so as to increase the wage they receive
 Employees may maximize the time they take to do the job to increase their wages
 Salaries: a method of pay based on a year’s work regardless of the hours it takes
 Employees would work hard during their contractual hours in order to avoid working
unpaid overtime
 There is no additional payment for hours worked in excess
 Piece work: a method of pay based n output, how many pieces or units employee
produced
 Only appropriate for workers who produce identifiable and uniform units
 Can encourage employees to work harder and produce more
 Can lead to poor quality if quality is sacrificed for speed
Financial Incentives . . . continued
 Bonuses & Commissions:
 Bonus: an extra payment in recognition of employee’s contribution to company’s
success
 Commissions: normally paid to sales executives and similar employees who have a
responsibility of selling company’s products
 Profit sharing: employees are paid a share of company’s profits usually in the form
of annual cash bonus
 Employees strive for the increase of profit of the company as they will receive a share
of this profit
 Pensions: schemes intended to provide employees with an income after retirement
 Contributory schemes: employees pay into the scheme by regular deductions from
their pay, usually with a additional contribution by the employer
 Non contributory: where the scheme is entirely funded by the employer
Non-Financial Incentives & Fringe
Benefits
Fringe benefits are subject to income tax in many countries,
examples of non-financial benefits
Company cars
Cheap loans
Subsidized food and accommodation; canteens, staff cafeteria,
staff restaurants
Health & insurance
Company stocks option
Reduced prices for company products
Activities
Incentives
Management Theories
Fredrick Taylor: Scientific Management

Taylor believed that the industrial management of his day was amateurish (unprofessional), that management could be formulated as an academic
discipline, and that the best results would come from the partnership between a trained and qualified management and a
cooperative and innovative workforce. Each side needed the other, and there was no need for trade unions.

Taylor's scientific management consisted of four principles:

Replace rule-of-thumb work methods with methods based on a scientific study of the tasks.
Scientifically select, train, and develop each employee rather than passively leaving them to train themselves.
Provide "Detailed instruction and supervision of each worker in the performance of that worker's discrete task".
Divide work nearly equally between managers and workers, so that the managers apply scientific management principles to planning the work and the workers
actually perform the tasks.

Managers and workers

Taylor had very precise ideas about how to introduce his system:
It is only through enforced standardization of methods, enforced adoption of the best implements and working conditions, and enforced cooperation that this faster
work can be assured. And the duty of enforcing the adoption of standards and enforcing this cooperation rests with management alone.
Workers were supposed to be incapable of understanding what they were doing. According to Taylor this was true even for rather simple tasks.
The introduction of his system was often resented by workers and provoked numerous strikes. Taylor believed the labourer was worthy of his hire, and pay was
linked to productivity. His workers were able to earn substantially more than those in similar industries and this earned him enemies among the owners of
factories where scientific management was not in use.

http://en.wikipedia.org/wiki/Frederick_Winslow_Taylor
Management Theories . .
continued
Elton Mayo is known as the founder of the Human Relations Movement

He carried out a number of investigations to look at ways of improving productivity, for example changing lighting conditions in the
workplace. What he found however was that work satisfaction depended to a large extent on the informal social pattern of
the work group. Where norms of cooperation and higher output were established because of a feeling of importance, physical
conditions or financial incentives had little motivational value. People will form work groups and this can be used by
management to benefit the organization. He concluded that people's work performance is dependent on both social issues and
job content. He suggested a tension between workers' 'logic of sentiment' and managers' 'logic of cost and efficiency' which could
lead to conflict within organizations.

Summary of Mayo's Beliefs:

Individual workers cannot be treated in isolation, but must be seen as members of a group.
Monetary incentives and good working condition are less important to the individual than the need to belong to a group.
Informal or unofficial groups formed at work have a strong influence on the behavior of those workers in a group.
Managers must be aware of these 'social needs' and cater for them to ensure that employees collaborate with the official
organization rather than work against it.

http://en.wikipedia.org/wiki/Elton_Mayo
Motivation & the Nature of
Work
Job satisfaction
Job enrichment & job enlargement
Job rotation
Developing working relationship
Activity
Job satisfaction survey
The container store video
Motivation & job satisfaction
Training & Development
Importance:
Employees to know how to do their jobs
Adapting to changing circumstances as new
technologies
Employer gains:
 employees’ increased motivation & commitment
 Increased quantity & quality of output

Employees gains:
 Enhanced career & promotion prospects
 Feeling of being valued
Training & Development . .
continued
Training Methods:
Internally:
 Subject to office pressure & distractions
Externally:
 More expensive
 Takes employees out of workplace

 Exposure to different ideas & cultures

Types of Training
Induction training
On the job training
Off the job training
Induction Training (orientation)
Initial introductory program designed to ease new employees into
an organization
Introduce new employees to the business
Familiarize new employees with practices of the organization
New employees to feel comfortable with their new employer
Give new employees confidence & competence in their working
environment
Help them carry out their jobs
On-the-job Training
Training carried out at the actual place of work
Learning job specific skills
Individual training for employees to be able to carry out their
duties & their specific tasks
Delivered by staying close to a an experienced worker / senior
colleague
Advantage: immediate gain of productivity
Disadvantage: quality of training highly depends n the abilities
of the trainer
Off-the-job Training
All forms of training carried out away from the actual
workplace
Aim to develop more skills and knowledge
Delivered both externally & internally
Activity
Defining training
Investing in training
Induction training
Case Study
Motivation in the building trade