MOT Chap 8

MANAGING
HUMAN
RESOURCES
IN
ORGANIZATION
S
OBJECTIVE
1. To describe the environmental context of human resource
management, including its strategic importance and its relationship
with legal and social factors.
2. To discuss how organizations attract human resources, including
human resource planning, recruiting, and selecting.
3. To describe how organizations develop human resources, including
training and development, performance appraisal, and performance
feedback.
3
OBJECTIVE
4. To discuss how organizations maintain human resources,
including the determination of compensation and benefits and
career planning.
5. To discuss the nature of diversity, including its meaning,
associated trends, impact, and management.
6. To describe labor relations, including how employees form unions
and the mechanics of collective bargaining.
7. To describe the issues associated with managing knowledge and
contingent and temporary workers.
4
What is
Human Resource
Management
(HRM)?
5
What is
Human Resource Management
(HRM)?
 The set of organizational activities
directed at attracting, developing, and
maintaining an effective workforce
6
1
THE ENVIROMENTAL
CONTEXT OF HRM
The Strategic Importance of
HRM
Human resources are critical for effective organizational functioning.
HRM was once relegated to second-class status in many organizations, but its
importance has grown dramatically in the last two decades. Its new
importance stems from:
⬢ increased legal complexities;

⬢ the recognition that human resources are a valuable means for improving
productivity; and
⬢ the awareness today of the costs associated with poor HRM.
8
HRM
Responsibility for HR activities is shared

between the HR department and line
managers.
The HR department may recruit and

initially screen candidates, but the final
selection is usually made by managers in
the department where the new employee
will work.
9
HRM
Human capital reflects the organization’s investment in attracting, retaining,

and motivating an effective workforce.
Human capital serve as a tangible indicator of the value of the people who
comprise an organization.
10
The Legal Environment of HRM
A number of laws regulate various aspects of employee–employer relations,

especially in the areas of;
 Equal Employment Opportunity

 Compensation and Benefits
 Labor Relations
 Health and Safety
11
⬢ Prohibition on Discrimination Against Women (Republic Act 6725)

RA 6725 considers it discrimination when your employer favors
a male employee over a female counterpart when they consider giving out
promotions, salary raises, training opportunities, or other benefits.
⬢ Extended Maternity Leave Law (Republic Act 11210)

RA 11210 entitles all female workers with 105 days of maternity
leave, paid with 100% of their average daily salary credit. This Act
prohibits employers from discriminating against women as they’ll
still provide their female employees’ benefits even if they’re on
12
⬢ Anti-Age Discrimination in Employment Act (Republic Act No. 10911)

RA 10911 mandates companies to hire employees based on their
competence and not their age. As such, employers can’t publish job
ads that indicate their age preferences.
⬢ Magna Carta of Disabled Persons (Republic Acts No. 7277 & 9442)
In RA 7277, employers must give a qualified disabled employee
the same terms and conditions of employment as a qualified non-
disabled person would have. Meanwhile, in RA 9442, it’s unlawful
to make fun of or mock a person with a disability, whether in writing,
13
⬢ International Convention on the Elimination of All Forms of Racial

Discrimination (Presidential Decree No. 966)
PD 966 aims to eliminate all forms of racial discrimination. This
decree prohibits the promotion and incitement of racial superiority or
hatred, whether in acts of violence, dissemination of ideas, or propaganda
activities. Moreover, employers can’t discriminate against an
applicant or employee on any aspect of employment. Additionally,
one is not allowed to utter racial slurs, display racially offensive
symbols, or make derogatory remarks about a person’s race, color, or
ethnic origin.
14
⬢ The Indigenous Peoples’ Rights Act (Republic Act No. 8371)

RA 8371 recognizes, protects, and promotes indigenous cultural
communities or indigenous peoples (ICCs/IPs). This Act extends to
providing the same employment rights, opportunities, and
privileges available to ICCs/IPs as an employer would grant any
other company member. According to this Act, it’s unlawful “to
discriminate against any ICC/IP with respect to the terms and conditions
of employment on account of their descent.” This also prohibits
denying ICCs/IPs any rights and discharging them to prevent them from
enjoying their rights and benefits.
15
Compensation and Benefits in the Philippines as provided under the Labor

Code of the Philippines otherwise known as Presidential Decree No. 442 and
other relevant laws are as follows:
⬢ MINIMUM WAGE
- Varies per region, province and industry sector.
⬢ OVERTIME
- Regular work day: plus 25% of the hourly pay rate.
- Rest day, regular/special holiday: plus 30% of the hourly rate on said day.
16
⬢ PREMIUM PAY
- On a rest day or special holiday, an employee is entitled to an additional 30% of his daily
basic rate, or a total of 130%.
- On a rest day which is also a special holiday, an employee is entitled to an additional 50%
of his daily basic rate, or a total of 150%.
- On a regular holiday which is also an employee’s rest day, an employee is entitled to an
additional 30% of the regular holiday rate of 200%, or a total of 260%. Note that it is only
applicable to employees covered by the holiday-pay rule.
⬢ HOLIDAY PAY
- The Labor Code requires the payment of an employee’s daily basic wage for all non
working regular holidays declared under Republic Act No. 9849
17
⬢ NIGHT SHIFT DIFFERENTIAL (NSD)

For work done between the hours of 10pm to 6am, employees are entitled to NSD, which
represents an additional 10% to the regular wage for each hour of work performed .
⬢ SERVICE CHARGES
Employees of employers collecting service charges are entitled to an equal share in the 85%
of the total of such charges, except managerial employees. The remaining 15% of the charges
may be retained by the management to answer for losses and breakages and for distribution
to managerial employees, at the discretion of the management in the latter case. Service
charges are collected by most hotels and some restaurants, night clubs, cocktail lounges,
among others.
18
⬢ NIGHT SHIFT DIFFERENTIAL (NSD)

For work done between the hours of 10pm to 6am, employees are entitled to NSD, which
represents an additional 10% to the regular wage for each hour of work performed .
⬢ SERVICE CHARGES
Employees of employers collecting service charges are entitled to an equal share in the 85%
of the total of such charges, except managerial employees. The remaining 15% of the charges
may be retained by the management to answer for losses and breakages and for distribution
to managerial employees, at the discretion of the management in the latter case. Service
charges are collected by most hotels and some restaurants, night clubs, cocktail lounges,
among others.
19
⬢ SERVICE INCENTIVE LEAVE (SIL)

Every employee who has rendered at least one (1) year of service is entitled to a SIL of five
(5) days with pay. SIL may be used for sick and vacation leave purposes. The unused SIL at
the end of the year can be converted into cash using the salary rate at the date of conversion. It
is the employer’s prerogative to grant additional vacation leave.
⬢ 13th MONTH PAY

Each year, a 13th month pay is given to all rank-and-file employees. By law, this benefit
must be paid before December 24th and is mandatory. Employees who have resigned or have been
severed from the company before the payment of the 13th month pay are still entitled to it in
proportion to the length of time they worked for during that year. The 13th month pay must
be at least 1/12th of the total basic salary of each employee earned during that calendar year.
20
⬢ SEPARATION PAY
Following the labor code of the Philippines, articles 283 and 284 state that an employee can
claim separation pay if his contract is ended under authorized causes. According to article
282 an employee terminated for just cause (neglect of duties, fraud, crime…) is generally not
entitled to separation pay.
⬢ RETIREMENT PAY
All employees from the private-sector may retire from age 60 up to age 65, at which
retirement becomes compulsory, and must have served the establishment for at least 5 years.
21
⬢ PARENTAL LEAVES
Maternity Leave - Whether married or not, each pregnant employee is entitled to a
maternity leave benefit of 105 days.
Paternity Leave - All married male employees are entitled to a 7 day paternity leave for the
delivery or miscarriage of his legitimate spouse with whom he must live,
Solo-Parent Leave - In addition to parental leaves at the time of a child’s birth, the Filipino
labor code drew a special leave for solo-parent employees as described in the Solo Parents
Welfare, Republic Act No. 8972. The employee must have been working for at least a year to be
entitled to a solo-parent leave, which allows him to 7 working days of leave in a year.
22
⬢ OTHER LEAVES
Gynecological Leave - A woman employee having rendered continuous aggregate
employment service of at least six (6) months for the last twelve (12) months shall be entitled to
a special leave benefit of two (2) months with full pay based on her gross monthly
compensation following surgery caused by gynecological disorders.
Leave For Women And Their Children Who Are Victims Of Violence - Victims shall be
entitled to take a paid leave of absence up to ten (10) days in addition to other paid leaves under the
Labor Code and Civil Service Rules and Regulations, extendible when the necessity arises
as specified in the protection order.
23
⬢ CONTRIBUTIONS
24
 Labor Relations
⬢ Industrial Peace Act (Republic Act No. 875)

To eliminate the causes of industrial unrest by encouraging and
protecting the exercise by employees of their right to self-
organization for the purpose of collective bargaining and for the
promotion of their moral, social, and economic well-being.
25
 Health and Safety
⬢ The Occupational Safety and Health Standards Act (RA 11058)

Employers are required to comply with occupational safety and
health standards including informing workers on all types of hazards in
the workplace and having the right to refuse unsafe work, as well as
providing facilities and personal protective equipment for the
workers, among others.
26
2
ATTRACTING
HUMAN RESOURCES
Human Resource Planning
The starting point in attracting qualified human resources is planning. HR

planning, in turn, involves job analysis and forecasting the demand and
supply of labor.
Attracting human resources cannot be left to chance if an organization

expects to function at peak efficiency. Human resource planning involves
assessing trends, forecasting supply and demand of labor, and then developing
appropriate strategies for addressing any differences
28
Job analysis is a systematic analysis of

jobs within an organization. A job analysis
is made up of two parts;
 Job description - lists the duties of a

job, the job’s working conditions, and
the tools, materials, and equipment used
to perform it.
29
Job analysis is a systematic analysis of

jobs within an organization. A job analysis
is made up of two parts;
 Job specification - lists the skills,

abilities, and other credentials needed to
do the job.
30
Forecasting Human Resource

Demand and Supply
After managers fully understand

the jobs to be performed within
the organization, they can start
planning for the organization’s
future human resource needs.
31
Replacement Chart
Lists of each important

managerial position in the
organization, who occupies it,
how long he or she will
probably remain in the position,
and who is or will be a qualified
replacement
32
Employee information system

(skills inventory)
Contains information on each

employee’s education, skills,
experience, and career aspirations;
usually computerized
33
Matching Human Resource

Supply and Demand
After comparing future demand and

internal supply, managers can make plans
to manage predicted shortfalls or
overstaffing.
34
Recruiting Human Resources
Once an organization has an idea of its

future human resource needs, the next
phase is usually recruiting new employees.
Recruiting is the process of attracting

qualified persons to apply for jobs that are
open.
35
Where do recruits
come from?
36
Internal Recruiting
Considering current employees as

applicants for higher level jobs in the
Organization
Promotion from within can help build

morale and keep high-quality employees
from leaving the firm.
37
External Recruiting
Getting people from outside the

organization to apply for jobs
This methods include advertising,

campus interviews, employment
agencies or executive search firms,
union hiring halls, referrals by present
employees, and hiring “walk-ins” or
38
Realistic Job Preview (RJP)
Provides the applicant with a real picture

of what it would be like to perform the job
that the organization is trying to fill.
39
Selecting Human Resources
Once the recruiting process has attracted a

pool of applicants, the next step is to select
whom to hire. The intent of the selection
process is to gather from applicants
information that will predict their job
success and then to hire the candidates
likely to be most successful.
40
Application Blanks
The first step in selection is usually asking the candidate to fill out an
application blank. Application blanks are an efficient method of gathering
information about the applicant’s previous work history, educational
background, and other job-related demographic data.
Application blank data are generally used informally to decide whether a

candidate merits further evaluation, and interviewers use application blanks to
familiarize themselves with candidates before interviewing them.
41
Tests
Tests of ability, skill, aptitude, or

knowledge that is relevant to the particular
job are usually the best predictors of job
success, although tests of general
intelligence or personality are occasionally
useful.
42
Interviews
The purpose of an interview is twofold: It

shows the employer what you can do for
the company, and it gives you an
opportunity to assess whether your
qualifications and career ambitions
align with the position.
43
Other Techniques
Organizations also use other selection techniques depending on the

circumstances. More and more organizations are requiring that applicants in
whom they are interested take physical exams.
Organizations are also increasingly using drug tests, especially in situations

in which drug-related performance problems could create serious safety
hazards.
44
3
DEVELOPING
HUMAN RESOURCES
Training and Development
Training
Teaching operational or technical
employees how to do the job for which
they were hired
Development
Teaching managers and professionals the
skills needed for both present and future
jobs
46
“Most organizations provide regular

training and development programs
for managers and employees.”
47
Assessing Training Needs
The first step in developing a training plan is to determine what needs to exist.
As training programs are being developed, the manager should set specific
and measurable goals specifying what participants are to learn. The manager
should also plan to evaluate the training program after employees complete it.
48
Common Training Methods
Many different training and development methods are available. Selection of

methods depends on many considerations, but perhaps the most important is
training content.
⬢ When the training content is factual material such as company rules or

explanations for how to fill out forms, assigned reading, programmed
learning, and lecture methods work well.
49
Common Training Methods
Many different training and development methods are available. Selection of

methods depends on many considerations, but perhaps the most important is
training content.
⬢ When employees must learn a physical skill, methods allowing practice

and the actual use of tools and materials are needed, as in on-the-job
training or workshop training.
50
Evaluation of Training
Training and development programs

should always be evaluated. Typical
evaluation approaches include measuring
one or more relevant criteria (such as
attitudes or performance) before and after
the training, and determining whether the
criteria changed.
51
Performance Appraisal
Once employees are trained and settled into their jobs, one of management’s
next concerns is performance appraisal.
Performance appraisal
A formal assessment of how well employees are doing their jobs.
52
Common Appraisal Methods
Two basic categories of appraisal methods commonly used in organizations

are;
⬢ Objective Methods; and

⬢ Judgmental Methods.
53
Objective method measures the

performance including actual output such
as number of units produced, scrap rate,
dollar volume of sales, and number of
claims processed.
This may be contaminated by

“opportunity bias” if some persons have a
better chance to perform than others.
54
Judgmental methods, including ranking and rating techniques, are the most
common ways to measure performance.
Ranking compares employees directly with one another and orders them from
best to worst.
Ranking has a number of drawbacks. Ranking is difficult for large groups

because the persons in the middle of the distribution may be hard to
distinguish from one another accurately. Comparisons of people in different
work groups are also difficult.
55
Rating differs from ranking in that it

compares each employee with a fixed
standard rather than comparison with other
employees. A rating scale provides the
standard.
56
57
Behaviorally Anchored Rating Scale

(BARS)
A sophisticated rating method in which

supervisors construct a rating scale
associated with behavioral anchor
58
59
Errors in Performance Appraisal
Recency Error
The tendency to base judgments on the subordinate’s most recent performance
because it is most easily recalled.
Halo error
Allowing the assessment of an employee on one dimension to “spread” to
ratings of that employee on other dimensions.
60
Errors can also occur because of race, sex,

or age discrimination, intentionally or
unintentionally.
The best way to offset these errors is to

ensure that a valid rating system is
developed at the outset and then to train
managers in how to use it.
61
360-degree feedback
A performance appraisal system in which

managers are evaluated by everyone
around them such as their boss, their peers,
and their subordinates.
62
Performance Feedback
The last step in most performance appraisal systems is giving feedback to

subordinates about their performance. This is usually done in a private
meeting between the person being evaluated and his or her boss. The
discussion should generally be focused on the facts—the assessed level of
performance, how and why that assessment was made, and how it can be
improved in the future.
63
4
MAINTAINING
HUMAN RESOURCES
Determining Compensation
Compensation
The financial remuneration given by the organization to its employees in

exchange for their work.
There are three basic forms of compensation;

⬢ Salary
⬢ Wages
⬢ Incentives
65
SALARY
vs
WAGE
66
SALARY vs WAGE
67
Incentives
It represent special compensation

opportunities that are usually tied to
performance. Sales commissions and
bonuses are among the most common
incentives.
68
“If employees do not earn enough to meet their basic

economic goals, they will seek employment elsewhere.”
Likewise, if they believe that their contributions are undervalued by the

organization, they may leave or exhibit poor work habits, low morale, and
little commitment to the organization. Thus, designing an effective
compensation system is clearly in the organization’s best interests.
69
Wage-Level Decision
A management policy decision about whether the firm wants to pay above,
at, or below the going rate for labor in the industry or the geographic area.
Most firms choose to pay near the average, although those that cannot afford
more pay below average.
Large, successful firms may like to cultivate the image of being “wage
leaders” by intentionally paying more than average and thus attracting and
keeping high-quality employees. 70
Wage Structure Decision
Wage structures are usually set up through a procedure called job evaluation.
An attempt to assess the worth of each job relative to other jobs.
The simplest method for creating a wage structure is to rank jobs from those
that should be paid the most (for example, the president) to those that should
be paid the least (for example, a mail clerk or a janitor).
71
Individual Wage Decisions
After wage-level and wage structure

decisions are made, the individual wage
decision must be addressed. This decision
concerns how much to pay each
employee in a particular job.
72
Determining Benefits
Benefits
Things of value other than compensation

that the organization provides to its
workers. (Benefits are sometimes called
indirect compensation.)
73
What benefits made
you stay in your
current company?
74
Determining Benefits
Benefits
Some organizations have instituted

cafeteria benefit plans, whereby basic
coverage is provided for all employees but
employees are then allowed to choose
which additional benefits they want (up to
a cost limit based on salary).
75
5
MANAGING
WORKFORCE DIVERSITY
The Meaning of Diversity
Diversity
A characteristic of a group or organization

whose members differ from one another
along one or more important dimensions,
such as age, gender, or ethnicity.
77
The Meaning of Diversity
Diversity
In the business world, the term diversity is

generally used to refer to demographic
differences among people—differences in
gender, age, ethnicity, and so forth.
78
The Impact of Diversity
“Diversity provides both opportunities and challenges for organizations.”
Diversity as a Competitive Advantage
Many organizations are finding that diversity can be a source of competitive

advantage in the marketplace (in addition to the fact that hiring and promoting
in such a way as to enhance diversity are simply the right thing to do).
⬢ Organizations that manage diversity effectively often have higher levels of

productivity and lower levels of turnover and absenteeism.
79
Diversity as a Competitive Advantage
⬢ Organizations with a diverse workforce are also better able to

understand different market segments than are less diverse
organizations.
⬢ Organizations with diverse workforces are generally more creative and

innovative than other organizations.
80
Diversity as a Source of Conflict
Unfortunately, diversity in an organization can also create conflict.
This conflict can arise for a variety of reasons;

⬢ When an individual thinks that someone else has been hired, promoted, or
fired because of his or her diversity status.
⬢ When diversity is misunderstood or misinterpreted or as a result of
inappropriate interactions among people of different groups.
⬢ If there is an environment of fear, distrust, or individual prejudice.
81
Diversity as a Source of Conflict
Unfortunately, diversity in an organization can also create conflict.
This conflict can arise for a variety of reasons;
⬢ When people are unwilling to accept people different from themselves.

Personal bias and prejudices are still very real among some people today
and can lead to potentially harmful conflict.
82
Managing Diversity in Organizations
Individual Strategies
One important element of managing diversity and multiculturalism in an

organization consists of things that individuals themselves can do.
Understanding, of course, is the starting point.
For instance, although people need to be treated fairly and equitably,

managers must understand that differences among people do, in fact, exist.
83
Managing Diversity in Organizations
Organizational Approaches
Whereas individuals are important in managing diversity and

multiculturalism, the organization itself must play a fundamental role. The
starting point in managing diversity and multiculturalism is an organization’s
policies and how they directly or indirectly affect how people are treated.
84
6
MANAGING
LABOR RELATIONS
Labor Relations
Labor relations
The process of dealing with employees

who are represented by a union.
86
How Employees Form Unions
87
Collective Bargaining
The process of agreeing on a satisfactory

labor contract between management and a
union. The contract contains agreements
about issues such as wages, work hours,
job security, promotion, layoffs, discipline,
benefits, methods of allocating overtime,
vacations, rest periods, and the grievance
procedure.
88
Grievance Procedure
The means by which the contract is enforced.
Most of what is in a contract concerns how management will treat employees.

When employees feel that they have not been treated fairly under the contract,
they file a grievance to correct the problem.
89
Grievance Procedure
The aggrieved employee discuss the alleged contract violation with her immediate superior
YES
END Resolved?
NO
Additional appeals to successively higher levels are made.
(A union official can help an aggrieved employee present her case.)
YES
END Resolved?
NO
Submit the grievance to binding arbitration.
An arbitrator is a labor law expert who is paid jointly by the union and
management. 90
NEW CHALLENGES IN
7 THE
CHANGING WORKPLACE
Managing Knowledge Workers
The Nature of Knowledge Work
Knowledge Workers - Workers whose contributions to an organization are

based on what they know.
The skill with which they are managed is a major factor in determining which
firms will be successful in the future. Knowledge workers, including
computer scientists, engineers, and physical scientists, provide special
challenges for the HR manager. They tend to work in high-technology firms
and are usually experts in some abstract knowledge base.
92
Managing Knowledge Workers
Knowledge Worker Management and Labor Markets
The demand for knowledge workers are strong. Organizations that need these
workers must introduce regular market adjustments (upward) to pay
them enough to keep them. This is especially critical in areas in which
demand is growing, as even entry-level salaries for these employees are high.
93
Contingent and Temporary Workers
Managing Contingent and Temporary Workers
HR managers must understand how to use such employees most effectively.
Managers must understand that they need to develop a strategy for integrating
contingent workers according to some sound logic and then follow that
strategy consistently over time.
94
Contingent and Temporary Workers
Managing Contingent and Temporary Workers
 Careful planning
 Understanding contingent workers and acknowledging both their
advantages and their disadvantages.
 Managers must carefully assess the real cost of using contingent workers.
 Managers must fully understand their own strategies and decide in advance
how they intend to manage temporary workers, specifically focusing on
how to integrate them into the organization.
95
“
“Financial Resource
may be the lifeblood of a
company but human
resources are the
brains”
—Rob Silzer
96
THANKS!
JAYVEE B. PAGKALIWAGAN
MBAT-1201
97

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MANAGING

Human resources are critical for effective organizational functioning.

⬢ increased legal complexities;

Responsibility for HR activities is shared

The HR department may recruit and

Human capital reflects the organization’s investment in attracting, retaining,

A number of laws regulate various aspects of employee–employer relations,

 Equal Employment Opportunity

⬢ Prohibition on Discrimination Against Women (Republic Act 6725)

⬢ Extended Maternity Leave Law (Republic Act 11210)

⬢ Anti-Age Discrimination in Employment Act (Republic Act No. 10911)

⬢ International Convention on the Elimination of All Forms of Racial

⬢ The Indigenous Peoples’ Rights Act (Republic Act No. 8371)

Compensation and Benefits in the Philippines as provided under the Labor

⬢ NIGHT SHIFT DIFFERENTIAL (NSD)

⬢ NIGHT SHIFT DIFFERENTIAL (NSD)

⬢ SERVICE INCENTIVE LEAVE (SIL)

⬢ 13th MONTH PAY

⬢ Industrial Peace Act (Republic Act No. 875)

⬢ The Occupational Safety and Health Standards Act (RA 11058)

The starting point in attracting qualified human resources is planning. HR

Attracting human resources cannot be left to chance if an organization

Job analysis is a systematic analysis of

 Job description - lists the duties of a

Job analysis is a systematic analysis of

 Job specification - lists the skills,

Forecasting Human Resource

After managers fully understand

Lists of each important

Employee information system

Contains information on each

Matching Human Resource

After comparing future demand and

Once an organization has an idea of its

Recruiting is the process of attracting

Considering current employees as

Promotion from within can help build

Getting people from outside the

This methods include advertising,

Realistic Job Preview (RJP)

Provides the applicant with a real picture

Once the recruiting process has attracted a

Application blank data are generally used informally to decide whether a

Tests of ability, skill, aptitude, or

The purpose of an interview is twofold: It

Organizations also use other selection techniques depending on the

Organizations are also increasingly using drug tests, especially in situations

“Most organizations provide regular

Assessing Training Needs

Common Training Methods

Many different training and development methods are available. Selection of

⬢ When the training content is factual material such as company rules or

Common Training Methods

Many different training and development methods are available. Selection of

⬢ When employees must learn a physical skill, methods allowing practice

Training and development programs

A formal assessment of how well employees are doing their jobs.

Common Appraisal Methods

Two basic categories of appraisal methods commonly used in organizations

⬢ Objective Methods; and

Objective method measures the

This may be contaminated by

Ranking has a number of drawbacks. Ranking is difficult for large groups

Rating differs from ranking in that it