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Lecture 10
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Human Resources
Looking after the human side of the business.
It is the set of activities that must be done to
acquire good employees and build their skills
and capabilities so they can work better.
Managing human resources to obtain a
competitive advantage and superior
profitability is a difficult and demanding task
for the HRM system.
• A company HRM system has five components
Recruitment & Selection.
Training & Development.
Performance Appraisal & Feedback.
Pay & Benefits.
Labour Relations.
• Each of the components of the system must be
carefully designed and managed for an effective
HR policy.
Performance Appraisal > The task of accurately
identifying differences in the level and quality
of the work employees do and providing them
with feedback that increases their
performance levels.
Performance Feedback > The communication
of performance appraisal information to
employees to influence their future
performance levels.
• Recruitment > The process of identifying and
attracting a pool of qualified applicants.
• Selection > Creating the set of job and company
specific criteria that determines which job applicants
are the best match for a particular job and company.
• Training & Development > The process through
which companies increase their employees work
skills and knowledge to improve their performance.
• Labour Relations > The process of working with employees,
or the unions that represent them, to create work rules and a
negotiation process to resolve disputes between them.
– Done by establishing rules and practices that are mutually
agreed upon and deal with how human resources should
be employed & rewarded.
• Pay > The monetary rewards, such as wages, bonuses, and
salaries associated with a particular job.
• Benefits > The monetary rewards, such as paid health care,
life insurance, sick and vacation pay and pensions, employees
receive because they are a member of a company.
• Trade Unions > Organisations that represent the
interests of employees who hold similar types of
jobs in a particular industry.
Human Resources Planning.
This is the process of forecasting the type &
number of employees a company needs to
meet the objectives of its business model.
Two important tools of human resources
planning are:
Work flow and
Job analysis.
Workflow Analysis....
Work-flow analysis is conducted to identify
what kinds of jobs will be required to allow
each value chain function to perform
efficiently & effectively in the future.
Job Analysis....
• Job analysis follows on from work-flow analysis.
• It is the process of obtaining detailed
information about the tasks and responsibilities
related to each job in the company.
• These analyses yield a more detailed picture of
the different tasks in each job and how best to
do them.
• Job Description & Specification are two
documents that are the product of this analysis.
• A job description is a list of the specific tasks,
duties and responsibilities that make up a
particular job.
• A job specification is a written list of the required
skills, abilities and knowledge needed to do a
particular job.
• This enables a company to know the type of
person that would perform the required duties
• The next step in the process then, is to find
qualified applicants.
• This is the recruitment part of the process.
• Recruitment can be internal or external.
• Internal recruitment involves promoting
company personnel.
• External recruitment involves finding the right
people from outside of the company for any
• What follows is to select the right candidate/s for
the work based on four steps.
– Screening applicants and cv's/resumes,
– Applicant testing and reference checks,
– Interviewing,
– Making the final selection.
• Companies have the obligation to make the
recruitment and selection process as fair as
• Companies with a good HR policy will usually
invest in their employees with training and
development programs that increase the skill-set
of the employee.
• It is done through a training needs analysis that
determines who needs which specific kind of
• Ideally this should be a continuous process
throughout the employment period.
• Once employees are working for a company, a
logical need is for the assessment of work input and
• This is the area of performance appraisal and
• Which involves testing and ascertaining the level of
work done by the employee and then
communication it to that employee.
• A necessary control feature to determine
• Assessing performance is on the basis of certain
measures that contain criteria for the analysis of
company performance.
• The appropriate measures must be selected to
ensure an increase in the performance of the
• Pay is used as an incentive for the employee to
carry out the functions of the organisation. There
are different categories of payment for different
categories of work.
– Base pay,
– Overtime pay,
– Bonus pay.
• Pay is linked with benefits which are monetary
rewards given to members of a company.
• Types of benefits include things like paid health
care & life insurance.
• The categories mentioned earlier are ways of
determining levels of pay and benefits for
• A pay structure determines the relative pay and
benefits received by employees doing different
types of jobs at different levels in an
• A company's pay level is the amount of pay it
gives its employees as compared to other
companies in comparable areas.
• A trade union are organisations that represent
the interests of workers who perform a similar
type of job in a particular company or industry.
• Collective bargaining is the process through
which union representatives and managers
negotiate a binding labour agreement or
contract over work related issues such as
– Pay,
– Benefits,
– Work rules,
– Safety conditions &
– Job security.