7-Human Resource Management

Basic Entrepreneurship (ENT028)

ENTREPRENEUSHIP

1. Mohd Firdaus Bin Razak2. Muhammad Asyraf Bin Azmi3. Amir Syazzuan Bin Omar4. Mohd Sabri Bin Salem5. Zaid Iqram Syakir Bin Mazlan


MODULE 7

HUMAN RESOURCE MANAGEMENT


HUMAN RESOURCE MANAGEMENT

• Introduction• Human Resource Planning• Job Analysis• Recruitment and Selection• Training and Employee Development• Compensation and Benefits• Performance Management• Industrial Relations and Employment Laws• Occupational Safety and Health• Summary

May 2013 6–3


Introduction The most challenging and critical resource that need to be managed is

human resource (HR). Human Resource Management (HRM) is the design of formal systems in an

organization to ensure effective and efficient use of human talent to accomplish organizational goals

HRM includes:1. HR Planning2. Job Analysis3. Recruitment and Selection4. Training and Employee Development5. Compensation and Benefits6. Performance Management7. Industrial Relations and Employment Laws8. Occupational Safety and Health


HR Planning

HR planning refers to the forecasting on HR needs in the context of strategic business planning

Forecasting of HR needs requires entrepreneurs to determine the demand for and supply of human resources for bot short and long-term planning.

May 2013 6–5


HR Planning HR planning process

May 2013 6–6


HR Planning

Forecasting Personnel Needs Trend Analysis Ration Analysis Computer Forecasting

May 2013 6–7


HR Planning Setting and Strategies Planning

Options for Reducing an Expected Labor Surplus and Avoiding an Unexpected Labor Shortage

Expected Labor Surplus Expected Labor Shortage

Options

• Downsizing• Pay Reduction• Demotions• Transfers• Work Sharing• Hiring Freeze• Early Retirement• Natural Attrition• Retraining

• Overtime• Temporary Employees• Outsourcing and Off shoring• Retrained transfers• Turnover Reductions• New External Hires• Technological Innovations

May 2013 6–8


Job Analysis Job Analysis is the process of gathering information

about the job The information are:

Job activities The duties Responsibilities Scope Work environment Person behaviour Person characteristics

May 2013 6–9


Job Analysis Steps in Job Analysis

May 2013 6–10

Step 1Select Job to be Analysed

Step 2Collect Data Using Job Analysis Method

Step 3Prepare Job Description and Job Specification


Job Analysis Methods and Sources of Job Analysis

Interview Face to face meeting Getting information from specific informant Questionnaires Done employees performing the job Observation Directly observing employees performing the job and writing

down all the job activities performed

Job analysis helps to perform other HR functions such as recruitment and selection, training, performance appraisal and compensation

May 2013 6–11


Recruitment and Selection

May 2013 6–12

Recruitment is the process of attracting the right candidate with the right skill and behavior to apply for the position

Selection is a process of choosing the best candidate for the job

3


Types and Sources of Recruitment

Internal Getting potential employees from

within the organization Methods of Recruitment

Job posting and job bidding Internal mails Memos Promotion from within

May 2013 6–13

External Getting potential employees from outside

the organization such as vocational school, secondary school, universities, labour unions, competitors, labour office and employment agencies.

Methods of Recruitment: Career fair Engaging employment agencies Advertisement in major mass media Advertising in firm’s websites and internet Advertising in recruitment agencies’ websites. Headhunters Employee referrals Walk-in

Basic Entrepreneurship (ENT028)May 2013 6–14

Selection Selection is the process of choosing the best candidate for the job Steps in selection process

Receive application form

Review of application form

Selection test

Employment interviews

Background and references checks

Selection decision

Medical examination

Employ individual


Training and Employee Development

Employee Orientation Training Process Training Techniques Employee Development

4


Employee Orientation Providing new employees with the information about the company

departments in which they will be working and community they will be with throughout their tenure

Contents (Examples): Company vision Company mission Goal Company history Language Performance proficiency Rules and regulations


Employee Orientation

Advantages to the new employees: Feel welcome and accepted Appreciate the company’s culture and values Understand the job’s requirements demand and

performance expectation


Employee Orientation

Three Stages of Orientation Programme: A general introduction to the organization A specific orientation to the department and their job A follow-up meeting


Training Process A planned effort to improve employee performance Training Process

Six steps of training design process•N

eeds Assessment

Step 1

•Employees’ Readiness for Training

Step 2

•Plan Training Programme

Step 3

•Ensure Transfer of Training

Step 4

•Select Training Methods and Implement the Programme

Step 5

•Evaluate Training Programmes

Step 6


Employee Development

Formal Education Assessment Job Experience Interpersonal Relationships


Compensation and Benefits Compensation is any kind of rewards whether tangible or

intangible for services rendered

Tangible rewardso Direct monetary rewards

• Salary, wages, bonus, commission, shares and overtime claims

o Indirect monetary rewards• Mandated or non-mandated benefits such as EPF, SOCSO,

annual leaves, maternity leaves, medical leaves, loans and scholarships.

Intangible rewardso Non-monetary rewards

• Conducive working environment, management support, recognition, empowerment and supervision

5


Compensation and Benefits Equity Compensation

Compensation system that is acceptable and effective that is perceived by employees as fair.

To make ensure fairness, equity must have:

Internal

External

Individual


Compensation and Benefits Compensation and benefits assist in:

Attracting the best candidate in the market to work for the organization

Motivating employees to achieve productivity Improving employees satisfaction


Performance Management

Performance management:

Is a system that aims to maximize the potential, competency and performance of the employees.

Is done through a continuous process of communicating, coaching, motivating, training, feedback, evaluating and reviewing employees performance

Is a dynamic, on-going and continuous process

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Performance Management Performance management also is defined as a process by which executives,

managers and supervisors work to align employees’ performance with the organization’s goals.

Performance management cycle:

Performance Management Cycle

Performance Planning

Managing Performance

Reviewing and Evaluating

Performance

Rewarding Performance


Performance Management Performance management:

Is a system that aims to maximize the potential, competency and performance of the employees.

Is done through a continuous process of communicating, coaching, motivating, training, feedback, evaluating and reviewing employees performance

Is a dynamic, on-going and continuous process

Purpose of Performance management:

To meet strategic, administrative and developmental purpose of the organization.


Performance Appraisal Performance Appraisal:

Is a system It is a process of evaluating employee’s current and/or past performance relative to his or her performance standards.

It involves setting work standard, assessing employee actual performance relative to these standards, and providing feedback to the employees with the aim of motivating or eliminating their performance deficiencies.

By evaluating employees’ performance, the organization is able to determine the level of its employees’ performance and allows to make administrative and developmental decisions.


Performance Appraisal Performance appraisal is conducted by:

Immediate supervisors Peer Employee himself or herself Committee Multisource


Performance Appraisal

Performance appraisal methods:

Category rating Comparative Narrative Behavioural or objective


Performance Appraisal Rater Error


Industrial Relations and Employment Laws

Refers to the relationship between employees and their employersThe three most important laws are:

Industrial Relations Act 1967 (IRA) The Trade Union Act 1959 (TUA) Employment Act 1955 (EA)

May 2013 6–31

7


Industrial Relations and Employment Laws

Refers to the relationship between employees and their employersThe three most important laws are:

Industrial Relations Act 1967 (IRA) The Trade Union Act 1959 (TUA) Employment Act 1955 (EA)

May 2013 6–32


Employment Act 1955 (EA)

An employee shall not be required to work: More than five consecutive hours without a break of not less than 30 minutes More than eight hours in one day More than 48 hours in one week

Employee is entitled to at least one rest day per week. Employee is entitled to a minimum of 10 paid public holidays in Peninsular

Malaysia, 14 days in Sabah and 16 days in Sarawak. Annual leave after 12 months of continuous services as follows:

Eight days for employment of less than two years 12 days for employment of between 2 and 5 years. 16 days for employment of more than 5 years

No hospitalization paid leave as follows: 14 days for employment of less than two years 18 days for employment of between 2 and 5 years. 20 days for employment of more than 5 years

Hospitalization paid leave of 60 days in the aggregate. 60 days paid maternity leave for female employees

May 2013 6–33


Occupational Safety and Health Occupational, Safety and Health Act 1994 (OSHA)

The aim is to promote safety and health awareness, and establish effective safety organization and performance

OSHA will help create a healthy and safe working environment

Implementing OSHA helps to: avoid accidents at workplace avoid costly medical related expenses minimize employees and their families’ physiology and psychological

distress Avoid severe legal implication

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Occupational Safety and Health Duties of the entrepreneurs to their employees are:

Ensure, so far as is practical, the safety, health and welfare at work of all their employees.

Make arrangements for safety and absence of risk to health in the use of plant and substances.

Provide information, instructions, training and supervision to ensure safety and health.

Maintain place of work and working environment to ensure safety and without risk to health.


Summary Entrepreneurs need to understand and be able to apply the

functions of HRM effectively. Functions of HRM include:

Human Resource Planning Job Analysis Recruitment and Selection Training and Employee Development Compensation and Benefits Performance Management Industrial Relations and Employment Laws Occupational Safety and Health

May 2013 6–36

7-Human Resource Management

Documents

human resource hr

job description

job analysis method

critical resource

human resource management

hr functions

supply of human resources

longterm planning