BBA Human Resource Management Module

HUMAN RESOURCE MANAGEMENT

COURSE OBJECTIVES

The purpose of this course is to provide an overview of Human Resource Management

with particular emphasis on human resource planning and strategy, personnel selection,

equal employment opportunity, training, performance appraisal, compensation and

contemporary issues. This course has been developed for the student of a general

management whose job will involve responsibility for managing people in a global

environment.

SUMMARY OF LEARNING OUTCOMES

1. To investigate the traditional view of Personnel Management and the new

approach of Human Resource Management

2. Evaluate the procedures and practices of used for recruiting and selecting suitable

candidates

3. Establish the effectiveness of principles and procedures for Monitoring and

evaluating the Employee

4. Explore rights and procedures on exit

5. To develop a working knowledge of the employment tools needed to manage

human resources effectively including job analysis and design, human resource

planning and employee development

TABLE OF CONTENTS

UNIT ONE 1.0. Introduction to Human Resource Management 1.1. Historical Development of Personnel and Human Resource Management 1.2. From Personnel to Human Resource Management 1.3. Personnel Management Vs Human Resource Management 1.4. Human Resource Policies 1.5. The Role of Human Resource Practitioners today 1.6. Revision Questions UNIT TWO 2.0. Human Resource Planning 2.1. Human Resource Planning Process 2.2. Assessing the Demands for Labour 2.3. Assessing the Supply for Labour 2.4. Conclusion 2.5. Revision Questions UNIT THREE 3.0. Employment and Job Analysis 3.1. Employment Policies 3.2. Working Definitions 3.3. Uses of Job Analysis Information 3.4. Stages in Conducting Job Analysis 3.5. Principles of Job Analysis 3.6. Revision Questions UNIT FOUR 4.0. Recruitment and Selection 4.1. Job Description 4.2. Person Specification 4.3. Difference between Job Description and Job Specification 4.4. Attracting Candidates 4.5. Advertising 4.6. Selecting Candidates 4.7. Employee Selection Methods 4.8. The Employment Contract 4.9. Placement and Induction 4.10. Revision Questions UNIT FIVE 5.0. Separation 5.1. Retirement and Pension 5.2. Redundancy 5.3. Termination

5.4. Dismissal 5.5. Remedies 5.6. Revision Questions UNIT SIX 6.0. Equal Opportunities, Policies and Practice 6.1. Sex Discrimination and Legislation 6.2. Race Relations Legislation 6.3. Religious Discrimination 6.4. Disabled Persons Act 6.5. Age Discrimination 6.6. Equal Opportunities Policies 6.7. Wage and Salary Management 6.8. Morale or Attitude surveys 6.9. Employee Services 6.10. Health and Safety at Work 6.11. Work Safety Committees 6.12. Revision Questions UNIT SEVEN 7.0. Motivation Theories and Reward Systems 7.1. Definition of Motivation 7.2. Maslow’s Hiererchy of Needs 7.3. Alderfer’s Theory 7.4. Herberg’s Motivation-Hygiene Theory 7.5. V. H. Vroom‘s Expectancy Theories 7.6. Reward Systems 7.7. The Trouble with Rewards 7.8. Minimizing Reward Problems 7.9. Revision questions UNIT EIGHT 8.0. Employee Performance Appraisal 8.1. Appraisal Methods 8.2. Reasons for Appraisal 8.3. Appraisal Interviews 8.4. Revision Questions UNIT NINE 9.0. Training and Development 9.1. Introductory Definitions 9.2. The Organisation and Development 9.3. Identifying Training and Development Needs 9.4. Training Needs Analyses 9.5. The Evaluation of Training 9.6. Revision of Training

UNIT TEN 10.0. Employee Relations 10.1. Sources of Conflict 10.2. Employer’s Representatives 10.3. Collective Bargaining 10.4. Trade Union Recognition 10.5. Revision Questions UNIT ELEVEN 11.0. Discipline and Disputes in Employee Management 11.1. Legal Immunities for Trade Unions 11.2. The Role of ACAS in Industrial Disputes 11.3. Strikes 11.4. Grievances 11.5. Disciplinary Matters 11.6. Dismissal 11.7. Remedies 11.8. Revision Questions

UNIT ONE

1.0. INTRODUCTION TO HUMAN RESOURCE MANAGEMENT

Introduction

Human resource management can be said to be the responsibility of all those who

manage people as well as a description of persons who are employed as specialists. It is

that part of management that involves planning for human resource needs, including

retirement selection, training and development, promotion and transfer, redundancy and

retirement. It also involves welfare and safety, wage and salary administration, collective

bargaining and dealing with most aspects of industrial relations.

Human resource management (HRM) may sometimes be known as Personnel

management (PM). Both expressions are used often interchangeably in practitioner and

academic circles.

The expression ‘Human Resource Management' is frequently being used in the

management of people in work organizations. The term ‘Personnel Managemet’ is

sometimes used to describe the same genre of management activity in such organizations.

It is clear over the past decade that, in the United Kingdom at least, the debate still rages

about whether, or what, differences may separate the two concepts. This unit examines

some of the arguments put forward by both sides in this debate, and concludes with the

view that there is insufficient evidence to indicate substantial differences between the two

concepts. The assumption is that the two expressions are so closely related in practice

that they are, in effect, interchangeable.

Personnel and human resource management activities are carried out by all those in a

leadership role in an organization. Every manager or team leader is necessarily involved

in concerns about the way in which people are employed as well as about what they need

to be doing, and how well. In most situations such leaders fulfill their personnel/HR

responsibilities within a clear framework of HRM policy. However, the principal focus

here will be on the work and responsibilities of practitioners in the field of personnel and

human resource management.

Definitions of HRM

HRM can be defined as

1. A strategic approach to acquiring, developing, managing, motivating and gaining

the commitment of the organization’s key resource- the people.

2. That part of the process of management that is concerned with the maintenance of

human relationships and ensuring the physical well-being of employees so that

they give the maximum contribution to efficient working.

3. The design of formal systems in an organization to ensure the effective and

efficient use of human talent to accomplish organizational goals

1.1. Historical development of personnel and human resource management

Over the last 50 years or so, the term ‘Personnel management’ has been used to describe

that function of management that deals with the recruitment, employment, training,

redeployment, safety and departure of employees

The former Institute of Personnel• and Development described the personnel function

as follows:

It is that part of management which is concerned with people at work and with their

relationships within an enterprise. Personnel management aims to achieve both

efficiency and justice ... It seeks to bring together and develop into an effective

organization the men and women who make up the enterprise, enabling each to make his

own best contribution to its success ... It seeks to provide fair terms and conditions of

employment, and satisfying work for those employed. (Statement on Personnel

Management and Personnel Policies 1963)'

Human resource management developed gradually in the 19th century as working

conditions became intolerable and it was considered that such exploitation was counter-

productive. Some owners, e. g. Robert Owen in Britain introduced principles of welfare

and education into profit-oriented business. Production was very different from early

methods and enlightened factory owners became more aware of the need to integrate the

workforce into the newer production process which meant a loss of traditional autonomy.

Notable aspects of HR function are its reference to justice as well as efficiently, implying

a caring role for the management in its relations with its employees. As well as referring

to fair terms of employment, the definition goes further by including satisfying work,

implying management’s responsibility for enabling employees to experience job

satisfaction. Today’s approach would be more likely to stress the contribution of satisfied

employees to achieving corporate goals such as customer satisfaction, cost-effectiveness

and profitability.

Until the 1990s, personnel management in practice was as much about handling

collective relationships with employees and their representatives about mediating

Individual employment relationships. In terms of stakeholder relationships the main

pressures on a Personnel Manager in those days came principally from the managing

director, trade union representatives and line management colleagues. The capacity for

the senior to management to introduce change and flexibility in operations was hampered

at this time due to such factors as:

o Government economic policy was directed towards full employment

o Industrial and public sector organizations were heavily unionized, often

with a multiple array of trade unions

o Employment legislation encouraged collective bargaining as the best

means of (a) settling pay and conditions, and (b) resolving disputes and

their employers.

The network of relationships that surrounded a senior personnel manager in the mid-

twentieth century was predominant. The board, and especially the chief executive, would

be looking to the personnel manager to ensure that employee relations were both peaceful

and predictable – in other words, no unpleasant surprises by way of unexpected strikes or

other employee sanctions, such as a ban on overtime working. Senior line managers were

particularly keen to ensure that there would be no disruption to their output schedules.

Bodies such as ACAS, the Advisory, Conciliation and Arbitration Service, could

intervene with the personnel manager on behalf of individuals or groups, where

grievances or disputes were involved. Finally, the individual employees always had

access to the personnel manager through the organization’s grievance procedure.

It is not surprising that against this background 'personnel management came to acquire a

reputation for defending the status quo. Personnel managers in the 1970s and 80s were

much more concerned with the smooth-running of operations than with making proposals

for change. It took a number of external factors in the UK to bring about the requires

change in the conduct of employee relations

The situation changed radically in the late 1980s when several external factors combined

to make a major impact on workplace relations. These factors were primarily:

Trade union power in one of its most conservative areas- printing- was

challenged by the newspaper owner, Rupert Murdoch, who was prepared to print his

daily newspapers abroad, if unable to do so in London; the early signs of what we now

call 'globalization' were beginning to emerge; the challenge caused much anger and

bitterness among the trade union movement, but it succeeded in breaking the print unions'

veto over the introduction of computer-led technology'

A Conservative government under Margaret Thatcher began to restructure employment

legislation so that the protection given to trade unions and unionized workgroups in the

course of industrial disputes was severely limited, whilst the protection for individual

employees was boosted

The so-called ‘closed shop’ arrangement whereby employees were obliged to join as a

condition of employment was outlawed, this had the effect of slowing down recruitment

in the workforce

When the economy began to improve, and as the effects of new employer-friendly

legislation began to take hold, businesses everywhere were able to place the customer at

the forefront of their stakeholder rather than their employees; thus developed the concept

of customer relations that is now so pervasive in the UK economy.

1.2. From personnel to human resource management

The 1990s came to be seen as the 'decade of the consumer' (customer, client, patient or

other end-user of goods and services); this situation brought forth a need to redefine

'Personnel management' so that it better reflected the contemporary focus on (a)

customers and their needs, and (b) the need to adapt to changing conditions in the

external marketplace; there was now less focus on either the concerns of employees or

the need for formal communication structures within the organization. The 1990s

was also the decade that saw a major at tack on organizational hierarchies,

leading to considerable de-layering of structures and a greater delegation of

accountability to work-team leaders.

The last decade of the twentieth century has sought to change the emphasis of

`personnel management', so as to be more concerned with primary business goals,

and less with the implications for employees of the consequences of pursuing those

goals. The work environment today has changed from the confrontational mixture

of mid-century employee relations, with its emphasis on highly regulated personnel

procedures, to collaborative approaches based on small work-teams dedicated to

customer satisfaction, where workplace learning is paramount and the need for

centralised procedures less relevant. At the same time the external environment for all of

the private sector, and parts of the public sector, has become much more competitive. Not

only are customers and their requirements important, but so too are the actions of

competitors. It is in this new environment that the term 'Human Resource

Management' sits more comfortably for many people than 'Personnel Management'.

1.3. Personnel management vs. human resource management

Much of the debate about whether there are significant differences between these two

concepts is of interest only to academics. Nevertheless, given that significant numbers of

business and government organisations have taken the step of renaming their personnel

function as the HRM function, it is fair to assume that they are making some kind of

statement about how they view people management. It could be argued that it has become

fashionable to speak of HRM, and that this is why many organisations have adopted the

expression..

Use of HRM language helps to bypass 'politically incorrect' terms used in the past, such

as man power planning. However, these are not very convincing answers so far as the

UK is concerned. It is significant that in July 2000, when the professional body for

personnel management in the UK was awarded chartered status, it decided not to change

its title to Human Resource Management, but to continue as the Chartered Institute of

Personnel and Development.

What are the principal primary distinctions between ‘personnel’ activities and ‘human

resource’ activities? There are no pat answers to this question, but the following points

have been made in recent debates on this topic:

Personnel Management implies

HRM implies

Reactive, servicing role Proactive, innovative role

Emphasis on implementation of procedures Emphasis on strategy

Specialist department General management activity

Focus on employees’ needs in their own

right

Focus on employee requirements in the

light of business needs

Employees seen as a cost to be controlled Employees seen as investment to be

nurtured as well as cost to be controlled

Presumption of union-management

conflicts

Conflicts dealt with by team leaders within

their teams

Preference for collective bargaining of pay

and conditions

Management-led planning of people

resources and employment conditions

Emphasis in settling pay more in terms of

the organisation’s internal market

Emphasis on competitive pay and

conditions to stay ahead of competitors

Serving other departments/units Contributing ‘added value’ to business

Supporting change Stimulating change

Challenging business goals in light of

effects on employees

Total commitment to business goals

Less flexible approach to staff deployments Completely flexible approach to staff

deployments

1.4. Approaches to HRM (hard and soft)

Some scholars have made a distinction between the hard and soft versions of HRM.

Hard HRM

The hard version of HRM is based on the classic models of management. It reflects a

long-standing capitalist tradition in which the worker is regarded as a commodity. It

regards people as human capital from which a return can be obtained by investing

judicially in their development. HR are another key resource for managers to do finance

and other materials resources.

Emphasis is on:

o Interests of management

o Adopting a strategic approach that is closely integrated with business

strategy

o Obtaining added value from people by the processes of human resource

development and performance management

o The need for a strong corporate culture expressed in mission and value

statements and reinforced by communications, training and performance

management processes

Soft HRM

The soft model for HRM traces its roots to the Human Relations School. It emphasizes on

o Communication

o Motivation

o Leadership

o

Human resource policies

Policy- making is a key part of strategic planning in an organization. It is especially

important when developing responses to key Human Resources management issues.

What is a policy?

A policy is an expression of the organization’s values and beliefs concerning all major

functions of the enterprise. It is a guideline for doing something. A policy states not what

the organization intends to do, (i.e. goals), but the manner in which the organization

intends to achieve these goals. Policies are not objectives. They define the approach or

philosophical values the organization intends to adopt in managing its human resources.

They are principles or reference points upon which managers are expected to act when

dealing with human resource issues.

The co-operation of workers must be obtained if the business is to run smoothly. The

workers must have confidence in the firm and this may not be easy when technical

advances produce a fear of unemployment and unrest.

Policy must be determined by the board and must be clearly defined, and those

employees who have to administer the policy should be given an opportunity to

contribute. This may be done in joint consultative committees. In order to have a good

policy, a knowledge of those factors an employee regards as important is essential. This

involves knowledge of the industrial application of sociological and psychological

theory, and the forces generated should be known and controlled in order to ensure

effective collaboration of individuals and groups to that company and individual goals

can be reached. 'Harmony of objectives' must be the goal.

Social scientists are being enrolled in industry to examine sociological problems. A

recent approach is to examine the organizational environment, the objectives and

methods of management, and the forms of company structure. It may be that these

conditions limit what the individual can achieve. Human resource policies, therefore, are

concerned with providing an effective organizational structure, manning it with

appropriate personnel and securing optimum working conditions; the object being to

create and maintain a level of morale which evokes the full contribution of all employees

in ensuring that the company operates at maximum efficiency.

The following factors may be regarded as important and necessary in a human resources

policy:

Remuneration

This must be at least the market rate for the job and give the employee a reasonable

standard of living.

Security

This is vital to the average worker; it is not so important to the young, or where there is

full employment, but stability of employment is essential and there must be guarantees

against unfair dismissal.

Opportunity

If this is not available, a worker may look elsewhere. Vacancies should therefore be

filled within a firm whenever possible or practicable. This does emphasize the need for

good education and training policies so that existing staff can be trained to fill vacancies.

Status

A person's feeling that he 'counts' or 'matters' and that he is a respected member of a

group can influence output and lead to the retention of workers.

Justice

This can be simply defined as confidence in being treated fairly. The security of the

worker must not be threatened and specific rules regarding punishment, judgment and

appeals procedure must be invoked. These should include guarantees of confidential

access to the human resources manager.

Democracy

In a capitalist structure it may not be easy to invoke the idea that a man has the right to a

voice in the way he is governed, and by whom he is governed. Attempts along these lines

are the formation of joint consultative committees and the establishment of procedures

for regular consultation between managers and employees.

General

To assist employees in developing social, educational and recreational amenities and to

maintain policies without discrimination between employees.

Why policies?

1. They develop a coherent approach to managing people which binds together the

various human resource strategies of the organization

2. They are the framework within which actions take place

3. They promote consistency and equity in the way in which people are treated

4. They facilitate decentralization and delegation because they provide guidance on

what managers should do in particular circumstances

Human resource policies can be implied (unwritten) or explicit (written). The latter are

more advantageous as they offer something concrete upon which managers can base their

decisions. In addition, policies should not be seen as permanent. They should be reviewed

and changed to adapt to changing situations.

Role of HRM practitioner today

Today the prime role of personnel/HR practitioners is that of developing the

organisation's staff resources so as to enable people to make a flexible, multi-skilled

contribution to the overall aims of the organization, be it a business or in the public

sector. In earlier decades it was the customer or supplier who often had to suffer in order

to meet the requirements of the workforce. Rigidity in job and employment structures

meant that line managers could not deploy employees to the best production advantage.

Managers' relations with their workforce were based as much upon fear of upsetting them

as upon respect for their skills and know-how. Nowadays this situation has changed. The

customer's needs are the focus of attention today. The external market place – be it a

competitive market or a public service market – is the battlefield, rather than the internal

one of workplace relations. This shift of focus calls for a different role for and HR

practitioners, but always one which endeavors to procure, deploy, train and motivate

people in the service of their organisation.

The relative influence on the HR practitioner can be analysed under two broad categories:

those that exert a direct influence on the job-holder, and those exerting indirect pressure.

The directly influential are as follows:

Top management- there is pressure on the HR practitionet to devise and implement

effective human resource policies that will contribute to corporate goals.

Line managers- expectations will be for HR support for recruitment, staff training,

competitive salaries, advice on employment and effective personal administration.

HR colleagues — the senior person's own staff will have expectations of clear direction

and effective leadership of the HR function, including having an interesting and

demanding job, opportunities for learning and promotion, and adequate backup

arrangements.

Existing workforce — the chief expectation of the organisation's employees is likely to

focus on fair treatment at work, opportunities for training and development, and the

effective administration of pay and conditions;

Those stakeholders who do not have a direct relationship with the HR director but who

nevertheless affect -what the jobholder may or may not do, include:

Customers/end-users

In service industries, in particular, where employees come face to face with their

customers, there are ample opportunities for the latter to experience poor levels of

service; their reactions can bring great pressures to bear on those responsible for staff

training and competence; customers can affirm a business's reputation, or

they can destroy it; if customers go elsewhere, the very existence of the

business could be in doubt; most end-users want an effective and reliable

service (or product) at an attractive price, and the HR function has a key role to play in

making this happen.

Shareholders/the community

In a business the shareholders will expect to see competitive outcomes from the

management: a healthy balance sheet, growing revenues from sales, stable or even

reducing costs, adequate profits and dividends, and a rising share value; where public

services, such as health and education, are concerned the community will expect adequate

public funding to ensure access to facilities and a fully satisfactory outcome.

Government/state bodies

Such bodies are expected to reflect public priorities for key services, including providing

adequate information about choices and performance; they may press for performance

standards.

Trade unions

External trade union officers have an ever-present interest in the employment conditions

of organisations; they can exert pressure for the recognition of a union, where there is no

independent representation of employees; they have more direct involvement in the

affairs of an organization if they have representation rights for one or more groups of

employees.

Potential employees

These as yet non-members of the organisation will have expectations of relevant

information about the organisation, the jobs on offer, the training and promotion

opportunities, available, and fair treatment at interview.

Competitors for labour

This group has a close interest in the recruitment activities of other,, watching for

changes in pay levels, employee benefits and recruitment techniques; in a tight labour

market, a competitor's actions in poaching staff from another employer, or offering extra

inducements to reduce staff turnover, can challenge a HR manager to improve existing

arrangements, with the inevitable knock-on effect on costs.

1.7. REVISION QUESTIONS

1. Define the term Human Resource Management

2. Distinguish between Personnel and Human Resource Management

3. State the reasons that led to the change from Personnel to Human Resource Management

4. What is the role of the Human Resource Management practitioner?

UNIT TWO

2.0 HUMAN RESOURCE PLANNING

Human resource planning (manpower planning) seeks to maintain and improve the

organization’s ability to achieve corporate objectives by developing strategies which are

designed to increase the present and future contribution of human resource.

Definitions of HR planning:

1. It is a strategy for the acquisition, utilization, improvement and retention of an

enterprise’s human resources (Department of Employment, 1974)

2. It is a prediction of the number and types of people needed to accomplish the

work of the organization

3. It is a process of recruiting the right people at the right time for the right job

Planning the resources of the organisation is a key responsibility of every senior manager.

Arguably the most important single resource is people. It is important, therefore, to

ensure that sufficient numbers of the appropriate calibre of people are available to the

organisation in pursuit of its objectives: Every organisation has to make some attempts to

acquire, train, re-deploy and dismiss employees in the course of its activities. Not all of

these attempts can be regarded as human resource planning, for they are much too

haphazard. Human resource planning, in the sense used here, is a much more rational

exercise. This particular definition sees human resource planning as a strategic activity,

i.e. one that is concerned with securing resources on a long-term basis.

Advantages of human resource planning

o The right number of staff is recruited at each level in the hierarchy

o Staffing requirements can be better balanced and movement of staff made

easier

o Areas of high labour turnover are highlighted

o Implications of changes in recruitment, promotions and succession plans

are foreseeable

o Staff performance can be improved

Limitations

o Detailed records are needed plus expensive clerical staff;

o Problems of forecasting changes, especially technological and government

policy areas;

o Forecasts can be uncertain even for a few years ahead.

o Inadequate planning skills among managers

The traditional attitude to HR planning is that it is a cost; there is greater consideration

now towards the idea that it is an investment. Therefore the best use of this investment

should be made so as to ensure that HR achieves personal satisfaction and the company

achieves a maximum return on the 'costs' it represents.

It is important to stress the problem of uncertainty today; changes can occur in the

following more detailed analysis:

o Production and sales targets and new products;

o Plans for diversifying, expanding or contracting production;

o Centralization or other organizational change;

o Technological changes, e.g. mechanization, improved methods, new

management techniques;

o Changes in hours of work, holidays, negotiations with trade unions and

collective agreements;

o National policies regarding taxation and redundancy;

o Changes within company, e.g. retirements, age structure, promotions.

A company must be able to recruit and retain human resources of the type and calibre it

requires for efficient operation. Change is a dominant factor today. Processes, products,

systems and methods change quickly. The role of the computer is increasing and there is

at present a shortage of systems analysts and programmers, and this will continue for a

number of years. New techniques, e.g. operational research, influence the organizational

structure of companies and alter the pattern of manning. Some jobs need increased skills,

others need less. Thus a high standard of planning is needed. The rewards to a company

are high as a great reduction in costs is possible; reduction in one area in particular,

labour turnover can save a great deal of money.

2.1. Human resource planning process

There are "four categories of staff that are important in human resource planning. These

are as follows:

a. Exiting staff

b. New recruits

c. Potential staff

d. Leavers

Each of these categories requires different decisions to be made by the managers

concerned, and some of these are set out below:

CATEGORY DECISIONS REQUIRED

Existing staff Performance appraisal

Productivity

Development

Equal opportunities

Training

Remuneration

Promotion/career development

New recruits Recruitment methods

Selection procedures

Induction

Training

Terms of contract

Potential staff Recruitment methods

Public relations

Wage/salary levels

Employee benefits

Leavers Dismissals for poor performance

Retirements

Redundancy procedures

Labour turnover

The above list indicates some of the far-reaching implications of human resource

planning activities. Clearly, we are considering a process which affects every aspect of

human resource management: recruitment, training, remuneration, performance

assessment, termination of employment and so on. More than this, it is a process which is

linked inextricably both to the corporate aims of the organization and to the economic,

social and political environment.

Organization should be designed to attain the objectives of the company. Functional

objectives are set and organization planned to attain them. Each department must be

staffed so that the available skills and abilities are equated with tasks to be done.

There may be changes in the external markets, in the supply of local labour skills,

changes in comparative earnings for each category of employee. Other relevant

information includes output per man hour and total man hours available. The human

resource plan can then be prepared and will also include consideration of policies on:

recruitment; promotion and career planning; pay and productivity; retirement,

redundancy and redeployment; training and development; industrial relations.

Reviews of the progress of plans will take place periodically, with yearly revisions as part

of a longer-term planning cycle. Monthly budget statements will be prepared and a

comparison of actual and planned targets will be made and variances noted. Information

obtained will be then fed back to earlier parts of the cycle which may then indicate the

need for changes in the plans.

Human resource planning should be an integral part of corporate planning and top

management backing is essential. The skills of individuals must be continually developed

in order to meet the needs of technological, economic and social change.

The recruitment and selection processes must be continually reviewed and evaluated, as

the cost of the process is high. Many company reports now contain the average numbers

of persons employed over the year and the amount of wages and salaries paid to them.

Labour turnover figures may also give valuable information.

The figure below shows some of the more important aspects of the main stages in human

resource planning. The starting point is the overall corporate objectives and plans of

which human resource plans are part.

The human resource demand forecast relies on sales forecasts. These are related to

forecasted production levels and required manpower is then determined.

The human resource supply forecast requires information of the current labour force,

labour turnover and retirement trends, training, skills available etc.

Man hours available will vary with shift patterns, overtime, sickness etc.

2.2. Assessing the demand for labour

Questions such as the above help the organisation to estimate the effective demand for

labour. Some existing employees undoubtedly could be used in such a venture, some new

recruits would also be required from amongst the local populations, and some jobs could

be put out to third parties such as leasing sub-contractors and professional advisers. Three

other questions can be raised at this stage:

• Should we train our own staff for selected key posts?

• Should we buy in experienced people from outside?

• How much time is required to staff this operation?

If the organization requires people quickly, then it is more or less obliged to recruit

trained staff from other organizations, possibly at premium salary or wage. If the

organization is to prepare its existing staff for a new role on the Continent, then the time-

span involved could be many months, whilst new language skills and knowledge of new

operations are acquired. Sometimes it is important to act quickly to get the nucleus of the

operation established, but once past this stage it may be more economical to feed in

‘homegrown' staff to promote the further development of the business.

At its simplest, the organization’s gross demand for labour can be shown as in the

diagram

Corporate objectives Intentions and plans organisation’s demand

for labour

Demand for the organisation’s Goods/services external pressures

The objectives of the organisation are translated into intentions and plans for assessing

and securing sufficient manpower resources, whilst the state of economic demand

represents a collection of external pressures on the organisation's awareness of its labour

requirements.

Another factor in assessing the organization’s effective demand for labour is technology.

To what extent could tasks be carried out by machines or electronic devices? In a

transport situation it might be thought that a driver is always a necessary requirement, but

in relation to metropolitan railways there are perfectly adequate services using driverless

trains (e.g. Docklands Light Railway). In offices, to take another example, there has been

a reduction in the demand for clerical and administrative posts because of the advent of

computers and word- processors, which are able to undertake a far greater volume of

work than any manual system. Such changes have not obviated the need-for people

but have certainly had a major effect on reducing the demand for particular categories of job.

The accuracy of an organisation's forecasts of its demand for labour depends

considerably on the state of its external market for goods or services. If the organisation

is operating in a relatively stable market, where demand is consistent, the product is

efficient and reliable, and there are few competing products, then forecasting for all

purposes becomes relatively straightforward.

If, however, the external market is a turbulent one, where demand fluctuates wildly,

where technological innovation is commonplace, and where the competition is intense,

then forecasting becomes an extremely difficult affair.

2.3. Assessing the supply for labour

In assessing the supply of labour available to the organization, there are two major areas

to be reviewed:

1. The existing workforce(the internal labour market)

2. The supply of potential employees (the external labour market)

Under each of these areas a number of important questions need to be asked, relating to

key aspects of manpower recruitments and utilization. A typical analysis of supply will

be a focus on the following:

Existing staff

Potential staff

Less leavers

Numbers

Categories

Skills

Performance

Flexibility

Location

Categories

Skills

Trainability

Attitudes

Retirements

Wastage rates

Redundancies

Dismissals

Promotability

Competition

Typical questions that managers need to ask when assessing the state of their internal

labour market are as follows:

Job categories – What categories of staff do we have e.g. engineers, process

workers, etc.)?

Numbers – How many people do we have in each category?

Skills – What skills are available amongst existing employees?

Performance – What levels of performance are we getting from our various categories of

employee?

Flexibility – How easy is it to transfer employees between jobs? Are individual skills

transferable? What about trade union views on this point?

Promotability – How many of our employees are ready for promotion into more

demanding roles? What training could be reasonably provided to assist promotions?

Age Profiles- do we have any age-related problems due to imbalances between

experienced and inexperienced staff?

Sex distribution – Have we an appropriate balance between the sexes, given the

requirements of our business?

Minority groups – Are minority groups properly represented in the workforce?

Leavers – What is our labour turnover rate by staff category and department? How many

people are due for retirement? Are any redundancies likely? How many people left for

reasons of dissatisfaction? Are any trends noticeable?

Answers to the above questions can provide a reliable picture of the state of the

organization’s own labour force. The resulting information can be matched with the

demand forecast for labour in the various categories identified by the management. The

overall outcome is likely to fall within one of three possibilities:

1. The supply available more or less matches the forecast of demand by staff

category

2. The supply exceeds forecast requirements in one or more categories

3. The supply falls short of requirements in one or more categories.

The first outcome is unlikely for all except small or very stable workforces. The second

outcome is more likely in an industry that is contracting, as in the European coal and

steel-producing industries, or that has suffered some short-term economic disaster, such

as an international boycott. The third outcome is likely to apply to most organisations

most .of the time, that is to say, they are always short of appropriately qualified personnel

in one part or another of their business.

Labour turnover

A common index of labour performance used in organisations is Labour Turnover. This

provides information about the ratio of leavers to the average numbers employed during

the course of a year. It is usually expressed as follows:

Number of employees leaving during the year

X 100

Average numbers employed during the year

A turnover rate of 25 per cent would be considered perfectly satisfactory by most firms.

A turnover rate of 100 per cent would be considered a major problem. Whilst the labour

turnover index is useful in broad terms, it has some distinct disadvantages:

• It does not indicate in which areas of the organisation the rate of

leavers is high

• It does not identify the length of service of the leavers

• It does not indicate any sudden changes in the numbers employed from

one year to the next.

These disadvantages mean that further questions have to be asked about the movement of

people through and out of the organisation. For example, which units are experiencing a

high turnover of staff? How long have the leavers served in the organisation? Are

numbers employed in the year concerned typical or do they represent an

increase/decrease on previous years?

In addition to the labour turnover index, some organisations make use of a Labour

Stability Index, which links the leaving rate with length of service. The index is usually

expressed as follows:

Number of leavers with more than one year's service

X 100

Number employed one year ago

The results of applying this measure of performance are to identify the extent

to which new recruits leave, rather than longer-serving employees. However, it

still does not identify which units are producing more early leavers than most. It

is also not very satisfactory to have a figure which includes as 'long-serving

employees' people with only just over one year's service!

If required, such an analysis could be further refined to show leavers by department or

unit as well as by length of service.

Staff turnover has a number of advantages and disadvantages.

Advantages:

1) It provides an incentive to recruit fresh staff

2) It enables organisations to shed stall' more easily when redundancies are planned

(i.e. through 'natural wastage')

3) It opens up promotion channels for longer-serving employees

4) It introduces an element of `self-selection' among new employees, which may

save dismissals at a later date.

Disadvantages:

a. Additional costs of replacement recruitment b. Disruptions to production of goods or services caused by leavers

c. Additional training costs, especially induction and initial job training

d. Wasted investment in people

e. This may lead to difficulties in attracting new staff.

On balance, a small amount of turnover is a positive benefit, as the above-mentioned

advantages suggest, especially when an organisation is going into decline. For most

organisations, however, the extra disruption and recruitment required to offset more than

a small amount of turnover are unwelcome.

2.4. Conclusion

Planning for a rational approach to the demand and supply of labour to meet the

organization’s objectives is not easy. People are the most volatile resource available to

organisations, and they are recruited, employed and rewarded against a complex

background of economic and social forces, which make firm decisions problematic for

human resource planning. What can be said, however, is that organisations which do

adopt a rational approach to manpower planning will be better able than their competitors

to maintain and renew a viable workforce capable of ensuring the success of the

enterprise.

The possible benefits from a planned approach to the acquisition, use and deployment of

people throughout the organisation include:

− Appropriately skilled and flexible workforce

− Ability to respond to change

− Stability in the core of the workforce

− Reduced need to recruit externally

− Improved morale and employee relations

− Improvement in quality of products/services

− Higher productivity.

2.5. REVISION QUESTIONS

1. Define the term Human Resource planning

2. Outline the Human Resource planning process

3. What are the advantages and disadvantages of Human Resource planning?

4. Why is it necessary to access the demand and supply for labour?

UNIT THREE

3.0. EMPLOYMENT AND JOB ANALYSIS

Employment or employee resourcing is a major function of human resource

management. In order to produce goods or render services an organization must

have the right human resources in the right positions at the right time — hence

the need to employ. The employment function starts with human resources

planning but also embraces such duties as recruitment, selection, promotions,

transfers, layoffs and separations.

3.1. Employment policies

Like other areas of HRM the employment function has policies. These policies may

be general, negotiated or public depending on whether they are determined

solely by management; negotiated between management and the union; or determined

according to the requirements of legislation. Employment policies cover the following

areas:

Human Resource Planning — a commitment by the organization to planning ahead in

order to maximize the opportunities for employees to develop their careers;

Quality of employees — believes in recruiting people who have the ability and potential

to meet the high standards of performance-

Promotion— to promote from within where possible as a means of satisfying its

requirements for high-quality staff

Equal opportunity – to indicate that the organization is an equal opportunity employer;

Discipline – employees have the right to know what is expected of them and what could

happen to them should they infringe the rules;

Grievances – the policy should state that employees have a right to raise their grievances

with their manager.

Other statements on this could be on smoking, AIDS, sexual harassment, age,

redundancy, etc.

Job analysis

The analysis of jobs is the major foundation for the performance of functions of human

resource management

What is a job?

Jobs are the basic components of the organisation's structure and are the means by which

it achieves its objectives. It follows therefore that for any organisation to be successful, it

must give a great deal of care and attention to the way in which jobs are designed. A

good person-job fit, which is generally recognised as essential for motivated and high

performing staff, can only be achieved if there is sufficient clarity about the job in

question. A person - job fit meaning appropriate qualification and experienced job

characteristics.

3.2. Working definitions

Job Analysis

This is a process used to determine and describe the content of jobs in such a way that a

clear understanding of what the job is about is communicated to any one who might

require the information for management purposes.

Robbins states that JA is a systematic way to gather and analyse information about the

content, context and human requirements of jobs.

Job Description

This is a written statement of the content of any particular job derived from the analysis

of that job.

Personnel Specification

Where as the job description describes the content of a particular job, the personnel

required or person specification describes the attributes required of any employer to carry

out the job described to a satisfactory standards.

Competence

Competence is an underlying characteristic of an individual that is related to effective or

superior performance in a job.

There are a number of important features of job analysis which need to be recognized at

the outset.

1. Job analysis attempts to access jobs, not people.

2. The standards of job analysis are relative, not absolute.

3. The basic information on which job evaluations are made is obtained from job

analysis.

4. Job analysis is carried out by groups, not individuals.

5. Job analysis committees utilize concepts such as logic, fairness and consistency in

their assessment of jobs.

6. There is always some element of subjective judgment in job analysis.

7. Job analysis does not determine pay scales, but merely provides the evidence on

which they may be devised.

Information obtained in a job analysis

On the Job

• Objective/Overall purpose

• Duties and work activities

• Responsibilities/Accountabilities

• Performance Standards

• Level of authority

• Machines and tools used

On the Job's Place in the Organisation (Organizational factors)

• Job Title

• Section/Department

• Reporting Relationships — supervisor and supervised

• Contacts — external and internal

On the Environment

a. Physical:

b. Location

c. Hazards involved

d. Physical effort applied

e. Social Environment

f. Isolated job e.g. laboratory work

g. Shift job

h.

On the Job Requirements

• Knowledge,

• Skills

• Qualifications requirements

• Education

• Professional qualifications

• Minimum experience

Other skills

• Communications skills

• Written presentation

• Computer sills

• Interpersonal skills

Other attributes

(1) Honesty

(2) Integrity

(3) Dependability

(4) Motivation

3.3. Uses of JA information

There are a number of reasons for analysing jobs. The main uses to the organisation are

as follows:

Selection / Recruitment

Before any part can be filled, it is important for the organisation to have a clear idea of

the requirement for the job. Without this information, it would be difficult to know what

qualification, experience and personal attributes to look for or what to pay. By providing

a job description and a personnel specification, the organisation will be better able o

decide how and who should take up the job.

Job Evaluation

Job evaluation is the assessment of a particular job to find its value in relation to other

jobs in the organization. Job evaluation creates a ranking or hierarch of jobs in the

organization which among other things, is used for establishing the salary structure. The

latter is then used for compensating jobs according to their value to the organization.

Performance management

This is the process of managing the performance of job holders to ensure achievement of

goals. It involves performance appraisal which is the measurement of job holder's

performance levels. Information on duties and work activities, accountabilities and

performance standards is used for this purpose.

Human resource planning

A JA is necessary for human resource planning as it enables an organization to set short-

term targets or objectives and it can aid the review of the organizations structure by

clarifying the basic needs of the job.

Training and Development

In order to train, there is need to find the training gap, i.e. the shortfall between the

person requirements of the job and what the job holder has. Information such as

knowledge, skills and qualifications on the job is used to find the training gap

Organization structuring and Job design

The oganization structure is made up of jobs. In turn, jobs have to be designed. To assist

in job design information on work activities, duties, and responsibilities is required. Other

types of information needed include that on the environment of the job.

Induction

Induction is the training process of introducing an employee to the organization and the,

job. All the information collected in the JA is used to induct employees.

Labour Relations

While there is no legal requirement to give an employee a job description, it is sound

management to do so to reduce ambiguity on either side about what the post holder is

required to do. Vagueness in this area could cause problems in any subsequent issue

relating to grievances, discipline, redundancy or termination of employment. In short the

content of job description forms part of the terms and conditions of employment and is

part of the contractual relationships between employee and employer.

I

3.4. Stages in conducting a job analysis

As already stated, JA is systematic in nature. It involves the following stages:

1. Planning the Job Analysis

This consists of identifying the objectives of the JA and obtaining top management

support.

2. Preparing for the JA

This involves identifying the jobs concerned and the methodology, reviewing existing job

documentation and communicating the process to managers and employees.

3. Conducting the JA

This consists of gathering, reviewing and compiling the data.

4. Developing Job Descriptions and Job Specifications

These are the two documents made from the Job Analysis information. A Job

Description is a written statement of what a job holder does, how it is done and why it is

done. A Job Specification is statement of the minimum acceptable qualifications that an

employee must possess to perform a given job successfully. Drafts of the two are made

and reviewed with managers and employees. Recommendations are received from them

and incorporated into the final documents.

5. Maintaining and updating the Job Descriptions and Job Specifications

This is done by periodically reviewing the two documents and updating them as changes

occur in jobs and in the structure.

3.5. Principles of job analysis

There are a variety of approaches to job analysis. Selecting the right process can be

problematic for an organization. Depending on the purposes for the analysis one I

approach may be better than the others. The following principles identify significant

issues to consider when selecting a JA system.

− Job analysis should improve communication

Both managers and employees should have a better understanding of the work performed

in a particular job when the analysis is complete than they did before the analysis

− Job analysis should accommodate change

The system for analysis should be designed to accommodate change. Jobs are dynamic

and constantly undergoing change. The system should allow for easy revision of the data

collected.

− All jobs can be analysed

Frequently employees express the feeling that their jobs cannot be described. To

some degree that is correct. The critical aspects of all jobs, however, can and should b e

described in terms of observable behaviours or work products.

− Employees should understand the process

The job analysis process and the resulting data should be understood by employees at all

levels of the organization. Since the data may be the basis or many personnel decisions

employees need to be confident that it is accurate and timely.

− Knowledge, Skills and Ability should be defined in operational terms

These are terms linked with job analysis. They should be defined to meet the needs of the

organization. Definitions for one organization will most likely differ from those of

another organization.

− The job analysis data should be the basis for major personnel decisions

A Job analysis system is most beneficial to an organization when the resulting data can

support a wide variety of personnel decisions.

− Job analysis should identify observable behaviours

The identification of observable data which will be extremely important in managing

work.

− Job analysis is a function of organizing information

There is an abundance of information available for every job from the lowest to the

highest job. Job analysis should identify the information which pertains to a job and

organize it so it will be useful in addressing multiple issues such as training, performance

evaluation, compensation and conflict resolution.

Job analysis responsibilities

Like the majority of human resource activities, Job Analysis is a joint activity between

the Human Resource Unit and the Line Managers. The responsibilities are shared as

follows:

Human resource unit Line managers

Coordinate job procedures

Complete or assist in

completing job analysis

information

Write job descriptions and job

specifications for review by

managers

Review and maintain accurate

job descriptions and

specifications

Periodically review job

descriptions and job

specifications

Request new analysis as jobs

change

Review managerial input to ensure

accuracy

Identify performance

standards based on job

analysis information

3.6. REVISION QUESTIONS

1. Why is it necessary to have employment policies?

2. What is the meaning of Job Analysis?

3. What are the stages involved in conducting a job analysis?

4. What is the meaning of job evaluation?

UNIT FOUR

4.0. RECRUITMENT AND SELECTION

Introduction

Effective recruitment and selection are critical components of the HRM process.

Recruitment is the process of generating a pool of qualified applicants for organizational

jobs while selection is the process of fitting the right applicants into the right positions.

The overall aim of the recruitment and selection process should be to obtain at minimum

cost the number and quality of employees required to satisfy the human resource needs of

an organization. There are three stages involved in recruitment and selection. These are:

− Defining requirements

− Attracting candidates

− Selecting candidates

Defining Requirements

This is a process of determining the vacancies to be filled in. It entails preparing job

descriptions and specifications and deciding terms and conditions of employment. The

number and categories of people required should be specified in the recruitment

programme, which is derived from the Human Resource Plan. In a large organization

usually a form for requisitioning staff is filled in by the head of the requisitioning

department/section. The information on the requisitioning form is that found on the

Person Specification. If this document is not available, then the job has to be analyzed

and a Job Description from which a Person Specification is then derived.

Once the organization’s recruitment activities have succeeded in attracting sufficient

numbers of relevant applicants from the external labour market, the aim of the subsequent

selection activities is to identify the most suitable applicants and persuade them to join

the organisation. Even in times of high unemployment, selection is very much a two-way

process, with the candidate assessing the organisation as well as the other way round.

From the organisation's point of view, selection is just as much a 'selling' operation as the

initial recruitment.

4.1. Job description

A Job Description is a result of Job Analysis. It is-a broad statement of the purpose,

scope, duties and responsibilities of a particular job. Job Descriptions provide basic

information on the overall purpose of the job and on the job holder's principal

accountabilities.

Purposes of a Job Description

The basic job description can be used for the following purposes:

a. To define the place of the job in the organization and to clarify for job holders and

others the contribution the job makes to achieving organizational or departmental

objectives;

b. To provide the information required to produce person specifications for

recruitment and to inform applicants about the job;

c. To be the basis for the contract employment.

Generally, a Job Description can be used as a basis for recruitment, training, staff

appraisal, promotion, job evaluation, job enlargement, job enrichment and for

restructuring the organization. In effect the use of a Description is the same as that of the

Job Analysis on which it is based.

Writing a Job Description

The Job Description normally contains the following information:

a. Job title

b. Reporting to job holder

c. Overall responsibilities

d. Principal accountabilities

e. Nature and scope

f. Factor analysis

4.2. Person specifications

Person Specifications, also known as recruitment, personnel or job specifications, define

the qualifications, experience and competences required by the job holder and any other

necessary information the special demands made by the job, such as physical conditions,

unusual hours, or travel away from. They also set out or refer to terms and conditions of

employment such as pay, employee benefits, hours and holidays. The information

required in the Person Specification can be analyzed using various frameworks. The

common ones are Rodger's Seven-point plan and the Munro-Fraser Five-fold grading

system.

The seven-point plan

This covers:

a) Physical make-up - health, physique, appearance, bearing and

speech;

b) Attainments - education, qualifications, experience;

c) General intelligence - fundamental intellectual capacity;

d) Special aptitudes- – mechanical, manual dexterity, facility in the use

of words or figures;

e) Interests – intellectual, practical – constructional, physically active,

social, artistic;

f) Disposition – acceptability, influence over others, steadiness,

dependability, self-reliance;

g) Circumstances – domestic circumstances, occupations of family.

The five-fold grading system

This covers:

• Impact on others - physical make-up, appearance, speech and manner;

• Acquired qualifications – education, vocational training, work experience;

• Innate abilities – natural quickness of comprehension and aptitude for learning;

• Motivation – the kinds of goals set by the individual, his or her consistency and

determination in following them up, and success in achieving them;

• Adjustment – emotional stability, ability to stand up to stress and ability to get on with

people.

Differences between Job Description and Job Specification

JOB DESCRIPTION JOB SPECIFICATION

Job based Person based

A written broad statement about the job A written statement of the minimum

acceptable human qualities necessary to

perform a job properlyA product of Job Analysis A product of Job Analysis or from the Job Description

Consists of information on:

-job title

Consists of the personal qualifications,

qualities and experiences needed by an- reporting relationships individual to carry out the job duties - overall purpose successfully - principle accountabilities - tasks/duties

Used for various activities e.g.: Used to match job to the person

- Orgnisational design

- recruitment

- job evaluation

4.4. Attracting Candidates

Attracting candidates is primarily a matter of identifying, evaluating and using the

most appropriate sources of applicants. There are several sources of candidates and an

organization may use one or a combination of sources. This depends on:

• the type of job to be filled

• the relative difficult of attracting candidates

• the area in which the organization operates

• the history of success or failure of using different methods

• the time limitations

• the cost.

The sources for candidates are basically two: internal from within the organization,

and external. Internally candidates can be obtained from organizational databases, job

posting, promotions and job transfers, current employee referrals and recruiting former

employees. External sources include:

• Colleges and universities

• Schools

• Labour Unions

• Employment Agencies and Labour Exchange

• Professional and Trade Associations

• Competitors

• Media Sources

• Employer Associations

The source to use depends on the factors already stated above.

4.5. Advertising

Advertising is the most obvious method of attracting candidates. Alternative sources

should initially be examined since advertising is rather costly. Once a decision has

been made to use advert is ing a choice can be made between using an

agency/consultants or the company doing it. Factors to consider include cost, speed and

the likelihood of providing good candidates.

Objectives of an Advert

a. To attract the attention of the intended target

b. To create and maintain interest by communicating the information in an attracting

and interesting manner

c. To stimulate action so that the intended audience is prompted to read to the end

and to reply

In order to achieve the above it is necessary to:

a. Analyse the requirement in terms of how many jobs, job descriptions and

specifications, sources of suitable candidates, etc.

b. Decide who does what — decision on use coy staff or an agency/consultant; each

has its own merits and demerits.

c. Write the copy — which should contain:

d. The company name

e. The job

f. The person required

g. The location

h. The action to be taken

i. Design the advertisement

j. Plan the media

k. Evaluate the response

4.6. Selecting candidates

Application letters

Applications for jobs arrive in four ways:

• Individuals turn up in person

• An application form is returned by post or email

• A letter of application is sent

• A CV (curriculum vitae) is submitted.

Of these four the application form is the most likely source of information about an

applicant, although CVs are becoming increasingly popular. Essentially a CV is an

application form designed by the candidate. On-line applications are becoming more

widespread with the increasing use of the internet.

Applications are usually sorted in the following way: applications are divided into three

groups:

• Clearly suitable

• Possibles

• Unsuitable

Clearly suitable applicants are called for interview, possible contenders are held

temporarily while unsuitable applicants are rejected. If the numbers accepting the

invitation for interview are disappointing, then some of the possible contenders may be

invited. In the current economic climate it is more than likely that personnel departments

will be overwhelmed with applications from prospective employees. In this situation,

only two categories are likely to be used – suitable and unsuitable

Application forms

One of the biggest advantages of using application forms is that the information about

candidates comes in a standardised format. Every applicant is more or less likely to

complete all sections of the form and any omissions are fairly obvious. A well-designed

application form should enable applicants to give a full and fair account of themselves,

and thus be provided with an opportunity to demonstrate their suitability for the vacancy

in question. The application form can be used as the basis for the job interview since it is

the fullest evidence about the candidate available prior to the interview.

Sifting applications

a. List the applicants with details such as name, experience, educational

qualifications etc.

b. Send standard acknowledgement letter or advertise in the media to

acknowledge receipt. Though this is expensive if the applicants are many.

Organizations may not therefore acknowledge these applications. They may

acknowledge only a few after short listing

c. Compare the applications with the key criteria in the job specification i.e.

qualifications, training, experience, age etc and sort them out into:

1. Possibles

2. Marginal

3. Unsuitable

d. Scrutinize the "possibles" again and make a shortlist. This can be done by the

human resource alone or together with the manager

e. Invite candidates to the interview using a standard letter. Application form can

be filled, in at this stage (some organizations call this a preliminary interview

for further sifting)

f. Review remaining possible and marginals to decide if they are to be held in

reserve. If so send a standard letter to keep them on hold. The standard regret

letter is sent to the unsuitable or a newspaper advert is sent when the people are

too many.

4.7. Employee selection methods

The significant features of the selection process are:

• The application details (forms, CVs and letters)

• The interview

• Psychological tests,

• Biographical data

• Assessment centres

• Other supporting evidence, such as references

The key stages in the selection process are:

1. Sifting through application forms or CV

2. Drawing up a shortlist of candidates

3. Inviting these candidates for interview

4. Conducting interviews (supported by tests where appropriate)

5. Making a decision about choice of candidates

6. Making an attractive offer and confirming it

7. Writing to unsuccessful candidates

8. Notifying appropriate managers of decisions

The Selection Interview

Definition

An interview is a person-to-person exchange of information. It is a formal exchange of

facts, impressions and view points between a prospective employer and a prospective

employee with a view to their mutual selection or parting. There are various types of

interviews including the employment/selection, disciplinary and exit interviews. Types of

employment interviews include:

a. Individual interview

b. Interviewing panels

c. Selection boards

Individual interviews

These involve a face-to-face discussion between an interviewee and interviewer. It

has the advantage of establishing the best rapport between two people. However, it gives

more room for biased decisions to be made.

Interviewing panels

This is where two or more people interview one candidate. In such an interview the panel

is usually made of the human resource manager and the concerned line managers with

other line managers. Generally speaking the greater the number of interviewers at any

one time, the greater the formality. Panel interviews are favoured in the public sector,

where they are thought to enable all the organizational interests concerned to play a part

in the proceedings and to see that justice is done.

Advantages:

a. Balanced decisions can be arrived at since the other panel members provide the

checks and balances can result in more comprehensive information being

collected through questions by the various panel's members.

b. The interviewers can discuss their joint impressions of the candidate and modify

any superficial judgments.

Disadvantages:

a. Unless well-planned questions tend to be unplanned and are delivered at random,

this can disorient the interviewee.

b. It is difficult to establish rapport where there are several interviewers. This can

make the interviewee nervous and unable to give quality responses to questions.

This can result in the selection of the very confident candidate who may not be

very suitable at the expense of the trained ones.

c. A dominating member (especially the chairperson) of the panel can bulldoze

others into accepting his judgments, which may be biased.

Selection boards

These are more formal and usually large interviewing panels convened by an official

body. This kind of panel is used where there are many people interested in the selecting

decisions (e.g. the civil service interviewing panels in the restructuring process. Its

advantages and disadvantages are the same as those of the interviewing panels.

Group selection

This involves gathering a number of candidates together (6 to 8) in the presence of group

interviewers. The candidates are subjected to a series of exercises and tests. An example

is where a group is given a case study to discuss under the eyes of the observers.

Members of the group may be tested on leadership qualities by being asked to take turns

in leading the group. Written exercises may be given to test written communications

skills and presentations skills through mini presentations.

The above are supplemented by individual or panel interviews. The idea of the group

interview is to observe the candidate in a near real situation and judge them in areas such

as:

a. Logical thinking

b. Realistic approach to problems

c. Confidence in group discussions

d. Willingness to consider other people views

e. Leadership qualities

f. Willingness to accept criticism.

Group interviews afford an opportunity to observe participants in a near work situation,

but it is time consuming due to the many activities to be undertaken. Also the validity of

such interviews has been put to question. Do the interviews really indicate a prediction of

future performance? Not always. This method has been proved to be effective only to the

level of .28 or 28 percent.

Testing

Testing is another method of selecting candidates. There are various types of selection of

tests. Their objective is to measure individual abilities or characteristics. Tests involve the

application of standard procedures to subjects, which enable their responses to be

quantified. A good test should have the following characteristics:

a. Reliability - always measuring the same thing

b. Validity - the degree to which a test actually predicts or correlates with the job

performance and also the degree to which the test activities are the same as the

jobs activities.

Types of tests

Intelligence tests

These are the oldest and most frequently used psychological tests. The test scores are

expressed in the form of intelligence quotients or IQs. The IQ is the ratio of the mental

age to the actual age (chronological). When the two correspond the IQ is expressed as

100. There are equal numbers of cases on either side of the mean, i.e. those with less or

more than 100.It is difficult to define intelligence and to define the instrument for

measuring because intelligence is a highly complex concept. Many tests are available.

Aptitude tests

These are tests designed to predict the potential an individual has to perform a job. Areas

covered include: clerical aptitude, numerical mechanical and dexterity.

Attainment tests

These are tests which measure abilities or skills that have already been acquired by

training or experience e.g. a typing or shorthand test.

Personality tests

The term personality is said to be the individual's behaviour and the way he/she interacts

with the environment. There are many types of personality tests (due to the many

different theories of personality). They include;

a. Self report personality questionnaires - these are the most commonly used.

Traits to be measured include sociability, adjustment, energy, etc.

b. Interest questionnaires - to supplement above. They assess preferences for types

of occupation.

c. Value questionnaires- assess beliefs of what is good or bad e.g. conformity,

independence.

Assessment centres

An assessment centre, despite its name, is a process, not a place. It is a process that

incorporates multiple forms of assessment- simulation exercises, in- tray exercises,

psychological tests and interviews.

Biological/physiological tests

These include screening for drugs.

Integrity tests

These are used to assess a candidates honesty e.g. (lie-detectors or polygraphs bar in

USA) e.g. questions on whether a person has ever thought about stealing or weather other

people steal.

Limitations of testing

• They may be discriminatory e.g. based on rave, sex, physical disabilities, etc.

• They are costly to develop and administer

• They may be inappropriate for the environment e.g. using tests developed in

the Western World in Zambia (where education levels are low compared to

Europe and USA).

Work Samples

This tool involves identifying a task or set of tasks that are representative of the job in

question. The tasks are then used for pre-employment testing. Examples include

individual and group decision making exercises, typing etc.

Biographical Data

This is personal data which can be collected using application forms.

References

These are references from two or more persons who know the candidate. Although they

are commonly used there is little evidence of the extent of their use as selection tools.

Reference can however be used to confirm information provided by the applicant and to

obtain views on the previous work performance or personal characteristics of the

applicant.

Appointment of candidates

Making the Job Offer

When a decision has been made on whom to employ the job offer is then made.

Forms of Employment

Employment can be offered on three bases:

Temporary employment where:

• The period of service is short but extendable (six months per period in Zambia)

• Normal disciplinary procedures not applicable

• Membership to Unions not permissible

• Termination of Service is easy

• Normal conditions and terms not applicable

Contract Employment where:

• Period of employment short but renewable e.g. one, two or three years

• Package is usually good

• Gratuity payable on completion

• Terms and conditions different and more enhanced

• Usually given to highly qualified and experienced professional staff

Permanent employment where:

• Length of service is long

• Appointment and disengagement by appointing authority

• Pensionable Terms of Service

• Security of employment guaranteed

• Disciplinary Code in place

• Termination of service difficult

4.8. The employment contract/contract of employment

The employment contract is a legal document and the most important of all documents in

the personnel function. It underpins the legal relationship between the employer and

employee. This is the document that establishes 'employment' between the two parties.

An employment contract can be unwritten or written although the written form is more

common today as it sets outs clearly the rights, duties and obligations of each party to the

agreement.

The Contract of Employment can be divided into Explicit and Implicit aspects. Explicit

terms are the visible features of the contract. These are:

− The letter of engagement (Appointment Letter)

− Job description

− Organization's rule books (Employee Handbook e.g. General Orders in the Civil

Service of Zambia)

− Published details of Collective Agreements

− Any subsequent offer or confirmation of promotion after initial appointment

Implicit terms are the unwritten features of the contract as reflected in:

a. Custom and practice

b. Common law obligations

Important Contents of Employment Contracts

—Identify the parties involved

—Specify the date of employment

—Rate of pay or pay scale and pay intervals

—Holiday entitlement

—Hours of work

—Job Title and description of the job

—Place/s of work

—Grievance handling procedure

—Disciplinary procedure

—The terms of notice

—Sick pay arrangements

4.9. Placement and induction

Settling down in a strange organization is not easy for most of us. To make this

easier, induction is conducted for the newly appointed. This is the training process of

introducing an employee to the organization, department and job. The type of

induction programme will depend on the environment and culture of the organization as

well as on the position, and its level in the organization.

Purpose of Induction

Induction is undertaken to:

a. Familiarize the employee to the organization, department and job

b. Reduce the learning period and enable quick settling down

c. Introduce the structure of the organization

d. Introduce the employee to the culture of the organization

Induction is usually done at two or three levels. The first level is undertaken by the

Human Resource Department to introduce organizational wide aspects. The second is

done by the Head of the department to explain the department and its functions. The final

part is done by the direct supervisor to explain the work and work procedures associated

with the job. A typical induction programme would, contain:

• The organization, its history, development, management and area of

activity

• Human resource policies

• Terms and conditions of employment

• Employee benefits and services

• Physical facilities in the workplace

• The job description and outline of other jobs in the organization

• Health and safety measures

• Social interaction with other employees

• Physical orientation to the workplace

QUESTIONS

1. What are the main stages involved in staff recruitment and selection?

2. What is a job description?

3. Define the term “person specification”

4. What are the objectives of a job advertisement?

5. What are the significant features of the selection process?

UNIT FIVE

5.0. SEPARATION

INTRODUCTION

The membership of any organisation is rarely static. People move into membership and

others move out. The rate of movement of people through the organisation is usually

expressed either as 'Labour Turnover' or as 'Labour Stability'. External factors such as the

economic condition of the industry have a considerable influence on the rate of staff

movement. At times of economic difficulty, firms and public sector organisations may

have to cut back severely on employee numbers, leading to redundancies and early

retirements. However, even in stable times, people leave the organisation for one reason

or another – career progression, dissatisfaction with present job, sickness, retirement or

dismissal. Indeed, it is important that such voluntary movement takes place, because it

creates promotion opportunities for individuals and encourages beneficial restructuring of

jobs and departments.

In an organization new recruits are appointed and allocated to their initial posts. Existing

staff may remain in their current post, be redeployed or promoted. Some will leave, either

because they have to or because they choose to.

In the first group come those who have come to the end of a fixed-term contract, or

whose job has ceased to exist. Then there are those who have reached compulsory

retirement age, or have been dismissed for one reason or another. People leaving for

serious health reasons also fall into this category. Some choose to leave because they

have been offered a job somewhere else, or for a variety of other personal motives. In an

expanding or unhappy organisation these elements of change will be ever-present; in a

moribund organisation the throughput of staff will be more or less at a standstill. For

good organisational health the best scenario is where there is a regular, but controlled

flow of people moving within and through the enterprise.

Human resource managers will always have to be aware of the need to persuade certain

key employees with particular skills and talents to stay with the organisation. This may

be achieved by offering better resources, greater job challenge, promotion or financial

incentives. However, more effort, and heartache, is likely to go into exiting employees,

and certainly this is where disputes and grievances can arise. The main grounds for

involuntary leaving are as follows:

5.1. Retirement and pension

Once men and women have reached their statutory retirement age, an organization is

entitled to enforce their retirement, though, of course, it need not do so.

Retirement refers to the time when an employee reaches the end of his working life. To

qualify for a State pension in the United Kingdom, a man must be 65 years of age, and a

woman 60. Most employers make provision for an occupational pension in addition to

what is provided by the State. An occupational pension is one where an employer makes

contributions to a scheme based on a percentage of the individual’s salary. This is

obviously a very important benefit to the employee. Most employers require the

individual to make regular contributions as well by deduction from pay. Not all

employers offer a pension scheme, and even those that do so invariably insist on a

qualifying period of six months to a year of service before adding the individual to the

scheme. Recently the government has decided employees should have access to a pension

arrangement at work. Employers who do not provide an occupational pension scheme for

their staff must now make provision for a so-called stakeholder pension. This does not

require the employer to make any financial contribution to an individual's pension, but

does require the employer to set up a scheme with a pensions provider and to administer

it on behalf of those employees who are not in any occupational scheme. In all cases

women employees must be given equal treatment with men.

At the age which an organisation decides to retire its employees may vary considerably

from the State scheme. Some organisations adopt a policy of flexible retirement in which

employees may leave early (e.g. after age 50 or 55), or may stay on after normal

retirement age, depending on their fitness and their continuing ability to fulfill their

employment contract. Firms with a paternalistic style of management tend to prefer a

flexible approach, allowing employees to retire when they want rather than when the

company itself might do better to retire them and bring on younger staff. Most

organisations, however, prefer a fixed retirement age, because this makes human

resource planning easier and allows succession plans to be effected. In these cases a usual

rule is to follow the state limits, but some employers, (e. g. banks and Civil Service) set

lower age limits.

The principal features of an occupational pension scheme are as follows:

a. A minimum age (e.g. 21) is required.

b. A minimum qualifying period is required (usually six months).

c. A retirement pension based on a proportion of final salary combined with length

of service.

d. The proportion of salary converted is based either on 60ths or on 80ths of final

salary, subject to a maximum of half-pay.

e. Part of the pension may be taken as a tax-free lump sum.

f. A Death Benefit, if the employee dies in service.

g. A Widows' and Dependants' Benefit on death after retirement.

h. Both employer and employee pay into the pension fund, usually on a two-to-one

basis, respectively.

Nowadays, early retirement is becoming a popular method of exiting unwanted

employees. Usually a minimum age of 50 or 55 is set, and the employees concerned

receive an immediate pension at a lower rate, but with some enhancements to act an

inducement to potential retirees.

Organisations that have a comprehensive retirement policy tend to provide pre-retirement

assistance for employees who are approaching their statutory retirement age. Holiday

entitlements may be increased during this period, special projects may be allocated to

managerial staff to help wean them away from their normal work routine, and free health

checks may be provided. Other help may include retirement counselling and pre-

retirement courses, covering such issues as health, travel and finance during retirement.

Some commercial enterprises also provide favourable arrangements for purchases of

shares by retiring employees.

5.2. Redundancy

Where by employees are employed on work which is no longer required, a firm may

dismiss these employees and pay a minimum severance payment to them. Redundancy

arises when the employer has ceased to carry on the business in which the employee was

employed, or has ceased to carry on the business at the place at which the employee was

employed, or no longer has a requirement for the work that the employee was employed

by the employer to carry out.

The fiction is that jobs become redundant, and not people, but the effect is the same. If

there is no work, then there is no need for workers! The most frequent cause of

redundancy at the present time is the organization’s intention to reduce its staffing levels

in order to cut the costs or to take advantage of technological advances which require

fewer people to operate the business.In this situation, the State sets minimum rates of

redundancy/severance pay and minimum standards of notice to, or consultation with

employees, whose jobs may be terminated. However, before any enforced redundancies

are considered, many organizations will consider other options. These may include:

• Restrictions on overtime

• Dismissal of part-time or short-term contract staff

• Restrictions on recruitment

• Redeployment within the organisation

• Retraining opportunities

• Retirement of staff over normal retirement age

• Early retirement of staff approaching normal retirement age

• Seeking voluntary redundancies.

Some of the above options may not be available in reality. For example, it may not be

possible to dismiss all contract staff, because they may be at a crucial stage in the project

they are employed on. Similarly, it may not be possible to consider redeployment of staff

if their skills are not required elsewhere in the organization. Thus, most organisations

find themselves concentrating on voluntary redundancies and retirements, as the most

practicable propositions.

If enforced redundancies cannot be avoided, there are several important to be decided:

• Which jobs are to be cut?

• How are employees to be selected for redundancy?

• How much advance notice will be given?

• What degree of consultation with employees or their representatives

should take place?

• What rates of severance payment will be made?

• Will employees be paid in lieu of notice?

• What should be done to help employees to find fresh work elsewhere?

Decisions about which jobs should be cut tend to be guided by

(a) demand for the work concerned, and (b) the need for the work in the light of new

machinery or methods. For example, if the demand for programming has slumped, but

not disappeared, it may be necessary to cut some jobs from the programming team but

not all of them. In this situation, the problem is to decide fairly who should go and who

may stay. However, if the need for programmers has disappeared because of the arrival of

brought-in software, then all the existing team could be declared redundant. So far as the

management is concerned, this is the least complicated situation, as no choices have to be

made. In situations where a choice between individual members of staff has to be made,

there are certain options available.

a. Last in, first out (LIFO) - this means that newcomers will be dismissed before

longer-serving employees. This sounds fair to individuals, but may not meet the

organisation's needs.

b. Value to the organisation - the criterion here is aimed at retaining better

performers but dismissing those who are less effective in their jobs.

c. Volunteers - some staff will always be willing to discuss redundancy terms in

order to take their chances elsewhere.

d. Enforcing retirements - of those over normal retirement age.

e. Early retirement - persuading employees over 50/55 to take early retirement.

5.3. Termination of contracts

The past decade has seen more employees recruited for a fixed term rather than on a

permanent basis The world of higher education is a prime example of a sector which

has come to rely heavily on staff appointed on short-term contracts. Public policy is

changing on this point. The Employment Relations Act 1999 has abolished the waiver to

unfair dismissal which individuals on fixed-term contracts were obliged to sign.

Employment may be terminated in a number of ways. The employee may be given

notice, may be sacked on the spot, or may be made redundant. The legal rules governing

these different situations will now be examined. It is important to note that the

Employment Protection (Consolidation) Act 1978 provides that an employee

continuously employed for between 4 weeks and 2 years is entitled to not less than 1

week's notice, with further entitlement of 1 week for each succeeding year's continuous

employment up to 12 years. Thus an employee with 12 years' or more continuous

employment is entitled to not less than 12 weeks' notice. Employees with more than 4

weeks' continuous employment must give not less than 1 week's notice. The phrase

'not less' is important; there is nothing to stop an individual employee's contract

entitling him to more than these periods. It is, of course, possible for the employee to be

given wages in lieu of notice. However, it is vital to grasp that, even though an

employee is given the notice which he is entitled to, he may still claim for unfair

dismissal. These provisions only apply to employees who are employed for 20 hours a

week or more or whose contract normally involves employment for 20 hours or more a

week. However, in some situations employees who only work 12 hours or more a week

are covered, and the Act should be consulted for full details.

5.4. Dismissal

A dismissed employee, provided he is not within the 'excluded classes’ may bring a claim

before an Industrial Tribunal that he was unfairly dismissed. The legal rules here are once

again contained in the Act. The employee must first prove that he has actually been

dismissed. This will not usually be difficult, but it should be noted that the term

'dismissed' here includes:

a. Where the employee was employed under a fixed term contract, e.g. for 1 year,

which has now ended without being renewed on the same terms;

b. Where the employee himself terminates his contract in circumstances where he is

entitled to do so because of the employer's conduct. (This is known as

constructive dismissal.)

Once proved, it is for the employer to try to show that the dismissal was fair. It is this

idea of fairness which lies at the heart of the unfair dismissal laws, and not the idea of

whether the dismissal was in breach of contract. Accordingly, even though the employee

was given the correct notice and thus his contract was not broken, he may still claim for

unfair dismissal.

The employer, to show the dismissal was fair, must prove that the dismissal was justified

under one of the five grounds set out in the Act. These are that the reason for dismissal:

a. Related to the employee's capabilities or qualifications for performing work of the

kind he was employed to do.

b. Related to the employee's conduct.

c. Was the employee was redundant?

d. Was it that the employee could not continue to work in the position he held

without breaking a legal duty or restriction.

e. Was it for some other substantial reason?

Even though the employer proves one of these reasons, the dismissal will still be unfair if

he did not act fairly in treating it as a reason for dismissing the employee. Thus the

procedures adopted by employers are of vital importance. ACAS has issued guidelines

under the title of 'Disciplinary practices and procedures in employment' which deal

with, for instance, warnings to be given to employees, the need for an investigation and

hearing before any actual dismissal, and the provision of a right of appeal. As these are

guidelines only, a failure to observe them will not necessarily mean that the employee is

held to have been unfairly dismissed. However, their importance in the human resource

management field scarcely needs stressing.

One small but important point should be noted here. A dismissed employee is entitled to

ask his employer to provide, within 14 days of request, a written statement of reasons for

dismissal. A claim for unfair dismissal can also be made in certain specialized situations,

each of which can only receive a bare mention here. The situations are:

a. That the employee has been unfairly selected for redundancy;

b. That the employee was dismissed because he was a member of an independent

trade union, or was involved in its activities. If this is shown to be the principal

reason for dismissal, the dismissal will be held to be unfair;

c. That the employee was dismissed for pregnancy.

An employer may dismiss employees who are on strike provided that, in effect, he

dismisses them all. If he dismisses some but takes other back, those dismissed may claim

for unfair dismissal. Dismissal of an employee will be automatically fair if there was a

practice, in accordance with a union membership agreement (closed-shop) requiring all

employees to belong to a specified independent trade union and the employee has refused

to join. However, if he had genuine religious reasons for so refusing, the dismissal will be

unfair.

5.5. Remedies

The primary remedy is re-instatement, where the employee is given his old job back. Re-

engagement may be ordered instead, where the employee is to be given a job which is

comparable to his old one. Where neither of these remedies are ordered, the tribunal will

award compensation. There are other elements in this; the basic award, payable in all

cases irrespective of whether the employee has suffered financial loss, and the

compensatory award, which is related to the tribunal within 3 months of dismissal. The

'excluded classes' (referred to above) are employees with less than 52 weeks of

continuous employment and those who have reached the age of 65 (men) or 60 (women)

or, alternatively, have reached the normal retirement age. In addition, the 20 hours a week

provisions apply here also.

5.6. REVISION QUESTIONS

1. What are some of the reasons for an employer leaving employment?

2. What are some of the reasons for declaring an employee redundant?

3. In which circumstances can an employee be dismissed from work?

UNIT SIX

6.0. EQUAL OPPORTUNITIES, POLICIES AND PRACTICE

Introduction

Equality at work is basically about fair treatment for the individual. Equal opportunity, in

particular, is about enabling individuals to have fair access to job opportunities,

promotion, training and other employee services. It also encompasses equal pay for work

of equal value Achieving equality of opportunity at work is not as simple as it sounds,

primarily because, for any opportunity that arises, there will almost certainly be

competition among employees to be considered for it. Managers, therefore, have to

decide (i.e. discriminate) between individuals. We talk of 'discriminating buyers' in an

antique market or an arts fair with approval. We clearly think that such people know what

is a quality product and can recognise it. In the arena of human resource management,

however, the very word 'discrimination' has a negative ring about it. Thus, there is a view

that managers ought not to discriminate between people, and yet that is what they are

being paid to do – to optimise the skills and effort of their staff.

Where, then, is the problem? It has to be found in the manner in which a manager

discriminates in favour of one individual, and therefore against the others. If a manager

(man or woman) selects a man for a promotion primarily because he or she is against the

idea of working wives, that is prima facie committing an unfair act. If an interviewing

manager ignores, let us say, the patently better quallifications and experience of an Asian

accountant over a less-well qualified white candidate and appoints the latter, that is also

likely to be unfair discrimination. However, so much depends on the circumstances of

each case, and individuals usually challenge managers' decisions by seeking external

conciliation, e.g. via the Advisory, Conciliation and Arbitration Service (ACAS)

There is a limited amount of statute law governing unfair discrimination in the UK and

leading cases are beginning to appear from the Employment Appeal Tribunal and from

the European Court. Nevertheless, at present only unlawful discrimination on grounds of

sex, marital status, disability and race are covered by legal requirements. Issues such as

discrimination on account of age included, and neither is discrimination on religious

grounds (except for Northern Ireland). However, a wider range of issues can always be

included in an equal opportunities policy, and the Chartered Institute of Personnel and

Development, for example, publishes a code of practice on this matter.

Discrimination against various groups in an organization has been made unlawful and

legislation designed to avoid discrimination includes:

6.1. Sex discrimination and legislation

The principal legislation here is the Sex Discrimination Act 1975, as amended by the Sex

Discrimination Act 1986. The Sex Discrimination Act 1975 makes it unlawful to treat a

person less favourably than another person of the opposite sex purely on the grounds of

sex. The act applies to offers of employment, dismissal and opportunities for promotion,

transfer, training hours of work, retirement arrangements and other benefits. In the

principal Act (1975) two kinds of unlawful discrimination are defined:

Direct discrimination – where an employer treats a person less favourably than another

on grounds of sex or of marital status. Examples of direct discrimination would be where

an employer did not allow women to compete for jobs beyond a certain level of seniority,

or where single people were always preferred to married persons when new vacancies

were filled.

Indirect discrimination – where a requirement or condition of employment is applied to

both sexes but has the effect of adversely affecting one sex (usually women). In such a

case the employer may not have intended to discriminate unfairly against one sex or the

other, but the practical effect is unfair. So, for example, when the Civil Service put a

maximum age limit of 28 years on applicants for professional posts, this was held by a

tribunal to be discriminatory against women, since they would be less able to apply for

such posts as they would be in their main child-bearing years. This practice has since

been suspended.

Discrimination is permitted on grounds of 'genuine occupational qualification', e.g. in

acting, a man would be expected to play a man's role. There are other exceptions, relating

to childbirth and matters of decency or privacy.

The major effect of the 1986 Act is to equalise the retirement age between the sexes.

With effect from November 1987, all employers have to set a common retirement date

for their employees. At present there is no obligation for employers to harmonise their

pension rights, however. Thus, although a woman employee may now be allowed to

continue working until 65 years of age, her employer is not bound to give her five extra

years of pension benefits after her sixtieth birthday. However, under the Employment Act

1989, a woman over 60 is entitled to a redundancy payment, if her job is no longer

required. The State retirement arrangements are still based on unequal treatment of the

sexes, with men receiving their pension at 65 and women at 60. The Act does not require

employers to set the same retirement age for all employers, so long as the grounds for

differential treatment are not discriminatory on grounds of sex. So, managers could be

retired at 60, staff at 62 and manual workers at 65, as long as the rules apply to both sexes

in each group.

6.2. Race relations legislation

The Race Relations Act, 1976, aims to prevent unfair discrimination on grounds of

colour, race, nationality, and ethnic or national origins. The law defines discrimination

along similar lines as described above for sex discrimination. Both direct and indirect

forms of racial discrimination can exist, and there are situations where an employer can

plead a special case for not employing a person of a particular kind. The practicalities of

ensuring equal opportunities for employees from the ethnic minorities are often dealt with

by means of an equal opportunities (EO) policy. The Race Relations Amendment Act

2000 extends the original legislation by requiring public authorities to promote racial

equality.

6.3. Religious discrimination

In the UK the only legislation to restrict unfair discrimination on the grounds of religion

is the Fair Employment (Northern Ireland) Act 1989, which places duties on employers to

'monitor their workforce and to submit annual ... returns showing religious composition'.

There is no similar law in the rest of the UK, but employers who aim to be 'Equal

Opportunity Employers' with a publicly-stated policy on equal opportunities always

include a reference to creed in their policy statement e.g. in local government 'applicants

for posts in the Authority will be considered regardless of their race, sex, creed, etc._

6.4. Disabled persons act

Until the Disability Discrimination Act, 1995, the main legal requirements in Britain for

dealing with the employment of disabled persons were contained in: Disabled Persons

(Employment) Act, 1944. The requirements were very modest, but represented an

example of what would now be called 'positive discrimination: This took two forms:

Employers of more than twenty employees had to employ a quota of disabled persons up

to 3 per cent of the total staff - a figure that was generally well in excess of the total

number of registered disabled persons in the population (about 2 per cent)

Certain work was identified as being particularly suited to disabled persons, who should

be given such work ahead of other employees.

The 1944 Act was repealed by the new Act, which introduced some major changes. The

1995 Act introduced a longer, more searching definition of 'disability', and relates it to

the ability to carry out the normal day-to-day activities of the employment. The quota

provision was repealed and replaced by a requirement not to discriminate against a

disabled person at any stage of employment, thus giving disabled employees some of the

rights available under sex and race discrimination laws. Discrimination against a disabled

person may take three forms:

Direct discrimination, i.e. where the disabled person is treated less favourably than

other persons on the grounds of his or her disability, when such treatment cannot be

justified by the employer.

Discrimination by failure of the employer to make reasonable adjustments to

working conditions and procedures: to ensure that a disabled person is not substantially

at a disadvantage compared with other employees.

Discrimination by victimisation, i.e. where a disabled person has brought evidence or

made a complaint against an employer, and is treated less favourably on account of

complaining.

6.5. Age discrimination

Unfair discrimination on grounds of age, sometimes called 'ageism' is not specifically

remedied by the law in Britain, although moves towards limiting unreasonable

discrimination against people are taking place. In 1999 government published a Code of

Practice on Age Diversity in Employment, aimed at employers and with the intention of

reducing the incidence of unnecessary age discrimination at work. The driving factor here

is not mere justice, but that Britain's population profile is becoming ever more weighted

towards the over 50s. In the next few years it is likely that many people over the present

retiring age will have to work to keep the economy going as well as to provide for

themselves.

As the proportion of young people in the economy continues to fall, so there will be

fewer workers to pay for the key services of health, education and social welfare.

Nevertheless, at the present time many employing organisations are discriminating

against would-be job applicants on the grounds that they are too old, at the same time as

they are telling others that they are too young!

In a survey carried out for the CIPD in December 2006, it was found that whereas 75 per

cent of those aged 45-54 were in paid employment, only 39 per cent of those aged 55-64

were employed. By comparison, at the other end of the age, range, 65 per cent of 16-24-

year-olds were in employment. A question relating to early retirements showed that 18

per cent of 55-64-year-olds had taken early retirement, as against 9 per cent in the 45-54

group and 1 per cent in the 35-44 group.

Although most respondents over 55 wanted to retire completely by the state pension age,

it was significant that one in five wanted to work either full-or part-time after this age,

mainly because they found their work enjoyable. Most age groups reported that they had

been discouraged from applying for jobs in the previous twelve months because of age

restrictions in job advertisements. Surprisingly, these restrictions were felt across the

spectrum - 13 per cent of 16-24 age range, and 35-44 age-range, and 9 per cent 55-64-

year-olds. Ageism is not just confined to recruitment practices, but even more so in

subsequent employment. Nearly one quarter of all respondents thought that their industry

was not interested in employing or promoting people over the age of 40.

6.6. Equal opportunity policies

Many employing organisations have introduced equal opportunities policies in order to

guide employment practices. Such policies spell out what constitutes unfair

discrimination (e.g. on grounds of race or sex) and what the organisation hopes to achieve

through the policy. Some employers have appointed an Equal opportunities

Officer/Manager to implement the policy. This person is usually a woman, and may be a

member of an ethnic minority.

An important aspect of any EO Policy is monitoring. The employer needs to ascertain

how many employees fall into the categories concerned and where they work, what jobs

they do and what training and career development they might have received. This

information can provide the basis for assessing where arbitrary discrimination may be

occurring. For example, in a well-known British Bank, studied by Incomes Data Services

in 1987, 53 per cent of the staff were women, yet only 2.8 per cent of the managers were

women, most of whom were employed in clerical roles. This has led to an increase in

training and career opportunities for women who wish to take advantage of promotion

prospects. Action on improving the number of applications from ethnic minorities has

also been taken as a result of ethnic monitoring of the recruitment process. In particular,

the Bank's aims have been as follows:

1. Increase number of women entering the Bank with expectations of being treated

as equal with their male counterparts

2. Women being promoted on the career ladders and being more assertive

3. More women in managerial positions

4. Eradicate the assumption that all men are career-minded and all women are not

5. Increase the number of black applicants to ensure that the Bank's image in the

labour market is one of a genuine equal opportunities employer.

All positive action programmes need to be carefully thought out if they are not to be

counter-productive. Those employees who are selected, or encouraged to join such a

programme need to see that they are neither being patronised nor being especially

privileged, but are only being given a fair chance to compete with others. Sensitivity

particularly needs to be shown in treating racial minorities, who, even when taken all

together, make up barely 4 per cent of the working population. If they appear to be

receiving privileged treatment, the majority may quietly resent the fact, and the cause of

racial harmony can receive a setback. Dealing with prejudice against women and racial

minorities at work is no easy task, and few organisations are happy with their attempts to

eradicate it. The mere fact that women, who make up more than 40 per cent of the

workforce, are presently campaigning, through Opportunity Now, to increase the quality

and quantity of women's participation in Britain's economy is a reflection of the relative

lack of success of anti-discrimination legislation over the last fifteen years.

Women in management

Women are still greatly under-represented in middle and senior management This is

neither fair nor sensible, and an aspect of equal opportunities which leading organisations

are attempting to address. Davidson and Cooper (1993) estimated that, in the UK, women

held less than 5 per cent of senior management posts and perhaps some 26 per cent of all

managerial-type positions. This is in a situation where as already mentioned they make

up more than 40 per cent of the total workforce. The difficulties faced by women in

breaking in to what is still very much a male preserve have been referred to as 'the glass

ceiling', an analogy to describe the subtly transparent barrier that prevents women from

gaining access to the more senior roles, in their organisations. What in these

circumstances can organisations do to achieve greater fairness for women and a better

balance of the sexes in managerial roles?

There are several possible actions that organisations can take to provide a fairer

framework of working conditions. These are more likely to succeed (i.e. to be fully

accepted by both sexes) if they are open to both to men and women, thus avoiding

possible charges either of favouring men or of patronising women. They include the

following:

1. Increasing part-time opportunities for permanent staff (and thus freeing

individuals to attend to domestic and family responsibilities whilst in a

permanent/career job)

2. Permitting flexible working hours, where this approach can be accommodated

within the usual demands of the lob

3. Making job-sharing more widely available, if this is practicable, given the

demands of the job

4. Enhancing training opportunities for potential managers, especially in such skills

as leadership, assertiveness and time management, whilst encouraging women, in

particular, to apply for such training

5. Providing personal development opportunities in form of secondments, special

projects and other opportunities to undertake new challenges and extend

experience in managerial roles

6. Developing senior management's awareness of (a) the benefits of more women

managers appointed on their merits, and (b) the potential loss to the organization,

if well-qualified women candidates are not appointed to more senior roles

7. Introducing career breaks for those who wish to take time out to focus on family

responsibilities

8. Providing, or paying for, crèche facilities for employees with family

responsibilities

9. Ensuring that individuals' accrued rights (e.g. to pensions, holidays, etc.) are not

disadvantaged merely because the jobholder is a part-time employee or has had

gaps in their service with the organisation.

6.7. Wage and salary management

Money is important, both economically and psychologically. Without it, we cannot buy

the goods and services that make life comfortable. Money is also equated with status and

recognition. Many employees are quite sensitive about the amount of pay they receive

and how it compares to what others in the company and in society are earning. We can

see, then, how money, or compensation, can strongly affect the motivation of employees.

Because of its importance, employee motivation was the subject of an earlier chapter.

Employee Compensation

The most common system by which nonmanagerial employees are compensated is

wages, which are based on time increments or the number of units produced.

Nonmanagerial employees traditionally have been paid at an hourly or daily rate,

although some are now being paid biweekly or monthly. Employees who are

compensated on a weekly or longer schedule are paid salaries. Hewlett-Packard Company

eliminated the daily rate of pay and now considers all personnel at all levels to be salaried

employees.

Wages

Some organizations try to motivate employees to improve performance by paying on the

basis of the number of units produced. This is a piecework system. Piece rates are

calculated by dividing the hourly wage for the job by the number of units an average

employee is expected to produce an hour. For example, if the rate of pay is $5 per hour

and the average employee is expected to produce 25 units per hour, the piece rate is 20

cents per hour. A worker who produced 40 pieces under this plan would earn $8 for the

hour.

A daily rate of pay is easier than a piece rate to understand and use because time

standards and records of the employee’s output are not needed. Unions generally prefer

the daily rate of pay over systems that involve piecework or incentive payments. This

preference is based on the belief that a piecework system tends to reduce group cohesion.

Many factors determine the wage rate for a nonmanagerial job. Wages for certain jobs are

affected by the availability of and demand for qualified personnel, although unions and

the government may hinder the effects of supply and demand. Through strike threats and

contract agreements, for example, unions can prevent employers from lowering wage

rates even when qualified personnel are available.

The existing wage rates in competing companies or in the community also help determine

wage scales. Organizations typically conduct wage surveys to assess hourly rates,

piecework or other incentive rates, and fringe benefits offered by other organizations. If

the wage rates of an organization are too low, it may be unable to attract qualified

personnel.

Many organizations determine the relative worth of a job and the wage adjustments for it

by using job evaluation systems. A job is compared with others within the organization or

with a scale. Under the ranking method, all jobs are ranked from highest to lowest, on the

basis of skill, difficulty, working conditions, contribution to goods or services, or other

characteristics. This simple plan is not totally objective. The personalities of the current

jobholders often distort rankings. Nor are unions enthusiastic about job evaluation. With

such a system, the union negotiator has almost no role to play.

6.8. Morale or attitude surveys

These should be made regularly, e.g. at least annually, as the knowledge gained about any

dissatisfaction enables early remedial action to be taken before employees decide to

leave. Some schemes provide measured reactions to supervision, communication,

working conditions, pay, employee benefits, security status and recognition,

administration, confidence in management and opportunity to development. Answers to

questions must be secret or they may be inaccurate. An example of a question is: ‘The

company as a place to work is — very poor, poor, fair, good, excellent.’ There may also

be open-ended questions, e.g. ‘What do you like best about working for the company?’

Questions of course must not be biased or misleading. Persons skilled in interviewing are

needed and the services of the National Institute of Industrial Psychology may be utilized.

Recent legislation has greatly affected this area and dismissal is now more costly and

more difficult for the employer. Termination of contracts has been restrained by public

policy.

Redundancy causes problems to employees and the human resources department can help

adjustment to the new conditions by instituting counselling services.

Services to assist the redeployment of workers can include, advice on their future

direction, financial arrangements, self-marketing and job-search techniques. Positive

steps must be taken to reduce the impact of redundancy and offset negative feelings

which may be held against the company.

6.9. Employee services

Many undertakings have paid more attention to the improvement of the environment in

which workers work and live. These are usually entitled employee services, and a number

of them will be briefly mentioned.

(a) Superannuation.

Many firms conduct pension schemes either as separate trust funds, where the firm’s

contribution (and the employee’s contribution in a contributory scheme) are invested and

the scheme controlled by trustees, or as life office schemes, where a contract is made

with a life assurance office. A firm may contract out of the state graduated pension

scheme if it has its own scheme which gives a pension at least equal to the maximum

under the State scheme.

(b) Catering.

This can be a very important service and plays a part in securing suitable labour. Most

canteens are subsidized by the company, but its cost is allowable for purposes of taxation.

The human resources manager may have to decide whether the company shall use the

services of outside caterers, or provide the service itself.

(c) Sickness and benefit schemes.

Employees absent from work for certain periods may still be paid their full wage, or a

proportion of the wage.

(d) Other services

These may include sports or recreational clubs, assistance with housing, special provision

for transport, assistance with tutorial fees and

textbooks for those studying for professional examinations.

6.10. Health and safety at work

The maintenance of safe working conditions and the prevention of accidents are most

important. Accident prevention is the responsibility of management and this

responsibility is often delegated to the human resources manager. In other firms, it may

be the responsibility of the works engineer or works manager.

The Health and Safety at Work Act was passed in 1974. This lays down broad duties,

which are being supplemented by more detailed regulations. The principal duty which the

Act lays on employers is to ensure, so far as is reasonably practicable, the health, safety

and welfare employees. A series of slightly more precise duties follow, dealing with, for

instance, plant and systems of work, handling and storage of materials. In all cases,

however, the duty is qualified by the phrase ‘reasonably practicable’. Accordingly, it

appears that the employer can balance risk of injury against the measures necessary for

eliminating that risk and, if the risk is in relation to these measures, the employer may not

be liable.

The Act aims to encourage employers and employees to play a positive role in promoting

safety. A duty is thus laid on employees to take reasonable care for their own safety and

that of others, there is provision for the appointment of safety representatives and safety

committees from among the employees and the employer must issue a written statement

of his safety policy. In furtherance of this ‘positive safety’ aim, the idea of criminal

sanctions for breach of Act is pushed into the background. Although such sanctions exist,

safety inspectors, who have statutory powers, will generally first issue notices requiring,

for instance, an improvement of some matter, before there is resort to a prosecution. The

primary job of inspectors is thus to provide detailed advice and assistance, rather than to

be law enforcers in the strict sense. Clearly, the role of the human resources officer in

encouraging this ‘positive safety attitude’ is of crucial importance. The Act also

established two bodies: the Health and Safety Commission, which has overall

responsibility for safety and whose role is one of advice, education, and research, and the

Health and Safety Executive, which is responsible for the actual operation of all safety

law.

Finally, it should be noted that an employee injured at work has tow other remedies open

to him: he may sue his employer for negligence and he may claim industrial injury

benefit.

Safety officer

If a person is appointed to this position he may be responsible to the human resources

officer or other department head. He should have good experience of industry and

knowledge of engineering principles and the relevant law, and have a common sense

approach to problems. Qualities required include efficiency, high morale, courage, so that

he can be respected, and he should be able to mix well with other people. His duties will

include:

• making routine, thorough inspections of plant and buildings etc, preferably with the

department manager concerned;

• seeing that all safeguards are in operation, that protective gear and fire escapes are clear;

• seeing newcomers are instructed in safety measures;

• keeping records of accidents and their causes and taking effective action where special

trends appear;

• advising on safety implications of plant layout, working methods, etc.

6.11. Work safety committees

These may be formed and the terms of reference should be made specific. It should be an

advisory committee which meets regularly, e.g. at least once a month, to discuss action

required about unsafe working conditions or methods. Members of the committee may

comprise works manager, human resources manager, safety officer, department and

union representatives.

Conclusion

In the final analysis, equal opportunities at work boil down to two key issues:

• changing people's attitudes so that they become more objective and

less

their ideas about people who are different from themselves;

•

making the fullest use of the organisation's human resources.

The best thing about equal opportunities policies is that they have the potential to bring

out the best in the workforce. In this task personnel and human resource managers have a

key role to play.

6.12. REVISION QUESTIONS

1. Define the following concepts

a) Indirect discrimination

b) Direct discrimination

2. Why are health and safety considered as important factors in human resource

management?

3.What are the noticeable setbacks that discrimination brings in an organisation?

UNIT SEVEN

7.0. MOTIVATION THEORIES AND REWARD SYSTEMS Introduction

Motivation theory attempts to explain why people behave in the ways they do. This is not

an easy task, as Vroom and Deci (1970) put it: “The question of what motivates workers

to perform effectively is not an easy one to answer.” The difficulty is that the researchers

involved have to make assumptions about the motives for behaviour that they have

observed or recorded. There is always an element of subjectivity, therefore, in any

judgments made about motivation.

The link between motivation theory and the practices of management is crucial to

management’s success. People are the greatest single asset available to an enterprise. In

fact an organization is people! Unfortunately, people are the only asset that can actively

work against the organisation’s goals. It is, therefore, only by collaborative efforts that

people can find a release for their latent energy and creativity in the service of the

enterprise.

7.1. Definition of Motivation

‘Motivation is a process in which people choose between alternative forms of behaviour

in order to achieve personal goals;

Such a definition excludes the operation of instinctive or reflex behaviour and focuses on

individual choice. Exercising choice is not just a rational process, but one which is

considerably affected by the emotions and deeply held-values of the individual.

The goals sought by individuals can be relatively tangible, such as monetary reward or

promotion, or intangible, such as self-esteem or job satisfaction. The rewards available to

an individual are generally classified under two headings- intrinsic and extrinsic rewards.

Briefly, intrinsic rewards are those that are derived from the individual’s own experience;

extrinsic rewards are those are conferred on a person from outside. An intrinsic would be

a sense of achievement or a feeling of self-esteem; an extrinsic reward would be a pay-

rise or a promotion. Whilst motivation as such is essentially a personal experience,

managers, in particular, are keen to find reliable links between individual motivation and

effective performance. They are also concerned to create the conditions under which

organizational and personal goals may be harmonized.

Motivation can be described as behaviour caused by some stimulus but directed towards

a desired outcome, as indicated in the figure below

The basic motivation model

Stimulus Appropriate Goal/Desired Behaviour Outcome

In this model the stimulus could be a need, drive or incentive of kind, e.g. the need for

food. Appropriate behaviour would be to pull into a motorway restaurant or go to the

larder. The goal or desired outcome would be, at the very least, the relief of hunger pangs

and, at best, the enjoyment of a satisfying meal.

In relation to the illustration above a researcher would want to ask the following

questions;

1) What stimulus prompted the observed behaviour?

2) What was the nature of the perceived stimulus?

3) What was the response to the stimulus?

4) Why was this particular behaviour chosen?

5) What goal appeared to be sought by the person?

6) Why was this goal chosen?

7) How effective was the behaviour?

8) How appropriate was the goal.

Theories that focus on the stimulus, i.e. on what specifically causes motivation, have

been content theories. Exponents include such well-known names as Maslow, Herzberg

and McGregor. Theories that focus on the behaviour have been called process theories.

Effective performance at work does not just depend on motivation. Numerous other

factors, such as individual knowledge and skill, the nature of the task, the management

style adopted and the organization climate, all play a part in the results people achieve.

The key feature of motivation is that it determines the extent to which an individual

desires to place his or her knowledge and skills at the disposal of others, and, more than

that, to shrug off the effects of obstacles and difficulties in so doing.

The theories suggested by Maslow, Alderfer, Herzberg, and McClelland are content

theories. Those that come under the labels of Expectancy Theory, Equity Theory, and

Goal Theory are primarily process theories.

7.2. Maslow’s hierarchy of needs

Maslow (1954) suggested that human needs operate at a number of different levels, from

basic physiological needs such as hunger, to higher-level needs such as self-devel-

oponent and self-fulfillment. These levels can be arranged in an hierarchy as shown

below;

Maslow’s hierarchy of human needs

Self- actualization needs

Esteem needs Belonging needs

Safety and security needs Physiological needs

Maslow’s general argument was that, other equal, people tend to satisfy their lowest level

of felt need before moving on to higher –level need. As Guest’s (1984) review of

motivation theories comments, however, research studies conducted in the 1960s and

early 1970s showed little or no support for the theories of Maslow… The major difficulty

associated with Maslow’s model lies in its apparent rigidity. Whilst few people would

deny that there are lower-level and higher-level needs, many would dispute that people

do tend to satisfy their in a relatively systematic way from the bottom to the top, as it

were.

7.3. Alderfer’s theory

Clyton Alderfer (1972) followed up Malsow’s idea with some studies which led him to

propose his so-called ERG theory of motivation. This suggested that people’s needs are

arranged along a continuum, rather than in a hierarchy, and there are three rather than

five groups of needs: Existence, Relatedness and Growth. Existence needs correspond to

Maslow’s lower -levels, Relatedness corresponds to Maslow’s social needs, while

Growth corresponds to Maslow’s higher-level needs. Alderfer’s model is altogether more

dynamic than Maslow’s. It allows for people to deal with two sets of needs once, and also

distinguishes between chronic or long-lasting needs and episodic or occasional, needs.

7.4. Herberg’s motivation-hygiene theory

Fredrick Herzberg (1996) took the view that man lives at two levels, the physical level

and the psychological level. His original study into the good and bad experiences at work

of two hundred engineers and accountants was designed ‘to test the concept that man has

tow sets of needs: his need as an animal to avoid pain and his need as human to grow

psychologically’. The respondents in the study were asked to recall times when they had

felt exceptionally good about their jobs, and then to recall negative feelings they had

experienced.

His interpretation of the results led him to state his two-factor theory, or Motivation-

Hygiene Theory, of motivation. Several factors led persistently to employee satisfaction,

while some others led persistently to dissatisfaction. The satisfiers were called

‘motivators’ and the dissatisfiers‘hygiene factors’. Motivators appeared to be closely

connected to the job, whilst hygiene factors were connected with the environment.

Motivators appeared to produce motivated behaviour, however, hygiene factors produced

either dissatisfaction on nil response.

To take a motoring analog, hygiene factors can be considered as filling up the petrol tank,

i.e. the car will not go if there is no fuel, but refueling of itself does not get the vehicle

under way. For forward movement, the car electronics must be switched on and the

starter operated- this is the effect created by the motivators. As theory of motivation

Herzberg’s ideas have been effectively discredited mainly on the grounds that there is no

evidence to support his concept of two independent sets of factors in motivation. Critics

(e.g. Campbell et al,1970)have claimed that, in an empirical sense, Herberg’s work had

been concerned more with job satisfaction/dissatisfaction than job behaviour.

Nevertheless, his work has led to what might be called the job enrichment movement

(adding motivators to jobs) and, more recently to the quality of working life movement.

Achievement motivation

Achievement motivation is generally associated with the work of D.Mclelland and

colleagues at Harvard University, working from a list of some 20 needs identified by an

ealier theorist, H.A. Murray, McClelland focused his attentions on three particular needs.

1) The need for achievement (n Ach)

2) The need for Affiliation (n Aff)

3) The need for power (n Pow)

Of these three, the need for achievement received the greatest emphasis in the research.

This was because this motive was perceived as having relatively stable tendency, and was

activated by external events in the individual’s situation.

McClelland (1961) found that individuals with a high n Ach factor tended to display the

following characteristic:

1) Their need for achievement was constant

2) They sought tasks in which they could exercise responsibility

3) They preferred tasks which provided a challenge without being too difficult, and

which

they felt they could master (i.e. they did not set themselves impossible goals)

4) They actively sought feedback on there results

5) The were less concerned about affiliation, or social, needs.

McClelland concluded that n Ach was developed more by the experiences of childhood

and cultural background than by inherited factors.

In view of the suggested characteristics of achieving type of person, McClelland’s ideas

have been applied in the selection of managers. The psychometric test known as the

Thematic Apperception test (TAT) has been widely used to elicit a person’s n Ach, n Aff

and n pow tendencies. This test asks subjects to look at a series of pictures, which they

have to describe in terms of what is happening, who are the people concerned, what will

happen, and so on. The strength of individual’s needs are inferred from their descriptions.

7.5. V. H. Vroom and expectancy theories

Vroom (1964). in an influential work, focused his individual behaviour in the work place.

He observed the work behaviour of individuals with the object of explaining the

processes involved. He assumed that much of the observed behaviour would be

motivated, i.e. that it was the result of preferences among possible outcomes and

expectations concerning the consequences of actions. His principle methodology was

‘objective observation’.

The essential elements of Vroom’s ideas have come be called ‘Expectancy Theory’. The

crux of this theory is that motivation behaviour is a product of two key variables;

1) The valence of an outcome for the individual, and

2) The expectancy that a particular act will be followed by a predictable outcome

Valence is the anticipated satisfaction from an outcome. This distinguishes it from value

of the outcome which is the actual satisfaction obtained. Expectancy is a momentary

belief concerning the likelihood that a particular act will be followed by a particular

outcome. The product of valence x Expectancy is force. Force is used in the sense of

pressure to perform an act. Thus the basic formula designed by Vroom can stated as

follows;

FORCE (Motivation) = VALENCE X EXPECTANCY

Vroom’s ideas have been pursued by numerous other theorists to the extent that in a

recent review of motivation theory, Guest (1984) concluded that ‘Expectancy theory

continues to provide the dominant framework for understanding motivation at work’.

Lawler & Porter (1967), in particular, have extended Vrooms ideas by developing a

model which attempts to address two major issues;

1) What factors determine the effort a person puts into his job?

2) What factors affect the relation between effort and performance?

The variables selected by Lawler & Porter were as follows:

• effort

• the value of rewards

• the probability that rewards depend on effort

• performance

• abilities

• role perceptions

The rewards that individuals will find attractive, that is to say those which have a high

valence for them, may be intrinsic or extrinsic rewards. Vroom (1964) considered the

question of job satisfactions an aspect of motivation. The term ‘job satisfaction’ was

regarded as ‘the conceptual equivalent of the valence of the job

or work role to the person performing it.’ In his opinion the main variables affecting job

satisfaction were:

1) Supervision

2) The work group

3) Job content

4) Wages

5) Promotional opportunities

6) Hours of work

In concluding his discussion on job satisfaction, Vroom comments that, ‘people’s reports

of their satisfaction with their jobs are…… directory related to the extent to which their

jobs provide them with such rewarding outcomes as pay, variety in stimulation,

consideration from their supervisor, a high probability of promotion, close interaction

with co-workers, an opportunity to influence decisions …….and control their pace of

work.

In practical terms, therefore, managers who wish to make use of the ideas embodied in

expectancy theory will need to consider the following;

1) How can employee values and preferences be identified?

2) What rewards are most likely to be valued by employees?

3) In what way can rewards be tied to performance?

4) How can available rewards be publicized?

5) What training resources are required to ensure that employee effort can result in

effective performance?

6) How can jobs be re-designed so as to incorporate the rewards sought by

employees.

7.6. REWARD SYSTEMS

Financial rewards are a fundamental part of the employment relationship. Organizations

distribute money and other benefits in exchange for the employee’s availability,

competencies, and behaviors. Rewards help to align individual goals with corporate goals

and to provide a return to the individual’s contribution. This concept of economic

exchange can be found across cultures. The word for “pay” in Malay and Slovak means

to replace a loss; in Hebrew and Swedish it means making equal. No matter which

culture, a paycheck means giving back or rebalancing the employee’s contribution to the

employer.

There are four main types of organizational rewards: membership and seniority, job

status, competency, and performance. Although Western culture dominates current

thinking on this topic, various rewards exist across cultures. For example, there is

increasing evidence that individuals in most cultures value some amount of performance-

based pay, rather than a fixed salary alone. One survey reports that 65 percent of large

employers throughout Asia already use some form of performance-based reward system.

Incentives are most popular in Thai companies and least likely to be found in Indonesian

firms.

Membership and Seniority-Based Rewards

The largest portion of most paychecks is based on membership and seniority. Employees

receive fixed hourly wages or salaries, and many benefits are the same for everyone in

the firm. Other rewards increase with the person’s seniority in the firm. Most

organizations offer longer vacations to those with higher seniority. Base pay sometimes

increases with the number of years in a job. Japanese firms usually move employees into

a higher pay rate for each year on the job or their age.

Company pension plans emphasize seniority because those who leave within the first five

years typically forfeit some or all of the company’s contribution to the pension plan.

Some firms offer special perquisites to employees above a certain seniority level

Advantages and disadvantages

Membership-based rewards may attract job applicants, particularly when the size of the

reward increases with seniority. Seniority-based rewards reduce turnover because the cost

of quitting increases with the employee’s length of service. One problem with

membership-based rewards is that they do not directly motivate job performance.

Another problem is that membership-based rewards discourage poor performers from

leaving voluntarily because they seldom have better job offers. Instead, the good

performers are lured to better-paying jobs. Lastly, golden handcuffs—financial incentives

that discourage people from leaving the organization—tend to undermine their loyalty

and job performance to that organization.

Job Status-Based Rewards

Almost every organization rewards employees for the status of their jobs in the

organization. Firms with many employees typically use job evaluation systems to

evaluate the worth of each job in terms of its required skill, effort, responsibility, and

working conditions. Jobs that require more skill and effort, have more responsibility, and

have difficult working conditions would have more value and consequently would be

placed in higher pay grades. Organizations that don’t rely on job evaluation still tend to

reward job status based on pay survey information about the external labor market.

A senior engineer typically earns more than, say, a purchasing clerk because the work

performed by the engineer is worth more to the organization. It has more value

(calculated by a job evaluation system or pay survey) and therefore employees in that job

receive more status-based rewards in the organization. People in some higher status jobs

are also rewarded with larger offices, company-paid vehicles, and exclusive dining

rooms.

Advantages and disadvantages

Companies reward job status to maintain feelings of equity. Job evaluation systems try to

maintain internal equity; that is, to ensure that employees feel their pay is fair when

compared to how much other jobs in the organization are paid. This process also

minimizes pay discrimination. Pay surveys generally try to maintain external equity; that

is, to ensure that employees feel their pay is fair when compared to how much people in

other organizations are paid. Job status-based rewards also motivate employees to

compete for positions further up the organizational hierarchy.

Despite these advantages, job status-based rewards have received much criticism. They

motivate employees to increase their job’s worth by exaggerating job duties and hoarding

resources. These political behaviors may increase the job’s pay rate through a job

evaluation system, but they don’t help the organization. Job status-based rewards also

cause employees to focus on narrowly defined tasks rather than broader organizational

citizenship and customer service behaviors. Job status-based benefits, such as executive

dining rooms and golf memberships, create a psychological distance between employees

and management, thereby inhibiting communication between these groups. Some

companies try to minimize these problems by closing executive dining rooms and

removing other status-based benefits. There is also a strong trend away from rewarding

employees for their job status and toward competency-based rewards.

Competency-Based Rewards

The emerging reward system strategy is to pay employees more for their competencies

than for the tasks they perform at a particular time. Competencies are the underlying

characteristics of people that lead to superior performance. Competency-based pay

rewards employees for their skills, knowledge, and traits that lead to desired behaviors.

Employees are expected to have several competencies, and these competencies are

evaluated by observing specific behavior patterns.

How does competency-based pay differ from job status-based pay? Companies with

traditional status-based rewards have many pay grades, each with a narrow range

between the lowest and highest pay. Employees might see their pay increase somewhat

by moving within a pay grade, but they are mainly rewarded through promotions to a

higher job and a higher pay grade. In contrast, companies with competency-based

systems use fewer pay grades with very wide ranges between the lowest and highest pay

rates within each grade. These wide pay ranges allow more room to reward employees

for their competencies rather than the specific jobs they hold. For example, some

competency-based systems allow highly competent employees to earn more than their

supervisors or team leaders. Similarly, this motivates employees to acquire skills and

knowledge by moving laterally through several jobs, rather than waiting for promotions

up a career ladder.

Skill-based pay (SBP) plans represent a variation of competency-based pay. In SBP

plans, employees earn higher pay rates with the number of skill modules they have

mastered. Through special training and job rotation, employees learn how to operate

another machine or complete another set of tasks. The employee’s pay rate depends on

the number of skill modules that he or she has mastered, not on the specific job

performed on a particular day.

Advantages and disadvantages

Competency-based rewards have been praised for developing a better-skilled and more

flexible workforce. Customer needs are met more quickly because employees can move

into different jobs as demands require. Product or service quality tends to improve

because employees who have work experience in several jobs are more likely to know

where problems originate. Moreover, employees find it easier to discover ways to

improve the work process as they learn more skills and tasks in that process.

Competency-based rewards are also consistent with the emerging view that people are

hired into organizations, not specific jobs. Rather than paying people for their ability to

perform a specific job, competency-based rewards ensure that the best-paid employees

are those who can adjust to new situations because they possess the capabilities across

jobs and circumstances.

However, competency-based rewards have their limitations. Competencies are supposed

to be measured by assessing the employee’s specific behaviors, but some critics worry

that this can deteriorate into subjective personality assessments.’ It is difficult enough to

measure personality traits through scientific measures; casual assessments by co-workers

and team leaders of someone’s personality would be less accurate. Skill-based pay

systems measure specific skills, so they are usually more objective and accurate.

However, SBP plans are expensive because they motivate employees to spend time

learning new tasks. Also, it’s not uncommon to have most employees eventually reach

the highest pay rate because few firms have established ways to reduce pay rates when

employees get rusty on specific skills.

Performance-Based Rewards

In the early 1990s, 90 percent of a typical manager’s pay at Sears Roebuck and Co. was

straight salary. Now it’s 80 percent and dropping as the retail giant moves to

performance-based pay. For some top executives, performance bonuses can exceed their

base salary. “1 wanted to move away from an entitlement mentality—put pay at risk and

increase it over time to motivate and drive people,” says Sears CEO Arthur Martinez.

Sears is following the trend toward performance-based rewards rather than purely

membership and seniority-based rewards. Although this shift is most apparent in North

America, companies in Europe and Asia are also paying employees more for their

performance than ever before. For instance, in a recent survey of 210 large firms in

Tokyo, Japan, 24 percent currently awarded pay increases on the basis of performance

rather than seniority.

Performance-based rewards are not new, but they now come in more flavors than ever

before.

Individual rewards

Individual rewards have existed since the time of

Babylon in the 20th century B.C. The oldest of these is the piece rate, which

calculates pay by the number of units the employee produces. Commissions pay people

based on sales volume rather than Units produced. Many real estate agents and

automobile salespeople are paid

straight commission. Royalties pay individuals a percentage of revenue from

the resource or work ascribed to them. For instance, some mining companies

pay royalties to their exploration geologists from the mineral deposits they discover.

Merit pay—increasing the individual’s pay based on performance appraisal

results—was common during times of high inflation. However, merit pay has

been replaced in many firms by reearnable bonuses for accomplishing specific

tasks or achieving certain goals. Although these bonuses are often determined

from team or organizational performance, they may also result from satisfactory

completion of individual goals.

Companies also reward top performers with gifts.

Team rewards

Organizations increasingly rely on teams to get the work done. Consequently, they are

rewarding team performance to support these team-based structures. Some teams are

rewarded with special bonuses or gifts if they collectively achieve specific goals. At the

San Antonio Marriott River Center, for example, general manager Arthur Coulombe

offered sales staff a four-day trip to Padre Island, Texas, if they achieved $1 million in

group room revenue over a six-month period. Coulombe sent buckets of sand or fishing

lures to employees’ homes every couple of weeks to remind them of the reward. The

sales team brought in $1.5 million in revenue, well beyond anyone’s expectations.

A gainsharing plan is a type of team reward that motivates team members to reduce costs

and increase labor efficiency in their work process. Gainsharing plans use a

predetermined formula to calculate cost savings and pay out a bonus to all team

members. Typically, the company shares the cost savings with employees for one or two

years. For example, 911 dispatchers in Howard County, Maryland, were recently

awarded bonuses up to $400 for significantly reducing the time to answer a call and send

out an emergency crew. The increased productivity avoided hiring two more dispatchers,

and employees shared the savings with taxpayers.

Gainsharing plans create a reasonably strong performance-to-outcome expectancy

because much of the cost reduction and labor efficiency is within the team’s control. In

other words, team members quickly learn that their work efficiencies increase the size of

the gainsharing bonus. However, costs do occasionally increase beyond the team’s

control, such as when demand for the product or service drops quickly, thereby

increasing costs per unit.

Organizational rewards

J. Robert Beyster believes that the best way to motivate employees is to instill an

“ownership culture.” The founder and chief executive officer of San Diego-based Science

Applications International Corp. (SAIC) has done that by forming an employee stock

ownership plan (ESOP) in which employees own over 90 percent of the company’s stock.

Beyster believes that this ownership has helped the company’s phenomenal success.

From just 6 employees in 1969, SAIC now employs 25,000 people and has annual

revenues of $3.4 billion. “We turn employees into stakeholders,” Beyster says. “I really

believe it makes a difference, and I think it’s fair.”

7.7. The Trouble with Rewards

Performance-based reward systems have become tremendously popular, but a few

scholars claim that these incentives might do more harm than good for organizations. One

strong critic of workplace rewards is Alfie Kohn, an educational researcher and writer.

Although Kohn identifies many concerns, he suggests that praise is unhealthy when

applied as a reinforcer. Kohn’s five main arguments against the use of performance-

based rewards are as follows:

• Rewards punish—Kohn suggests that there are punitive features built into every

reward. First, when rewarding people, we are also demonstrating our control over them.

This can eventually assume a punitive quality by making the reward recipient feel

subservient. Second, after being rewarded, employees come to expect that reward in the

future. If their expectation is not met, they feel punished.

• Rewards rupture relationships—Kohn complains that individual rewards create

jealousies and competition. In other words, rewards usually lead to feelings of inequity

because people invariably compare their rewards to others. Team rewards aren’t any

better because they encourage peer pressure. Rewards also create a psychological

distance between the person giving and receiving the reward. Taken together, rewards

disrupt the collaboration needed for organizational learning.

• Rewards ignore reasons—Employers need to spend time discovering the cause of

behavior problems. Instead, according to Kohn, they use incentives as quick fixes. We

can see this in situations where companies use incentives for the most trivial reasons. For

example, an Arizona company hands out cash to employees who arrive early at company

meetings and fines those who arrive late. The company would be better off identifying

the causes of lateness and changing the conditions, rather than using money to force a

solution to the problem.

• Rewards discourage risk taking—Kohn cites evidence that rewards motivate people

to do exactly what is necessary to get the reward and nothing more. Incentives dampen

creativity because employees no longer explore new opportunities outside the realm of

rewarded behaviour or results. In other words, rewards motivate employees to get

rewards, not to discover better ways to help the organization.

• Rewards undermine intrinsic motivation—Kohn’s greatest concern with reward

systems is that they kill a person’s motivation found in the work itself. This intrinsic

motivation relates to fulfilling growth needs, which are the most powerful and sustaining

sources of motivation. Kohn reports studies indicating that employees are less

intrinsically motivated to perform a task after they have received an extrinsic reward for

performing it. Critics point out that these studies were not conducted in real work

situations. However, until more precise research indicates otherwise, we should be

concerned about the risk of losing intrinsic motivation when extrinsic rewards are

introduced.

Should we abandon rewards, based on Alfie Kohn’s arguments? Probably not.

Organizational behavior scholars have known for years that performance- based rewards

are imperfect. Even with these concerns, the OB literature generally concludes that

properly implemented financial rewards do motivate employees. And what about Alfie

Kohn’s criticisms? Our opinion is that they must be viewed as caveats of performance-

based rewards, but not an outright dismissal of them.

One additional argument for performance-based rewards comes from the economic

concept called agency theory. According to agency theory, company owners (principals)

and the executives and employees representing the owners (agents) have different goals

and interests. For example, companies typically want to provide a good return on

investment to stockholders, serve customers effectively, and meet government

obligations. Agency theory argues that agents will not support the owner’s goals unless

they happen to coincide with their personal goals or there is a compelling incentive to

fulfill those goals. Reward systems are designed to successfully align employee goals and

actions with the owner’s interests.

Minimizing Reward Problems

Reward systems do motivate—but only if the problems that often plague performance-

based reward systems in organizational settings can be avoided. Here are some of the

more important strategies.

Measure performance accurately

Rewards won’t work unless companies learn how to measure employee performance and

tie that information to the reward. This strengthens the performance-to-outcome

expectancy because accurate performance measurement increases the probability that

employees who perform well are correctly identified and thereby receive larger rewards.

Ensure that rewards are relevant

Companies need to align rewards with performance within the employee’s control. For

example, Sears rewards senior executives for corporate performance because they have

some control over the company’s overall success. Bonuses for department sales

managers, on the other hand, are based on profits and customer satisfaction in their

departments but not on Sears’ overall corporate performance. Reward systems also need

to correct for situational contingencies. Salespeople in one region may have higher sales

because the economy is stronger there than elsewhere, so sales bonuses need to be

adjusted for these economic factors.

Use team rewards for interdependent jobs

Organizations should use team (or organizational) rewards rather than individual rewards

when employees work in highly interdependent jobs. One reason is that individual

contributions can’t be identified or measured very well in these situations. For example,

you can’t see how well one employee in a chemical processing plant contributes to the

quality of the liquid produced. It is a team effort. A second reason is that team rewards

tend to make employees more cooperative and less competitive. People see that their

bonuses or other incentives depend on how well they work with co-workers, and they act

accordingly.

The third reason for having team rewards in team settings is that they support employee

preferences for team-based work arrangements.

Ensure rewards are valued

Employers often introduce a reward without considering whether employees really value

it. This point relates to the valence concept in expectancy theory. If a reward isn’t valued,

then it won’t motivate. Moreover, we need to determine whether there are countervalent

factors related to the reward that undermine its motivational value. A British firm failed

to do this when it asked staff to choose an employee-of-the- month. Everyone thought

that the incentive was so tacky that they chose the worst employees for the award. “The

company was surprised at the choices,” explains a consultant familiar with the case, “but

it didn’t dawn on them what was going on.” Employees may have appreciated praise, but

the “uncool” nature of this reward easily offset its benefits.

Watch out for unintended consequences

Performance-based reward systems sometimes have an unexpected.—and undesirable—

effect on employee behavior. Employee behavior is a complex combination of needs,

competencies, role perceptions, and situational factors, so it is often difficult to foresee

the unexpected results when reward systems are introduced. Consider the pizza company

that decided to reward its drivers for on-time delivery. The plan got more hot pizzas to

customers on time, but it also increased the accident rates of its drivers because the

incentive motivated them to drive recklessly.

Reward systems are not the only way to motivate people. Organisational Behaviour

scholars usually emphasize the job itself as the preferred source of motivation. It is also

an important factor in work efficiency, work-related stress, and various other employee

outcomes. The process of assigning tasks to a job, including the interdependency of those

tasks with other jobs, is called job design. A job is a set of tasks performed by one

person. Some jobs have very few tasks, each requiring limited skill or effort. Other jobs

include a very complex set of tasks and can be accomplished by only a few highly trained

tradespeople or professionals.

7.8. REVISION QUESTIONS

1) What is motivation

2) Describe the motivation theories stated by Maslow, Alderfer, Herberg

3) What is achievement motivation?

4) What are the four main types of organizational rewards?

5) What are the advantages and disadvantages of the rewards you have mentioned in

question four?

UNIT EIGHT

8.0. EMPLOYEE PERFORMANCE APPRAISAL

Employee performance appraisal is carried out within a practical context which is

essentially the day-to-day business of the enterprise. What is being assessed in the first

instance is the employee's performance in carrying out the general duties of his or her

role, together with any specific targets that have been set. Appraisal may be used to

assess a person's suitability for promotion, either generally or with a specific job in mind.

In the appraisal situation, individuals are entitled to ask what aspects of their job are

being assessed and against what criteria. An individual will also want to know how the

process of appraisal will be carried out, and what opportunities they themselves will have

to contribute to it. In most cases the appraisal is conducted by the employee's immediate

manager, but for some management posts the appraisal may involve the manager's own

colleagues, where so-called 360' appraisal is employed.

Standards

The most crucial aspect of performance appraisal is identifying the standard of effective

performance. In performance evaluation systems, it is customary to refer to standards as

criteria—ways of identifying success in an activity. A criterion for a student is the grade

earned in a course or the grade point average after one year at college. An important and

necessary step in developing a performance appraisal system is the development of

criteria that indicate successful performance.

Primary sources of individual job performance criteria are the organization’s overall

objectives and strategies. It is an important principle that individual performance should

contribute to organizational performance. Although this principle seems self—evident, it

remains difficult to implement, particularly when organizational objectives change.

Information

Information enables managers to judge the performance of subordinates. Managers must

decide three issues regarding performance information: the source, the schedule, and the

method.

Sources of Information

Five possible parties can provide appraisal information:

(1) The supervisor or supervisors of the appraisee,

(2) The peers,

(3) The appraisee,

(4) subordinates of the appraisee, and

(5) individuals outside the work environment. In most situations, the appraiser is the

immediate supervisor of the person rated and should be most familiar with the

employee’s performance.

Some organizations use group ratings to appraise managerial personnel; members of the

group could include superiors, subordinates, and peers. Although some companies use

peer appraisal systems, lack of success with this method is not unusual. Peers need

mutual cooperation to do their jobs, and performance appraisal undermines the spirit of

cooperation.

There is some interest in using self-appraisals. The major claims in support of this

approach are that it improves the employee’s understanding of job performance, increases

the personal commitment of employees because of their participation in the performance

appraisal process, and reduces the hostility between superiors and subordinates over

ratings. Some employers fear that self-appraisals would be unusually high and not

sufficiently critical of current performance.

There is some support for the use of multiple appraisers. The major advantage of using

superior, peer, and self-ratings is that this provides a great deal of information about the

appraisee. In making decisions about promotion, training/development, and career

planning, as much information as possible is needed to suggest the best alternative

courses of action for the employee.

8.1. Appraisal Methods

At one extreme, the most simplistic method of information gathering consists solely of

the manager’s periodic observations of the subordinate’s performance. At the other

extreme are complex systems, the manager completes forms documenting the

subordinate’s performance during the period covered by the appraisal. A number of

performance evaluation systems have been developed.

Schedule of Appraisal

In general, long-term employees receive one formal

appraisal a year. Recent hirees usually are appraised more frequently than other

employees. The time to appraise depends on the situation and on the intent of the

appraisal. If performance appraisals are either too far apart or occur too

frequently, the appraisee may not be able to use the feedback to make improvements.

An appraisal program conducted solely for the sake of appraising employees soon will

lose impact unless it becomes integrated with the main emphasis of the organization. The

performance appraisal program should be considered a continual process that focuses on

task accomplishment, personal development, and the organization’s objectives.

8.2. Reasons for appraisal

There are several reasons why appraisals are carried out in organisati,: may be

summarised as follows:

• To identify an individual's current level of job performance

• To identify employee strengths and weaknesses

• To enable employees to improve their performance

• To provide a basis for rewarding employees in relation to their contribution to

organisation goals

• To motivate individuals

• To identify training and development needs

• To identify potential performance

• To provide information for succession planning.

The most likely reason for the adoption of staff appraisal is to draw present performance

in the job in order to (a) reward people fairly’ and (b) identify those with potential for

promotion or transfer.

Appraisal forms

There are various ways in which appraisal forms can be devised. The key elements

however, are the following:

• The focus of the appraisal, i.e. the job or the person

• The performance criteria selected

• The performance ratings used.

Where the appraisal focuses on the job, the appraisal form is more likely to ask the

appraiser to look for success in achieving job targets or objectives than to comment on

the job-holder's personal attributes. Where the focus is on the person rather than on the

job, the reverse is true, i.e. the appraiser is expected to give an account f the jobholder's

qualities and attitudes rather than of his or her relative success in achieving results. Thus,

the focus of the appraisal will determine the nature of thecriteria against which individual

performance will be judged, as well as of the ratings or measures to be used.

Forms which seek information about the person rather than about his performance in the

job are typified by an emphasis on:

• Generalized criteria

• Generalized ratings of performance

• Box-ticking as method of describing performance.

Rating scales in performance appraisal

Appraisal criteria are generally either person-oriented or results oriented. Within each of

these orientations appraisers still have to 'measure' individual performance. They do so by

using one or more scales for rating performance. The principal options available are:

Linear or Graphic Rating Scales, in which the appraiser is faced with a list of

characteristics or job duties and is required to tick or circle an appropriate point on a

numerical, alphabetical or other simple scale.

Behavioural Scales, in which the appraiser has a list of key job items against which are

ranged a number of descriptors, or just two extreme statements of anticipated behaviour.

Free Written Reports, in which appraisers write essay-type answers number of

questions set on the appraisal document.

Behavioral Anchored Rating Scales

Behavioral anchored rating scales (BARS) are constructed through the use of critical

incidents. Once the important areas of performance are identified and defined by

employees who know the job, critical—incident statements are used as criteria to

discriminate among levels of performance. The form for a BARS usually covers 6 to 10

specifically defined job behaviors, each uniquely described. Each description is based on

observable behaviors and is meaningful to the employees being evaluated.

Despite the time, cost, and procedural problems of developing and implementing BARS,

this system possesses some advantages. Specifically, a BARS program could minimize

subordinate or superior defensiveness toward evaluation. By being involved in the

development of BARS, subordinates have input into how they are to be appraised. The

BARS development steps could include both superiors and subordinates. In a sense, then,

all of the parties involved can contribute to the creation of the evaluation criterion.

Another advantage of using BARS is that the appraisal program concentrates on job-

specific and job-relevant behaviors. Many performance appraisal programs are abstract

and not meaningful to either party involved in the process. Thus, when providing

feedback to employees, the appraiser must convert the ratings to examples of actual job

behavior. There are, in many cases, variances in appraisers’ ability to make these

conversions from the rating scale to meaningful job behaviors. BARS contain behaviors

that scale to meaningful job behaviors that the superior can use in developing the

appraisal counseling interview.

Finally, since job-knowledgeable employees participate in the actual development steps,

the final rating form is assumed to be reliable and valid and to cover all aspects of the

job. (A common problem of many performance appraisal techniques is that they do not

evaluate all aspects of a job.) The use of BARS also provides valuable insights for

developing training programs. The skills to be developed are specified in actual

behavioral incidents rather than abstract or general skills. Trainees could learn expected

behaviors and how job performance is evaluated.

8.3. Appraisal interviews

The appraisal interview is the formal face-to-face meeting between the jobholder and his

or her manager at which the information on the appraisal form is discussed, after which

certain key decisions are made concerning salary, promotion and training, for example.

Judging from research studies into appraisal, the majority of managers do not like

conducting annual appraisals of their staff. McGregor (1957) in an article on appraisal

interviews commented that 'Managers are uncomfortable when they are put in the

position of playing God'.

Rowe (1964) in a major British study of six firms found that:

• Appraisers were reluctant to conduct appraisals, finding ways of evading full

completion of the appraisal forms

• Appraisers were extremely reluctant to carry out face-to-face interviews

• There was inadequate follow-up to the appraisals, in terms of their effect on

transfers, etc.

Appraisal styles

Maier (1958) identified three basic approaches to the appraisal interview.

TELL & SELL approach, in which the manager tells his/her subordinate how he/she is

doing, and endeavours to persuade him/her to accept what has been led for him/her in

terms of improvement.

TELL & LISTEN approach, where the manager tells his/her subordinate how/she is

doing, but then sits back and listens to the individual's point of view about the appraisal

and about any follow-up action required.

PROBLEM-SOLVING approach, in which the manager effectively puts aside the role

of judge in order to join the subordinate in mutual reflection on progress and mutual

discussion about required act

Conclusion

Employee performance appraisal is an important means by which organizations improve

their chances of attaining their key operational goals. Employees who know what, and

how much, is expected of them are likely to be more effective than those who are unclear

about their role. The process of appraisal itself is an important way for managers and

their team-members to work together on the issues that really matter.

8.4. REVISION QUESTIONS

1. What is performance appraisal?

2. What could be some of the reasons for employee performance appraisal?

3. What is an appraisal interview?

4. What are some of the sources of appraisal information?

UNIT NINE

9.0. TRAINING AND DEVELOPMENT

Introduction

No organization can function without people; infact no organization can function without

developed people. Appropriately trained and developed human resources can mean the

'difference between organizational success and failure skills and knowledge of employees

must be adapted to change in the environment. Training and development of employees is

an issue that has to be faced by every organisation. The amount, and quality, of training

carried out varies enormously from one organisation to another. Factors influencing the

quantity and quality of training and development activities include:

1. Degree of change in the external environment (e.g. technological change, new

legislation, etc.)

2. Degree of internal change (new processes, new markets, etc.)

3. Availability of suitable skills within the existing work-force

4. Adaptability of existing workforce

5. The extent to which the organisation supports the idea of internal career

development

6. The commitment of senior management to training as an essential part of

economic success

7. The extent to which management see training as a motivating factor in work

8. Knowledge and skills of those responsible for earring out the training.

Many organisations meet their needs for training in an adhoc and haphazard way.

Training in these organisations is more or less unplanned and unsystematic. Other

organisations set about identifying their training needs, then design training activities in a

rational manner, and finally assess the results of training. Such organisations are

engaging in a systematic approach to the training and development of their employees.

9.1. Introductory definitions

When considering the subject of training and development, constant reference shall be

made to the terms development, training, learning and education. As such, it is important

to be clear about these at the outset.

Development

The focus is on long term individual or organization development through continuous

learning and growth. Development will be seen as any learning activity which is

directed toward the future needs rather than present needs, and which is concerned more

about career growth rather than immediate performance. The focus of development tends

to be primarily on an organisation's future manpower requirements, and secondly on the

growth needs of individuals in the workplace. Examples of development needs might be

the need for managers to be able to utilize the facilities offered by microcomputers in the

operation of the business, the need for replacing senior staff with potential candidates

from within the organisation, and the need for preparing employees to accept change.

Training

Training refers to a planned process to modify attitude, knowledge or skill behaviour,

through learning experiences, to achieve effective performance in an activity or range of

activities. It is essentially concerned with short-term performance with regard to a job.

Necessarily, training provides the preparation to the development of particular skills e.g.

• Training to use a new piece of equipment

• Improve letter writing or report writing skills.

3. Education

This has been defined as activities that aim to develop knowledge, normal values and

understanding required in all spheres of life rather than a knowledge and skill relating

only to a sphere of activity. As such, it encompasses the concept of why things happen,

rather than simply how they happen (or can be made to happen). This can help to make to

skills more transferable. In other words education is also about the wider knowledge

underpinning process and procedures as well as their contexts. The focus of 'education' is

primarily on the individual and his or her needs, and secondly on the community as a

whole, i.e. on society's needs. Examples of individual needs are the need to be literate,

the need to be prepared for some occupation and the need to make the most of one's

personal gifts and talents. Society's needs can include the need for respect for law and

order, the need for a variety of talents to sustain economic activities and the need to

protect itself from external aggression.

4. Learning

Refers to a process by which individuals acquire knowledge, skills and behaviours or

attitudes that they use to deal with all aspects of life. It should be noted that learning

underpins the way in which effective training and education is provided. As such, failure

to understand the processes involved can easily render such a provision ineffective.

9.2. The organization and development

From the outset, it should be noted that training and development are key factors in

ensuring the effectiveness of an organization's workforce. They are concerned with

ensuring that employees have the necessary knowledge, skills and that there is a pool of

such attributes in the organization to meet its future needs. In general, we rely on schools,

colleges and universities to provide the bulk of the ‘educational’ activities carried out in

our society. We rely on individual organisations partnership with the vocational elements

of our educational system (technical: colleges and the new universities), to provide most

of the 'training' in society.

Purpose of training and development

The purpose of training and development needs to be clearly understood as a basis for its

appropriate use. It is

• To maximize productivity and service provision

• To develop the adaptability of the workforce

• To develop the organization as whole

• To increase job satisfaction, motivation and morale

• To improve standards and safety at work

• To make the best use of existing material, resource and equipment

• To standardize working practices and procedures

Since all organizations are faced with rapid and on - going change; there is need for them

to be pro active and adopt a positive attitude by seeking to incorporate training and

development within the strategic plan.

Example of internal and external forces include the following

a) Internal forces

• New ways of doing things

• New people and equipment in carrying out processes

• Financial pressures, such as budgeting constraints

b) External forces

• Political changes, including legislation

• Changes brought by economic cycles

• Social demands on the organization, especially when customers become

better informed and more demanding

• Changes in the external technological environment.

What is a training need?

Basically, it is any shortfall in employee performance, or potential performance, which

can be remedied by appropriate training. There are many ways of overcoming

deficiencies in human performance at work, and training is only one of them. It is

important to recognise this fact, since sometimes training staff are asked to meet needs

which ought to be dealt with in some other way, such as improving pay, replacing

machinery or simplifying procedures, for example.

Demands of the job

• Knowledge

• Understanding

• Skills: manual, social, intellectual

• Attitudes

If the employee does not have the of understanding of the job or does not have any

knowledge about it, training becomes a must.

9.3. Identifying training and development needs

Always remember that misdirected training cannot only detract from the credibility of the

training and development but also fail to realise the objectives. There is need for effective

identification of training needs due to the following reasons:

1. Training can be expensive, and of what is required can result in significant haste

of organizations resources.

2. An accurate training analysis enables limited training budget to be directed

towards activities that will achieve optimum benefits for the organization

3. Accurate information about training needs is essential so as develop the

specification of learning objectives and design appropriate training programmes

4. An organization's training plan should be based upon the assessment of training

needs and their prioritization

As such, training programmes should be implemented under a human resource plan that

has identified needs both present and future, on the demand side and match them to

resources on the supply side. The result of the match is identification of the training gap,

which has to be bridged through a mixture training existing staff and the recruitment of

new staff with the necessary skills.

Assessing individual and corporate needs

There are two approaches towards identification of training needs.

1. Assessing the needs of the individual

So far as the organisation is concerned, the sources of an individual's training are

a. the demands of the job and

b. the demands of organisational change.

The former require improvements in, or additions to, knowledge, understanding, skills

and attitudes; the latter require attitudinal changes (e.g. personal adaptability more than

anything else. Note that this view of individual training needs appears to take no account

of what the employee personally desires.

Within any group of employees doing same work, there will be differences in individual

training needs, which are influenced by differences in aptitude or previous experience.

The major methods of assessing these (i.e. training needs) on employee- by-employee

basis are:

• The performance appraisal process i.e., with each employee's individual on- going

training and development requirements being identified and discussed at the

annual appraisal interview.

• In the absence of a formal appraisal system, it is vital to examine an employee's

individual output and quality records

• By questionnaire, usually with a checklist of training topics, this asks how they

would benefit from further training. Supervisors are given similar questionnaires

for each member of their work group

Assessing the needs of the organization (i.e. corporate needs)

By corporate needs, as apposed to individual needs, we are concerned with training and

development designed to meet organizational objectives i.e. at section, departmental and

whole organization levels. The focus is on groups of staff and their common needs as

defined by management. There are three particular aspects to this:

1. A concern to improve performance, whether derived from problems of

effectiveness or not, which may require corporate response e.g. time management,

team building.

2. A concern with consolidating or introducing new core values such as quality

(management or customer services orientation)

3. A concern to ensure the effective, introduction of new production / services and

working practices e.g. such as introduction of a new financial management system

or use of new equipment

Knowledge, skills and behaviour

Once training / development needs have been identified, the particular form of activities

that will enable them to be met must be considered. To do this demands that we are clear

about

a. The knowledge

b. Skills

c. Behaviours that needs to be developed

In other words, we need to ask the following questions:

1. What do employees need to know in order to perform their jobs well?

2. What skills or competences are required and to what level?

3. What behavioural characteristics are needed?

9.4. Training needs analyses

A systematic survey, or analysis, of training needs will progress through the following

key stages:

1. Preparatory

• Determining the scope of the survey (e.g. whole organisation? single function?)

• Agreeing objectives of survey (e.g. 'improve sales representatives product

knowledge', 'improve managers' negotiating skills')

• Agreeing time-scale, resources, etc.

2. Data collection:

• Organization-level information

• Occupational-group level

• Job-level

• Individual performance

3. Interpretation of data:

• Nature of training needs arising

• Extent of needs identified

• Non-training needs (for referral to others).

4 Recommendations:

• Training proposed

• Resources required

• Time-scale

• Evaluation arrangements

• Estimated costs.

5. Action plan:

• Identify those responsible

• Time-schedule.

Once the scope, objectives and timescale of the survey have been agreed, the next priority

is to collect sufficient and relevant information. The two basic questions at this stage are

'What do we need to know?' and 'Where do we find it?' The answer to the first question

arises from the objectives set at the preparatory stage. So, if the principal objective is

concerned with improving managers' negotiating skills, then we need to know the

following:

1. Which managers are involved in negotiating?

2. At what level are they negotiating, e.g. company level or departmental level:

3. What is the current level of performance of the managers concerned?

4. What standards of performance should we be aiming for?

The information necessary for answering the second question may be obtained partly

from documentary evidence, such as job descriptions, collective agreements and

personnel manuals, partly from appraisal reports, and partly from interview with relevant

personnel.

Analysing and interpreting data

The analysis and interpretation of the information collected for the purpose assessing

training needs straddles two key points: firstly, the standard performance required;

secondly, the level of performance achieved by those concerned. If performance

standards have not been found, perhaps because of' some recent change in technology, for

example, then agreement on an interim standard should be achieved. Where standards are

already in force, and are still acceptable, then the analysis of results should be able to

distinguish where any shortfalls are occurring and whether these can be made good by

training, as opposed to some other solution, such as job redesign. Evidence that may

point to training need could include one or more of the following trends:

• High turnover among new recruits

• Increase in materials wastage

• Increase in number of reject items

• Increase in number of customer complaints

• Failure to meet job targets

• Increase in accident rate

• Reduced productivity

• Increase in machine breakdowns.

Standards on competence-based training and development can provide a useful basis of

evidence for assessing training needs.

A systematic survey and analysis of training needs will be concluded by making

appropriate training proposals in the form of a plan, indicating what training is proposed,

who should conduct it, when, where and at what cost.

Training plans

Training plans are central to the training process. A training plan is a systematic

statement of training intentions and the means by which they are to be achieved and

measured. A plan may embrace the organization as a whole, or just a small part of it.

Either way it will typically contain information under the following headings:

1. Training policy

2. Assessment of needs

3. Internal factors

4. External factors

5. Training plan

6. Implementation

7. Evaluation

Training methods

When we talk about training methods we are essentially discussing the mean which we

intend to communicate information, ideas, skills, attitudes and fee to learners. Thus

methods are a crucial element in the trainer's success. The choice of various methods of

training is a key feature of effective employee's development. The basic distraction is

between on-the job and off-the-job methods.

On-the-job training

In an on-the-job training, emphasis is more on the acquisition of specific, local

knowledge in a ‘real’ situation. It should be noted that (on-the-job) learning on the job

provides trainees with experience which is a combination of work-based knowledge and

the development of skills. As such, the following methods are used:

Demonstration:

This is where an experienced instructor demonstrates to trainees how to carry out a

particular task. Demonstration is an essential preliminary to operating most machines and

equipment. The major disadvantage with this approach is that the leaner is not provided

with an understanding of why something is done. Also, the leaner may pick up bad habits

and good ones.

Coaching:

This is a process by which a trainee learns by carrying out tasks under guidance from an

experienced person. The instructor gives guidance and feedback to the trainee, and

provides encouragement and assistance in overcoming difficulties.

Project:

Assigning to trainees the task of investigating problems and analyzing potential solutions

to those problems is a popular method of learning in the Office. So much knowledge of

work practices, analytical and problem solving skills can be developed, etc.

Job rotation:

Normally, this takes the form of a series of relatively short-term training period in a

number of pre-determined positions in different parts of the company. It develops right

skills by running smaller profits centres or strategic business units.

Attachments / Secondments:

The purpose of this method is to broaden the experience of staff / employees. Here a

member of staff is attached to other divisions of the same business or, in some cases, to

other organizations’staffs that is undergoing development programmes.

Mentoring:

This involves a young manager taking guidance from an experienced manager, and it

should be a two- way process. The junior manager gains from the experience of the more

experienced manager; who in turn gains from having an enthusiastic helper with fresh

ideas

Off-the-job training

What follows below are the training methods used:

a) Short courses:

These are normally specified skills. They can either be

• open: i.e. made up of course member from a variety of members

• Closed: i.e. concerned with courses that are developed for a specific organization

Particular techniques which associate with short courses are:

Case studies: Here, trainees are presented with the task of solving simulated business

problems described as case studies. These help to illustrate points that are difficult to

explain by other development of problem solving skills and analytical skills

In-tray exercises: Students are provided with such things as letters from customers,

memos from staff, requests for information, etc and they are observed how best to deal

with this workload.

Management games:

Here students are presented with business situations and data that they are required to

analyse before making decision. Their decisions are fed into the computer that gives a

report that forms a basis for a new situation that must then be analysed.

a) Role-playing: Here trainees act out business situations from prepared briefs. This is

the technique most suited to developing skills in dealing with people. Feedback can be

provided by means of video recording and replay of closed circuit television (CCTV).

b) Longer- education-based courses:

Courses like MBAs, DMS as well as other education courses are popular ways of

developing both professional skills and understanding or management skills. The

following modes are used:

• Distance learning

• Evening classes

• Full time

c) Conferences, seminars and workshop

Normally they are short, sharp, put based on current topics latest development and

updating session. Conferences and Seminars can be very valuable, though not always

directly relevant to the organization

d) Programmed Instruction:

Under this form of training, there is no direct involvement of an instructor, but

programmed instruction is provided through a combination of following:

• Bode s (or binders or prepared notes)

• Audio cassettes or discs

• Television programmes

• Computers

9.5. The evaluation of training

Hamblin (1970) contributed a well-known definition of evaluation, in a training context,

as follows:

“Any attempt to obtain information (feedback) on the effects of a training programme

and to assess the value of the training in the light of that information.”

To evaluate the effectiveness of training, an organization needs information about

training arrangements such as

• Contents,

• Objectives,

• Assessments, as well as

• Criteria by which to evaluate training

Evaluation criteria could be subsequent behaviour of trainees and the organizational

benefits.

The five levels of evaluation

Hamblin in his book suggests that there are five levels at which evaluation can take

place and they are:

1. Reaction of trainees

2. New skills and knowledge that have been acquired

3. Job behaviour

4. Organization

5. Ultimate value i.e. profitability, growth or survival etc.

Training intervention

The organization has to determine exactly what it hopes to achieve by training and

development intervention. There are five stages for the organization to consider:

Determination of the development-training objective: This will specify the task,

procedures, techniques, skills and ability that employees should be able to perform /

exhibit and the standards required.

Determination of the appropriate training and development strategy: The criteria of

determining the appropriate strategies are:

• Capability of employees

• Estimated likelihood of transfer of learning / development to the work situation

• Available resources

• Employee consideration

Planning and implementation: Here, careful briefing of employees and their

managers should take place, in order that they know what is happening, when and

why.

Evaluation of the programme: The aim is to evaluate the effectiveness of the

investment, in terms of resources, and find out whether it has achieved the stated

objectives.

Reviewing the system: regular reviews to ensure that it are still satisfying the

organization's training and development needs.

9.6. REVISION QUESTIONS

1. Define the terms: Training, Development, Education, Learning

2. What factors influence the quality and quantity of training and development

activities?

3. What are the purposes of training and development?

4. What is a training need?

5. Why is it necessary to identify a training need?

6. What are the key stages in analyzing a training need?

UNIT TEN

10.0. EMPLOYEE RELATIONS

The expression 'Employee Relations' refers to the interrelationships, both formal and

informal, between managers and those whom they manage. Thus, employee relations has

a wider scope than 'industrial relations', for example, because the former is concerned

with all aspects of the interrelationship between management and employees, whereas the

latter is confined to the regulation of the relationship principally by means of collective

bargaining (to be discussed later). Employee Relations' embraces most, if not all, of the

following issues:

• The contractual obligations between employer and employed

• Communications policy and practice

• Joint decision-making

• Joint problem-solving

• Collective bargaining

• Individual grievance and disciplinary policy and practice

• Social responsibility

• Employee development

• Employee welfare

Perspectives on employee relations

The major parties to employee relations are primarily individual employees and their

managers. There are other important stakeholders in management-employee

relationships. These are

• Individual employees

• Trade union representatives

• Government and government bodies

• Managers

• Employers’ association representatives

• Courts and tribunals

Managers tend to see employee relations in terms of the following activities:

• Creating and maintaining employee motivation

• Obtaining commitment from the workforce

• Establishing mutually beneficial channels of communication throughout the

organisation

• Achieving high levels of efficiency

• Negotiating terms and conditions of employment with employee representatives

• Sharing decision-making with employees

• Engaging in a power struggle with trade unions.

Employers' association representatives would tend to share most of these views.

Trade unionists tend to see employee relations as:

• Collective bargaining about terms and conditions of employment

• Representing individuals and groups of individuals in conflict with their

management

• Improving the ability of employees to influence events in the workplace

• Regulating relations with other trade unions.

Individual employees tend to see employee relations in terms of the opportunity to:

• Improve their conditions of employment

• Voice any grievances

• Exchange views and ideas with management

• Share in decision-making.

Third parties, such as Government ministers, arbitrators, judges and civil servants may

see employee relations more in terms of:

• Creating and maintaining harmonious relationships at work

• Creating a framework of rules of fair conduct in employer employee relations

• Representing the community as a whole in dealing with the repercussions of

internal conflicts or decisions made within individual organisations

• Establishing peace-making arrangements to deal with breakdowns in employer-

employee relations

• Achieving a prosperous society with justice.

With differing perspectives such as the above, it is not surprising that some degree of

conflict is inherent in employee relations. In certain cases, this potential for conflict has

broken out with savage and long-lasting results, as the paragraphs on strike statistics

indicate. Nevertheless, there can also be a substantial amount of common interest, and

much of employee relations are concerned with finding out what are these areas and how

they can be turned to mutual advantage.

10.1. Sources of conflict

Sources of conflict can be said to occur either between individual managers or between

workers, or between workers and managers. Conflict can exist between people in the

organization and those outside the organization. Many of these conflicts would relate to

economic aspects of pay and prices, others relate to competition for sales and markets.

The main sources of conflicts can be summarized under the following headings:

Money

The ratio of profits to wages- a conflict between workers and managers, or between

workers themselves, where the sum of money has to be shared.

Job

Rates of pay are different for each job and sometimes one group 'claims' a job, possibly to

safeguard their future security, or loss of earnings, if the job is given to others. This 'right'

to do the job can lead to disagreement between groups on 'demarcation lines' between

jobs, and frequently occurs (e.g. should a metal worker or a wood-worker fit a wooden

frame to an aluminum surround?).

Goals

Managers are concerned with efficiency and workers with security. Managers may want

newer, more efficient machinery, this may displace workers as less are needed. Conflict

may occur between marketing and production managers as their policies and interests

often differ.

Environmental factors

Downward fluctuations in the market for a product are a threat to workers' security. Such

problems may cause conflict even within a union, if the rank and file do not think their

leaders are doing sufficient to secure their jobs.

Authority and power

Workers are pressing for more say in decisions which affect their lives. This is vertical

conflict. In addition, subordinates may resent the fact that there is always a superior

above them.

Nature of work itself

The socio-technical system organizes people in a particular way which often leads to a

boring job, no control of the pace of work, no responsibility or group identity.

10.2. Employers’ representatives

In cases where the organisation's own managers do not form the management side in

collective bargaining, they are represented by officials of their appropriate employers'

association. Such associations are primarily instruments of employee relations (unlike

trade associations, which have essentially commercial aims). Their principal objectives

are as follows:

• To represent employers in collective bargaining

• To develop machinery for the avoidance of disputes

• To provide information on employee relations matters, and to give advice

• To represent members on national issues.

10.3. Collective bargaining

What is collective bargaining?

Collective bargaining is the process whereby procedures are jointly agreed and wages and

conditions of employment are settled by negotiations between employers, or associations

of employers, and workers’ organizations. (ACAS 1980). It is an important technique or

mechanism for resolving goal conflicts and may be said to have these main features:

• It is a joint activity where each side recognizes the right of the other to be present

on equal terms;

• The respective interests of those represented in collective bargaining should be

identified so common interests can be noted and means found to reconcile areas

of conflict;

• The result is the joint regulation of the work situation by establishing a framework

of rules and practice to govern relationships between the management and

workforce.

• The aim, as in every form of bargaining, is to reach agreement eventually

• The voluntary nature of the activity, i.e. not imposed by law

Collective bargaining process

The process of negotiating collective agreements does not occur in a vacuum. It forms

part of a continuous relationship between rank-and–file employees and their management

(also employees). The aim of the process is to achieve a workable relationship with

management, founded on mutual respect, in which tangible benefits are realized on

agreed terms and not just on management’s whim. Management representatives see

collective bargaining as one method of attaining corporate objectives relating to pay and

the conduct of employee relations. By the time bargaining begins, there are already

several divergent attitudes at work when it comes to agreeing what is to be negotiated and

The first step towards effective collective bargaining is for employers to recognize trade

unions, who both agree to negotiating procedures resulting in collective agreements,

which may be for a company, a unit, or the industry a whole. The policy of the

government has been to encourage and support collective bargaining and most employers

negotiate with unions to agree terms and conditions of employment for 'blue collar' and

'white collar' workers. Collective agreements between unions and employers cover many

issues and may relate to a whole industry, a company, or a single unit. In some industries

joint negotiating bodies have been set up with formal constitutions. Other industries have

more informal meetings between employers and unions. It is important that these

agreements should be continually reviewed as they may soon become out of date. The

pluralist approach still seems dominant, in that there seems to be an acceptance of the

inevitability of conflict in industry and the need to negotiate joint solutions. Management

still consider only they should determine some issues (e.g. hire and use of labour). Issues

submitted to collective bargaining by management usually cover wage rates, hours of

work, holidays, etc. The strength of the two sides determines the result. Strength depends

upon:

• Quality of organization of unions and management;

• Ratio of capital to labour; the smaller the proportion of the labour cost to total

costs the more likely management may grant their demands;

• Degree of skill; the more skilled workers, who can move readily to other jobs, are

in a stronger bargaining position;

• State of the market for products; the more a firm approaches a monopolistic

position, the more easily it can pass costs on to consumers by higher prices and

still retain a good share of the market, then the firm may more readily accede to

union demands;

• State of demand for products; full order of books enable more consessions to be

made by management; low order of books may even encourage management to

force a strike, which will reduce labour costs.

Although the aim of bargaining is to reach agreement eventually, there is usually a degree

of conflict between the parties concerning both the means by which agreement may be

reached, and the terms on which it is reached. As a general rule, managers, as buyers of

labour, seek to achieve agreement at a minimum cost to the organisation and with the

maximum pay-off from improved productivity and/or improved employee relations. The

trade union representatives, as agents for labour, look for an agreement that incorporates

the best possible terms of employment with the minimum number of concessions on

working practices. This kind, of representation of managers as buyers, and unions as

agents, of labour implies a pluralist view of industrial relations. This means that the

different, indeed opposing, perspectives of the management and union negotiators are

accepted as part of the reality that has to be faced in reaching eventual agreement. A

rather less adversarial view is the so-called 'unitary' perspective, which sees common

interests, and hence common aims, as paramount. Organisations adopting this perspective

emphasise the common interests of employees and management alike, and seek to find

mechanisms for enhancing collaboration, such as joint consultation, team briefings and

quality circles.

10.4. Trade union recognition

The starting point of any collective bargaining is the process of recognising one or more

trade unions to act on behalf of the employees affected. Recognition gives trade unions a

number of important statutory rights, such as the right to information for collective

bargaining purposes, the right to time off for trade union activities, and the right to

appoint safety representatives. It also brings other benefits to the union, such as increased

membership and revenue. Employers have not been legally obliged to recognise a union

unless it can be shown that a substantial number of the employees desire to be

represented. Against this background it is not surprising that an official workplace

relations survey published in 1999 (the Workplace Employment Relations Survey 1998)

indicated that there was no structure for employee representation in 32 per cent

workplaces.

This situation is likely to change in the future, as there is now the possibility of obtaining

statutory recognition of a trade union in specified cases. Under the Employment

Relations Act 1999, there is provision for a trade union to apply to the Central Arbitration

Committee (CAC) for statutory recognition in cases where it can demonstrate (a) that it

has at least 10 per cent of the workforce in membership, (b) that it has tried

unsuccessfully to gain voluntary recognition from the employer. A recent example of this

situation is the case of the Honda car company's factory at Swindon, where the AEEU

engineering union tried for some time to secure voluntary recognition for the company's

3000 workforce. Honda had been the only non-unionised car manufacturer in Britain

since it first opened its factory in 1985. The company adopted a unitary approach to

employee relations based upon in-house arrangements between the management and

employee representatives, which had produced attractive outcomes for both the company

and its employees. This paternalistic situation changed when the AEEU sought CAC

support for recognition, and was awarded the appropriate rights. Such a decision is only

made after a thorough and independent ballot of all the employees concerned to assess

their readiness to be represented by an outside trade union. In the Honda case it was

confirmed by the CAC Case Manager that more than 1400 employees had already joined

the union, so the 10 per cent minimum was met easily, and the company said they would

not oppose recognition.

In cases where the union is seeking a voluntary recognition agreement from an employer,

then the latter can ask ACAS to conduct a secret ballot of employees to assess the degree

of support for representation by the union concerned. Where there is insufficient support

from among the workforce to justify full recognition rights, the employer may

nevertheless grant certain representational rights to the union on behalf of those

employees who are already members.

10.5. REVISION QUESTIONS

1. Describe the sources of various types of conflicts

2. What is collective bargaining?

UNIT ELEVEN

11.0. DISCIPLINE AND DISPUTES IN EMPLOYEE MANAGEMENT

Introduction

No relationships are without their difficulties, and Employee Relations is no exception.

However sound the underlying relationship between a management team and their

workforce may be. There is always scope for mistakes and misunderstandings on both

sides. It is prudent, therefore, to devise an agreed procedure to be followed by the parties

if a dispute arises. This unit describes some of the legal and practical issues that occur

when the employer-employee relationship breaks down.

Definitions

Collective disputes: (henceforth referred to simply as 'disputes'), involving issues taken

up on behalf of groups of employees by their representatives

Individual disputes: (henceforth referred to as 'grievances'), involving individual

employees only.

This unit will deal with disputes, since they have a far greater impact on employee

relations than individual grievances, and because they are specifically referred to in a

number of labour law statutes. The present legal definition of a collective dispute is based

on the meaning given to the term 'trade dispute' in the Trade Union & Labour Relations

(Consolidation) Act, 1992 (TULRCA). To be considered a dispute the following

conditions must be fulfilled:

• The dispute must be between workers and their own employer

• The dispute must be wholly or mainly about matters directly affecting their terms

and conditions of employment.

11.1. Legal immunities for trade unions

The reason why the legal definition of a dispute is so important to trade unions is that the

law provides protection against civil actions for those organising strike action or other

forms of industrial action on behalf of a trade union. If immunity was not provided, the

officials concerned would be liable to civil action for inducing employees to break their

contracts of employment. In the 1970s in Britain, the legal immunities provided for trade

unions and their officials were extremely wide ranging. Over the past 30 years, however,

these immunities have been much more closely-defined. If a union or an official

organises industrial action which interferes with contracts, including the employer's

contracts with his or her customers, there will only be immunity from civil action if the

following conditions apply:

• There is a trade dispute, and the action is in furtherance of that dispute

• The trade union concerned has previously held a secret ballot of members, and a

majority has agreed to support the action.

• Due notice has been given of official action by the trade union to the employee

• The action does not constitute secondary action or lead to secondary picketing

(i.e. the action does not involve an employer who is not a party to the trade

dispute)

• The action is not designed to enforce trade union membership.

Furthermore, a trade union will be held liable for unofficial industrial action initiated by

workplace representatives (shop stewards, etc.) unless it repudiates the action in writing

at the highest level to the members concerned, their leaders and the employer concerned

Where immunity is not provided, or where it does not apply (e.g. in the case of other civil

wrongs committed by strikers), the persons who have suffered loss as a result may sue the

union or the officials concerned for damages. The damages that may be awarded are

limited by legislation, but could be substantial. Other action that may be taken is for

persons affected to seek an injunction (an order restraining somebody from doing

something) from the courts. If an injunction is disobeyed, the union concerned may be

declared to be in contempt of court and face heavy fines. If the fines are not paid, the

union's funds may be liable to seizure by the courts. The law, therefore, is playing an

increasing role in disputes.

11.2. The role of ACAS in industrial disputes

The Advisory, Conciliation and Arbitration Service, was established by the Employment

Protection Act 1975, when its terms of reference were as follows:

The Service shall be charged with the general duty of promoting the improvement of

industrial relations, and ... encouraging the extension of collective bargaining and ... the

reform of collective bargaining machinery. (EP Act 1975)

Employee relations were at a low ebb when these terms of reference were drawn up. Over

the next twenty years the situation changed considerably, and ACAS saw a change of

emphasis away from collective bargaining to broader issues of organisational

effectiveness. In its annual report for 1999/2000, ACAS set out its mission statement as:

To improve the performance and effectiveness of organisations by providing an

independent and impartial service to prevent and resolve disputes and to build

harmonious relationships at work.

This unitary emphasis derived directly from the Trade Union and Labour Relations Act

1992. This has recently been repealed by the Employment Relations Act 1999 which has

restored part of the original terms of reference, so that the present mission of ACAS is to

promote the improvement of industrial relations'.

In relation to collective disputes between employers and trade unions, ACAS offers three

main services - conciliation, mediation and arbitration. The distinctions between these

three are briefly as follows:

Conciliation - ACAS offers help and advice aimed at bringing the disputing parties to the

point where they themselves can agree a mutually acceptable solution. This approach is

voluntary, and the agreements reached are responsibility of the parties.

Mediation - ACAS, in the form of an experienced and independent mediator, takes a

more proactive role than in conciliation, suggesting possible solutions and drawing up

proposals. As with conciliation any decision to agree a way forward is taken by the

parties themselves. The mediator does not impose a decision.

Arbitration - in this situation, the parties acknowledge that they cannot agree mutually

acceptable solution and jointly ask a third party to make the decision for them. ACAS can

appoint a single arbitrator or a board of arbitration. It can also refer certain cases to the

Central Arbitration Committee. The last named is essentially a senior tribunal. It usually

sits as a chairman (legally-qualified) plus two experienced lay arbitrators representing

both sides of industry. Its awards are not legally binding, but are always accepted by the

parties in practice.

ACAS's success in assisting disputing parties towards an early solution of difficulties can

be measured by the number of cases in which a settlement was achieved out of all the

requests that were received. The figure below shows just how successful the Service has

been over recent years, and points to the value of building up a core of experienced staff

capable of handling the range of issues in dispute. In every sense of the phrase, people

are ACAS's prime resource, and their expertise is sought after by employers and trade

unions alike.

2000-2001 1999-2000 1998

Requests received 1472 1500 1301

Requests withdrawn 58 81 45

Conciliation

completed

1226 1247 1214

Settlements 1139 1152 1110

Conciliation

unsuccessful

84 95 104

11.3. Strikes

Definition

A strike is a form of industrial action taken by the employees against their employer by

means of stopping work.

Most strikes are a result of the parties’ inability to achieve a settlement of some dispute

over wages and other conditions of employment. Employees who take strike action are

effectively breaking their contract of employment and are liable to be sued by their

employer or others affected by their action, such as customer or supplier. In order to

permit strike action under certain conditions, the law provides a degree of protection to

employees against actions for breach of contract. So-called 'protected industrial action'

can only be called upon after the employees' representatives or their trade union officers

have exhausted all the usual disputes procedure. The union then has to ballot its members

on the question of strike action, and if the proposed action is supported by the employees,

the union has to give appropriate notice of the strike (at least one week) to the employer.

This means that the strike is 'official' and protected by the law. It is generally unfair to

dismiss strikers in this situation. Where strike action is taken without the above

procedures, it is considered an 'unofficial' or 'wildcat' strike and the employees involved

are not protected from being sued for breach of contract, nor indeed from being dismissed

by the employer.

Strikes are only protected where they involve a dispute between employers and

employees over terms and conditions of employment. They are not protected where a

strike is taken on political grounds, or in support of workers at a different employer. The

UK government has kept detailed statistics on the number and nature of strikes for man-

years. Strikes, whether official, or unofficial, are only recorded where at least ten workers

are involved or where the strike lasts for at least one day. The official statistics for strikes

produced over the last 30 years provide an interesting picture of the changing nature of

employee relations in Britain, as the figure below indicates.

Year No. of stoppages No. of workers

involved (000s)

Working days lost

(000s)

1970 3 943 1 801 10 980

1974 2 946 1 626 14 750

1980 1 348 834 11 964

1986 1 074 720 1 920

1990 588 237 1 880

1993 211 385 649

1994 180 265 331

1996 244 364 1 303

2000 212 183 499

UK strike statistics 1970-2000 (source: Department for Employment/Labour Market Trends)

The official figures show the sorry state of industrial relations in Britain during the

period 1970-80, when there was a rash of lengthy strikes in key industries such as

mining, railways and printing. The 1980s saw a significant reduction in the number

of working days lost even though the number of stoppages was still in excess of

1000. Since 1990 the situation has improved dramatically with far fewer stoppages

and fewer workers involved. Particular strikes can produce a substantial loss of

working days where they linger on even if the numbers taking part are relatively

small. By the end of the century, the combined effects of global competition on the

UK, and the legal restrictions on industrial action, had produced a much less

adversarial spirit between employers and employees.

The official statistics published by the Department of Employment use a range of

measures of strike activity, of which the following are the most important:

• The number of stoppages

• The number of workers involved

• The number of working days lost

• The number of stoppages by industry

• The incidence of stoppages per 1000 employees per industry

• The geographical distribution of stoppages by region

• The causes of stoppages

• The duration of stoppages in terms of the number of working days lost

• The number of stoppages in terms of the total number of workers involved.

Although the official statistics provide few clues to the wider context in which strikes

occur, they do supply some evidence concerning the prima facie cause of stoppages. This

is provided by an analysis of the principal causes of stoppages. which have been

identified as follows:

• Pay – wage rates/earnings levels/fringe benefits

• Duration/pattern of working hours

• Redundancy questions

• Trade union matters

• Working conditions/supervision

• Staffing and work allocation

• Dismissal/discipline

11.4. Grievances

A grievance is an individual dispute between an employee and his or her employer.

However, since individuals and their problems are as much a part of employee relations

as collective issues, then it is in the interests of both management and trade unions to

have a written procedure for dealing with grievances. There is also the point, of course,

that individual disputes, if left to fester, may themselves lead to a collective dispute. The

main object of a grievance procedure is to settle the issue at the earliest possible stage.

Once a grievance has passed beyond the first stage, it necessarily gathers greater

formality. Hence written records should be kept after that stage. Such records will be

extremely useful if the grievance turns eventually into a collective dispute involving the

use of the organisation's collective disputes procedure.

Whilst grievances are almost inevitable in any organisation, their numbers can be kept to

a minimum by maintaining effective communication between employees and their

immediate supervisors/managers. It is helpful if conditions of employment, in the

broadest sense, are open to discussion at any time on an informal basis, in addition to any

formal negotiations that may take place as part of collective bargaining. A firm with a

well-motivated workforce and adequate communication procedures can expect little in

the way of grievances.

11.5. Disciplinary matters

Whereas grievances are initiated by the employee, disciplinary matters are initiated by

management. At work discipline is a question of

(a) Devising appropriate rules of behaviour for employees and

(b) Providing fair and consistent means of enforcing them. ACAS in its Code of Practice

on disciplinary matters suggests the following as model features of a disciplinary

procedure.

The procedure should:

• Be in written form

• Specify to whom it applies

• Provide for the speedy progress of disciplinary hearings

• Indicate the various forms of disciplinary action that may be taken (warnings,

dismissal, etc.)

• Specify appropriate levels of authority for exercising disciplinary action

• Ensure that individuals are informed of the disciplinary charges made against

them

• Permit such individuals to state their case and to be accompanied by a friend or

trade union representative (Employment Relations Act 1999)

• Ensure the proper investigation of every case before disciplinary action is

implemented

• Ensure that individuals are informed of the reasons for the action being taken

against them

• Ensure that no individual is dismissed for a first offence except in cases of gross

misconduct

• Provide for a right of appeal.

An example of an approach to discipline is given below. In this example, taken

from local government, the references to discipline are set out in a handbook on

disciplinary procedures. A sound standard of discipline is essential for the efficient

and orderly conduct of the county Council’s affairs and for the safety and well being of

its employees.

The procedures take full account of the ACAS code of Practice on Disciplinary Practice

and Procedures in Employment….

…employees from time to time may engage in actions which can lead to disciplinary

proceedings. These actions can be grouped in to three broad areas covering poor

performance, misconduct and gross misconduct

Poor Performance [means]:

a. consistent failure to perform work to a reasonable and acceptable standard...e

b. evidence of negligence or inadequate attention to the requirements of the job...

Misconduct [means]:

a. Breaches, infringements or non-observance of any of the general rules ... or of

the specific working rules ... e.g. poor attendance, bad time-keeping ...

b. Failure to obey the lawful and reasonable instruction of a supervisor

c. Unreasonable or unacceptable conduct, e.g. abusive behaviour, being under

the influence of alcohol ...

d. Threatened violence on a colleague or member of the public whilst at work

Gross Misconduct [means]:

... behaviour which, in the County Council's view, subject to investigation,

warrants immediate dismissal ... Instances could be ...

a. Falsifying various claim sheets such as time-sheets, bonus sheets, car

allowance ... etc ...

b. Malicious damage to County Council property ...

c . Sexual misconduct in work which demands high levels of personal

behaviour, e.g. in work with children ...

Extracts from a disciplinary procedure (local authority example)

A key issue in any disciplinary procedure is that of authority to act. In order to achieve

fairness and consistenrcy, individual managers and supervisors need to know what the

limits of their authority are when it comes to disciplinary action. The options available to

organisations are as follows:

a. Oral warning to employee

b. First written warning

c. Second or final written warning

d. Suspension of employee with pay

e. Suspension of employee without pay

11.6. Dismissal

A dismissed employee, provided he is not within the 'excluded classes' (see below) may

bring a claim before an Industrial Tribunal that he was unfairly dismissed. The legal rules

here are once again contained in the Act. The employee must first prove that he has

actually been dismissed. This will not usually be difficult, but it should be noted that the

term 'dismissed' here includes:

• Where the employee was employed under a fixed term contract, e.g. for 1 year,

which has now ended without being renewed on the same terms;

• Where the employee himself terminates his contract in circumstances where he is

entitled to do so because of the employer's conduct. (This is known as

constructive dismissal.)

Once proved, it is for the employer to try to show that the dismissal was fair. It is this

idea of fairness which lies at the heart of the unfair dismissal laws, and not the idea of

whether the dismissal was in breach of contract. Accordingly, even though the employee

was given the correct notice and thus his contract was not broken, he may still claim for

unfair dismissal.

The employer, to show the dismissal was fair, must prove that the dismissal was justified

under one of the five grounds set out in the Act. These are that the reason for dismissal:

1. Related to the employee's capabilities or qualifications for performing work of the

kind he was employed to do.

2. Related to the employee's conduct.

3. Was that the employee was redundant.

4. Was that the employee could not continue to work in the position he held without

breaking a legal duty or restriction.

5. Was for some other substantial reason.

Even though the employer proves one of these reasons, the dismissal will still be unfair if

he did not act fairly in treating it as a reason for dismissing: the employee. Thus the

procedures adopted by employers are of vital importance. ACAS has issued guidelines

under the title of 'Discipline practices and procedures in employment' which deal with,

for instance: warnings to be given to employees, the need for an investigation and hearing

before any actual dismissal, and the provision of a right of appeal. As these are guidelines

only, a failure to observe them will not necessarily mean that the employee is held to

have been unfairly dismissed. However, their importance in the human resource

management field scarcely needs stressing.

One small but important point should be noted here. A dismissed employee is entitled to

ask his employer to provide, within 14 days of request, a written statement of reasons for

dismissal.

A claim for unfair dismissal can also be made in certain specialized situations:

• That the employee has been unfairly selected for redundancy;

• That the employee was dismissed because he was a member of an independent

trade union or was involved in its activities. If this is shown to be the principal

reason for dismissal, the dismissal will be held to be unfair;

• That the employee was dismissed for pregnancy.

An employer may dismiss employees who are on strike provided that, in effect, he

dismisses them all. If he dismisses some but takes others back, those dismissed may

claim for unfair dismissal. Dismissal of an employee will be automatically fair if there

was a practice, in accordance with a union membership agreement (closed-shop)

requiring all employees to belong to a specified independent trade union and the

employee has refused to join. However, if he had genuine religious reasons for so

refusing, the dismissal will be unfair.

11.7. Remedies

The primary remedy is re-instatement, where the employee is given his old job back. Re-

engagement maybe ordered instead, where the employee is to be given a job which is

comparable to his old one. Where neither of these remedies are ordered, the tribunal will

award compensation. There are two elements in this; the basic award, payable in all cases

irrespective of whether the employee has suffered financial loss, and the compensatory

award, which is related to the tribunal within 3 months of dismissal. The 'excluded

classes' (referred to above) are employees with less than 52 weeks of continuous

employment and those who have reached the age of 65 (men) or 60 (women) or,

alternatively, have reached the normal retirement age. In addition, the 20 hours a week

provisions apply here also.

11.8. REVISION QUESTIONS

1. What is do the following terms mean (i) Strike (ii) Grievances (iii)

Dismissal

2. As a manager of a company, what solutions would you recommend to the

case of an unfairly dismissed employee?

3. Poor performance, misconduct and gross misconduct are some of the

problems that are found in companies. Define the above three terms.

BIBLIOGRAPHY

1. Armstrong. M- Handbook of Personnel Management practice

2. Robert. C. Appleby- Modern Business Administration

3. James. H. Donnell; James. L. Gibson; John. M. Ivancevich- Fundamentals of

Management

4. G. A. Cole- Personnel Management, fourth edition

5. G. A. Cole- Personnel and Human Resource Management, Theory and

Practice, fifth edition

6. Laurie J. Mullins- Management and Organisational Behaviour, Harlow

Pretence Hall 7th edition, 2002

WEBSITES

1. www.acas.org.uk- Advisory, Conciliation and Arbitration Service

2. www.bized.ac.uk- Chattered Institute of Personnel and development website with

a range learning sources

3. www.drc-gb.org.uk- Disability Rights Comission