Unit 4 Area of Study 1: The Human Resource Management Function

Unit 4 Area of Study 1: The Human Resource Management FunctionChapter 10: Management of the employment cycle

The Employment Cycle The stages an employee progresses

through from the time they are employed until they leave the organisation

Pattern repeats itself as new employees are hired to replace those leaving

Three phases of the employment cycle

Establishment Phase

Maintenance Phase

Termination Phase

1. HR Planning2. Job analysis and job

design3. Recruitment4. Selection5. Employment

Arrangements6. Remuneration

1. Induction2. Training and

development3. Performance

Management4. Recognition and

rewards

1. Voluntary Methods2. Involuntary Methods3. Unfair Dismissal4. Termination

Management5. Outplacement6. Transition Services

The Establishment Phase

Human Resource Planning Planning for future personnel needs, taking

into account both internal activities and factors in the external environment

Awareness of factors from internal and external environment include: Structural changes in the labour market –

decline in manufacturing industries Work patterns are changing – flexible working

hours and a move away from traditional working week

(continued on next slide)

Length of working life is changing – later entry into employment, attitudes to retirement

Change in skills and education expectations – more people seeking tertiary qualifications

Labour shortage within the next decade due to the ageing of Australia’s working population

Increasing demand for work-life balance Generational change – difference need to be

acknowledged and worked around Change in strategic direction of organisations –

downsizing operations

HR Management must plan to assist the organisation to: Meet current employment requirements in all

phases of the employment cycle Cater for future needs by determining how

many employees will be required and what specific skills they must have

Ensure that the required human resources will be available to achieve the organisations strategic plan

Be in a position to assist the organisation to respond to external factors

Activity 10.1

Job Analysis Job analysis: systematic process of

gathering information relating to a job being performed. Finding out all the information about a job.

Job design: creating a new job or altering an existing position.

Job description: written statement of tasks performed, how and why they are done (job title, summary, responsibilities, duties, key performance indicators)

Job specification: the person’s experience, qualifications, skills, abilities, knowledge, remuneration and special requirements of the person

Methods used to conduct a job analysis: 1. Interviewing the present job holder –

can be time consuming 2. Questionnaires – allows for information

on a large number of jobs to be collected in a short period of time

3. Observation – job holder could be watched

4. Supervisory reports – details provided by supervision to give perception of what the job entails

5. Log books and daily work diaries – completed by the job holder

Activity 10.2 Worksheet

Recruitment The process of finding the best qualified

pool of applicants Process begins with:

Identifying human resource requirements Determining where the qualified pool of

applicants can be found (recruitment sources)

Choosing a specific means of attracting employees to the organisation (recruitment methods)

Identifying human resource requirements Ensure that people recruited and

selected have the unique skills and attributes required by the organisation

Determine whether the focus is on technical skills and formal qualifications or personality and the potential for personal and career development

Recruitment Sources Internal Recruitment: positions

advertised within the organisation to allow employees career advancement by transferring or being promoted

Advantages DisadvantagesQuicker adjustment to position

Employees may be promoted beyond competency level

Incentive for employees to gain career progression

No new ideas introduced, could stifle creativity

Motivator and morale booster Infighting and negative impact for unsuccessful applicants

Organisation knows applicant, applicant knows organisation

Any poor work habits will remain

External Recruitment: Locating candidates from outside of the organisation

Advantages DisadvantagesLarger pool of applicants Attracting/selection of new

employee is time consuming and difficult

New insights, skills and abilities bought to organisation

Induction takes longer

Costs can be lower as do not have to fill two positions

Limits career advancement of existing employees

New approach to work, issues and problems

Greater element of risk as new employee is an ‘unknown’ personCostly form of recruitment

Recruitment Methods Newspapers – large, well-known employment

sections in certain editions of local and national newspapers

Internet sites – those seeking jobs can enter specific details of the position they want

Business websites – often used in conjunction with other methods

Recruitment agencies – time is money so an organisation may outsource the initial stages of recruitment who screens out non-suitable applicants

Word of mouth – ‘head hunting’ is actively pursuing one person wanted for a position and offering them an attractive package to leave organisation for which they currently work

Activity 10.3

Activity 10.5

Selection

Selection is the process undertaken by an organisation to decide whether to make a job offer to a candidate

Selection Criteria

A list of what the organisation is looking for in the applicants for new positions

Include: Qualifications or

experience Skills Personal qualities

Receipt of application

Application: the letter or communication used in expressing interest in a job or advertised vacancy

Application form: basic source of employment information covering qualifications, experience and other job-related data

Initial screening Eliminates

applicants who do not possess the skills and expertise required for the position

Shortlist of applicants to be created for interviewing

Interviews 1. Planning the

interview 2. Create the interview

environment 3. Opening the interview 4. Questioning 5. Understand the legal

requirements 6. Listen and observe 7. Sell the job and the

organisation 8. Close the interview 9. Evaluate the

applicants

Testing Provides a scientific

component to recruitment

Aptitude test: test of special abilities that are required for a specific job

Personality or temperament questionnaire

Motivational questionnaire

Competency testing Physical examination

Background investigation

Reference checks provide important opportunities to learn more about candidates

Wise to check academic qualifications

Police check can be undertaken

Advising applicants of outcome

Position needs to be officially offered to the successful applicant

Remaining unsuccessful short-listed applicants need to be advised of their non-success

Employment Arrangements Permanent full-time basis – continuing contract of

employment, working 38 hours per week, entitled to salary or wages, leave entitlements and superannuation as well as long service leave

Permanent part-time basis – continuing contract working fewer hours than full-time, same entitlements made on a pro-rata basis

Casual basis – short-term, irregular or seasonal work. Usually paid on an hourly basis and no employment benefits such as leave

Fixed-term basis – either full-time or part-time for project work or to replace employees absent on long service or parental leave

Types of remuneration Wages – worked out on an hourly basis, overtime paid if an

employee exceeds ordinary hours. Penalty rates may be paid for Sundays and public holidays.

Salary – annual figure usually paid on a monthly or fortnightly basis. Overtime not paid to salaried employees.

Packages – use for senior positions, include a salary component, performance-based pay, company car, share options and other fringe benefits

Benefits – can be categorised as dependent care assistance programs (family care, maternity/paternity leave, alternative work arrangements) or benefit plans (additional superannuation, travel insurance, life insurance, medical benefits)

Maintenance Phase

Induction Induction: all the activities undertaken

by the organisation to introduce a new employee to the organisation

Aim is to familiarise the new employee with their workplace so that they can perform to their maximum ability as soon as possible

Induction Procedures New employee

introduced to colleagues and organisational structure and day-to-day practices

Often a buddy or mentor is assigned to the new employee to show the new person the ropes

Policies and procedures of the organisation should be explained to the new staff member. Can be a formal induction process.

Even mundane matters should be covered

Benefits of Induction

For the organisation: recruitment process costly

and a good induction program can help the employee feel motivated and ensure morale is high.

Allows them to be productive almost straight away

For the employee: Will be put at ease with a

well-conducted induction program

Feel a sense of purpose and achievement, increasing their feelings of self-esteem

Training and Development Training: process of developing workplace skills

needed to do a job May be necessary right at the start of

employment. HR Manager conducts a training needs analysis:

Who needs to be trained? Should training be done at the organisation or

outside? If internally should training be provided by

someone in-house or by an external provider? How is the training going to be evaluated? Will follow-up training be required at a later date?

Development: activities an employee undertakes to help prepare them to take on more responsibility in the future (e.g. promotions and long term opportunities)

Training is often skill based (e.g. learning how to operate a new piece of machinery) whereas development focuses more on increasing the knowledge base of employees.

Benefits of training and development: Improved employee performance and therefore

profitability Reduced absenteeism and reduced staff turnover Increased efficiency in how things are done

(processes) Increased job satisfaction, morale and motivation

among employees

Recognition and Rewards Recognition programs may acknowledge

achievement by giving financial and/or non-financial rewards

Rewards may be given for: Achieving a target Being the best compared with others

Advantages DisadvantagesRecognition is immediate and not linked to normal remuneration

Colleagues may perceive favouritism has taken place

Reward boosts recognition from colleagues

Costly in terms of administration and time

Winning the reward is more valuable than the monetary value of the reward

Loss of motivation if employee feels they will never receive a reward

Performance Management Performance management: the various

methods of achieving the maximum performance levels that are possible from employees

Effective performance management ensures that: Jobs are well designed in the first place Skilled employees are hired to do the job Employees are trained properly Employees are appropriately rewarded for good

performance

Performance appraisal: evaluations of an employee’s work over a period of time

Involves: Assessing how well an employee is doing their job Providing feedback to the employee about job

performance Agreeing on new objectives and establishing a plan to

improve future performance Purpose of appraisal is to:

Identify what objectives are the most important to accomplish

Establish how objectives are measured so that performance can be monitor

Make individual employees accountable for their performance

Help improve an employee’s performance Identify training needs

Performance appraisal outcomes Remuneration and rewards Training and development Counselling Job promotion Job rotation/transfer Termination

Termination Phase

Outcomes

Voluntary

Resignation Retirement

Involuntary

Retrenchment Dismissal

Voluntary Termination Methods Resignation: An employee chooses to leave

an organisation – often this is because they have another job to go to

An exit interview is recommended as it helps to highlight if there are any organisational problems causing the resignation

Retirement: The situation where an employee has decided that they are at the end of their working life.

Has traditionally ben at the age of 65 for men and 60 for women but is not compulsory in Australia

Involuntary Termination Methods Redundancy: when there is no longer a

position for one or more employees. Redundancy packages are offered which is usually an amount of money based on the number of employment at that organisation

Retrenchment: Employees are ‘let go’ based on the financial needs of the organisation (e.g. downsizing)

Dismissal: Situation where an employee is fired due to a serious breach of their employment contract or fail to perform the job adequately (have been put ‘on notice’ and fail to improve their performance)

Effects on an organisation from involuntary employee departure.Positive NegativeCutting of a non-productive employee

Loss of talent

Reduction in costs, e.g. wages and overheads

Decline in morale

Change in organisation’s structure

Breakdown of effective teamsIncreased pressure on performance of remaining staff

Unfair Dismissal An employee can apply to Fair Work

Australia if they believe their employment was terminated for an unlawful or discriminatory reason

Termination Management HR Manager must ensure that an employee who is

leaving is given certain entitlements It is also their job to see that the transition from

employment to termination is conducted appropriately and within the law

In the case of redundancy the HR manager should: Have explored the possibility of redeploying or

relocating the employee Give the employee reasonable notice of the expected

redundancy Provide reasonable redundancy benefits Provide additional services Ensure the process of choosing who is to be made

redundant is fair and unbiased

Outplacement Services Services provided to assist employees who have

been retrenched to gain new work 60% of LSOs in Australia not provide outplacement

consultants to assist employees making the transition Involves:

Counselling to counteract negative feelings associated with retrenchment

Skill development in how to look for employment opportunities

Assistance in writing resumes, interview techniques Cost is borne by the former employer and is seen as

rewarding the employee for loyal service Shows remaining staff that organisation cares about

its people

Transition Services Provided to employees who are retiring

and need assistance to organise their finances, lifestyle planning and volunteering activities

Employees often find it hard to completely cut themselves off from the business world