HRM NOTES
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Timberline High School**We aren't endorsed by this school
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BUSSINES 0
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Management
Date
Dec 16, 2024
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17
Uploaded by 1mdon
1. What is Meant by Employee Compensation? Employee compensation refers to the total monetary and non-monetary rewards provided to employees in exchange for their work. This includes wages, salaries, bonuses, commissions, benefits(such as health insurance, retirement plans, and paid time off), and other incentives. Compensation is a critical component of human resource management as it helps attract, retain, and motivate employees. 2. What is the Wage Mix? The wage mix refers to the combination of internal and external factors that influence how much employees are paid. It determines the structure and level of compensation provided to employees. These factors are typically grouped into: •Internal factors: Organizational policies, job value, and employee performance. •External factors: Market rates, economic conditions, and labor laws. The wage mix ensures that pay levels are competitive, equitable, and aligned with organizational goals. 3. External and Internal Factors That Determine How Employees Are Paid External Factors: 1.Labor Market Conditions: The supply and demand for specific skills in the job market influence wages. For example, a shortage of skilled IT professionals may lead to higher pay for those roles. 2.Legal and Regulatory Framework: Minimum wage laws, overtime regulations, and equal pay acts set boundaries for employee compensation. Internal Factors: 1.Job Evaluation: The relative worth of a job within the organization determines its pay scale. For example, jobs requiring higher skills or responsibility may be paid more. 2.Company’s Pay Policy: Organizations may adopt different pay policies such as market-leading (pay above market rate) or market-following (pay at market rate) strategies based on their financial capability and goals. 4. Comparison of Payment Plans i. Job-Based Pay
•: Compensation is tied to the specific job performed, based on the job's roles, responsibilities, and required qualifications. •Example: A receptionist earns a fixed salary based on the value of the job as defined by the company. •Jobs That Use It: Administrative positions, factory workers, and clerks. ii. Competency-Based Pay •: Pay is based on the employee’s skills, knowledge, and abilities rather than the specific job they perform. •Example: A software developer earning more for mastering additional programming languages. •Jobs That Use It: Skilled trades, technical roles, and professions requiring continuous learning. iii. Pay for Performance •: Employees are compensated based on their individual, team, or organizational performance. •Example: A salesperson earning a commission for exceeding sales targets. •Jobs That Use It: Sales roles, executive management, and customer service. Laws that influence or impact employee pay The Minimum Wage Act •This law ensures that workers are paid a fair minimum wage as established by the government, protecting them from exploitation. The Employment (Equal Pay for Men and Women) Act •Ensures that men and women receive equal pay for equal work, addressing gender-based wage disparities. The Labour Relations and Industrial Disputes Act (LRIDA) •Governs industrial relations, including disputes about wages and working conditions, and facilitates fair negotiations between employers and employees. The National Insurance Act •Requires employers to contribute to employees’ benefits, such as pensions and maternity leave, which form part of an employee's overall compensation package. The Holidays with Pay Act
•Mandates that employees are entitled to paid vacation leave based on their length of service, ensuring fair compensation even during rest periods. .Definitions 1.Labour Supply: Labour supply refers to the availability of workers with the skills, qualifications, and experience needed to perform specific jobs. It includes the internal workforce (current employees) and potential external candidates in the labor market. 2.Labour Demand: Labour demand refers to the organization's need for workers to perform specific tasks, based on its strategic objectives, operational requirements, and workforce planning. It reflects the number and type of employees required at a given time. Strategies for Labour ImbalancesWhen Labour Demand Exceeds Labour Supply: 1.Recruitment Campaigns: Increase external recruitment efforts, such as advertising job openings and attending job fairs. 2.Overtime Work: Offer overtime to existing employees to meet production or service needs temporarily. 3.Training and Development: Upskill current employees to fill critical gaps. 4.Outsourcing: Hire external contractors or agencies to handle specific tasks or projects. When Labour Supply Exceeds Labour Demand: 1.Voluntary Redundancy or Retirement: Offer incentives for employees to voluntarily leave the organization. 2.Reduced Work Hours: Implement shorter workweeks or job-sharing arrangements. 3.Retraining Programs: Re-skill employees to fit into other roles within the organization. 4.Hiring Freeze: Temporarily halt recruitment to balance workforce levels. Factors Affecting HR PlansInternal Factors:
1.Organizational Goals: The company's strategic objectives determine workforce needs. For example, expansion plans may require additional employees, while cost-cutting measures may lead to downsizing. 2.Current Workforce Capabilities: The skills, qualifications, and experience of the existing employees influence hiring and training decisions. External Factors: 1.Economic Conditions: A booming economy may lead to increased demand for labor, while a recession may cause hiring slowdowns or layoffs. 2.Technological Changes: Advancements in technology can create demand for new skills, making some roles obsolete and necessitating re-skilling or recruitment. The First Four Steps in Human Resource Planning 1.Analyzing Organizational Objectives: Define the company's goals and strategies to understand workforce requirements. For example, expansion into new markets may necessitate hiring new staff or training existing employees. 2.Forecasting Labour Demand: Estimate future workforce needs in terms of numbers and skills, based on factors like business growth, market trends, and technological advancements. 3.Assessing Labour Supply: Analyze the current workforce to determine availability, skills, and readiness. Also, evaluate external labor market conditions to identify potential candidates. 4.Gap Analysis: Identify discrepancies between the current workforce supply and future labor demand. This involves determining whether there will be a surplus or shortage of employees and specific skills. Importance of Direction Sharing, Role Clarification, Ongoing Performance Monitoring, and Feedback Before Performance Appraisal Performance appraisal is only one part of the larger performance management process. The steps preceding it are crucial to ensure a fair and meaningful appraisal. Here's why: Direction Sharing •Definition: Communicating the organization's goals, vision, and expectations to employees so they understand how their roles contribute to the overall objectives.
•Activities: Setting organizational goals, team objectives, and individual targets; explaining how tasks align with company priorities. •Importance: Employees who know the company's direction can align their efforts with organizational goals, ensuring relevance and focus in their work. Role Clarification •Definition: Ensuring employees fully understand their job roles, responsibilities, and expected outcomes. •Activities: Developing clear job s, outlining specific duties, and setting performance expectations. •Importance: Unclear roles lead to confusion and poor performance. Clarifying roles ensures that employees know what is expected, which is critical for fair assessment later. Ongoing Performance Monitoring •Definition: Regularly tracking and evaluating employee performance against set objectives. •Activities: Using key performance indicators (KPIs), conducting regular one-on-one check-ins, and tracking progress on tasks. •Importance: Continuous monitoring helps identify issues in real-time and allows for timely interventions, avoiding surprises during the appraisal. Feedback •Definition: Providing constructive insights and suggestions to employees about their work performance. •Activities: Holding feedback sessions, offering praise for good work, and suggesting areas for improvement. •Importance: Feedback motivates employees and provides actionable steps to improve, ensuring better results before the appraisal phase. 2. Reasons Companies Should Manage Employee Performance 1.Improving Productivity and Efficiency: Effective performance management helps employees understand their roles better and align their efforts with organizational goals, leading to higher productivity. 2.Employee Development and Retention: Performance management identifies skill gaps and provides opportunities for employee growth through training and feedback, increasing job satisfaction and reducing turnover.
3. Strategic, Administrative, and Developmental Purposes of Performance ManagementStrategic Purpose •Focus: Aligning employee activities with organizational goals and ensuring everyone contributes to business success. •Example: Setting KPIs based on strategic objectives, such as increasing customer satisfaction or reducing costs. Administrative Purpose •Focus: Using performance management data for HR-related decisions like promotions, salary adjustments, and terminations. •Example: Evaluating employees for merit-based pay increases or determining who qualifies for a leadership role. Developmental Purpose •Focus: Identifying areas where employees can improve and providing the necessary training and development opportunities. •Example: Using performance reviews to recommend professional courses or mentorship programs. 4. Comparison: Graphic Rating Scale Method vs. MBOGraphic Rating Scale Method •: A traditional method where employees are rated on a scale (e.g., 1 to 5) for specific traits like punctuality, teamwork, and communication. •Advantages: Simple to use, cost-effective, and applicable across different job types. •Disadvantages: Can be subjective, lacks depth, and doesn’t account for specific goals.•Example: Rating an employee’s teamwork as "4/5" based on their perceived collaboration skills. Management by Objectives (MBO) •: A performance management system where employees and managers collaboratively set specific, measurable objectives, and performance is evaluated based on achieving those goals. •Advantages: Encourages employee involvement, goal alignment, and clear accountability.
•Disadvantages: Time-consuming to implement and difficult to measure non-quantifiable goals. •Example: Setting a target for a sales representative to achieve a 15% increase in sales over the next quarter and evaluating performance based on results. In Summary: The graphic rating scale is easy to administer and provides quick feedback, but it is less specific. MBO, on the other hand, is more comprehensive and goal-focused but requires more effort and collaboration to implement effectively. Importance of Job Analysis Job analysis is a systematic process of gathering and analyzing information about the duties, responsibilities, and requirements of a specific job. It is a cornerstone of many HR activities and is crucial for organizational success. Key Importance: 1.Recruitment and Selection: oProvides clear job s and specifications, helping HR identify the right candidates for the role. 2.Training and Development: oHighlights skill gaps and training needs by identifying the knowledge and abilities required for the job. 3.Compensation Management: oHelps determine fair and competitive pay scales based on job value and responsibilities. 4.Performance Appraisal: oEstablishes objective standards for evaluating employee performance, ensuring fairness. 5.Legal Compliance: oEnsures compliance with labor laws by documenting job duties, reducing the risk of discrimination claims. 6.Workforce Planning: oHelps align roles and responsibilities with organizational goals, improving efficiency and productivity.
2. Six Steps in the Job Analysis Process1.Determine the Purpose of Job Analysis: oIdentify why the analysis is being conducted (e.g., recruitment, training, or restructuring). 2.Select the Jobs to Be Analyzed: oFocus on critical or frequently changing roles that significantly impact organizational goals. 3.Collect Job Information: oGather data about the job’s duties, responsibilities, required skills, and working conditions. 4.Verify and Confirm the Data: oCross-check information with employees, supervisors, and stakeholders to ensure accuracy. 5.Prepare Job s and Specifications: oCreate detailed documents outlining the job’s responsibilities (job ) and qualifications (job specification). 6.Update and Maintain Job Analysis: oRegularly review and update the job analysis to reflect changes in job roles or organizational needs. Methods of Gathering Data for Job Analysis1.Interviews: o: One-on-one discussions with employees, supervisors, or subject-matter experts to gather in-depth insights about job responsibilities and tasks. oAdvantages: Provides detailed and qualitative data, clarifies ambiguities. oDisadvantages: Time-consuming and may be subject to bias if employees misrepresent their roles. 2.Observation: o: Directly observing employees as they perform their duties to understand job activities, workflows, and tools used.
oAdvantages: Provides real-time, practical insights and captures tasks that employees may forget to mention in interviews. oDisadvantages: Not suitable for roles involving mental work or tasks performed sporadically. 3.Questionnaires: o: Distributing structured forms to employees to collect standardized data about job tasks, responsibilities, and requirements. oAdvantages: Cost-effective, allows for input from multiple employees, and provides quantifiable data. oDisadvantages: Responses may lack depth, and employees might misunderstand or skip questions. These components of job analysis ensure that organizations have a thorough understanding of job roles, which is essential for making informed HR decisions. Steps in the Performance Appraisal Process 1.Establish Performance StandardsoThe organization defines clear, measurable, and job-specific performance criteria. These standards align with the organization's goals and employee job roles. oExample: Setting sales targets or outlining key behaviors like teamwork and punctuality. 2.Measure Actual PerformanceoEmployee performance is assessed based on the established standards, using methods like observation, reports, or performance metrics. oExample: Tracking sales figures or customer feedback scores over a specific period. 3.Provide Feedback and Conduct Appraisal DiscussionoManagers share the results of the evaluation with employees, providing constructive feedback on strengths and areas for improvement. This step often includes a discussion of future goals and development plans. oExample: A manager meets with an employee to review achievements and create a plan for skill enhancement. 2. Challenges in the Performance Appraisal Process
1.Bias and SubjectivityoExplanation: Personal preferences, stereotypes, or biases may influence the evaluation, leading to unfair appraisals. oExample: A manager rates a favorite employee higher despite average performance. oCorrection: Train appraisers to recognize and avoid biases by using structured rating systems and focusing on objective data. 2.Halo EffectoExplanation: A single positive trait or achievement influences the overall appraisal, overshadowing other aspects of performance. oExample: An employee who exceeded one sales target is rated highly in unrelated areas like teamwork. oCorrection: Use detailed criteria to evaluate each performance aspect separately, ensuring a comprehensive assessment. 3.Lack of Standardized CriteriaoExplanation: Inconsistent standards across departments or unclear performance metrics can lead to unfair or inaccurate evaluations. oExample: Different managers evaluating the same role using varying criteria. oCorrection: Develop and communicate uniform appraisal guidelines to ensure consistency and fairness. 3. Performance Appraisal Methods1.Graphic Rating Scale Methodo: Employees are rated on a fixed scale (e.g., 1 to 5) for various traits or behaviors such as punctuality, communication, and problem-solving. oAdvantages: Simple, quick, and cost-effective. oDisadvantages: May be subjective and lacks depth. oExample: Rating an employee’s punctuality as “4/5.”2.Management by Objectives (MBO)o: Employees and managers collaboratively set specific, measurable objectives. Performance is evaluated based on achieving these goals.
oAdvantages: Promotes goal alignment, employee involvement, and accountability. oDisadvantages: Time-consuming and not suitable for roles with non-quantifiable tasks. oExample: Setting a target for a customer service agent to reduce complaint resolution time by 20% within a quarter. These steps, challenges, and methods provide a structured and effective framework for performance appraisals, ensuring that employees are fairly assessed and motivated to achieve their best. 1. Benefits of Hiring a Human Resource Manager 1.Improved Recruitment and Retention: oA human resource manager ensures that the organization hires the right talent through effective recruitment strategies, job analysis, and candidate assessments. They also implement retention strategies, reducing turnover and associated costs. 2.Compliance with Employment Laws: oHR managers help organizations comply with labor laws and regulations, avoiding legal issues related to wages, discrimination, workplace safety, and benefits. 3.Enhanced Employee Engagement and Productivity: oHR managers design programs to boost employee morale, provide feedback, and create a positive workplace culture. This improves motivation and productivity. 2. Impact of Changes in the Global Economy on HRM1.Globalization: oImpact: HR managers must handle diverse workforces, navigate cultural differences, and manage global teams. This requires developing strategies for cross-cultural communication and aligning international practices with organizational goals. 2.Technological Advancements: oImpact: Automation and artificial intelligence are changing job roles, requiring HR managers to focus on upskilling and reskilling employees to meet the demands of a digital workplace. 3.Workforce Demographics:
oImpact: An aging workforce and the rise of younger generations (e.g., Millennials and Gen Z) demand flexible work arrangements, remote working options, and tailored benefits to meet different employee preferences. 3. Major HRM Functionsi. Occupational Health, Safety, and Wellness •Definition: This function ensures the workplace is safe and promotes the physical and mental well-being of employees. •Activities: oConducting risk assessments and implementing safety protocols. oOffering wellness programs like health check-ups and stress management workshops. •Importance: Reduces workplace accidents, enhances productivity, and ensures compliance with safety regulations. ii. Talent Management •Definition: The process of attracting, developing, and retaining high-performing employees to achieve organizational goals. •Activities: oIdentifying critical roles and succession planning. oProviding growth opportunities for employees to maximize their potential. •Importance: Ensures the organization has a skilled and motivated workforce. iii. Recognition, Reward, and Incentives •Definition: Programs to acknowledge and reward employee contributions and motivate continued high performance. •Activities: oOffering monetary rewards like bonuses and non-monetary recognition such as employee of the month. oCreating incentive plans tied to performance goals. •Importance: Enhances employee satisfaction, retention, and engagement. iv. Career Development and Training
•Definition: Providing employees with opportunities to improve their skills and advance in their careers. •Activities: oConducting training workshops and providing access to professional development courses. oOffering mentorship and coaching programs to guide career progression. •Importance: Helps employees grow within the organization, increasing loyalty and reducing turnover. These aspects demonstrate the strategic role HR managers play in fostering a productive, motivated, and compliant workforce while adapting to economic changes. Edison and Associates began their business operations in 2010 as a partnership. The company expanded rapidly and soon outgrew its ten (10) employees. In August 2017, the partners concluded the legal process of registering the business as a private limited company, Edison Ltd. With its new status, Edison Ltd. hopes to employ an additional forty (40) to sixty (60) persons to fill the posts created by the expansion. The management also plans to create a HR department and employ trained HR practitioners to replace the partner who originally managed the HR functions. Management recognizes that with the expansion of the business, their recruitment, selection, orientation and training processes must be effective. New and existing employees will need to be trained and developed to meet organizational goals. The company will therefore be investing heavily in the training and development of its workforce. Describe the first THREE (3) stages of the recruitment and selection process that Edison Ltd. should use when seeking to recruit additional external employees. Identify any TWO (2) factors which will influence the recruitment and selection process at Edison Ltd. State the steps in the training process which Edison Ltd. should use when undertaking training of its employees and describe any TWO (2) of these steps. 1. First Three Stages of the Recruitment and Selection Process To effectively recruit external employees, Edison Ltd. should follow these stages: i. Job Analysis and Workforce Planning •: Analyze the specific roles needed, define job responsibilities, and determine the qualifications and skills required. Workforce planning ensures the company understands how many employees are needed and for what roles.
•Activities: Create job s and job specifications based on organizational needs. ii. Sourcing and Attracting Candidates •: Identify suitable channels to advertise job openings and attract a pool of qualified candidates. This may include job boards, recruitment agencies, social media, and company websites. •Activities: Post job ads, conduct outreach through networks, and organize job fairs. iii. Screening and Shortlisting •: Review applications and resumes to identify candidates who meet the minimum qualifications and are best suited for the role. Shortlisted candidates are then invited for interviews or assessments. •Activities: Conduct initial application reviews, perform phone screenings, and create a shortlist based on predefined criteria. 2. Factors Influencing the Recruitment and Selection Process at Edison Ltd.i. Internal Factor: Organizational Goals •The company's plans to expand and employ 40–60 additional employees will require a structured process to align recruitment with workforce needs and ensure sufficient resources are available for onboarding. ii. External Factor: Labor Market Conditions •Availability of skilled candidates in the job market will impact how quickly Edison Ltd. can fill positions. If there is a labor shortage in the area, the company may need to offer competitive salaries or look beyond its usual geographical area. 3. Steps in the Training ProcessEdison Ltd. should use the following steps when training its employees: 1.Identify Training NeedsoAssess skill gaps and determine what training is required to meet organizational and individual goals. 2.Set Training ObjectivesoDefine what the training should achieve, such as improving specific skills, knowledge, or behaviors. 3.Design the Training Program
oCreate a structured training plan, including the content, methods, and resources needed. 4.Implement the TrainingoDeliver the training program through workshops, e-learning, or on-the-job training. 5.Evaluate the TrainingoMeasure the effectiveness of the training by assessing whether objectives were met through tests, feedback, or performance reviews. of Two StepsIdentify Training Needs •: The first step involves evaluating the skills and competencies employees currently possess and identifying gaps relative to the organization's goals. This ensures that training focuses on relevant areas. •Example: Conducting a performance review to determine that employees need training on new software introduced for the business. Evaluate the Training •: After training is completed, evaluate its effectiveness by analyzing feedback, assessing performance improvements, or monitoring changes in productivity. •Example: Testing employees’ knowledge after a technical training session and comparing pre- and post-training performance metrics. These structured recruitment, selection, and training processes will help Edison Ltd. effectively manage its workforce expansion while aligning employee development with organizational goals. "Training and Development should be ongoing in an organization." Identify FOUR (4) steps in an effective orientation session Explain THREE (3) job training strategies used in an organization State the differences between on-the-job and off-the-job training Discuss THREE (3) key professional development tools used by HRM in an organization. 1. Steps in an Effective Orientation Session
1.Introduction to the OrganizationoProvide an overview of the company's history, mission, vision, and values. Explain the organizational structure and key departments. 2.Explanation of Job Role and ExpectationsoDetail the specific job responsibilities, performance expectations, and how the role contributes to organizational goals. 3.Overview of Policies and ProceduresoDiscuss workplace policies, including attendance, safety, and ethics. Review benefits, such as leave entitlements and health insurance. 4.Tour and IntroductionsoGive a tour of the workplace and introduce the new employee to their team and key personnel, helping them feel integrated and familiar with their environment. 2. Job Training Strategies1.Job Shadowingo: A new or less experienced employee observes a skilled worker to learn specific tasks or procedures. oExample: An intern shadowing a senior accountant to understand financial reporting. oBenefits: Provides hands-on exposure and allows real-time observation of best practices. 2.Apprenticeshipso: A structured program where employees learn technical skills through a combination of classroom instruction and hands-on work. oExample: A plumber learning through an apprenticeship under a licensed professional. oBenefits: Ideal for trades and technical roles, offering a comprehensive learning experience. 3.Job Rotationo: Employees rotate through different roles or departments to gain a broader understanding of the organization and its functions.
oExample: A management trainee spending time in HR, marketing, and operations. oBenefits: Enhances skills diversity and prepares employees for leadership roles. 3. Differences Between On-the-Job and Off-the-Job TrainingAspectOn-the-Job TrainingOff-the-Job TrainingLocation Takes place at the employee's workplace. Conducted away from the workplace. Method Learning through practical, hands-on tasks. Theoretical or simulated learning environments. Examples Job shadowing, mentoring, apprenticeships. Workshops, seminars, e-learning courses. Cost Generally cost-effective as it uses existing resources. May involve higher costs due to external trainers or facilities. Focus Task-specific skills related to current job roles. Broader skills development or general knowledge. 4. Key Professional Development Tools 1.Mentorship Programso: Pairing less experienced employees with seasoned professionals for guidance, skill-building, and career advice. oBenefits: Enhances employee growth, provides personalized support, and builds a strong internal network. 2.E-Learning Platformso: Online training programs offering courses, certifications, and resources to improve employees' skills. oBenefits: Flexible and scalable, allowing employees to learn at their own pace. oExample: Platforms like LinkedIn Learning or Coursera for professional development. 3.Workshops and Seminarso: Interactive sessions conducted by industry experts to teach specific skills or share knowledge on current trends. oBenefits: Encourages collaborative learning and keeps employees updated with industry advancements.