Readings in Human Resources Management
Chapter 1
Introduction and Overview
1.1. Importance of Human Resources
With the increase in the size and complexity of business organizations, man has become the most important factor in business. Business needs people as owners, employees, and consumers. Organizations need people to make them operate. Business may be operated differently and the objectives of business may differ, but the universal element in all business activities is people. An organization is nothing without human resources. Any human organization- a factory, a hospital, or an association- consists of people working together. According to economists, the factors of production are land, labor, capital and entrepreneurship. Of all the resources, the most important one is human resource, because human beings play a dual role- as resource, as well as a motive force for all other resources by manipulating them, by way of developing, utilizing, commanding and controlling. It is the most important of all other resources. This is because manpower is that resource through which management wants to control and direct all other resources like machines, materials, money and others. An organization is nothing without people.
It is true that capital; technology and human force are the important elements for production. In fact, productivity is the function of a set of interrelated factors (e.g., political, social, economic, educational and cultural). Experts on productivity improvement emphasize more on people factor for enhancing productivity. They are of the view that relatively human resource is the most important of all the factors of production. Resources other than human beings could produce nothing. Physical resources by themselves cannot improve efficiency or contribute to an increased rate of return on investment. It is through the combined and concerted efforts of people that monetary or material resources are harnessed to achieve organizational goals. Why is human resource superior to other elements of production? Capital can be borrowed and technology can be imported, but people cannot be bought. All the factors of production other than the workforce skills can be duplicated anywhere in the world. It is all fungible- capital, technology, raw materials, information- all except for one thing, the most critical part, the one element that is unique about a nation: its workforce (Griffin, 1994). Fred Luthans (2000), an Organizational Behavior, rightly argues that
“ it is not technology, which separates the Saturn plant of GM from other manufacturing facilities. Rather the Saturn plant represents a profound change in the way people are managed”.
Productivity is basically people-based. It is for this reason the developing countries in spite of acquiring modern technologies could not achieve higher level of productivity. The rapidity of technology transfer, access to worldwide capital markets and global competition reduce the traditional advantages of superior technology and isolated markets. Technology becomes inactive without work forces. It is man who works behind machine. Even in a highly automated plant, people are nevertheless required to co-ordinate, and control the plant’s operation. Workers must use them effectively. They must be motivated to provide the best quality and customer service possible. Sakurai (1989), an advisor of the Japan Productivity Center has rightly pointed out that
“Improvement of productivity through the introduction of new technology depends, by and large, on how people in the organization accept the change. To obtain desired result from the introduction of change in technology, the change must be acceptable to them”.
That is, acceptance of change will lie with the behavioral level of the workforce.
Needless to say, machine increases the muscle power of man. Man without the machine is also less productive. They are inseparable. Labor and technology combined generate the outputs that are priced and sold to customers. As Morita, the founder and chairman of Sony Corporation and the author of “Made in Japan” remarks, “assets make things possible but people make things happen.” Organizations depend on people to make them operate. No change occurs without efficient human beings. Improved productivity through people is ultimately the fountainhead of all human progress. In the ultimate analysis, it is the human factor, which will determine the final productivity of enterprise. People supply the talents, skills, knowledge and experience to achieve the organization’s objectives. Let us now explain some inherent qualities that a human being is endowed with.
1.2 Why Employees are Superior to Other Factors of Production
Human being is the best creature of God. Management experts have tried to identify the basic qualities possessed by a human being (Davis, 1989; Werther, 1992; Griffin, 1993).
Firstly, human beings can think, imagine, and feel. They have creative and innovative power. They have problem-solving ability. People contribute to new ideas, which are the foundation for any technological innovation. Human beings offer competitive edge a country or a firm needs to achieve the desired economic development.
Secondly, human beings can be motivated and stimulated. Experts believe that employee satisfaction leads to better performance. Happy workers are usually productive workers. A motivated worker works hard, and sustains that pace and is self-directing toward meeting challenging goals. There is a positive relationship between employee satisfaction and customer satisfaction or customer loyalty. Profit and growth are primarily stimulated by customer loyalty. Loyalty is a direct result of customer satisfaction. Satisfaction is largely influenced by the values of services provided to the customers. The satisfied, loyal and productive employees create value of services. Productivity improvement can only occur through such motivated employees. This is why; literature on employee motivation is quite rich.
Finally, human beings have synergetic power. Synergy means the whole is greater than the sum of its parts. From organizational point of view, synergy means that departments that interact co-operatively are more productive than they would be if they operate in isolation. Human beings can work together as a team and team performance is usually better than individual performance. Effective employee teams can bring a wide range of individual skills and work backgrounds to projects delivering better quality results. Synergy is an important concept for managers because it emphasizes the importance of working together in a co-operative and co-ordinated fashion. Morita (1982) rightly says,
“Your competitiveness is your ability to use the skills and knowledge of people most effectively and team are the best way to do that”.
These qualities as stated above are not found or existed in any factors of production other than human resources. In view of these qualities of people, it is felt that business firms must adopt the method of productivity through people. It is not a slogan; rather it is a reality. The people and the will of the people to grow economically are the pivotal for the economic development of every country.
Take the case of Japan, for example. Japan lacks virtually all types of resources except human ones. The World War Two had almost crippled its economy but it could not destroy the creativity and ingenuity of its people. Japanese companies have been placing increased emphasis on the quality of human resources. Morita (1982) says that there is no magic in the success of Japanese companies in general and Sony Company in particular. The secret of their success is simply the way they treat their employees. Highly educated, skilled and motivated human resources have made extreme contribution to the robust economic growth of Japan. It achieves success mainly by involving its people in the development process.
1.3. Employee may be the Key to Productivity in Bangladesh
From the demographic point of view, Bangladesh is the ninth largest country in the world. Neither natural resource nor technology is her greatest asset. It is people, which constitute the most precious resource. Tapping that wellspring may be the best hope for the economic success of Bangladesh. Unfortunately, most of its people are illiterate, unskilled and inefficient. Manpower shortage exists both in quantitative and qualitative terms and includes not only engineers and technicians but also managers. In many cases, the manpower shortages are aggravated by the “ brain drain”. The lure of better living condition is causing brain drain among the third world countries. Another aspect is the supply of required mix of manpower resources. Bangladesh falls into the category of LDC with human development rank of 143 among the 174 nations (Haque, 1997). Our working force is simply not keeping pace with the kinds of skills required in the new economy. Until now most of its people could not become productive resources, rather they are liabilities for the nation. A person is said to be resourceful when he or she has attained problem-solving ability. It is evident that many people are ignorant, unskilled and cannot sustain themselves, and become a factor of degradation and backwardness for the society. As a result, they are becoming liability for Bangladesh. Thus, although wages are lower in Bangladesh than in the western countries, it is suggested that the actual labor cost to the industry is above the levels in the western countries because of the higher labor efficiency in such countries. They are liabilities because of our failure to handle them well. They are becoming a source of corporate distress, not a competitive advantage.
Most of the scholars believe that Bangladesh is lagging behind in economic spheres largely because of its inability to handle human resources. We are poor in managing human resources. The real difference between Bangladesh and developed countries lies not in the volume of capital but in the knowledge gap (Kibria, 1999). There is a shortage of knowledge, skill and technological know-how to utilize human and natural resources. Although information technology and communication have shortened the geographical distance among the countries, the knowledge gap between a developed country and a developing country like Bangladesh is increasingly widening. The developed countries are basically knowledge and information – based societies. The people of the developed countries are becoming more educated and knowledgeable so they can easily solve all the problems that a human society is likely to face. Peter. F. Drucker (1990), the prolific management scholar, rightly observed that “productivity depends on knowledge and its application” The phenomena of globalization calls for increased labor productivity which in turn will call for a greater emphasis on human resource development as a means of enhancing the capacity of labor for productive work. So in order to develop Bangladesh economically, her human population must be transformed into human resources.
1.4. Definition of Human Resources Management (HRM)
Management and human resources management are one and the same. They should never be separated. Management is personnel administration. Management has three jobs, two of which are directly related to personnel- -managing, a business, managing managers and managing workers and work. The word management has three syllables- Manage-Men-T. If T is taken for tact, then etymologically management means how to manage men with tact. Management is the process of efficiently getting things done with and through other people. HRM deals with the design of formal systems in an organization to ensure the effective and efficient use of human talents to accomplish organizational goals.
There are many definitions about human resource management (HRM). One of the well-known definitions offered by Michael Jucious (1984). He defined human resources management or personnel management –
“as the field of management involves planning, organizing, directing, and controlling the functions of procuring, developing, maintaining and motivating a labor force”.
It is the process of acquiring, retaining, terminating, developing and properly using the human resources in an organization. The acquisition function begins with planning. It includes the recruitment, selection and socialization of employees. Through HR planning, managers attempt to anticipate forces that will influence the future supply of demand for employees.
The development function includes employee training, management development and career development. As jobs evolve and change, ongoing retraining is necessary to accommodate technological changes. Encouraging development of all employees is necessary to prepare organizations for future challenges. Career planning identifies paths and activities for individual employees as they develop within the organization.
The motivation function begins with the recognition that individuals are unique and the motivational techniques (job satisfaction, employee performance appraisal and compensation) must reflect the needs of each individual. Assessing how employees perform their jobs is the focus of performance appraisal. Compensation rewards people for performing organizational work through pay, incentives and benefits.
The maintenance function is concerned with providing those working conditions that employees are necessary in order to maintain their commitment to the organization. The relationship between managers and employees must be handled effectively if both the employees and the organization are to prosper together. HRM deals with the design of formal systems in an organization to ensure the effective and efficient use of human talents to accomplish organizational goals. There is a growing recognition that effective use of people in the organization can provide a competitive advantage.
It pervades the organization. Every person in an organization is involved with personnel decisions. The responsibility for human resource management activities rests with each manager. If managers throughout the organization do not accept their responsibility, then human resources activities may be done only partially or not at all. It is concerned with managing people at work. It covers all types of personnel. It is a continuous function.
It draws on a number of related disciplines, such as industrial psychology, Sociology, Social Psychology, Anthropology and Economics. The function of HRM is advisory in nature. In management terminology, it is a staff function. The personnel manager advises the operating departments on matters relating to personnel. He does not issue orders to them but gives them advice.
1.5. Personnel Management VS Human Resource Management
Although on some key issues- a natural concern for people, and their need, together with finding efficient means to select, train, appraise, develop and reward them, there are some points of dissimilarities between Personnel Management (PM) and Human Resource Management (HRM). Traditional Personnel Management tends to be parochial, striving to attend line managers, whereas HRM is integrated into the role of line managers, with a strong proactive stance and a bias towards business. PM has a history of placing emphasis on bureaucratic control often in a reactive sense, i.e., control of manpower and personnel systems. Some would argue that PM represented a highly compartmentalized system.
By contrast, HRM makes a determined effort to be a more integrative mechanism in bringing people issue into line with business issues, with a pronounced problem-seeking and problem-solving orientation, and a determination to build collaborative organizational systems. The role of top management in setting the agenda for change and development is very much in evidence in HRM.
Some personnel managers will no doubt see the growing influence of HR managers as a threat fearing that they may just become custodians of personnel systems. Beer (1997) identified major obstacles in transforming the traditional administrative personnel function and moving to a fully-fledged HRM system. He contends that one of the greatest problems in the transformation of HR function is that most HR professionals do not possess the requisite analytical and interpersonal skills.
In HRM there is a greater emphasis on strategic issues and on the way which the human resource contributes to the achievement of corporate objectives. HRM underlines the importance of flexibility and the ability to react and adapt quickly to changes in the organizational environment.
PM can be described as a series of activities related to various aspects of an employee’s relationship with the organization. HRM is also concerned with these issues, but in addition stresses the primacy of business needs. Other points of departure are that HRM embraces individual flexibility and congruency between individual and organizational goals, whereas PM is concerned with systems applied to individuals and collectivism.
1.6. The philosophy of Human Resources Management
The basic guide to HR management action in any company derives from its philosophy toward people. A philosophy exists in every company, although it is not written down. It guides to personnel policies. There are two contrasting views regarding employee at work:
Labor is viewed as technical factor-a factor of production. They are treated as a commodity and they can be bought and sold. They are considered as cogs in the machine. They are hired and fired at will. Writings of Taylor and Adam Smith reinforced these concepts. Employees must be controlled and closely supervised by management to attain company goals. This approach treats employees with limited potentiality. This is consistent with theory X as suggested by Douglas McGregor.
Labor has been viewed as a human factor with a lot of positive potentials. So they must be treated with respect and dignity. People are assets- not cost. Investment on people is very rewarding. Management must develop and utilize the talent of people to achieve common goals. Japan is the first country who realized the importance of human beings in its attempt to improve productivity. When Japan realized this truth and recognized human values, it achieved unprecedented progress in all fields. Stagnation in economic progress of Bangladesh compared to Japan is again attributed to this lack of focus on human resources development and utilization. Although we are endowed with fertile land, rich in natural gas, possess large population.
1.7. Basic Principles of Human Resources Management
A principle is a basic statement of truth explaining cause and effect relationship between two or more variables. Every subject is guided by its principles. HRM is not an exception. The fundamental principles of HR management, according to M. Jucious, 1992; Memoria, 1998; Flippo, 1986), are as follows:
· Deal with people as complete individuals. Consider employee as a whole person. For example, the family life of an employee may have an effect on his working life.
· Make people feel worthwhile and related. People are the most valuable asset of the organization.
· Treat all employees with justice, there should be no discrimination.
· Human resources management is not personal. The uniqueness of the human resource must be recognized, and cannot be treated like any other resource. After all, people have feelings and emotions.
· Rewards should be earned, not given. If it is given, it becomes a gift or donation.
· Supply employees with relevant information. Because secrecy may create confusion and misunderstanding. Information should be shared with employees. Commitment by employees to the organization is nurtured when the organization informs them of important matters, such as the mission statement, the values it cherishes and trading prospects.
· Do not underestimate the intelligence of people. People have a lot of positive potentiality.
· Treat people with respect and dignity. This will enhance people’s motivation and commitment to the organization.
· People ought to would to be considered as social capital capable of development.
· Provides opportunities for growth within the organization.
· Group interest predominance over individual interests.
· Sell the personnel program. It must be sold. This follows because employees will learn by themselves or from others if management does not teach them.
1.8. Objectives of Human Resources Management
All the functions of the organization should contribute to the objectives of the organization. This means that the determination of objectives is of prime importance and is a prerequisite to the solution of most management problems. Objectives are predetermined goals at which individual or group activity in an organization is aimed. The formulation of the objectives of an organization is necessary for the following reasons:
· Human beings are goal – directed. People must have a purpose to do some work. Announced organizational goals invest work with meaning.
· Objectives serve as standards against which performance is measured.
· The objectives stand out as guidelines for organizational performance. They help in establishing the character of an organization.
· The central focus for HR management must be on contributing to organizational success. The objectives of Human resources management can be described as follows:
· To maintain and sustain industrial peace. Without peace, prosperity is not possible. It is true for a nation as well as for a business organization. Without industrial peace, all resources remain under-utilized.
· To improve the productive contribution of people to the organization. In a competitive environment, productivity improvement is very significant. Productivity is the function of ability and motivation. Training and education can improve ability. The HR managers must take measures to increase employees’ willingness to put more effort. Excellent companies of USA also encourage productivity through people.
· To attract and secure appropriate people capable of performing effectively and efficiently the organization’s specific tasks. This important for obtaining and sustaining competitive advantage.
· To generate maximum individual development of the people within the organization. Individuals get internally developed through training and experience. It is a motivating factor according to human behavior experts Maslow and Hezberg.It should be kept in mind that today’s industries are knowledge-based and skill-intensive.
· To recognize and satisfy individual needs.
· To maintain a high morale and better human relationships inside the organization.
· M.W. Cumming (1989) has described the objectives of HR management in these words: HR management aims to achieve both efficiency and justice, neither of which can be pursued successfully without the other. It seeks to bring together and develop into an effective organization, the men and women who make up an enterprise enabling each to make his own best contribution to its success both as an individual and as a member of a working group.
· According to Mathis and Jackson (1999), the main goal of HR management is to enhance human capital of the organization. Human capital is the total value of human resources to the organization. It is composed of the people in the organization and what capabilities they have and can utilize in their jobs. AS a part of strategic role, HR managers are often seen as responsible for expanding the capabilities of the human resources in the organization.
1.9. Functions of HRM
HR managers are performing a variety of functions. The functional areas of HR managers are changing as the time goes on. The main HRM functions include:
Human resource planning is an important activity that involves estimating the size and makeup of the future work force. It is a process by which an organization ensures that it has the right number and kinds of people, at the right places, at the right time. Capable of effectively and efficiently completing those tasks that will aid the organization in achieving its overall objectives. Planning of human resources is the life-blood of the firm. Without the right people in the right place at the right time, the firm could go out of business.
Recruitment is the process of finding and attracting qualified or suitable applicants to fill vacancies. Recruiting is important because the best- qualified applicants must be found to fill vacancies. The methods and procedures used to acquire an understanding about jobs are called job analysis. This is discussed next. There are mainly two sources of recruitment: internal and external. Promotion from within an organization is called internal source and recruiting new people from outside the organization is known as external source.
Job analysis is the process of determining the tasks that make up the job and the knowledge and skills and abilities an employee needs to successfully accomplish the job. From job analysis, job description and job specification can be prepared. Job description is a written statement of what the jobholder does how it is done and why it is done. Job specifications state the qualifications necessary for a job.
Selection is a process of hiring suitable people for job. Right man for right job is the main goal of selection. The selection process involves many steps such as preliminary reception of application, interviewing, test, medical test, references and final decision of hiring.
Placement is the assignment or reassignment of duties to employee. It may take different forms such as promotion, transfer, demotion, and termination.
Orientation is a process of getting new employees acquainted with the organization, its culture, rules and regulation, objectives and supervisors and other employees. It is the act of introducing new employees to organization and their work units. It is important because it helps new employee to adapt with new situation.
Training is a continual process of helping employees to perform at a high level. It is a process of acquiring new skills to do job properly. Training changes and modifies employee attitudes and behaviors that will improve his ability to perform on the job. To be effective, a training program must accomplish a number of objectives. First, it must be based on both organizational and individual needs. Second, the objectives of training should spell out what problems will be solved. Third, all training should be based on sound theories of learning. Finally, a training program must be evaluated to determine whether it is working.
Job evaluation is a process of measuring and determining the value of each job in relation to all jobs within the organization. Jobs are ranked in order to arrive at each job’s appropriate worth. It is the basis of designing a well- balanced compensation program. The widely used methods of job evaluation are ranking method, classification method, point rating method, and factor comparison method.
Performance appraisal is a process in an organization whereby each employee is evaluated to determine how he or she is performing. Employee may be appraised against absolute standards, relative standards, and objective. The appraisal process consists of six steps: establish performance standards, communicate performance expectations to employees, measure actual performance, compare actual performance with standards, discuss the appraisal with the employee, if necessary, initiate corrective action.
Compensation is the reward or price for labor. The goal of compensation administration are to design the lowest-cost pay structure that will attract, motivate and retain competent employees, and that also will be perceived as fair by these employees.
Discipline refers to a condition in the organization when employees conduct themselves in accordance with the organization’s rules and standard s of acceptable behavior. For the most part, employees discipline themselves. But not all employees will accept the responsibility of self-discipline. Some are problem employees. These employees require some degree of extrinsic disciplinary action. This extrinsic is labeled punishment. The most frequent discipline problems can be classified as related to attendance, on-the-job behavior, dishonesty, and outside criminal activities. Disciplinary actions available to the manager include oral warning, written warning, suspension, demotion, pay cut, and dismissal.
Trade union is an organization of workers, acting collectively, who seek to protect and promote their mutual interests through collective bargaining. The goals of unions include
· Influencing the wage and effort bargain,
· Establish a security system for members,
· Influencing the administration of rules,
· Obtaining political power in the state and over the economy.
Collective bargaining is negotiation, administration and interpretation of a written agreement between two parties; at least one of, which represents a group that is acting collectively, that, covers a specific period of time.
1.10. Tests of the Efficiency of the HR Department
The personnel man is concerned with staffing, motivating, maintaining good employer-employee relationships and running welfare services. The performance achieved in all these spheres will have to be assessed by the general management to ascertain the efficiency and quality of personnel man. Biswanath Ghosh (1997) used the following criteria to measure the efficiency of personnel man:
a) Recruitment cost t report
This report will indicate the recruitment cost for different categories of employees and compare such costs with results over the time. If recruitment cost has increased over the year, it reflects inefficiency of the personnel department. If it has reduced, it is an index of successful personnel policy.
b) Labor productivity report
Although labor productivity depends not only on the efficiency of labor but also on many other factors which lie outside the jurisdiction of personnel department, yet the personnel department is mainly responsible for maintaining an efficient workforce. A comparison of labor productivity and efficiency of different departments and between different periods is a good index of labor productivity. It the total productivity falls, personnel department is inefficient; it rises, personnel department will be considered efficient.
c) Labor turnover report
Labor turnover may be used as an index to judge the efficiency of the personnel department. Excessive labor turnover indicates a failure of personnel policy while lower turnover reflects the success of such policy.
d) Discipline
Discipline is an indication of success or failure of the personnel policy concern. Discipline is good when employees follow willingly the rules of the company and discipline is said to be bad when employees disobey them.
e) Morale
The effectiveness of the personnel policy determines the morale of the employees. Morale is the sate of mental health. An individual’s morale is high when he is happy with his work, his surroundings and his fellow-beings. High morale indicates the efficiency of personnel administration while poor morale reflects its failure. Poor morale is reflected in high rate of absenteeism, turnover, accident records, grievances and the low level of output.
r) Welfare provisions
The personnel department looks after welfare activities within the organization. When workers feel that the company has an adequate labor welfare policy, their tendency to grouse and grumble will disappear. Welfare activities will reduce labor turnover and absenteeism and will increase the efficiency of the work force.
1.11. Proactive versus Reactive Approaches to HRM
HR department cannot always wait for feedback and then respond. HR managers must be proactive. HRM can increase its contribution to employees, managers and the organization by anticipating challenges before they arise. Proactive HRM occurs when HR problems are anticipated and corrective action begins before the problem exists. Reactive approach occurs when decision- makers respond to HR problems. If efforts are reactive only, problems may be compounded and opportunities may be missed. A proactive approach to HRM is a major step in enhancing organizational productivity.
1.12. Specific Challenges of Modern HRM
HRD managers are facing many challenges these days. The field of HR management is undergoing transition because organizations themselves are changing. Flippo (1992), a renowned expert on personnel management, has identified four challenging problems of personnel department:
(1) Changing mix of the workforce,
(2) Changing values of the workforce,
(3) Changing demands of employees, and
(4) Changing demands of the environment.
Among the major changes in the mix of personnel entering the workforce are
(1) increased numbers of minority entering occupations requiring greater skills,
(2) Increasing levels of formal education for the entire workforce,
(3) More female employees,
(4) More married female employees, and
(5) More working mothers.
Discussion Questions
· Define Human Resources Management.
· Why is employee the key to productivity?
· “Assets make things possible but people make things happen”. Justify
· Why is managing employee at work so complex?
· “Productivity is through people”. Explain.
· Discuss the following statement: “ In many ways, all managers are and must be HR managers.”
· A HR manager must be effective and efficient. Why?
· “Management is getting things done with and through others.” Do you agree or disagree? Why?
· What are the objectives of HRM?
· Distinguish between proactive and reactive approach to HRM.
· What are the challenges faced by HRM?
· “HRD has grown importance in globalization”. Explain.
Chapter 2
Human resource Planning (HRP)
2.1. Meaning of Human Resource Planning
Planning is the most important and primary function of management. It is a process of selecting the organizational objectives and taking action to achieve those objectives. Planning must be realistic and workable. Planning of human resources is a major managerial responsibility. It is important because human resources provide a firm the competitive advantage. In the age of competition, firms are focusing their attention on employee knowledge and skill. Obviously, human resources are going to occupy the central stage of human activities, especially in the field of industry and business. In view of its importance in the organizational effectiveness, separate HRP departments have been set up in most of the important business organizations. Certainly, many organizations have voiced the idea that their human resources differentiated them from their competitors. The significance of human resources as a core competency was confirmed in a study of 293 U.S. firms. The study found that HR management effectiveness positively affected organizational productivity, financial performance and stock value (Huselid 1997).
Human resource planning is the major task of HRM because it is concerned with utilizing manpower resources. An organization does not own person as it does capital and physical assets; this resource is seldom given proper attention. Many managers gave failed because they have taken their human resources for granted. It is one of the most critical management undertakings of this decade. Some popular definitions of HRP are given below.
Robbins (1998) defines HRP as –
“the process by which an organization ensures that it has the right number and kinds of people at the right places, at the right time, capable of effectively and efficiently completing those tasks that will help the organization achieve its overall objectives”.
In the words of Coleman Bruce (1997), HRP is the process of determining manpower requirements and the means of meeting those requirements in order to carry out the integrated plan of the organization.
It, then, translates the organization’s objectives and plans into the number of people needed to meet those activities. Through planning management makes a balance between demand for and supply of right number and kinds of people at the right time. It is a supply and demand calculation. Manpower is an asset; it is an asset which appreciates-which grows over time. Machines depreciate as time goes on.
According to the above definitions, HRP consists of the following elements:
1. Establishing and recognizing the future job requirements,
2. Identifying deficiency in terms of quantity,
3. Identifying deficiency in terms of quality and specification,
4. Identifying the sources of right type of man,
5. Developing the available manpower and
6. Ensuring the effective utilization of work force.
A manpower plan must be a set of two plans: a manpower demand plan and a manpower supply plan.
2.2. Benefits of Human resource planning
If HR planning is done well, the following benefits should result:
Upper management has a better view of the human resource dimensions of business decisions. –
· HR costs may be lower because management can anticipate imbalances before they become unmanageable and expensive.
· More time is available to locate talent because needs are anticipated and identified before the actual staffing is required.
· Development of managers can be better developed.
· Improving the utilization of human resources,
· Achieving economies in hiring new employees,
· Expanding the personnel management information base to assist other personnel activities and other organizational units,
· Coordinating different personnel program.
· Rapid technological changes makes manpower planning more important as the demand for new skills is increasing.
· Proper manpower policy will reduce wastage rate. There are two types of wastage- voluntary (marriage, pregnancy, immigration, early retirement and involuntary (death, retirement and dismissal).
· Manpower planning stresses the value of human resources as corporate assets.
· Interest in manpower planning is increasing because the size of the organization is gradually increasing.
2.3. Human resources planning methods
Four methods are used to determine the requirements of personnel:
1. Annual estimate of expected vacancies,
2. Long range estimate of expected vacancies,
3. Man specification requirements,
4. Job requirements.
Personnel manager will examine the organizational structure regularly to anticipate its manpower requirements. A job analysis must be made to know the requirements of a particular job. What does the job analysis mean?
2.4. Job Analysis
Employee turnover is a very serious problem in most of the industries. Turnover is harmful because causes serious inconveniences, high costs, wastage of trained manpower, reduces morale and motivation. It occurs mainly due to frustration on the following:
· Mismatch between expectation and reality in the nature of work,
· Mismatch between requirements in the job and capabilities,
· Mismatch between responsibility and compensation.
This mismatch has arisen because the actual work has not been properly defined, designed and disclosed. This leads to the concept of job analysis. Job analysis defines the jobs within the organization and the behaviors necessary to perform these jobs.
Mathis and Jackson (1999) view job analysis as a systematic way to gather and analyze information about the content and human requirement of jobs, and the context in which jobs are performed.
Dale Yoder (1983) defines job analysis as-
“A process in which jobs are studied to determine what tasks and responsibilities they include their relationships to other jobs, the conditions under which work is performed, and the personnel capabilities required for satisfactory performance”.
In the opinion of Strauss and Sales, Job analysis consists of two parts, a statement of work to be done (Job description), and the skills and knowledge which must be possessed by anyone filling the job (Job Specification).
It involves developing a detailed description of the tasks involved in a job, determining the relationship of a given job to other jobs, and ascertaining the knowledge, skills and abilities necessary for an employee to successfully perform the job. Job analysis includes the following information:
1. Work activities and behaviors,
2. Interaction with others.
3. Performance standards.
4. Job relationships.
5. Personal attributes.
6. Machines and equipment used,
7. Working conditions.
8. Work methods.
9. Supervision given and received,
10. Knowledge, skills and abilities needed.
Job Analysis Methods
Job analysis information can be gathered in a variety of ways. Common job analysis methods are:
· Observation Method. The job analyst observes the individual performing the job and takes notes to describe the tasks and duties performed. He keenly observes the work connected with a job. It is a direct method. Its main limitation is that when the work of employee is being observed, the employee becomes conscious. In certain job like managerial, observation method is impossible.
· Work sampling. Under this method, a manager can determine the content and pace of a typical workday through statistical sampling of certain actions rather than through continuous observation and timing of all actions.
· Individual interview. Here a manager or job analyst visits each job site and talk with employees performing each job. A standardized interview form is used most often to record the information. Frequently, both the employee and the employee’s supervisor must be interviewed to obtain a complete understanding of the job.
· Structured questionnaire. A survey instrument is developed and given to employees and managers to complete. The main advantage of this method is that information on a large number of jobs can be collected inexpensively in a relatively short period of time.
· Diary method. Under this method, the employees observe their own performance by keeping a diary of their job duties, noting how frequently they are performed and the time needed for each duty.
Uses of job analysis
Job analysis obtains information about the jobs and it uses that information to
· Develop job description,
· Job specification,
· Conduct job evaluation.
Design compensation program
These, in turn, are valuable in helping managers identify the kinds of employees they should recruit, select, and develop, as well as providing guidance for decisions about training and career development, performance appraisal and compensation administration.
2.5. Differentiating between Job Analysis and Job Design
Job analysis is different from job design. Job design is broader in nature and its main thrust is matching the productivity needs of the organization with the needs of the employees performing the various jobs. It is concerned with changing, simplifying, enlarging or enriching or otherwise making jobs such that the efforts of each worker fit together better with other jobs. Job analysis has a much narrower focus in that it is a formal system for gathering data about what people are doing in their jobs. Its main purpose is to get a clear understanding of what is done on a job and what capabilities are needed to do a job as it has been designed.
2.6 Job Description
The record that keeps all the relevant information about a job is called job description. It is a written statement of what a jobholder does how it is done, and why it is done. It should accurately portray job content, environment and conditions of employment. A common format for a job description includes
· the job title,
· the duties to be done,
· the main features of the job,
· the authority and responsibilities of the jobholder.
It must be kept in mind that working environment changes because of changes in production technology, market demand and customer choices and competitors strategies. So job description needs to be reviewed and updated. HR managers must appraise the changes that are likely to occur over time.
2.7 Job Specification or Man Specification
After the job description is prepared, man specification or job specification should be prepared. It is of utmost importance to determine the characteristics of suitable person who will do the job effectively and efficiently. Based on the information acquired through job analysis, the job specification identifies the knowledge and skills needed to do the job effectively. Man specification is a statement giving the details of the physical make-up, education, training, intelligence, aptitudes, and other relevant specifications required in the applicant to perform the job satisfactorily. Some of these attributes are measured through tests like intelligence test, aptitude tests, and others. Examples include SAT, GMAT, TOEFL for admission for graduate studies in the USA universities. Job specification can include minimum desirable score for selection in such tests.
2.8 Job Evaluation
The final use of job analysis is job evaluation. Job analysis is valuable in providing information that makes comparison of jobs possible. Job evaluation is the process of finding and specifying the relative value or worth of each job in the organization. Job evaluation is an important part of compensation administration. Compensation is one of the important elements in the condition of employment. Compensation must be fair and equitable. In the meantime we should keep in mind that job evaluation is made possible by the data generated from job analysis. We cannot over-emphasize the importance of job analysis as it permeates most of the organization’s activities.
2.9. Stages or Steps of HR planning
Human resource planning is a process involving few stages. These are as follows:
· HR planning process begins with considering organizational objectives and strategies. The first stage of HR planning is to integrate it with corporate planning. All manpower planning stems from business plans in relation to a corporate strategy.
· The second stage in the HR planning is to forecast or assess the internal and external environmental factors that affect demand and supply of labor. Some of the more significant environmental factors include government influences; economic, geographic and competitive conditions; technological factor, workforce composition, management philosophy, and work patterns. There are a number of techniques now available for doing HR forecast. Among the important these are : Delphi technique, Brain Storming. Committee board, expert opinion. Constancy, Trend analysis, Regression and correlation analysis, PERT and CPM.
· The next stage is the preparation and analysis of internal inventory of HR capabilities. Assessment of internal strengths and weaknesses as a part of HR planning requires that current jobs and employees capabilities are audited and organizational capabilities are inventoried.
· The information gathered from external environmental scanning and assessment of internal strengths and weaknesses is used to predict or forecast HR supply and demand in light of organizational objectives and strategies. Forecasting periods may be short (less than one year), intermediate (one to five years), and long range (beyond five years). Forecasts of demand may be either judgmental or mathematical. The HR forecast is concerned with anticipating the number of replacements required due to resignations, retirements, death, dismissals, transfer and promotions, and technological changes resulting in increased productivity. This will highlight shortage and overstaff positions.
· Once the demand for HR has been forecasted, then their availability must be identified. The fourth stage of HR planning is to locate the sources from where personnel required will be available. The source may be internal and external. Although the internal supply may be easier to calculate, it is important to calculate the external supply as accurately as possible.
· The final stage of HRP is concerned with allocation of human resources within an organization over time.
Questions for Discussion
What do you mean by the term Human Resources Planning?
What is job analysis?
Distinguish between job description and job specification.
Mention different job analysis techniques.
Outline the steps in the human resource planning process.
Mentions the steps of human resource planning.
Describe the benefits of human resource planning.
Chapter 3
Recruitment and Selection of Employee
3.1. Meaning of Recruitment
Successful human resource planning should identify human resource needs. Once these needs are identified, we are able to do something to meet them. The next step is the acquisition function of human resource management. Recruitment forms the first stage of acquisition function. This is the process of locating potential candidate for selection. Recruitment is the process of finding and attracting capable applicants for employment. It is the discovering of potential candidates for actual or anticipated organizational vacancies. Dale Yoder (1986) defines recruitment as a process of searching for prospective employees and stimulating and encouraging them to apply for jobs in an organization. The process begins when new recruits are sought and ends when their applications are submitted. The result is pool of qualified applicants from which new employees are selected.
3.2. Recruitment functions
Responsibility for recruitment usually belongs to the HR department. This department works to find and attract capable applicants. Job descriptions and specifications provide the needed information upon which the recruitment process rests. Line and staff cooperation in recruitment is essential. The HR manager who recruits and initially screens for the vacant job is seldom the one responsible for supervising its performance. So he needs the help of line personnel. Functions of the recruitment office are given below:
· Assessing recruitment
· Fixing standards.
· Advertisement and publicity
· Making initial contact with prospective candidates.
· Preliminary perusal and assessment of applications.
· Short-listing of probable candidates for selection.
· Selection Process like interviewing or testing.
· Recording and documentation.
3.3 Objectives of recruitment policy
Objectives are targets and goals. According to Yoder, following are the main objectives of recruitment policy:
· To find and employ the best qualified person for each job.
· To retain the best and most promising ones.
· To offer promising careers and security.
· To provide facilities for growth and development.
· To minimize the cost of recruitment.
· To reduce scope of favoritism and malpractice.
3.4 Factors affecting recruitment
· There are many factors affecting recruitment. These factors may be considered into two broad groups:
· Internal factors: These are the factors within an organization. These factors are listed down here:
· Image of the organization. An organization with poor image cannot attract a large number of applicants. For example, among most university graduates Dhaka University has a positive image.
· Image of job or attractiveness of the job. If the job to be filled is unattractive, recruiting a large and qualified pool of applicants will be difficult.
· Size and growth potential of the organization. Higher the size and growth potentials, higher the advancement opportunities.
· Internal policies. Internal organizational policies such as promote from within will give priority to individuals inside the organization. Such a policy will usually ensure that all positions will be filled from within the ranks.
Trade union requirements.
Recruiting budgets.
· External factors: These are the factors over which organization has little or no control. Some of these are given below.
· Demographic factors: Gender ratio, age group, and educational level. Economic condition of people and their per capita income, proximity of other organizations offering employment.
Government requirements.
Industrialization: Industrialization within the geographical area and geographical concentration will have influence on employment market in recruitment.
Labor market: Supply of labor may be plenty or shortage. In Bangladesh, supply of labor of unskilled labor is abundant but there is shortage of skilled labor. The right type is difficult to find.
The recruitment process involves several steps. Personnel managers or specialists known as recruiters identify job openings through human resource planning or requests by managers. They make a thorough analysis of job information, particularly job descriptions and specifications. This information tells the human resource specialist the features of both the jobs and the people who will fill them. They may also collect information from the concerned managers.
3.5. Sources of Recruitment
There are basically two sources of supply from where potential employees can be drawn. These are internal sources and external sources. Internal sources indicate recruiting qualified people from within the organization itself (from the present working force). When reference is made to the number of employees already employed by the organization we speak of the internal supply. Whenever any vacancy occurs, someone from within the organization is upgraded, promoted or transferred to another department. Advantages and disadvantages are associated with promoting from within the organization and hiring from outside the organization to fill openings.
Advantages of Internal Recruiting
The people responsible for selecting internal candidates for vacant positions have access to more comprehensive information relating to their abilities, track record and potential achievement than they would have if they were selecting people originating from the external labor market.
· It is motivating to employees, as they are preferred over outsiders when the vacancies occur. Employees tend to be committed to firms that are committed to them.
· It provides an opportunity for advancement.
· It is economical in terms of time and money.
· It improves employee morale.
· It improves image of the organization.
· It improves the probability of better performance as the candidate is in a better position in knowing the objectives and expectations of the organization.
The demerits of the inter