A. Introduction

Defining human resource management

Human resources is used to describe the people who work for a company or organization. A network of individuals working together in an organisation for the purpose of achieving the common goal of the organisation is referred to as a manpower system (Vincent A. Amenaghawon et al., 2020). 

Human resource management activities aim to manage an organization’s human capital. Human resource management activities are concerned with the following goals: obtaining and keeping the number and quality of staff required, motivating workers, keeping employees productive and efficient.

Where do the human resources management activities come from? First, organizations obtain the number and quality of staff from recruitment and selection process. Second, organisations keep workers by some activities which make them happy (training and development, performance appraisal, rewards , etc.). Third, organizations keep workers on track by training, development, performance appraisal process, and rewards. Human resource management is therefore focused on the following activities: Job analyses, Human resource planning, Recruitment and Selection, Training and development, Performance appraisal, Rewards , etc. 

Expansion

Human Resources Management is introduced to manage employee skills, capacity, and knowledge. HRM practices aim to enhance, motivate, and reduce employee turnover so as to ensure the effective implementation and the success of the firm and its employees (Halbast and Tarik, 2019 ). 

The essential factor that will lead an organization to have a competitive advantage is human capital (human resources). Human capital refers to the stock of employee skills that exist within a firm at any given point in time. Human resource and human capital are almost the same, however, human capital concerns more about human talent (Wright et al., 2001).

Intellectual capital (intellectual capital is the total value of all of an organisation’s intangible assets. It includes human capital but goes beyond it) is composed of three forms of intellectual capital – human capital, customer capital (or relation capital), and structure capital which can be divided into innovation capital and process capital. Among the elements of intellectual capital, human capital is the most fundamental. Human capital affects innovation capital and process capital. Innovation capital affects process capital, which in turn influences customer capital. Finally, customer capital contributes to performance. When a company has a $1 increase in R&D expenditure, it has a $2 increase in earnings and $5 increase in market value over the next seven years (Wen-Ying Wang and Chingfu Chang, 2005).

Resource is ‘anything which could be thought of as a strength or weakness of a given firm (all assets, capabilities, organizational processes, firm attributes, information, knowledge, etc). In the resource-based view of the firm, resources are the sources of competitive advantage (Wright et al., 2006).

HRM Practices refer to the pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals (Yousef Alsafadi, and Shadi Altahat, 2021). Human Resource Management practices include job analysis/job design, recruitment, selection, training and development, incentive compensation, other compensation, (self-managed) teams, participation/autonomy, (results-oriented) performance appraisal/ management, job security, employee voice/grievance, promotion from within/career development/internal labor market, information sharing/communication, HR planning, flexible work/family-friendly practices, and other practices (Boon et al., 2019). 

REFERENCES

. Yousef Alsafadi, Shadi Altahat (2021). Human Resource Management Practices and Employee Performance: The Role of Job Satisfaction. Journal of Asian Finance, Economics and Business. 8 (1): 519–529. Doi: 10.13106/jafeb.2021.vol8.no1.519.

Human capital – Creativity

The sum of the labour abilities possessed by all people in a specific scope is human resources, which includes human intelligence, physical strength, knowledge, skills, and so on. (Jinyang Cao, 2022).

A company’s most important asset is creative capital, an arsenal of creative thinkers whose ideas can be turned into valuable products and services. Creative employees pioneer new technologies, birth new industries, and power economic growth Richard Florida and Jim Goodnight (2005).

Creativity is generally defined as the production of novel, useful ideas or problem solutions. It refers to both the process of idea generation or problem solving and the actual idea or solution. Weisberg’s (1988) description of creativity as both the act of novel problem solving or idea generating and the actual solution or idea (Teresa M. Amabile et al., 2005).

Creativity requires both originality and effectiveness (usefulness, fit, or appropriateness). Originality is vital for creativity but is not sufficient. Ideas and products that are merely original might very well be useless.  A truly random process will often generate something that is merely original (Mark A. Runco and Garrett J. Jaeger, 2012).

Graham Wallas drew on Poincare’s account to develop a theory of the creative process as consisting of four stages: preparation, incubation, illumination and verification (or elaboration). But if a process of making something is creative, then one cannot know the end: for if one knows the end, one has already been creative (Berys Gaut, 2010).

The creative person has a lower threshold, or greater sensitivity, for the gaps or the lack of closure that exist in the environment (Mark A. Runco and Garrett J. Jaeger, 2012). Gregory Feist writes that creative people ‘tend to be open to new experiences, less conventional and less conscientious, more self confident, self-accepting, driven, ambitious, dominant, hostile, and impulsive’ (Berys Gaut, 2010).

REFERENCES

. Berys Gaut (2010). The Philosophy of Creativity. Philosophy Compass 5/12: 1034–1046. Doi: 10.1111/j.1747-9991.2010.00351.x.

. Mark A. Runco and Garrett J. Jaeger (2012). The Standard Definition of Creativity. Creativity Research Journal, Vol. 24, No. 1, 92–96.

.  Richard Florida and Jim Goodnight (2005). Managing Creativity. Harvard Business Review. July – August.

. Robert J. Sternberg (2006). The Nature of Creativity. Creativity Research Journal, Vol. 18, No. 1, 87–98.

.  Teresa M. Amabile, Sigal G. Barsade, Jennifer S. Mueller, Barry M. Staw (2005). Affect and Creativity at
Work. Administrative Science Quarterly, 50: 367–403.

Weisberg’s (1988) description of creativity as both the act of novel problem solving or idea generating and the actual solution or idea.

REFERENCES

Green HRM

The Green HRM Approach is involved in modifying HRM culture, structure, strategies, and organizational policies for protecting the environment. 

HR managers vs general managers

People at the HR department are HR managers, and they manage human capital (human resources). General managers are managers at other departments, and they manage People’s activities. 

From the perception of Michael Armstrong (2006), the Harvard school suggested that HRM had two characteristic features: 1) line managers accept more responsibility for ensuring the alignment of competitive strategy and personnel policies; 2) personnel has the mission of setting policies that govern how personnel activities are developed and implemented in ways that make them more mutually reinforcing.

line managers are responsible for managing people. The personnel function provides the necessary advice and support services (Michael Armstrong, 2006).

Although line managers are also involved in the HRM process and HR managers are also involved in the management process, each job has its own unique features. 

Characteristic of HRM are not universal. There are many models.

For example:

Model 1: HR has the final decision to change employee status. Supervisors can recommend, but cannot make final decisions. 

Model 2: HR is the processor after department managers make decisions about hiring, firing and promotions. 

HRM’s Functions

Human resource management philosophy

Human resource philosophies, which specify the values that inform an organization’s policies and practices (Susan E. Jackson and Randall S. Schuler, 1995).

Personnel management philosophy – the whole of principles, moral, as well as administrative rules, which were developed in the organization and which equally divides each of its employees. This philosophy – this is one of the most important components of the company philosophy. The philosophy of management personnel of the organization – it is a some document, which demonstrates that the person has the right to work in safe workplace, he has the right to freely express their views, he has the right to use his abilities fully (Irina Ivanovna Saenko and Julia Pavlovna Pavlova). 

Corporate culture is a powerful determinant of employee attitudes and behaviors in general, as well as their reactions and attitudes toward specific events and practices. Thus, fit between strategies, practices, and culture is critical to success (G. Stoney Alder, 2020).  

Philosophical assumptions represent the backdrop within which to consider the issues within and between each level of analysis (Thomas N. Garavan et al.,). 

Confucius – Chinese legend.

Confucius’ perception

In East Asia, moral justification for bureaucracy is broadly understood to be based on the work of Confucius and his followers.

Distinctive elements of Confucian ideology include rule of man versus rule of law, distinctive characteristics of good public officials, the nature of moral conventions and practices in governing, the importance of education and merit for public officials, how good officials should deal with those in political power, the logic of civil reciprocity, and the nature of order in society (H. George Frederickson, 2002). 

Confucius management style

Education, it is assumed, brings understanding and knowledge, and with understanding and knowledge the educated person will be moral and behave properly. 

Confucian ideal type, good officials, rather than laws, are the primary instruments of governance. The power derives from moral actions and from example (H. George Frederickson, 2002).

Confucian education tends to emphasise rote learning and memorisation” and that “studying means finding a good teacher and imitating his words and deeds”. Learners are conditioned to accept and respect what the teacher presents as correct (Tan, 2015). 

Han Fei – Chinese legend.

Han’s perception

Han Fei had the opposite perception to Confucius. In his opinion, people obey the law because they are afraid of punishment. If we want to manage people, we should use bonuses and punishment.

Han Fei may well has been genuinely concerned about the urgency of brining about political order and a measure of socioeconomic security for all. Han Fei’s philosophical elaborations on the ruler’s position are largely concentrated in the “Brandishing Authority” (Yuri Pines, 2013). 

Han’s management style

First, If we want to manage people, we should use bonuses and punishment. If someone contributes meaningfully to your organisation, we should reward them. If someone breaks the rules, we should punish them. 

Second, If we want to manage people, we should do 3 important activities. We should set up rules. We should empower the managers. We should teach managerial techniques to our managers.

XY theory

From McGregor idea, Managers make assumptions about employees in work organizations, even if they are unaware of doing so. Two broad categories of managerial assumptions can be identified: a pessimistic view (Theory X), and a more optimistic view (Theory Y) (Richard E. Kopelman et al., 2012). Managerial work behaviors (or practices) ultimately reflect a manager’s fundamental assumptions about people (Lawter et al., 2015).

From the review part of (Lawter et al., 2015; Richard E. Kopelman et al., 2008), we have the following assumption. 

• Theory X

X manager Perception: (a) employees are lazy and try to avoid work whenever possible; (b) employees are inherently irresponsible, incapable of self-direction and autonomous work behaviour; (c) most employees have little to contribute intellectually to the operation of an enterprise.

Management style: closely monitor work behaviour; providing detailed instructions; and reducing the scope of work to match the limited abilities of “hired hands”. 

• Theory Y

Y manager Perception: (a) employees not inherently lazy, they can find work enjoyable, and under suitable conditions, experience motivation and fulfillment; (b) employees are capable of self-direction and self-control, they are not inherently irresponsible; and (c) employees are capable of providing important ideas/suggestions that will improve organizational effectiveness.

Management style: Managers provide objectives and rewards and the opportunity to participate in decision making, personal and organizational goals. 

Managers with a positive view of human nature will act in accordance with these beliefs, and will show higher levels of Y-type behaviors (Lawter et al., 2015). 

Unitarist philosophy

Michael Armstrong (2006) said: The HRM approach to employee relations is unitarist not pluralist, it is believed that employees share the same interests as employers. In the words of Gennard and Judge (1997), organizations are assumed to be ‘harmonious and integrated, all employees sharing the organisational goals and working as members of one team’.

Strategy and workers

Corporate level: Scope of an organization, how to run, resources allocate to different operations.

Business strategy: How to compete, which product/services should be developed, how to meet customers needs.

Operational strategy (HR strategy included): at the functional level, enables an organization to achieve the higher level strategies.

The summary below is based on the research of Raymond E. Miles et al., (1978).

There are three strategic types, which are Defenders, Analyzers, and Prospectors.

The Defender:

• The Defender aims to maintain a stable form of organisation, so Defenders tend to ignore developments and trends outside of their domains.
• Defender invests a great deal of resources in solving its engineering problem: how to produce and distribute goods or services as efficiently as possible. 
• Defender focuses on highly cost-efficient. 

HRM for the defender:

• Top-management group heavily dominated by production and cost-control specialists. 
• Promotions from within. 
• High degree of formalization.
• Reward system favours production and finance. 
• Organisational performance measured against previous years. 

The Prospectors:

The Prospectors are almost the opposite of the Defender. Prospector’s prime capability is that of finding and exploiting new product and market opportunities.

HRM for the prospectors:

• This type of organisation invests heavily in workers who scan the environment for potential opportunities. 
• The Prospector requires flexible in its administrative system 
• Prospector’s administrative system must be able to deploy and coordinate resources among numerous decentralized units and projects rather than to plan and control the operations of the entire organization centrally. 
• Product or project structures characterized by a low degree of formalization. 
• Key managers may be hired from outside as well as promoted from within.
• Organisational performance measured against important competitors.
• Reward system favors marketing and research and development. 

The Analysers:

The Analyser is a unique combination of the Prospector and Defender types. 

A true Analyser is an organisation that attempts to minimise risk while maximising the opportunity for profit. 

HRM for the analyser:

• Core workers work in an influential applied research group, this group develops solutions that match the organisation’s existing technological capabilities with the new products desired by product managers. 
• Performance appraisal based on both effectiveness and efficiency measures.
• Most rewards to marketing and engineering. 

Fiza Amjad et al., underlied strategies for enhancing “organisational sustainability”.  The term sustainability can be defined as “the development to meet the current needs of the people effectively without compromising the future needs of the next generations”. 

The authors found significant effects of GHRM practices, i.e. (training and development, performance appraisal, and reward and compensation), on Organizational Sustainability. 

REFERENCES

. Fiza Amjad, Waseem Abbas, Muhammad Zia-UR-Rehman, Sajjad Ahmad Baig, Ayesha Khan, Hakeem-ur- Rehman (2020). Effect of green human resource management practices
on organizational sustainability: the mediating role of environmental and employee performance. Environmental Science and Pollution Research. Doi: 10.1007/s11356-020-11307-9. 

. Raymond E. Miles, Charles C. Snow, Alan D. Meyer, Henry J. Coleman (1978). Organizational Strategy, Structure, and Process. Academy of Management Review. 

B. Practice

1. Job Design

Jobs are what workers do at work. characteristics of individual jobs likely to impact on employee job satisfaction and performance (David Morrison et al., 2005). 

Job design is concerned with the activities of workers, their duties, the tasks required to perform their work, and how those tasks and duties are structured and scheduled (Kevin Daniels et al., 2017).

Job design is a process which aims to improve the job contents. Job redesign is the means through which job characteristics can be changed to improve job quality. Job design is concerned with the activities of workers, their duties, the tasks required to perform their work, and how those tasks and duties are structured and scheduled (Kevin Daniels et al., 2017). 

HR managers assess the content of jobs, and introduce changes in job characteristics. With the job design process, an organization expects that jobs fit to its workers’ expectations and organization’s requirements. 

For example,  In our own work on job design,we proposed that enriched work was advantageous so long as those who performed it had the requisite skills, had at least moderately strong personal needs for growth and learning, and were generally satisfied with their pay, co-workers, and supervisors (Greg R. Oldham et al., 2010). The jobs must provide active learning opportunities and it is increased job control that provides a key role in facilitating such opportunities  (David Morrison et al., 2005).

Frederick Herzberg’s revolutionary approach to job design which specified that, to motivate employees to do good work, jobs should be enriched rather than simplified. Work should be designed and managed to foster responsibility, achievement, growth in competence, recognition, and advancement (Greg R. Oldham and J. Richard Hackman, 2010).

REFERENCES

. David Morrison, John Cordery, Antonia Girardi, Roy Payne (2005). Job design, opportunities for skill utilization, and intrinsic job satisfaction.  European Journal of Work and Organisational Psychology, No 14.

. Greg R. Oldham, J. Richard Hackman (2010). Not what it was and not what it will be: The future of job design research. Journal of Organizational Behavior, No 31. 

. Kevin Daniels, Cigdem Gedikli, David Watson, Antonina Semkina & Oluwafunmilayo Vaughn (2017) Job design, employment practices and well-being: a systematic review of intervention studies, Ergonomics, 60:9, 1177-1196.

2. Job Analysis

Job analysis is a fundamental tool that can be used in every phase of employment research and administration (Cascio & Aguinis, 2005). The practices of proactive job analysis were strongly related to organizational performance(C.M. Siddique, 2014). Job analysis concerns different aspects of jobs. The main purpose of job analysis is to better understand the jobs and people who perform jobs. Job analysis provides a rich source of information about jobs and jobholders that HR professionals use to develop such important documents as ‘job description’, ‘job specification’ (C.M. Siddique, 2014). We use job analysis data for the development of selection and staffing, performance management, training and development, performance appraisal, compensation and benefits, employment equity and affirmative action, and many other human resource management systems.

Application of job analysis

– Recruitment and selection

The information from job analysis let us know the workers characteristics required for job performance. Characteristics required for job performance refer to knowledge, skill, ability, and other  characteristics (KSAOs) that a person needs for a job. Beside, the job description is usually present in the job advertisement.

– Training

Companies that regularly conduct job analysis possess a much better knowledge of their employees’ strengths and limitations, and can take timely corrective action to improve any deficiencies in their skills and job behavior (Clifford, 1994). With information from job analysis, the training program must provide the necessary competencies.

– Performance appraisal

Performance has been defined as “the degree to which the level of productivity of an individual employee meets the firm’s performance standards”. The information from job analysis can help a company in defining the tasks to be performed as well as the timelines for performing them (C.M. Siddique, 2014).

Type of job analysis

a) Traditional job analysis is concerned with describing the requirements needed to perform the work activities and associated worker requirements that characterize the representative or prototypical job incumbent (Juan I. Sancheza, Edward L. Levine, 2009). 

So, from the traditional view, job analysis has two different purposes.
+)  The first purpose of job analysis is to describe the job’s contents.
+)  The second purpose of job analysis is to acknowledge the workers characteristics required for job performance. Characteristics required for job performance refer to knowledge, skill, ability, and other  characteristics (KSAOs) that are needed for jobs (Juan I. Sancheza, Edward L. Levine, 2009).

b) Contemporary job analysis tends to identify the relationships between the situation, the behavior of workers, and the consequences of a particular behavior. Today, job analysis methods focus on the links between a job and the personality characteristics required for a job. Contemporary job analysis ideally attempts to open up a conduit for strategy execution, so that the employee learns how to incorporate strategic concerns into day-to-day behavior.

Best practice

– All persons involved in the job analysis process should receive appropriate training.
– Sources of job-analysis information were classified into three groupings: (1) incumbents, (2) analysts, and (3) technical experts.
 Incumbent sources referred to job information derived from job holders (Erich C. Dierdorff and Mark A. Wilson, 2003)
– We can use questionnaires or checklists to certain standardized quantitative methods, such as positional analysis questionnaires, functional job analysis, and semi-structured, qualitative methods 
– When we analyze information, we need to eliminate unnecessary job requirements, areas of conflict or dissatisfaction

REFERENCES
. Erich C. Dierdorff and Mark A. Wilson (2003). A Meta-Analysis of Job Analysis Reliability. Journal of Applied Psychology, Vol 88.
. Juan I. Sancheza, Edward L. Levine (2009).  What is (or should be) the difference between competency modeling and
 traditional job analysis?. Human Resource Management Review, No 19.. Greg R. Oldham and J. Richard Hackman (2010). Not what it was and not what it will be: The future of job design research. Journal of Organizational Behavior. 31, 463–479. Doi: 10.1002/job.678.
. C.M. Siddique (2014).  Job analysis: a strategic human resource management practice. Int. J. of Human Resource Management, 15:1. 

3. Recruitment and selection

Recruitment and selection are two important activities of a hiring process.

Recruitment is a process to attract people who meet the requirements. It is the process that provides the organization with a pool of qualified job candidates from which to choose.

Selection is the process of picking or choosing the right candidate, who is most suitable for a vacant job position in an organisation.

3.1. Recruitment

A recruitment aim to attract potential candidates from a pool of candidates. The potential candidates should be qualified to take the job. If you do not want to think too much, in this process, we build and post a job advertisement. If you want to think more, you can think about rewards and marketing campaigns before posting a job advertisement. 

When we want to attract a good worker to our organisation, the first we need to think is right pack of benefits. A qualified candidate likely has multiple choices, so this person may not work for a company with poor rewards. We will talk about rewards in its own section. 

A marketing campaign is really important. We may provide good benefits to our employees, but potential candidates do not know our offers. Big companies usually have many HR marketing campaigns a year, so the attraction force is strong. 

Workers likely applies for a job after they sees job advertisements. Marketing campaigns are not enough, we still need to write and post a job advertisement in the right place to attract potential candidates. Most job advertisements provide the reader the following information: Company name and logo, job title, briefly describe the job, job content (job description), job requirement (job specification), reward packet (may include), submission guide. The job advertisement structure varies, but so many job advertisements just provide the above information from top to bottom. 

This part ends with the source of candidates. From the theory, we have internal sources and external sources. External sources mention candidates from the labour market, while internal sources mention current workers. Each source has its own advantages and disadvantages. The following table indicates the main advantages and disadvantages of each recruitment source.   

	Advantages	Disadvantages
Internal Candidate	– Rewards contributions of current staff – Can be cost effective, as opposed to using a traditional recruitment strategy – Can improve moraleKnowing the past performance of the candidate can assist in knowing if they meet the criteria	– Can produce inbreeding, which may reduce diversity and difference perspectives – May cause political infighting between people to obtain the promotions – Can create bad feelings if an internal candidate applies for a job and doesn’t get it
External Candidates	– Brings new talent into the company – Can help an organisation obtain diversity goals – New ideas and insight brought into the company	– Implementation of recruitment strategy can be expensive – Can cause morale problems for internal candidates – Can take longer for training and orientation

3.2. Selection

From this process, employers make a choice between candidates. A selection process may include the following steps: criteria development, resumes screening, interviews, tests, and final decision.

– Criteria development

This step aims to find which skills, abilities, and personal characteristics are required to be successful at any given job. After we finish this step, we specify the knowledge, skills, abilities, and other personal characteristics (KSAOs) that make a person successful on the job. The following example indicates some selection criteria. 

Example of selection criteria:
1. Two years of experience
2. A bachelor degree in business
3. Problem-solving ability
4. Conflict-management ability
5. Score of at least a 7.0 on IELTS test

– Resumes screening

In this step, we compare each candidates’ ability against selection criteria. The comparison aims to eliminate weak candidates who do not meet the selection criteria. Today, many computer programs can help a lot.

– Test administration

So many organizations conduct administration tests after the resume screening. A variety of tests may be given upon successful completion of an interview. These employ ment tests can gauge a person’s KSAOs in relation to another candidate. The major categories of tests include the following:

1. Cognitive ability tests (measure reasoning skills, math skills, and verbal skills)

2. Personality tests

3. Physical ability tests

4. Job knowledge tests

5. Work sample

– Interview

After the HR manager and/or manager have determined which applications meet the minimum criteria, he or she must select those people to be interviewed. Most people do not have time to review twenty or thirty candidates, so the field is sometimes narrowed even further with a phone interview.

– Final decision

In this step, we compare candidates in some ways to find the best for our organisation. In general, each assessment step has its own results, and we need to combine the results in a particular way. 

4. Rewards

Most of us, no matter how much we like our jobs, would not do them without benefits. Benefits can include pay, health-care benefits, and other benefits. “Pay (benefits give to employees) is important both in its effect on employees and on account of its cost, organisations need to plan what they will pay employees in each job”.

Employees realize that pay will lead to some security in living, recognition by peers, and status in his or her professional group (Abdelghafour Al-Zawahreh, Faisal Al-Madi, 2012). 

Today, so many organisations use total rewards instead of compensation and benefits or pay.

Total rewards

According to Crystal Hoole, Gabi Hotz (2016), total rewards can be described as the sum of the values of each element of an employee’s reward package and may include everything that employees view as important and of value within their jobs.

A firm’s entire employee value proposition, including direct and indirect financial rewards, positive characteristics of the work itself, career opportunities in the firm, social activities associated with the workplace, and a variety of other conveniences and services provided by the employer. 

Total rewards include: (1) base pay, (2) performance and career management, (3) contingency pay, (4) quality working environment, (5) benefits and (6) work–home integration. 

4.1. Goals of a Compensation Plan

First, the compensation package should be positive enough to attract the best people for the job. An organization that does not pay as well as others within the same industry will likely not be able to attract the best candidates, resulting in a poorer overall company performance.

Second, once the best employees and talent come to work for your organization, you want the compensation to be competitive enough to motivate people to stay with your organization.

Third, compensation can be used to improve morale, motivation, and satisfaction among employees. If employees are not satisfied, this can result not only in higher turnover but also in poor quality of work for those employees who do stay. A proper compensation plan can also increase loyalty in the organization.

Finally, pay systems can also be used to reward individual or team performance and encourage employees to work at their own peak performance.

4.2. Types of PayWe can divide our total pay system into three categories: pay, incentives, and other types of compensation. Pay is the hourly, weekly, or monthly salary an employee earns. An incentive, often called a pay-for-performance incentive, is given for meeting certain performance standards, such as meeting sales targets.

4.3. Pay Theories: equity theory

According to Abdelghafour Al-Zawahreh and Faisal Al-Madi (2012), what motivates people to work? According to equity theory, it is the perception of equitability and in equitability. Equity theory focuses on two sides: the input and the outcome. An employee compares his or her job’s inputs with an outcomes ratio. If the employee perceives inequality, he or she he will act to correct the inequity. The employee may lower productivity or reduce the quality of their job.

Inputs: Education, intelligence, experience, training,Skills, seniority, age, sex, ethnic background, Social status, job effort, personal appearance, health,spouse’s characteristics.

Outcomes: Pay, intrinsic rewards, satisfying supervision, Seniority benefits, fringe benefits, job status, Status symbols, job perquisites, poor working conditions, monotony, fate, uncertainty. 

According to Crystal Hoole, Gabi Hotz (2016), Employees want to see a direct correlation between what they put into the organization and what they receive from it. 

In summary, equity theory concerned with the relational satisfaction employees get from pay and inputs they provide to the organization. People will evaluate their own compensation by comparing their compensation to others compensation and their inputs to others inputs.

For example:

Your monthly salary is 15 million Dollars (maybe Zimbabwe dollar). You receive this amount because you can make 15 products per hour. When you compare your salary with your coworker, you realize that your coworker salary is 20M. What do you think about your coworker’s salary? Actually, you may face several cases below.

Case 1

You	Your Coworker
15M (your Outcome) Make 15 products per hour (your Input)	20M (coworker Outcome) Make 20 products per hour

Case 2

You	Your Coworker
15M (your Outcome) Make 15 products per hour (your Input)	20M (coworker Outcome) Make 25 products per hour

Case 3

You	Your Coworker
15M (your Outcome)  Make 15 products per hour (your Input)	20M (coworker Outcome) Make 15 products per hour

What do you think about each case?

Normally, people will look at their own compensation packages and at their own inputs (the work performed) and compare that with others. If they perceive this to be unfair, in that another person is paid more but they believe that person is doing less work, motivational issues can occur. In HR, we need to look at two factors related to pay equity: internal pay equity and external pay equity.

Internal equity theory: Internal pay equity focuses on employees within the same organization. Within the same organization, employees may look at higher level jobs, lower-level jobs, and years with the organization to make their decision on pay equity.

People first think  about their own Outcome and Input,  and then they think about their coworkers’ Outcome and Input. Outcome means something you get from your organization, and Input means something you give to your organization. Normally, people are happy if their own ratio between outcome and input is almost the same as the coworker ratio.

External pay equity: External pay equity refers to what other people in similar organizations are being paid for a similar job. From this theory, people compare the ratio between outcome and input with other people in similar organizations.

When we make pay decision, we must do something so we can achieve both Internal equity and External pay equity

4.4. Job Evaluation Systems

The value of the job is a major factor when determining pay. Job evaluation is defined as the process of determining the relative worth of jobs to determine pay structure.

One of the simplest methods, used by smaller companies or within individual departments, is a job ranking system. In this type of evaluation, job titles are listed and ranked in order of importance to the organization.

In a job classification system, every job is classified and grouped based on the knowledge and skills required for the job, years of experience, and amount of authority for that job.

Sometimes we can not directly compare our inputs, we must use Job Evaluation Systems. From this system, we can calculate the value of jobs.

For example: We can calculate a job’s value based on job requirements.

Sale representative	Head of marketing department
Do not need experience            50	Need at least 3 years experience  150
Need BSC                                100	MBA                                     200
Simple job                                100	Complicated job                            200

After conducting job evaluation, we can make a pay decision. Sales representative worth 250 points, head of marketing department worth 550 points. If each point is worth 2 Dollars per month, the sales representative will receive 500 Dollars per month, and the head of the marketing department will receive 1100 Dollars per month.

Play the game below, and you will learn more about Job Evaluation.

4.5. Pay Systems

Once you have performed a job evaluation, you can move to the last step, which we call pay grading. This is the process of setting the pay scale for specific jobs or types of jobs. The popular method to pay grade is to develop a variety of pay grade levels.

REFERENCES

.  Abdelghafour Al-Zawahreh, Faisal Al-Madi (2012). The Utility of Equity Theory in Enhancing 
Organizational Effectiveness. European Journal of Economics, Finance and Administrative Sciences, 46.

. Crystal Hoole, Gabi Hotz (2016). The impact of a total reward system of work engagement. SA Journal of Industrial Psychology.

5a. Training

What is training? And why do organizations need training courses?

A training course is a process which provides useful information to the learner.

Human resources and organizational knowledge are two of the main sources of sustainable competitive advantages for the company (Antonio Arago ́n-Sa ́nchez et al., 2003). 

Employees get the benefits from the training course, because the increased productivity to which training leads will also lead to increased wages.

Any effective company has training in place to make sure employees can perform their job. Although the right person can be hired, the right person usually needs training in how your company does things.

Lack of training can result in lost productivity, lost customers, and poor relationships between employees and managers. It can also result in dissatisfaction, which means retention problems and high turnover. All these end up being direct costs to the organisation.

Orientation – Special kind of training 

Orientation is a process used for welcoming a new employee into the organization.

A well-done orientation makes for a better prepared employee, which means less time having to teach the employee. Starting a new job can be stressful, so the main goal of an orientation is to reduce the stress and anxiety people feel when going into a familiar situation. If employees know from the start what the expectations are, they tend to perform better. Likewise, if employees learn the values and attitudes of the organization from the beginning, there is a higher chance of a successful tenure at the company.

If an orientation is done right, it can help get the employee up to speed on various policies and procedures, so the employee can start working right away. It can also be a way to ensure all hiring paperwork is filled out correctly, so the employee is paid on time.

Employee turnover tends to be higher when employees don’t feel valued or are not given the tools to perform. An employee orientation can show that the organisation values the employee and provides tools necessary for a successful entry.

Usually, the new employee goes through an orientation, and then he or she will receive in-house training on job-specific areas, next, the employee should be assigned a mentor, and then, as comfort with the job duties grows, employees may engage in external training.

5.1. Methods in training an employee

From the review of Barbara Ostrowski Martin et al., (2014), 13 training methods were identified: case study, games-based training, internship, job rotation, job shadowing, lecture, mentoring and apprenticeship, programmed instruction, role-modeling, role play, simulation, stimulus-based training, and team-training.

The following sections describe some popular training methods. 

5.1.1. Coaching &  Mentoring (on the job)

Coaching and mentoring refer to a partnership between employees with senior employees. The research results show that “Training performed inside the company with outside trainers affects several results measurements positively, but on-the-job training influences an even higher number of results positively” (Antonio Arago ́n-Sa ́nchez et al., 2003). 

On-the-job coach refers to an approved person training an employee on the skills necessary to complete tasks. A manager or someone with experience shows the employee how to perform the actual job. The selection of an on-the-job coach can be done in a variety of ways, but usually the coach is selected based on personality, skills, and knowledge. This type of training is normally facilitated in-house. The disadvantage of this training revolves around the person delivering the training. If he or she is not a good communicator, the training may not work. Likewise, if this person has other things to do, he or she may not spend as much time required to train the person and provide guidance.

Mentoring is a process by which an employee can be trained and developed by an experienced person. Normally, mentoring is used as a continuing method to train and develop an employee. 

A mentor is a trusted, experienced advisor who has direct investment in the development of an employee. A mentor may be a supervisor, but often a mentor is a colleague who has the experience and personality to help guide someone through processes. While mentoring may occur informally, a mentorship program can help ensure the new employee not only feels welcomed but is paired up with someone who already knows the ropes and can help guide the new employee through any on-the-job challenges. One disadvantage of this type of training is possible communication style and personality conflict. It can also create overdependence in the mentee or micromanagement by the mentor. This is more different than on-the-job coaching, which tends to be short term and focuses on the skills needed to perform a particular job.

5.1.2. Computer based training

Computer-based training delivery has a number of names. It could be called e-learning or Internet-based, web-based, or technology-based learning. No matter what it is called, any web-based training involves the use of technology to facilitate training. From this method, trainees explore a variety of experiences. 

5.1.3. Team-training

Intended exclusively for groups of individuals that behave interactively, to either improve mutual knowledge within a team or to train the team on a team specific skill (Barbara Ostrowski Martin et al., 2014).

5.2. Training contents

5.2.1. Technological training 

This type of training means to teach the new employee the technological aspects of the job. 

For example, in a retail environment, technical training might include teaching someone how to use the computer system to ring up customers. In a sales position, it might include showing someone how to use the customer relationship management (CRM) system to find new prospects.

5.2.2. Quality training

Quality training refers to familiarising employees with the means of preventing, detecting, and eliminating non quality items, usually in an organisation that produces a product.

Training employees on quality standards, including ISO standards, can give them a competitive advantage. It can result in cost savings in production as well as provide an edge in marketing of the quality-controlled products.

5.2.3. Skills training

Skills training as the things you actually need to know to perform your job. A cashier needs to know not only the technology to ring someone up but what to do if something is priced wrong. This training includes proficiencies needed to actually perform the job.

For example, an administrative assistant might be trained in how to answer the phone, while a salesperson at Best Buy might be trained in assessment of customer needs and on how to offer the customer information to make a buying decision.

5.2.4. Job content training

In some jobs, professional training must be done on an ongoing basis. Professional training is a type of training required to be up to date in one’s own professional field. For example, tax laws change often, and as a result, an accountant must receive yearly professional training on new tax codes.

5.2.5. Team training

Team training is a process that empowers teams to improve decision making, problem solving, and team-development skills to achieve business results. Often this type of training can occur after an organization has been restructured and new people are working together or perhaps after a merger or acquisition.

5.3. Planning and implementing an training program

Step 1, Determining needs and Setting objectives

Needs assessments are conducted to analyze problem areas and to identify training contents.

This part aims to figure out what kind of training is needed in an organization. The HR specialist can ask workers, managers, or assess the performance results to find the training needs. If an untrained person is poor in a particular skill, special training for that skill may be needed.

Step 2, Make training plans

+ Determining the training objectives. What needs to be taught? How will you sequence the information?  Objectives are set after the needs have been determined from the previous step. Objectives may include knowledge, skills, and behavior which learners learn from the course, and the actual results to the business like production, quality, turnover, absenteeism, morale, sales, profits, and return on investment.   

+ Selecting participants. Who will be part of this training? A mix of roles may be acceptable, for instance accounting people and marketing people can join one course. 

+ Selecting appropriate instructors. 

+ Estimate the budget. 

+ Determining the best schedule & facility?

Step 3, Implementing an training program

+ Communication: How will employees know the training is available to them?

+ Coordinating: Sometimes the instructor coordinates as well as teaches. In other situations a coordinator does not do the teaching.

Step 4, Evaluating the training program

Evaluating the effectiveness of a training program is a process aimed to determine the effectiveness of it. “In evaluations, we can borrow techniques”. 

There are many ways to determine the effectiveness of a training program, for instance asking the participants (what are all the possible subjects that will help our people to do their best?), test the participants, analyze performance. 

Among different models for carrying out training evaluation, Kirkpatrick’s Model can be highlighted.  

From the research of  Antonio Arago ́n-Sa ́nchez et al., (2003), the evaluating model includes four levels. The first level measures workers’ opinion and the degree of satisfaction with the training activity (Evaluating Reaction). The second level corresponds to learning evaluation, that is, the extent to which workers have advanced in skills, knowledge or attitude after the training activity (Evaluating learning). The third level evaluates behaviour, focusing on the changes in behavior after taking training activities (Evaluating behavior). The fourth and last level evaluates the effects of training on business results: productivity increase, sales increase, cost reduction, quality improvement or decrease in absenteeism rates and labour turnover (Evaluating results). 

Evaluating reaction Reaction: May best be defined as how well the trainees liked a particular training program.

Evaluating learning: This evaluation aims to answer the question: “What principles, facts and techniques were understood and absorbed by the training program?”. For example, Directors can set up before and after situations in which each conferee demonstrates whether or not they know the principles and techniques being taught. Sometimes, it is possible to find a standardized test to assess the learning aspect. 

Evaluation behavior: This assessment aims to indicate what changes in behavior took place after learners attended a particular course. The assessment is based on the described job behavior of their learners. For instance, subordinates were asked to indicate what changes in behavior of the boss after a training course. Post-training appraisal should be made a few months after the training. 

Evaluating results: Acknowledge the link between training provided by the trainer and results. The result of a training program may include reduction of costs, reduction of turnover and absenteeism, reduction of grievances, increase in quality and quantity of production, or improved morale. 

REFERENCES

. Antonio Arago ́n-Sa ́nchez, Isabel Barba-Arago ́n and Raquel Sanz-Valle (2003). Effects of training on business results. Int. J. of Human Resource Management. 14(6) 956–980.

.  Barbara Ostrowski Martin, Klodiana Kolomitro, and Tony C. M. Lam (2014). Training Methods: A Review and Analysis.  Human Resource Development Review, Vol. 13.

. Donald L. Kirkpatrick (1979). Techniques for evaluating training programs. Training and Development Journal.

5b. Development

What does development mean?

Biology: Developmental biology is the study of the process by which animals and plants grow and develop. Development concerns the growth of the living creatures. In mammal life, it is the growth from fertilized eggs.   

Business: Development of an organization’s performance capacity and capability. It refers to new products developed and brought to market, enhanced revenues and market share, increased production, or better customer service, and so on. Although human resources are important, business development concerns a lot about other resources. 

HRM:  Development refers to the personal and professional advancement of employees’ knowledge, skills, and competencies. 

HRD is concerned with organized series of learning activities. HRD focuses on training, team building and self learning. The purposes of HRD are resource maximisation, productivity enhancement and realising the full potential of employees towards achieving organisational goals (Thomas N. Garavan et al.,). A HRD process aims to maintain and retain workers for an organization.

In a HRD process, HR managers are involved in linking HRD issues with the business requirement. In a HRD process, HR managers may help employees focus their future career paths, understand their strengths and weaknesses, develop personal ability to meet their goal and organizational goals, creatie of learning environment through HRD tools. In general, HRD binds the individual to the organisation. 

For example, a good manager may need the following abilities: self control, impartiality, honesty, self-confidence, friendliness, optimism, vision, open-mindedness, flexibility, and resourcefulness. This person has improved all relevant abilities from the HRD programs.  

A successful development program needs facilities, motivation, and training courses. Learner motivation is an important part of personal development. Individual development likely depends on some factors like learner attitudes and beliefs, job satisfaction, motivation and commitment. 

Succession planning is a human development technique that can develop future leaders for the organization and encourage employees to participate in learning and development opportunities. Luna (2012) defined succession planning as “a long-term systemic process of determining goals, needs, and roles within an organization and preparing individuals or employee groups for responsibilities relative to work needed within an organization”. When organizations invest in their employees, employees will focus their efforts to achieve organizational goals. Succession planning relates to employee performance (Zulqurnain Ali et al., 2019). 

REFERENCES

. Zulqurnain Ali, Babak Mahmood, Aqsa Mehreen (2019). Linking succession planning to employee performance: The mediating roles of career development and performance appraisal. Australian Journal of Career Development. 28(2): 112–121. 

. Thomas N. Garavan, David McGuire, David O’Donnell. Exploring Human Resource Development: A Levels of Analysis Approach.

. Thomas N. Garavan, Michael Morley, Patrick Gunnigle Eammon Collins, (2001), “Human capital accumulation: the role of human resource development”, Journal of European Industrial Training, Vol. 25 Iss 2/3/4 pp. 48 – 68

. Liker, J.K. and Hoseus, M. (xxxx) ‘Human Resource development in Toyota culture’, Int. J. Human Resources Development and Management, Vol. x, No. x, pp.xxx–xxx. 

. Previously published in Advances in Developing Human Resources, 2014, vol. 13(3), pp. 386-405 http://adh.sagepub.com/content/ 13/3/386.full.pdf+html

6. Performance appraisal

6.1. What is performance appraisal  

A  performance appraisal system is a systematic way to examine how well an employee is performing in his or her job. Performance appraisal can also be called performance evaluations , performance assessments, or employee appraisals.

Performance appraisal is one of the most important processes in human resource management, because it has a great effect on both the financial and program components of any organization. 

One of the basic and major needs in any organization is to evaluate its employee’s performance continuously and continually to find out whether they improve or not and know their situation in the organization. Employees want to know how well they perform on their jobs (Mostafa Jafari et al., 2009). 

Performance appraisal refers to a formal process, which occurs infrequently, by which employees are evaluated by some judge (typically a supervisor) who assesses the employee’s performance along a given set of dimensions, assigns a score to that assessment, and then usually informs the employee of his or her formal rating. Performance management refers to the wide variety of activities, policies, procedures, and interventions designed to help employees to improve their performance. These programs begin with performance appraisals but also include feedback, goal setting, and training, as well as reward systems. Performance ratings are usually obtained from supervisors, but other sources might be used (peers, supervisors, and subordinates) (Angelo S. DeNisi, and Kevin R. Murphy, 2017).

Traditional performance appraisals assess past performance.

Contemporary performance appraisals (performance management) comparing the personal performance associated company goals in short period which aims to fin individual solution to improve his or her performance in time.

6.2. Performance measurement

The introduction of a performance measurement system is based on a three-stage process: design, implementation and use (Panagiotis et al., 2011).

6.2.1. Design stage

6.2.1.1. Developed performance measurement for Organization or SBU

The balanced scorecard is one of the most popular approaches developed in the field of performance measurement (Panagiotis et al., 2011). BSC is a strategic management tool, it illustrates the linkage between measures and strategies. 

Financial: How should we appear to our shareholders? Example of measurement: retention,  contracts renewed, new contracts per period, market share, satisfaction, …

Customer: How should we appear to our customers? Example of measurement: customer satisfaction.

Internal business processes: What processes must we be good at? Example of measurement: customer satisfaction (this measurement can be used in the customer perspective and the internal process perspective).

Learning and growth: How can we sustain our ability to change and improve? Example of measurement: training times, skills and knowledge, …

From the research of Bruce Gurd, and Tian Gao (2008). The BSC is a conceptual tool, and the four perspectives were never considered as a “strait-jacket”. Most organizations modified the four perspectives according to their institution’s current conditions and different understanding. 

6.2.1.2. Developed performance measurement for Departments

Each department has its own responsibility. In general, the sum of all departments’ responsibility must equal the total organization’s responsibility. The formula above is a principle to set up departments’ goals.

6.2.1.3. Developed performance measurement for Individuals 

Each worker has his or her own responsibility. The personal responsibility is indicated in the job description. A job description is a description of what an organization wants an employee in a particular job to accomplish. From the expression above, the  individual’s key job responsibilities are based on the job descriptions. 

Job performance is a function of two different things: what the person accomplishes and how the person goes about doing the job. Probably all of us have encountered people who were excellent at one and failures at the other. Consider the high-pressure salesman who achieves quota by making unrealistic promises, badgering prospects into submission, and lying about his competitors’ products. Great results, unacceptable behaviors. Or consider the computer programmer who works long hours, reads all of the technical journals, takes advanced classes,

but this person can’t write code that operates properly. The computer programmer exhibits all of the right behaviors but she doesn’t deliver the results.

For an organization to be successful, both behaviors and results are important. People have to get the job done, deliver the goods, bring home the bacon results. And they have to do that job in a way that reflects the organization’s expectations about how team members will act toward each other and outsiders’ behaviors.

Method for examining the effectiveness of performance appraisal systems, which consists of three main measurement criteria, i.e., utilization (purposefulness, or behavior), qualitative (fairness), and quantitative (accuracy) (Iqbal MZ et al., 2019). 

When we develop performance measurement for Individuals, we need to remember that a good performance measurement can measure results, behavior, and ASKs. 

6.2.1.4. Choice appropriate assessment methods

i) Absolute Standards 

Absolute standards means that employees compare to a standard, and their evaluation is independent of any other employee in a group. The graphic rating scale is the most commonly used method. 

The graphic rating scale, a behavioural method, is perhaps the most popular choice for performance evaluations. This type of evaluation lists traits required for the job and asks the source to rate the individual on each attribute.

Normally, the graphic rating scale form has some rating scales that asks whether the performance failed to meet expectations (one)/met some expectations (two)/met all expectations (three)/exceeded expectations(four)/far exceeded expectations(five). 

For example: Our rating scale is numerical: one, two, three, four, and five, with five being the highest on the scale. Sally basically did a good job this year. I rate her a five!

ii) Relative Standards

When we use relative standards, Individuals are compared against other individuals. These methods are relative standards rather than absolute measuring devices. The most popular of the relative methods are individual ranking and paired comparison. 

Ranking Method

It is the oldest and simplest method of performance appraisal in which an employee is compared with all others for the purpose of placing order of worth. The employees are ranked from the highest to the lowest or from the best to the worst.

Employees in a particular department are ranked based on their value to the manager or supervisor. This system is a comparative method for performance evaluations. The manager will have a list of all employees and will first choose the most valuable employee and put that name at the top. Then he or she will choose the least valuable employee and put that name at the bottom of the list. With the remaining employees, this process would be repeated. Obviously, there is room for bias with this method, and it may not work well in a larger organization, where managers may not interact with each employee on a day-to-day basis.

Remember:

(i) This method does not tell that how much better or worse one is than another,

(ii) The task of ranking individuals is difficult when a large number of employees are rated, and

(iii) It is very difficult to compare one individual with others having varying behavioural traits.

Paired Comparison

In this method, each employee is compared with other employees on one on one basis, usually based on one trait only.

The rater is provided with a bunch of slips each coining a pair of names, the rater puts a tick mark against the employee whom he considers the better of the two.

iii) Common assessment methods

The MBO (Management by Objectives), is perhaps the most popular choice. 

Results include actual job outputs, countable products, measurable outcomes and accomplishments, and objectives achieved. Results deal with what the person achieved.

In your company’s performance appraisal system, objectives may be called any number of things: responsibilities, accountabilities, duties, results, outputs, targets, and so on. 

Objective data means facts that are not influenced by opinions.

First, the manager and employee sit down together and develop objectives for the time period. At the end of the performance evaluation period, the manager and employee sit down to compare the goals and the personal achievement.

Example of objectives:

• Job outputs: sales report
• Countable results: sales numbers

Example of assessment: Your sales were 10 percent below the target.

To write objectives, they should be SMART. SMART is an acronym for the five components of an effective goal. An effective result should be:

Specific (S): What is the result that should be achieved? The result should be clear. 

Measurable (M): At the end of the time period, it should be clear if the goal was met or not. Usually a number can be attached to an objective to make it measurable, for example, sell $1,000,000 of new business in the third quarter.

Attainable (A): The objective should not be impossible to attain. It should be challenging, but not impossible.

Result-focused (R): The objective should be tied to the company’s mission and values. Once the objective is made, it should make a difference in the organization as a whole.

Time-oriented (T): The objective should have a reasonable time to be accomplished, but not too much time.

The SMART is a test. We use this method to test individual objectives. If we have a SMART objective, it has been structured properly. 

6.2.1.5. More consideration 

i) Determine how often performance appraisals should be given

We need to determine how often performance appraisals should be given. The advantage to giving an evaluation twice per year, of course, is more feedback and opportunity for employee development. The downside is the time it takes for the manager to write the evaluation and discuss it with the employee. If done well, it could take several hours for just one employee. Depending on your organization’s structure, you may choose one or the other. For example, if most of your managers have five or ten people to manage (this is called span of control), it might be worthwhile to give performance evaluations more than once per year, since the time cost isn’t high.

ii) Determining who should evaluate the performance 

It could be their direct manager (most common method), subordinates, customers or clients, self, and/or peers.

– Managers

Advantages: Usually has extensive knowledge of the employee’s performance and abilities.

Disadvantages: Bias.

– Peers

Advantages:

• Works well when the supervisor doesn’t always directly observe the employee.
• Can bring a different perspective, since peers know the job well.
• If confidential, may create mistrust within the organization.

Disadvantages:

• Relationships can create bias in the review
• If evaluations are tied to pay, this can put both the employee and the peer in an awkward situation.

– Subordinates

Advantages:

• Data gathering can include how well the manager treats employees.
• Can determine if employees feel there is favoritism within their Department.
• Can be used as a self-development tool for managers.
• If nothing changes despite the evaluation, it could create motivational issues among employees.

Disadvantages:

• If confidential, may create mistrust within the organization.
• Subordinates may not understand the “big picture” and rate low as a result.

– Self

Advantages: Self-analysis can help with employee growth.

Disadvantages: In the employee’s interest to inflate his or her own ratings.

– Customers

Advantages:

• Customers often have the best view of employee behavior. 
• Can enhance long-term relationships with the customer by asking for feedback.

Disadvantages: Possible bias.

6.2.2. Implementation stage

Line managers are the main response in the implementation stage. 

6.2.2.1. Clarifying individual assignment 

Appraisal process begins with an individual assignment plan where workers at different levels discuss the upcoming year, set goals, and review the competencies that the organization expects from each department and workers. The organization may also discuss the subordinate’s development needs, rewards and goals. 

6.2.2.2. Managing performance

 Manager manages performance. They help workers to solve performance problems if any arise. Managers also motivate workers.

6.2.2.3. Assessment

The manager evaluates how well the worker has performed, and assigns the appropriate ratings.

6.2.2.4. performance review

Managers and subordinates discuss the evaluation of the individual’s performance.

6.2.3. Use stage

Coming soon …

6.3. Performance Appraisal Error

Organizations frequently use subjective appraisals to evaluate substantial parts of an employees’ job performance. While this may strengthen the setting of incentives as more facets of job performance are evaluated, the opposite may be true when supervisors bias the evaluations according to personal preferences (Johannes Berger et al., 2010). 

The ‘Halo Effect’ (Guilford,1954) is the result of an assessment which is based on one specific criterion that distorts the assessment of others. 

REFERENCES

. Angelo S. DeNisi, Kevin R. Murphy (2017). Performance Appraisal and Performance Management: 100 Years of Progress?. Journal of Applied Psychology, 102 (3): 421–433. Doi: 10.1037/apl0000085.supp.

. Bruce Gurd, and Tian Gao (2008). Lives in the balance: an analysis of the balanced scorecard (BSC) in healthcare organizations. International Journal of Productivity and Performance Management Vol. 57 No. 1, pp. 6-21.

 . Iqbal MZ, Akbar S, Budhwar P (2019) Effectiveness of Performance Appraisal: Evidence on the Utilization Criteria. Journal of Business Research. 101: 285-299. 

. Johannes Berger, Christine Harbring, Dirk Sliwka (2010). Performance Appraisals and the Impact of Forced Distribution: An Experimental Investigation. IZA Discussion Paper No. 5020. 

. Mostafa Jafari, Atieh Bourouni, Roozbeh Hesam Amiri (2009). A New Framework for Selection of the Best Performance Appraisal Method. European Journal of Social Sciences, 7 (3). 

. Paul E. Levy, Jane R. Williams (2004). The Social Context of Performance Appraisal: A Review and Framework for the Future. Journal of Management. 30(6): 881–905. 

. Robert S. Kaplan (2012). The balanced scorecard: comments on balanced scorecard commentaries. Journal of Accounting & Organizational Change Vol. 8 No. 4.

7. HR Plan

Because labor costs are expensive, HR Plans are important for effective enterprises.

I. Definition

The HR Plan decision consists of knowing the number of employees that should be available to work at a given time. An HR plan may include a solution plan (Kibaek Kim, Sanjay Mehrotra, 2015). 

Simply, an HR plan is going to answer the question “How many workers does a company need at a particular time?”. For example, this year the mentioned company needs 10 workers, next year this company needs 15 workers. Some HR plans may include a schedule, for example, we need 10 more workers so we are going to hire 10 workers next month.

	This year	Next year
Salesman	44	50
Manager	4	5

HR definition (Add): A network of individuals working together in an organisation for the purpose of achieving the common goal of the organisation is referred to as a manpower system (Vincent A. Amenaghawon et al., 2020). 

The sum of the labour abilities possessed by all people in a specific scope is human resources, which includes human intelligence, physical strength, knowledge, skills, and so on. (Jinyang Cao, 2022).

7. HR Plan

Because labor costs are expensive, HR Plans are important for effective enterprises.

I. Definition

The HR Plan decision consists of knowing the number of employees that should be available to work at a given time. An HR plan may include a solution plan (Kibaek Kim, Sanjay Mehrotra, 2015). 

Simply, an HR plan is going to answer the question “How many workers does a company need at a particular time?”. For example, the simple HR plan shows that this year the company needs 10 workers, next year this company needs 15 workers. Some HR plans may include a schedule, for example, we need 10 more workers so we are going to hire 10 workers next month.

	This year	Next year
Salesman	44	50
Manager	4	5

II. Process

Planners use different methods to determine the personnel level that is required to cover the organization’s workload. Most of the decisions aim to minimize the labour cost, because under-staffing requires additional workers in order to maintain the desired quality of service, while being overstaffed results in lost wages. 

A HR plan process includes three estimations, which are labour demand, labour supply, and labour need. Labour demand refers to future labour requirements and provides an answer to “How many workers will we need?”. Labour supply refers to the number of staff available at a particular time or period of time based on training, retirement, and promotion or demotion. Labour need refers to the potential gap between the labour demand and the labour supply.

The following example illustrates the HR planning process.  

First step, labour demand estimations

The process begins with identification of the organization’s strategic objectives and labour needs at a particular time. A company may make goods, or provide services to customers, so the strategic objectives simply refer to the quantity of products or services made in a particular period of time.

From the explanation above, the first task aims to answer some or all of the following questions: “What kind of products will we make?”, “What kind of services will we provide to your customer?”, “How many products will we make at a particular time?”, “How many customers will we serve at a particular time?”, and/or “What is our expected revenue”. For instance: A small company is going to make 1,200 products per month at the planning time. 

Next, the planners identify the ability of workers and estimate the labour demand for a particular period of time. Worker ability refers to the quantity of products or services a worker can make per time period (day/month/year). For instance a worker can make 10 products per day. The labour demand is calculated with the formula: Quantity of products or services/worker’s ability.

For instance, a company is going to make 40 products per month at the estimation period, (1,200 products/30 days = 40 products). Because a worker can make 10 products a day, the labour demand is 4 workers (40/10).

Second step, labour supply estimation

This step aims to estimate the number of employees available to work at a given time. Normally, a running business has workers at different departments. For instance, a company has 3 workers at the production department. 

Third step, labour need estimation and solution

This step aims to identify the potential gap between the labour demand and the labour supply and predict solutions needs (if any). The solutions are devised to close the gap, which may include hiring, promotions, transfers, retraining, out-sourcing, training, career planning, remuneration, redundancies, etc. For instance, a company needs 4 workers, but it has 3 workers, so the gap is 1. Because this company needs 1 more worker, the solution plan says that the company needs to hire 1 worker.

III. Workforce demand and supply estimate methods

Modeling methodologies: qualitative, time series, regression models, simulation, optimization, and generic mathematical models (Anahita Safarishahrbijari, 2018). 

a. Qualitative methods

These methods are particularly useful when high‐quality empirical data are not available. Instead, they rely heavily on the experience of engaged experts (Anahita Safarishahrbijari, 2018).

b. Quantitative methods 

Time series modeling methods

Among time series modeling methods, Box–Jenkins, exponential smoothing, vector error correction and Markov modeling.

Statistics and regression method

The uncertain parameters are approximated based on his toric data through a fitting process. 

The example below illustrates a simple regression method.

Year	Worker
2012	7210
2013	7287
2014	7291
2015	7312
2016	7348

The data table shows the association between labor demand and time. The equation (y = 30.1x – 53332) predicts the labour demand each year. 

c. Experimental method

The workforce demand can be predicted based on our marketing plan. A marketing plan shows the HR planner the organization’s strategic objectives (production and/or sale plan). In other words, the marketing plan helps the planner answer the questions like “How many products will we make?” or “How many customers will we serve?”.

Examples.

– The marketing plan shows that a company is going to make 100 products per day. If the planner knows that one worker can make 10 products, this person can find the labour demand equal to 100/10 = 10 workers.

– The marketing plan shows that a company is going to serve 200 customers per day. If the planner knows that one worker can serve 50 customers, this person can find the labour demand equal to 200/50 = 4 workers.

– The marketing plan shows that the expected revenue is 5B. If the planner knows that an average worker can sell 500M , this person can find the labour demand equal to 5B/0.5B = 10 workers.

IV. Markov analysis 

At present, the Markov model has become a very important quantitative analysis technology in human resource forecasting (Jinyang Cao, 2022).

Markov modelrefers to a time series with no after-effect, that is, the state of the sequence in the future is only related to its current state and has nothing to do with its past state (Jinyang Cao, 2022). 

From this method, the employees are classified into exclusive subgroups based on work-related and/or personal characteristics. 

A widespread time series approach is Markov analysis, which models movements among states based on transition probabilities (Jinyang Cao, 2022). For example, the number of employees that move from subgroup i to subgroup j. The Markov model uses the transition probability matrix between states to predict the state of events and their development trends. 

In the classical Markov model for a manpower system (or organisation), the members are assumed to move through a network of states, which may be defined in terms of ranks or position or length of service, each is assumed to belong to one of the states, say S = {1, 2, …, k}, which are exhaustive and mutually exclusive, and movements between states are assumed to be governed by a time-homogeneous transition matrix, P = (pij). 

V. A big company 

A big company may use quantitative models for manpower planning based on Markov theory, but a big company may also use qualitative methods. 

A small company always has a simple structure, so many companies just have the owner and worker so the workforce planning process is very simple. 

A big company has different departments, so the HR plan needs to be made for individual departments.

The HR plan process for a big organization may include the following steps. 

1st Drawing organization’s structure.

2nd, Estimated workforce demand for individual departments.

3rd, Drawing replacement charts, and estimate the labour supply.

4th, Calculate the labour needs.

5th, Make an HR plan for individual departments, and combine the individual plans to make the whole plan.

6th, Make an action plan for individual departments and the whole organization (if any).

REFERENCES

. Vincent A. Amenaghawon, Virtue U. Ekhosuehi, Augustine A. Osagiede (2020). Markov manpower planning models: a review. International Journal of Operational Research.

. Jinyang Cao (2022).  AnAnalysisoftheOptimalAllocationofCoreHumanResourcesin Family Enterprises Based on the Markov Model.  Journal of Mathematics

. Tim De Feyter, Marie-Anne Guerry, Komarudin.  Optimizing cost-effectiveness in a stochastic Markov manpower planning system under control by recruitment.

.  Kibaek Kim, Sanjay Mehrotra (2015). ATwo-StageStochasticIntegerProgrammingApproach to Integrated Sta ng and Scheduling with Application to Nurse Management.

.  Anahita Safarishahrbijari (2018). Workforce forecasting models: A systematic review.  Journal of Forecasting, Vol 15.

.  Silviya Valeva, Mike Hewitt, Barrett W. Thomas (2015). A Matheuristic for Workforce Planning with Employee Learning and Stochastic Demand.

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Electronic performance monitoring (EPM) systems are electronic technologies used to observe, record, and analyze information on employee performance. More frequent supervisory use of EPM is associated with better task performance and OCB (Devasheesh P. Bhave, 2014). Early forms of electronic monitoring include telephone call, computer time accounting, cards to monitor locations, computer file monitoring, screen sharing, video camera (Alder et al., 1997). Since 2000, dramatic advances in information technologies have created an environment in which organizations are able to monitor employees to a greater extent and with greater intensity than was previously possible. For example, portable devices, such as smartphones, capable of collecting large amounts of personal and behavioral data about employees, are ubiquitous today but did not exist in 2000 (Daniel et al., 2020).

Electronic performance support systems (EPSS) is a method to enable human performance through just-in-time learning and task support. This system deliver relevant support information to users while they are performing tasks.The study suggests that provid- ing any kind of EPSS to support task performance is better than having none at all (Frank et al., 2005).

Balanced Scorecard: The measures are a balance between external measures for customers and shareholders and internal measures of business processes, innovation and learning and growth.  The number of software packages for scorecard on the market was growing and exceeds 100 today (Meena Chavan, 2009). Design techniques used for the development of a balanced scorecard are rather poor (Panagiotis et al., 2011).

Electronic recruitment and selection: Nikolaou, I. (2021) discuss the four stages of the recruitment and selection process. The four stages include attraction stage (on-line/internet recruitment and social networking websites), the screening stage (cyber vetting and applicant tracking systems), employee selection stage (asynchronous/digital interview and gamification/games-based assessment), on-boarding and socialization stage.