Essential of human resources management

1.1. Traditional view

Human resources (HR) represent the workforce within an organization - every employee, from entry-level staff to executive leaders. The term “manpower system” extends this idea, emphasizing the collective effort of individuals working in harmony to achieve the organization’s goals. Access and review personal assessment reports. & Add new employees to the system.

A manpower system is dynamic, requiring constant adaptation to changing organizational needs, market trends, and workforce challenges. It reflects not just the people but also the processes and strategies that enable effective teamwork and productivity.

1.1.1. Human Resource Management Goals

HRM is a strategic function designed to maximize the value of an organization’s human capital. Its goals can be broken down as follows:

a. Staffing:

• HRM ensures that the organization has the right people in the right roles.

• This involves workforce planning, analyzing the skills needed, and filling gaps through recruitment and hiring.

b. Motivation:

• Employees who feel valued and supported are more likely to stay engaged and committed.

• HRM implements activities like rewards, recognition, and fostering a positive work culture to motivate workers.

c. Efficiency:

• HRM focuses on productivity by ensuring employees have the tools, training, and support to work effectively.

• HRM focuses on productivity by ensuring employees have the tools, training, and support to work effectively.

1.1.2. Sources of HRM Activities

HRM activities are rooted in three foundational processes:

a. Recruitment and Selection:

• HR’s role begins with attracting candidates through job postings, advertisements, or referrals.

• The selection process evaluates applicants through interviews, tests, and assessments to find the best fit for the role.

b. Retention:

• Retaining employees involves keeping them satisfied and engaged.

• HR achieves this through:

  • Training and Development: Ensuring employees grow professionally.

  • Performance Appraisal: Providing feedback and recognition.

  • Rewards: Offering financial and non-financial incentives like bonuses, promotions, and benefits.

c. Productivity Maintenance:

• Maintaining alignment with organizational goals involves regular training, skill development, and structured evaluations.

• These activities ensure employees stay relevant, motivated, and aligned with organizational objectives.

1.1.3. Core HRM Activities

Each key activity within HRM serves a specific purpose to create a cohesive and efficient workforce:

a. Job Analysis:

• Understanding each role in the organization.

• This involves identifying tasks, responsibilities, and the skills or qualifications needed for a position.

b. Human Resource Planning:

• Forecasting workforce needs based on business goals.

• HR determines whether to hire, train existing staff, or outsource to meet organizational demands.

c. Recruitment and Selection:

• Recruitment involves attracting potential candidates through job advertisements or headhunting.

• Selection focuses on screening and interviewing to identify individuals who meet the organization’s needs.

d. Training and Development:

• Training equips employees with new skills required for their roles.

• Development focuses on long-term growth, preparing employees for future roles and leadership positions.

e. Performance Appraisal:

• A structured evaluation process to assess employee performance.

• It helps identify strengths, weaknesses, and areas for improvement, often tied to feedback, promotions, and career growth.

f. Rewards Systems:

• Incentives that recognize and reward employee contributions.

• These include salary increments, bonuses, health benefits, recognition awards, or non-monetary perks like flexible work arrangements.

1.2. Definitions and short explains

This framework highlights the definition and some important aspects of human capital, HRM practices, intellectual capital, and creativity in shaping a firm’s ability to achieve sustained competitive advantage. It also underscores the economic benefits of investing in human and intellectual capital.

1.2.1. Human Resources Management (HRM)

Definition: HRM involves managing employee skills, capacity, and knowledge to enhance motivation, reduce turnover, and ensure organizational success (Halbast & Tarik, 2019).

Practices: HRM practices encompass activities such as recruitment, training, performance appraisals, job security, and fostering autonomy (Yousef Alsafadi & Shadi Altahat, 2021).

1.2.2. Human Capital

Definition: Human capital is the stock of employee skills, talent, and knowledge within a firm (Wright et al., 2001). In so many cases, Human Resources and Human Capital are synonyms.

Significance: It is the foundation of an organization’s competitive advantage, directly influencing innovation and process efficiency. Human capital impacts the development of other forms of intellectual capital, such as innovation and process capital, which in turn affect customer capital and organizational performance (Wen-Ying Wang & Chingfu Chang, 2005).

1.2.2.1. Intellectual Capital

Definition: Intellectual capital includes all intangible assets of an organization. It consists of:

• Human Capital: Skills, knowledge, and expertise of employees.

• Customer Capital: Relationships with customers.

• Structural Capital: Internal processes and systems, further divided into:

  • Innovation Capital: Capacity for innovation.

  • Process Capital: Efficiency in operations.

Economic Impact: Investment in intellectual capital, such as a $1 increase in R&D expenditure, can yield a $2 increase in earnings and a $5 increase in market value over seven years (Wen-Ying Wang & Chingfu Chang, 2005).

1.2.2.2. Creativity in Organizations

Definition: Creativity is the generation of novel and useful ideas or solutions (Weisberg, 1988).

Attributes of Creativity:

- Originality: Must be unique but also effective or practical.

- Stages of Creativity (Wallas’ Model):

+ Preparation

+ Incubation

+ Illumination

+ Verification

Characteristics of Creative Individuals: They tend to be open to new experiences, ambitious, self-confident, and less conventional (Gregory Feist, 2010).

1.2.3. Resource-Based View (RBV)

Definition: RBV emphasizes that resources, including assets, capabilities, and knowledge, are the primary sources of a firm’s competitive advantage (Wright et al., 2006).

1.3. HR Managers vs. General Managers: Roles, Perspectives, and Practices

The organizational landscape relies heavily on effective management to achieve strategic objectives. Within this framework, human resource (HR) managers and general managers play distinct yet interdependent roles. While HR managers oversee human capital and develop personnel policies, general managers focus on managing activities and outcomes within their respective departments.

1.3.1. Core Responsibilities

HR managers specialize in managing human resources, often referred to as an organization’s most valuable asset. Their responsibilities encompass hiring, training, performance management, compliance, and fostering organizational culture. They ensure that the workforce is aligned with the company’s vision while adhering to labor laws and ethical standards.

General managers, in contrast, manage the activities and operations of their departments. Their focus lies in achieving departmental objectives, optimizing resources, and maintaining productivity. While HR managers concentrate on policies and frameworks, general managers execute tasks and manage team performance within those guidelines.

1.3.2. The Harvard Perspective on HRM

Michael Armstrong (2006) highlights the Harvard school’s influential take on human resource management (HRM). Two key features stand out:

- Responsibility of Line Managers: Line managers (a category encompassing general managers) are tasked with aligning personnel policies with competitive strategies. This responsibility ensures that HR practices support broader organizational goals.

- Mission of the Personnel Function: HR managers develop and implement policies that are mutually reinforcing, promoting consistency and coherence across the organization.

Thus, while general managers and HR managers may operate within distinct domains, their roles are interconnected to achieve organizational alignment and efficiency.

1.3.3. Distinctions in Role and Scope

Despite overlaps, HR and general management roles have unique features. HR managers bring expertise in regulatory compliance, compensation structures, employee engagement, and workforce planning. They also act as gatekeepers, ensuring that decisions about personnel are consistent with organizational policies and legal requirements.

General managers, however, are focused on day-to-day operations. They are responsible for delivering results by managing resources, motivating employees, and driving departmental success. Although they collaborate with HR for guidance, their focus remains on operational outcomes rather than HR frameworks.

1.3.4. Variations in HRM Models

HR management is not a one-size-fits-all approach. Organizations adopt different models to suit their needs, with two notable examples:

Model 1: HR retains ultimate decision-making authority regarding employee status changes, such as hiring, promotions, and terminations. Supervisors can provide recommendations, but HR makes the final call.

Model 2: Department managers hold decision-making power, with HR serving as a support function. In this model, HR processes decisions made by general managers, ensuring compliance and documentation.

These models illustrate the flexibility of HRM practices and the varying degrees of authority allocated to HR and departmental managers.

1.3.5. Collaborative Dynamics

While HR managers and general managers have distinct responsibilities, collaboration is crucial. General managers rely on HR for guidance on workforce management, while HR managers depend on insights from department heads to craft relevant policies. This partnership ensures that personnel practices align with both strategic objectives and operational realities.

1.4. Overview of Human Resource Management Philosophy

1.4.1. Definition and Scope

Human Resource (HR) philosophies define the core values and principles guiding an organization’s HR policies and practices (Jackson & Schuler, 1995). These philosophies influence the organization's approach to employee engagement, management, and development, shaping its corporate culture and aligning HR practices with broader organizational strategies.

1.4.2. Personnel Management Philosophy

Personnel management philosophy encompasses moral, administrative, and operational principles that guide interactions within the workplace. It prioritizes: Embedding personnel management within the broader corporate philosophy, emphasizing fairness and equal treatment.

1.4.3. Corporate Culture and Strategic Fit

Corporate culture plays a pivotal role in shaping employee attitudes and behaviors. It influences how individuals perceive and respond to workplace practices and events. Success is contingent upon the alignment of strategies, practices, and culture (Alder, 2020).

Philosophical Foundations in HR and Management: Comparative Philosophies provide the intellectual and ethical foundation for evaluating HR practices.

1.4.4. Comparative Philosophies in Management

1.4.4.1. Confucian Philosophy

- Assumptions:

+ Emphasis on morality, education, and leadership by example.

+ Governance is rooted in the virtue and moral authority of officials rather than legal enforcement (Frederickson, 2002).

- Management Style:

+ Trust in employees to act morally when guided by competent and ethical leaders.

+ Heavy emphasis on hierarchy and respect for authority in workplace interactions.

+ Education fosters understanding and moral behavior.

+ Leaders serve as moral exemplars and rely on ethical conduct for governance.

1.4.4.2. Han Fei’s Legalist Philosophy

- Assumptions:

+ Governance through laws, rewards, and punishments.

+ Skeptical of inherent morality; assumes individuals act in self-interest.

- Management Style:

+ Use of structured rules and clear consequences to shape behavior.

+ Empowerment of managers and training in specific management techniques to ensure adherence to policies.

+ Balances incentives for positive contributions with strict penalties for violations.

1.4.4.3. McGregor’s XY Theory

a. Theory X

- Assumptions: Employees are inherently lazy, avoid responsibility, and require close supervision.

- Management Style: Emphasis on control, detailed instructions, and task simplification.

b. Theory Y

- Assumptions: Employees seek fulfillment and are capable of self-direction and meaningful contributions.

- Management Style: Encourages participation, goal alignment, and intrinsic motivation through autonomy and rewards.

1.4.4.4. Unitarist Philosophy in HRM

The unitarist philosophy, as described by Armstrong (2006), assumes that:

- Organizations function as harmonious entities with shared goals.

- Employees and employers are aligned in their interests.

- Conflict is minimal, and collaboration is the norm, fostering a cohesive team-oriented culture.

1.5. Strategy and Workers: Insights from Strategic and HRM Practices

1.5.1. Strategic Levels in Organizations

Corporate Strategy: Focuses on defining the scope of an organization, deciding how it should operate, and allocating resources across various functions.

Business Strategy: Deals with competition by determining the products or services to develop and identifying how to meet customer needs effectively.

Operational Strategy: Exists at the functional level, including HR strategy, to align operational practices with corporate and business objectives.

1.5.2. Strategic Types (Raymond E. Miles et al., 1978)

Organizations may adopt one of three strategic orientations: Defenders, Prospectors, and Analyzers. By aligning HR strategies with organizational objectives and integrating sustainability principles, businesses can achieve operational excellence while fostering a future-ready workforce.

1.5.2.1. The Defender Strategy

- Characteristics:

+ Focus on stability and efficiency.

+ Limited attention to external developments or trends.

+ Heavy investment in production and cost control.

- HRM Implications: Focus HR practices on cost-efficiency, formalized structures, and internal promotions to maintain stability.

+ Leadership: Dominated by production and cost-control specialists.

+ Talent Development: Promotions from within; reward systems prioritize production and finance.

+ Structure: High degree of formalization.

+ Performance Metrics: Organizational success is measured against historical performance.

1.5.2.2. The Prospector Strategy

- Characteristics:

+ Emphasis on exploring and exploiting new markets and product opportunities.

+ Flexible and adaptive administrative systems.

- HRM Implications: Encourage innovation, flexibility, and external hiring to support dynamic market exploration.

+ Leadership: Key managers sourced both internally and externally.

+ Workforce: Focus on employees adept at environmental scanning and innovation.

+ Structure: Decentralized units with low formalization.

+ Performance Metrics: Measured against competitors; rewards favor marketing and R&D.

1.5.2.3. The Analyzer Strategy

- Characteristics:

+ Combines elements of both Defender and Prospector strategies.

+ Balances risk minimization with profit maximization.

- HRM Implications: Combine structured performance appraisals with rewards that recognize both efficiency and adaptability.

+ Core Workers: Influential applied research groups bridge existing capabilities and new product demands.

+ Performance Metrics: Appraisals based on efficiency and effectiveness.

+ Rewards: Greater emphasis on marketing and engineering.

Chapter main references

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

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

3. Runco, Mark A., & Jaeger, Garrett J. (2012). The Standard Definition of Creativity. Creativity Research Journal, 24(1), 92–96.

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

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

6. Sternberg, Robert J. (2006). The Nature of Creativity. Creativity Research Journal, 18(1), 87–98.

7. Amabile, Teresa M., Barsade, Sigal G., Mueller, Jennifer S., & Staw, Barry M. (2005). Affect and Creativity.

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

Human Resource Management (HRM) is an essential function in any organization, encompassing a range of activities designed to manage people effectively. From designing jobs to appraising performance, HRM ensures that employees contribute meaningfully to organizational goals. This chapter introduces key HRM activities, including job design and analysis, HR planning, recruitment and selection, training and development, performance appraisal, and compensation.

2.1. Job Design and Job Analysis

Job Design involves structuring and scheduling tasks and duties to optimize productivity and employee satisfaction. It focuses on creating or improving roles by defining responsibilities and how they are performed (Daniels et al., 2017).

Job Analysis, on the other hand, recognizes the tasks, knowledge, skills, and abilities (KSAs) required for effective performance. Strategic job analysis prepares organizations for future roles by using current job data to inform recruitment, training, and performance evaluations (Benjamin and Andrea, 2006).

Example of a job analysis / job design products for a Sales Executive position:

KSAs: Two years of experience, a bachelor’s degree in business, problem-solving and conflict-management abilities.

Tasks: Selling products, conducting market research, preparing sales reports, analyzing competitors, and maintaining customer relationships.

While job design creates or enhances roles, job analysis deepens understanding of those roles and their performers.

2.2. HR Planning

HR Planning addresses the fundamental question: “How many people will be needed to meet organizational goals?”. This includes planning for replacements and forecasting future labor requirements (Edgar, 1976). Team-based HR planning, as highlighted by Min-Yuan et al. (2005), aims to determine maximum project capacity with existing labor and assess future needs based on anticipated workloads.

2.3. Recruitment and Selection

Recruitment and selection are crucial for hiring the right talent.

Recruitment focuses on attracting qualified candidates to apply for job vacancies (Olajide and Martin, 2021).

Selection involves choosing the best applicant from the pool, ensuring they align with job requirements and organizational goals (Joy et al., 2015).

Effective recruitment and selection not only secure skilled employees but also help organizations achieve strategic objectives.

2.4. Training and Development

Training equips employees with the knowledge, skills, and attitudes / abilities (KSAs) needed to excel in their roles, enhancing job performance and career advancement (Phyllis, 2001). Development programs go beyond task-oriented training, fostering sustainable behavioral and cognitive changes to meet individual and organizational goals (Eduardo et al., 2012).

The field of Human Resource Development (HRD) emphasizes that organizational success depends on human expertise. Modern training extends beyond instructing employees to also include process and organizational-level improvements (Russell F. Korte, 2007).

2.5. Performance Appraisal

Performance appraisal is a systematic evaluation of individual, group, and organizational performance. It supports administrative decisions like promotions, salaries, and dismissals, while also providing feedback to employees (António et al., 2017).

At its core, performance appraisal enables organizations to monitor whether they are achieving desired outcomes and helps identify areas for employee development (G. Stoney Alder, 2020). This dual purpose ensures both organizational control and individual growth.

2.6. Compensation and Rewards

Compensation refers to the benefits employees receive in exchange for their work. Organizations use competitive compensation packages to attract and retain top talent. Fairness in compensation is critical to employee satisfaction, as perceived inequities can lead to dissatisfaction (Rajiv and Jacob, 2011). Total Rewards, as described by Hoole and Hotz (2016), encompass all elements of an employee’s reward package, including monetary and non-monetary benefits. A well-designed rewards system enhances employee engagement and aligns their efforts with organizational objectives.

3.1. Job Design

3.1.1. What is Job design?

Job design refers to the structuring and organization of work activities, duties, and tasks to optimize both job performance and employee satisfaction. It directly impacts how workers engage with their roles and contributes to individual productivity, organizational efficiency, and workplace well-being (David Morrison et al., 2005).

Purpose and Process: Job design aims to define or refine job contents to ensure alignment with organizational goals and worker expectations. It focuses on structuring tasks and scheduling duties to create meaningful and efficient workflows (Kevin Daniels et al., 2017).

Job Redesign: Job redesign involves modifying existing job characteristics to enhance job quality. This process improves job satisfaction and performance by adjusting elements like autonomy, variety, and responsibility.

3.1.2. Factors Influencing Effective Job Design

HR managers play a pivotal role in job design, assessing current job content and implementing changes to ensure that:

- Jobs meet organizational requirements.

- Jobs align with workers’ skills and expectations.

For example, jobs that include active learning opportunities and increased autonomy allow employees to develop their competencies while maintaining motivation (Greg R. Oldham et al., 2010).

3.1.3. How to design good jobs?

3.1.3.1. Enrichment

Enrichment, as suggested by Oldham and Hackman (2010), involves designing roles that emphasize:

Responsibility: Encouraging ownership of tasks.

Achievement: Providing opportunities for measurable success.

Growth in Competence: Facilitating skill development.

Recognition: Acknowledging contributions and accomplishments.

Advancement: Enabling career progression.

3.1.3.2. The Role of Active Learning and Job Control

Job designs that foster active learning opportunities have been shown to improve performance.

For example, enabling employees to solve problems independently and manage their workflows boosts engagement and satisfaction. Increased job control—allowing workers to make decisions about how to perform their tasks—is a critical factor in facilitating these learning opportunities (David Morrison et al., 2005).

3.1.3.3. Herzberg’s Motivation Theory and Job Design

Frederick Herzberg’s approach revolutionized job design by emphasizing job enrichment over simplification. Herzberg identified key motivational factors that should be embedded in job structures to foster sustained employee engagement. These include: Responsibility for meaningful tasks.

- Opportunities for growth and competence development.

Recognition for achievements.

Clear paths for career advancement.

3.2. Job Analysis

3.2.1. What is Job analysis?

Job analysis is a core process in Human Resource Management, offering comprehensive insights into the nature of jobs and the qualifications required to perform them effectively. It is used across various HR functions, from recruitment to performance appraisal, ensuring alignment between organizational goals and employee roles (Cascio & Aguinis, 2005).

The primary goal of job analysis is twofold:

Describe Job Contents: Understand the tasks, duties, and responsibilities that define a role.

Identify Worker Characteristics: Highlight the knowledge, skills, abilities, and other characteristics (KSAOs) essential for job performance (Sancheza & Levine, 2009).

Job analysis provides HR professionals with valuable data for developing key documents such as job descriptions and specifications. These, in turn, inform recruitment, training, and performance management systems.

3.2.2. Applications of Job Analysis

Recruitment and Selection

Job analysis identifies the characteristics required for effective job performance. This information is used to draft job advertisements that attract suitable candidates by clearly defining roles and expectations.

Training and Development

Regular job analysis helps organizations pinpoint skill gaps and behavioral deficiencies. Training programs can then be tailored to address these areas, ensuring employees possess the competencies necessary to succeed (Clifford, 1994).

Performance Appraisal

Job analysis clarifies tasks, responsibilities, forming a basis for evaluating employee productivity. It ensures performance standards are realistic and aligned with organizational goals (Siddique, 2014).

3.2.3. Types of Job Analysis

3.2.3.1. Traditional Job Analysis

Traditional methods focus on work activities and the associated worker requirements. These include: Describing Job Contents: Documenting tasks, responsibilities, and workflows.

Identifying Worker Characteristics: Determining the KSAOs necessary for successful job performance (Sancheza & Levine, 2009).

3.2.3.2. Contemporary Job Analysis

Modern approaches emphasize the relationship between job roles, worker behavior, and organizational strategy. Key features include:

- Linking personality traits to job performance.

- Fostering strategic alignment by letting employees know how to integrate organizational goals into daily tasks.

3.2.4. Best Practices in Job Analysis

To ensure accuracy and relevance, the following best practices are recommended:

- Training: All participants in the job analysis process should receive proper training.

- Reliable Information Sources: Job data should be collected from incumbents (jobholders), analysts, and technical experts (Dierdorff & Wilson, 2003).

- Utilizing Effective Tools: Employ diverse methods, such as:

Questionnaires or checklists.

+ Standardized quantitative techniques like positional analysis questionnaires.

Semi-structured qualitative methods.

Focus on Elimination: Identify and remove unnecessary job requirements and address areas of conflict or dissatisfaction during the analysis process.

Chapter main references

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

2. Dierdorff, Erich C., & Wilson, Mark A. (2003). A Meta-Analysis of Job Analysis Reliability. Journal of Applied Psychology, 88.

3. Morrison, David, Cordery, John, Girardi, Antonia, & Payne, Roy. (2005). Job design, opportunities for skill utilization, and intrinsic job satisfaction. European Journal of Work and Organisational Psychology, 14.

4. Sancheza, Juan I., & Levine, Edward L. (2009). What is (or should be) the difference between competency modeling and traditional job analysis? Human Resource Management Review, 19.

Oldham, Greg R., & Hackman, J. Richard. (2010). Not what it was and not what it will be: The future of job design research. Journal of Organizational Behavior, 31, 463–479. https://doi.org/10.1002/job.678

Siddique, C.M. (2014). Job analysis: A strategic human resource management practice. International Journal of Human Resource Management, 15(1).

Recruitment and Selection: Key Pillars of the Hiring Process. Recruitment and selection are integral components of an organization’s talent acquisition strategy. While recruitment focuses on attracting qualified candidates, selection narrows the field to the most suitable individual for the role. Both activities are critical to ensuring the organization secures the best talent while aligning hiring practices with strategic objectives.

4.1. Recruitment

The recruitment process seeks to attract potential candidates who meet the qualifications for a given role. A well-executed recruitment strategy includes crafting compelling job advertisements, offering competitive benefits, and leveraging marketing campaigns to build employer branding.

4.1.1. Rewards and Marketing Campaigns

To attract top talent, organizations must first develop attractive compensation and benefits packages. Candidates with strong qualifications often have multiple options, so robust rewards can be a decisive factor.

Marketing campaigns further amplify recruitment efforts by highlighting the company’s offerings and culture. Large organizations often run multiple HR marketing campaigns annually to enhance visibility and attract diverse talent.

4.1.2. Job Advertisements

Effective job ads provide potential candidates with essential information, including:

• Company name and logo.

• Job title and description.

• Job requirements (job specification).

• Rewards and benefits (optional).

• Submission guidelines.

While the structure may vary, the clarity and accuracy of the content are critical for attracting the right candidates.

4.1.3. Sources of Recruitment

Recruitment sources are categorized as internal (current employees) or external (people from outside the organization). Each source has distinct advantages and challenges:

Internal Sources

Advantages: Recognizes existing talent, boosts morale, cost-effectiveness, and leverages known performance history.

Disadvantages: May reduce diversity, lead to internal competition, or cause discontent if promotions are denied.

External Sources

Advantages: Brings new perspectives, supports diversity, and injects fresh ideas.

Disadvantages: Higher costs, longer onboarding periods, and potential morale concerns for internal candidates.

4.2. Selection

The selection process involves choosing the most suitable candidate from the applicant pool. This rigorous process ensures the individual selected aligns with the role’s requirements and the organization’s goals.

Steps in the Selection Process

Step 1: Criteria Development

In this step, HR professionals identify the skills, abilities, and traits required for success in the job.

For instance:

- Two years of experience.

- A bachelor’s degree in business.

- Problem-solving and conflict-management abilities.

A minimum score of 7.0 on the IELTS.

Step 2: Resume Screening

Candidate resumes are screened against the established criteria to filter out those who do not meet minimum qualifications. Technology, such as applicant tracking systems (ATS), can expedite this process.

Step 3: Test Administration

Organizations often use employment tests to assess candidates’ suitability. Common tests include:

- Cognitive ability tests: Evaluate reasoning, math, and verbal skills.

- Personality tests: Assess traits like teamwork or leadership potential.

- Physical ability tests: Measure physical capabilities for physically demanding roles.

- Job knowledge tests: Gauge understanding of specific job-related tasks.

- Work samples: Simulate actual job duties to assess practical skills.

Step 4: Interviews

Candidates who pass preliminary evaluations are invited for interviews. These may include phone screenings to narrow the pool further. Interviews are an opportunity to assess interpersonal skills and cultural fit.

Step 5: Final Decision The final step involves comparing assessment results to identify the best candidate. Each evaluation step contributes unique insights, and the decision-making process often involves combining these results systematically.

5.1. The Role of Compensation in Employee Motivation and Retention

Employee rewards are a cornerstone of Human Resource Management, directly influencing satisfaction, performance, and retention. While passion for work is significant, most employees expect tangible benefits for their contributions. Rewards encompass pay, benefits, and other value-driven elements, forming the basis of a company's employee value proposition.

Total rewards extend beyond monetary compensation, encompassing a holistic package of benefits that employees perceive as valuable. These include direct and indirect financial incentives, career development opportunities, and workplace quality enhancements.

Components of Total Rewards (Hoole & Hotz, 2016):

- Base Pay: Salaries or wages earned hourly, weekly, or monthly.

- Performance and Career Management: Opportunities for professional growth and recognition of contributions.

- Contingency Pay: Incentives tied to meeting specific performance standards.

Quality Working Environment: A workplace fostering well-being and productivity.

Benefits: Health care, retirement plans, and other fringe benefits.

Work-Home Integration: Support for work-life balance, such as flexible schedules or remote work options.

5.2. Goals of a Compensation Plan (rewards)

A well-structured compensation plan is crucial for organizational success. Its goals include:

- Attracting Talent: Competitive packages draw top candidates, enhancing workforce quality.

- Retention: Compensation that aligns with industry standards motivates employees to remain with the organization.

- Boosting Morale: Fair pay increases job satisfaction and commitment.

Encouraging Performance: Linking pay to individual or team achievements drives productivity.

5.3. Pay Theories: Equity Theory

Equity theory posits that employee motivation is influenced by perceived fairness in the balance between inputs (effort, skills, and qualifications) and outcomes (pay, benefits, and recognition). Key Elements of Equity Theory (Al-Zawahreh & Al-Madi, 2012):

Inputs: Education, experience, skills, and effort contributed by the employee.

Outcomes: Compensation, benefits, and intrinsic rewards received in return.

Case Examples of Pay Comparisons:

Equal Outcomes and Inputs: Employees feel satisfied when their input-to-outcome ratio matches that of coworkers.

Higher Input with Lower Outcome: Perceived inequity leads to dissatisfaction, reduced motivation, or decreased productivity.

External Comparisons: Employees may also assess fairness by comparing their pay with those in similar roles at other organizations.

Achieving Equity, organizations should aim for:

Internal Equity: Ensuring fairness across roles within the organization.

External Equity: Offering competitive pay relative to similar positions in the market.

5.4. Job Evaluation Systems

Determining the value of a job is integral to developing fair compensation structures.

Job evaluation methods include:

Job Ranking System: Ranking job titles in order of importance or value to the organization.

Job Classification System: Grouping jobs based on required skills, experience, and authority levels.

Point System: Assigning points to job characteristics such as education, complexity, and experience.

Example of a Point System:

- Sales Representative: Requires a bachelor's degree and no prior experience, totaling 250 points.

- Head of Marketing: Requires an MBA and three years of experience, totaling 550 points.

If each point equals $2, the Sales Representative earns $500/month, while the Head of Marketing earns $1,100/month.

5.5. Pay Systems

Once job values are established, organizations implement pay grading, setting pay scales for roles within similar levels. Pay grading ensures consistency and fairness across the organization while maintaining flexibility for individual negotiations.

Chapter main references

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

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

6.1. Training

6.1.1. What is Training?

Training is a structured process designed to impart valuable information and skills to learners, enabling them to perform tasks effectively. It plays a crucial role in enhancing employees' productivity, equipping them with organization-specific knowledge, and fostering sustainable competitive advantages (Aragón-Sánchez et al., 2003).

Why Do Organizations Need Training Courses?

- Increased Productivity: Training equips employees with the skills required for optimal performance, leading to higher efficiency and wages.

- Organizational Alignment: Even the right hire may require training to adapt to specific workflows and expectations within a company.

- Reduced Costs: Lack of training results in lost productivity, dissatisfied customers, and strained workplace relationships, contributing to higher turnover and direct financial losses.

- Retention and Satisfaction: Employees who feel valued through training are more likely to stay and contribute effectively.

Orientation as a Special Form of Training

Orientation introduces new employees to an organization’s culture, expectations, policies, and procedures.

Benefits: Reduces new hire stress, accelerates productivity, and instills organizational values.

Process: Orientation often precedes in-house training, mentoring, and eventually external development programs.

6.1.2. Methods in Employee Training

6.1.2.1. Coaching and Mentoring (On-the-Job Training)

Coaching involves a senior employee training others in specific tasks, while mentoring offers continuous guidance and professional development.

Advantages: Builds skills through direct interaction, facilitates immediate feedback, and aligns training with real-world applications (Aragón-Sánchez et al., 2003).

Disadvantages: Communication or personality conflicts, over-dependence on mentors, and potential micromanagement can hinder effectiveness.

6.1.2.2. Computer-Based Training (CBT)

CBT encompasses e-learning and web-based training using technology. It offers a diverse range of interactive learning experiences and is often scalable for large organizations.

6.1.2.3. Team Training

Team training enhances collaboration by improving decision-making, problem-solving, and team-building skills. It is especially effective during organizational restructuring or post-merger integration (Martin et al., 2014).

6.1.3. Training Content

6.1.3.1. Technological Training

Focuses on teaching employees the technological tools relevant to their roles, such as customer relationship management (CRM) software in sales or point-of-sale systems in retail.

6.1.3.2. Quality Training

Introduces employees to quality standards (e.g., ISO certifications) and methods for ensuring high product or service standards. This training reduces production costs and enhances brand reputation.

6.1.3.3. Skills Training

Covers job-specific proficiencies essential for performance. For instance, cashiers learn transactional processes, while salespeople are trained in customer assessment.

6.1.3.4. Job Content Training

Ensures employees stay updated in their professional domains, such as tax law updates for accountants or new safety protocols for factory workers.

6.1.3.5. Team Training

Designed to empower teams, improve interpersonal skills, and align collective efforts with organizational goals.

6.1.4. Planning and Implementing a Training Program

Step 1: Determining Needs and Setting Objectives Conduct needs assessments to identify skill gaps or problem areas.

Set objectives based on organizational and individual goals.

Step 2: Creating Training Plans Define training objectives and sequence information.

Select participants, instructors, and venues.

Estimate budgets and create a schedule.

Step 3: Implementing Training Programs Communicate opportunities to employees.

Coordinate sessions effectively to minimize disruptions.

Step 4: Evaluating Training Programs

Evaluation determines the effectiveness of training initiatives. Kirkpatrick’s Model (Aragón-Sánchez et al., 2003) offers a four-level approach: Reaction: Assess participant satisfaction.

Learning: Measure knowledge and skills gained.

Behavior: Evaluate changes in workplace behavior post-training.

Results: Analyze organizational improvements such as reduced costs, increased productivity, or higher morale.

6.2. Development: Personal and Professional Growth

6.2.1. What is Development?

Development refers to the enhancement of employees’ knowledge, skills, and abilities for the future usage. In HR, development emphasizes personal and professional growth, often through activities like training, team-building, and self-learning.

6.2.2. Importance of Development in HRD

Organizational Alignment: HR Development (HRD) connects employee growth to business needs, ensuring alignment between individual and organizational goals (Garavan et al.).

Career Pathing: HR managers assist employees in charting future career paths, identifying strengths, and addressing weaknesses.

Retention: Development fosters employee commitment by demonstrating that the organization values their growth.

6.2.3. Succession Planning

Succession planning is a strategic process to identify and prepare future leaders. Defined by Luna (2012), it involves long-term efforts to align individual capabilities with organizational needs. Benefits: Ensures leadership continuity, enhances employee engagement, and prepares the workforce for future challenges.

Impact: Succession planning correlates positively with employee performance (Ali et al., 2019).

Chapter main references

Training

1. Aragón-Sánchez, Antonio, Barba-Aragón, Isabel, & Sanz-Valle, Raquel. (2003). Effects of training on business results. International Journal of Human Resource Management, 14(6), 956–980.

2. Martin, Barbara Ostrowski, Kolomitro, Klodiana, & Lam, Tony C. M. (2014). Training Methods: A Review and Analysis. Human Resource Development Review, 13(3), 386–405.

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

Development

1. Ali, Zulqurnain, Mahmood, Babak, & Mehreen, Aqsa. (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.

2. Garavan, Thomas N., McGuire, David, & O’Donnell, David. (2001). Human capital accumulation: The role of human resource development. Journal of European Industrial Training, 25(2/3/4), 48–68.

3. Garavan, Thomas N., Morley, Michael, Gunnigle, Patrick, & Collins, Eammon. Exploring Human Resource Development: A Levels of Analysis Approach.

4. Liker, J.K., & Hoseus, M. Human Resource Development in Toyota Culture. International Journal of Human Resources Development and Management.

Performance appraisal is a systematic method for evaluating employee performance. It is a cornerstone of Human Resource Management (HRM) that affects financial outcomes, employee development, and overall organizational success.

7.1. What is Performance Appraisal?

Performance appraisal, also known as performance evaluation, is a formal process of assessing an employee’s performance based on predefined criteria. It typically involves: Performance Review: Assessment by a supervisor or other evaluator.

- Feedback: Informing employees of their ratings and areas for improvement.

- Development: Incorporating appraisal results into performance management activities, such as goal setting and training.

- Traditional Performance Appraisals: Assess past performance.

Contemporary Performance Management: Aligns personal performance with organizational goals and offers solutions for immediate improvement. Performance appraisal fulfills employees’ need to understand how well they are performing while also providing management with actionable data to guide decision-making (Jafari et al., 2009).

7.2. Performance Measurement

Performance measurement involves three main stages: Design, Implementation, and Use (Panagiotis et al., 2011).

7.2.1. Design Stage

7.2.1.1. Organizational or SBU-Level Performance Measurement

The Balanced Scorecard (BSC) is widely used for measuring organizational performance across four perspectives:

• Financial: Examples include market share or revenue growth.

• Customer: Customer satisfaction or retention metrics.

• Internal Processes: Efficiency in key operational workflows.

• Learning and Growth: Employee training and knowledge acquisition (Gurd & Gao, 2008).

7.2.1.2. Departmental Goals

Departmental goals should align with organizational objectives.

For instance, sales targets must support overall revenue goals.

7.2.1.3. Individual Performance Measurement

Individual performance is based on job descriptions and evaluated through:

- Results: What employees accomplish (e.g., achieving quotas).

- Behaviors: How employees conduct their tasks (e.g., teamwork and ethics).

Common Individual Assessment Methods:

Absolute Standards

- Employees are evaluated independently of others against defined criteria.

- Example: The graphic rating scale, which rates attributes on a numerical scale.

Relative Standards

- Employees are compared to one another using ranking or paired comparisons.

- Example: The ranking method lists employees from highest to lowest performers.

Management by Objectives (MBO)

Goals are set collaboratively between managers and employees, ensuring objectives are:

- Specific

- Measurable

- Attainable

- Result-focused

- Time-oriented (SMART).

7.2.2. Implementation Stage

Clarifying Assignments: Discuss individual goals and responsibilities.

Performance Management: Address performance issues and motivate employees.

Assessment: Evaluate individual results and behaviors.

Performance Reviews: Provide feedback and set future goals.

7.2.3. Use Stage

Details on how organizations use appraisal results for HR decisions and strategic alignment are forthcoming.

7.3 Performance Appraisal Errors

Subjective appraisals can introduce biases, including:

- Halo Effect: Judging an employee’s entire performance based on one trait or outcome (Guilford, 1954).

- Leniency or Severity Bias: Overrating or underrating employees, respectively.

- Central Tendency: Avoiding extreme ratings by clustering all employees near the average.

Chapter main references

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

Gurd, Bruce, & Gao, Tian. (2008). Lives in the balance: An analysis of the balanced scorecard (BSC) in healthcare organizations. International Journal of Productivity and Performance Management, 57(1), 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.

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

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

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

Kaplan, Robert S. (2012). The balanced scorecard: Comments on balanced scorecard commentaries. Journal of Accounting & Organizational Change, 8(4).

Human Resource Planning (HRP) is a systematic approach to determining an organization's labor requirements at a given time. By aligning workforce capabilities with organizational goals, HRP minimizes labor costs while ensuring optimal productivity.

8.1. Definition

Human Resource Planning: HRP answers the question, “How many workers does a company need at a particular time?”. It also includes action plans, such as schedules for hiring additional employees (Kibaek Kim & Sanjay Mehrotra, 2015).

Manpower System: A network of individuals working together to achieve organizational objectives. It encompasses human intelligence, skills, knowledge, and physical abilities (Vincent A. Amenaghawon et al., 2020; Jinyang Cao, 2022).

8.2. HR Planning Process

HR planners use various methods to estimate the number of workers required, ensuring that the organization neither overstaffs nor understaffed. The process comprises three steps:

Step 1: Labor Demand Estimation

Strategic Goals: Identify the labour’s requirements.

Method: Calculate labor demand using the formulas:

Labor Demand = Product quantity / Worker Productivity

Labor Demand = Services Required / Worker Productivity

Labor Demand = Expected revenue / Average personal revenue

Example:A company producing 1,200 products/month with a worker capable of making 10 products/day. This company requires: 1,200 / 30 / 10 = 4 workers.

Step 2: Labor Supply Estimation

Estimate the current workforce available at different point of time, accounting for promotions, retirements, or training.

Step 3: Labor Need and Solution Planning

Calculate gaps between labor demand and supply, then devise strategies to close the gap.

Example: If demand = 4 workers and supply = 3 workers, the gap = 1 worker. A solution plan might include hiring or training.

8.3. Workforce Demand and Supply Estimation Methods

8.3.1. Qualitative Methods

Useful in scenarios with limited empirical data. Relies on expert opinions (Safarishahrbijari, 2018).

8.3.2. Quantitative Methods

- Time Series Modeling: Techniques such as Box–Jenkins or Markov modeling.

- Regression Models: Use historical data to forecast labor needs. Example: Using the regression equation y=30.1x−53332y = 30.1x - 53332y=30.1x−53332, HR planners predict yearly demand based on historical trends.

8.3.3. Experimental Methods

Align workforce demand with marketing strategies.

Examples: A company needs to serve 200 customers a day, a worker can handle 50 customers. So, 200 / 50 = 4 workers.

8.3.4. Markov Analysis

The Markov model predicts workforce transitions (e.g., promotions or exits) using a transition probability matrix (Jinyang Cao, 2022).

8.4. HR Planning in Big Organizations

Larger organizations require detailed HR plans for each department with the following steps.

Step 1: Draw the Organizational Structure.

Step 2: Estimate Workforce Demand - Determine labor requirements for each department.

Step 3: Create replacement Charts based on account for potential retirements or promotions.

Step 4: Labor Need Analysis - Identify and address workforce gaps.

Step 5: Action Plans - Develop strategies like hiring, training, or reassigning staff.

8.5. Example HR Plan

Job title	2023 Workforce	2024 Workforce
Salespersons	44	50
Managers	4	5

A Human Resource Management System (HRIS) is an integrated suite of tools designed to streamline HR processes, from recruitment to performance monitoring, leveraging technology to enhance efficiency and data-driven decision-making.

9.1. Electronic Performance Monitoring (EPM)

EPM systems use electronic technologies to observe, record, and analyze employee performance data.

Key Features:

- Early methods included telephone call monitoring, time accounting systems, and video cameras (Alder et al., 1997).

- Modern advancements allow for real-time performance tracking through smartphones, wearables, and other devices (Daniel et al., 2020).

Benefits:

- Increases task performance and organizational citizenship behavior (OCB) (Bhave, 2014).

- Provides detailed insights into employee productivity and behavioral patterns.

Challenges:

- Ethical concerns over privacy.

- Potential for employee dissatisfaction if perceived as intrusive.

9.2. Electronic Performance Support Systems (EPSS)

EPSS systems provide just-in-time learning and task support to employees.

Key Features:

Delivers relevant and contextual information during task execution.

Combines training and real-time assistance to improve productivity.

Benefits:

Enhances performance by reducing reliance on memory and minimizing errors.

Proven to be effective even in minimal configurations (Frank et al., 2005).

9.3. Balanced Scorecard design system

The Balanced Scorecard is a strategic management software.

Despite its popularity, design techniques for scorecard development remain inadequate (Panagiotis et al., 2011).

Over 100 software solutions are available, but implementation varies widely in effectiveness (Chavan, 2009).

9.4. Electronic Recruitment and Selection

Electronic Recruitment and Selection integrates digital tools to streamline hiring processes.

Stages (Nikolaou, 2021):

- Attraction: Online job postings and leveraging social networking platforms.

- Screening: Cyber vetting, applicant tracking systems (ATS).

- Selection: Gamification-based assessments and asynchronous interviews.

- Onboarding: Digital platforms for orientation and integration into the organization.

Benefits:

- Reduces time-to-hire.

Enhances candidate experience with streamlined digital interfaces.

Allows for sophisticated talent analytics.

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