Bmhr5103 Human Resource Management

BMHR5103
HUMAN RESOURCE
MANAGEMENT
Prof Dr Rusinah Siron
Dr Chew Kok Wai
Project Directors: Prof Dr Mansor Fadzil
Prof Dr Mohd Ghazali Mohayidin
Open University Malaysia
Module Writers: Prof Dr Rusinah Siron

Universiti Tenaga Nasional
Dr Chew Kok Wai

Universiti Multimedia
Moderators: Dr Rosmah Mohamed

Dr Jo Ann Ho
Universiti Putra Malaysia
Developed by: Centre for Instructional Design and Technology

Printed by: Meteor Doc. Sdn. Bhd.

Lot 47-48, Jalan SR 1/9, Seksyen 9,
Jalan Serdang Raya, Taman Serdang Raya,
43300 Seri Kembangan, Selangor Darul Ehsan
First Printing, December 2010

Second Printing, March 2011
Copyright © Open University Malaysia (OUM), March 2011, BMHR5103
All rights reserved. No part of this work may be reproduced in any form or by any means
without the written permission of the President, Open University Malaysia (OUM).
Version March 2011

Table of Contents
Course Guide xi - xix
Course Assignment Guide xxiii - xxvii
Topic 1 Human Resource Management: A Perspective 1

1.1 Human Resource Management Definitions 1
1.2 What is Human Resource Management? 3
1.2.1 Why is Human Resource Management Important to 3
an Organisation?
1.3 Responsibilities of Human Resource Management 5
Department
1.4 Human Resource Management Functions 7
1.5 Human Resource Management: The Challenges 10
1.5.1 Managing a Diverse Workforce 10
1.5.2 Technological Challenges 12
1.5.3 Globalisation 12
1.5.4 Providing Equal Employment Opportunities 13
1.6 The Changing Nature of HRM 15
Summary 16
Key Terms 17
References 18
Topic 2 Job Analysis and Human Resource Planning 20

2.1 Job Analysis 21
2.1.1 Definition of Job Analysis 22
2.1.2 Purpose of Job Analysis 23
2.1.3 What Aspects of a Job are Analysed? 24
2.1.4 Key Factors in Job Analysis 24
2.1.5 Job Analysis Information 25
2.1.6 Job Analysis Methods 27
2.1.7 Trends in Job Analysis 30
2.2 Job Descriptions 30
2.2.1 The Importance of Job Descriptions 31
2.2.2 Job Specifications 35
2.3 Job Design 36
2.3.1 What are the Features of a „Good‰ Job Design 37
2.3.2 Designing Jobs that Motivate 37
2.3.3 Approaches to Job Design 39
iv  TABLE OF CONTENTS
2.3.4 Impact of Technology on Job Design 40

2.3.5 Designing Jobs that Meet Mental Capabilities and
Limitations 41
2.4 Case Studies 42
2.5 Human Resource Planning 46
2.5.1 Human Resource Planning Concepts 47
2.5.2 The Strategic Human Resource Planning Process 48
2.5.3 Staff Management Plan 55
Summary 57
Key Terms 59
References 61
Topic 3 Recruitment and Selection 63

3.1 Recruitment 63
3.2 The Recruitment and Selection Process 64
3.2.1 Sources of Recruitment 64
3.2.2 On-line Applications/Recruiting on the Internet 67
3.2.3 An Example of the Recruitment Process 69
3.2.4 Issues in Recruitment 71
3.2.5 Building a Diverse Workforce 72
3.2.6 Recruitment Checklist 73
3.3 The Four Metre Model for Recruitment: Measuring 76
Recruitment Programme Effectiveness
3.4 Selection 78
3.4.1 Selection Process 79
Summary 87
Key Terms 88
References 89
Topic 4 Interviewing 92
4.1 Types of Interviews 93
4.2 Successful Interviewing 99
4.3 The Interview Form 101
4.4 Case Study 107
Summary 109
Key Terms 109
References 110
Topic 5 Training and Development 112

5.1 Training 113
5.1.1 Training Needs According to Business Strategies 113
5.1.2 Influences of Business Conditions on Training 115
TABLE OF CONTENTS  v
5.2 Steps in the Training Process 116

5.2.1 Step 1: Conduct Training Needs Analysis 116
5.2.2 Step 2: Designing Training Programmes 123
5.2.3 Step 3: Select Training Methods 127
5.2.4 Step 4: Evaluate Training Programme 135
5.3 Employee Development 140
5.3.1 Development of Planning Process 141
5.4 Career Management 143
5.5 Career Development 144
5.6 Career Management and Career Management Systems 146
5.7 Roles of Various Parties in Career Management 149
5.8 Career Path 150
5.9 Career Plateauing 151
5.10 Skills Obsolescence 152
5.11 Handling Job Loss 152
5.12 Retirement 154
Summary 156
Key Terms 159
References 160
Topic 6 Performance Appraisal 162

6.1 Performance Management 162
6.2 The Performance Management Process 165
6.3 Performance Appraisal Methods 167
6.4 Managing EmployeesÊ Performance 173
6.5 Problems In Performance Appraisal 176
6.5.1 Finding Solutions to Performance Problems 176
6.6 Characteristics of an Effective Appraisal System 178
Summary 181
Key Terms 182
References 183
Topic 7 Compensation and Benefits 185

7.1 Employee Compensation 185
7.1.1 Types of Compensation 187
7.1.2 Components of a Compensation System 188
7.1.3 Types of Compensation Plans 190
7.1.4 Employee’s Compensation 191
7.2 Employee Benefits 192
7.2.1 What are Employee Benefits? 192
7.2.2 Employee Choice in Benefits 195
7.2.3 Trends and Innovation in Employee Benefits 198
vi  TABLE OF CONTENTS
Summary 200
Key Terms 200
References 202
Topic 8 Employee and Industrial Relations 204

8.1 Labour Relations Process 205
8.2 Objectives and Growth of Unions 206
8.3 Why Employees Unionise? 207
8.4 Union Organising Campaigns 210
8.4.1 Organising Steps 210
8.5 Impacts of Unionisation on Managers 212
8.6 Structure and Functions of Labour Unions 213
8.7 Union-free Strategies and Tactics 214
8.8 Relevant Acts in Malaysian Industrial Relations 217
8.9 Collective Bargaining 218
8.10 Factors Affecting Collective Bargaining 219
8.11 The Collective Bargaining Process 221
8.12 Collective Agreement 227
8.13 Impacts of Collective Bargaining on Employees and 227
Employers
8.13.1 Impacts of Collective Bargaining on Employees 229
8.13.2 Impacts of Collective Bargaining on Employers 230
Summary 231
Key Terms 235
References 235
Topic 9 Occupational Health and Safety 237

9.1 Occupational Health and Safety 238
9.1.1 Workplace Accidents 238
9.1.2 Occupational Health 239
9.1.3 Workplace Safety Policies and Programmes 240
9.2 Sexual Harrassment and Workplace Violence 242
9.2.1 Workplace Sexual Harassment 242
9.2.2 Workplace Violence 243
9.3 Case Study 245
Summary 246
Key Terms 247
References 247
Topic 10 Legal Environment 248

10.1 Employment Act 1955 248
10.2 Employees Provident Fund Act 1991 257
10.3 EmployeesÊ Social Security Act 1969 259
TABLE OF CONTENTS  vii
Summary 261
Key Terms 262
References 263
viii  TABLE OF CONTENTS
COURSE GUIDE
x  COURSE GUIDE
COURSE GUIDE  xi
Table of Contents
Welcome to BMHR5103 iii
What will you get from doing this course? iii

Description of the course
Aim of the course
Objectives of the course
How can you get the most from this course? iv

Learning package
Course topics
Organisation of the course content
Assessment Method viii
What support will you get in studying this course? viii

Tutorials
MyVLE Online Discussion
Facilitator/ Tutor
Library resources
Learner Connexxions
How should you study for this course? ix

Time commitment for studying
Proposed study strategy
xii  COURSE GUIDE
WELCOME TO BMHR5103 HUMAN RESOURCE

MANAGEMENT
BMHR5103 Human Resource Management is one of the required courses for the
Master of Business Administration, Master of Management and Master of
Human Resource Management programmes. The course assumes you have little
or no previous knowledge of human resource theories but you are required to
tap into your experiences and relate them to the human resource theories,
concepts and principles that will be discussed in the course. This is a three-credit
hour course conducted over a semester of 14 weeks.
WHAT WILL YOU GET FROM DOING THIS COURSE?

Description of the Course
Human resource management (HRM) encompasses those activities designed to
provide for and coordinate the human resources of an organization. In an
attempt to cover each of the major areas of human resource management, this
book contains ten topics that begins the understanding of human resource
management with the human resource management perspective, followed by the
job analysis and human resource planning. The third topic covers the recruitment
and selection that focused on strategic human resource planning and then
interviewing that describe the methods of successful interviewing. The topic four
and five focused on human resource development that mainly explain the staff
development and training program followed by the performance appraisal of the
employees. Then the course focuses its attention to the employee benefits and the
industrial relations. The last two topics concentrated on the occupational health
and safety of the employees and the legal environment which focused on the
evaluation of the legislations practices in Malaysia.
The book provides helpful insights for those students who desire to make human
resource management their career choice and for all others who aspire to
management position.
Aim of the Course

The objective of the course is to enhance studentsÊ understanding and application
of human resource management to managerial decisions. We believe this goal
can best be accomplished by providing a clear and brief statement of the
principles of human resource management and supplementing this material with
problems, examples and cases that illustrate how such principles are applied.
COURSE GUIDE  xiii
Course Learning Outcomes

After completing this course, you should be able to understand human resource
management theory together with the management application to business and
administrative of employee well-being. Specifically, you should be able to:
1. Apply human resource management activities in administration;
2. Conduct the recruitment, selection and interviewing of the employees
effectively;
3. Focused on the staff development programme and career planning in the
strategic planning of the organisation;
4. Determine the employee compensation and benefits; and
5. Adopt occupational health and safety at the workplace.
HOW CAN YOU GET THE MOST FROM THIS COURSE?

Much of what we discuss here is not too difficult if you put some thought into
your study of it. One way to sharpen your human resource management skills is
to keep an eye on the news and management in many of the magazines such as
Management Today, Malaysian Business and The Wall Street Journal. You will
find, as we have, that the success or failure of many business undertakings
hinges on how well management has understood many of the concepts we
discuss in the topics to follow. We will cite some experiences of real businesses
and as you work your way through the course, we expect that you will develop
some definite opinions about which firms have played their human resource
management functions wisely and which ones have not. All of this, we hope, will
help you to play yours well in the future.
Learning Package
In this Learning Package you are provided with THREE kinds of course materials:
1. The Course Guide you are currently reading
2. The Course Content (consisting of 10 topics) and
3. The Course Assessment Guide (which describes the assignments to be
submitted and the examinations you have to sit for) will be given to you in
a separate folder.
Please ensure that you have all of these materials.

xiv  COURSE GUIDE
The Human Resource Management Structure

The diagram below portrays the role of human resource management in
organisation which focused on human resource management structure in order
to understand the theories and application of human resource management.
Table of Content
Topic 1 Human Resource Management: A Perspective
Topic 2 Job Analysis and Human Resource Planning
Topic 3 Recruitment and Selection
Topic 4 Interviewing
Topic 5 Human Resource Development
Topic 6 Performance Appraisal
Topic 7 Compensation and Benefits
Topic 8 Employee and Industrial Relations
Topic 9 Occupational Health and Safety
Topic 10 Legal Environment
COURSE GUIDE  xv
Course Content
This course consists 10 topics altogether than mainly focused on the following:
Topic 1: Provides a perspective of human resource management
Topic 2: Analyse the human resource planning and the job analysis
Topic 3: Discusses the recruitment and selection process
Topic 4: Examines the key factors for successful interview
Topic 5: Evaluate the human resource development programs
Topic 6: Evaluate an effective of performance management criteria
Topic 7: Discusses the components of compensation systems
Topic 8: Discusses the factors that affect the process of collective bargaining
Topic 9: Evaluate the Occupational Safety and Health culture that can be used
by employers
Topic 10: Evaluate the legislations practices in Malaysia
Organisation of Course Content

In distance learning, the module replaces the university lecturer. This is one of the
main advantages of distance learning where specially designed materials allow you
to study at your own pace, anywhere and at anytime. Think of it as reading the
lecture instead of listening to a lecturer. In the same way that a lecturer might assign
something for you to read or do, the module tells you what to read, when to read
and when to do the activities. Just as a lecturer might ask you questions in class, your
module provides exercises for you to do at appropriate points.
To help you read and understand the individual topics, numerous realistic
examples support all definitions, concepts and theories. Diagrams and text are
combined into a visually appealing, easy-to-read module. Throughout the course
content, diagrams, illustrations, tables and charts are used to reinforce important
points and simplify the more complex concepts. The module has adopted the
following features in each topic:
ACTIVITY
These are situations drawn from situations to show how knowledge of
the principles of learning may be applied to real-world situations. The
activities illustrate key points and concepts dealt with in each topic.
xvi  COURSE GUIDE
SELF-CHECK
Questions are interspersed at strategic points in the topic to encourage
review of what you have just read and retention of recently learned
material. The answers to these questions are found in the paragraphs
before the questions. This is to test immediately whether you
understand the few paragraphs of text you have read. Working
through these tests will help you determine whether you understand
the topic and prepare you for the assignments and the examination.
The main ideas of each topic are listed in brief sentences to provide a review of
the content. You should ensure that you understand every statement listed. If
you do not, go back to the topic and find out what you do not know.
Key terms discussed in the topics are placed at the end of each topic to make you
aware of the main ideas. If you are unable to explain these terms, you should go
back to the topic to clarify.
At the end of each topic, a list of articles and topics of books is provided that is
directly related to the contents of the topic. As far as possible, the articles and
books suggested for further reading will be available in OUMÊs Digital Library
which you can access and OUMÊs Library. Also, relevant Internet resources are
available to enhance your understanding of selected curriculum concepts and
principles as applied in real-world situations.
COURSE GUIDE  xvii
Assessment Method
Please refer to myVLE.
WHAT SUPPORT WILL YOU GET IN STUDYING THIS

COURSE?
Seminars
There are 15 hours of seminars or face-to-face interaction supporting the course.
These consist of FIVE seminar sessions of three hours each. You will be notified
of the dates, times and location of these seminars, together with the name and
phone number of your facilitator, as soon as you are allocated a seminar group.
MyVLE Online Discussion

Besides the face-to-face seminar sessions, you have the support of online
discussions. You should interact with other students and your facilitator using
MyVLE. Your contributions to the online discussion will greatly enhance your
understanding of course content, how to go about doing the assignments and
preparation for the examination.
Facilitator
Your facilitator will mark your assignments. Do not hesitate to discuss during the
seminar session or online if:
• You do not understand any part of the course content or the assigned
readings
• You have difficulty with the self-tests and activities
• You have a question or problem with the assignments.
Library Resources
The Digital Library has a large collection of books, journals, thesis, news and
references which you can access using your student ID.
xviii  COURSE GUIDE
Learner Connexxions
This is an online bulletin which provides interesting and relevant information to
help you along the programme. There are many useful study hints and you can
read about the experiences of other distant learners.
HOW SHOULD YOU STUDY FOR THIS COURSE?

1. Time Commitment for Studying
You should plan to spend about six to eight hours per topic, reading the
notes, doing the self-tests and activities and referring to the suggested
readings. You must schedule your time to discuss online. It is often more
convenient for you to distribute the hours over a number of days rather
than spend one whole day per week on study. Some topics may require
more work than others, although on average, it is suggested that you spend
approximately three days per topic.
2. Proposed Study Strategy

The following is a proposed strategy for working through the course. If you
run into any trouble, discuss it with your facilitator either online or during
the seminar sessions. Remember, the facilitator is there to help you.
(a) The most important step is to read the contents of this Course Guide
thoroughly.
(b) Organise a study schedule. Note the time you are expected to spend
on each topic and the date for submission of assignments as well as
seminar and examination dates. These are stated in your Course
Assessment Guide. Put all this information in one place, such as your
diary or a wall calendar. Whatever method you choose to use, you
should decide on and jot down your own dates for working on each
topic. You have some flexibility as there are 10 topics spread over a
period of 14 weeks.
(c) Once you have created your own study schedule, make every effort to
Âstick to itÊ. The main reason students are unable to cope is because
they get behind in their coursework.
(d) To begin reading a topic:
• Remember in distance learning much of your time will be spent
READING the course content. Study the list of topics given at the
beginning of each topic and examine the relationship of the topic
to the other nine topics.
COURSE GUIDE  xix
• Read the topic overview showing the headings and subheadings

to get a broad picture of the topic.
• Read the topic learning outcomes (what is expected of you). Do
you already know some of the things to be discussed? What are
the things you do not know?
• Read the introduction (see how it is connected with the previous
topic).
• Work through the topic. (The contents of the topic has been
arranged to provide a sequence for you to follow)
• As you work through the topic you will be asked to do the self-test
at appropriate points in the topic. This is to find out if you
understand what you have just read.
• Do the activities (to see if you can apply the concepts learned to
real-world situations)
(f) When you have completed the topic, review the learning outcomes to
confirm that you have achieved them and are able to do what is
required.
(g) If you are confident, you can proceed to the next topic. Proceed topic
by topic through the course and try to pace your study so that you
keep yourself on schedule.
(h) After completing all topics, review the course and prepare yourself for
the final examination. Check that you have achieved all topic learning
outcomes and the course objectives (listed in this Course Guide).
FINAL REMARKS
Once again, welcome to the course. To maximise your gain from this course you
should try at all times to relate what you are studying to the real world. Look at
the environment in your institution and ask yourself whether the ideas discussed
apply. Most of the ideas, concepts and principles you learn in this course have
practical applications. It is important to realise that much of what we do in
education and training has to be based on sound theoretical foundations. The
contents of this course provide the principles and theories explaining human
learning whether it be in a school, college, university or training organisation.
We wish you success with the course and hope that you will find it interesting,
useful and relevant in your development as a professional. We hope you will
enjoy your experience with OUM and we would like to end with a saying by
Confucius – „Education without thinking is labour lost‰.
xx  COURSE GUIDE
COURSE ASSIGNMENT
GUIDE
xxii  COURSE ASSIGNMENT GUIDE
COURSE ASSIGNMENT GUIDE  xxiii
Table of Contents
Introduction xxvi
Academic Writing xxvi

(a) Plagiarism?
 What is Plagiarism?
 How Can I Avoid Plagiarism
(b) Documenting Sources
• Direct Citation
• Indirect Citation
(c) Referencing
• Journal Articles
• Online Journal
• Webpage
• Book
• Article in a Book
• Printed Newspaper
Details about Assignments xxviii

 Facilitator-Marked Assignment (FMA)
 General Criteria for Assessment of FMA
xxiv  COURSE ASSIGNMENT GUIDE
INTRODUCTION
This guide explains the basis on which you will be assessed in this course during
the semester. It contains details of the facilitator-marked assignments, final
examination and participation required for the course.
One element in the assessment strategy of the course is that all students should
have the same information as facilitators about the answers to be assessed.
Therefore, this guide also contains the marking criteria that facilitators will use in
assessing your work.
Please read through the whole guide at the beginning of the course.
ACADEMIC WRITING
(a) Plagiarism
(i) What Is Plagiarism?
Any written assignment (essays, project, take-home exams, etc)
submitted by a student must not be deceptive regarding the abilities,
knowledge or amount of work contributed by the student. There are
many ways that this rule can be violated. Among them are:
Paraphrases: A closely reasoned argument of an author is paraphrased but

the student does not acknowledge doing so. (Clearly, all our
knowledge is derived from somewhere, but detailed arguments
from clearly identifiable sources must be acknowledged.)
Outright Large sections of the paper are simply copied from other
plagiarism: sources, and the copied parts are not acknowledged as
quotations.
Other These often include essays written by other students or sold by
sources: unscrupulous organisations. Quoting from such papers is
perfectly legitimate if quotation marks are used and the source
is cited.
Works by Taking credit deliberately or not deliberately for works
others: produced by others without giving proper acknowledgement.
These works include photographs, charts, graphs, drawings,
statistics, video clips, audio clips, verbal exchanges such as
interviews or lectures, performances on television and texts
printed on the Web.
Duplication The student submits the same essay for two or more courses.
COURSE ASSIGNMENT GUIDE  xxv
(ii) How Can I Avoid Plagiarism?

• Insert quotation marks around Âcopy and pasteÊ clause, phrase,
sentence, paragraph and cite the original source.
• Paraphrase clause, phrase, sentence or paragraph in your own
words and cite your source.
• Adhere to the APA (American Psychological Association) stylistic
format, whichever applicable, when citing a source and when
writing out the bibliography or reference page.
• Attempt to write independently without being overly dependent
of information from anotherÊs original works.
• Educate yourself on what may be considered as common
knowledge (no copyright necessary), public domain (copyright
has expired or not protected under copyright law), or copyright
(legally protected).
(b) Documenting Sources

Whenever you quote, paraphrase, summarize, or otherwise refer to the
work of another, you are required to cite its original source documentation.
Offered here are some of the most commonly cited forms of material.
 Direct Citation Simply having a thinking skill is no assurance

that children will use it. In order for such skills to
become part of day-to-day behaviour, they must
be cultivated in an environment that value and
sustains them. „Just as childrenÊs musical skills
will likely lay fallow in an environment that
doesnÊt encourage music, learnerÊs thinking skills
tend to languish in a culture that doesnÊt
encourage thinking‰ (Tishman, Perkins and Jay,
1995, p.5)
 Indirect Citation According to Wurman (1988), the new disease of

the 21st century will be information anxiety,
which has been defined as the ever-widening gap
between what one understands and what one
thinks one should understand.
(c) Referencing
All sources that you cite in your paper should be listed in the Reference
section at the end of your paper. HereÊs how you should do your Reference.
xxvi  COURSE ASSIGNMENT GUIDE
Journal Article DuFour, R. (2002). The learning-centred principal:

Educational Leadership, 59(8). 12-15.
Online Journal Evnine, S. J. (2001). The universality of logic: On the
connection between rationality and logical ability
[Electronic version]. Mind, 110, 335-367.
Webpage National Park Service. (2003, February 11). Abraham
Lincoln Birthplace National Historic Site.
Retrieved February 13, 2003, from
http://www.nps.gov/abli/
Book Naisbitt, J. and Aburdence, M. (1989). Megatrends
2000. London: Pan Books.
Article in a Nickerson, R. (1987). Why teach thinking? In J. B.
Book Baron & R.J. Sternberg (Eds). Teaching thinking
skills: Theory and practice. New York: W.H.
Freeman and Company. 27-37.
Printed Holden, S. (1998, May 16). Frank Sinatra dies at 82:
Newspaper Matchless stylist of pop. The New York Times, pp.
A1, A22-A23.
DETAILS ABOUT ASSIGNMENT

Facilitator-Marked Assignment (FMA)
You will be able to complete the assignment from the information and materials
contained in your suggested readings and course content. However, it is
desirable in graduate level education that you are able to demonstrate that you
have read and researched more widely than the required minimum. Using other
references will give you a broader perspective and may provide a deeper
understanding of the subject. When you have completed the assignment, submit
it together with a FMA form to your facilitator. Make sure that your assignment
reaches the facilitator on or before the deadline.
General Criteria for Assessment of FMA

In general, your facilitator will expect you to write clearly, using correct spelling
(please use your spell checker) and grammar. Your facilitator will look for the
following: That
• You have critically thought about issues raised in the course.
COURSE ASSIGNMENT GUIDE  xxvii
• You have considered and appreciated different points of view, including

those in the course.
• You have given your own views and opinions.
• You have stated your arguments clearly with supporting evidence and
proper referencing of sources.
• You have drawn on your own experiences.
xxviii  COURSE ASSIGNMENT GUIDE
Topic  Human
1 Resource
Management:
A Perspective
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1. Define human resource management;
2. Explain the responsibilities of the human resource management
department;
3. Explain the human resource management activities;
4. Describe the challenges in human resource management; and
5. Analyse the issues in human resource management.
 INTRODUCTION
The primary goal of human resource management (HRM) in any organisation is
to facilitate organisational performance. However, many managers and
organisations tend to view human resource management as a necessary expense,
rather than a source of revenue to their organisations.
1.1 HUMAN RESOURCE MANAGEMENT

DEFINITIONS
Human resource management (HRM) encompasses those activities designed to
provide and coordinate the human resources of an organisation. Human resource
management is a modern term for what has traditionally been referred to as
2  TOPIC 1 HUMAN RESOURCE MANAGEMENT: A PERSPECTIVE
personnel administration or personnel management. However, some experts

believe human resource differs somewhat from traditional personnel
management. They see personnel management as being much narrower and
more clerically oriented than human resource management (Byers and Rue,
2003).
Now, let us look into the four definitions of human resource management
(HRM), as shown in Table 1.1.
Table 1.1: Definition of Human Resource Management
Definition Source
HRM encompasses those activities designed to provide for and Byars and Rue (2004)
coordinate human resources.
HRM is the policies and practices, and systems that influence Noe, et al. (2004)
employeesÊ behaviour, attitudes, and performance.
HRM is the policies and practices that involved carrying out Dessler (2005)
the „people‰ or human resource aspects of a management
position, including recruiting, screening, training, rewarding
and appraising
HRM is the utilisation of individuals to achieve organisational Mondy, et al. (2005)
objectives.
Based on the definitions above, Figure 1.1 summarises the definitions of HRM.

Figure 1.1: Human resource management
TOPIC 1 HUMAN RESOURCE MANAGEMENT: A PERSPECTIVE  3
1.2 WHAT IS HUMAN RESOURCE MANAGEMENT?

Human resources management (HRM) is a system of philosophies, policies and
practices that affect the people who work for an organisation. HRM includes
activities related to staffing, training and development, performance review and
evaluation, and compensation.
For stakeholders, an effective human resources management system is essential

for an organisation to achieve its strategic goals. Human resources management
systems evolved over a long period of time and people outside the organisation
often have difficulty fully understanding them.
Organisations must operate within the constraints of the law, recruit and hire
people to staff the organisation, be sure that employees are trained to do the
work they were hired to do, assess employee performance and compensate
employee fairly for the work they do.
Human resources management is a way of management that links people-related

activities to the strategy of a business or organisation. HRM is often referred to as
"strategic HRM". It has several goals. Let see the four main goals of "strategic
HRM":
(a) To meet the needs of the business and management (rather than just serve
the interests of employees);
(b) To link human resource strategies and policies to the business goals and
objectives;
(c) To find ways for human resources to "add value" to a business; and
(d) To help a business gain the commitment of employees to its values, goals
and objectives.
The primary goal of human resource management in any organisation is to

facilitate organisational performance. Managers and economists view human
resource management as a necessary expense, rather than a source of revenue to
their organisations.
1.2.1 Why is Human Resource Management

Important to an Organisation?
The human resource department functions as a link between the organisation
and its employees. It is also responsible for planning, organising, leading and
controlling of the human resource function. The following are the importance of
human resource department in an organisation:
(a) The role of human resource managers has changed. HRM jobs today
require a new level of sophistication.
(i) Federal and state employment legislation has placed new
requirements on employers.
(ii) Jobs have become more technical and require more skill.
(iii) Traditional job boundaries have become blurred with the advent of
trends such as project teams.
(iv) Global competition has increased demands for productivity.

(b) Planning and implementing strategic human resource policies.
(i) The process of formulating HR strategies and establishing
programmes to implement them is called strategic human resource
planning. When done correctly, strategic HR planning provides many
direct and indirect benefits for the organisations.
(ii) Encouragement of proactive rather than reactive behaviour of an
employees. Proactive means developing a vision of where the
company wants to be and how human resources can be used to get
there. Reactive behaviour focuses on responding to problems as they
arise.
(iii) Explicit communication of organisational goal. Strategic HR planning
can help an organisation develop a focused set of strategic objectives
that capitalises on its special talents and know-how.
(iv) Strategic planning can stimulate critical thinking and the development
of new initiatives by continuing a flexible process rather than a rigid
procedure through discussions and simulations.
(v) Strategic HR planning can help an organisation identify the difference
between „where we are today‰ and „where we want to be.‰

ACTIVITY 1.1
You work in the human resource department of Labu Kundur Sdn Bhd,
a medium size manufacturing company in Seremban, Negeri Sembilan.
The company has been unionised for many years but has never had a
strike. The company director, Mr. Ismail Sendayan has just requested
that all departments develop a budget for year 2008 and be prepared to
justify their budget requests. As a human resource executive, you are
required to prepare a list of at least 10 reasons why the human resource
department and its performance are important to the success of the
entire company. Be prepared to present your list to the class.

1.3 RESPONSIBILITIES OF HUMAN RESOURCE

MANAGEMENT DEPARTMENT
There are eight responsibilities of human resource management department as
stated in Figure 1.2.

Figure 1.2: Responsibilities of human resource management
Let us discuss the details of each responsibility one by one.
(a) Analysing and Designing Jobs

(i) Job analysis is a process of getting detailed information about jobs.
(ii) Job design is a process of defining the way work will be performed
and the tasks that a given job require.

(b) Recruiting and Hiring Employees

(i) Recruitment is the process through which an organisation seeks
applicants for potential employment.
(ii) Selection refers to the process by which an organisation attempts to
identify applicants with the necessary knowledge, skills, abilities and
other characteristics that will help the organisation achieve its goals.
(c) Training and Developing Employees

(i) Training is a planned effort to enable employees to learn job-related
knowledge, skills and behaviour.
(ii) Development involves acquiring knowledge, skills and behaviour that
improve employeesÊ ability to meet the challenges of a variety of new
or existing jobs.
(d) Managing Performance

(i) Managing human resources includes keeping track of how well
employees are performing relative to the objectives such as job
descriptions and goals for a particular position.
(ii) The activities of performance management include specifying the
tasks and outcomes of a job that contribute to the organisationÊs
success.
(e) Planning and Administering Pay and Benefits

(i) The pay and benefits that employees earn play an important role in
motivating them.
(ii) Pay and benefits have the greatest impact when they are based on
what employees really want and need.
(f) Maintaining Positive Employee Relations

(i) This function often includes providing information through
communication to employees.
(ii) The HR department also can expect to handle certain kinds of
communication from individual employees such as questions about
benefits and company policy, discrimination issues, safety hazards
and dissatisfaction with a supervisorÊs response.

(g) Establishing and Administering Personnel Policies

(i) Organisations depend on their HR departments to help establish
policies related to hiring, discipline, promotions, benefits and other
activities of HRM.
(ii) Record keeping ranging from preparation of employee handbooks to
processing of job applicants, performance appraisals, benefits
enrolment and government-mandated reports.
(h) Ensuring Compliance with Labour Laws

(i) The government has many laws and regulations concerning the
treatment of employees such as matters like equal employment
opportunity, employee safety and health, pay and benefits, privacy
and job security.
(ii) Requirements include filing reports and displaying posters as well as
avoiding unlawful behaviour.
SELF-CHECK 1.1
State the responsibilities of human resource management.
1.4 HUMAN RESOURCE MANAGEMENT

FUNCTIONS
Human resource management functions refer to those tasks and duties
performed in both large and small organisations to provide for and coordinate
human resources. The basic purpose of human resource management remains
the same. The difference is in the approach used to accomplish its objectives.
There are six activities of the major human resource functions are illustrated in
Figure 1.3.

Figure 1.3: Human Resource Management functions

Let us discuss each activities in greater details.

(a) Human Resource Planning, Recruitment and Selection
(i) Employment specialists coordinate the staff function and help line
management by advertising vacancies, doing initial screening,
interviewing, making job offers and doing paperwork related to
hiring.
(ii) Conducting job analysis to establish the requirements of individual jobs.
(iii) Developing and implementing human resource planning.
(iv) Recruiting the human resources of the organisation.
(v) Selecting and hiring people.
(b) Human Resource Development

(i) Training and development specialists help employees to maximise
their potential, serve as internal change agents to the organisation,
and provide counselling and career development.
(ii) Orienting and training employees.
(iii) Designing and implementing organisational development programme.
(iv) Designing systems for appraising employees.
(v) Assisting employees in their career plan.

(c) Compensation and Benefits
(i) Compensation and benefits establish objective and equitable pay
systems and design cost effective benefits packages that help attract
and retain high quality employees.
(ii) Benefits administrators also help employees to effectively utilise their

benefits, such as by providing information on retirement plans.
(iii) Designing and implementing a compensation and benefits system for
employees.
(iv) Ensuring that compensation and benefits are fair and consistent.

(d) Employee and Labour Relations
Designing discipline and grievance handling systems.

(e) Safety and Health
Designing and implementing programmes to ensure employee health and
safety.

(f) Human Resource Research
(i) Human resource research is clearly an important key to developing
the most productive and satisfied workforce possible.
(ii) Designing and implementing human resource research team for
conducting research, for instance, a study related to recruitment may
suggest the type of worker most likely to succeed in a particular firm.
Most managers are involved to some extent in each of the major human resource
functions. For example, at one time or another, almost all managers are involved
in some aspect of employee recruiting, selecting, training, developing, team
building etc. In small organisations, most human resource functions are
performed by the owner or by operating managers.
SELF-CHECK 1.2
In human resource management, what types of functions must be

performed regardless of the organisationÊs size?

ACTIVITY 1.2
Thousands of workers in Malaysia have lost their jobs due to
downsizing. At the same time, many organisations are complaining that
they cannot find people to fill-up the vacancies. How can you explain
this situation?
1.5 HUMAN RESOURCE MANAGEMENT: THE

CHALLENGES
Do you know that almost daily, business owners, executives, managers and
human resource professionals are challenged by frustrating employee-related
challenges? These challenges cost the company time, money, resources, lost
opportunities and reduced productivity. Organisations that deal with these
challenges effectively are likely to outperform those that do not. Some of the
human resource management challenges are as follows:
1.5.1 Managing a Diverse Workforce

Diversity refers to any perceived difference among people: age, functional
specialty, profession, sexual orientation, national origin, lifestyle, tenure with the
organisation or position. The composition of the workforce will continue to
change dramatically. Specifically, it will continue to become more diverse as
women, multi-cultural group members and older workers flood the job market.
Now, let us find out the diversity composition of the workforce available.

(a) Single Parents and Working Mothers
The trend of single parents and working mothers is increasing and the
human resource department will increasingly be consulted to help
companies accommodate these employees needs and requirements:
(i) Today, businesses have begun to see that providing childcare services
and having a diverse workplace may influence workersÊ choice of
employers.
(ii) Many companies have begun providing day care services for
employees.
(iii) More and more companies are providing paid maternity leave and
some offer paternity leave. Maternity leave is compulsory leave by
law in Malaysia. Hence, organisations must pay for maternity leave to
female employees who are legally married and have given birth.
(iv) Managers need to be sensitive to the needs of single parents and
working mothers. At the same time, management also needs to be
creative in accommodating this most valuable segment of the
workforce.
(v) The Malaysian society is embedded with the belief that working
women must carry their main responsibilities of running a domestic
role and a career. They are fully responsible for their childrenÊs
education and housework, as well as provide love, assistance and

support to their husbands and families. So, the management needs to
understand the stress factors faced by the female employees.
(b) Ageing Workers

Many organisations focus on the new policies aimed at encouraging ageing
employees to stay, or at attracting previously retired employees. Many
American companies offer attractive packages to retired employees to make
them stay. For instance Aerospace Corp lets their ageing employees to work
part-time rather than retire completely. Oracle Corp retrains older recruits
to be IT workers. Ford Corp offers numerous new elder care services to
employees such as hospitalisation, counselling and moral supports and
spiritual needs (Gary Dessler, 2005).
(c) Women in the Labour Force

The large number of women in the labour force has already necessitated the
implementation of more flexible work schedule options and calls for greater
attention to promotional opportunities for female workers. The managers
must be prepared to deal with stress at work for this segment of workers.
For women employees, some of them may find it difficult to relate to other
members of the team. Stress may also be induced from severe work
overload, which may be due either to poor management or because she has
been assigned tasks for which she is not adequately trained to do.
(d) Feelings of Discrimination

Female employees tend to feel that their male colleagues are treated more
favourably in terms of promotion and career prospects and training
opportunities.
The assessment towards male managers and female managers are at dual
standards; so, female managers feel under pressure to do their jobs better
than men.

(e) Young Person with Limited Education or Skills
The shortage of skilled workers is the greatest challenge facing Malaysian
businesses and organisations. The skills needed to maintain a competitive
edge are outpacing the current skill of the workforce.
Those who have graduated from universities often find that their education
hardly fits the work they are expected to do.
1.5.2 Technological Challenges

The dramatic growth of technology such as Internet in recent years has affected
organisations and their human resource practices. The Internet is having
persuasive impact on how organisations manage their human resources. Let us
look at some of the examples:
Internet technology creates a high demand for workers who can deal effectively
with e-mail messages. E-mail writing may also involve legal issues, as an
example, an employeeÊs e-mail response to a customer complaint may be legally
binding on the firm, and there is the „written‰ record to prove it.
Now, almost all firms use the Internet as part of their normal business practices
and the usage of technology for communication such as Facebook, e-mail, SMS,
website, and etcetra can affect the flow of communication between employees
and the management. It could be difficult for the managers to give direct
instructions or directions to their staff face to face as the employer-employee
inter-relationship could be affected by the usage of technology.
1.5.3 Globalisation
Are you aware that one of the most dramatic challenges in managing global human
resource is how to compete against foreign firms, both domestically and abroad?
Production is becoming globalised too, as manufacturers around the world put
manufacturing facilities where they will be most advantageous. Globalisation refers
to the tendency of organisations to extend their sales or manufacturing to new
markets abroad, and for businesses everywhere. A global organisation needs a
transnational HRM system. This is a type of HRM system that makes decisions from
a global perspective, where managers come from many countries, and is based on
ideas contributed by individuals representing a variety of cultures and languages.
The managers must understand the challenges they will face in globalisation. From
tapping the global labour force to formulating selection, training and compensation
policies for expatriate employees, managing globalisation will thus be a major HR
challenge in the near future.
Now, let us look into two main HR challenge in the near future.
(a) Global alliances
International alliances with foreign firms require a highly trained and
devoted staff. Some firms recruit workers globally particularly in high-
technology areas, where specialised knowledge and expertise are not
limited by national boundaries.
(b) Skill shortages

Many available local workers are unskilled and lack experience and it can
be very costly to train them especially for high technology industries. To
train the workers, the companies need to answer these following questions
in order to get the best impact from the training for their international
workforce:
(i) What are the objectives of the training and its content?
(ii) What training techniques, strategies and media will be used?
(iii) What other interventions and conditions must be in place for the
training to meet its objectives?
(iv) Who should be involved in reviewing and approving the training
programme?
1.5.4 Providing Equal Employment Opportunities

Now, let us look into other challenges that affect HR practices in greater detail.

(a) Management Role in Providing for Equal Employment Opportunity
It is not easy for the organisation to practice an equal employment
opportunity to every employees based on their gender, race, religion and
belief. Due to motives ranging from concern for fairness to the desire to
avoid costly lawsuits and settlements, most companies recognise the
importance of complying with equal employment opportunity laws by:

(i) Avoiding discrimination
 Discrimination is often difficult to identify and prove. Legal
scholars and court rulings have arrived at some ways to show
evidence of discrimination if it occurs in the organisation.
 Disparate treatment is differing treatment of individuals, where
the differences are based on the individualsÊ race, colour, religion,
sex, national origin or disability status will be avoided.
(ii) Providing reasonable accommodation

 Especially in situations involving religion and individuals with
disabilities, equal employment opportunity may require that an
employer make reasonable accommodation.
 An accommodation is considered reasonable if it does not impose

an undue hardship, such as expense that is large in relation to a
companyÊs resources.
 Assuming that it would not present an undue hardship,
employers are required to accommodate religious practices.
(iii) Preventing sexual harassment

 Sexual harassment refers to unwelcome sexual advances.
Preventing sexual harassment includes managing the workplace
in a manner that does not tolerate anyone who threatens or
intimidates employees through sexual behaviour.
 To ensure a workplace is free from sexual harassment, the
organisation can follow some important steps:
– First, the organisation can develop a policy statement making it
very clear that sexual harassment will not be tolerated.
Management can prepare to act promptly to discipline those who
engage in sexual harassment as well as to protect the victims.
– Second, all employees, young and old can be trained to
identify inappropriate workplace behaviour. Organisations
can develop a mechanism for reporting sexual harassment in a
way that encourages people to speak out.
(b) Skill Deficiencies of the Workforce

(i) The increasing use of computers to do routine tasks has shifted the
types of skills needed for employees in the Malaysian economy.
(ii) Often, when organisations are looking for technical skills, they are
looking for skills related to computers and using the Internet.
(iii) TodayÊs employees must be able to handle a variety of
responsibilities, interact with customers and think creatively. To find
such employees, most organisations consider educational
achievements. A college or university degree is a basic requirement
for many jobs today.
(iv) The gap between skills needed and skills available has reduced
Malaysian companiesÊ ability to compete because they sometimes lack
the skills to upgrade technology, reorganise work and empower
employees.

ACTIVITY 1.3
„Twenty years ago, young employees we hired were ambitious,
conscientious, hardworking and honest. TodayÊs young workers do
not have the same values.‰ Do you agree or disagree with this
managerÊs comments? Give reasons to support your opinion.

ACTIVITY 1.4
Form a group of three to four people, and appoint one member as a
spokesperson who will communicate your findings to the class when
called upon by the instructor. Then discuss the following scenario:
The Trash Man Never Showed Up
You are the executive of human resources for a company named Rubbish
World Sdn Bhd, a private trash removal service located in Serdang,
Selangor. Customers have been complaining that their trash have not
always been picked up on time. After investigating the matter, the
dispatcher discovered that quite a few drivers have been taking time off
their routes to run personal errands. The offending parties were
disciplined, even dismissed; yet the practice persists. You and other
company officials are concerned because you do not want the problem to
continue with the new employees you hire. At a high-level meeting, you
are asked to provide advice on this matter.
After interviewing some employees, you learn that dual career conflicts
lay at the root of the problem. In view of this, what steps can be taken by
the company to help alleviate such conflict?

1.6 THE CHANGING NATURE OF HRM

When a business grows from regional to national, to international in nature, the
human resource management function must take on a new and broader
perspective. As a national organisation expands overseas, first with a sales
operation, then to production facilities and fully expanded operations or to
international joint ventures, the human resource function must adapt to a
changing and more complex environment.
There is a movement away from centralisation of functional areas towards more

self-contained business units which may have their own HR generalist, who has
responsibilities in all human resource areas.
(a) Human Resource and Corporate Ethics

(i) HRM must make sure that employees know about corporate ethics
policies and train employees and supervisors on how to act ethically
in organisations.
(ii) The bottom line is that corporate greed and unethical behaviour must
be stopped.
(b) Human Resource Management in an Entrepreneurial Enterprise

(i) General managers may perform HRM functions, HRM activities may
be outsourced or a single generalist may handle all the HRM
functions.
(ii) Benefits of an entrepreneurial business environment include freedom
from many government regulations, an absence of bureaucracy and
an opportunity to share in the success of the business.
ACTIVITY 1.5
„Globalisation has led us to the realisation that workers are interchangeable

between countries, so long as language issues are resolved.‰ Do you agree
or disagree with this statement? Explain your position.
 Human resource management is the people component of management. As a

staff function, HR helps line managers with staffing, training and
development, motivation and maintenance.
 The HRM functions include staffing, human resource development,
compensation and benefits, safety and health, and employee and labour
relations.
 HRM has responsibility for the „people‰ component of an organisation. If

HRM is successful, the organisation may gain a competitive edge through its
employees.
 Human resource management, in a sense, means getting things done through
people. It is an essential part of every managerÊs responsibilities, but many
organisations find it advantageous to establish a specialist division to provide
an expert service dedicated to ensuring that the human resource function is
performed efficiently.
 Globalisation is creating a situation where human resource management
must search for mobile and skilled employees who can succeed at their jobs
in other countries.
 The major HR challenges facing managers today are workforce diversity,
women in the labour force, technological challenges and globalisation.
Compensation and Benefits Human Resource Development

Corporate ethics Human Resource Management (HRM)
Discrimination diversity workforce Human Resource Research
Employee and Labour Relations Recruitment and Selection
Employment Safety and Health
Global environment Training and Development
Globalisation

1. Explain what is meant by the term „Human Resource

Management‰.
2. Explain the purpose of HRM in an organisation.
3. Describe the importance of human resource management.
4. Describe the activities in the HRM functions.
5. Discuss the issues in human resource management.
6. How are HRM functions translated into practice?
7. You have been offered two positions in HRM. One is a
generalist position in a smaller business, and one is a recruiting
position in a large corporation. Which of the two jobs do you
believe will give you more involvement in a variety of HRM
activities? Provide reasons for your answers.
8. „Employees only need to provide employees with enough
information so they can effectively and efficiently get their jobs
done. Beyond that, employees do not have a need to know.‰ Do
you agree or disagree with the statement? Justify your answer.
Asong, B. (2002). Does workforce diversity live up to its promise? Retrieved May
7, 2010, from http://www.helium.com/items/858569-does-workforce-
diversity-live-up-to-its-promise
Byars, L. L., & Rue, L. W. (2004). Human resource management (8th ed.).
London: McGraw-Hill Irwin.
Dessler, G. (2005). Human resource management (10th ed.). Upper Saddle River,
New Jersey: Pearson Prentice Hall.
Gomez-Mejia, L. R., Balkin, D. B., & Cardy, R. L. (2007). Managing human

resource (5th ed.). Upper Saddle River, New Jersey: Pearson International
Edition.
Mondy, R. W., & Noe, R. M. (2005). Human resource management. Upper Saddle
River, New Jersey: Pearson Prentice Hall.
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2004). Fundamentals of
human resource management. London: McGraw-Hill Irwin.
Topic  Job Analysis
and Human
2 Resource
Planning
LEARNING OUTCOMES
1. Explain job analysis, job description and job design;
2. Identify the key factors and methods used in job analysis;
3. Identify the steps in designing jobs;
4. Describe how technology can affect job design; and
5. Analyse the strategic human resource planning process and its
application to the organisation.
 INTRODUCTION
Welcome to Topic2! In this topic, you will look into the job analysis and the human
resource planning in greater detail. Do you know that, humans are organisation's
greatest assets because without them, everyday business functions such as cashflow
management, business transactions, media communications and customer services
could not be carried out? In other words, humans and their potential are the drivers
of an organisation. Today's organisations are continuously changing and these
changes impact not only the business but also its employees. It is essential for
organisations to manage their human potential ă individuals' capabilities, time and
talents ă so that their effectiveness is maximised and to ensure that employeesÊ
ability can help organisations achieve their goals.
According to Cherrington (1995), human resource management is responsible for

how people are treated in organisations as well as for bringing people into the
organisation, helping them perform their work, compensating them for their
labours, and solving problems that arise. The human resources (HR) department
TOPIC 2 JOB ANALYSIS AND HUMAN RESOURCE PLANNING  21
specifically addresses seven management functions: staffing, performance

appraisals, compensation and benefits, training and development, employee and
labour relations, safety and health, and human resource research.
Generally, in small organisations where less than a hundred employees are

employed, there may not be a HR department at all. Therefore, the line manager
will be responsible for the functions of HRM. In large organisations, on the other
hand, where a hundred employees or more are employed, the human resource
manager will coordinate the HRM duties and report directly to the chief
executive officer (CEO).
In larger organisations, the HR staff may include human resource generalists and
human resource specialists, where generalist is routinely involved with all seven
HRM functions, while the HR specialist only focuses on one of the seven
responsibilities.
Job analysis is an essential component of any HR unit regardless of its size. It is

designed to determine activities, skills and knowledge of a specific job. You will
see that job analyses are performed on three occasions:
(a) When the organisation is first started,
(b) When a new job is created; and
(c) When a job is changed as a result of new methods, new procedures or new
technology (Cherrington, 1995).
Jobs can be analysed through the use of questionnaires, observations, interviews,

employee recordings or a combination of any of these methods. Let us look into
the two important tools used in defining jobs:
(i) A job description, which identifies the job, provides a listing of
responsibilities and duties unique to the job, gives performance standards,
and specifies necessary machines and equipment; and
(ii) The job specification, which states the minimum amount of education and
experience needed for performing the job (Mondy and Noe, 1996).
In other words, a job is a collection of tasks and responsibilities that an employee

is responsible to conduct.
2.1 JOB ANALYSIS

Job analysis is a critical tool in HRM as it serves to gather data from many
functions of HRM. It is essential that jobs are analysed before many of other
22  TOPIC 2 JOB ANALYSIS AND HUMAN RESOURCE PLANNING
human resource functions are performed. In short, job analysis serves as the
cornerstone of all human resource functions.
2.1.1 Definition of Job Analysis

Now, let us look into the nine definitions of job analysis, as shown in Table 2.1.
Table 2.1: Definition of Job Analysis
Definition Source
A systematic exploration of the activities within a job. It defines Armstrong (2006)
and documents the duties, responsibilities and accountabilities
of a job and the conditions under which a job is performed.
A systematic investigation of jobs using a variety of methods, to Townley (1996)
determine essential duties, tasks and responsibilities.
The identification of relevant skills and competencies. It Legge (1995)
involves obtaining objective and verifiable information about
the actual requirements of a job, and the skills and
competencies required to meet the local area and UniversityÊs
needs.
The „process of determining and reporting pertinent Nadler et al. (1986)
information relating to the nature of a specific job. It is the
determination of the tasks which comprise the job and of the
skills, knowledge, abilities, and responsibilities required of the
holder for successful job performance‰.
The process of determining through observation and study, the Wray (1996)
pertinent information relating to the nature of a specific job.
Facilitates accurate recruitment and selection practices, sets Simmonds (1989)
standards for performance appraisals and allows appropriate
classification/reclassification of positions.
The process whereby jobs are investigated in sufficient detail to Storey (1986)
enable (i) recruitment of people into them or (ii) assessment of
the performance of people who are already working in them.
The gathering, evaluating and recording of accurate, objective Strike (1995)
data about the characteristics of a particular job.
Information about a position to be filled that helps to identify Dessler (1997)
the major job requirements and links them to skills, education,
training, etc., needed to successfully perform the functions of
that job.
2.1.2 Purpose of Job Analysis

The purpose of job analysis is to establish and to document the „job relatedness‰
of employment procedures such as training, selection, compensation and
performance appraisal.
Let us now discuss each purpose in greater details.

(a) Determining Training Needs
Job analysis can be used in training/needs assessment to identify or
develop training content and assessment tests to measure effectiveness of
training, equipment to be used in delivering the training and methods of
training. For example: small group discussion, computer-based, video
presentation and lecture.
(b) Compensation
Job analysis can be used in compensation to identify or determine skill
levels, compensable job factors, work environment (e.g., hazards, attention
and physical effort), responsibilities (e.g., fiscal and supervisory) and
required level of education (indirectly related to salary level).
(c) Selection Procedures

Job analysis can be used in selection procedures to identify or develop job
duties that should be included in advertisements of vacant positions. There
should be appropriate salary level for the position to help determine what
salary should be offered to a candidate. Minimum requirements (i.e.:
education and/or experience) should be set for screening applicants,
interview questions; selection tests/instruments (e.g., written tests, oral
tests and job simulations), applicant appraisal/evaluation forms and
orientation materials for applicants/new hires.
(d) Performance Review

Job analysis can be used in performance review to identify or develop goals
and objectives, performance standards, evaluation criteria, length of
probationary period and duties to be evaluated.
2.1.3 What Aspects of a Job are Analysed?

Job analysis should collect information on the following areas as shown in Table 2.2.
Let us now discuss each evaluation aspects in greater details.
Table 2.2: The Evaluation Aspects of Job Analysis
Evaluation Aspects Description

Duties and Task The basic unit of a job. Information collected about these items
may include the following: frequency, duration, effort, skill,
complexity, equipment, standards, etc.
Environment Gives significant impact on the physical requirements needed
to perform the job. The work environment may include
unpleasant conditions such as offensive odours and extreme
temperatures, as well as definitive risks to the employees such
as harmful fumes, radioactive substances, hostile and
aggressive people, and dangerous explosives.
Tools and Equipment Some duties and tasks may require usage of specific equipment
and tools such as protective clothing. These items need to be
specified in a job analysis.
Relationship This encompasses the supervision given and received as well as
the relationships with internal or external people.
Requirements The knowledge, skills and abilities required to perform a job.
The incumbent may possess higher knowledge, skills and
abilities than required. Job analysis typically states only the
minimum requirement.
2.1.4 Key Factors in Job Analysis

After a work analysis has been done and jobs have been designed, the employer
needs to define and communicate job expectations for individual employees. This
is best done through job analysis which is the systematic gathering and
organisation of information concerning jobs. Specifically, job analysis identifies
the tasks, duties and responsibilities of a particular job. Job analysis is most often
performed because of changes in the nature of jobs. Job analysis information is
used to prepare both job descriptions and job specification.
Now, let us find out the key factors in job analysis as shown in Figure 2.1.
Figure 2.1: Key factors in job analysis
As shown in Figure 2.1, data derived from job analysis can have an impact on
virtually every aspect of human resource management. Each job requires
different knowledge, skills and ability levels. Obviously, effective human
resource planning must take these job requirements into consideration.
SELF-CHECK 2.1
1. What are the purpose of job analysis?
2. Describe the evaluation aspects of job analysis.
3. State the key factors in job analysis.
2.1.5 Job Analysis Information

Considerable information is needed for the successful accomplishment of job
analysis. The job analysis identifies the jobÊs actual duties and responsibilities
and gathers the other types of data as shown in Table 2.3 and Table 2.4.
Now, let us see how the job analysis information can be gained (see Table 2.3).
Table 2.3: Job Analysis Information
(a) Employees can fill out a questionnaire that asks about what they do,
or they can complete a diary that details their activities over several
days. These two methods work best when the jobs are easy to
describe or involve identifiable tasks or activities.
(b) A job analyst visits the workplace and watches or videotapes an
employee performing the job. This method is most appropriate for
jobs that are repetitive in nature and involve physical activity.
(c) A job analyst can visit the workplace and ask an employee to show
what the job entails. This method is most appropriate for clerical and
technical jobs.
(d) A manager or supervisor can imagine what an outstanding job would
look like. The analyst can identify the activities necessary to create the
outputs, particularly if the position is new.
(e) A job analyst can review company records related to performing the
job ă for example, work orders or summaries of customer calls. These
records can show the kinds of problems a person solves in the course
of doing a job.
The job analysis looks at job-related tangibles and intangibles, such as the
knowledge needed, the materials processed and the goods made or services
performed. Subjective skills required, such as strong interpersonal skills, should
be identified if the job requires that the job holder be personable. Information
associated with a job analysis can be gained from the following sources as shown
in Table 2.4.
Let us look into the source of information in greater details.

Table 2.4: Job Analysis Details
Source of Information Description

Job duty A single specific task.
Knowledge A body of information applied directly to the performance of a
duty.
Skill A present, observable competence to perform a learned activity.
Ability A present competence to perform an observable behaviour or a
behaviour that results in an observable product.
Physical characteristic The physical attributes employees must have in order to
perform job duties; unaided or with the assistance of a
reasonable accommodation.
Credentials and The minimal acceptable level of education, experience and
Experience certifications necessary for employment.
Other Characteristics Duties, knowledge, skills and abilities that do not have a logical
place in the job description.
2.1.6 Job Analysis Methods

Job analysis has been conducted in a number of different ways because
organisation needs and resources for conducting job analysis differ.
There are eight common methods of job analysis. Let us discuss them in greater
details.
(a) Observation
A trained observer observes a worker by recording what the worker does,
and how the work is done, and the time required to complete the given
task. There are two types of observation:
(i) Continuous observation which involves observing a job over a given
period of time; and
(ii) Sampling observation which involves observing several incumbents
over random, relatively short period of time.

Observation is a simple and frequently used method of job analysis.

(b) Interview
A trained job analyst interviews a job incumbent, usually using a
standardised format. Results are aggregated when more than one candidate
is being interviewed. There is also group interview, where several

incumbents are interviewed at the same time.
(c) Critical Incident

Behaviourally-based critical incidents are used to describe work, and a job
analyst determines the degree of each behaviour that is present or absent in
the job.

(d) Diary
The job incumbent records activities and tasks in a log as they are
performed.

(e) Checklist
A worker or supervisor checks items on a standardised task inventory that
applies to the job. Checklists may be custom-made or purchased from an
outside vendor.

(f) Questionnaire
There are two types of questionnaires: the structured questionnaire and the
open-ended questionnaire. The structured questionnaire comprises of a
standardised list of work activities, called a task inventory, that job
incumbents or supervisors may identify as related to the job. In addition,
the respondent may also identify additional information such as how much
time is spent on the task, the amount of supervision required, and/or the
expertise required. The open-ended questionnaire asks the job incumbent to
describe the work in his or her own words.

(g) Technical Conference
Several experts (often called "subject matter experts") on the job collaborate
to provide information about the work performed. A job analyst facilitates
the process and prepares the job description based on the consensus of the
technical experts.
(h) Quantitative Job Analysis Technique

If the company aim is to assign a quantitative job analysis to each job so the
jobs can be compared for pay purposes, a more quantitative job analysis
approach may be best such as a Position Analysis Questionnaire (PAQ).
The Position Analysis Questionnaire is a questionnaire used to collect
quantifiable data concerning the duties and responsibilities of various jobs.
The PAQ provides a quantitative score or profile of how a job rates on five
basic activities:
(i) Having decision-making/communication/social responsibilities;
(ii) Performing skilled activities;
(iii) Being physically active;
(iv) Operating vehicles/equipment; and
(v) Processing information.
Figure 2.2 shows an example of the elements of written materials that

received a rating of 4, indicating that the written materials such as books,
reports and office notes play a considerable role in the job.
Figure 2.2: Portions of a completed page from the Position Analysis Questionnaire
SELF-CHECK 2.2
List several methods for collecting job analysis data and explain.
ACTIVITY 2.1
Work individually or in groups, obtain copies of job descriptions for

executive positions at the organisation where you work. What types
of information do they contain? Do they give you enough
information to explain what the job involves and how to do it? How
would you improve on the description?
2.1.7 Trends in Job Analysis

Nowadays, organisations are beginning to appreciate the need to analyse jobs in
the context of the organisationÊs structure and strategy and are realising that job
analysis are constantly subject to changes. TodayÊs workplace must be adaptable
to these changes. Job analysis must not only define jobs when the jobs are
created, but also must detect changes in jobs as time passes by.
Some researchers and business people have observed a trend they call de-
jobbing. This trend consists of viewing organisations as a field of work that needs
to be done, rather than as a series of jobs held by individuals. Changes in the
nature of work and the expanded use of „project-based‰ organisational
structures require the type of broader understanding that comes from an analysis
of workflows.
The end product of a job analysis is a written description of the actual

requirements of the job. This is known as the job description and the job
specifications. The person who analyses a job is known as a job analyst.
2.2 JOB DESCRIPTIONS
Job descriptions define a personÊs role and accountability (in a particular job).
In recruitment, job descriptions enable human resource manager and the
applicants to understand the role beforehand prior to the selection process.
In short, job descriptions are necessary for those who are about to be or
already are employed. Without a job description it is not possible for a
person to properly commit to, or be held accountable for a job.
Job descriptions are written statements that describe the:

(a) Duties and responsibilities of a job;
(b) Most important contributions and outcomes needed from a position;

(c) Required qualifications of candidates; and
(d) Reporting relationship and co-workers of a particular job.
Job descriptions are based on objective information obtained through job

analysis, an understanding of the competencies and skills required to accomplish
needed tasks, and the needs of the organisation to produce work. Job
descriptions clearly identify and spell out the responsibilities of a specific job
which may include information about working conditions, tools, equipment
used, knowledge and skills needed, and relationships with other positions are
also included.
Do you know that typically, job descriptions are used especially for advertising
to fill an open position, determining compensation and as a basis for
performance reviews. A job description is also a communication tool that tells co-
workers where their job ends and the job of another starts, where their job fits
within the overall department and the overall company.
The best job descriptions are „living, breathing‰ documents that are updated as
responsibilities change and they do not limit employees, but rather, cause them
to expand their experience, grow their skills and develop their ability to
contribute within their organisation.
2.2.1 The Importance of Job Descriptions

Do you know why job descriptions are important? Job descriptions improve an
organisationÊs ability to manage people and roles in the following ways:
(a) Clarifying employer expectations for employee and providing the basis for
measuring job performance.
(b) Providing clear description of role for job candidates and a structure, and
discipline for company to understand and structure all jobs and ensure
necessary activities, duties and responsibilities are covered by one job or
another.
(c) Providing continuity of role parameters irrespective of manager as well as
providing the interpretation, and preventing arbitrary interpretation of role
content and limit by employee and employer and manager.
(d) Providing essential reference tool for employee/employer in the issues of
disputes and disciplines.
(e) Enabling pay and grading systems to be structured fairly and logically.
(f) Providing important reference points for training and development areas as
well as neutral and objective (as opposed to subjective or arbitrary)
reference points for appraisals, performance reviews and counselling.
(g) Enabling the formulation of skill set and behaviour set requirements per
role
(h) Enabling organisation to structure and manage roles in a uniform way, thus
increasing efficiency and effectiveness of recruitment, training and
development, organisational structure, workflow and activities, customer
service, etc.
(i) Enabling factual view (as opposed to instinctual) to be taken by employees
and managers in career progression and succession planning.
Do you know that a job description should be a formal document, usually from
one to three pages long? It should include the following:
(a) Date written

(b) Job status (full time or part time, salary)
(c) Position title
(d) Job summary (a synopsis of the job responsibilities)
(e) Detailed list of duties and responsibilities
(f) Supervision received (to whom the jobholder reports)
(g) Supervision exercised, if any (who reports to these employees)
(h) Principal contacts (in and outside the organisations)
(i) Related meetings to be attended and reports to be filed
(j) Competency or position requirements
(k) Required education and experience
(l) Career mobility (positions) for which jobholder may qualify next
Samples of job descriptions are given in Figure 2.3, 2.4 and 2.5.
Figure 2.3: Job description sample ă Sales and Marketing Executive
Figure 2.4: Job Description sample ă Account Manager / Salesperson

Figure 2.5: Job Description Sample ă Manager / Salesperson
SELF-CHECK 2.3
Describe the types of information typically found in a job specification.
ACTIVITY 2.2
1. Do you think companies can really do without detailed job

descriptions? Why?
2. In a company with only 25 employees, is there less need for job
descriptions? Give reason to support your answer.
2.2.2 Job Specifications

A job specification describes the characteristics required from incumbents to
perform the job such as competency, experience and educational qualifications. A
job specification may be prepared as a separate document or as the concluding
section of a job description ă as is usually practiced.
Now, let us look into the samples of a job specification as shown in Figure 2.6
and 2.7.
Figure 2.6: Job specification sample ă Accounting Clerk

Figure 2.7: Job specification sample ă Administrative Services Manager
2.3 JOB DESIGN
Job design is the process of defining how work will be performed and what
tasks will be required in a given job or job redesign, a similar process that
involves changing an existing job design (Noe et al. 2005).
Job design refers to the way that a set of tasks, or an entire job, is organised. Job
design can helps you to determine:
(a) What tasks are done;
(b) How the tasks are done;
(c) How many tasks are done; and
(d) In what order the tasks are done.
It takes into account all factors which affect the work, and organises the content
and tasks so that the whole job is less likely to be a risk to the employee.
There are three important influences on job design. The first is the work flow
analysis which seeks to ensure that each job in the organisation receives work as
an input, adds value to that work, and then passes it on to another worker. The
other two influences are business strategy and the organisational structure that
best fits that strategy.
2.3.1 What are the Features of a “Good” Job Design

Now, let us look at some of the "good" job design.
(a) Allow employees to have option to vary activities according to personal
needs, work habits, and the circumstances in the workplace and gives
employees a sense of accomplishment.
(b) Include training so employees would know what tasks to do and how to do
them properly.
(c) Provide good work/rest schedules and allows for an adjustment period for
physically demanding jobs.
(d) Provide feedback to the employees about their performance.
(e) Minimise energy expenditure and force requirements and balances static
and dynamic work.
A well-designed job design will encourage a variety of „good‰ body positions,

have reasonable strength requirements, require a reasonable amount of mental
activity, and help foster feelings of achievement and self-esteem.
2.3.2 Designing Jobs that Motivate

A focus purely on efficiency will not achieve the human resource objectives.
Therefore, job design should take into account factors that make jobs motivating
to the employees.
The Job Characteristic Model developed by Richard Hackman and Greg Oldham
illustrates how to make jobs more motivating. Desirable work outcomes will
increase when jobs are redesigned such that they include the characteristics as
shown in Figure 2.8.
Figure 2.8: The job characteristic elements
Employees experience a high level of job satisfaction in jobs that generally have
at least one or more of the following characteristics as shown in Figure 2.9.
Figure 2.9: The job characteristics model

As you can see, the job characteristics model identifies five core job dimensions
that produce three psychological states. Workers who perceive that their jobs are
high in skill variety, task identity and task significance attain the psychological
state of experienced meaningfulness of the work. In autonomous jobs, employees
who make their own decisions rather than rely on detailed instructions from
supervisors or procedure manuals will experience responsibility for work
outcome. The employees who get the feedback based on direct sensory
information from the job itself will experience the knowledge of results in their
work performances.
2.3.3 Approaches to Job Design

Table 2.5 stated the six approaches to job design. Let us now study each
approaches in greater details.
Table 2.5: Approaches to Job Design
Approaches to Job Description

Design
Job enlargement Broadening the types of tasks performed. Methods of job
enlargement include job extension and job rotation.
Job extension Enlargement by combining several relatively simple jobs to

form a job with a wider range of tasks.
Job rotation Does not actually redesign the jobs themselves, but moves
employees among several different jobs. This approach to job
enlargement is common among production teams.
Job enrichment. The idea of job enrichment, or empowering workers by adding
decision-making authority to their jobs, comes from the work
of Frederick Herzberg.
Self-managing team A self-regulating team who works without direct supervision.
High performance Focuses on setting up working groups in environments where

work design high level of performance are required.
ACTIVITY 2.3
Consider the „job‰ of college student. Perform a job analysis on this job.
What tasks are required in the job? What knowledge, skills and abilities
are necessary to perform those tasks? Prepare a job description based on
your analysis.
2.3.4 Impact of Technology on Job Design

Let us see the impact of technology on job design. Among the important impacts
of technology can influence job design are:

(a) Socio-technical Systems
(i) Reflect the importance of integrating people and technology to create
high performance work systems.
(ii) Essential for new developments in job design, given the impact of
computers and information technology in the modern workplace.
(b) Flexible Manufacturing Systems

(i) Adaptive computer-based technologies and integrated job designs
that are used to shift work easily and quickly among alternative
products.
(ii) Workers develop expertise across a wide range of functions and the
jobs offer a wealth of potential for enriched core job characteristics.
(c) Automation and Robotics

(i) Highly simplified jobs can be problematic since they lack intrinsic
motivation.
(ii) Automation is one approach for dealing with highly simplified jobs:
Ć Machines are used to do the work previously accomplished by
human beings.
Ć Increasingly involves the use of robots.
(d) Electronic Offices

(i) Developments in electronic offices offer job enrichment possibilities
for workers equipped to handle the technology.
(ii) These developments can be stressful and difficult for workers lacking
the necessary skills.
(e) Workflow and Process Reengineering

(i) Process reengineering is the analysis, streamlining, and
reconfiguration of actions and tasks required to reach a work goal.
(ii) This approach for improving workflows and job designs is driven by
one question:
 What is necessary and what else can be eliminated?
2.3.5 Designing Jobs that Meet Mental Capabilities

and Limitations
Just like the body, the mind too has capabilities and limitations. As you can see,
there are several ways to simplify a jobÊs mental demands:
(a) Limit the amount of information and memorisation that the job requires.
(b) Provide adequate lighting.
(c) Provide easy-to-understand gauges and displays.
(d) Provide simple-to-operate equipment.
(e) Provide clear instructions.
Job descriptions should be updated on a regular basis to avoid inaccuracies. This

task is performed by supervisors through the reviews of job descriptions during
an employee's annual performance appraisal, before the advertisement of a
vacant position, and whenever departmental changes affect the distribution of
office duties and responsibilities. Revisions to written job descriptions must be
reviewed with the current incumbent to assure the employee's acknowledgement
and understanding of the changes and current job expectations.
ACTIVITY 2.4
1. Working individually or in groups, obtain copies of job

descriptions for executive positions at the company where you
work. What types of information do they contain? Do they give
you enough information to explain what the job involves and how
to do it? How would you improve the descriptions?
2. How does technology influence job design?
3. You will most probably enter the workforce after completing your
studies. What are the implications of job analysis and job design
for you?
4. What method of job analysis do you think would be most
applicable for jobs in a large grocery store?
5. Differentiate between duties, position and job.
6. From a human resource managerÊs viewpoint, what are several
potential uses of a job analysis?
7. Form a small group with several of your class members and
develop some „best practices‰ that will reduce the need for
employees to feel compelled to overwork, so that they can
maintain a healthy balance between their personal life and work
life. Here are some possible areas to explore when developing a
list of best practices:
 Using technology
 Adapting flexible work schedules
 Educating employees about healthy lifestyles
 Dealing with expectations concerning employeesÊ off-duty
hours
2.4 CASE STUDIES

Now, read the case studies below and answer all the questions at the end of this
section.
CASE STUDY 1: Ikhwan and Family Cafeteria
Ikhwan and Family Cafeteria is a large establishment located close to the MIDEC
Institute of Technology in Skudai, Johor. The cafeteria has a busy food and drinks
trade and is a popular lunchtime as well as dinnertime destination.
This cafeteria is owned by DatoÊ Khamis and his son Ikhwan and employs 50
staff. One of the staff members is Rashid Atan, who has worked in the cafeteria
for a number of years. Rashid has learning disability. He works as the senior
storesperson and is responsible for dealing with daily deliveries, checking these
are correct, stocking the shelves behind the cafeteria counters and ensuring that
there are enough produce in stock at all times.
According to Ikhwan, Rashid is an excellent worker who is reliable and

consistent in his work. Ikhwan has regular meetings with Rashid to monitor his
performance and resolve any problems. Rashid is fully integrated into the
workforce and has built up a good relationship with other staff members. He
initially started working in the cafe through a placement by DORAS and is now a
full-time employee.
DORAS is a support service offered by COPE Foundation to young people with

learning disabilities wishing to access employment in the open labour market.
This service offers ongoing support to both Ikhwan and Rashid, as required.
Ikhwan has not encountered any difficulties in employing Rashid and no specific
accommodations were required.
Rashid really enjoys working in Ikhwan and Family Cafeteria and says he would
like to stay there. When he first started in this job he was a junior storesperson.
When the senior storesperson left, Ikhwan offered him the opportunity of taking
up the vacant post. Rashid is now delighted to hold this responsible position.
Rashid has no difficulties in his job. It offers him the opportunity of
independence in earning his living and gives him the freedom to enjoy a social
life with his friends and his passion in sports.
CASE STUDY 2: KarinaÊs Supermarket/Diner
Karina's Supermarket is based in Bandar Iskandar Shah, Johor and the operation
is involved in providing motorway forecourt services, incorporating a
supermarket, diner, fuel pumps and post office. Karina's has 50 employees and
employs four people with various disabilities, some of whom have worked there
for two and a half years, and none for less than 18 months.
They all have different responsibilities such as scanning operator and till operator,
pump attendant and general shop assistant. Sarimah, who has worked there for the
longest period of time, is hearing impaired and works in the restaurant. Prior to this,
Sarimah worked as a sewing machinist in the Galtex factory until it closed down.
Sarimah enjoys the work and says „like everyone else, I need to work for money and
would be bored staying at home all of the time.‰
Mohd Zulkarnain is the general manager of the company and says that „my
expectations of people with disabilities employed in the company as with all of
the employees are a level of commitment, a conscientious effort and that they
take the training provided on board and carry out their duties as best as they
possibly can⁄all of our employees with disabilities are absolutely meeting these
expectations.‰
Mohd Zulkarnain says that rapport is quickly built between the employees with
disabilities and their co-workers and the disabled workers are all very much an
integral part of the team. No difficulties have arisen. Sarimah, for example, has a
notebook and communicates with him and the rest of the staff by writing and by
hand gestures. There is an annual training budget for employees, and all four
have participated in training. The company and its employees avail of the
support of a job coach, Jamil, from the Johor South Supported Employment
Programme. Jamil keeps in regular contact, either in person or by phone. The
local South Johor Employment Services office has also been supportive and
provides financial assistance through the operation of the Employment Support
Scheme for one of the company's employees with disabilities.
Management had no concerns in employing people with disabilities and was

very keen to be seen as an equal opportunities employer. Mohd Zulkarnain
points out that everyone is affected by disability in some way. His advice to other
employers is to be open-minded. Look outside of the box at the bigger picture.
Give people a chance and if they are given a fair crack of the whip they will
perform well. After all, performance is everything in business.
The people with disabilities working here are very much part of the team and are
important contributors to the success of the business.
ACTIVITY 2.5
1. How can a job analysis of each job in the work unit help a supervisor
to do his or her job?
2. Based on the Case Study 1, write the job description for Mr. Rashid as
a Senior Storesperson.
3. Based on the Case Study 2, Mr Mohd Zulkarnain would like to promote
Sarimah as a senior clerk in his company. As a human resource executive
in the company, write a job specification for Sarimah.
Now, let us read the article as shown in Figure 2.10, and identify what can be
concluded from the article.
Figure 2.10: An article on HRM in action

ACTIVITY 2.6
1. Your company is a leading producer of microchips. You are the chief
researcher in your firmsÊ „think tank,‰ which consists of eight people
with various specialities. Your group has generated most of the ideas
and product innovations that have kept the company an industry
leader for 10 years. In fact, the think tank has been so successful that
another one has been organised to support the companyÊs newest
manufacturing operation on the coast. The individuals to be included
in the new think tank have already been selected, but your boss has
just assigned you the task of deciding which person from your group
of thinkers that will head the new organisation.
The person best qualified for the job is Mohd Daniel, a graduate from
MARA Institute of Technology University. Mohd Daniel is the
informal team leader, who personally spearheaded three of the teamÊs
five most successful product advancements. However, if Mohd
Daniel is given the promotion, the void created by his leaving will be
difficult to fill. On the other hand, the boss forced his nephew, Rahim
Jailani, into the group. Rahim Jailani is a sharp graduate from a local
university and is a team player ă he is always trying to push you
around. You can either recommend Mohd Daniel, illustrating that
„those who produce the most benefit the most‰, or you can
recommend Rahim Jailani, making the boss happy, getting rid of a
problem, and most important of all, keeping your best performer.
What would you do?
2. In this exercise, you need to gather some background information

from other students to determine whether they appear to be
overworked. Interview some classmates and friends about their
work schedules. Find out how many hours per week they: (1)
attend classes; (2) study; (3) work at part-time jobs; (4) answer e-
mails and other communications from classmates.
What conclusions can you draw? Are students at your university

overworked? When is a studentÊs work schedule unbalanced?
2.5 HUMAN RESOURCE PLANNING

Human resource (HR) planning is a strategic process that forecasts the demand
for jobs in the organisation and anticipates the supply of workers. HR planning
enables the hiring managers and recruiters to obtain the best fit between a
candidate and the job at hand. It ensures that there are adequate human
resources to fill in the slot of the employees who leave the organisation.
It also assists organisations in recruiting, retaining, and optimising the

deployment of the personnel needed to meet business objectives and to respond
to changes in the external environment. The HR planning process involves
carrying out a skills analysis of the existing workforce, carrying out manpower
forecasting, and taking action to ensure that supply meets demand. This may
include the development of training and retraining strategies.
Human resource planning is most effective when it is linked with strategic,

operational and work planning. Human Resource Planning defines project roles,
responsibilities and reporting relationships. One key result of Human Resource
Planning is the staffing management plan which depicts how and when team
members are added to the team, and how the team members are released from
the project, the training needs of the team, and several other key components.
2.5.1 Human Resource Planning Concepts

The important concepts in human resource planning are shown in Table 2.6. Let
us now find out more on each concept.
Table 2.6: Human Resource Planning Concept
Human Resource Description

Planning Concept
Action plan A document that explains the strategies departments have decided to
do to meet their forecasted human resource needs.
Barrier Any attitude, belief, system, policy, practice or procedure which

denies or limits access to employment or career development
opportunities.
Career planning The process by which employees set their own career goals and
identify training and development strategies to achieve those goals.
Definitive objectives Describe planned activities that a department expects to do within the
budget year.
Employment equity Equality of access to employment opportunities and freedom from

discrimination in the workplace. The usual indicator of employment
equity is a workforce that is representative of the population it serves.
Employment equity Human resource planning that focuses on increasing opportunities

planning and removing barriers within the workplace to achieve a
representative workforce.
Forecasting The process of making predictions, based on systematic and thorough

analysis of all information.
Forecasting methods Specific techniques designed to yield accurate predictions.

Goal
A broad, general statement describing what a department will do over
the planning period to meet its human resource needs.
Human resource The analysis of human resource needs and the development of
planning strategies to reach them. The purpose of human resource planning is
to help managers set and achieve strategic and operational goals.
Human resource The number and type of people the department will need over the
requirements planning period to achieve its objectives.
Merit Deserving of appointment or promotion because of qualifications,

competence and personal suitability.
Staff development Activities that prepare employees for promotion, by focusing on skills
beyond those needed for the job they have now.
Staff training Activities that provide employees with specific information or skills to
improve their performance in the job they have now.
Strategic planning The process of defining long-term objectives and developing strategies
to achieve those objectives.
SELF-CHECK 2.4
1. Define succession planning. Why is it important?

2. What actions could a firm take if it forecasted a shortage of
workers?
2.5.2 The Strategic Human Resource Planning Process

The strategic human resources planning process has the following elements. Let
us now study the process in greater detail.
(a) Assessing the Current Human Resource Capacity

This is the first step in the strategic human resources planning process.
Here, the current human resources capacity, knowledge, skills and abilities
of the organisationÊs staff are assessed. This can be done by developing a
skills inventory for each employee.
The skills inventory should go beyond the skills needed for the particular
position. List all skills each employee has demonstrated. For example,
recreational or volunteer activities may involve special skills that could be
relevant to the organisation. Education levels and certificates or additional
training should also be included.
The employee's performance assessment form can be reviewed to

determine if the person is ready and willing to take on more responsibility
and to look at the employee's current development plans.
(b) Forecasting Human Resources Requirements

The second step is to forecast human resources needs for the future based
on the strategic goals of the organisation. Realistic forecasting of human
resources involves estimating both demand and supply. Questions to be
answered include:
(i) How many staff will be required to achieve the strategic goals of the
organisation?
(ii) What jobs will need to be filled?
(iii) What skill sets will people need?
When predicting demands for human resources, HR manager should also

assess the challenges faced in meeting the staffing needs based on the
external environment. A question that a HR manager may be faced with is
on how the external environment will impact on the human resources
needs.
(c) Gap Analysis

The third step is where a HR manager needs to analyse the gap between
organisationÊs current level and the target level it wants to be in the future.
The analysis includes identifying the number of staff and the skills and
abilities required in the future. In addition, HR manager should also
evaluate organisationÊs current HR practices and determine what changes
should be made, if they are necessary to equip organisation with desirable
capacity to move forward.
Questions to be answered include:

(i) What new jobs will be needed?
(ii) What new skills will be required?
(iii) Do present employees have the required skills?
(iv) Are employees currently in positions that use their strengths?
(v) Does the organisation have managers/supervisors?
(vi) Are current human resources management practices adequate for
future needs?
(d) Developing Human Resources Strategies to Support Organisational Strategies

The fourth step is to develop human resource strategy. When overall
business strategy planning is done in combination with HR strategy
planning, firms can identify the potential problems and opportunities with
respect to the people expected to implement in business strategy.
Developing HR strategies is to support the firmÊs overall businesses
strategy. A successful HR strategy demands a vision tied to the long-term
direction of the business. There is no single approach in developing a HR
strategy. The specific approach will vary from one organisation to another.
This approach identifies six specific steps in developing a HR strategy as
presented in Figure 2.11.
Figure 2.11: Six steps in developing a human resource strategy

Source: http://gametlibrary.worldbank.org/FILES/844_HR planningprinciples.pdf
Let us now study each step in greater detail.
(i) Setting the strategic direction.

 This process focuses on aligning human resource policies to
support the accomplishment of the company's mission, vision,
goals and strategies and many organisations cite their people as
their primary source of competitive advantage.
 More importantly, they structure work and design training,
performance management, pay and reward policies to help members
of the organisation succeed in achieving desired organisational
outcomes as shown in Figure 2.12.
Figure 2.12: Strategic Direction

Source: http://www.workinfo.com/free/Downloads/176.htm
(ii) Designing the human resource management system.

 This stage focuses on the selection, design and alignment of HRM
plans, policies and practices. Various options may be open to the
organisation such as drawing on industry best practices as shown
in Figure 2.13.
Figure 2.13: Human resource management system

(iii) Planning the total workforce.

 Workforce planning is a systematic process of identifying the
workforce competencies required to meet the company's strategic
goals and for developing the strategies to meet these
requirements.
 It provides managers with a framework for making human
resource decisions based on the organisationÊs mission, strategic
plan as shown in Figure 2.14.
Figure 2.14: Total workforce planning

(iv) Generating the required human resources.

 This stage focuses on attracting, accessing and initially assigning
the people needed in the organisationÊs total workforce as shown
in Figure 2.15.
Figure 2.15: Generating required human resource

(v) Investing in human resource development and performance.

 Investing in human resource development and performance
focused on the developing and reinforcing competence and
performance in individual groups and teams in the organisationÊs
workforce as illustrated in Figure 2.16.
Figure 2.16: Investing in human resource development and performance

(vi) Assessing and sustaining organisational competence and

performance.
 In particular, the organisation need to measure the organisationÊs
progress towards its desired outcomes and adjusting the system
accordingly to sustain the organisational competence and
performance as shown in Figure 2.17.
Figure 2.17: Assessing and sustaining organisational competence and performance

To meet organisationÊs future needs, the five human resources strategies

highlighted are:
(i) Restructuring strategies

Restructuring strategy provides an overview of the strategies industries,
networks, where businesses are deploying to shape, adapt to or survive in
the chaotic conditions to enhance business profitability.
(ii) Training and development strategies

Individuals at all levels must have the right skills to perform their work and
this is vital to promote healthy workplace and to meet the organisationÊs
overall business goals. A solid business plan/healthy workplace plan will
identify the human resource capabilities needed and address how training
gaps (gaps between skills employees currently hold and those they need)
are identified and resolved. A good training and development strategy
should continuously provide support by allocating sufficient resource and
ensuring that individuals who need to enhance and develop job skills
receive appropriate training in a timely fashion.
Example of healthy training and development strategy:

Management training that addresses the organisation of work as it relates
to employee and organisational stress (i.e. demand-control model of job
stress). Follow-up support for involved managers is provided as strategies
implemented in their departments are based on the training received. The
training efforts are evaluated using an appropriate framework to determine
if the training/development strategy is achieving its intended goals.
Employee feedback about the current level of training and its effectiveness
are gathered. The effectiveness of the training/development strategy at
improving departmental and organisational outcomes is measure.
Consequent improvement in work practices is assessed.
(iii) Recruitment strategies

Internal recruitment such as promotion and transfer of existing personnel
or through referrals, by current staff members, of friends and family
members can be conducted. However, it does not always produce the
number or quality of personnel needed.
External recruitment is another method where candidate from outside of

organisation needs to recruit from external sources, either by encouraging
walk-in applicants; advertising vacancies in newspapers, magazines and
journals, and the visual and/or audio media; using employment agencies to
„head hunt‰; advertising on-line via the Internet; or through job fairs and
the use of college/university recruitment.
(iv) Collaboration strategies

 Build on previous research collaboration and needs assessment.
 Conduct workshops at mentoring institution.
 Establish contact procedures.
 Site visits to adapting institutions.
 Active and regular communication.
 Regular face-to-face meetings with community building activities.
 Flexible approach to unique approaches and systems on different
organisations.
(v) Restructuring strategies

 Reducing staff either by termination or attrition.
 Regrouping tasks to create well-designed jobs.
 Reorganising work units to be more efficient.
At an operational level, organisations also need to be aware of the

interdependencies between operational decisions and human resources
management practices. Decisions made on one aspect of human resources
often have an impact on another aspect of human resources management.
SELF-CHECK 2.5
1. Describe the human resources strategies to support
organisational strategies.
2. Explain the human resource planning process.
2.5.3 Staff Management Plan

The staff commitment to their organisation depends on how the organisation
treats them. To make sure the organisation uses the talents of its people, and
reassure them of their value, so that they do not become dissatisfied and leave
the organisation, the staff management plan is an important output of the human
resource planning which establishes the timing and methods for meeting project
human resource requirement and for the staff to have a better future in the
organisation.
There are seven components of the staffing management plan shown in Table 2.7.
Let us now study each component.
Table 2.7: Components of the Staffing Management Plan
Components of the
Staffing Management Description
Plan
Staff Acquisition Staff Acquisition details how the organisation will be staffed,
where the team will work, and the level of expertise needed
with the staff.
Timetable The timetable illustrates the necessary time frames for the
team to be available. One tool commonly used is a resource
histogram.
Release Criteria Release criteria lists the method and timing of doing the job.
Training Needs Training needs is a plan on how to train the people in the
organisation.
Recognition and Recognition and rewards are the criteria for rewarding and
rewards promoting desired team behaviours.
Compliance Compliance details the strategies for complying with
regulations, contracts and other established human resource
policies.
Safety Safety procedures are listed to protect the team members.
Organisations collect information and provide feedback to employees about their

behaviour, communication style, skill and job experiences. To plan and prepare a
management plan for the staff requires active career management, which
includes planning for employee development.
SELF-CHECK 2.6
1. State the six steps in developing human resource strategy.
2. How can the human resource planning process help
management to plan the workforce for the organisation?
ACTIVITY 2.7
Mr. Ahmad Farid, the vice-president of marketing for ALFA
Manufacturing Sdn. Bhd, commented at the weekly executive directorsÊ
meeting, „I have good news. We can get the large contract with Melodi
Corporation. All we have to do is complete the project within the period
of one year instead of two. I told them we could do it.‰
Ms. Alya Faridha, vice-president of human recources, brought Ahmad

Farid back to reality by reminding him, „Remember the strategic plan
we were involved in developing and we all agreed upon? Our present
workers do not have the expertise required to produce quality work.
We need to gradually retrain our workers. With this new time
schedule, we will have to go into the job market and recruit workers
who are already experienced in this process. We all need to study your
proposal further. Human resource costs will rise considerably if we
attempt to complete the project in one year instead of two. Sure,
Ahmad Farid, we can do it, but with these constraints, will the project
be cost effective?‰
Questions:
Was Alya considering the strategic nature of human resource planning
when she challenged Ahmad FaridÊs „good news‰ forecast? Discuss.
 Job analysis is the process of gaining detailed information about jobs, and it
usually includes both a job description and a job specification as an output of
the process.
 Job description is a list of the tasks, duties and responsibilities (work being
performed) required by a job.
 Job specification is a list of the knowledge, skills, abilities and other
characteristics that a jobholder must have in order to be able to effectively do
the tasks, duties, and responsibilities.
 Without a properly conducted job analysis, it would be difficult, if not
impossible, to satisfactorily perform the other human resource related functions.
 The job analyst may administer a structured questionnaire, witness the work
being performed, interview both the employee and the supervisor, or ask
them to describe their daily work activities in a diary or log. A combination of

methods is often used.
 The job description should portray the work of the position so well that the
duties are clear without reference to other job descriptions. Always ask, „Will
the new employee understand the job if he or she reads the job description?‰
 According to the Job Characteristics Model, jobs are more motivating if they
have greater skill variety, task identity, task significance, autonomy and
feedback about the performance effectiveness.
 Ways to create jobs include job enlargement through job extension or job
rotation and job enrichment. In addition, self-managing work teams offer
greater skill variety and task identity. Flexible work schedules and telework
offer greater autonomy.
 Job analysis permeates all aspects of HRM in that almost everything that
HRM does relates directly to the job analysis process. Recruiting, selection,
compensation, and performance appraising, employee training and career
activities, and safety and health requirements for example, are affected by job
analysis, which identifies necessary skills, knowledge and abilities.
 The job specification takes the job description and answers the question,
„What human traits and experience are necessary to do this job well?‰ It tells
what kind of person to recruit and for what qualities that person should be
tested. Job specifications are usually based on the educated guesses of
managers; however, a more accurate statistical approach to developing job
specifications can also be used.
 Human resource planning is the process of determining an organisationÊs
human resource needs.
 The strategic human resource planning process has the following elements:
assessing the current human resources capacity, forecasting human resources
requirements, gap analysis and developing human resources strategies to
support organisational strategies.
 The human resource strategy consists the following elements:
(a) Setting the strategic direction.
(b) Designing the human resource management system.
(c) Planning the total workforce.
(d) Generating the required human resources.
(e) Investing in human resource development and performance.
(f) Assessing and sustaining organisational competence and performance.
Autonomy Job enrichment

Feedback Job enlargement
Human resource planning Job rotation
Human resource strategy Job sharing
Job analysis Job specifications
Job analyst Responsibility
Job characteristic model Strategic direction
Job descriptions Task identity
Job designs Task significance
Cumi Cleaning Company

The Job Description
Based on her review of the stores, Jamilah concluded that one of the
first matters she had to attend is to be involved in developing job
descriptions for her store manager. As Jamilah tells it, her lesson
regarding job descriptions in her basic management and HR
management courses were insufficient to fully convince her of the
pivotal role job descriptions actually play in the smooth functioning of
an enterprise. Many times during the first few weeks on the job,
Jamilah found herself asking one of her store managers why he was
violating what she knew to be recommended company policies and
procedures. Repeatedly the reply was either „Because I didnÊt know it
was my job‰ or „Because I didnÊt know that was the way we were
supposed to do it.‰ Jamilah knew that a job description, along with a
set of standards and prodecures specifying what was to be done and
how to do it, would go a long way towards alleviating this problem.
In general, the store manager is responsible for directing all store
activities in such a way that quality work is produced, customer relations
and sales are maximised, and profitability is maintained through effective
control of labour, supply and energy costs. In accomplishing that general
aim, a specific store managerÊs duties and responsibilities include quality
control, store appearance and cleanliness, customer relations,
bookkeeping and cash management, cost control and productivity,
damage control, pricing, inventory control, spotting and cleaning,
machine maintanance, employee safety, hazardous waste removal,
human resource administration and pest control.
The questions that Jamilah had to address are as the following:
1. What should be the final format for the store managerÊs job
description?
2. Was it practical to specify standards and procedures in the body
of the job description or should these be kept separately?
A guide to strategic human resource planning. Retrieved May 31, 2010, from:
http://www.workinfo.com/free/Downloads/176.htm
A Strategic Human Resource Management System for the 21st Century. Naval
Personnel Task Force, U.S. Department of Navy, September 2000.
Armstrong, M. (2006). A handbook of human resource management practice

(10th ed.). New York: McGraw Hill.
Cherrington, D. J. (1995). The management of human resources. Englewood

Cliffs, New Jersey: Prentice-Hall.
Dessler, G. (1997). Human resource management (7th ed.). Englewood Cliffs,

New Jersey: Prentice Hall.
Developing a human resource strategy: A good practice guide. South East

Employers, June 1999.
Human resource management. Retrieved December 10, 2009, from

http://www.hr.guide.com/

http://humanresources.about.com

http://www.business.gov/topic/humanresources/
Legge, K. (2005). Human resource management: Rhetorics and realities

(Anniversary Edition). Bassingstock: Macmillan Business.
River, New Jersey: Prentice-Hall.
Nadler, Leonard, & Wiggs, G. D. (1986). Managing human resource

development. San Francisco: Jossey-Bass.
Noe, M. & Mondy, R. (2005). Human resource management (9th ed.). Pearson
International Edition.
Simmonds. S. (1989). Human resource development: The management, planning

and training of health personnel. Health Policy and Planning, 4(3),187-196.
Storey, J. (1989). Human resource management in the public sector. Public Money
and Management, 9(3), 19-24.
Strike, A. J. (1995). Human resources in health care: A manager's guide. London:

Blackwell Science.
Townley, B. (1994). Reframing human resource management, power, ethics and

the subject at work. London: Sage Publication.
Wray, G. (1996). The role of human resources in successful outsourcing.

Employment Relations Today, Spring, 23( 1), 17-23.
Topic  Recruitment
3 and Selection
LEARNING OUTCOME
1. Explain the recruitment process;
2. List the main sources of recruitment;
3. Illustrate the recruitment process flowchart;
4. Interpret the Four Metre Model of Recruitment and the usage of
the model to measure the effectiveness of the organisation
recruitment programme; and
5. Discuss the selection process.
 INTRODUCTION
Recruitment and selection of quality staff continues to be one of the challenges to
every organisation that seeks to attract, select and retain the best people as their
employees. Do you know that, many organisations capable of attracting good
quality professionals are unable to secure employment contracts with them, due
to poor first impression at the interviews or wrong selection tools used? Even if
some organisations are able to recruit quality employees, they are unable to
retain them for a long-term period. You will learn all of these and many issues on
recruitment and selection which will be discussed in this topic.
3.1 RECRUITMENT
Let us now begin with the concept of recruitment. The process of staff
recruitment and selection is becoming increasingly complex and its integration
into organisational and Human Resource (HR) strategies indicates that the
outcome of these processes affects job performance and organisational success.
64  TOPIC 3 RECRUITMENT AND SELECTION
Recruitment is the process of generating a pool of qualified candidates for a

particular job. The firm must announce the jobÊs availability to the market (inside
or outside the organisation) and attract qualified candidates to apply.
Recruitment is the process of attracting individuals on a timely basis, in sufficient

numbers and with appropriate qualifications, developing their interest in an
organisation and encouraging them to apply for jobs within it (Mondy & Noe,
2005).
3.2 THE RECRUITMENT AND SELECTION

PROCESS
Before we go any further, let us see the recruitment and selection process that can
be viewed as a series of hurdles that require:
(a) Doing employment planning to determine the duties of the position to be
filled.
(b) Building a pool of candidates by recruiting internal or external candidates.
(c) Having applicants fill out the application forms and focus on the
requirement of the screening interview.
(d) Using various selection techniques such as tests, referrals, physical tests and
personal investigations to identify reliable candidates.
(e) Supervisors and other relevant parties interview final candidates to make a
final choice of the candidates.
SELF-CHECK 3.1
Elaborate the recruitment and selection processes in any of the

Malaysian private limited company that you know.
3.2.1 Sources of Recruitment

Another critical element of an organisationÊs recruitment strategy is its decisions
about where to look for applicants. Figure 3.1 summarises major sources from
which organisations draw recruits.
TOPIC 3 RECRUITMENT AND SELECTION  65
Figure 3.1: Internal sources of recruitments
Let us now discuss the main internal sources of recruitment.
(a) Internal Sources

(i) An organisation may emphasise internal or external sources of job
applicants. Internal sources are employees who currently hold other
positions in the organisation.
(ii) Organisations recruit existing employees through job postings ă
communicating information about vacancies on bulletin boards, in
employee publications, on corporate intranets and anywhere else the
organisation communicates with employees. Where the organisation
does its own printed advertising it is useful if it has some identifying
logo as its trademark for rapid attraction and it must take precaution
as not to offend particular gender or race, etc. or violate any anti-
discrimination legislation either directly or indirectly.
(iii) The form on which the applicant is to apply (personal appearance,
letter of application, completion of a form) will vary according to the
posts vacant and the numbers to be recruited.
(iv) Management should be able to identify current employees who are
capable of filling positions as they become available. Helpful tools
used for internal recruitment include employee databases, job

postings and job bidding procedures.
For the employer, relying on internal sources offers several advantages such as:
 Generates applicants well known to the organisation;
 Applicants are relatively knowledgeable about the organisationÊs
vacancies;
 Faster and less expensive than external recruitment;
 It can help minimise the commonly heard complain that insiders never
heard of job opening until it is filled;
 The procedures of job promotion and career advancement reflects an
openness that most employees value highly;
 It provides a clear signal to the current workforce that the organisation
offers opportunities for advancement; and
 Management must choose the most qualified applicant and every staff
will have the same opportunity to move forward in the organisation.
Now that we are aware of the internal sources, let us also look into the external
sources of recruitment in greater detail.
(b) External Sources

(i) Organisations often have good reasons to recruit externally such as
they do not have internal recruits available and would like to bring in
new ideas or new ways of doing business. Organisations often recruit
through direct applicants and referrals, advertisements, employment
agencies, schools and websites.
(ii) Direct applicants and referrals: Direct applicants are people who
apply for a vacancy without prompting from the organisation.
Referrals are people who apply because someone in the organisation
prompted them to do so.
(iii) One advantage is that many direct applicants are to some extent
already „sold‰ on the organisation. This process is called self-
selection. A form of aided self-selection occurs with referrals.
(iv) Some employers offer current employees financial incentives for
referring applicants who are hired and perform acceptably well on the
job. Other companies play on their good reputations in the labour
market to generate direct applicants.
(v) A major downside of referrals is that they limit the likelihood of

exposing the organisation to fresh viewpoints. Sometimes referrals
contribute to hiring practices that appear unfair such as nepotism or
we can loosely define it as „the hiring of relatives.‰
(vi) Advertisements in newspapers and magazines: These ads typically
generate a less desirable group of applicants than direct applicants or
referrals and do so at greater expense.
(vii) Colleges and universities: On-campus interviewing is the most
important source of recruits for entry-level professional and
managerial vacancies. Participating in university job fairs is another
way of increasing the employerÊs presence on campus.
(viii) Electronic Recruiting: The Internet has opened up new vistas for
organisations trying to recruit talent. One of the easiest ways to get
into „e-cruiting‰ is by utilising the organisationÊs own website to
solicit applications.
For the employer, external sources of recruitment offer several advantages

such as:
 Bringing in outsiders may expose the organisation to new ideas or new
ways of doing business or innovation in the organisations.
 For entry level positions and for specialised upper-level positions, most
of the organisations prefer to recruit through referrals, advertisements
or websites. It can enhance the reputation of the organisation in the
public eyes.
3.2.2 On-line Applications/Recruiting on the Internet

Do you know that, the Internet is a large system of many connected computers
around the world that individuals and businesses use to communicate with each
other. The Web (World Wide Web) is the system of connected documents on the
Internet.
Using the Internet is faster and cheaper than many traditional methods of
recruitment. Jobs can be posted on Internet sites for a modest amount (less than
in the print media), remain there for periods of thirty or sixty days or more ă at
no additional cost ă and are available 24 hours a day. Candidates can view
detailed information about the job and the organisation and then respond
electronically.
Most homes and workplaces are now using computerised equipment for
communication; the Internet is rapidly becoming the method of choice for
accessing and sharing information. First-time job seekers are now more likely to
search websites for job postings than through newspapers, magazines or
journals. The prevalence of advertising on the Internet has made it easier.
The Internet speeds up the hiring process in three basic stages as shown in Figure 3.2.
Figure 3.2: The Internet speeds up the hiring process three basic stages

(a) Faster Posting of Jobs
On the Internet, the advertisement appears immediately and can be kept
online for as long as the recruiter requires it.
(b) Faster Applicant Response

Jobs posted on the Internet and requiring responses via the same medium
receive responses on the same day.
Companies that are likely to advertise on-line usually have a website that
allows potential candidates to learn about the company before deciding
whether to apply, thus lowering the incidence time-wasting through the
submission of unsuitable applications. The website can be used as a tool to
encourage potential job seekers to build an interest in joining the organisation.


„Talent no longer refers to „innate ability‰, but is a new
management buzzword used to refer to „brainpower‰ (either
natural or trained), and is used by some to refer to their entire
workforce and others to refer to the management of specific
competencies. The bottom line is, however it is defined ă there is a
TALENT SHORTAGE looming.‰

The Economist, Oct 7, 2006

SELF-CHECK 3.2
1. List the sources of recruitment.
2. Identify the main source of recruitment and describe briefly.
3.2.3 An Example of the Recruitment Process

Let us go through an example of the company recruitment as given below:
CAMO TECHNOLOGIES SDN BHD
CAMO Technologies Sdn Bhd delivers unmatched services to its clients and
candidates throughout the relationship, by following rigorous internal
recruitment processes. First, the CAMO Technologies team discusses the
requirements, parameters and objectives of each staffing and contracting
initiatives, with its clients. Consultants/Candidates that fit into the defined
parameters are validated throughout the process. This methodical and focused
approach has helped CAMO Technologies foster long-term relationships with
clients and consultants.
Objectives:
(a) Ensure precisely channelled selection of resources, to enable achievement of
the company's business goals.
(b) To attract potential employees into the role of the company.
(c) To make a positive impact with our clients, thereby increase the goodwill
and equity for the company, leading to better market standing.
You can see the example of the recruitment process at CAMO Technologies as
Figure 3.3: The example of the recruitment process flowchart at CAMO Technologies
Recruitment Process Diagram at CAMO Technologies
As you can see, Figure 3.4 is another example of a flowchart by the CAMO
Technologies. However, this flowchart also add summariy of the various
elements of the recruitment process through assessment and presentation to the
board of CAMO Technologies Sdn Bhd directors for approval.
Figure 3.4: Elements of the recruitment process at CAMO Technologies
3.2.4 Issues in Recruitment

Managers must understand the issues in recruitment that can affect the practice
of HRM when taking on new employees especially on the issues of
discrimination based on sex, family background, race, disability, religion and
belief. Now, let us look at some of the best defence to a discrimination claim as
for the employer to practice fair recruitment process:
(a) The position will have to be advertised so as to ensure that all potential
applicants have the opportunity to apply;
(b) The employer will have drafted a job description setting out what the job
entails as well as a person specification. The person specification will set
out the qualifications, skills and experiences that will be required by the
candidate;
(c) The candidates will be assessed against the person specification and the
interviews will be conducted on a fairly standard basis so that each
candidate is given an equal opportunity to compete for the position; and
(d) The candidates will be marked or assessed in some way against the person
specification and the candidate with the best assessment/score will be
appointed to the position.
Provided that the above kind of recruitment procedure has been adopted, it will
be fairly straightforward for an employer to show that the best candidate was
appointed and thereby defeat any potential discrimination claims.
3.2.5 Building a Diverse Workforce

To build a more diverse workforce, an organisation needs to enhance two critical
aspects: the process by which employees are recruited and hired, and the
environment in which they work. Creating and maintaining a supportive and
productive work environment and providing opportunities for employee
development are as important in retaining quality employees as is the process of
recruiting them.
(a) Why is Diversity Recruiting Important?

Are you aware that, diversity recruiting is important to a companyÊs
profitability? In todayÊs global economy, buying power rests in the hands of
people from all walks of life. By employing a diverse workforce, companies
can tap into their specialised insights and knowledge about the
marketplace.
Diversity recruitment is also important if a company wants to build a

quality workforce. Demographic changes that are affecting the labour pool
and available talent will make diversity recruitment a growing factor in the
coming years.
(b) Building and Maintaining a Diverse Workforce

An effective diversity recruitment programme can provide companies with
a valuable competitive advantage. Competing for skilled and talented
employees is challenging, and will become even more challenging as
demographic trends change the labour force.
For these reasons, an organisation needs to be prepared and take steps to

help turn an average diversity recruitment programme into a „shining
star.‰ Let us study each step now.
(i) Use Referrals

Referrals can be a powerful tool for diversity recruitment
programmes. Employee referral programmes should routinely
measure employee perception. This way, both current and former
employees are empowered with the information necessary to express

why they work where they work, and why someone might want to
consider joining them. There are four ways to improve the
effectiveness of an employee referral programme:
 Find out what current and former employees are saying;
 Determine whether any employee demographic groups have more
negative perceptions than others;
 Develop methods to communicate with employees and actively
manage their perceptions; and
 Persistently disseminate stories to employees that provide unique
and compelling reasons why diverse individuals would want to
work for the organisation.
(ii) Offer Incentives, Recognition and Rewards

A company can make itself more appealing to its diverse workforce
by increasing employee satisfaction. For example, benefits and
workplace programmes such as reward initiatives, flexible-work
arrangements and phased retirement that are appealing to older
workers.
(iii) Establish Colleges and Universities Relationships

Establishing relationships with colleges is another good way to
diversify the workforce. Bringing in students as interns is another
effective strategy, with the idea of eventually hiring them to
participate in a management training programme.
(iv) Connect with External Diverse Professionals, Organisations and

Communities
In addition to building colleges and universities relationships,
companies can build other external relationships with minority
organisations. Relationships with community and philanthropic
groups also help companies with their long-term diversity efforts. A
programme that recruits from part-time schools, community colleges
and other educational programmes, can help pull in more minorities.
3.2.6 Recruitment Checklist

In practice, most organisations use their human resource manager to have a
recruitment and selection checklists in order to provide better information for
hiring a reliable candidate, as shown in Table 3.1.
Table 3.1: Recruitment Checklist

RECRUITMENT CHECKLISTS
How
No. Checklist How desirable?
True?
1. Recruitment strategies are based on long-term manpower
forecasts.
2. Job descriptions are pre-requisite components of our
recruitment plans and identify the required skill-set for
each job candidate.
3. The company recruits with both the short and long-term
needs in mind.
4. Reference checks are made for all short-listed job
applicants.
5. Managers and supervisors are closely involved in the
recruitment process.
6. All information gathered from short-listed job candidates is
verified.
7. Managers and supervisors understand the company's
recruitment objectives and targets.
8. Our company policy is to promote from within.
9. All job openings are posted internally prior to the external

recruiting cycle.
10. Managers and supervisors are trained in interview
techniques.
Case Study: Recruitment
A long-established charity organisation campaigning for social justice in

Malaysia needs to recruit several new employees. Its young and enthusiastic staff
group, conscious of their inner-city location, wanted to ensure that the workforce
reflected the local community, which up to then did not.
With three posts to fill, they decided to make sure that a Chinese candidate was
appointed to the secretarial vacancy, and to make the recruitment to the two
campaign officer posts open. Accordingly, they used their equal opportunities
monitoring form to shortlist only Chinese candidates, and a relatively
inexperienced young Malay woman was appointed after she and four others
were interviewed. The other posts were both filled by a Malay men.
It soon became apparent that the new secretary, a

It is illegal to recruit Malay girl was unhappy with her post, and she was
people because of unable to relate well to overseas enquirers, of whom
the colour of their there were many. After only four months, she
skin or other resigned and during her exit interview, she explained
characteristic that that she had found out about the decision to appoint a
defines their race. Chinese person, and had felt that hers was a token
appointment.

There was no incentive to do well, and in any case, nobody had offered her
training ă they just had assumed that she would be able to deal with the
organisationÊs international contacts.
After taking advice from outside, the charity learnt some important lessons:
(a) It is illegal to recruit people according to race in an effort to redress an
imbalance;
(b) HR manager should understand the job well, and measure candidates for
their potential to meet its requirements; and
(c) People who are not appointed on their own merits rarely succeed, and
always need support.
The next time round, they developed a clear person specification, identified a
series of tests to measure the key criteria, and then targeted their recruitment
drive at all local people. They short-listed both Chinese and Malays candidates,
and the successful one was a Chinese man with extensive secretarial experience
in the developing world.
He is now doing very well, especially in handling overseas contacts. Confident

that he won the job on merit, he is not afraid to ask for help in performing it
better, and expects to stay there for several years. Nevertheless, the charity still
had the expense of recruiting twice, when a clearer focus on the law and a better-
planned campaign would have saved money and effort in the long run.
Now, let us look at five of the main key points for Human Resource Manager.
Among the key points are:
Key Points for Human Resource Manager

(a) Getting the right staff for the job is rarely easy ă cast your net
wide.
(b) As an employer, you must ensure your selection procedures
comply with accepted equal opportunity policies.
(c) Give employees incentives to succeed, not sanctions to fail.
(d) Establish standard procedures for dealing with redundancy,
misconduct, absence and incapability.
(e) Employment law is complex and frequently changes.
Establish what your responsibilities are and if in doubt,
check with specialists.
SELF-CHECK 3.3
How can a firm improve its recruiting efforts to achieve diversity?
3.3 THE FOUR METRE MODEL FOR

RECRUITMENT: MEASURING RECRUITMENT
PROGRAMME EFFECTIVENESS
The Four Metre Model Recruitment is used to measure the recruitment
programme effectiveness. The human resource manager should focus on the
following items in order to measure the effectiveness of the recruitment
programme in the organisation (Table 3.2).
Table 3.2: Measurement for Effectiveness of the Recruitment Programme
No. Item Question Metric

a. Strategic How many candidates do you Number of candidates you need
Alignment need? to find by level, role and skill set.
Are you meeting executive Satisfaction survey and
expectations? interviews with key business
leader.
Are we getting our moneyÊs ROI of recruitment activity in
worth? relation to avoid cost of turnover.
b. Prospects Which methods for finding Response rates for all recruiting
new talents are most effective? tactics: website, advertising in
media and direct mail, job fairs or
other events, referrals etc.
How long does it take to find Rate of talent acquisition by level,
the types of talent you need? role and skill set (time to hire).
Are we a preferred employer? Referral rate.
c. Human How do you decline Time to decision and time to
Resource candidates who are not follow-through communication
Operations appropriate while ensuring and appropriate closure.
that they send you referrals?
How can you decline them
graciously?
Are your internal clients Internal client satisfaction surveys
satisfied with your ability to and interviews.
support their recruitment
needs?
How quickly are we filling Cycle time from when the need
positions? is identified to start date.
Aged „request‰ or „vacancy‰
reporting.
How much does it cost to Time and money associated with
support the recruiting process? recruiting.
d. Recruits Is our process recruit friendly Candidate satisfaction with the

and effective? recruitment process (via surveys
and interviews with new hires).
How quickly do new recruits On-boarding time.

become functional in their Job progression rate.
role?
Can you manage/handle their Conversion rate. Number of
referrals? repeat referrals.
Are the new recruits staying? Early days (3-6 months)
turnover ratio.

You can see the Four Metre Model Recruitment elements as shown in Figure 3.5.

Figure 3.5: The Four Metre Model Recruitment

SELF-CHECK 3.1
How can the Four Metre Model for Recruitment be used to measure the
effectiveness of the recruitment programme?

ACTIVITY 3.1
Working individually or in groups, bring to class several job

advertisements from the local newspaper. Analyse the effectiveness of
these ads in recruiting people.

ACTIVITY 3.1
3.4 SELECTION
Applicants should be fully informed about the selection criteria for effective
performance as well as career opportunities available when employed by the
organisation. Whether or not a particular job vacancy will be filled by someone
from within, or outside, the organisation depends on the organisationÊs human
resource policies, the requirements of the job to be filled, the talent to be found
and, often, the organisational politics surrounding the decision (Poe, C.A. 2002).
You must understand that, matching the right applicant to the right job is a
never-ending complex task for management and HR practitioners and the
selection process is designed to choose the individual who can successfully

perform the job from a pool of qualified candidates.
3.4.1 Selection Process

Selection is the process of choosing from a group of applicants the individual
best suited for a particular position (Mondy & Noe, 1993) based on conventional
and non-conventional methods (Crawford, 2004).
Effective recruitment leads to efficient selection process. An efficient selection

process provides maximum number of reliable and valid information about the
applicants. Consequently, applicantsÊ qualifications may be carefully matched
with the job requirements.
While the selection process is usually the responsibility of the human resource
director or similar professional, managerial and supervisory personnel in all the
business units of an organisation also have an important role in the selection
process (Goldrick, 1997).
The selection process is shown in Figure 3.6.
Figure 3.6: Steps in the selection process

Let us now look into the explanations of each step.
(a) Application Blank

Application blank is a valuable tool for the initial screening for employment
prospects, as it functions as a predictive device in the selection of
employees. Unfortunately, most employers do not properly utilise this tool
ă they either scan the blank for items considered relevant or use the
information only as a point of departure for the employment interview.
Employers have the right to define the valid, job-related selection criteria
necessary for satisfactory job performance. At the same time, employers
are obliged to judge all applicants for a particular job by the same criteria.
The common factors to include in the application blank are proficiencies,
experience and education. You can see the explanation below:
(i) Proficiencies ă Competencies that are reflected in the job description.
Skills that do not contribute to job performance should not be taken
into consideration.
(ii) Experience ă Amount and breadth of experience should be identified.
Sufficient previous work experiences (paid or unpaid) are applicable.
Responsibilities, unless implied by job title, should be included.
(iii) Education ă This may include academic emphasis, class standing and
coursework or technical training that are relevant to job-related
responsibilities. CandidateÊs reading and written communication
skills are indirectly demonstrated throughout the application process.
(b) Screening Interview

There are two categories of interviews: the screening interview and the
hiring or selection interview. Screening interview is used to qualify a
candidate before he or she meets with a hiring authority for possible
selection. Whereas the hiring or selection interview can take on many
different forms.
The screening interview can be in the form of telephone interview,

computer interview, videoconference interview and structured interview.
Two of the examples of screening interview are telephone interview and
computer interview. You can see explanation below.
(i) Telephone interview

The telephone interview is the most common way to perform an
initial screening interview. The advantage of this type of interview is
that it saves time and money. Through this interview, the interviewer
and the candidate will get a general sense if they should move to the
next level ă the face-to-face meeting. This interview may be tape

recorded.

(ii) Computer interview
The computer interview involves answering a series of multiple-
choice questions by pushing appropriate telephone buttons or by
submission of a resume on a companyÊs website for a potential job
interview.

(c) Employment Interview
This interview is more traditional and is of two-way street style ă the
candidate will also interview the employer for job suitability. This
interview usually takes place in an office setting and its method can be in
the forms as described below:
(i) One-on-One interview

This is a traditional and loosely structured type of interview.
Candidates meet with employers on a one-on-one basis and the
interview for each candidate is unique. At the end of the interview,
both the candidate and employer would have a sense whether or not
the fit is right.
(ii) Serial interview

In a serial interview, candidates are interviewed by different
interviewers at different time slots, throughout the course of a day.

(iii) Sequential interview
The candidate meets with one or more interviewers on a one-on-one
basis over the course of several days, weeks or even months. Each
interview that follows is designed to progressively move the
candidate towards learning more about the position and the
company. This hopefully, may lead to a job offer.

(iv) Panel interview
CandidatesÊ interpersonal skills, qualifications and their ability to
think independently are evaluated. This interview may be
intimidating as candidates do not have control over the panel.
Focusing on one or two key members and control of their reaction,
good eye contact and effective communication may contribute to the
candidateÊs success. The time and venue of this interview is usually
arranged to accommodate the schedule of the committee or panel.
Even though this type of interviews can be time consuming and

costly, they are a flexible method for assessing and selecting
candidates for all levels and types of positions. The interviews
provide interviewer with data to analyse which will in turn generate
information about whether a candidate is a good fit for the company
or not.
However, managing information from different interviews is

potentially difficult because the data are:
 Hard to bring together coherently;
 Open to potential interviewer bias;
 Based on an interview that may stress on one area and neglect
others;
 Subject to all kinds of potential problems in the interpretation and
analysis of the information obtained; and
 Always subject to the possibility of distorted impression.
(d) Employment Testing

Employees affect an organisationÊs performance and profitability, therefore it is
important to hire people that are suitable. A wrong decision could cost a
company time, money and potential new business. One method to determine a
potential candidateÊs suitability is through employment testing. Employment
testing is the practice of administering written, oral or other examinations to
determine the suitability or desirability of a job applicant.
Through carefully developed and administered employment tests,

organisations can decide systematically and accurately which people can
perform well on the job, will not leave the organisation, will not engage in
counterproductive behaviours or will be able to learn from training
programmes. Individuals who wish to determine if they are matched to the
positions they are suited for can also benefit from this test.
Let us now look into some of the more commonly cited reasons for testing.
Among them are:
(i) Testing leads to savings in the decision-making process. Employment
tests can be a cost effective way to trim down the applicant pool.
Individuals who do not match with the job needs and requirements of
the organisation are eliminated, making decision making more
efficient and less time consuming. However, some tests do require
more time up-front with individuals to determine who are and who
are not qualified.
(ii) The cost of making a wrong decision is high. For certain employment
decisions, a wrong decision can be very costly in terms of training
costs, errors made by a poor performer, costs of replacement, etc.
Therefore, investments in testing may be seen as worthwhile because
these tests eliminate the risks of costly wrong decision making in the
long run.
(iii) The job requires attributes that are hard to develop or change. Tests are
often used for assessing characteristics that cannot be developed through
training but are acquired over a long period of time or even a lifetime
(e.g., personality traits and in-depth knowledge of a profession).

Now, let us look into types of employment tests. There are a variety of tests
available to facilitate employers in making decisions. The following are four
of the employment tests that can be used to test the potential candidates.
We will now look into more detail on each type of the tests.
(i) Biographical data
The content of biographical data instruments varies widely, and may
include such areas as leadership, teamwork skills, specific job
knowledge and specific skills (e.g., knowledge of certain software,
specific mechanical tool use), interpersonal skills, extraversion,
creativity, etc. Biographical data typically uses questions about
education, training, work experience and interests to predict success
on the job. Some biographical data instruments also ask about an
individualÊs attitudes, personal assessments of skills and personality.
(ii) Cognitive ability tests
Cognitive ability tests typically use questions or problems to measure
candidateÊs ability to learn quickly, think logically with reasoning,
read and comprehend and other enduring mental abilities that are
fundamental for the success in many different jobs.
(iii) Integrity tests
Integrity tests assess a personÊs attitudes and experiences relating to
honesty, dependability, trustworthiness, reliability and pro-social
behaviour to predict candidateÊs future job behaviour and to identify
individuals who possess unfavourable work behaviour such as
dishonesty and anti-social work behaviour. Direct questions about
previous experiences related to ethics and integrity or questions about
preferences and interests are typically asked. Inferences are then
drawn from candidateÊs answers.
(iv) Personality tests

Personality tests are self-reported measures of traits, temperaments or
dispositions. The personality assessments will very much focused on
each personÊs needs, attitudes, motivations and behavioural
tendencies. Honesty and integrity are important personality traits to
consider in the selection process.
(e) Reference Checks

A human resource manager or executive is responsible to carefully and
thoroughly check references to avoid hiring the wrong person. Letters of
recommendation may list candidate's abilities and experience, but talking
to people will provide HR manager or executive better and deeper
understanding of the candidate's values, nature, approach to work and
interpersonal quality. Reference checks are the last opportunity to validate
and verify information provided by the candidate and explore any areas of
concern. An offer should only be made after the HR manager or executive
is satisfied with the references.
In conducting reference checks, the HR manager or executive should obtain

consent from the candidate and identify those references not preferred by
the candidate. Questions that may be asked include candidateÊs resume,
character, work achievement, as well as areas that need development. The
reference responses should be recorded and compliance with human rights
legislation should be observed. The sample of the personal and professional
reference check are shown in Table 3.3.
Table 3.3: Sample Report ă Personal and Professional Reference Check

Reported Verified
Number : 542-69-4321 542-69-4321
Name : Jamilah Kadir Jamilah Kadir
Personal Reference
Name: Eric Chen
Date of Interview(s): 11/8/2004
Association: Co-worker at Labu Kundur Accounting Company
Comments: We worked well together, handling client account compliance.
Name: Kassim Selamat
Date of Interview(s): 11/10/2004
Association: Friend for 7 years
Comments: We have never worked together but he is dependable
and responsible.
ACTIVITY 3.2
Working in a group, conducting a workshop

The interview is a common tool for employee selection. However, many
interviewers have never been trained and it has long been recognised
that there is little intra- and inter-rater reliability (consistency) where
traditional non-structured interviews are utilised. This two-day
workshop provides busy recruitment agency staff, human resource
managers/professionals, selection panels and line management with
tools for increasing the objectivity and standardisation of interviews.
Course Length
As noted above, our public course is two days in length. In-house
courses may be two full days or four half days. Where necessary, extra
one and half days may be added where there is a requirement to spend
more time learning job analysis or practicing and assessing competency-
based interviewing.
Aims and Objectives

At the conclusion of this programme, participants will be expected to:
 Have a process for creating competency requirements for any given
position;
 Understand why behavioural interviews are two to five times more
accurate than traditional interviews; and
 Identify and apply the principles of behaviour interviews, and
performance-based selection methods.
Behaviour-based Interviewing Training Course

 The importance of hiring the right people.
 The cost of hiring errors. Why behavioural interviewing?
 From the applicantÊs point of view.
 From a team leader/managerÊs point of view.
 Forming the interview questions.
 Identifying the pattern.
The groups are required to conduct an interview based on the above

information.
(f) Physical Ability

Physical ability of the candidates can be tested by using physical ability
tests. Physical ability tests typically use tasks or exercises that require
physical ability to be performed. These tests typically measure physical
attributes and capabilities, such as strength, balance and speed.
Let us now read through the advantages and disadvantages of the physical
ability.

Advantages
(i) Produce valid inferences regarding performance of physically
demanding tasks.
(ii) Can identify applicants who are physically unable to perform
essential job functions.
(iii) Can reduce business costs by identifying individuals for hiring,
promotion or training those who possess the needed skills and
abilities, by minimising the risk of physical injury to employees and
others on the job, and by decreasing disability/medical, insurance
and workers compensation costs.
(iv) Will not be influenced by test taker attempts to impress or fake
responses.
Disadvantages
(i) Are typically more likely to differ in results by gender than other
types of tests.
(ii) May be problematic for use in employee selection if the test is one
used to diagnose medical conditions (i.e., a physical disability) rather
than simply to assess ability to perform a particular job-related task.
(iii) Can be expensive to purchase equipment and administer.
(iv) May be time consuming to administer.

(g) Final Employment Decision
After the completion of interviews and reference checks on companyÊs top
candidates, the HR manager is obliged to select the candidate who best
meets the requirements of the position offered. The goal is to select the
best-fit candidate for the position based on qualifications and all the
qualities that the company required.

ACTIVITY 3.3
Working individually or in group, interview a manager between the

ages of 25 and 35 at a local business who manages employees age 40 or
older. Ask the manager to describe three or four of his or her most
challenging experiences managing older employees.
 Recruiting is discovering potential applicants for actual or anticipated

organisational vacancies. It involves seeking viable job candidates.
 The principal sources for recruiting employees include external search,
advertisements, employee referrals/recommendations, employment
agencies, temporary rental services, schools, colleges, universities,
professional organisations, the Internet, and causal or unsolicited applicants.
 Recruitment must be tailored to the needs of each firm. In addition,
recruitment sources and methods often vary according to the type of position
being filled.
 The selection process includes the initial screening interview, completion of
the application form, employment tests, comprehensive interview,
background investigation, physical examination and the final decision.
 Selection devices provide managers with information that helps them predict
whether an applicant will prove to be a successful job performer.
 During the selection process, candidates also learn about the job and
organisation.
 Proper selection can minimise the costs of replacement and training, reduce
legal challenges and results in a more productive workforce.
 Types of employment tests include biographical data, cognitive ability tests,
integrity tests, job knowledge tests and personality tests.
 The interview should provide information about the company, the job and
expectations required from the candidate.

Advertisements Group interviews

Application blank Internal sources
Candidate selection decision matrix Job knowledge tests
Cognitive ability tests Panel interview
Diverse workforce Physical ability
Employment interview Recruitment
Employment testing Recruits
External sources Reference checks
Final employment decision Screening interview
Four metre model for recruitment
Cumi Cleaning Company

Getting Better Applicants
If you were to ask Jamilah and her father on what the main problem
was in running their firm, their answer would be quick and short ă
hiring good people. Originally begun as a string of coin-operated
laundromats requiring virtually no skilled help, the chain grew to six
stores, each heavily dependent on skilled managers, cleaner-spotters
and pressers. Employees generally have no more than a high school
education (often less), and the market for them is very competitive.
Over a typical weekend, literally dozens of want ads for experienced
pressers or cleaner-spotters can be found in area newspapers. All these
people are usually paid around RM15.00 per hour, and they change
jobs frequently. Jamilah and her father are thus faced with the
continuing task of recruiting and hiring qualified workers out of a pool
of individuals they feel are almost nomadic in their propensity to move
from area to area and job to job. Turnover in their stores (as in the
stores of many of their competitors) often approaches 200%. „DonÊt talk
to me about human resource planning and trend analysis,‰ says
Jamilah. „WeÊre fighting an economic war and IÊm happy just to be able
to round up enough live applicants to be able to keep my trenches fully
manned.‰ In light of this probe, JamilahÊs father asked her to answer
the following questions:
(a) How Cumi Cleaning Company can improve their recruitment
programme by using the Four Meter Model of Recruitment?
(b) What suggestions could Jamilah make to Cumi Cleaning
Company for improving its recruiting processes?
Brewster, C., Sparrow, P. R., & Vernon, G. (2007). International human resource
management (2nd ed.). London: Chartered Institute of Personnel and
Development.
Fleishman, E. A., & Berniger, J. (1960). Using the application blank to reduce
office turnover. In Fleishman, E. A. (Ed.), Studies in personnel and
industrial psychology (pp. 63). Homewood, Illinois: Dorsey.
Executive approval to fill vacancy. (n.d.). Retrieved on December 11, 2009, from
htttp://www.hru.uts.edu.
Fleetwood, S. & Hesketh, A. (2007). Understanding the performance of human

resources. Cambridge: Cambridge University Press.
Fisher, C. D., Schoenfeldt, L. F., & Shaw, J. B. (1993). Human resource

management (2nd ed.). Boston: Houghton Mifflin. Flynn.
Hosie, P. J., Sevastos, P. P., & Cooper, C. L. (2006). Happy-performing managers:

The impact of affective well-being and intrinsic job satisfaction in the
workplace. London: Edward Elgar.
Hoag, B. & Cooper, C. L. (2006). Managing value based organisations: It's not
what you think. Northampton: Elgar.

http://www.accel-team.com/human-resources/hrm_03.html.
Internet Recruiting Power: Opportunities and Effectiveness. CareerJournal.com.

Retrived November 2011, from http://www.edu/research. This study was
the result of a survey conducted in Europe by IRCO-IESE Business School
on E-Recruitment.
Gonez-Meija, L. R., Balkin, D. B., & Cardy, R. L. (2007). Managing human

resources (5th ed.). Upper Saddle River, New Jersey: Prentice Hall.
Mondy, R. W. & Noe, R. M. (2005). Human resource management. Upper Saddle

River, New Jersey: Prentice Hall.
Martinez, M. (2002). Recruiting here and there. HR Magazine, September, p. 95.
Mauro, M. & Jaime, S. (2006). Recruitment 4 Meter Model. Western Management

Consultant Handbook, Oct. 25.
Meneghetti, M., & Steffensen, J. (2006). Recruitment four meter model:

Measuring recruitment program effectiveness. Retrieved June 24, 2010,
from http://74.125.153.132/search?q=cache:OFteBbOrpxcJ: www. Wmc
calgary. ca/wmcfiles/Recruitment%2520Metrics.ppt +Four+Metre+ Model
+Recruitment&cd=1&hl=en&ct=clnk&gl=my.
Poe, C. A. (2002). Selection savvy. HRM Magazine, 47, April: 77.
Society for Industrial and Organizational Psychology, Inc. (2009). Types of

employment tests. Retrieved June 24, 2010, from
http://www.siop.org/Workplace/employment%20testing/testtypes.aspx.
Sparrow, P. R. (2007). Globalisation of HR at function level: Four case studies of

the international recruitment, selection and assessment process.
International Journal of Human Resource Management, 18 (5): 144-166.
Schuler, R. S. (1987). Personnel and human resource management (3rd ed.). St

paul: West Publishing.
Teal, K. C. (2002). Recruitment evaluation: The case for assessing the quality of
applicants attracted. Personnel Psychology 55, 461-490.
Tom Porter. (2000). Effective techniques to attract, hire, and retain top notch
employees for your company ÂSan Diego Business Journal 21, 13, b36.
Wallace, J. Craig; Tye, Mary G.; Vodanovich, Stephen J. (2000). Applying for jobs
online: Examining the legality of internet-based application forms.
Personnel Management, Vol. 29 No. 4, Winter.
Wilmott, N. (2010). Interviewing styles: Tips for interview approaches. Retrieved

June 24, 2010, from http://humanresources.about.com/cs/
selectionstaffing/a/interviews_2.htm.
Topic  Interviewing
4
LEARNING OUTCOMES
1. Describe several basic types of interviews;
2. Identify the key factors for successful interviews;
3. Identify the types of interviews form and checklist; and
4. Analyse the interviewing successfullness and failures.
 INTRODUCTION
Welcome to Topic 4! In this topic, you will learn about interview in greater detail.
Do you know that interviews are particularly useful for getting the story behind
a participant's experiences as well as attaining in-depth information about a
topic? Interviews may also function as a follow-up to certain respondentÊs
questionnaires e.g., to further investigate their responses.
Interview plays a different role for different parties. Candidates perceive

interview as a method of getting a job. In order to be selected, candidates must
be able to convince potential employers that they are a good match. On the other
hand, an employer conducts interview as a way of finding the right person for
the vacancy available. By interviewing a candidate, an employer will have a
clear idea of what skills, experience and personality are required by the position
offered, refer to Figure 4.1.
TOPIC 4 INTERVIEWING  93
Figure 4.1: Employer will have a clear idea of a candidateÊs skills, experiences and
personality throught interview session
4.1 TYPES OF INTERVIEWS

There are 17 different types of interviews that a HR manager can choose to
conduct. Let us now study them one by one in greater detail.

(a) Screening Interview
This is a preliminary interview which can be done either in person or by
phone. Through this interview, the company representative determines
whether the interviewee has the basic qualifications to justify for the
subsequent interview.
(b) Structured/Patterned Interview

This is a very straightforward interview. All candidates will be asked a
standard set of questions that are designed to pinpoint skills essential to the
position offered. Through this interview, the interviewer will be able to
compare candidatesÊ experience and skills with those that are required by
the job offered. Results among candidates are then compared. This
interview is very common and it is also fairly easy to conduct.
(c) Unstructured Interview

The interviewer is provided with a written description of the ideal
candidate. However, there is no instruction on what specific areas to cover.
(d) Multiple Interviews

Multiple interviews are commonly used with professional jobs. A candidate
will be interviewed by a series of interviews individually by various
representatives of the organisation. The initial interview is usually
conducted to gather basic information on candidateÊs skills and abilities. In
subsequent interviews, candidateÊs performance on the job in relation to the
94  TOPIC 4 INTERVIEWING
company's goals and objectives is assessed. After completion, the

interviewers compare information gathered and make collective decision.
In some cases, unsuitable candidates are screened out at each succeeding
level.
(e) Stress Interview

In this interview, candidates are intentionally put under pressure in order
to have their responses evaluated. Candidates may be asked questions that
would make them uncomfortable or they may be interrupted when they are
speaking.
(f) Targeted Interview

This interview is similar to the structured interview but its area of coverage
is much more limited. Key qualifications for success on the job are
identified and relevant questions are prepared in advance.
(g) Situational Interview

Situations are set up which simulate common problems candidate may
encounter on the job. CandidateÊs responses to these situations are
measured against pre-determined standards. This approach is often used as
a part of traditional interview rather than as an entire interview format.
(h) Group Interview

The candidate is interviewed by two or more company representatives
simultaneously. Sometimes, one of the interviewers would be inclined to ask
stress questions to see how candidate would respond under pressure. The
interviewers may also interview a group of candidates at the same time.
(i) Video Interview

Video interview comprises of transfer of audio and video between two
remote sites. It is a convenient communication method and an alternative to
the more costly face-to-face meetings. The involved parties only need to
have access to the Internet and proper tools ă i.e. microphone, camera and
compatible software ă and with that an interview can be conducted. Video
interview is becoming a popular method of interview due to its efficiency
and low costs.
(j) Serial Interviews

Candidates are passed from one interviewer to another throughout the
course of a day, or sometimes may take up a full weekend or even several
days. After the final interview has taken place, the interviewers will discuss
and make a collective decision. To succeed in this type of interview, a
candidate must project the proper first impression and should always be
ready and energised for each interview.
(k) Audition Interview

Sometimes companies wish to know how a potential candidate would
perform real-time before selection is made and this is achieved through
audition interview. Candidates are required to perform job task in a
simulated situation and this allows them to demonstrate their abilities in
interactive ways that are familiar and at the same time provide them with a
simplified sense of what the applied-for position requires. This type of
interview works well for job openings for computer programmers, trainers,
welders and mechanics.
(l) Stress Interview

A stress interview is generally intended to put candidates under stress and
have their reactions stressed. Candidates may be held in the waiting room,
face long silences or cold stares, or be challenged in terms of their beliefs or
judgements. Interviewer may ask candidates to perform an impossible task
or be convinced to do tasks irrelevant to job requirement. They may also be
faced with insults, rudeness and miscommunication. All these are designed
to see if they have the right criterion to deal with company culture, clients
or any other possible stress.
(m) Informal Interview

Job seekers secure informational meetings to seek the advice from someone
in their current or desired field and to gain further references. Employers
who belong to the list of available talents are often open to these types of
interviews even when there is no vacancy.
(n) Directive or Structured Style

In a directive or structured interview, the interviewer has a clear agenda
and follows it to the utmost detail. This format is rigid and is used to ensure
parity between interviews. Each candidate is asked the same series of
questions and results are then compared.
(o) Tag Team Interview

This interview is often practiced by companies that rely heavily on team
cooperation. Candidates are placed in a room with several other people and
then the interview will take place. Through this method, employers could
gain insights of various people and determine if the candidate's skills meet
the needs of the company and whether or not the candidate can get along
with other workers.
(p) Meandering Style Interview

The meandering style interview is often used by inexperienced interviewers
in which interviewer relies on the candidate to lead the discussion. Broad
questions such as, „tell me about yourself,‰ may be thrown to the
candidates and candidates can often lead or manipulate this type of
interview according to what serves them best. This could be an advantage
as long as candidates show respect and let the interviewer be in control.
(q) The behavioural interview

The behavioural interview is a structured interview where applicants are
asked to relate actual incidents from their past relevant to the target job. In
a behavioural interview, a situation is described and interviewees are asked
how they have behaved in the past in such a situation.
(i) Questions in a Behavioural Interview

Behavioural interviews can produce a lot of tension as interviewees
need to react to situations in the past as the interviewer assumes that
past behaviour is the best predictor of future behaviour. You can see
some of the example questions in a behavioural interview are as
follows:
 Give an example of an occasion when you used logic to solve a

problem.
 Give an example of a goal you reached and tell me how you
achieved it.
 Describe a decision you made that was unpopular and how you
handled implementing it.
 Have you gone above and beyond the call of duty? If so, how?
 What do you do when your schedule is interrupted? Give an
example of how you handled it.
 Have you had to convince a team to work on a project they were
not thrilled about? How did you do it?
 Have you handled a difficult situation with a co-worker? How?
 Tell me about how you worked effectively under pressure.
Source: http://jobsearch.about.com/cs/interviews/a/behavioral.htm
(ii) Problems in Conducting Interviews

There are several common interviewing mistakes that undermine an
interviewÊs usefulness that can threaten the success of employment
interviews.
 The tendency of the interviewer to become either favourably or
unfavourably impressed with the job applicant for the wrong
reason. Closely related is the problem of the halo effect that occurs
when the interviewer allows a single prominent characteristic to
dominate judgement of all other traits. For instance, it is often easy
to overlook other characteristics when a person has a pleasant
personality. However, merely having a pleasant personality does
not necessarily guarantee that the person will be a good employer.
 Central tendency in the interview can occur when the interviewer
virtually rates all candidates as average, as he or she fail to
differentiate between strong and weak candidates.
 Some of the interviewers make premature judgements about
candidates in the first few minutes of the interview. When this
occurs, a great deal of potentially valuable information will not be
considered.
 Some of the interviewers tend to give inappropriate or unintended
non-verbal communication such as fingers moving up and down,
facial expressions, playing with the fingers etc. that could be
interpreted wrongly by the interviewees.
 Interviewer domination in the interview session by asking and
answering his own questions without giving much opportunity to
the interviewees to speak for himself or herself. In successful
interviews, relevant information must flow both ways. Therefore,
interviews must learn to be good listeners as well as suppliers of
information.
ACTIVITY 4.1
Form a small group with several of your class members and develop a
Activity 1.1
mock interview session. Here are some possible questions to explore
when conducting the session:
Be prepared to present your best practices to other members of your class.

 Do you prefer to work in a small, medium or large organisation?
 Why do you want this job?
 What qualities do you think this job requires?
 Why do you want to work for this organisation?
 What have you got to contribute?
 What can we offer you that your previous organisation cannot offer?
 How long have you been looking for a new job?
 What do you know about this organisation?
 What interests you about this organisation?
 What are you looking for in a new job?
 What do you not like about the job?
ACTIVITY 4.2
Cumi and Ciki Cleaning Centres
The Better Interview
Like virtually all the other personnel management ă related activities at

Cumi and Ciki Cleaning Centres, the company currently has no
organised approach to interviewing job candidates. Store
managers, who do almost all the hiring, have a few of their own
favourite questions that they ask. However, in the absence of any
guidance from top management, they all admit their interview
performance leaves something to be desired. Similarly, Mr. Jamil
Mohd himself is admittedly most comfortable dealing with what he calls
the "nuts and bolts" machinery aspect of his business and has never felt
particularly comfortable having to interview management or other
job interviewees. Mr. Jamil is sure that lack of formal interviewing
practices, procedures and training account for some of the employee
turnover and theft problems. Therefore, he wants to do something to
improve his company's scoring average in this important area.
Questions
1. In general, what can Mr. Jamil do to improve his employee

interviewing practices? Should he focus on methods of interviews
that suit the needs and requirements of his company? Or should he
develop an interview list of questions for management and non-
management jobs, and if so, how can you help Mr. Jamil to organise
the successful interview session?
2. Should Mr. Jamil implement a training programme for his

managers, and if so, specifically what should be the content of such an
interview training programme? In other words, if he did decide to
start training his management people to be better interviewers, what
should he tell them and how should he tell it to them?
4.2 SUCCESSFUL INTERVIEWING

In order to perform well during interviews, the candidates should be well-versed
with aspects related with the interviews, which has convinced them that they
have the potential to do the job. Then, the candidate needs to re-visit the relevant
list of skills, experiences and qualities to present at the interview. Candidates
should be well prepared in the following areas:
 The knowledge of the occupational area.

 The knowledge of the employer background.
 The knowledge of the vacancy.
 The motivation and enthusiasm in getting the job.
 The academic choices and achievements.
 The strengths and weaknesses of himself or herself .
Sufficient preparation would help potential candidates perform well in a group

or panel job interview. Some of the most important tips for interview success are
Figure 4.2: Some tips for interview
Get Ready with the Potential Questions
You can see that Figure 4.3 shown a list of typical interview questions that may
be asked during an interview which the candidate can prepare beforehand.
Figure 4.3: Typical interview questions
4.3 THE INTERVIEW FORM

The main reason for the interview is to find out about the applicant. To do this,
the human resource manager must plan the interview. It can begin with the
candidateÊs application and resume. If possible, use a structured form like those
in Table 4.1 as interviews based on structured guide usually result in the best
interviews.
The following are a few examples of forms that can be used by human resource
managers for the purpose of interviewing.
Let us now study each type of forms.

(a) The Interview Form - Interviewer

Table 4.1 shows an example of an interview form from an interviewer.

Table 4.1: Interview Form from an Interviewer

Interview Form
Candidate __________________
Interview Date __________________
Question Key Words from candidateÊs „Story‰
1. Describe a project or activity that highlights ___________________________

your leadership style. ___________________________
2. Tell me about a time that you had to deal with ___________________________
a conflict between licensed and unlicensed ___________________________
personnel and how you handled the situation.
3. Tell me about a time in the past where you ___________________________
did something to improve teamwork and ___________________________
motivate staff towards a common goal.
4. Give me an example of a time where you ___________________________
needed more information to solve a problem. ___________________________
How did you go about gathering and ___________________________
analysing information to solve the problem? ___________________________
5. Describe a time when you were responsible ___________________________
for organising different types of personnel to ___________________________
get work done and some of them were not ___________________________
very enthusiastic. What did you do?
6. Describe a time when you made a mistake ___________________________
when dealing with a staff person and how did ___________________________
you handle the situation.
7. Describe a difficult customer or co-worker ___________________________
you have experienced in the past and tell me ___________________________
how you dealt with him or her.
___________________________
8. Describe a time when you felt it was necessary
___________________________
to change a staffing pattern to better meet
your unitÊs needs. How did you handle the
situation?

(b) The Interview Checklist
After the candidate leaves, the interviewer should review their interview
notes, fill in the interview checklist as shown in Table 4.2 as a guide to
review the interview while it is fresh in the interviewersÊ mind. Making
snap judgements and negative emphasis are two common interviewing
mistakes. Reviewing the interview shortly after the candidate has left can
help interviewer minimise these two problems.
Table 4.2 illustrates the interview checklist for the interviewer.
Table 4.2: Example of Interview Checklist for the Interviewer
NAME OF
Mr. Mohd Amin bin Hj. Tasripan
CANDIDATE
Appearance
 Acceptable
 Could be improved
 Unacceptable
Education
 Exceeds requirements
 Meets requirements
 Does not meet requirements
Experience
 Partly relevant
 Not relevant
Assertiveness
 Assertive, self assured
 More passive than assertive
 More aggressive than assertive
Ability to
 Very able
overcome
problems and  Able
cope with stress
 Fairly able
 Not so able
Sociability
 Enjoys company
 Wide circle of friends
 More sociable than reserved
 More reserved than sociable
 Reserved, individual pursuits
 Few, but maybe close friends

Speech
 Good articulate speaker
 Reasonable speaker
 Rather poor speaker
 Poor speaker
Any other factors to be taken into account :

Acceptability
 Acceptable
 More information needed
 Unacceptable
Others:
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
(c) The Interview Form - Candidate

Hiring the right people is a crucial management job and managers cannot
do that job well if they do not know how to interview. When the
management decides to get the staff from other organisation or the staff
within the organisation, they must be able to conduct a more effective
interview. The interviewer must ask more consistent and job-relevant
questions. He or she must use job knowledge, situational or behaviourally-
oriented questions and objective criteria to evaluate the intervieweeÊs
response as shown in Figure 4.4.
Date: __________________
Employee: __________________ Identity Card No.: _________________
Title: __________________ Department/Location: _________________
D/O/H: __________________ Supervisor's Name: _________________
1. What did you like about your job?

2. Specify the most satisfying part of your job.
3. Specify the least satisfying part of your job.
4. Specify your relationship with your direct supervisor.
5. What made you decide to leave the company?
6. Are you accepting another position? If so, with whom, when
and where?
7. Indicate your thoughts concerning the company's compensation
policies.
8. Please indicate your comments on how the company can
improve your job function or provide your comments on any
other matter that should be brought to our attention.
9. Describe your vision and mission in fulfilling your job.
Employee signature
Interviewer/Date
FOR PERSONNEL DEPARTMENT ONLY
Interviewer's comments:
REVIEWED BY:
________________________
Immediate Supervisor/Date
Figure 4.4: Interview Form for candidates

ACTIVITY 4.3
CASE INCIDENT: The Out-of-Control Interview
Maria Farida is a bright, popular, and well-informed mechanical engineer who

graduated with an engineering degree from UTM in June 1995. During the month
preceding her graduation, she went out on many job interviews, most of which she
thought were courteous and reasonably useful in giving both her and the prospective
employer a good impression of where each of them stood on matters of importance
to both of them. It was, therefore, with great anticipation that she looked forward to
an interview with the one firm in which she most wanted to work, Apex
Environmental. She had always had a strong interest in cleaning up the environment
and firmly believed that the best use of her training and skills lay in working for a firm
like Apex, where she thought she could have a successful career while making the world
a better place. The interview, however, was a disaster. Maria walked into a room in
which five men ă the president of the company, two vice presidents, the marketing
director and an engineer ă began throwing questions at her that she felt were aimed
primarily at tripping her up rather than finding out what she could offer through her
engineering. The questions ranged from unnecessarily discourteous ("Why would you
take a job as a waitress in college if you're such an intelligent person?‰) to
irrelevant and sexist ("Are you planning on settling down and starting a family any time
soon?"). Then, after the interview, she met with two of the gentlemen individually
(including the president) and the discussions focused almost exclusively on her technical
expertise. She thought that these later discussion, went fairly well. However, given the
apparent aimlessness and even mean-spiritedness of the panel interview, she was
astonished when several days later, she got a job offer from the firm. The offer forced her
to consider several matters. From her point of view, the job itself was perfect ă she liked
what she would be doing, the industry and the firm's location. And, in fact, the
president had been quite courteous in subsequent discussions, as had been the other
members of the management team. She was left wondering whether the panel interview
had been intentionally tense to see how she'd stand up under pressure, and, if so,
why they would do such a thing.
Questions
1. How would you explain the nature of the panel interview Maria had to endure?
Specifically, do you think it reflected a well-thought-out interviewing strategy on
the part of the firm or carelessness on the part of the firm's management? If it was
carelessness, what would you do to improve the interview process at Apex
Environmental?
2. The job of applications engineer for which Maria was applying requires: (1)
excellent technical skills with respect to mechanical engineering; (2) a
commitment to working in the area of pollution control; and (3) the ability to
deal well and confidently with customers who have engineering problems. What
questions would you ask when interviewing applicants for the job?
4.4 CASE STUDY

Case Study: An Interview with Shell Oil Company
The Shell Oil Company is well known for its human resource assessment
methodology, which has proven successful in the identification and selection of
candidates for its global operations. Its approach and assessment criteria have been
adopted by some government agencies for selecting scholars and public officials.
While it is not a financial institution, the experience documented below is the

first-hand real-life experience of one of the authors that has applicability and
relevance on interviewing with global financial institutions.
The Shell Oil Company Interview Experience
The second largest global oil giant and a Fortune 500 company, Shell is known
for its stringent selection criteria when it comes to executive hiring. The interview
process of this world-class company is very thorough and demands a lot out of a
candidate. The whole experience is exhausting (it lasts approximately 6 hours
including lunch) and one has to be very well prepared mentally to perform well.
The setting is as such: the candidate, along with five to six other shortlisted
candidates, are invited to a local hotel/resort/country club for a day. The panel
that will be interviewing you consists of senior managers from different divisions
of the company. One point to note: Through this thorough interview process, the
company seeks to employ candidates who can eventually progress to a General
Management position in one of the companyÊs numerous divisions.
Let us now discuss the various stages of the long process.

(a) Panel Interview
Candidates are first put through an interview regarding one's personal and
educational background, career objectives, achievements, extra curricular
activities, etc. The panel usually consists of senior management from
different divisions of the company. Some of the questions asked are
featured in the „Frequently Asked Questions‰ section above.

(b) Panel Discussion
Candidates discuss with the rest of the shortlisted candidates. A Human
Resource personnel will normally chair this session. Topics are typically
general in nature and the key here is to assess how each candidate engages
in the discussion process, how nimble is his thought process and grasp of
current issues outside of the normal textbook environment.
(c) Lunch with the Interviewers

Even if this interview involves a free lunch, it comes with a purpose. This
session is used to gauge the social and dining etiquette of the candidate.
How he behaves, conducts conversations over lunch and his obvious table
manners. The candidate should avoid slurping loudly and stuffing himself
too full, as the afternoon sessions are even more demanding and a full
stomach will only dull his thought process.

(d) Presentation to Interviewers and the Rest of Candidates
One is asked to give a short 5-minute speech/presentation on a topic of
oneÊs choice, and to take some questions following that. (there will
definitely be some from the interviewers). The purpose of this is to test the
candidateÊs presentation skills and presence.

(e) In-tray Exercise
The candidate is seated behind a desk and asked to review various memos,
e-mails that are in his in-tray. Issues cut across the various functions:
marketing, sales, finance, audit, control and human resource. The candidate
will be asked on how he would act and why ă in every one of the
highlighted issues. It is a vigorous and demanding exercise. It focuses on
how the person reacts under different circumstances, the decisions made on
every issue and the candidateÊs thought process when arriving at a
decision. This exercise does not expect the candidate to have full
understanding of the various operations. However, it will test on how one
copes under pressure and works in new/unfamiliar situations. (This
exercise displays the „helicopter‰ qualities of the person, whether he has
the maturity and qualities to make a good manager.)

(f) Cocktails
Top management would typically join the candidates and the interviewers
for cocktails at the end of the day. Though it is a time to finally relax and
get to know each one better, it is also an excellent opportunity to reinforce
one's strengths and qualities. This is the best opportunity to make an
impression on top management. Hence, the candidate should prepare the
right questions and be ready to engage.

Given that only the most highly qualified graduates are shortlisted for
ShellÊs job interviews, the company, by carrying out the above intensive
interview process, aims to select the candidates who clearly stand out
amongst the group. Candidates who are further shortlisted after this
process will still have to go through more interviews before being hired.
Source : www.shell.com
 Interview is a formal meeting and discussion with someone, especially one at

which an employer meets and judges a prospective employee.
 The screening interview uses screening tools to ensure that candidates meet
the minimum qualification requirements. Computer programs are among the
tools used to filter unqualified candidates.
 The informational interview is for candidates who want to acquire
information on the job of interest from experts merely to establish
knowledge.
 The meandering style interview usually occurs when interviewer is
inexperienced and constrained by time and lack of resources. Candidate may
be compelled to lead the discussion.
 The behavioural interview is an increasingly popular type of interview.
CandidateÊs previous behaviour is used to indicate their future performance.
 The group interview puts candidates in a group and they are interviewed
simultaneously. It provides the company good input on candidatesÊ
leadership potential and style.
Audition interview Stress interview

Behavioural interviewing Structured/Patterned interview
Directive or structured style interview Situational interview
Group interview Successful interviewing
Informal interview Tag team interview
Meandering style interview Targeted interview
Multiple interviews Unstructured interview
Screening interview Video Interview
Serial interviews Questioning techniques
Your class are required to discuss the following questions related with
the organisation that you choose to work for.
1. What are the company's strengths and weaknesses compared to
its competition?
2. How important does upper management consider the function of
this department/position?
3. What is the organisation's plan for the next five years, and how
does this department fit in?
4. Could you explain your organisational structure?
5. How will my leadership responsibilities and performance be
measured? By whom?
6. What are the day-to-day responsibilities of this job?
7. Could you describe your company's management style and the
type of employee who fits well with it?
8. What are some of the skills and abilities necessary for someone to
succeed in this job?
9. What is the company's policy on providing seminars, workshops
and training so employees can keep up their skills or acquire new
ones?
10. What kind of work can I expect to be doing in the first year?
11. What percentage of routine, detailed work will I encounter?
12. How much opportunity is there to see the end result of my efforts?
13. Who will review my performance? How often?
Baron, R. A. (1987). InterviewerÊs moods and reactions to job applicants: The

influence of affective states on applied social judgements. Journal of
Applied Social Psychology, 17, 911-920.
Campion, M. A., Palmer, D. K., & Campion, J. E. (1997). A review of structure in

the selection interview. Personnel Psychology, 50, 655-702.
Campion, M. A., Pursell, E. D., & Brown, B. K. (1988). Structured interviewing:

Raising the psychometric properties of the employment interview.
Personnel Psychology, 41, 25-42.
Cole, J. C., & Dragman, R. (1985). Guidelines for improving employer

effectiveness in interviewing disabled applicants. Journal of Rehabilitation,
51, 46-81.
Dessler, G. (1997). Human resource management (7th ed.). Upper Saddle River ,
Dipboye, R. L., Fontenelle, G. A., & Garner, K. (1984). Effects of previewing the
application on interview process and outcomes. Journal of Applied
Psychology, 69, 118-128.
Dougherty, T. W., Ebert, R. J., & Callender, J. C. (1986). Policy capturing in the
employment interview. Journal of Applied Psychology, 71, 8-15.
Fletcher, C. (1992). Ethical issues in the selection interview. Journal of Business

Ethics, 11, 361-367.
Gifford, R., Ng, C. F., & Wilkinson, M. (1985). Nonverbal cues in the employment
interview: Links between applicant qualities and interviewer judgements.
Journal of Applied Psychology, 70, 720-730.
Latham, G. P., & Saari, L. M. (1984). Do people do what they say? Further studies
on the situational interview. Journal of Applied Psychology, 69, 560-573.
Maurer, S. D., & Fay, C. (1988). Effects of situational interview, conventional

structured interview, and training on interview rating agreement: An
experimental analysis. Personnel Psychology, 41, 329-344.
Wiesner, W. H., & Cronshaw, S. F. (1988). A meta-analytic investigation of the

impact of interview format and degree of structure on the validity of the
employment interview. Journal of Occupational Psychology, 61, 275-290.
Willihnganz, M. A., & Langan, S. A. (1998). Development and use of structured

employment interviews: A manual of theory and practice. Sacramento, CA:
California State Personnel Board.
Wilmott, N. Interviewing styles: Tips for interview approaches. Retrieved June 8,

2010, from http://humanresources.about.com/cs/selectionstaffing /a/
interviews_4.htm
Topic  Training and
5 Development
LEARNING OUTCOMES
1. Identify training needs according to business strategies;
2. Discuss the four steps in training process;
3. Compare training with development;
4. Elaborate career and career management;
5. Discuss skill obsolescence and its practices in the organisation; and
6. Discuss how to handle job loss.
 INTRODUCTION
In any organisation, training and development focuses on the processes and
activities that help employees perform their jobs in an excellent manner. There is
a slight distinction between training and development. The purpose of the
training function is to improve the knowledge, skills and abilities of employees
for the short-term and normally it is particular to a specific job or task. On the
other hand, the purpose of the development function is to prepare an employee
for future job responsibilities, while increasing capacity to perform his or her
current job. In other words, development refers to formal education, job
experiences, relationships, assessment of personality and abilities that help
employees perform effectively in their current or future job in the company.
In this topic, we will discuss in detail the training and development activities
carried out by organisations.
TOPIC 5 TRAINING AND DEVELOPMENT  113
5.1 TRAINING
What comes to your mind when mentioned the word training? Training is the
process of providing employees with skills needed to do their jobs. It can
enhance a companyÊs competitiveness by improving employee performance and
increasing the employeeÊs knowledge, skills and abilities. Training also can be
used to attract, retain and motivate employees. Likewise, training should support
the companyÊs strategic plans.
Training traditionally focused on teaching skills and this will continue within a
broader focus of creating and sharing knowledge.
Figure 5.1 shows the role of training that focuses on teaching skills and
knowledge that links training to business needs and the use of training to create
and share knowledge.
Figure 5.1: Broadening of trainingÊs role

Source: Martocchio, J. J. & Baldwin, T. T. (1997). The Evolution of Strategic Organisational
Training: New Objectives and a Research Agenda. Research in Personnel and Human
Resource Management. Vol 15. Ed. G. R. Ferris, Greenwich, CT. JAI Press, pp1-46

SELF-CHECK 5.1
In your own words, define training. How can training enhance a
companyÊs competitiveness? Discuss.
5.1.1 Training Needs According to Business Strategies

Training activities should assist the firm to achieve its business strategy so that
the firm can be successful. Basically there are four types if business strategies. Let
us discuss the strategies in more details.
114  TOPIC 5 TRAINING AND DEVELOPMENT
(a) Strategy influences suggested by Schuler & Jackson (1987) encompass the
amount of training dedicated to current or future job skills and the extent to
which it is shaped and developed towards the needs of an employee or a
team. Also, Schuler and Jackson looked into whether training is:
(i) Limited to a select group of employees (for example, executives
identified as having managerial talent) or open to everyone;
(ii) Planned and systematically administered;
(iii) Provided only when problems occur and as a reaction to what
competitors are doing; and
(iv) Prioritised as a comparison to other human resource management
functions such as staffing and compensation.
(b) A concentration strategy is mainly concerned with increasing market share,
reducing costs and creating and maintaining a market niche for products and
services. Training for a company with an orientation towards concentration
strategy should focus on team building, cross-training, specialised
programmes, interpersonal-skill training and on-the-job training.
(c) An internal growth strategy is mainly concerned with areas such as new
market, product development, innovation and joint ventures. Training for a
company with an orientation towards internal growth strategy should
focus on high quality performance, culture, creative thinking, technical
skills, conflict negotiation and providing feedback for managers. An
external growth strategy is mainly concerned with acquiring vendors and
suppliers and buying businesses to enable the company to expand into new
markets. Training for a company with an orientation towards external
growth strategy should focus on employee capabilities analysis in acquired
firms and integration of firmsÊ methods, procedures and team building.
(d) A divestment strategy is mainly concerned with liquidation and divestiture.

Training for a company with an orientation towards divestment strategy
should focus on:
(i) Motivation;
(ii) Goal setting;
(iii) Time management;
(iv) Stress management;
(v) Cross training;
(vi) Leadership training;
(vii) Interpersonal communications training;
(viii) Outplacement assistance; and
(ix) Job search training.
5.1.2 Influences of Business Conditions on Training

Now, let us look at some of the influences of business condition on training.
Among the influences are:
In an integrated business, employees need to understand all parts of the

company and training should fulfil those needs. For companies with overseas
operations, training is essential to prepare employees for international
assignments. Training managers can decide on the location of the training.
For companies in unstable business environments, which can be due to mergers,

acquisitions or disinvestments, managers can decide on the training. These types
of training can be short-term oriented. This can help employees adapt mentally
and acquire skills to adapt to the new environment with new demands.
For companies experiencing growth, there may be a greater demand on training

from employees who want to reward themselves to lateral job positions and
promotions. However, when companies are trying to recover from a slow
business environment, earnings may be low and there are likely fewer incentives
for participation in training programmes. On the other hand, when companies
downsize, training should concentrate on continued employability for the
employees.
Employees who retain their jobs during the companyÊs downsizing need skills
training to work in multiple jobs while retrenched employees need mental and
selected self-employment skills training to help them face their future. Training
helps employees to prepare for succession due to staff retirement or resignation,
and upgrades employees with the latest skills to avoid skill obsolescence.

SELF-CHECK 5.2
1. In what ways can strategy influence training?

2. List the four types of business strategies; and provide examples
of training suitable for each of them.
3. Explain how business conditions can influence training.

5.2 STEPS IN THE TRAINING PROCESS

In your opinion, is systematic approach important in training process? A
systematic approach is required to develop an effective training programme and
training is effective only when employees can understand instructional or
training goals and objectives. Measurable learning objectives should be identified
prior to the training. Ultimately, the training process should be systematic as well
as flexible enough to adapt to changing business conditions. The steps involved
in training are shown in Figure 5.2.
Evaluation of training plays an important role in planning and choosing a

training method, when monitoring the training programme and when suggesting
changes to the training process. The method of evaluation needs to be
determined in the initial design of the training programme.

Figure 5.2: Steps in the training process

Now let us look at each step in more detail.
5.2.1 Step 1: Conduct Training Needs Analysis

Do you understand the meaning of training needs analysis (TNA)? A training
needs analysis is a systematic method for determining if training is necessary in
order to bring performance in a particular job or set of jobs to the expected level
by providing a benchmark of the skills trainees have before training. The
benchmark can be compared to a measure of the skills acquired in training and
functions as a post-measure; since with pre- and post-measure, it is possible to
demonstrate the cost savings or value added as a result of training. TNA also
ensures that training focuses on knowledge, skills and abilities or KSAs the
trainees really need.
The indicators suggesting that training is needed are as when you have:
(a) Work performance problems;
(b) The introduction of a new technology;
(c) Redesign of jobs;
(d) Changes in legislation;
(e) New products developed by the firm; and
(f) Lack of work skills.

In some cases, the needs analysis determines that employees lack necessary
knowledge, skills and abilities (KSAs) to do the job and training is required.
When training is perceived as relevant, it is more likely to create interest. On the
other hand, employees who are sent for training but do not need it, are not going
to take the training seriously.
The needs analysis also allows the trainer to present a logical explanation, at the
start of training about what is not happening now (but should be) on the job and
how the training will be useful. A good needs analysis not only ensures that only
those who need the training are included, it also provides the data to show why
it is needed.

There are three types of analysis done in a TNA (Table 5.1). Now, let us look at
each type in more detail.

Table 5.1: Types of Analysis in Training Needs Analysis

No. Type Description

(a) Organisational Determine the appropriateness of training, taking into
Analysis consideration the firmÊs business strategy, resources,
managerial and peer support.
(b) Task Analysis Identify the important tasks that are performed and the
knowledge, skills and behaviours that are required.
(c) Person Analysis This analysis involves finding out if performance deficiencies
are due to a lack of knowledge, skills, motivation or work
design, which needs the training and if the employees are
ready for training.
(a) Needs Assessment Process

Needs assessment is defined as the process of determining learning needs
and opportunities. It also considers whether the training is needed in the
organisation.
The training needs assessment process is shown in Figure 5.3 below.

Figure 5.3: Needs assessment process
Source: Adapted from Noe, R. A. (2008). Employee training and development
(4th ed.). New York: McGraw-Hill.
(i) Organisational Analysis

If the organisational analysis shows that the firm needs training, then
person and task analyses will be done. There are three factors to be
looked at during organisational analysis to determine if training is
needed (see Table 5.2):
Table 5.2: Three Factors to Consider during Organisational Analysis to Determine

if Training is Needed
No. Factors to Consider

(a) The firmÊs strategic direction: For firms where training plays a significant
strategic role, more money will be allocated for training.
(b) ManagersÊ and peersÊ support for training:
 Positive attitude among peers and managers about participation in
training is crucial.
 ManagersÊ and peersÊ willingness to create opportunities for the
trainees to use new skills, knowledge and behaviours at their job is
important.
(c) Training resources such as money, time and expertise:

 When using external consultants for training, a document outlining to
potential consultants what services the company is seeking, the
timeline, funding, etc., may be made. This document can be used as a
benchmark to evaluate consultants.
 Some of the questions to ask training consultants are:
- What training experience does his/her firm have?
- What are the qualifications of the trainers?
- Have the training programmes conducted by the consultant
proven effective?
 When choosing an external trainer, it is important to determine how
tailored the training is to the companyÊs needs.

(ii) Person Analysis
During this phase, employees that need training are determined by
examining if their current job performances match with their expected
performances (refer back to Figure 5.3). It shows some factors that can
affect employee performance and learning, through the motivation to
learn (see Table 5.3).
Table 5.3: Motivational Factors that Affect Employee Performance and Learning
No. Factor Explanation

(a) Person Examples are knowledge, skills, abilities, attitudes and
Characteristics motivation.
(b) Input Refers to instructions and resources given to employees.
(c) Output Refers to job performance standards communicated by
superiors.
(d) Consequences Refer to the incentives that trainees receive for good job
performance. By communicating to the trainees on the
job, personal- and career-related benefits of learning, and
their motivation to learn can be enhanced.
(e) Feedback Refers to the information employees receive on their job
performance and if they are meeting performance
standards.

To determine if training is needed, the company needs to evaluate
whether:
 The performance problem can potentially cost the company
significant money or loss of production;
 Workers do not know how to work effectively;
 Workers cannot show the correct knowledge or behaviour;

 Performance expectations are clear;
 No obstacles for employees to work well;
 Positive rewards for good performance are available;
 Employees receive timely and relevant feedback on their
performance; and
 Other solutions such as job redesign or transferring employees are
not feasible.

Training is compulsory if employees lack the knowledge and skill to
work but other functions are satisfactory, but may not be necessary if
they have the knowledge and skill to work but other factors are not
satisfactory. However, if poor performance actually results from lack
of feedback, then the managers would be the ones that require
training and in this case, on how to give performance feedback.

(iii) Task Analysis
A task is a specific work activity that is a component of a job. Certain
KSAOs, or Knowledge, Skills, Abilities and Other considerations, are
required to perform each task. Knowledge can have facts, figures and
procedures. Skill is the capability to do a task. Ability is the physical and
mental capability to do a task and other considerations include conditions
under which tasks are performed, such as necessary equipment, time
constraints, safety considerations or performance standards.
You can read the four steps in task analysis in Table 5.4.

Table 5.4: Steps in Task Analysis
Step Description
1 Select a job to be analysed.
2 Interview and observe employees and talk to others who have performed a task
analysis to develop a preliminary list of tasks performed on the job.
3 The preliminary list of tasks is confirmed by asking a group of subject matter
experts (SMEs) to determine:
 How often the task is performed.
 How much time is spent to complete the task.
 How critical the task is for successful job performance.
 How difficult the task is to do.
4 The knowledge, skills and abilities required to successfully do each task are
identified through interviews or questionnaires.
SELF-CHECK 5.3
1. What is training needs analysis (TNA)?
2. Define needs assessment.
3. Explain the three types of analysis done in a TNA.

(b) Participant in Needs Assessment
Traditionally, only trainers were concerned with needs assessment.
However, as training is increasingly used to achieve strategic goals, both
upper- and top-level managers are involved. Table 5.5 shows the key
concerns of upper- and middle- level managers and trainers in needs
assessment.

Table 5.5: Key Concerns of Upper-level Managers, Middle-Level
Managers and Trainers in Needs Assessment

Training Upper-level Middle-level Trainers
Analysis Managers Managers
Organisational Is training important Do I want to spend Do I have the budget to
analysis to achieve our money on training? buy training services?
business objectives? How much?
Will managers support
How does training
training?
support our business
strategy?
Person What functions or Who should be How will I identify

analysis business units need trained? Managers? which employees need
training? Professionals? Core training?
employees?
Task analysis Does the company For what jobs can What tasks should be
have the people with training make the trained?
the knowledge, skills biggest difference in
What knowledge, skills,
and abilities needed product quality or
ability or other
to compete in the customer service?
characteristics are
marketplace?
necessary?
Source: Noe, R. A. (2008). Employee training and development (4th ed.).

New York: McGraw-Hill.

Identifying training needs is the role of subject matter experts (SMEs).

Subject matter experts (SMEs) have knowledge on:
(i) Tasks to be performed;
(ii) Knowledge, skills and abilities required to do the tasks effectively;
(iii) Equipment needed; and
(iv) Conditions under which tasks will need to be done.
(c) Conditions when Training Needs Analysis (TNA) is not necessary

There are two situations below that do not need TNA. Now, let us look at
each situation in more detail.
(i) When an organisation is trying to convey a new corporate message or
instil a new culture (attitude change), it would be advisable to educate
all its employees. Consider a companyÊs concerns regarding sexual
harassment. To ensure everyone is aware of how seriously top
management considers breaches of the sexual harassment policy,
company-wide education on this issue would ensure that
managementÊs expectations regarding this issue are clear. It would
also demonstrate to the courts the employerÊs position should an
employee consider a sexual harassment lawsuit.
(ii) When team-building skills are needed for new teams. Here, the goal is
to build the dynamics of the team so that the members work together
cohesively and effectively, as well as to provide the relevant
knowledge, skills and abilities (KSAs). Everyone on the team must be
part of the training, even though he or she may already possess many
of the teamÊs KSAs.
For most types of training, however, a training needs analysis or TNA will
increase the relevance and effectiveness of training. For example, team
building for teams that have been working together for a while would
benefit from a TNA. In this case, the TNA would focus on the team, not the
individuals. Only teams that demonstrate problems in effectiveness or
cohesion would go through training. Teams that are already functioning
effectively would not need to attend, reducing the overall cost.
(d) Training Need Analysis and Competencies

A current trend in needs assessments is to focus on competencies.
Competencies relate to personal capabilities that allow employees to
perform their jobs successfully by achieving outcomes or completing tasks.
The competency can be knowledge, skills, attitudes, values or personal
characteristics.
A competency model identifies the competencies necessary for job

performance and the necessary knowledge, skills, behaviour and
personality characteristics. It is used to identify training needs by
comparing current competencies to those required by the job.

SELF-CHECK 5.4
1. What are the main concerns of upper- and middle-level managers,
and trainers in needs assessment?
2. Describe two situations that do not need TNA.
3. How can competencies be used for TNA?

5.2.2 Step 2: Design Training Programmes

Programme design refers to the organisation and coordination of the training
programme. The main activities involved are setting objectives, choosing the
trainer, developing a lesson plan, selecting training methods and techniques,
preparing materials and scheduling the programme.
Let us now look at each activity in more detail.
(a) Setting Objectives

The objectives refer to the purpose and targeted outcomes of the training
activities. Individuals learn best when they understand the training
objectives. Now, let us look at some of the training objectives. Among the
objectives used by the company are:
(i) As the basis for selecting training programme content and methods;
(ii) To evaluate the programmeÊs success; and
(iii) To help trainees focus their attention and efforts during the training.
Programme objectives are broad summary statements that reflect the

purposes of the programme. Course objectives or lesson objectives are
defined as goals for the course or lesson. They are more precise than overall
programme objectives.

(b) Choosing the Trainer
Effective trainers communicate their knowledge clearly, use a variety of
instructional methods, and possess good interpersonal skills and the ability
to motivate others to learn.
However, less qualified trainers can be assisted through teaming skilled

trainers with in-house subject matter experts to form an instructional team,
using a training method that does not need a human trainer, such as
programmed instruction or computer-aided instruction programmes. Less
qualified trainers can also benefit from train-the-trainer programmes, which
involves identifying in-house subject matter experts who lack training skills
and training them to become effective trainers.
(c) Developing a Lesson Plan

The lesson plan is a trainerÊs guide for the actual delivery of the training
content. Gilley and Eggland (1989) suggested that a lesson should describe:
(i) Contents to be covered;
(ii) Sequencing of activities;
(iii) Selection or design of training media;
(iv) Selection or development of experiential exercises, or both;
(v) Timing and planning of each activity;
(vi) Selection of instruction method; and
(vii) Number and type of evaluation items to be used.

(d) Selecting Training Methods and Techniques
Choosing a suitable training method is based on four factors (see Table 5.6).
Table 5.6: Training Methods and Techniques
Choosing Suitable
Description
Training Method
Programme objectives For example, if the objective is to improve
interpersonal skills then more active methods such as
videotaping, role playing or behaviour modelling are
better choices than lecturing or computer-based
methods.
Availability of time and Some training methods are cheaper, compared to
money others.
Availability of other Some methods require highly trained trainers and
resources specialised equipment and facilities so that training
can be conducted effectively.
Training characteristics A method like computer-based training (CBT)

and preferences requires trainees to be computer and reading literate.
If literacy is a problem, either a less-reading intensive
method such as video tape or literacy training can be
conducted first. A suitable training method should
also consider principles of learning and adult
learning styles.
(e) Preparing Materials

There are four types of training materials: programme announcements,
programme outlines, training manuals and textbooks.
Let us now look at each type in more detail (see Table 5.7).
Table 5.7: Preparing Materials
Preparing Materials Description

Programme Play the role of providing information to the target
announcements audience about the training programme, including the
purpose of the training programme, its time and venue
and information on the required qualifications to attend.
Programme outlines Also known as course syllabi are materials that show the
content, goals and expectations for the training programme.
Programme outlines consist of course objectives, topics
covered, required materials and tools, requirements of each
participant and schedule of events, and all these are for
establishing punctuality, attendance, work habits, class
participation and courtesy towards other trainees.
Training manuals Used by trainers for basic instructional materials, readings,
and textbooks exercises and self-tests. Textbooks provide a broad
treatment of the subject, while training manuals are more
known for their briefness and hands-on approach.
(f) Scheduling the Programme

The aim of scheduling a training session is to make sure that the trainer and
trainees are available and have their attention focused on the learning task.
The advantage of scheduling the training programmes during office hours
are that outside conflicts such as travelling, family and personal obligations
can be avoided and it sends a message to trainees that learning is an
important part of their job.
The following should be taken into account when scheduling a training

session during office hours:
(i) Day of the week;
(ii) Time of day;

(iii) Peak office hours;
(iv) Staff meeting times; and
(v) Travel requirements.

The disadvantages of scheduling training programmes after office hours or
during weekends are that it may cause difficulty to trainees with family
obligations or personal commitments, and fatigue. Many trainees also do
not like to give up their leisure time.
To counter the disadvantages of conducting training session after office

hours or during weekends, companies can do the following for the trainees:
 Give overtime pay;
 Give compensatory time or time off;
 Make training as a requirement for promotion; and
 Leisure activities to coincide with the training, e.g. by conducting the
training at a tourist resort.

(g) Training Administration
Training administration involves the coordination of activities before,
during and after the training session and it encompasses:
(i) Enrolling trainees in courses;
(ii) Preparing instruction materials;
(iii) Arranging training facilities;
(iv) Evaluating the training session; and
(v) Evaluating learner outcomes.
Proper training administration allows trainees to learn effectively without

distractions. Therefore, before the session takes place, trainees are provided
with vital information namely the objectives of the session, date, time and
venue of the training programme, the contact person if they have any
queries and the pre-training work to be done.
During the training, the following needs to be arranged for:

 Sufficient lighting and ventilation at the training venue;
 A person assigned to take phone messages;
 Time for trainees to take tests on what they have learned and to
evaluate the training programme; and
 Trainees to be informed on starting and ending times for the session.

When the training is over, trainees who have completed the programme
successfully will have their names recorded. Areas of improvement for the
training session are assessed for future reference so that the future session
will be conducted better.
SELF-CHECK 5.5
1. Describe the six main activities involved in designing a training

programme.
2. What does training administration consists of?

5.2.3 Step 3: Select Training Methods

There are many methods to conduct training. Now, let us look at each method in
more detail.
(a) Lecture
A lecture involves the trainer verbally communicating the material for the
trainees to learn. There are several variations of lecturing as described
below:
(i) Standard lecture: Trainer talks, while trainees listen.
(ii) Team teaching: Two or more trainers present different topics or
alternative views of the same topic to the trainees.
(iii) Guest speakers: Invited speakers visit the training session for a
period of time and conduct the main instruction.
(iv) Panels: Two or more speakers present information and ask questions.
(v) Student presentations: Groups of trainees present their assignment or
project to the class.
Lecture method is one of the least expensive, least time-consuming way to

present a large amount of information efficiently and it can be used with
large number of trainees.
However, lecture method discourages traineesÊ involvement, feedback and

meaningful connection to the work environment. This will minimise
learning and training transfer as it appeals to few of the traineesÊ senses
since it focuses mainly on hearing information and also is difficult for
trainer to assess the traineesÊ level of understanding.

(b) Video
It is one of the most popular training methods usually used together with
lectures. The video method is highly effective in showing communication,
interviewing and customer-service skills, step-by-step procedures and real-
life examples of material covered through lecture or other methods.
Video method is advantageous in a sense that it can expose trainees to the

equipment, problems and events that cannot be easily demonstrated, such
as equipment malfunctions, angry customers or emergencies, and trainees
can also consistently receive consistent instruction. In addition, videotaping
of trainees allows them to see and hear their own performance.

However, poor dialogue or poor acting in video could affect the message
and/or the credibility of the message and too much usage of music or
humour in the video can make it difficult for the trainees to understand
important learning points.
(c) On-the-job Training (OJT)

This method involves new or inexperienced employees learning by
observing their peers or managers at work and trying to follow their
behaviours. OJT benefits companies because it requires less time or money
investment, uses expertise from peers and managers, and is effective for
cross-training employees within a department or team.
However, OJT has weaknesses too. It is normally unstructured and

therefore, managers and peers may not use the same process to complete
the same task. Bad habits that are practiced on the job can be passed on to
the trainees and demonstration by the peer or manager can also be flawed.
SELF-CHECK 5.6
1. Define lecture.
2. List the advantages and disadvantages of lecture.
3. How can videos be used as a training method?
4. Discuss on-the-job training.

(d) Job Rotation

What is job rotation? Job rotation involves moving employees through
various job assignments in various functional areas, within one functional
area or within a work team in the company. However, the employeeÊs title
and level of compensation remain the same throughout the rotation.
Job rotation helps the employee to understand overall mission and goals of
the company and how various jobs and functions contribute to achieving
these goals, allows for networking and enhances problem solving and
decision-making skills.
However, the problems with job rotation are that it may create a short-term
perspective on problems and solutions, employees may not be given
enough time in a position to receive a challenging assignment until job
satisfaction and motivation may be negatively affected, and productivity
losses and workload increases may occur in both departments involved in
the job rotation process.

(e) Self-directed Learning
This method places responsibility for learning on the employee/learner,
e.g., when the learning will take place and with whom. The Training
content is predetermined but trainees can learn the content at their own
pace and in their own way. A trainer should be available to answer
questions and facilitate the learning process.
Self-directed learning is flexible in a sense that it allows trainees to learn at their

own pace and to receive feedback about their learning. In addition, it requires
fewer training staff that will in turn reduce the costs of facilities. Travel costs for
trainees and trainers are also reduced, and self-directed learning also allows
constant access to training materials for the involved parties.
However, self-directed learning demands that trainees are willing, able to

and are motivated to learn on their own. This may not be comfortable for
many employees. This method also has higher development costs in terms
of time and money.
(f) Apprenticeship
This method involves both on-the-job training and classroom. A majority of
the apprenticeship programmes are in the skilled trades such as plumbing,
carpentry, electrical work and bricklaying.
Apprenticeship is advantageous in the sense that trainees are paid while they
learn, with wages typically increasing as their skills do and this method is also
an effective combination of learning principles in the classroom and the

opportunity to practice what they have learned on the job.
Apprenticeship however poses two major drawbacks. There is no

guarantee that employment will follow after trainees complete the training
programme and sometimes the skills focused are too narrow for example,
one craft or trade.
SELF-CHECK 5.7
1. What is job rotation?
2. Identify the advantages and disadvantages of job rotation.
3. Explain self-directed learning.
4. Describe apprenticeship.

(g) Mentoring
Mentoring involves an experienced, productive senior employee (the mentor)
helping to develop a less experienced employee (protégé). Most mentoring
relationships develop informally due to shared interests, values or work
assignments but it can become companyÊs formal mentoring programme.
In a group mentoring programme, one mentor is paired with four to six

protégés, allowing protégés to learn from each other as well as from the
mentor and requiring fewer mentors than traditional one-on-one
arrangement.
Formalised mentoring allows all employees have access to the programme

and participants can be informed of what is expected of them. The
disadvantage of formalised mentoring is that the relationship may not
„stick‰ if it has been „artificially‰ created.
(h) Simulation
This is a training method that represents a real-life situation where identical
elements to those on the job are presented. TraineesÊ decisions resulting in
outcomes that mirror what would happen if they were on the job are
documented.
The advantages of simulation are it allows trainees to learn production

skills without being engaged in the actual flow of production and without
the fear of making a mistake in the actual work environment and the trainer
can observe and evaluate traineesÊ performance followed by giving
feedback to them. However, simulation is expensive to develop and

requires continuous maintenance and updating.
(i) Case Studies

A case study is a description about how an organisation dealt with a
difficult situation. Trainees are required to analyse and critique the actions
taken, indicating the appropriate actions and suggesting what might have
been done differently. This method assumes that trainees will learn through
the process of discovery.
Case studies are suitable for developing higher-order intellectual skills such
as analysis, synthesis and evaluation, which are needed by managers and
many other professionals. It also helps trainees to take risks given uncertain
outcomes.
However, it requires high traineesÊ participation and trainees must be

willing and able to analyse cases and have the ability to communicate their
recommendations, so the method requires prior skill in these areas.

SELF-CHECK 5.8
1. Discuss mentoring as a training method.

2. Explain simulations.
3. Discuss the appropriateness of using case studies as a training tool.
4. What are the advantages and disadvantages of case studies?

(j) Business Games
This method requires trainee to actively gather and analyse information,
and make decisions, typically for the purpose of developing managerial
skills. The games would demonstrate all aspects of management practice
such as labour relations, marketing and finance.
However, business games require high traineesÊ participation and time-

intensive development. In addition, learning objectives may get
overshadowed by the competition in the game itself.
(k) Role Plays

This method requires trainees to act out characters based on situations
provided. Role play provides less detailed information regarding the situation,
as compared to simulation. Role play focuses on „soft skills‰ or interpersonal
skills while simulation focuses on „hard skills‰ or technical skills. Simulation
also requires procedural responses on the part of the trainees while role play
requires mental and emotional reactions to other trainees.
Before role play takes place, its purpose must be explained. Clear
instructions, monitoring and feedback from the facilitator are vital to help
trainees understand the experience.

(l) Adventure Learning
This method is also known as outdoor training or wilderness training. It is
aimed at developing teamwork, leadership skills, self-awareness, problem
solving and conflict management skills, through structured outdoor
activities. The activities range from highly strenuous and challenging ones,
such as mountain climbing, to less physically challenging ones such as rope
courses, all tailored to the skill objectives of the training. After exercises, the
facilitator leads a discussion about what was learned.
Through adventure learning, trainees can interact and build relationships

with co-workers in a situation not governed by formal business rules, share
a strong emotional experience, which may open them to change, and
experience exercises that are highly self-enlightening, invigorating and self-
esteem enhancing.
However, many adventure-learning activities are physically demanding and

risky which puts company at the risk of negligence claims due to personal
injury, emotional distress or invasion of privacy. The activities are also costly.

SELF-CHECK 5.9
1. Explain how business games can be used as a training method.
2. Describe role play.
3. What is adventure learning?

(m) Computer-based Training (CBT)
It is an interactive method of delivery. The computer provides learning
stimuli, the learner must respond to and the computer then assesses the
responses and provides feedback to the learner. The most common form of
CBT is software on a CD that runs on a personal computer. However, using
the Internet for CBT is the current trend.
Internet or web-based training refers to training delivered through public

or private computer networks and displayed by a web browser while
intranet-based training is delivered via companyÊs own computer network.
Now, let us look at some of the Internet-based training advantages. Among
the advantages are:
(i) Availability of the training material to trainees anywhere in the world
at any time;
(ii) Efficiency and cost savings in the administration of training;
(iii) Self-paced instruction that can be self-directed;
(iv) Capability of monitoring traineesÊ learning;
(v) Controllable access to the material;
(vi) The ease of changing programme content quickly and at low cost;
(vii) Provides links to other resources;
(viii) Allows trainees to share information and communicate with each
other or to make „deposits‰ into databases before, during or after
training;
(ix) Trainees are actively involved in the learning process; and
(x) Accessible to many trainees at one time.

However, this method also has drawbacks. Computer network may not be
able to handle extensive video and audio. Aside from difficulty in revising
linear learning material to hypermedia (referred to as re-purposing), which
allow the learner to decide the direction and order of learning, users need
to be controlled and billed.
Virtual reality is a computer-based technology that immerses trainees in a

three-dimensional learning experience, moving through and interacting
with a simulated environment. Multiple senses of the trainee are stimulated
to create the sensation of presence, or the perception of actually being in a
particular environment. Presence is influenced by the amount of sensory
stimulation, control over the sensors in the environment and the traineesÊ
ability to alter the artificial environment.
Virtual reality allows the trainee to practice dangerous tasks without

putting him/herself or others in danger as it can closely replicate the work
environment. Its realistic 3-D environment maximises learning and
training transfer and is effective for complex tasks or tasks that involve high
use of visual cues.
However, virtual reality will only be effective with good equipment for the
appropriate level of presence. In addition, poor presence (e.g., poor tactile
feedback and long time lags between sensing and responding to traineesÊ
actions) can be annoying and can even make the trainee feel ill, e.g.,
vomiting, dizziness and headaches („simulator sickness‰) due to the
distortion of senses.

(n) Distance Learning
Distance learning allows two-way communication between geographically
dispersed people through two types of technology, which are
teleconferencing and individualised and personal computer-based training:
(i) Teleconferencing: It refers to the synchronous exchange of audio, video
and/or text between two or more individuals or groups at two or more
locations. Trainees attend training programmes in training facilities in
which they can communicate with trainers (who are at another
location) and other trainees using the telephone or personal computer.
(ii) Individualised and personal computer-based training with trainees
participating wherever they have access to a computer. This may
utilise multimedia methods such as web-based training.

Video teleconferencing involves using a telephone link so that trainees can
view a presentation, ask questions and give comments to the trainer.
The advantage of distance learning is that the company can save on travel
costs because trainees do not have to be in one location to receive quality
training. The disadvantage of distance learning is the relatively low level of
interaction between the trainer and trainees and among trainees at different
locations that sometimes can happen.

SELF-CHECK 5.10
1. Define computer-based training.
2. Explain advantages and disadvantages of Internet-based training.
3. Describe virtual reality.
4. Discuss the advantages and disadvantages of distance learning.

ACTIVITY 5.1
Working individually or in groups, create several examples to show

how a lecturer can use at least four of the training methods described in
this topic to teach the human resource management course to students
studying for a Master degree .

5.2.4 Step 4: Evaluate Training Programme

Training evaluation is the process of collecting data on the outcomes needed to
find out if training objectives were achieved. Training outcomes are the measures
that the trainer uses to evaluate training programmes. Evaluation design refers
to from whom, what, when and how information is collected to gauge the
effectiveness of the training programme.
Do you have any idea why training programmes should be evaluated? Let us
look into the explanation. The reasons why training programmes should be
evaluated are:
 To determine the programmeÊs strengths and weaknesses. Does the
programme meet learning objectives? What is the quality of the learning
environment? Does the training received get transferred to the job?
 To assess whether the content, organisation and administration of the
programme contribute to learning.
 To identify the trainees who benefited most from the programme and
determine why.
 To collect information such as traineesÊ testimonials, that can be used to
promote training programmes.
 To determine the costs and financial benefits of training.
 To compare training costs and benefits with other human resource
investments.
 To compare the costs and benefits of various training programmes so that the
most effective programme can be selected.

(a) Outcomes Used in Evaluating Training

KirkpatrickÊs model proposes that training outcomes can be evaluated
based on four levels (see Table 5.8).
Table 5.8: Level of Training Outcomes

Level No Evaluation level training outcomes

Level 1 Reactions level It focuses on trainee satisfaction.
Level 2 Learning level It focuses on gaining knowledge, skills,
abilities and behaviours.
Level 3 Behaviour level It focuses on improvement in job
performance or behaviours.
Level 4 Results level Focuses on whether desired business
results were achieved as a result of the
training.

Referring to Table 5.8, KirkpatrickÊs Framework categorise training
outcome to four levels (Level 1 to Level 4). Meanwhile, Table 5.9 shows the
five major areas of the training outcomes which are cognitive outcomes,
skill-based outcomes, affective outcomes, results and return on investment.
Table 5.9: Five Major Areas of Training Outcomes
No. Training Description

Outcomes
1. Cognitive Show the extent to which trainees are familiar with principles, facts,
Outcomes techniques, procedures and processes covered in the training
programme.
2. Skill-based Determine the level of technical skills acquired, including its
Outcomes learning and application (transfer). Skill learning is evaluated by
observing performance in work samples such as simulators, while
skill transfer is assessed by observing trainees on the job or
supervisor ratings.
3. Affective Mean attitudes and motivation. Reaction outcomes mean the
Outcomes traineesÊ perceptions of the training experience including the
content, facilities, trainer and the delivery methods. Other affective
outcomes include tolerance for diversity, motivation to learn,
attitudes toward safety and customer service orientation.
4. Results Results are outcomes used to determine benefits of the training
programme to the firm. The examples are reduced costs relating to
employee turnover or accidents, increased production and
improved quality or customer service.
5. Return on It compares trainingÊs financial benefits to its costs, both direct and
Investment indirect.
(ROI) (i) Direct costs are salaries and benefits of trainees, trainers,
consultants and other people involved in training;
programme materials and supplies; equipment and facilities;
and travel costs.
(ii) Indirect costs are office supplies, facilities, equipment and
related expenses not directly related to the training
programme; travel expenses; training department
management; and staff salaries not related to a single
programme.
(iii) Determining benefits can be done through:
 Technical, practitioner and academic literature
summarising benefits of training programmes.
 Pilot training programmes assess benefits from a small
group of trainees before a company commits more
resources.
 Observing successful job performers to determine what
successful job performers do differently than
unsuccessful performers.
 Asking trainees and their managers to provide estimates
of training benefits.
(Raymond, 2008).

Which training outcomes measure is the best? The answer depends on the
training objectives:
(i) Result outcomes: If the training objectives have business-related
outcomes such as increased customer service or product quality.
(ii) Reaction outcomes: If information on the extent to which the trainer,
facilities or learning environment may have hindered learning is
required.
(iii) Cognitive outcomes: If the objective is to determine the extent of
training content acquired by trainees.

Reaction and cognitive outcomes do not determine the extent to which
trainees actually use the training content on their jobs. Evaluation should
include skill-based, affective or results outcomes to determine the extent to
which training transfer has happened.

(b) Evaluation Designs

The purpose of evaluation designs is to determine if the training causes
changes in evaluation outcomes. There are four types of evaluation design,
namely pre-test, post test, pre and post test, and time series.
The post-test only design involves collecting only post-training outcome

measures. It can be strengthened by the use of a control group, which
would help to rule out alternative explanations for changes in performance
(Table 5.10). The pre-test/post-test design collects both pre-training and
post-training outcome measures to determine whether a change has
occurred, but without a control group. The pre-test/post-test with
comparison group design includes pre-training and post-training outcome
measurements as well as a comparison group in addition to the group that
receives training. If the post-training improvement is greater for the group
that receives training, it proves that training was responsible for the
improvement.
The time series design collects outcome measurements at periodic intervals

during pre- and post-training. A comparison group can be used with time
series evaluation design. Time series allows for an analysis of outcomes, for
example, accident rates, productivity, over time to observe any changes that
occur. The Solomon Four-Group design combines the pre-test/post-test
comparison group design and the post-test only control group design. It is
the most difficult design to use. Four groups are involved:
(i) A training group and comparison group for which outcomes are
measured both at pre- and post-training; and
(ii) A training group and comparison group for which outcomes are
measured only after training.
Table 5.10 shows the comparison of various types of evaluation design.

Table 5.10: Comparing Various Types of Evaluation Design
Design Groups Measures

Pre-training Post-training Cost Time Strengt
h
Post-test only Trainees No Yes Low Low Low
Pre-test/post-test Trainees Yes Yes Low Low Med
Post-test-only Trainees and No Yes Med Med Med
Comparison Group Comparison
Pre-test/post-test Trainees and Yes Yes Med Med High
Time series Trainees Yes Yes, several Med Med Med
Time series Trainees and Yes Yes, several High Med High
Solomon four-group Trainees A Yes Yes High High High
Trainees B No Yes
Comparison A Yes Yes
Comparison B No Yes
Source: Noe, R. A. (2008). Employee training and development (4th ed.). New York:
McGraw-Hill.

Evaluation designs without pre-testing or comparison groups are most
suitable when the company is interested only in whether a specific level of
performance has been achieved, and not how much change has occurred.
Pre-test can evaluate how much change has occurred while comparison
group allows the isolation of training as the cause of the change.
A more rigorous evaluation design (pre-test/post-test with comparison

group) should be considered if:
 Evaluation results can be used to change the programme;
 The training programme is ongoing and has the potential to affect many
employees and customers;
 The training programme involves many classes and a large number of
trainees;
 Cost justification for training is based on numerical indicators;
 The company has the expertise or the budget to purchase expertise from
outside the company to design and evaluate data collected from an
evaluation study;
 The cost of the training creates a need to show that it works;

 There is sufficient time for conducting an evaluation. Here, information
regarding training effectiveness is not needed immediately; and
 There is interest in measuring change (in knowledge, behaviour, skills,
etc.) from pre-training levels or comparing two or more different
programme.

SELF-CHECK 5.11
1. List the reasons why training programmes should be evaluated.
2. Describe the five major areas of training outcomes.
3. Compare the various types of evaluation design.

5.3 EMPLOYEE DEVELOPMENT

Development refers to activities and experiences, such as formal education, job
experiences, relationships and assessments that help employees to grow and
prepare for the future. It involves voluntary learning that is not tied directly to
the employeeÊs current job. In comparison, training is related to current job
performance and is often required of the employee (Table 5.11).

Table 5.11: Comparison between Training and Development
Category Training Development

Focus Current Future
Use of Work Experiences Low High
Goal Preparation for current job Preparation for changes
Participation Required Voluntary
Source: Noe, R. A. (2008). Employee training and development (4th ed.). New York:
McGraw-Hill.

Employee development is important for a company to improve quality, meet the
challenges of global competition and social change and incorporate technological
advances and changes in work design. Employee development also helps
employees to understand cultures and customs that affect international business
practices, perform roles traditionally reserved for managers and overcome
stereotypes and attitudes that prevent innovative contributions that can come
from a workforce made up of employees with diverse racial backgrounds.
Formal education programmes can be used to develop employees. They are on-
site or off-site programmes tailored specifically for a companyÊs employees, short
courses offered by consultants or academic institutions, executive MBA
programmes and on-campus university programmes. Some of the examples are
corporate entry leadership conferences, new manager development course,
executive programmes and officer workshops.
Increasingly many companies and universities, such as Open University

Malaysia offer distance education to reach working adults. Students can discuss
lectures and work on team projects using the forum in the Learning Management
System.
5.3.1 Development of Planning Process

The purpose of the development planning process is to develop a person through
identifying his development need and goal and the means to achieve the goal.
The development of planning process comprises of steps and responsibilities as
described below (see Figure 5.4).
Figure 5.4: Five steps and responsibilities in the development of planning process
Let us now study each step and responsibility in more detail.
(a) Opportunity
(i) EmployeeÊs responsibility is to determine how he/she needs to
improve.
(ii) CompanyÊs responsibility is to provide assessment information to
help the employee identify strengths, needs, values and interests.
(b) Goal Identification

(i) EmployeeÊs responsibility is to determine what he/she wants to develop.
(ii) CompanyÊs responsibility is to provide development-planning guidance.
(c) Criteria
(i) EmployeeÊs responsibility is to determine how he/she will know
progress is being made.
(ii) CompanyÊs responsibility is to provide feedback (for example,
through the manager).
(d) Actions
(i) EmployeeÊs responsibility is to determine what he/she will do to
reach his/her goals.
(ii) CompanyÊs responsibility is to provide courses, assessment
opportunities, job experiences and access to developmental
relationships.
(e) Time
(i) EmployeeÊs responsibility is to determine what his/her timetable is.
(ii) CompanyÊs responsibility is to have the manager help the employee
set a realistic timetable and follow his/her progress.
The approach to development depends on needs and goals. A need can emerge
from a gap between current capabilities and those required or interests the
employee wants to pursue in future work.

SELF-CHECK 5.12
1. Define development.
2. Compare training with development.
3. What is a formal education programme?
4. Identify the steps and responsibilities in the development planning
process.

ACTIVITY 5.2
Working individually or in groups, contacts a provider of

management development seminars. Obtain copies of their recent
listings of seminar offerings. At what levels of managers do they aim
their seminar offerings? What seems to be the most popular types of
development programmes? Why do you think that is the case?

5.5 CAREER MANAGEMENT

Normally, you can describe a career as ă an advancement: a sequence of
promotions held within a company; or a profession: occupations with a clear
pattern of advancement; or a lifelong sequence of jobs; or a lifelong sequence of
role-related experiences. There is a new concept of career, called protean career.
It is a career that is frequently changing based on changes in employeesÊ:
(a) Competencies;
(b) Interests;
(c) Values; or
(d) Work environment.

The current trend is that you (the employee) take major responsibility for your
career. The protean career requires more readiness to learn than the traditional
career. It requires:
(i) „Knowing why‰;
(ii) „Knowing whom‰; and
(iii) „Knowing how‰.

Career patterns are changing. The traditional pattern was linear, moving up in
the hierarchy. However, spiral career patterns that involve movement across
specialisations or disciplines, will emerge. Transitory career patterns, involving
more frequent job changes, will also become more common. The new view of a
career is that it is „without boundary‰, meaning it can involve movement across
employers and/or occupations. Career success can be defined as achieving
personally meaningful goals rather than strictly promotions determined by the
company. Hence, the new definition of a career is a pattern of work-related
experiences over the course of oneÊs lifetime.
5.5 CAREER DEVELOPMENT

Career development is the lifelong series of activities that contribute to your
career like exploration, establishment, success and fulfilment.
It is also the process of you progressing through a series of stages. Each stage
brings different developmental tasks, activities and relationships. There are three
types of career model as shown in Figure 5.5.

Figure 5.5: Career models
Let us now study each type in more detail.
(a) Life Cycle Models

(i) These models suggest that employees go through distinct life or
career stages.
(ii) The employees face certain developmental tasks through the course of
their careers.
(b) Organisation Based Models

(i) These models propose that careers proceed through a series of stages.
(ii) Each stage involves changes in activities and relationships.
(iii) Career development involves learning to perform certain activities.
(c) Directional Pattern Models

(i) These models describe the form or shape of careers.
(ii) They suggest that employees make decisions about how quickly they
want to progress through the career stages.
According to Noe (2008), there are four major career stages:

 The exploration stage;
 The establishment stage;
 The maintenance stage; and
 The disengagement stage.
Let us now study each stage in more detail.
(i) The Exploration Stage

It is characterised by the identification of oneÊs interests, skills and fit
between oneself and work. Individuals learn and follow directions. The
new employee is considered an apprentice.
(ii) The Establishment Stage

It involves advancement, growth, security, and the development of
lifestyle. An employee contributes at work as a colleague.
(iii) The Maintenance Stage

It involves holding on to accomplishments, updating skills, training,
sponsoring, policy making, and mentoring.

(iv) The Disengagement Stage
It is characterised by retirement planning, changing the balance between
work and non-work by phasing out of work, and acting as a sponsor.
In a nutshell, we can conclude that there are four major career stages as shown in
Figure 5.6.

Figure 5.6: Four major career stages
SELF-CHECK 5.13
1. Define career and career development.
2. Identify the types of career models.
3. Explain the major career stages.

ACTIVITY 5.3
Write a one-page essay stating, „Where I would like to be career-wise
10 years from now.‰ Look for realistic expectations.
5.6 CAREER MANAGEMENT AND CAREER

MANAGEMENT SYSTEMS
Career management is the process through which the employee becomes aware
of his/her interests, values, strengths, and weaknesses, obtains information about
job opportunities in a company, identifies career goals and establishes action
plans to achieve career goals.
From the companyÊs perspective, failure to help employees plan their careers
may result in a shortage of employees, low employee commitment and
ineffective use of training allocation.
Meanwhile, from the employeesÊ perspective, lack of career management may

mean frustration, feelings of not being valued and inability to find acceptable
work should a job change be necessary.
A career management system can be used to assist workers, supervisors and the
organisation to determine career development needs. There are four components
in a career management system, as shown in Figure 5.7.
Figure 5.7: Components in a career management system
Let us examine these components separately.
(a) Self-assessment
It is the use of information, tests, and interest inventories to identify and
understand your career interests, values, aptitudes, and behavioural
tendencies.
(b) Reality Check

It refers to information given to employees about how the company sees
their skills and knowledge and where they fit into the companyÊs plan.
Managers usually provide the information during the performance
appraisal process.
(c) Goal-setting
It is the process where employees develop short and long-term career
objectives. Employees usually discussed these issues with their manager.
Employees write these objectives into a career development plan. The goals
relate to:
(i) Competencies;
(ii) Areas for improvement;
(iii) Career goals;
(iv) Next assignments; and
(v) Training and development needs.
(d) Action Planning

It involves employees determining how to achieve short- and long-term
goals. Action plans may include training courses and seminars,
informational interviews, or applying for jobs. The important factors in an
effective career management system are (Baumann, Duncan, Former &

Leibowitz, 1996; Hall, 2002):
(i) The system should be positioned as a response to a business need;
(ii) Employees and managers participate in the development of the
system;
(iii) Employees are encouraged to take an active role in their career
management;
(iv) Evaluation should be ongoing and used to improve the system;
(v) Business units should be able to customise the system for their own
purposes;
(vi) Employees should have access to career information services;
(vii) Senior management must support the career system;
(viii) Career management should be linked to other human resource
functions, such as performance management, training and recruiting
systems;
(ix) The system creates a large, diverse talent pool; and
(x) Information about career plans and talent evaluation is accessible to
all managers.
Evaluation of career management systems should be based on concrete and

measurable objectives. The results of a career management system can be
tracked, for example:
 Time to fill open positions;
 Amount of employee use of the system; and
 The number of women and minorities promoted.

SELF-CHECK 5.14
1. Define career management.
2. Describe the four components in a career management system.
3. Identify the important factors in an effective career
management system.

5.7 ROLES OF VARIOUS PARTIES IN CAREER

MANAGEMENT
Ask yourself, if you are a doctor, what would you be five years later on? Is your
position still the same today or will it change? Well, you have to plan for your
own future, right? The employeeÊs role in todayÊs career management means
taking responsibility for career planning. Now, let us look at some of the roles of
various parties in career management.

(a) The EmployeeÊs Role
(i) Take the initiative to ask for feedback from managers and peers
regarding their strengths and weaknesses.
(ii) Identify their career development stage and current needs.
(iii) Gain exposure through learning opportunities.
(iv) Interact with employees from other work groups, inside and outside
the company.
(v) Create visibility through good performance.
(b) The ManagerÊs Role

(i) Coaching ă listening, probing problems and clarifying concerns.
(ii) Appraising ă giving feedback, clarifying company standards and
needs, and job responsibilities.
(iii) Advising ă generating options, assisting in goal setting and giving
recommendations.
(iv) Referring ă linking to career resources and follow up on career
management plan.
(c) The Human Resource ManagerÊs Role

(i) Providing information about training and development opportunities.
(ii) Providing specialised services such as testing.
(iii) Helping employees prepare for job searches.
(iv) Career counselling.
(d) The CompanyÊs Role

(i) Providing employees with the resources they need to be successful in
their career planning:
 Career workshops;
 Information or access to information on career and job
opportunities;
 Career planning workbooks and materials;
 Career counselling; and
 Career paths.
(ii) The company must also monitor and evaluate the career management
system, and the managersÊ and employeesÊ roles.

SELF-CHECK 5.15
1. Define the role of an employee in career management.
2. Identify the role of a manager in career management.
3. Describe the role of a human resource manager in career
management.
4. Identify the role of the company in career management.

5.8 CAREER PATH

A career path is a sequence of job positions through which employees move in
the company, involving similar types of work and skills. Advancement in
technical and scientific career paths may be limited, often ending in a managerial
position. A dual career path allows the employee to remain on the technical path
or to move into a managerial path. Now, let us look at some of the effective
career paths. Among the them are:
(a) Have salary, status and incentives for technical employees that are
competitive with those of managers.
(b) Allow individual contributors (for example, scientists) opportunities to
increase their total compensation through bonuses for developing new
products or obtaining patents.
(c) Treat the individual contributor career path as one for employees with
outstanding technical skills, not for those with no managerial potential.
(d) Allow individual contributors the opportunity to choose their career path
through assessment resources made available by the company.
(e) May utilise skill-based pay to reward employees who are unlikely to move
into managerial positions in order to motivate employees to increase their
skills as well as to reduce the pay differential between managerial and non-
managerial positions.
5.9 CAREER PLATEAUING

Career Plateauing refers to a low likelihood that an employee will receive future
job assignments, for example, promotions. This is most likely to happen to mid-
career employees. Plateauing becomes dysfunctional when the employee feels
stuck in a job that offers no personal growth opportunities, often resulting in
poor attitudes and/or performance. Employees can plateau due to:
(a) Discrimination (e.g., age, gender, or race);
(b) Lack of skill or ability;
(c) Lack of training;
(d) Low need for achievement;
(e) Unfair or dissatisfying pay decisions;
(f) Confusion about job responsibilities; and
(g) Slow company growth allowing fewer developmental opportunities.
Possible remedies for plateaued employees include:

(i) Ensuring that the employee understands the reasons for the plateau;
(ii) Encouraging the employee to participate in developmental activities;
(iii) Encouraging the employee to seek career counselling;
(iv) Helping the employee to reality-test his solutions; and
(v) It may even be in the best interest of all parties to encourage the employee
to move on from the company.

SELF-CHECK 5.16
1. In your own words, define plateauing.
2. Why employees can plateau?
3. Describe remedies for plateaued employees.

5.10 SKILLS OBSOLESCENCE

Skills obsolescence refers to a reduction in an employeeÊs competence due to a
lack of knowledge of new processes, techniques, or technologies that have
emerged since the employee completed his/her education. This has traditionally
been a concern for those in the technical and professional occupations. However,
rapidly advancing technology today makes this a concern for all employees.
Skills obsolescence must be avoided for a company to be a learning organisation.
Skills obsolescence can be avoided by:
(a) Having managers provide challenging work assignments and encourage
employees to acquire new skills through various means;
(b) Having the company climate emphasise continuous learning;
(c) Encouraging peers to discuss ideas and problems and share information; and
(d) Having a reward system that allows for sabbaticals, pays for new ideas, and
pays for employee development. A sabbatical is a leave of absence from the
company, with full or partial pay for the purpose of skills renewal or
developing new ones.
SELF-CHECK 5.17
1. Define skills obsolescence.
2. How can skills obsolescence be avoided?

5.11 HANDLING JOB LOSS

Coping with job loss is becoming important in an environment of:
 Downsizing;
 Corporate restructuring;
 Mergers;
 Acquisitions; and
 Takeovers.
Lay-offs cause reduced job commitment, distrust of management and

disillusionment among current employees. It can cause difficulty in recruiting
new employees. Job loss causes stress and personal life disruption for those laid
off. Alternative solutions that should be tried is downsizing by cutting work, not
filling open positions, offering early retirement and delaying wage increases. In
the event of downsizing, companies and managers have two responsibilities:
(a) Help employees who loss their jobs.
(b) Take action to ensure that the „survivors‰ who are not laid off remain
productive, committed to the organisation and satisfied with their work
situation.
Outplacement services can be provided by companies to help laid-off employees

prepare for and deal with the lay-off. These services should include:
(i) Advanced warning and explanation for the layoff;
(ii) Psychological, financial and career counselling;
(iii) Assessment of skills and interests;
(iv) Job search services, including resume writing assistance and interviewing
skills training;
(v) Job banks containing job postings, newspaper listings, phones and other
resources; and
(vi) Electronic delivery of job openings, self-directed career management
guides, and interest and values inventories.
For employees who remain with the company following a downsizing (the
survivors), uncertainty about their future remains. Survivors may feel a sense of
gratification, but they do not know how safe their current job is nor know the
direction the company is heading. Survivors may be expected to perform the
work of the laid-off employees as well as their own, resulting in:
 Anxiety;
 Anger towards top-level managers;
 Cynicism toward reorganisation and new business plans;
 Resentment; and
 Resignation.
Survivors need to be trained to deal with increased workloads and job

responsibilities due to the consolidation and loss of jobs. They should be
provided with realistic information about their future with the company.

SELF-CHECK 5.18
1. Discuss the importance of coping with job loss from the perspective
of the organisation and the employee.
2. What are the effects of lay-offs?
3. Describe the responsibilities of companies and managers when
downsizing occurs.
4. Explain outplacement services for laid-off employees.
5.12 RETIREMENT
Pre-retirement socialisation is the process of helping employees prepare for exit
from employment. These programmes usually involve addressing:
(a) The psychological aspects of retirement, including developing interests and
activities.
(b) Housing considerations, transportation, living expenses and proximity to
healthcare.
(c) Health during retirement, including
(i) Financial planning, insurance and investments;
(ii) Nutrition and exercise;
(iii) Healthcare plans;
(iv) Estate planning; and
(v) The collection of benefits from company pension plans.
Retirement refers to leaving a job and work role and transitioning into a life
without employment or, perhaps, „recycling‰ into another career or job. The
ageing workforce and early retirement programmes have three implications:
(i) Companies must meet the needs of older workers;
(ii) Companies must assist employees in planning for retirement; and
(iii) Companies must ensure that older employees are not discriminated
by early retirement programmes.
Early retirement programmes offer employees financial incentives to leave

the company before the traditional retirement age, usually as part of a
companyÊs strategy to reduce labour costs without laying anyone off.
Eligibility is usually based on age and years with the company. Early
retirement programmes have two main problems:
(i) Employees who will be difficult to replace may opt to retire early; and
(ii) Older employees may feel that they are being pushed out of the company.
Effective early retirement programmes:

(i) Are part of the employee benefit package;
(ii) Justify age-related distinctions for early retirement eligibility;
(iii) Ensure that early retirement is voluntary; and
(iv) Involve training employees to understand the financial and other
implications of early retirement and the process of retiring early.
SELF-CHECK 5.19
1. List the features of a pre-retirement socialisation programme.

2. In your own words, define retirement.
3. Describe an effective early retirement programme.
ACTIVITY 5.4
Case Study: The Mentor Relationship Turns Upside Down
„I wish I could talk this problem over with Hock Seng,‰ Wai Leng
thought. Hock Seng had been her mentor for many years at Hisham
Consulting, yet now he was her problem.
Wai Leng thought back to the beginning of her association with Hisham
and with Hock Seng. She had joined the firm as a writer and editor.
Her job during those early years had been to revise and polish the
consultantsÊ business reports. The work brought her into frequent
contact with Hock Seng, who was a senior vice president at that time.
Wai Leng enjoyed discussing the consultantsÊ work with him, and
when she decided to try to join the consulting team, she asked for his
help. Hock Seng became her mentor as well as her boss and guided her
through her successful transition to consultant and eventually partner.
At each promotion to various supervisory jobs along the way to partner, Wai
Leng cemented her relationship with her new subordinates by
acknowledging the inevitable awkwardness and by meeting with each
person individually to create a new working relationship. Her career
prospered, and when Hock Seng moved on to run a start-up software
publishing venture for Hisham, Wai Leng was promoted to take over his
place. However, his new venture failed, and the partners decided someone
else would have to step in. Despite the fact that Wai Leng was much
younger than Hock Seng and once had worked for him, she was given the
task of rescuing the start-up operation.
Wai LengÊs discomfort over the task only grew as she began to review the
history of the new venture. Her rescue mission was going to involve
undoing much of what Hock Seng had done, reversing his decisions about
everything from product design to marketing and pricing. Wai Leng was so
reluctant to second-guess her old mentor and boss that she found herself
unable to discuss any of her proposed solutions with him directly. She
doubted that her previous experience had prepared her to assume the role of
Hock SengÊs boss. In these difficult circumstances, her need to turn the
operation around would be, she felt, like „pouring salt on his wounds.‰
Questions:
1. What is Wai LengÊs role in Hock SengÊs career development now?
Should Hisham have any such role? Why or why not?
2. What advice would you offer Wai Leng for approaching Hock Seng?
3. Assume Wai Leng has heard a rumour that Hock Seng has considered
resigning. What should she do about it?
Adapted from Dessler, G. (2005). Human resource management (10th ed),

Upper Saddle River, New Jersey: Pearson Prentice Hall.
 Training is the process of providing employees with skills needed to do their jobs.
 Training needs are based on business strategies. There are four types of
business strategies, namely concentration strategy, internal growth strategy,
external growth strategy and divestment strategy.
 The four steps in the training process are (1) conduct training needs analysis,
(2) design training programme, (3) select training method and (4) evaluate
training programme.
 A training needs analysis (TNA) is a systematic method for determining

whether training is needed to bring performance in a particular job or set of
jobs to the expected level. There are three types of analysis done in a TNA,
namely organisational analysis, task analysis and person analysis.
 The main activities involved in designing a training programme are setting
objectives, choosing the trainer, developing a lesson plan, selecting training
methods and techniques, preparing materials and scheduling the
programme.
 There are many training methods such as lecture, video, on-the-job training,
job rotation, self-directed learning, apprenticeship, mentoring, simulations,
case studies, business games, role-plays, adventure learning, computer-based
training, and distance learning.
 Training evaluation is the process of collecting data on the outcomes needed
to find out if training objectives were achieved. Training outcomes are the
measures that the trainer uses to evaluate training programmes.
 Development refers to activities and experiences, such as formal education,
job experiences, relationships and assessments that help employees to grow
and prepare for the future.
 Career can be described as:
(a) Advancement: a sequence of promotions held within a company; or
(b) A profession: occupations with a clear pattern of advancement; or
(c) A lifelong sequence of jobs; or
(d) A lifelong sequence of role-related experiences.
 Career development is the lifelong series of activities that contribute to oneÊs
career exploration, establishment, success and fulfillment.
 Career management is the process through which the employee:
(a) Becomes aware of his/her interests, values, strengths and weaknesses;
(b) Obtains information about job opportunities in a company;
(c) Identifies career goals; and
(d) Establishes action plans to achieve those career goals.
 There are four components in a career management system. They are (1) self-
assessment, (2) reality check, (3) goal-setting and (4) action planning.
 The employeeÊs role in todayÊs career management means taking
responsibility for career planning.
 The managerÊs role in career management involves coaching, appraising,

advising and referring.
 The human resource managerÊs role involves providing information and
specialised services, helping employees and career counselling.
 The companyÊs role involves providing employees with the resources they
need to be successful in their career planning.
 A career path is a sequence of job positions through which employees move
in the company, involving similar types of work and skills.
 Plateauing refers to a low likelihood that an employee will receive future job
assignments, for example, promotions.
 Skills obsolescence refers to a reduction in an employeeÊs competence due to
a lack of knowledge of new processes, techniques, or technologies that have
emerged since the employee completed his/her education.
 In the event of downsizing, companies and managers have two
responsibilities:
(a) Helping employees who lose their jobs.
(b) Take action to ensure that the „survivors‰ who are not laid off remain
productive, committed to the organisation and satisfied with their work
situation.
 Retirement refers to leaving a job and work role and transitioning into a life
without employment or, perhaps, „recycling‰ into another career or job.

Action learning Organisational analysis

Adventure learning Outplacement services
Apprenticeship On-the-job training (OJT)
Business games Person analysis
Career Plateauing
Career management Pre-retirement socialisation
Career development Programme design
Career path Retirement
Computer-based training (CBT) Role plays
Case studies Self-directed learning
Distance learning Skills obsolescence
Evaluation designs Simulations
Job rotation Task analysis
Lecture Training evaluation
Mentoring Training needs analysis
Needs assessment Training outcomes

1. Which specific training techniques can you use to train

salespeople and web designers? Why?
2. One reason for implementing global training programmes is the

need to avoid lost business „⁄ due to cultural insensitivity.‰
What sort of cultural insensitivity do you think is referred to
and how might that translate into lost business?
3. Is job rotation a good method to use for developing

management trainees? Why or why not?
4. What stage of career development are you in? What career

concerns are most important to you?
5. Why should companies be interested in helping employees plan

their careers? What benefits can companies gain? What are the
risks?
6. If you were asked to develop a career management system,

what would it look like? How might you evaluate whether it
was effective? What information would you use to develop the
system?
7. How could you help downsized survivors remain motivated

and productive? Rank your recommendations in order of
importance. Provide a rationale for your ranking.

Baumann, B., Duncan, J., Former, S. E., & Leibowitz, Z. (1996). Amoco primes the
talent pump. Personnel Journal, February, 79-84.
New Jersey: Pearson Prentice Hall.
Gilley, J. W., & Eggland, S. A. (1989). Principles of human resource development.

Reading: Addison-Wesley.
Hall, D. (2002). Careers in and out of organisations. Thousands Oaks, California:

Sage.
Noe, R. A. (2008). Employee training and development (4th ed.). New York:
McGraw-Hill.
Schuler, R. F., & Jackson, S. F. (1987). Linking competitive strategies with human
resource management practices. Academy of Management Executive, 1, (3)
207-219.
Topic  Performance
6 Appraisal
LEARNING OUTCOMES
1. Explain what is performance management;
2. Describe the performance management process;
3. Describe the performance appraisal methods;
4. Analyse the advantages and disadvantages of each performance
appraisal method; and
5. Evaluate the criteria of an effective performance appraisal.
 INTRODUCTION
Welcome to Topic 6! In this topic, you will learn about performance appraisal in
greater detail. Do you know that most of the organisations have some formal and
informal means of appraising their employeesÊ performance which the main aim
is to improve performance of the employees. Organisations usually conduct
appraisals for administrative and/or developmental purpose whenever they are
the basis for a decision about the employeeÊs work conditions, including
promotions, termination and rewards.
6.1 PERFORMANCE MANAGEMENT

Do you know what is performance management? Performance management is a
holistic process, which contributes to the effective management of individuals
and teams in order to achieve high levels of organisational performance. It relates
to every activity of the organisation set in the context of its human resource
policies, culture and communications systems.
Defining performance is considered to be a critical part of performance

management system and thus a number of performance evaluation research
TOPIC 6 PERFORMANCE APPRAISAL  163
studies have focused on defining performance (Kane and Lawler, 1979).

Performance is usually depicted as desired results, behaviours, attitudes, or traits
and establishes shared understanding about what is to be achieved.
In the process of performance management, raters use performance standards

form to judge a rateeÊs performance. On the other hand, a ratee views a
performance standard form as an important mechanism to communicate with
employees on what is expected of them.
According to Gomez-Mejia et al. (2007) performance management includes the

identification, measurement and management of human performance in
organisation as shown in Figure 6.1.
Figure 6.1: The Performance Management
Performance appraisal is potentially valuable for every human resource

functional area such as the human resource planning. The appraisal system
should have a profile of the organisationÊs human resource strengths and
weaknesses as to serve a useful career planning purpose.
Performance appraisal results provide a basis to conduct training and

development programmes for employees. For good performance employees, the
organisations should design a training programme that permit their strength and
achievements. Performance appraisal data can be used to design and implement
164  TOPIC 6 PERFORMANCE APPRAISAL
a reliable award system that can satisfy employees to be more pro-active and
productive in fulfilling their jobs and duties.
Let us now look into the meaning of the performance management. Performance
management are:
About establishing a culture in which individuals and groups take

responsibility for the continuous improvement of business processes and
of their own skills, behaviour and contributions.

About sharing expectations where managers

can clarify what they expect
individual and teams to do; likewise individuals and teams can
communicate their expectations of how
they should be managed and what
they need to do in their jobs.

About interrelationships and about improving the quality of relationships
ă between managers and individuals, between managers and teams,

between members of teams and so on ă and is therefore a joint process.

As you can see, there are three important elements of performance management
system as indicated in Figure 6.2. Defining employee performance is important
as to make sure the employee understand their duties and job standards based
on the job description. After that, the managers need to compare the
subordinateÊs actual performance to the standard that have been set that used the
rating form as a tool of evaluation. Then, the performance appraisal usually
requires one or more feedback sessions to discuss over the employees
performance.

Figure 6.2: Basic framework of performance management system

SELF-CHECK 6.1
What is the purpose of performance appraisal?
6.2 THE PERFORMANCE MANAGEMENT

PROCESS

„Managing requires the active involvement of the supervisor and the

employee‰

There are three steps that influences the performance management process. Now
let us study the steps one by one.
(a) Planning
Planning encourages commitment and understanding by linking
employeesÊ work with organisationÊs goals and objectives.
Mutual commitment must be established between supervisor and employee

with respect to expectations. Open and honest two-way communication
pertaining to responsibilities, past accomplishments and future plans
between both parties is an important first step. Results must be measurable.

(b) Managing
Every employee at the workplace is responsible for managing his or her
own work performance. Within this context, managing consists of:
(i) Maintaining a positive approach to work;
(ii) Initial objectives, performance standards and job updates and
revisions;
(iii) Management of competency areas as conditions change;
(iv) Feedback request by supervisor;
(v) Feedback submission by employees;
(vi) Career development experiences recommendations; and
(vii) Cooperative work between employees and supervisors managing the
performance management process.

(c) Reviewing
Reviewing is the third step in the performance management process cycle.
It includes:
(i) Comparing actual results against expected results;
(ii) Receiving and providing feedback;
(iii) Engaging in a constructive dialogue to reinforce positive performance
and opportunities for improvement; and
(iv) Recalibrating expectations for the next performance management
process cycle: planning, managing and reviewing.
The performance management process cycle focuses on four steps. The first step
is to establish a common understanding between the evaluator or the manager
and the employee. The second step is to perform the assessment based on the
progress against work expectation and the third step is a formal documentation
of the performance through completion of a performance appraisal form. The last
step is to discuss and appraise the performance and development of the
employee based on the completed appraisal form.
You can read an overview of the performance management process cycle as

Figure 6.3: Performance management process cycle

It is necessary to set up a fair and accurate performance evaluation process,
which decreases the discomfort and dissatisfaction that raters and ratees have
with the evaluation process. As shown in Figure 6.4, a fair and accurate
evaluation process can be designed and implemented to include encouraging
raters to provide feedback at frequent, regular intervals throughout the appraisal
period, holding raters accountable for the ratings they provide to their ratees
through setting policy for accurate ratings, monitoring ratees reactions to
evaluation processes, letting ratees conduct self-appraisal and examining the
disparity between raters and ratees assessments, allowing raters and ratees to
participate in designing evaluation process, and developing multi-source and
multi-rater evaluation system.

Figure 6.4: Evaluating performance: Fair and accurate process

SELF-CHECK 6.2
Explain the performance management process cycle.
6.3 PERFORMANCE APPRAISAL METHODS

Do you know what is performance appraisal? Let us read through for the
explanation. Performance appraisal is a formal system of review and evaluation
of individual or team task performance. An appraisal system evaluates
accomplishments and initiates plans for development, goals and objectives.
Research studies show that employees are likely to feel more satisfied with their
appraisal result if they have a chance to talk freely and discuss their performance
with their employer. It is also more likely that such employees will be better able
to meet future performance goals (Segal, 2000).
Employees are also more likely to feel that the appraisal process is fair if they are
given a chance to talk about their performance. This is especially so when they
are permitted to challenge and appeal against their evaluation (Kiger, 2001).
The performance appraisal methods can be classified in three as shown in Figure 6.5.

Figure 6.5: Classification of performance appraisal methods
Let us discuss the details of each method now.
(a) Forced Choice Rating

The rates are asked to choose from among groups of statements those that
best fit the individual employee who is rated and those that least fits him or
her.
(b) Field Review

It is a technique where a member of the personnel department meets with
small groups of raters from each supervisory unit and goes over each
employeeÊs ratings with them.
(c) Graphic Rating Scale

It is a method of performance measurement that lists traits and provides a
rating scale for each trait where the employer uses the scale to indicate the
extent to which an employee displays each trait.
A model of a graphic rating scale is given in Table 6.1.
Table 6.1: Typical Graphic Rating Scale
Employee Name................... Job title .................

Department ......................... Rate ...............
Data ..................................
Quantity of work: Volume of Unsatisfactory Fair Satisfactory Good Outstanding

work under normal working
conditions
Quality of work: Neatness,
thoroughness and accuracy of
work. Knowledge of job
A clear understanding of the
factors connected with the job
Attitude: Exhibits enthusiasm
and cooperativeness on the job
Dependability: Conscientious,
thorough, reliable, accurate, with
respect to attendance, leaves,
lunch breaks, etc.
Cooperation: Willingness and
ability to work with others to
produce desired goals.
The supervisor would be able to make inference whether the standards of the
performance of the employees are superior or disappointing by tabulating the
total results.
Let us look into each rating scale in greater detail.
(i) Behaviourally-Anchored Rating Scale

It is a method of performance measurement that rates behaviour in terms of
a scale showing specific statements of behaviour that describe different
levels of performance, see Figure 6.6.
Figure 6.6: Behaviourally-Anchored rating scale
The following chart in Table 6.2 represents an example of a sales traineeÊs

competence and a behaviourally-anchored rating scale.
Table 6.2: An Example of Behaviourally-Anchored Rating Scale (BARS)
Performance Points Behaviour

Extremely 7 Can expect trainee to make valuable suggestions for
good increased sales and to have positive relationships
with customers all over the country.
Good 6 Can expect to initiate creative ideas for improved
sales.
Above 5 Can expect to keep in touch with the customers
average throughout the year.
Average 4 Can manage, with difficulty, to deliver the goods in
time.
Below 3 Can expect to unload the trucks when asked by the
average supervisor.
Poor 2 Can expect to inform only a part of the customers.
Extremely 1 Can expect to take extended coffee breaks and roam
poor around purposelessly.
(ii) Forced Choice Method

This is a method of performance measurement that assigns a certain
percentage of employees to each category in a set of categories, see Figure
6.7.
Figure 6.7: Forced choice method
Table 6.3: Forced Choice Items
Forced Choice Items

1. Least Most
A Does not anticipate difficulties A
B Grasps explanations easily and quickly B
C Does not waste time C
D Very easy to talk to D
2. Least Most
A Can be a leader A
B Wastes time on unproductive things B
C At all times, cool and calm C
D Smart worker D
The favourable qualities earn a plus credit and the unfavourable ones earn
the reverse. The worker gets plus when the positive factors override the
negative ones or when one of the negative phrases is checked as being
insignificantly rated.
(iii) Essay Evaluation

The essay evaluation is the technique used with a combination of the
graphic rating scale because the rater can elaborately present the scale and
give comments positively and negatively about the candidates, see Figure
6.8.

Figure 6.8: Essay evaluation

While preparing the essay on the employee, the rater considers the
following factors:
 Job knowledge and potential of the employee;
 EmployeeÊs understanding of the companyÊs programmes, policies,
objectives, etc.;
 The employeeÊs relations with co-workers and superiors;
 The employeeÊs general planning, organising and controlling ability;
and
 The attitudes and perceptions of the employee, in general.
(iv) Critical Incident Method

The critical incident method is the performance measurement based on
managersÊ records of specific examples of the employee acting in ways that
are either effective or ineffective (see Figure 6.9).

Figure 6.9: Critical incident method
(v) Management By Objectives (MBO)

MBO is a goal-directed approach to performance appraisal in which
workers and their supervisors set goals together for the upcoming
evaluation period (see Figure 6.10).
Figure 6.10: Management by objectives
MBO thus represents more than an evaluation programme and process.

Practicing management scientists and pedagogues view it as a philosophy
of managerial practice; it is a method by which managers and subordinates
plan, organise, control, communicate and debate.
(vi) 360 Degree Feedback

The 360 degree feedback is a performance measurement that combines
information from the employeeÊs managers, peers, subordinates, self and
customers, see Figure 6.11.
Figure 6.11: 360 degree feedback

360 degree feedback helps by bringing out every aspect of an employee's
life. Cooperation with people outside their department, helpfulness
towards customers and vendors, etc. may not be rewarded by other types
of appraisal. This system also helps those who have conflicts with their
manager.
360 degree feedback may be given directly to the employees, who have the
option of discussing them with their managers; or it may be given to the
managers for use in a feedback meeting. Whichever method is chosen,
training for the managers and ratees is necessary.
6.4 MANAGING EMPLOYEES’ PERFORMANCE

The major goal in any good performance system is to ensure that the employeesÊ
activities ă what they do and how well they do them ă are in-sync with the goals
of the organisation, while maintaining a motivated and happy workforce.
Let us now look into each goal in greater detail.

(a) Who appraises an employeeÊs performance?
There are five categories of people involved in employee's performance. Let
us look into the categories in greater detail as shown in Table 6.4.
Table 6.4: Categories of Employee's Performance
Categories of Description
Employee's
Performance
The Immediate The supervisor usually has the best position to observe and
Supervisor evaluate the subordinateÊs performance. The supervisor is also
responsible for subordinateÊs performance.
Peers A person is rated by his or her own peers. This type is

becoming more popular with firms using self-managing teams.
Rating These consist of multiple raters, typically the employeeÊs

Committee immediate supervisor and three or four other supervisors.
Self The person rates him or self. The scores tend to be higher than
one done by the supervisor or peers.
Subordinates Also known as upward feedback. This is where subordinates
anonymously rate their supervisorÊs performance.

(b) The appraisal interview steps and tips
Now, let us look at some of the appraisal interview steps and tips. Among
the steps and tips are:
(i) Appraisal interview enables the supervisor and subordinate to review
the appraisal and make plans to remedy deficiencies and reinforce
strengths.
(ii) Before the interview, essential preparations are made by assembling
the data, preparing the employee, and choosing the time and place.
(iii) During interview, it is important for the interviewer to be direct and
specific, act impersonal and encourage the employee to talk.
(iv) Interviewer may sometimes be faced with defensive subordinate. A
good interviewer would avoid acting harshly such as attacking a
personÊs defences since defensive act is quite normal. Instead, the
interviewer may opt for a more tactful solution such as action
postponement.
(v) Interviewer may have to criticise a subordinate. A good critic will
criticise in a manner that lets the person maintain his/her dignity and
sense of worth. Criticism is usually done privately and constructively.
(vi) In terms of formal written warning, it should identify the standards
by which the employee is judged, make it clear that the employee was
aware of the standard, specify any violation of the standard and show
that the employee had an opportunity to correct the behaviour.
(vii) To ensure that the interview results in improved performance, job-

related problems must be cleared up and improvement goals and a
schedule for achieving them must be set up.

ACTIVITY 6.2
Individual or Group Activities
Working individually or in groups, develop a graphic rating scale for

the following jobs: secretary, engineer, directory assistance operator.
Job characteristics may include, but are not be limited to: Secretary ă
quantity of work, frequency of errors, attendance, and initiative;
Engineer ă initiative, significance of contribution to the organisation,
problem solving skills, frequency of errors and communication skills.
Working individually or in groups, describe the advantages and

disadvantages of using the forced distribution appraisal method for
college professors. Students should review the section on the forced
distribution method and describe how the use of this method would
impact the rating of their college professors.
(c) Feedback
Feedback is critical part of performance management system because it
influences individual and organisational goals. It is thus important to
establish and implement a feedback process that provides clear, specific
and descriptive feedback, gives feedback in a non-threatening and
supportive manner, involves employees in discussions about their career
development opportunities and decisions, and offers reinforcement for
good performance (Figure 6.12).

Figure 6.12: Providing feedback on employee performance: Effective and supportive
methods
6.5 PROBLEMS IN PERFORMANCE APPRAISAL

Several common errors have been identified in performance appraisals. Personal
preferences, prejudices and biases can also cause errors in performance
appraisals. Managers with biases or prejudices tend to look for employee
behaviours that conform to their biases. Appearance, social status, dress, race and
sex have influenced many performance appraisals. Figure 6.13 highlights the
common problems in performance appraisal.
Figure 6.13: Common problems in performance appraisal
6.5.1 Finding Solutions to Performance Problems

As shown in Figure 6.14 the most effective way to improve performance varies
according to the employeeÊs ability and motivation. In general, when employees
have high levels of ability, motivation or both, corrective action is needed.
When a motivated employee lacks knowledge, skills or abilities in some area,

there are a number of ways to help the employee improve. The manager may
offer coaching, training and counselling or direct communication with the
employees.


Figure 6.14: Improving performance management
ACTIVITY 6.3
Performance Appraisal
As a production supervisor for ALFA Sdn. Bhd, Ahmad Farid was

generally well regarded by most of his subordinates. Ahmad Farid was an
easygoing individual who tried to help his employees in any way he could.
If a worker needed a small loan until payday, he would dig into his pocket
with no questions asked. Should an employee need some time off to attend
to a personal problem, Ahmad Farid would not dock the individualÊs pay;
rather he would take up the slack himself until the worker returned.
Everything had been going smoothly, at least until the last performance
appraisal period. One of Ahmad FaridÊs workers, Mohd Amin, had been
experiencing a large number of personal problems for the past year. Mohd
AminÊs wife had been sick much of the time and her medical expenses were
high. Mohd AminÊs son had a speech impediment and the doctors had
recommended a special clinic. Mohd Amin, who had already borrowed the
limit the bank would loan, had become upset and despondent over his
general circumstances.
When it was time for Mohd AminÊs annual performance appraisal, Ahmad
Farid decided he was going to do as much as possible to help him.
Although Mohd Amin could not be considered as more than an average
worker, Ahmad Farid rated him outstanding in virtually every category.
Because the firmÊs compensation system was heavily tied to the
performance appraisal, Mohd Amin would be eligible for a merit increase
of 10 percent in addition to a regular cost of living raise.
Ahmad Farid explained to Mohd Amin why he was giving him such high ratings,
and Mohd Amin acknowledged that his performance had really been no better than
average. Mohd Amin was very grateful and expressed this to Ahmad Farid. As
Mohd Amin left the office, he was excitedly looking forward to telling his friends
about what a wonderful boss he had. Seeing Mohd Amin smile as he left gave
Ahmad Farid a warm feeling.
1. From ALFA Sdn. Bhd standpoint, what difficulties might Ahmad FaridÊs
performance appraisal practices create?
2. What can Ahmad Farid do now to reduce the negative impact of his
evaluation of Mohd Amin?
(Mondy & Noe 2005).
6.6 CHARACTERISTICS OF AN EFFECTIVE

APPRAISAL SYSTEM
Do you know what is the basic purpose of a performance appraisal system? Let
us look into the explanation. The basic purpose of a performance appraisal
system is to improve performance of individuals, teams and the entire
organisation. The system must honestly inform people of where they stand
within the organisation. Figure 6.15 below elaborates factors that assist in
accomplishing these purposes.
Figure 6.15: Contributing factors to effective appraisal systems

Successful Performance Appraisal Process
To make performance appraisal a reliable tool in measuring companyÊs

weaknesses and strengths, a company should understand that:
(a) The employees should be allowed to participate in the appraisal process.
The more employees participate in the performance appraisal process, the
more satisfied they will be in the appraisal process.
(b) The more a manager uses positive motivational techniques in appraisal
process, the more satisfied the employee is likely to be.
(c) Discussing and solving problems that may be hampering the employeeÊs
current job performance improve the employeeÊs performance.
(d) The manager should be focus on the important information that can be
related to performance appraisal of the employees such as the performance
report and any other related information.
(e) The more the employee perceives that performance appraisal results are
tied up to organisational rewards, the more beneficial the performance
appraisal will be.

ACTIVITY 6.4
1. Discuss the pros and cons of at least four performance appraisal

tools.
2. Explain in your own words how you would go about developing
a behaviourally-anchored rating scale.
3. Explain the problems to be avoided in appraising performance.
4. Compare and contrast performance management and
performance appraisal.
5. How would you get the interviewee to talk during an appraisal
interview?

ACTIVITY 6.5
Experiential exercise: Performance appraisal
Students are asked to develop an appraisal form.

1. Students should develop their own tool for appraising the
performance of an instructor. Look for them to apply concepts
discussed in this topic.
2. Students should present their tools to the class. How similar are
the tools? Do they all measure about the same factors? Which
factor appears most often? Which do you think is the most
effective tool? Encourage students to reflect on the factors that
they chose, or did not choose. Share your perspective on what
makes good teaching.
 Performance refers to the degree of accomplishment of the tasks that make up

an employeeÊs job. It reflects how well an employee is fulfilling the
requirements of a job.
 Job performance is a main effect of an employeeÊs effort as modified by
abilities and role perceptions. Thus, performance in a given situation can be
viewed as resulting from the interrelationships among effort, abilities and
role perceptions.
 Performance appraisal is a system of review and evaluation of an individualÊs
for teamÊs job performance. The performance appraisal process is the
identification of specific goals as the starting point for the process. The job
expectations are established with the help of job analysis. The next step
involves examining the actual work performed. Performance is then
appraised. The final step involves discussing the appraisal with the
employee.
 The problems associated with performance appraisals include lack of
objectivity, halo effect, leniency/strictness, central tendency, personal bias
and judgemental role of the evaluator. Leniency refers to grouping at the
positive end of a curve instead of spreading them throughout the
performance scale. Central tendency occurs when appraisal statistics indicate
that most employees are appraised as being near the middle of the
performance scale. The halo effect occurs when a rater allows a single
prominent characteristic of an employee to influence his or he judgement on
each separate item in the performance appraisal.
 The aspects of a personÊs performance that an organisation should evaluate
include traits, behaviours and task outcomes.
 People who are usually responsible for performance appraisal include
immediate supervisors, subordinates, peers, groups, the employees,
customers; and for the 360 degree feedback evaluation methods, perhaps of
all the above.
 Performance appraisal methods include 360 degree feedback evaluation,
rating scales, critical incidents, essay, behaviourally-anchored rating scales
and forced distribution.
 A successful appraisal interview should be structured in a way that allows
both the supervisor and the subordinate to view it as a problem-solving
rather than a fault-finding session.
Behavioural expectation scale Forced choice rating

Critical incident method Graphic rating scale
Essay evaluation Management by Objective (MBO)
Field review Performance appraisal
Forced choice method Performance management
1. What are the steps in the appraisal interview?
2. Briefly describe each of the following methods of

performance appraisal
(a) Critical incidents
(b) Essay
(c) Forced choice scale
(d) Behaviourally-anchored rating scales
(e) 360 degree feedback
3. What are the various problems with performance appraisal?

Briefly describe each.
4. Define the following types of performance appraisal errors:

(a) Leniency
(b) Central tendency
(c) Halo effect
(d) Personal bias
5. Explain the characteristics of an effective appraisal system.
6. You are the new Human Resource Manager for Labu Kerabu Sdn.
Bhd, a company that has not been performing well, and everyone,
including yourself, has a mandate to deliver results. The pressure
has never been heavier. Shareholders are angry after 31 months of a
„tough‰ market that has left their stock „under water.‰ Many
shareholders desperately need stock performance to pay for their
retirement. Working for you is a 52-year-old manager with two kids
in college. In previous evaluations, spineless executives told him he
was doing fine, when he clearly was not, and his performance is still
far below par. If you are to show others in the company that you are
willing to make tough decisions, you feel you must fire this
individual. The question is who is going to suffer: the firm and
ultimately shareholders whose retirement is in jeopardy or a nice
guy whoÊs been lied to for 20 years?
What would you do?
Armstrong, M., & Baron, A. (2004). Performance management: an overview.

Retrieved June 16, 2010, from: http://www.cipd.co.uk/subjects
/perfmangmt /general/perfman.htm
Byars, L. L., & Rue, L. W. (2003). Human resource management. Boston: McGraw
Hill Publishers.
Kane, J. S., & Lawler, E. E. (1979). Performance appraisal effectiveness: Its

assessment and determinants. In B. Screw & L. Cummings (Eds)
Research in organisational behaviour, Vol.1: p.p 425-478.
Kiger, P. J. (2001, March). Frequent employee feedback is worth the cost and time
Workforce, 80 (3), 62-65.
Mejia Gomez et al. (2007). Managing Human Resources. Pearson International

Edition, fifth edition.
Mondy, W. R., & Noe, R. M. (2005). Human Resource Management. Upper

Saddle River, New Jersey: Pearson Education International.rformance
Management for Improved Results
Segal, J. A. (2000, October). Your performance appraisal process. Human

Resource Magazine, 199-202.
Topic  Compensation
7 and Benefits
LEARNING OUTCOMES
1. Define the employeesÊ compensation;
2. Identify types of employee benefits;
3. Analyse the components of compensation system; and
4. Explain the types of compensation plans.
 INTRODUCTION
How would you define compensations? Compensation refers to a payment to an
employee in return for their contribution to the organisation, that is, for doing
their job. The most regular compensations are wages, salaries and tips.
With regard to benefits, it is a form of value provided by the employer to the

employees in return for their contribution in doing their job to the organisation.
Examples of benefits are vacation, medical insurance, bonuses, maternity leave
and etc.
7.1 EMPLOYEE COMPENSATION

Compensation is a systematic approach to providing monetary value to
employees in exchange for work performed. In other words, it is an extrinsic
motivational monetary reward to an employee in return for their contribution to
the organisation, that is, for doing their job. The most common forms of
compensation are wages, salaries and tips.
186  TOPIC 7 COMPENSATION AND BENEFITS
Compensation may achieve several purposes assisting in recruitment, job

performance and job satisfaction. It is also a tool used by management for a
variety of purposes to further the existence of the company and maybe adjusted
according to the business needs, goals, and available resources.
Determining the most appropriate employee compensation plan is a sensitive

matter for any business because company will need to address many human
resource-related concerns. Equally crucial is an understanding of the financial
aspects of employee compensation. Employee compensation is much more than
just the direct amount that the organisation pay to an employee. There are other
costs that need to be incorporated in the overall payroll budget.

The areas to consider when figuring out how to compensate employees:
(a) The guidelines for incentives and bonus plans. They have to be clear in
order to minimise any confusion.
(b) Short-term as well as long-term expenses. Improper provisions or
additions for benefits may burden the company financially in the short or
long term.
Compensation is usually provided as base pay and/or variable pay. Base pay is the
hourly, weekly or monthly pay that employees receive and is based on the role in the
organisation and the market for the expertise required for conducting that role.
Variable pay is based on the performance of the person in that role, for example,
for how well that person achieved his or her goals for the year. Incentive plans,
for example, bonus plans, are forms of variable pay.

In essence, compensation may be used to:
(i) Recruit and retain qualified employees;
(ii) Increase or maintain morale/satisfaction;
(iii) Reward and encourage peak performance;
(iv) Achieve internal and external equity;
(v) Reduce turnover and encourage company loyalty; and
(vi) Modify (through negotiations) practices of unions.
Benefits are rewards offered for being a member of the company and can include
paid vacation, health and life insurance, and retirement pension.
Now, let us look at some of the definitions of relevant terms in compensation, as

shown in Table 7.1.
TOPIC 7 COMPENSATION AND BENEFITS  187
Table 7.1: Definition of Relevant Terms in Compensation
Terms Definition
Compensation All the extrinsic rewards employees receive in exchange for
their work.
Pay Only to the actual dollars/ringgit employees receive in
exchange for their work.
Incentives Rewards offered in addition to the base wage or salary and are
usually directly related to performance.
Benefits Rewards employees receive as a result of their employment and
position with the organisation. Paid vacations, health insurance
and retirement plans are examples of benefits.
Intrinsic rewards Satisfactions one gets from the job itself, such as a feeling of
achievement, responsibility or autonomy.
Extrinsic rewards Include monetary compensation, promotion and tangible
benefits.
7.1.1 Types of Compensation

In exchange for job performance and commitment, an employer offers rewards to
employees. Adequate rewards and compensations potentially attract a quality
work force, maintain the satisfaction of existing employees, keep quality
employees from leaving, and motivate them in the workplace. A proper design of
reward and compensation systems requires careful review of the labour market,
thorough analysis of jobs and a systematic study of pay structures.
The types of compensation include the following:

(a) Group 1: Base pay, commissions, overtime pay.
(b) Group 2: Dental, insurance, medical, vacation, leaves, retirement.
(c) Group 3: Base pay, commissions overtime pay.
(d) Group 4: Bonuses, profit sharing, merit pay, stock option.
The types of compensation are shown in Figure 7.1.


Figure 7.1: Types of compensation
Table 7.2 shows some examples of the different types of employee compensation.
Table 7.2: Types of Employee Compensation
Base Wage or Incentives Benefits

Salary
 Hourly wage  Bonuses  Paid vacation
 Weekly,  Commissions  Health insurance
monthly, or  Profit sharing  Life insurance
annual salary
 Piece rate plans  Retirement pension
7.1.2 Components of a Compensation System

Compensation will be perceived by employees as fair if based on systematic
components. Various compensation systems have been developed to determine
the value of positions. These systems utilise many similar components including
job descriptions, salary ranges/structures, and written procedures.
The components of a compensation system include the following as shown in

Table 7.3. Now, let us see the components in more detail.
Table 7.3: Components of Compensation System
No. Component Description

a. Job A critical component of both compensation and selection systems,
Descriptions job descriptions define in writing the responsibilities,
requirements, functions, duties, location, environment, conditions
and other aspects of jobs.
b. Job Analysis The process of analysing jobs from which job descriptions are
developed. Job analysis techniques include the use of interviews,
questionnaires and observation.
c. Job Evaluation A system for comparing jobs for the purpose of determining
appropriate compensation levels for individual jobs or job elements.
d. Pay Structures Useful for standardising compensation practices. Most pay
structures include several grades with each grade containing a
minimum salary/wage and either step increments or grade range.
e. Salary Survey Collections of salary and market data. May include average
salaries, inflation indicators, cost of living indicators, salary
budget averages.
ACTIVITY 7.1
Think of the most recent job you held. This job could have been a part-
time or full-time job. Which of the two situations described below better
characterise this job?
(a) Rewards (monetary and non-monetary) were tied directly to oneÊs

level of performance; management did attempt to discriminate
between the high and low performance and did reward
accordingly.
(b) Everyone within very broad, general categories received basically

the same rewards; oneÊs level of performance did not substantially
affect the rewards recieved.
Depending on which situation you selected, what effect do you think it

had on your level of motivation? If you selected situation A, explain
basically how the system worked. If you selected situation B, what
specific recommendations would you make to improve the
performance reward relationship?
7.1.3 Types of Compensation Plans

Since companies cannot afford to continually increase wages by a certain
percentage, they tend to introduce many innovative compensation plans tied to
performance. Now, let us look at some of the innovative compensation plans.
Among them are:

(a) Skill-based or Knowledge-based Compensation
Skill-based pay rewards employees based on the skills they possess or master,
not for the job they hold. Some managers believe that mastery of certain sets of
skills leads to higher productivity and therefore want their employees to
master a series of skill sets. As employees gain one skill and then another, their
wage rate goes up until they have mastered all the skills. Similar to skill-based
pay is knowledge-based pay. While skill-based pay evolved in the
manufacturing sector, pay-for-knowledge developed in the service sector
(Pauline, 1997). For example, public school teachers with a bachelor's degree
received the lowest rate of pay, those with a master's degree received a higher
rate, and those with a doctorate received the highest.

(b) Team-based Compensation
As many companies introduce team-based management practices such as
self-managed work teams, they begin to offer team-based pay. Recognising
the importance of close cooperation and mutual development in a work
group, companies want to encourage employees to work as a team by
offering pay based on the overall effectiveness of the team.

(c) Performance-based Compensation
In the traditional sense, pay is considered entitlement that employees
deserve in exchange for showing up at work and doing well enough to
avoid being fired. While base pay is given to employees regardless of
performance, incentives and bonuses are extra rewards given in
appreciation of their extra efforts. Pay-for-performance is a new movement
away from this entitlement concept (Milkovich and Newman, 1996). A pay-
for-performance plan increases even the base pay ă the so-called merit
increases ă to reflect how highly employees are rated on a performance
evaluation. Other incentives and bonuses are calculated based on this new
merit pay, resulting in substantially more total dollars for highly ranked
employee performance. Frequently, employees also receive an end-of-year
lump sum bonus that does not build into base pay.
Incentive compensation pays proportionately to employee performance.

Incentives are typically given in addition to the base wage; they can be paid
on the basis of individual, group or plant-wide performance. While

individual incentive plans encourage competition among employees, group
or plant-wide incentive plans encourage cooperation and direct the efforts
of all employees toward achieving overall company performance.
SELF-CHECK 7.1
1. Define compensation and distinguish it from pay.
2. Define compensation, pay, incentives and benefits.
3. TITI Company has just decided to take all of its 200 employees
to Kuala Muda, Kedah for an all-expense paid, three-day
weekend to show its appreciation for their high level of
performance this past year. What do you think of this idea?
4. Comment on the following statement: „Employees are not
capable of deciding what rewards they should receive.‰
7.1.4 Employee’s Compensation

EmployeeÊs compensation is meant to protect employees from loss of income and
to cover extra expenses associated with job-related injuries or illness. Figure 7.2
summarises the types of injuries and illnesses most frequently covered in
EmployeeÊs compensation laws throughout the world.
Figure 7.2: EmployeeÊs job-connected injuries coverage

7.2 EMPLOYEE BENEFITS

Employee benefits, sometimes called fringe benefits, are those rewards that
employees receive for being members of the organisation and for their positions
in the organisation. Unlike wages, salaries and incentives, benefits are usually
not related to employee performance. Figure 7.3 shows the employee benefits in
the organisation.

Figure 7.3: The employee benefits
7.2.1 What are Employee Benefits?

Now, let us look at the categories of the common employee benefits, as shown in
Table 7.4.
Table 7.4: Categories of the Common Employee Benefits
No. Category Benefits

a. Retirement Pension fund, Annuity plan, Early retirement, Disability
Related retirement, Retirement gratuity
b. Insurance Medical insurance, Accident insurance, Life insurance, Disability
Related insurance, Dental insurance, Survivor insurance
c. Payment for Vacation, Holidays, Sick leave, Military leave, Election day,
Time not Birthdays, Funerals, Paid rest periods, Lunch periods, Wash up
Worked time, Travel time
d. Other Benefits Company discounts, Meals furnished by company, Moving
expenses, Severance pay, Tuition refunds, Credit union,
Company car, Legal services, Financial counselling, Recreation
facilities
(a) Retirement-related Benefits

These benefits are in the form of private pension and retirement plan, as

Figure 7.4: Retirement-related benefits
Let us now study each plan in more detail.

(i) Private pension plans
Employee benefits that provide a source of income to people who
have retired, funded either entirely by the organisation or jointly by
the organisation and employee during employment.
(ii) Desired benefit plans
Pension plan under which an employer pledges to provide benefits
determined by a definite formula at the employeeÊs retirement date.
(iii) Defined contribution plans
Pension plans in which the employer sets up an individual account
for each employee and specifies the size of the investment into that
account.
Right of employees to receive money paid into a pension or

retirement fund on their behalf by their employer if they leave the
organisation prior to retirement.

(b) Insurance Related Benefits
Insurance programmes of various types represent an important part of any
benefit package. Major medical benefits to cover extraordinary expenses
that result from long-term or serious health problems (refer Figure 7.5).
Figure 7.5: Insurance-related benefits
Let us study each medical benefit in more detail now.

(i) Dental insurance
Dental insurance has been one of the fastest growing types of
employee benefits. A majority of dental plans specify a deductible and
require the employee to pay a portion of the cost of services.
(ii) Life insurance
Life insurance is a benefit commonly available from organisation.
Generally, the employer provides a minimum coverage of the
insurance and the employees often have the option to purchase more
insurance at their own expense.
(iii) Disability insurance
The disability insurance is designed to protect employees who
experience short term and long-term disability. . Short term disability
insurance pays a percentage of a disabled employeeÊs salary as
benefits to the employee for six month or less. The long term disability
insurance pays a percentage of a disabled employeeÊs salary after an
initial period and potentially for the rest of the employeeÊs life.
(c) Payment for Time Not Worked

It is a standard practice for organisation to pay employees for certain times when
they do not work. Rest periods, lunch breaks, and wash-up times represent time
not worked that are almost always taken for granted as part of the job.

Paid holidays and paid vacations
Hari Raya, Chinese New Year, Deepavali Day, National Day, Christmas Day
and Labour Day are part of paid holidays in Malaysia by most companies.
(d) Other Benefits

In addition to the other major benefits, organisation may offers a wide
range of additional benefits such as food services, exercise facilities, health
and first-aid services, financial and legal advice, counselling services,
educational and recreational programmes, day care services and purchase
discounts. The extent and attractiveness of these benefits vary considerably
among organisations.
ACTIVITY 7.2
Who is Eligible for Retirement Benefits?
Mohd Kamal, 52, had been an hourly worker in a machine shop of

Reditech Company for 21 years and four months. On Hari Raya Aidil
Fitri, he suffered a severe heart attack and was hospitalised for three
weeks. After his recuperation period, his doctor, along with
ReditechCompanyÊs physician, was to decide whether or not Mohd
Kamal should be retired for disability reasons. They never got the
opportunity to make this decision because on February, Mohd Kamal
died of a second heart attack. He left a wife, four sons and two
daughters. As part of Mohd KamalÊs household, his wife received the
normal group insurance payments, the balance of his savings plan
account and the other benefits. However, she did not receive pension
from Reditech Company as the survivor of an eligible employee. When
Mrs Jamilah, Mohd KamalÊs wife and company representatives
discussed the settlement, she had inquired about her husbandÊs pension
and about her right to receive it. The human resource department had
stated that since contributions to this fund were made only by the
company, no survivorÊs benefits were provided.
(a) What do you think Mrs. Jamilah should do at this point?

(b) How can the company help Mrs. Jamilah and her family for their future?
7.2.2 Employee Choice in Benefits

If an organisation expects to get the maximum return from its benefit package in
terms of factors such as motivation, satisfaction, low turnover, and good relations
with unions, the benefits should be those most preferred by its employees. Some
companies began to offer flexible benefit plans to employees.
Flexible plans are also called cafeteria plans because they provide a „menu‰, or
choice of benefits, from which employees select. The selection possibilities within
a flexible-benefit plan may vary considerably from plan to plan. Some plans limit
the choices to only a few of coverage, such as life insurance and health insurance.
Others allow employees to choose from a wide range of options.

Types of Flexible Benefits Plans
Below are the types of benefits plans. Let us now study them separately.

(a) Core Cafeteria Plans
The core cafeteria plan offers employees a wide range of choices, thus
enabling them to tailor benefits to suit their specific needs. Some of the
possible compensation vehicles utilised in a cafeteria approach are shown
in Table 7.5.

Table 7.5: Compensation Vehicles Utilised in a Cafeteria Compensation Approach

 Accidental death  Health maintenance organisation
 Birthdays (vacation) fees
 Bonus eligibility  Home health care
 Business and professional  Hospital surgical medical insurance

membership  Incentive growth fund
 Cash profit sharing  Interest free loans
 Club memberships  Long-term disability benefit
 Commissions  Matching educational donations
 Company medical assistance  Nurseries
 Company provided automobile  Nursing home care
 Company provided housing  Outside medical services
 Company provided or  Personal accident insurance
subsidised travel  Price discount plan
 Day care centres  Recreational facilities
 Deferred bonus  Resort facilities
 Deferred compensation plan  Sabbatical leaves
 Dental and eye care insurance  Salary continuation
 Discount on company products  Savings plan
 Education costs  Scholarships for dependents
 Educational activities (time off)  Severance pay
 Free checking discount  Sickness and accident insurance
 Free or subsidised lunches  Stock appreciation rights
 Group automobile insurance  Stock bonus plan
 Group homeownersÊ insurance  Stock purchase plan
 Group life insurance
(b) Buffet Plan

Employees have the option of retaining exactly the same coverage they had
prior to the introduction of flexible benefits, e.g. the employees may choose
lower benefits such as less vacation or a higher medical plan.

(c) Alternative Dinner Plan
It represents some degree of choice for the employees but does not provide
a side open selection, for example, one package might be aimed at the
single employee etc.
SELF-CHECK 7.2
FLEXIBLE BENEFIT PLAN WORKS FOR FUJITSU EMPLOYEES

(www.fujitsu.com)
Fujitsu is a leading provider of global information and

communication technology. The company had approximately 170,000
employees worldwide as of spring 2002. As the companyÊs US
website states, „At Fujitsu, we believe the best benefits program is
one where employees themselves determine their level of
involvement....The Fujitsu employee benefits are based on individual
needs.‰ FujitsuÊs benefits include medical, dental and vision coverage;
an employee assistance plan for personal problems; pre-tax payroll
deducation for health care and dependent care expenses, life
insurance, accidental death and dismemberment insurance; short-
term and long-term disability plans and paid time off for holidays
and vacations.
Compare the benefits that you get from your organisation with
Fujitsu.
ACTIVITY 7.2
Taking a Raise
Assume that you are currently employed as a human resource

specialist for a medium-sized company. You have been in your
job for a little over two years, and your current salary is
RM120,000 per year. Two months ago, your company announced
it was going to implement a flexible benefit plan in conjucton
with this yearÊs salary raises. Your annual salary review was held
last week, and you were informed that your raise would be
equivalent to RM3,000. For your salary level, the following
options are available:
(a) Take the entire raise as a montly salary increase.

(b) Take as much of the RM3,000 as you desire in the form of
vacation at the equivalent of RM 200 per day.
(c) Have as much as you desire of the RM3,000 put into a tax-
sheltered retirement plan.
(d) Purchase additional term life insurance at the cost of RM250 per
RM100,000 of face value.
(e) Purchase dental insurance at the cost of RM20 per month for
yourself and RM10 per month for each dependent.
The company currently provides full health insurance at no cost to

employees. How would you select to take your raise?
Be prepared to share your answer with your classmate.
7.2.3 Trends and Innovation in Employee Benefits

Regardless of economic conditions, it seems that organisations are continually
competing for top calibre employees. While benefits may not serve as strong
motivators of performance, they are obviously important in attracting and
retaining these desired individuals. Let us look at the numerous unique benefits
offered by American firms. Among them are (Levering and Moskowitz, 2003):
(a) Goldman Sachs: Employees get 52 hours of paid volunteer time each year
(b) Alcon Laboratories: A rich benefit package includes defibrillators placed
everywhere to prevent heart attack deaths.
(c) Fannie Mae: Employees receive a „healthy-living day off‰ and a day of
„home purchase leave‰. Also available is a 100 percent forgivable home
loan that is worth up to $30,000 in some markets.
(d) Starbucks: Even part-timers get health insurance, stock options and,
available soon, tuition reimbursement. They even get a free pound of coffee
weekly.
(e) AFLAC: The firmÊs 32 acre campus has a YMCA fitness centre, acute-care
clinic, 14 training classrooms, walking trails, child care, and a duck pond.
Twelve weeks of paid maternity/paternity leave are available for eligible
staff.
(f) Colgate-Palmolive: New parents get a three week paid leave on top of
regular disability. On-site banking, travel agent and film processing make
errands easier and intramural sports leagues contribute to the fun.
(g) Eli Lily: On-site mammograms and gynaecological exams (for spouses too)
are available, as are colonoscopies for employees, retirees and spouses.
New mothers get 68 weeks of job-protected leave and eligible employees
may receive $10,000 adoption assistance.
(h) Freddie Mac: Included are lactation rooms where women can privately
breastfeed or pump milk. The firm allows new mothers a free consultation
with a lactation expert, gives new parents beepers, and has highchairs,
colouring books and crayons in the cafeteria.
(i) TM Malaysia: TM provides a number of benefits and facilities aimed at
increasing staff welfare. Among these are personal health insurance
coverage, plus medical care for the families; housing, car and computer
loans; and social and recreational facilities including a fully equipped gym.
TM promotes family involvement by holding an Annual Family Day.
Employee well-being is given such emphasis that TM also runs an
Employee Assistance Programme (EAP) through which personnel with
personal or work-related problems are given counseling.
(j) Sime Darby: In Sime Darby, a variety of rewards and awards given to
employees and/or operating units that excel in their job or operations. The
benefits program in the group is very comprehensive. Here is a sample of
some of Sime Darby benefits:
 EmployerÊs Employee Provident Fund (EPF) Contribution of up to 16%
(for Malaysia operations).
 Annual Leave averaging 22 days per year.
 Maternity Leave of 60 days on full pay.
 Interest Subsidy on housing loans.
 Car Allowance under our Senior Management Car Scheme.
 Motor Vehicle Loans.
 Outpatient medical and hospitalisation coverage for employees and
family members.
 Financial assistance in furthering your education.
 Loyal service awards.
 WorkersÊ compensation is meant to protect employees from loss of income

and to cover extra expenses associated with job-related injuries or illness.
 Benefits include all financial rewards that employees generally receive
indirectly.
 Employee benefits are those rewards that employees receive for being
members of the organisation and for their positions in the organisation;
usually not related to employee performance.
 Employee benefits, sometimes called fringe benefits, are those rewards that
organisations provide to employees for being members of the organisation. In
general, benefits can be grouped into five major categories: (1) legally
required, (2) retirement related, (3) insurance related, (4) payment for time
not worked, and (5) other.
 Flexible benefit plan is where the individual employees have some choice as
to the specific benefits they will actually receive. Usually employees select
from among several options how they want their direct compensation and
benefits to be distributed.

Benefits Incentive compensation plan

Cafetaria plan Performance-based Compensation
Employee benefits Skill-based or knowledge-based
compensation
Employee benefits
Team-based compensation
Flexible benefit plan
Breaking Up Is Hard To Do
The Situation
Kassim and Kamariah began a 25-year friendship after finishing college and discovered
their mutual interest in owning a business. Established as a general partnership, their
home-furnishings centre is a successful business sustained for 20 years by a share and
share alike friendship. Start-up cash, daily responsibilities and profits have been shared
equally. The partners both work four days each week except when busy seasons require
both of them to be in the store. Shared goals and compatible personalities have led to a
solid give-and-take relationship that helps them overcome business problems while
maintaining a happy interpersonal relationship. The division of work is a natural match
and successful combination because of the partnersÊ different but complementary
interest. Kassim buys the merchandise and maintains up-to-date contacts with
suppliers. He also handles personnel matters (hiring and training employees).
Kamariah manages the inventory, buys shipping supplies, keeps the books, and
manages the finances. Kassim does more selling, with Kamariah helping out only
during busy seasons. Both partners share in decision about advertising and promotion.
The Dilemma
Things began changing two years ago, when Kassim became less interested in business
and got more involved in other activities whereas KamariahÊs enthusiasm remained
high. KassimÊs time was increasingly consumed by travel, recreation, and community-
service activities. At first, he reduced his work commitment from four to three days a
week. Then he indicated that he wanted to cut back further, to just two days. „In that
case,‰ Kamariah replied, „weÊll have to make some changes,‰. Kamariah insisted that
profit sharing be adjusted to reflect her larger role in running the business. She
proposes that KassimÊs monthly salary be cut in half (from RM10,00 to RM5,000).
Kassim agreed. She recommended that the RM5,000 savings be shifted to her salary
because of her increased work load, but this time Kassim balked, arguing that
KamariahÊs current RM10,000 salary already compensated her for her contributions. He
proposed to split the difference, with Kamariah getting a RM2500 increased and the
other RM2,500 going to the firmÊs cash account. Kamariah said no and insisted on a full
RM5,000 raise. To avoid a complete falling out, Kassim finally gave in, even though he
thought it was unfair for KamariahÊs salary to jump from RM 10,000 per month to
RM15,000. At that point, he made a promise to himself: „To even things out, IÊll find a
way to get RM2000 worth of inventory for personal use each month.‰
Questions:
a. Identify the compensation issues, if any, regarding KassimÊs and KamariahÊs

respective positions on KamariahÊs proposed RM5000 salary increase.
b. What kind of salary adjustments do you think would be fair in this situation?
Explain why.
Byars, L. L., & Rue, L. W. (2004). Human resource management. New York: Mc
Graw Hill.
Cherrington, D. J. (1995). The management of human resources. Englewood

Cliffs, New Jersey: Prentice-Hall.
Henderson, R. I. (1994). Compensation management: Rewarding performance

(6th ed.). New York: Prentice Hall.
Henderson, Richard I. (1997). Compensation management in a knowledge-based

world (7th ed.). New York: Prentice-Hall.
Jennifer, R., & Amy, B. (1997). Even executives are wincing at executive pay.
Business Week, May 12, 40-41.
Jennifer, R., & Melcher, R. A. (1998). Executive pay. Business Week, April 20, 64-68.
Klein, A. L. (1996). Validity and reliability for competency-based systems: Reducing

litigation risks. Compensation and Benefits Review, 28(4), 31-37.
Levering, R., & Moskowitz, M. (2003). 100 Best Companies to work for fortune,
January 20: p. 140.
Milkovich, G. T., & Newman, J. M. (1996). Compensation (5th ed.). Chicago:

Irwt5in.
Pauline, G. B. (1997). Executive compensation and changes in control: A search

for fairness. Compensation and Benefits Review, 29 (March/April): 30-40.
Topic  Employee and
8 Industrial
Relations
LEARNING OUTCOMES
1. Define industrial relations, collective bargaining and collective
agreement;
2. Explain the structure and functions of unions;
3. Evaluate various union-free strategies and tactics that can be used
by employers;
4. Identify two main Acts used in the Malaysian industrial relations
system;
5. Discuss factors affecting the process of collective bargaining;
6. Describe the process of collective bargaining; and
7. Analyse the impact of collective bargaining on employees and
employers.
204  TOPIC 8 EMPLOYEE AND INDUSTRIAL RELATIONS
 INTRODUCTION

Figure 8.1: Industrial relations
Source: http://www.nicholsoncartoons.com.au/cartoons/new/2005-05-
27%20Industrial%20harmony%20226.jpg
Welcome to Topic 8! In this topic, we will discuss the employee and industrial
relations in more detail. Figure 8.1 gives an overview of industrial relations. How
do you define industrial relations? It is about the relationships between
employees and their employers. Industrial relations is also known as employee,
labour or employment relations. Employee relations in local firms refer to the
management of employee welfare and internal communications. In an
organisation, the employee relations department usually provides services to its
employees such as canteen, prayer facilities, transport, sports and recreation. The
term „labour relations‰ has the same meaning as industrial relations and its
usage is common in the United States. However, in Australia and New Zealand it
is commonly known as employment relations that refers to the relationship
between parties at work (Maimunah, 2007). This topic will use „industrial
relations‰ and „labour relations‰ terms interchangeably.
There are three participants in the industrial relations framework:

(a) Employees and their unions;
(b) Management; and
(c) Government.
In Malaysia, the public policy concerning labour relations comes from federal
and state legislations, executive orders, court decisions, and the administrative
ruling handed down by the Ministry of Human Resources. Management is
perhaps the most important among the three participants. Management holds the
„balance of power‰ in employment relations and managers are proactive (states
TOPIC 8 EMPLOYEE AND INDUSTRIAL RELATIONS  205
tend to „facilitate‰ while unions tend to „react‰ or „respond‰ to management

initiatives).
8.1 LABOUR RELATIONS PROCESS

Employees may experience little power when they have to bargain individually
with the employer. To correct this situation, they may elect to unionise. When
workers pursue this direction, the labour relations process begins.
They are four events that make up the labour relations process that you need to
know, which are:
 The desire of workers for collective representation;
 Organising campaigns;
 Contract negotiations; and
 Contract administration.
The labour relations process begins when individual employees perceive that
their best interests are better served through organised collective bargaining than
through one-on-one negotiation with management for improved wages and
benefits.
Figure 8.2: The labour relations process

Source: Open University Malaysia. (2006). BMHR5103 Human resource management
course guide, reading 1: The dynamics of labour relations, p.127
As shown in Figure 8.2, this logical sequence of events can be broken down into
four steps. Let us look at the steps in more detail.
(a) Workers Seek Collective Representation: Usually due to a perceived need to

shift power to a more equal footing, this desire motivates individuals to
organise for bargaining collectively.
(b) Union Begins Organising Process: A union begins its efforts to persuade a
majority of employees that it can better serve their interests in negotiation
with management than other alternatives.
(c) Collective Negotiations Lead to a Contract: In this stage, the union bargains
collectively with management to receive a contract. This is a two-edged
sword for the management. On the one hand, management resents the loss
of control brought on by collective bargaining. On the other hand, the
labour force is typically more predictable and manageable when it accepts a
collectively bargained agreement.
(d) Contract is Administered: The signing of a contract helps to reduce

uncertainty for both sides as clear policies and procedures are set forth for
the activities of labour and management during the length of the new
contract.
SELF-CHECK 8.1
1. Define industrial relations.
2. Provide other terms for industrial relations.
3. Name three participants in the industrial relations framework.
4. Explain the four steps in the labour relations process.
8.2 OBJECTIVES AND GROWTH OF UNIONS

Although each union is a unique organisation seeking its own objectives, several
broad objectives characterise the labour movement as a whole. Let us now look at
some of them:
(a) To improve the living standards and economic status of its members;
(b) To enhance and, if possible, guarantee individual security against threats
and contingencies that might result from market fluctuations, technological
change, or management decisions;
(c) To influence power relations in the social system in ways that favour and
do not threaten union gains and goals;
(d) To advance the welfare of all who work for a living, whether union
members or not; and
(e) To create mechanisms to guard against the use of arbitrary policies and
practices in the workplace.
A union must strive for continual growth to maximise its effectiveness. Members
pay dues, which are vital in promoting and achieving union objectives.
Obviously, the more members the union enlists, the more dues they pay to
support the union and the labour movement. Thus, an overall goal of most
unions is continued growth.
However, the percentage of union members in the workforce seems to be

declining. This decline is due to more open economies, more flexible labour
market, decline in the size of the manufacturing sector, growth of the service
industry, increase in women and part time employees, and the change of social
attitudes towards unions (Stone, 2005). Most union leaders are concerned about
this trend. Much of a unionÊs ability to accomplish its objectives is derived from
the strength in numbers. For this reason, union must continue to explore new
sources of potential members.
SELF-CHECK 8.2
1. List the objectives of a union.
2. Why must a union aim for continual growth?
8.3 WHY EMPLOYEES UNIONISE?

Individuals join unions for many different reasons, which tend to change over
time. The reasons may involve job, personal, social or political considerations.
Some of the major ones are the managementÊs attitude, economic needs, social
and status concerns, opportunity for leadership, peer pressure, and the need for a
social outlet, as shown in Figure 8.3.
Figure 8.3: Reasons of Employee Unionise
Now, let us discuss the reasons why individuals join unions one by one.
(a) The Attitude of Management

People like to feel that they are important. They do not like to be considered
a commodity that can be bought and sold. Thus, employees do not like to
be subjected to arbitrary actions by management. In some firms,
management is insensitive to the needs of its employees. In such situations,
employee may perceive that they have little or no influence in job-related
matters. Workers who feel that they are not really part of an organisation
are main targets for unionisation.
ManagementÊs attitude may be reflected in such small actions as how

bulletin board notices are written. For example, memos addressed „to all
employees‰ instead of „to our employees‰ may indicate managers that are
indifferent to employee needs. Such attitudes are likely stemmed from top
management. However, employees noticed them initially in the action of
first-line supervisors.
Employees may unionise when they believe that managerial practices are
unfair and/or administered in a biased way. This is true particularly of
those issues that greatly affect the employment conditions of employees.
These issues include transfer, promotion, discipline, performance appraisal,
and salary increases. Organisational behaviour studies show that

employees want to have some voice in the decisions affecting their
employment conditions. The failure of managers to allow employees a
chance to become involved in decisions affecting their jobs also may
encourage unionisation.
(b) Economics Needs

Dissatisfaction with wages, benefits, and working conditions is the
strongest motive for employees to unionise. When employees believe that
their economic need is greater than they can fill in individual negotiations,
it enhances the chance for successful unionisation.
(c) Social and Status Concerns

Union organisations promote social and leadership opportunities to
members. When an employer denies the social and leadership needs of
employees, they may turn to the union. The union becomes a channel for
fraternisation and shared feelings about the job in a safe environment. It
also provides the basis for developing off-work friendships based on shared
interests.
(d) Opportunity for Leadership

Some individuals aspire to leadership roles, but it is not always easy for an
active employee to progress into management. However, employees with
leadership aspirations can often satisfy themselves through union
membership. As with the firm, the union also has a hierarchy of leadership,
and individual members have the opportunity to work their way up
through its various levels. Employers often notice employees who are
leaders in the union. The top management sometime promotes such
employees into managerial ranks as supervisors.
(e) Peer Pressure

Some individuals will join a union simply because they are urged to do so
by other members of the work group. Friends and associates may
constantly remind an employee that he or she is not a member of the union.
In the past, this social pressure from peers was difficult to resist, but as the
age gap between workers increases and the educational gap broadens, peer
pressure becomes less and less of an issue. Quite possibly, rejection of these
employees by current union members has less influence than in the past. In
extreme cases, union members threaten non-members with physical
violence and sometimes carry out these threats.

(f) A Social Outlet

By nature, people have strong social needs. They generally enjoy being
around others who have similar interests and desires. Some employees join
a union for no other reason than to take advantage of union-sponsored
recreational and social activities that members and their families find
fulfilling. Some union offer services that appeal to working men and
women and increase their sense of solidarity with other union members.
People who develop close personal relationships, either in a unionised or
union-free organisation, will likely stand together in difficult times.
SELF-CHECK 8.3
State the seven reasons for individuals to join unions.
8.4 UNION ORGANISING CAMPAIGNS

Are you aware that, the workers in Malaysia have the right to form or join trade
unions? This right is known as the freedom of association, as described in the
Industrial Relations Act (Part II.4), 1967.
In general, a unionÊs organising campaign begins:

(a) When union organisers contact employees:
(b) When employees initiate the action by contacting the union; or
(c) By accident through a chance meeting between an employee and a union
organiser.
8.4.1 Organising Steps

Most campaigns are organised following a series of steps that, when carried out
successfully, can lead to unionisation. There are five organising steps. Let us have
a look at the steps in more detail.
(a) Step 1: The first step of the drive takes place when employees and the union
organiser meet to discuss the possibilities of unionisation. The organiser
will obtain information about the employer, such as employee wages and
benefit levels, working conditions, the financial picture of the organisation
and supervisory practices. This information will be used to build a case
against the employer and for the union.
(b) Step 2: If the organiser believes that enough workers desire to unionise,
meetings will be set up to build additional support for the union. During
these organisational meetings, the organiser will find employees who can
help him or her to direct the campaign. The organiser will establish a
communication chain to reach other employees.
(c) Step 3: Once the campaign is successfully under way, the organiser will
form an in-house organising committee made up of supportive employees.
This committee will pass out literature, gather additional information about
the employer, watch for managementÊs unfair labour practices and get
authorisation cards signed.
(d) Step 4: After obtaining the authorisation cards, the organiser will petition
the Director-General of Trade Unions to hold a secret ballot election. The
time before the election is an emotional period, as each side will go all out
to persuade employees to adopt its point of view.
(e) Step 5: If the union wins the election, the Director-General of Trade Unions
will certify the union as the bargaining representative of employees. The
employer is now obligated to negotiate with union representatives for the
formation of a labour agreement. The employer, however, is not required to
reach a final agreement with the union.
SELF-CHECK 8.4
Explain the five steps needed for a union organising campaign.
ACTIVITY 8.1
1. Assume that you are a union recruitment officer. Prepare a one-

hour presentation to encourage employees in the an organisation
to join your union.
2. Assume that you are a human resource manager of a local

manufacturing company with 500 production workers. Discuss
why organisations sometimes resist the formation of unions.
8.5 IMPACTS OF UNIONISATION ON

MANAGERS
The unionisation of employees can affect managers in several ways. Perhaps the
most significant one is the effect it can have on the prerogative exercised by
management in making decisions about employees. Furthermore, unionisation
restricts the freedom of management to formulate policy unilaterally and can
challenge the authority of supervisors. There are two main impacts of
unionisation on managers that you need to know, which are:

(a) Challenges the Management Prerogative
Unions usually try to achieve greater participation in management
decisions that affect their members. Specifically, these decisions may
involve issues such as subcontracting of work, productivity standards and
job content. Employers quite naturally seek to claim many of these
decisions as their exclusive management prerogatives ă decisions over
which management claims exclusive rights. However, these prerogatives
are subject to challenge and erosion by the union. They can be challenged at
the bargaining table, through the grievance procedure and through strikes.
(b) Loss of Supervisory Authority

The labour agreement will set forth the condition of employment under
which employees will work. These employment conditions are normally
defined as wages, hours and working conditions. The employer is free to
set human resource policies in areas not covered in the agreement as long
as these policies are consistent with the terms of the contract.
Supervisors play a key role in labour-management relations because they

must administer the labour agreement on a daily basis. Since a primary
responsibility of a supervisorÊs job is to direct the workforce, the supervisor
must be careful and have just cause for his or her actions. When the union
believes that a supervisorÊs actions are unjust, these actions will be grieved
through the grievance procedure.
SELF-CHECK 8.5
How can the unionisation of employees affect managers?
8.6 STRUCTURE AND FUNCTIONS OF LABOUR

UNIONS
The labour movement has developed a multi-level organisation structure over
time. It ranges from local unions to the principal federation. Each level has its
own officers and ways of managing its affairs. Let us study each level in more
detail.

(a) Structure and Functions of National Unions
The most powerful level in the union structure is the national union. The
national union is governed by a national constitution and a national
convention of local unions, which usually meets every two or five years.
Elected officers, aided by an administrative staff, conduct the day-to-day
operation of the national union.
The national union is active in organising workers within its jurisdiction,

engaging a collective bargaining at the national level and assisting its local
unions in negotiations. In addition, the national union may provide
numerous educational and research services for its local unions, publish the
union newsletter, provide legal counsel, and actively lobby at national and
state levels.
National unions represent the centre of power in the labour movement.

Each national union is responsible for conducting its own affairs, much as
business organisations do. National unions charter local unions to carry on
the unionÊs purpose of representing workers at the shop or office level.
Local unions support the national structure by paying a per capita tax
established by the national union. In return, the local unions receive various
services from the national union. National unions govern themselves
through conventions held on a periodical basis. Local unions send their
delegates to the convention in order to have a say in the governance of the
national union.

(b) Structure and Functions of Local Unions
The basic element in the structure of Malaysian labour movement is the
local union (enterprise or in-house union). To the individual union
member, it is the most important level in the structure of organised labour.
Through the local union, the individual deals with the employer on a day-
to-day basis. Some of them are affiliated with the national union.
In general, there are two kinds of local union: craft and industrial. A craft
union is typically composed of members of particular trade or skills in
specific locality. Members usually acquire their job skills through an

apprenticeship programme. An industrial union generally consists of all the
workers in a particular factory or group of factories. The type of work they
do and the level of skill they posses are not a condition for membership in
the union. Elected officials run the local union. These officers, except in very
big local unions or in certain craft unions, are normally workers of the
unionised organisation.

Local unions carry out the daily functions of business unionism. The two
primary tasks of the local are to:
(i) Negotiate the labour agreement; and
(ii) Represent member rights through enforcing the contract by way of
the grievance procedure.
SELF-CHECK 8.6
Identify the structure and functions of national unions and local
unions respectively.
8.7 UNION-FREE STRATEGIES AND TACTICS

One of managementÊs most basic decisions is whether to encourage and
discourage the unionisation of its employees. It may discourage unions because it
fears higher wage and benefit costs, the disruptions caused by strikes, and an
adversarial relationship with its employees or, more generally, greater
constraints placed on its decision-making flexibility and discretion.
If management voluntarily recognises a union or if a union already represents

employees, the focus shifts from dealing with employees as individuals to
employees as a group. However, certain basic management objectives remain;
such as controlling labour costs (by keeping wages and benefits in check),
increasing productivity and maintaining management prerogative in important
areas such as staffing levels and work rules.
However, employers who follow union-free strategies and tactics can remain or
become union-free. Some managers believe that the presence of a union is
evidence of managementÊs failure to treat employees fairly. This is true in certain
cases, but the factors that will significantly reduce the chances of unionisation are
explained in Figure 8.4.
Figure 8.4: Union-free strategies and tactics
Now, let us discuss the strategies and tactics in more detail.
(a) Effective First-line Supervisors

Supervisors can be considered as the first line of defence against
unionisation. Their supervisory ability often determines whether
unionisation will be successful. The supervisor assigns work, evaluates
each individualÊs performance, and provides praise and punishment. The
manner in which he or she communicates with the employees in these
matters can affect the individualÊs attitude toward the firm. Even though
the first-line supervisor is the lowest level of management in the workplace,
this person usually has more influence over employees than any other
manager does.

(b) Union-free policy
When the organisation has a goal of remaining union free, it should clearly
and forcefully communicated to all its members. For example:
„Our success as a company is based on the skill and efforts of our

employees. Our policy is to deal with employees as effectively as
possible, respecting and recognising each of them as individual.‰
This type of policy evolves into a philosophy that affects everyone in the
organisation. All employees must understand it. The company must tell
the workers why it advocates the policy and how it affects them. This
involves much more than sending a memo each year to all employees
stating that the companyÊs goal is to remain union free. Every means of
effective communication may be needed to convince employees that the
organisation intends to remain union free.

(c) Effective Communication
For an organisation that wants to remain union free, one of the most
important actions the company can take is to establish credible and
effective communication. A very positive by-product of the movement
toward participative management, cooperation and teamwork is open and
effective communication. Employees should be given the information they
need to do their jobs. Management should provide feedback to their
subordinates on their performance. They should openly share information
with workers concerning activities taking place within the organisation.
One approach that encourages open communication is the open-door

policy. It will give employees the right to take any grievance to the person
next in the chain of command if the immediate supervisor cannot solve the
problem.
(d) Trust and Openness

Trust and openness between managers and employees are important for a
company to remain union free. Credibility, based on trust, must exist
between workers and management, and this trust develops over time. If
employees perceive the organisationÊs management as being open and
receptive to ideas, feedback is likely to be encouraged. Managers need this
feedback to do their job effectively. However, if managers give the
impression that their directives should never be questioned,
communication will be stifled and credibility is lost. Here again, the
participative style will enhance trust, openness, employee involvement and
participation, helping management to maintain a union-free organisation.

(e) Effective Compensation Programme
The financial compensation that employees receive is the most tangible
measure they have of their worth to the organisation. Compensation must
be relatively competitive if the organisation expects to remain union free.

(f) Healthy and Safe Work Environment
An organisation that gains a reputation for failing to maintain a safe and
healthy work environment leaves itself wide open for unionisation. For
years, unions have campaigned successfully by convincing workers that the

union will provide them with a safer work environment. In fact, labour
organisations were leading advocates of the Occupational Safety and
Health Act, and they continue to support this type of legislation.

(g) Effective Employee Relations
No organisation is free from employee disagreements and dissatisfaction.
Therefore, a way to resolve employee complaints, whether actual or
perceived, should be available. The grievance procedure is a formal process
that permits employees to complain about matters affecting them.
If a firmÊs goal is to remain union free, it should establish its strategy long
before a union organising attempt begins. Management must be able and
willing to offer workers equal or better conditions than they could expect
with a union. The development of long-term strategies and effective tactics
for the purpose of remaining union free is crucial because the employeesÊ
decision to consider forming a union is usually not made overnight.
Negative attitudes regarding the company are typically formed over a
period of time and well in advance of any attempt at unionisation.
SELF-CHECK 8.7
Explain union-free strategies and tactics that can be adopted by
organisations.
8.8 RELEVANT ACTS IN MALAYSIAN

INDUSTRIAL RELATIONS
The industrial relations system in Malaysia is largely shaped by the statutory
provisions in the Trade Unions Act, 1959 and the Industrial Relations Act, 1967.
These two Acts very much determine the conditions and procedures in the
relationships between the employers and the employees. Let us read through
both Acts in more detail.
(a) The Trade Unions Act, 1959 has tremendous power and means of control
over organised labour in Malaysia. These controls cover unions of employees
as well as unions of employers, however it tends to be an Act more to curb
organised labour in Malaysia than otherwise. There are several provisions in
the Trade Unions Act, 1959 that protects the rights of the trade unions and its
members in engaging in lawful trade union activities.
(b) The Industrial Relations Act, 1967 regulates the relations between employers
and workmen and their trade unions. The Malaysian industrial law
recognises the right and the freedom of workmen to form and join a trade
union and participate in its lawful activities by prescribing to several
provisions in the Industrial Relations Act, 1967 to deter unfair labour
practices particularly by the employer.
SELF-CHECK 8.8
What are the two main Acts used in the Malaysian industrial
relations system?
8.9 COLLECTIVE BARGAINING

How do you define collective bargaining? Collective bargaining is a process that
involves the negotiation, drafting, administration and interpretation of a written
agreement between an employer and a union for a specific period. This written
agreement includes wages, terms and conditions of employment like overtime
rates, retirement benefits, leave benefits, allowances and medical benefits. The
collective bargaining process also provides a formal channel through which the
differing interests of management and employees may be resolved on a collective
basis.
Generally, the basic tenets of collective bargaining process are:

(a) Negotiation of relevant issues in good faith by both management and the
union;
(b) Incorporation of the parties' understandings into a written contract;
(c) Administration of the daily working relationships according to the terms
and conditions of employment specified in the contract; and
(d) Resolution of disputes in the interpretation of the terms in the contract
through established procedures.

Although there is an inherent conflict of interest between management and
employees, the collective bargaining relationship is based on mutual dependence
between the two parties. It is this conflict, which provides the input into the
collective bargaining process. However, the perception of the degree of mutual
dependence may vary. Management may perceive its dependence on its work
force decreases during times of high unemployment.

Collective bargaining can only exist and function if:

(i) The employees themselves are prepared to identify a commonality of
purpose and then organise and act in concert;
(ii) Management is prepared to recognise their organisation and accept a
change in the employment relationship that removes, or at least
constrains, its ability to deal with employees on an individual basis.
SELF-CHECK 8.9
1. Define collective bargaining.
2. List the basic tenets of collective bargaining process.
8.10 FACTORS AFFECTING COLLECTIVE

BARGAINING
A number of factors, which both management and labour unions must deal with,
affect the process of collective bargaining. Let us discuss the factors affecting
collective bargaining now.
(a) Demand for (skilled and unskilled) labour force depends on the economic
situation in the country and the needs of the industries. During times of
high level of unemployment, management will have a better advantage in
collective bargaining for the degree of their dependency on the workers has
decreased.
(b) There is also a growing trend among organisations to consider alternatives

to recruitment such as outsourcing, use of contingency workers and
employee leasing. The reason is many have found it hard to remove
workers who only exhibit marginal performance and they have become
wary of the potential problems of unionisation. This practice of outsourcing
as well as the other alternatives to recruitment has weakened unions'
strength (low membership) to a certain extent and subsequently their
bargaining strength for the size of the permanent employees has reduced
considerably.
(c) Technological changes also affect collective bargaining. Companies

characterised as high tech or capital intensive have less concern for the
impact of unions than firms that are heavily dependent on unskilled or
semi-skilled labour. As a result, unions have frequently attempted to
control technological change in order to protect job opportunities.
(d) International forces may have a profound impact on labour-management

relations, especially for firms that take advantage of less expensive foreign
labour. However, this is dictated by the host country's laws regarding
immigration and employment of foreign workers. In Malaysia, history is
repeating itself. If before, we depended on Chinese and Indian foreign
labour to work in the tin mines and estates during the colonial days, now
the scenario is pretty much the same. We are still dependent on cheap,
unskilled foreign labour in the construction and agriculture sectors. These
foreign workers are not interested to join unions or not allowed to join one.
It has important implications on union membership and bargaining
strength.
(e) Economic conditions such as inflation rates, unemployment levels as well

as geographic differences in economic conditions affect the collective
bargaining process. During periods of high inflation, unions will exercise
more pressure on management to keep wage levels in line with changes in
the Consumer Price Index. Periods of high unemployment may dilute the
bargaining power of unions because the effectiveness of a strike as an
economic weapon is reduced.
(f) During adverse economic times, bargaining conditions may shift from high
wages and better benefits to job security issues such as demanding
protection from layoffs. In extreme cases, employee concessions may be
necessary to bail the employer out of dire financial straits. Companies that
have earned high profits, good rates of return, and a bright economic
outlook are challenged to "share the wealth" by unions through generous
wage increases and good benefits.
(g) In Malaysia, the federal laws guided the collective bargaining process as
they govern every facet of union-management relations. These laws, like
the Industrial Relations Act 1967, are primarily procedural, i.e. they dictate
how the parties must deal with each other, the management prerogatives
that are not negotiable, and how to conduct collective bargaining.
Legislation also provides for the settlement of disputes through conciliation
and arbitration. Hence, the greater the extent of government participation,
the less scope there is for voluntary collective bargaining.
SELF-CHECK 8.10
Discuss factors affecting the process of collective bargaining.
8.11 THE COLLECTIVE ARE BARGAINING

PROCESS
There are five collective bargaining process. Let us discuss them one by one now.
(a) Pre-negotiation
In a collective bargaining, both parties attempt to receive concessions that
will help them achieve their objectives. This entails a lot of preparation
work during the pre-negotiation period and the follow-up in terms of the
implementation of the agreement.
Both union and management maintain data of all types. It is also important
to check the background of the union negotiators. This will allow
management to interpret the style and personalities of these negotiators.
Management will also look into the union's financial strength, its total
membership, the power structure and internal problems that might weaken
its position.
Some companies resort to having regular formal and informal contacts with
union leaders at both the headquarters and factory levels to gain useful
information should a collective bargaining arises. It could also improve
relationship between the bargaining parties, make the collective bargaining
a more pleasant and smooth process. Conducting frequent attitude surveys
helps to ascertain the demands the union is likely to make on behalf of its
members like the complaints and grievances of the workers and this helps
management to be better prepared for collective bargaining.
Economic information is probably the most important data required in the

preparation for a collective bargaining. Both parties will study the recently
signed agreements in comparable companies and industries. In almost all
collective bargainings , wages and benefits are the most difficult items to
agree on and workers expect to get a wage increase every time a new
agreement is signed. The economic state of the country is an important
consideration for both parties when they negotiate wages. The usual
bargaining edge trade unions use is that wage increases should
commensurate with the cost of living and tenure of service.

Information on the current Consumer Price Index (CPI) and the changes
that have taken place since the last agreement is also important. The CPI is
a statistical representation of the change in the cost of living over a
particular period. By checking the prices of a "basket" of goods including
food, clothing, rent, etc. and services (medical, transport, etc.) used by an
average Malaysian family on a monthly basis, the CPI is a useful tool to

indicate inflation rates.
Bargaining data that are useful for negotiators are:

(i) Number of workers in each job classification.
(ii) Minimum and maximum pay in each job classification.
(iii) Compensation per worker.
(iv) Overtime pay per hour and number of annual overtime hours
worked by job classification.
(v) Number of employees, by categories, who work on each shift.
(vi) Cost of shift differential premiums.
(vii) History of recent negotiations.
(viii) Cost of fringe benefits.
(ix) Cost of living increases.
(x) Vacation costs by years of service of employees.
(xi) Demographic data on the bargaining unit members by sex, age and
seniority.
(xii) Cost and duration of lunch breaks and rest periods.
(xiii) Outline of incentive, progression, evaluation, training, safety and
promotion plans.
(xiv) Grievance and arbitration awards.
(xv) Comparative industry wage rates.
(xvi) Comparative occupational wage rates.
(xvii) Comparative fringe benefits.
(xviii) Consumer Price Index (CPI).
(xix) Patterns of relevant bargaining settlements.
(b) Selecting the Negotiators

It is important that the employer and union select their negotiators carefully
because this can determine the outcome of the collective bargaining. It is
not only the skills and experience that are important but also the
negotiators must be patient, have strong communication skills, physically
fit to withstand long sessions and very knowledgeable of the employment
laws and the Malaysian Industrial Relation system. They will be
responsible for both the pre-negotiation preparation and the negotiation

itself.
The management side usually consists of the Industrial Relation Manager

or the Human Resource Manager, the Finance Manager (to handle the
costing in the union's proposals) and one or two line managers. Usually, the
Chief Executive Officer is not advised to be present, as this will give the
management an advantage to insist on a break or postponement so that he
can confer with his superior officer.
If the bargaining/negotiation is at the national level, the union

representatives will be fulltime officers or employees of the union including
the Executive Secretary and the Industrial Relation officers who have plenty
of bargaining experience and the company level union leaders. In-house
unions will choose their own union executive council members.
(c) Developing Bargaining Strategy and Tactics

Strategy is the plan and policies that will be pursued at the bargaining
table. Tactics are the specific actions taken in the bargaining sessions. An
important issue in mapping out a strategy is the maximum concessions that
will be granted. Granting too much will be perceived as weak. Hence, the
management or union will have to go through a very delicate balancing act
before the risk of a work stoppage or lockout is considered. All these have
to be determined before the bargaining starts.
Another strategic plan is to develop the total cost profile of the maximum
concession package. How much will the package cost the company now
and in the future? Will this affect the human resource policies or
production procedures if these concessions are granted? These
considerations help management determine how willing it is to take a
strike. Planning for a strike is very difficult but it should be part of the
strategic planning.
Two elements commonly found in collective bargaining strategy and tactics

are resistance points and the use of trade-offs to reach an agreement. Each
side has a resistance point. For example, in the bargaining of wages
increment, the union may be willing to settle for a RM2 an hour increase
but not for less. Thus, its resistance point is RM2. Meanwhile, management
may be willing to settle for a RM3 an hour to avoid a strike, so its resistance
point is RM3.
Each side's resistance point is largely determined by its BATNA (Best

Alternative to a Negotiated Agreement). The union negotiators may
conclude, based on their evaluation (which may be incorrect) of the

company's competitive position and the strength of their union, that they
could win RM5 through a long strike. However, such a strike is expensive
and there is a good chance it may lose. Thus, it settles for RM2 by
discounting the RM5 after considering highly subjective factors like high
costs and uncertainty of a strike. Management also sets its resistance point
at RM3 after going through a similar process.
In this case, there is a positive contract zone (the difference between the two
resistance points) of RM1, and the main task of bargaining (also a very
difficult haggling task and a lengthy one) is to divide the RM1 between the
two parties. However, if the bottom line of the union is RM4 and
management too refuses to reconcile on that, the contract zone is negative
and a strike is likely unless the parties change their resistance points.
Bargaining becomes further complicated when neither side reveals its

resistant point. By not revealing its resistant point, the union may win up to
RM1 more. Therefore, the union bluffs and claims it needs RM4.
The second element is the possibility of making trade-offs to reach an

agreement. Trade-offs require at least the existence of two issues, with the
parties differing as to the priority they give to these issues. Unions may
think wages is the most important whereas management may prioritise
working rules. Thus, union makes a concession on working rules in return
for management's concession on wages. In such a trade-off, neither side
gets everything it wants but both sides are better off than they were
previously. Hence, trade-offs create value. However, such value creating
trade-offs do not come easily because each side has an incentive not to
reveal its priorities. If unions were to announce publicly its top priority,
management might hold this item „hostage‰ and may concede it only for
major union concessions.

(d) Using the Best Tactics
Tactics are calculated actions used by both parties. Occasionally, tactics are
used to mislead the other party and to secure an agreement that is
favourable to either management or the union. Some popular tactics used
by both unions and management to secure a favourable agreement are,
(refer to Figure 8.5):
Figure 8.5: Best tactics
Now, let us discuss the best tactics in greater detail.
(i) Conflict based

Each party is uncompromising, takes a hard line and resists any
overtures for compromise or agreement. Typically, what happens is
that one party mirrors the other party's actions.
(ii) Army truce

Each party views the other as an adversary. Although they are
adversaries, an agreement must be worked out under the guidelines
specified by the law. In fact, the law is followed to the letter to reach
an agreement.
(iii) Power bargaining

Each party accepts the other party with the knowledge that a balance
of power exists. Hence, it would be unproductive to pursue a strategy
of trying to eliminate the other party in the relationship.
(iv) Accommodation
Both parties adjust to each other. Positive compromises, flexibility and
tolerance are used, rather than emotion and raw power. Most
managers and union leaders use this tactic for the bulk of union-
management bargaining issues.
(v) Cooperation
Each side accepts the other as a full partner. This means that
management and the union work together not only on everyday
matters but also in difficult areas such as technological change,
improvements in quality of work life and business decision-making.

Bargaining in „good faith‰ is important. Both parties consider threats
and abusive language as weak tactics. Logical presentations, good and
calm manners seem to be more effective than threats. If either party
does not bargain in good faith, unfair labour practices can be charged.
The costs, publicity and hostility associated with not bargaining in

good faith are usually too significant to ignore. This does not mean
the union and management must agree with each other on all issues.
In fact, the very essence of collective bargaining is disagreement and
negotiation. Lack of good faith would include:
(i) Unwillingness to make counter proposals;
(ii) Constantly changing positions;
(iii) Usage of delaying tactics;
(iv) Withdrawing concessions after they have been made; and
(v) Refusal to provide necessary data for negotiations.

(e) Reaching a Formal Contractual Agreement
Once an agreement is reached, it is put in writing in a language as precise,
simple and unambiguous as possible and signed. A formal signing
ceremony is held with an invited guest from the Ministry of Human
Resources as witness. Media coverage would reflect well on the parties
involved and illustrate the harmonious relationship between the company
and union.
Each side will proceed with a post-mortem to evaluate the extent of their
success in securing their objectives and make a note of those strategies and
tactics that had been proved effective. This is useful for the subsequent
round of bargaining.
After resolving their differences and agreeing on contract language with

management, the union negotiators must submit the tentative agreement to
the members for ratification. Ratification usually requires a simple majority
vote.

SELF-CHECK 8.11
1. Describe items that need to be prepared in the pre-negotiation stage

of the collective bargaining process.
2. Who are the negotiators for the employer and union during the
collective bargaining process?
3. Explain bargaining strategy and tactics that can be used by the
employer and union for collective bargaining.
8.12 COLLECTIVE AGREEMENT

Once the negotiations through collective bargaining are successful, the trade
union and employer may conclude a collective agreement (CA). A collective
agreement is an agreement in writing between an employer or employer union
on one hand, and an employee union on the other, relating to the terms and
conditions of employment and work of workmen or concerning relations
between such parties (Industrial Relations Act, 1967).
The Industrial Relations Act 1967 provides that the collective agreement shall be
in writing and signed by the parties to the agreement or by persons authorised in
that behalf. It shall set out the terms of the agreement and shall, where
appropriate:
(a) Name the parties to the agreement;
(b) Specify the duration of the agreement which shall not be less than three
years from the date of commencement of the agreement;
(c) Prescribe the procedure for modification and termination of the agreement;
and
(d) Specify the procedure for the resolution of any question that may arise as to
the implementation or interpretation of the agreement, by reference of any
such question to the Industrial Court for a decision.

The Act requires the submission of every collective agreement to the Industrial
Court for approval. The Court may amend the agreement if it does not comply
with the law before approving it. The collective agreement regulates the
relationship between the employer and its employees for the set period. If the
employer fails to comply with the terms contained in the collective agreement,
the union or individual employee can lodge a complaint to the Industrial Court.
It is important to note that the principle of collective bargaining and collective
agreement do not apply to the Malaysian public sector.
In Malaysia, collective bargaining and collective agreement are regulated by the

Industrial Relations Act 1967 (Part IV). Malaysian industrial law prescribes the
following prerequisites for collective bargaining to exist and be effective:
(i) Ensures the freedom of workmen to form and join a trade union and
participate in its lawful activities;
(ii) Requires the employer to recognise the trade union as the sole bargaining
agent if it has sufficient membership;
(iii) Defines the scope of collective bargaining in order to enable the parties to
know what bargaining demands they can negotiate;
(iv) Imposes on both parties an obligation to bargain in good faith or negotiate

with each other with a sincere desire to reach an agreement; and
(v) Ensures the smooth administration of the contract by providing for both the
interpretation and implementation of the provisions of the collective
bargaining.

Once a trade union is given recognition, it may invite an employer or groups of
employers to commence collective bargaining and vice versa. However, an
employer will rarely initiate a collective bargaining. The invitation is made in
writing and sets out the proposals for a CA. Upon receiving the invitation, the
employer or trade union of employers must reply in writing within 14 days from
receipt of the invitation, notifying acceptance or otherwise of the invitation.
Collective bargaining must commence within 30 days from the date of
notification of acceptance.
Section 13(3) of the Industrial Act 1967 stipulates six matters, which trade unions
may not include in their proposals for negotiation in a collective bargaining.
These matters are described as managerial prerogatives. The six matters are:
 The promotion of a workman from one grade or category to a higher one;
 The transfer of workmen within the employer's organisation or
establishment;
 The employment of any person in the event of a vacancy arising in an
establishment;
 The termination of the services of a workman by reason of redundancy;
 The dismissal and reinstatement of a workman; and
 The assignment or allocation of duties to a worker.

SELF-CHECK 8.12
1. Define collective agreement.

2. List six matters that trade unions may not include in their
proposals for negotiation in collective bargaining.
8.13 IMPACTS OF COLLECTIVE BARGAINING

ON EMPLOYEES AND EMPLOYERS
There are two categories of impacts of collective bargaining, which are:
(a) On employees; and
(b) On employers.
Let us discuss the categories in more detail.
8.13.1 Impacts of Collective Bargaining on Employees

Collective bargaining provides a uniform set of issues, which apply, to all
bargaining units such as wages increases, terms and conditions of work. Uniform
provisions such as these ensure a more egalitarian atmosphere in the workplace
and tend to reduce the uncertainty associated with personnel practices and
procedures.
Through the institution of a collective bargaining, employees obtain access to a

formal grievance procedure through which they can contest management's
personnel practices and procedures. Employee power is increased through the
threat or use of unfair labour practice charges if the employer violates certain
federal labour law provisions as well as through work stoppages via the
economic strike.
Very often, however, employees lose their individual power to bargain with the
employer. Instead of annually negotiating a salary or wage increase on an
individual basis, employees are forced to accept a standardised wage scale or
promotion system in which the roles of superior job performance, meritorious
accomplishments and exceptional initiative and reliability are largely ignored.
Although an arrangement of this nature may be perfectly acceptable to many
employees, the more ambitious and upwardly mobile worker may feel that such
a system is both confining and frustrating.
Lastly, collective bargaining provides employees with an opportunity to release

tension and gives them a voice. It eliminates abuse and often provides a sense of
participation and commitment.
8.13.2 Impacts of Collective Bargaining on Employers

Unionisation has a potentially profound impact on the management and
operational performance of a company. In any collective bargaining,
management typically loses much of its unilateral discretion on personnel
matters. However, even without formal collective bargaining, management never
has complete discretion. It is subject to government regulations and market
pressures. Furthermore, it is often forced to engage in informal, implicit
bargaining with its employees. For example, unless it provides acceptable
working conditions and wages, employees may leave, sabotage or evade work.
Undeniably, collective bargaining strengthens the employees' hands through

their trade unions in negotiations. Trade unions have forced some organisations
into modifying personnel practices and policies that had become obsolete and a
source of employee morale problems. In this sense also, it brings into the open
employees' dissatisfaction about the workplace.
Management has to enforce greater uniformity in personnel practices and

policies. In a way, this helps to lighten their burden when the management has to
make tough decisions on matters such as individual pay raises, promotions and
disciplinary matters.
Workers who have the benefits of collective bargaining generally enjoy higher
wages, better benefits, fewer injuries, narrower wage dispersions and greater
equality between genders and ethnic groups. Through rising labour costs,
collective bargaining reduces turnover and better-qualified employees are hired.
It may increase efficiency, although this is debatable.
For labour-intensive firms whose product, price and competitive edge are
heavily affected by the cost of labour, unionisation can be difficult for the
company. For example, an organisation that spends 50% to 70% of its budgets for
personnel expenditures will be in serious financial problem if unionisation puts
further pressure on it to increase the pay level ă especially when it also faces stiff
competition and rising non-labour costs. Time (number of man-hours) is lost also
through strikes and negotiation.
Unionisation also reduces management's flexibility and makes it more difficult

for management to adapt to technological and market changes. Unions are
thought to hinder production and efficiency through the enforcement of certain
work rules and procedures. Unions may protect less desirable employees whose
performance is sub-standard.
SELF-CHECK 8.13
Describe the impact of collective bargaining on employees and

employers.
ACTIVITY 8.2
Case Study: You are Out of What?
Ahmad eagerly drove his new company pickup onto the construction site. His
employer, Bina Setia Construction Sdn Bhd, had just assigned him to supervise
a crew of 16 equipment operators, oilers and mechanics. This was the first
unionised crew Ahmad had supervised, and he was unaware of the labour
agreement in effect that carefully defined and limited the role of supervisors.
As he approached his work area, he noticed one of the cherry pickers (a type of
mobile crane with an extendable boom) standing idle with the operator beside
it. Ahmad pulled up beside the operator and asked, „WhatÊs going on here?‰
„Out of gas,‰ the operator said.
„Well, go and get some,‰ Ahmad said.
The operator reached to get his thermos jug out of the toolbox on the side of
the crane and said, „The oilerÊs on break right now. He will be back in a few
minutes.‰
Ahmad remembered that he had a five-gallon can of gasoline in the back of his
pickup. So he quickly got the gasoline, climbed on the cherry picker, and
started to pour it into the gas tank. As he did so, he heard the other machines
shutting down in unison. He looked around and saw all the other operators
climbing down from their equipment and standing to watch him pour the
gasoline. A moment later, he saw the union steward approaching.
(a) Why did all the operators shut down their machines?
(b) If you were Ahmad, what would you do now? Explain.
Adapted from Mondy, R. W. (2008). Human resource management (10th ed.).

Upper Saddle River, New Jersey: Pearson Prentice Hall.
 Industrial relations is also known as employee, labour or employment

relations. It is about the relationships between employees and their
employers.
 There are three participants in the industrial relations framework:

(a) Employees and their unions;
(b) Management; and
(c) Government.
 The four steps in the labour relations process are:
(a) Workers seek collective representation;
(b) Union begins the organising process;
(c) Collective negotiations lead to a contract; and
(d) Contract is administered.
 The objectives of a labour union are:
(a) To improve the living standards and economic status of its members;
(b) To enhance and, if possible, guarantee individual security against
threats and contingencies that might result from market fluctuations,
technological change, or management decisions;
(c) To influence power relations in the social system in ways that favours
and do not threaten union gains and goals;
(d) To advance the welfare of all who work for a living, whether union
members or not; and
(e) To create mechanisms to guard against the use of arbitrary policies
and practices in the workplace.
 Individuals join unions for many reasons, such as dissatisfaction with
management, compensation, job security, managementÊs attitude, need for a
social outlet, opportunity for leadership, forced unionisation and peer
pressure.
 There are five steps needed for a union organising campaign.
 The unionisation of employees can affect managers in a few ways Perhaps the
most significant one is the effect it can have on the prerogative exercised by
management in making decisions about employees. Furthermore,
unionisation restricts the freedom of management to formulate policy
unilaterally and can challenge the authority of supervisors.
 The most powerful level in the union structure is the national union. The
national union is governed by a national constitution and a national
convention of local unions, which usually meets every two or five years.
Elected officers, aided by an administrative staff, conduct the day-to-day
operation of the national union.
 The basic element in the structure of Malaysian labour movement is the local
union (enterprise or in-house union). To the individual union member, it is
the most important level in the structure of organised labour. Through the
local union, the individual deals with the employer on a day-to-day basis.
Some of them are affiliated with the national union.
 The union-free strategies and tactics are:
(a) Effective first-line supervisors;
(b) Union-free policy;
(c) Effective communication;
(d) Trust and openness;
(e) Effective compensation programmes;
(f) Healthy and safe work environment; and
(g) Effective employee relations.
 The industrial relations system in Malaysia is largely shaped by the statutory
provisions in the Trade Unions Act, 1959 and the Industrial Relations Act,
1967.
 Collective bargaining is a process that involves the negotiation, drafting,
administration and interpretation of a written agreement between an
employer and a union for a specific period.
 A number of factors affect the process of collective bargaining. Economic
conditions such as inflation rates, unemployment levels as well as geographic
differences in economic conditions affect the collective bargaining process.
 The practice of outsourcing as well as the other alternatives to recruitment
has weakened unions' strength (low membership) to a certain extent and
subsequently their bargaining strength for the size of the permanent
employees has reduced considerably.
 Technological changes also affect collective bargaining. Unions have
frequently attempted to control technological change in order to protect job
opportunities. International forces may have a profound impact on labour--
management relations, especially for firms that take advantage of less
expensive foreign labour. In Malaysia, the federal laws guide the collective
bargaining process as they govern every facet of union-management
relations.
 In a collective bargaining, both parties attempt to receive concessions that
will help them achieve their objectives. This entails a lot of preparation work
during the pre-negotiation period and the follow-up in terms of the
implementation of the agreement.
 Both union and management maintain data of all types. It is also important to
check the background of the union negotiators. This will allow management
to interpret the style and personalities of these negotiators. Management will
also look into the union's financial strength, its total membership, the power
structure and internal problems that might weaken its position.
 It is important that the employer and union select their negotiators carefully
because this can determine the outcome of the collective bargaining. It is not
only the skills and experience that are important but also the negotiators
must be patient, have strong communication skills, physically fit to withstand
long sessions and very knowledgeable of the employment laws and the
Malaysian industrial relation system. They will be responsible for both the
pre-negotiation preparation and the negotiation itself.
 Two elements commonly found in collective bargaining strategy and tactics
are resistance points and the use of trade-offs to reach an agreement.
 Bargaining in „good faith‰ is important. Both parties consider threats and
abusive language as weak tactics. Logical presentations, good and calm
manners seem to be more effective than threats.
 Once an agreement is reached, it is put in writing in a language as precise,
simple and unambiguous as possible and signed. After resolving their
differences and agreeing on contract language with management, the union
negotiators must submit the tentative agreement to the members for
ratification.
 A collective agreement is an agreement in writing between an employer or
employer union on one hand, and an employee union on the other, relating to
the terms and conditions of employment and work of workmen or
concerning relations between such parties.
 Through the institution of a collective bargaining, employees obtain access to
a formal grievance procedure through which they can contest management's
personnel practices and procedures. Employees lose their individual power
to bargain with the employer. Collective bargaining provides employees with
an opportunity to release tension and gives them a voice. It eliminates abuse
and often provides a sense of participation and commitment.
 In any collective bargaining, management typically loses much of its
unilateral discretion on personnel matters. Management has to enforce
greater uniformity in personnel practices and policies. For labour-intensive
firms whose product, price and competitive edge are heavily affected by the
cost of labour, unionisation can be difficult for the company. It reduces
management's flexibility and makes it more difficult for management to
adapt to technological and market changes.
Collective Agreement National unions

Collective bargaining Union
Consumer Price Index (CPI) Industrial Relations Act, 1967
Industrial relations Trade Unions Act, 1959
Labour relations
Local union
1. Outline the approaches that management may take in their

relationship with trade unions.
2. Discuss the concept of „good industrial relations.‰ Evaluate the

extent to which good industrial relations strategy could contribute
to organisational efficiency, profitability and industrial harmony.
3. Consider the latest development of trade unionism in Malaysia.

Critically examine factors that cause the decline or increase (not
merely members, but also roles) in unionisation in Malaysia. Have
unions outlived their usefulness to workers and society? Discuss
and support your arguments with some examples.
4. Carefully examine what has been the trend of Collective Bargaining

in Malaysia. In your opinion, what are the factors that may improve
the effectiveness of Collective Bargaining?
Maimunah, A. (2007). Malaysian industrial relations and employment law (6th

ed.). Kuala Lumpur: McGraw-Hill.
Mondy, R. W. (2008). Human resource management (10th ed.). Upper Saddle

River, New Jersey: Pearson Prentice Hall.
Open University Malaysia. (2006). BMHR5103 Human resource management

course guide, reading 1: The dynamics of labour relations, pp. 123-140.

course guide, reading 2: Malaysian Industrial Relations: A legal framework,
pp. 141-171.

course guide, reading 3: Collective bargaining in Malaysia: The process and
regulations, pp. 172-195.
Stone, R. J. Human resource management (5th ed.). Queensland: John Wiley &
Sons Australia
Topic  Occupational
9 Health and
Safety
LEARNING OUTCOMES
1. Identify the objective of Occupational Safety and Health Act
(OSHA);
2. Describe the sexual harassment and violence in workplace; and
3. Evaluate the Occupational Safety and Health practices that can be
used by employers.
 INTRODUCTION
Companies should be proactive in maintaining a safe and healthy working
environment for their workers. Do you know that there are two Acts in
governing the safety of the workplace in Malaysia? The two Acts governing the
safety of the workplace in Malaysia, are the Occupational Safety and Health Act
(OSHA) 1994 and the Factories and Machinery Act 1967. MalaysiaÊs work-
related accidents rate is high compared to other developed countries. In 2005,
the rate was 5.5 accidents per 1,000 employees. The Social Security Organisation
(SOCSO) paid RM890 million to workers involved in work related accidents in
2005. Don't you think that instead, this money could be used for other purpose if
there were less number of industrial accidents?
In Malaysia, the Department of Occupational Safety and Health (DOSH) enforces

the rules and regulations on safety. DOSH inspects the companies regularly and
look into complaints and major accidents. The National Institute of Safety and
Health (NIOSH) trains workers, do consultancy projects and disseminate safety
and health information in Malaysia.

Meanwhile, the purpose of Occupational Safety and Health Act (OSHA) is to
ensure every working person a safe and healthful workplace. Supervisor and
managers of the organisation play a key role in monitoring workers for safety.
238  TOPIC 9 OCCUPATIONAL HEALTH AND SAFETY
Workers in turn have a responsibility to act safely. A commitment to safety on

the part of top management is an important aspect any safety programme.
9.1 OCCUPATIONAL HEALTH AND SAFETY

How do you practise a safety culture? A safety culture should be a part of the
companyÊs culture. Senior managers of the companies should commit to
reducing accidents at the working place. Workers should participate actively in
safety-related matters. In a safety culture, both employers and employees should
continuously maintain safety and decrease the number of accidents.
9.1.1 Workplace Accidents

Workplace accidents have bad effects on the companies and their employees.
Organisations suffer in terms of financial loss, reduced output and bad publicity,
while their workers have low morale as a result of accidents at the workplace.
The company will need to pay medical expenses to their injured employees. In
fact, some companies bought insurance for such matters. However, the premium
for the accident insurance paid by the company may increase if it has a history of
frequent workplace accidents. Workplace accidents can also cause damage to the
machinery, raw materials and finished goods.
When investigating an accident, production will be stopped, hence causing a loss in

output. Workers will be on medical leave due to their injuries and machines need to
be repaired. The morale of the injured employees will be low. Other workersÊ morale
in the same department will be affected. Employees will look for jobs in other
companies that have lower rate of industrial accidents. Usually, serious workplace
accidents are published in the newspapers, giving a bad image to the companies
involved. The bad publicity of the company may turn away potential job applicants
and investors.

There are two categories of accidents that you need to learn, namely:
(a) types of accident; and
(b) causes of accidents.
Let us now look at the types of accidents:

(i) A near miss, where no worker was injured but there may be damages to the
asset;
(ii) An employee is injured and needs first aid treatment;
(iii) An employee is injured and temporarily disabled;
TOPIC 9 OCCUPATIONAL HEALTH AND SAFETY  239
(iv) An employee is injured and permanently disabled; and

(v) An employee is killed as the result of the workplace accident.
According to SOCSO, the most common causes of accidents are falling objects,
being caught in an object, and slips as shown in Figure 9.1. Some workers like to
play around near machinery that is still operating. This act is dangerous as it can
result in a serious accident. Other workers do not like to wear safety equipment
such as goggles, hand gloves and earplugs when handling dangerous materials
or working with hot, noisy and heavy machines. Fatigue due to long working
hours, boredom, carelessness, stress and lack of sleep can cause workplace
accidents. Young and inexperienced employees are prone to workplace accidents.
Figure 9.1: Example of an act which can cause accident at the workplace
Source: http://todaysfacilitymanager.com/facilityblog/wp-
content/uploads/workplace_safety.jpg
The following video will show a scenario on how by thinking safety first, we can
avoid unnecessary accidents. Click on the play button to view the video clip.
http://www.youtube.com/watch?v=WX6iCFXz2Gc&feature=related.
9.1.2 Occupational Health

At the workplace, the common health hazards are chemicals, toxic materials,
dust, smoke, fume, radiation, high noise level and temperature that is too high or
too low (see Figure 9.2). Employees using computers can experience eye-strain,
neck pain, back pain and shoulder pain. Cigarette smoke, bad air quality at
workplace, back pain due to poorly designed chair, muscle strain due to carrying
heavy load and skin disease due to contact with toxic materials are some of the
occupation health hazards suffered by workers. These occupational health
hazards should be addressed in a safety and health policies and programmes,

including campaigns on creating awareness for such issues among employees in
the company. Can you give some example of health hazards at your workplace?
Have you experienced any?

Figure 9.2: Examples of health hazard sign
Source: http://www.nirma.co.za/images/hazard.jpg
9.1.3 Workplace Safety Policies and Programmes

Companies that are concerned with the safety of their employees should
implement a safety policy and various safety programmes. A safe working
environment is important for a company that places high importance on
productivity and a dedicated workforce. According to the Occupational Safety
and Health Act 1994, companies with more than five workers must have a safety
policy. Do you think that your company have a safety policy?
Now, let us look at some of the details in safety policy. Among them are:
(a) A statement indicating the companyÊs commitment to having a safe and
healthy working environment.
(b) A person accountable for safety in the company. However, it should be
clear that all employees are responsible for their own safety at the
workplace.
(c) Procedures to implement safe practices at workplace are clearly described.

The safety policy should be made available to all employees in the company.
Briefings on the contents of safety policy should be conducted so that all
employees understand the importance of working safely. The employees should
be clear on how the safety policy will be implemented by the company. Each
worker should receive a copy of the safety policy. The safety policy may be
reviewed from time to time to determine if it is still relevant to the companyÊs
needs.

What about safety programme? A safety programme covers many safety-related
issues. The top management of the company should be committed to safety in
their company. Only when the top management is concerned with safety, will the
middle management, supervisors and workers also take safety matters seriously.
Top management can indicate their seriousness on safety issues by allocating
sufficient budget for safety and health equipment and activities, being
chairpersons of safety committees, being involved in various safety activities and
following safety rules and regulations at all times. Do you involve in any safety
programme?
A manager responsible for safety and a safety committee can be appointed by the
top management of the company to handle operational safety issues. The safety
manager should be a senior person in the company that has enough influence to
make sure that a proper safety procedure is followed by all departments in the
company. The chairperson of the safety committee should be a senior manager
and the committee consists of representatives from various departments in the
company and the trade union, if the workers belong to a union. The safety
committee creates policies, rules and regulations on safety and health matters,
maintain records on workplace accidents and health issues, investigate
workplace accidents, plan and organise safety and health awareness campaigns,
and suggest proper safety equipment to be purchased by the company. In large
companies, a safety committee can be formed by each department to help the
main safety committee in implementing various safety and health activities at the
departmental level. Employees in each department can give their feedback on
various health and safety matters to its department safety committee, which then
can be communicated upwards to the companyÊs main safety committee.
The companyÊs safety and health awareness programmes must be able to

communicate to all employees that they are responsible for their own safety and
health at the workplace. This message should be continuously repeated to the
employees. There are many workplace accidents that have happened due to
employees skipping certain procedures that are meant to keep them safe and
healthy. Companies can take disciplinary action on employees that do not follow
safety procedures.

The safety committee should keep a proper record of workplace accidents so that
the causes of accidents can be determined and suggestions on improvement can
be made to prevent or minimise such accidents in the future. Record keeping is
also important as the Social Security Act, WorkmanÊs Compensation Act and the
Occupational Safety and Health Act require the reporting of workplace accidents.
These reports are needed for the injured employees to claim their benefits.
Safety committee members should attend training courses on safety. All workers
should be trained on how to do their work safely. The safety manager or safety
management consultants can conduct training for the companyÊs employees.
Training can be useful to minimise the chances of workplace accidents, provided
that safety rules and regulations are properly enforced in the company. A safety
and health campaign is useful to create safety and health awareness among
employees in the company. The campaign can be done on a yearly basis. During
the campaign, various safety and health-related activities such as training,
seminars, games and competitions can be organised for a period of one month.
Personal protective equipment such as helmets, goggles, ear plugs, aprons, hand
gloves and safety boots are useful to minimise accidents. Unfortunately, there are
many workers that do not like to wear such protective equipments. Some of them
feel uncomfortable wearing such equipments while others think that it is not
necessary for them to do so. However, the company should be firm on insisting
that workers wear the safety equipment for their own protection, especially when
doing a dangerous task, handling toxic materials or working at places that have a
high risk of getting an accident.
9.2 SEXUAL HARASSMENT AND WORKPLACE

VIOLENCE
How do you define sexual harassment and workplace violence? Let us now read
through the explanation. The following are the definition and explanation on
workplace sexual harassment and workplace violence.
9.2.1 Workplace Sexual Harassment

Before we look into the definition of sexual harassment, let us look at the
following video clip. Click on the play button to view the video clip.
http://www.youtube.com/watch?v=TfIUivftMyo.
Have you came across or experience such situation from the video? What was
going on in your mind when that happens? This is a classic example of a sexual
harassment that can occurs at the workplace.
The Ministry of Human Resources, Malaysia has issued the Code of Practice on
Preventing and Eradicating Sexual Harassment in the Workplace in 1999.
According to this code, the definition of sexual harassment is:

„Any unwanted conduct of a sexual nature having the effect of verbal,

non-verbal, visual, psychological or physical harassment.‰
The Code gives a guideline to the companies on how to handle sexual

harassment. All companies should have a policy of zero tolerance to sexual
harassment. Victims of sexual harassment usually could not do their work well.
The victims of sexual harassment face stress due to their predicament (see Figure
9.3). Companies need to take active measures to prevent sexual harassment at the
workplace. The policy of zero tolerance on sexual harassment at the workplace
should be communicated to all employees in the company. All workers should be
clear on the definition of sexual harassment, so that they do not do it. The
company needs to have a grievance procedure for the victims of sexual
harassment to report these incidents so that a proper investigation can be
conducted. Employees found guilty of such offences should be punished.
Figure 9.3: Example of sexual harassment

Source: http://211.167.236.236/zt/magazine/pic/%E5%A6%87%E5%A5%B3.jpg
If you would like to know more on the sexual harassment, see the following
video. Click on the play button to view the video clip. http://www.youtube.
com/watch?v=1Nfs7dIZSs0&feature=related.
9.2.2 Workplace Violence

Let us ponder at Figure 9.4. The company should ensure that the working
environment is free of violence. An act of violence or attempted violence is a
major misconduct. Therefore, if an employee is guilty of an act of violence or
threat of violence, the company should take disciplinary action against that
person. Workplace violence is defined as an act where the employee is

threatened, abused or assaulted at the workplace by another employee or another
person not employed by the company. It also includes the act of bully and
harassment. The company should create a procedure to handle violence at the
workplace. This procedure needs to be communicated to all employees so that
when an act of violence happens, they know what to do. Enforcement of rules
and regulations on violent acts at the workplace should be taken seriously by the
company, so that all employees know that any act of violence will not be
condoned by the employer.
Figure 9.4: Workplace violence

Source: http://www.sreejith.net/wp-content/uploads/2006/09/angry-guy.jpg
SELF-CHECK 9.1
1. Identify the issues involved in occupational health and safety.

Discuss each issue briefly.
2. Explain the issues involved in sexual harrassment and
workplace violence.

9.3
CASE STUDY
Let us enhance our understanding by discussing the case study below.
The Disaster at Syarikat Zumaju Sdn Bhd
Nathan was exhausted. He had a bad headache caused by the stress of what had
been a very long day. As Factory Manager, he was responsible for the production
of all Syarikat ZumajuÊs products and the 200 production workers. The company
made mostly steel filing cabinets, which sold very well, as well as a few other
minor items such as metal safes for the home consumer. The company used to
have a Safety and Health Officer, but after he had resigned six months ago, the
position had remained vacant.
Nathan had received a telephone call from a night-shift supervisor at 4.00am,

asking him to come to work as there had been a bad accident. When he arrived,
thirty minutes later, he was briefed by the supervisor as to what had happened.
A worker on a metal cutting machine had slipped in a pool of oil, which had
leaked from his machine. In trying to stop his fall, he had grabbed the machine,
which had clamped down on his hand cutting off two fingers of his right hand in
the process and mangling the hand badly. The supervisor had called the nearest
hospital for an ambulance as the worker was losing a lot of blood, but the
ambulance had taken nearly 35 minutes to arrive. In the meantime, the worker
continued to bleed and nobody knew what to do to help him. All the other
workers had stopped their machines after the accident as they were not in the
mood to continue work. The supervisor had not ordered them back to work,
especially as two of the women in the same section were semi-hysterical.
Later that morning, Nathan had conducted a preliminary investigation into the
accident and had reported the incident to the Department of Occupational Safety
and Health (DOSH). He knew that they would send out an officer to investigate
and he wanted to be ready for any questions they might ask. He also realised that
in the last 12 months, the company had neglected the safety of its workers in the
interests of ensuring they achieved the production targets set for them. He
suspected that DOSH might even issue a stop-work order, which would really
upset the companyÊs chief executive officer, as they had a huge number of
cabinets to complete in the next month for a customer who had promised them
further orders if they could supply according to specification and on time.
Nathan had prepared a list of some of the issues that could have led to the
accident. They included:
(a) The worker concerned had been working maximum overtime for the last
two months and had volunteered for the night-shift because he earned a
higher rate of pay when he worked at night.
(b) The worker had only been with the company for three months and, so far,
had not attended any safety training.
(c) Many of the workers in the cutting section did not wear the gloves
provided to them by the company. They complained that the materials
made their skin unbearably itchy.
Nathan also checked the records of the CompanyÊs Safety and Health Committee.
The last meeting was five months ago. He did not look forward to the visit from
DOSH officer expected any time now.
Questions
1. Syarikat Zumaju is not complying with the Occupational Safety and Health
Act in a number of ways. Identify these.
2. What steps would you recommend to overhaul the safety programme in

the company?
Source: Maimunah Aminuddin (2008). Human resource management: Principles and

practices. Selangor: Oxford University Press.
 There are two Acts governing the safety of the workplace in Malaysia,
namely the Occupational Safety and Health Act (OSHA) 1994 and the
Factories and Machinery Act 1967.
 In Malaysia, the Department of Occupational Safety and Health (DOSH)
enforces the rules and regulations on safety.
 The purpose of Occupational Safety and Health (OSHA) is to ensure every
working person a safe and healthful workplace. Supervisor and managers of
the organisation play a key role in monitoring workers for safety. Workers in
turn have a responsibility to act safely.
 Workplace accidents have bad effects on the companies and their employees.
Organisations suffer in terms of financial loss, reduced output and bad
publicity while their workers have low morale as a result of accidents at the
workplace.
 There are two categories of accidents, namely types of accident and causes of
accidents.
 At the workplace, the common health hazards are chemicals, toxic materials,
cigarette smoke, bad air quality at workplace, back pain due to poorly
designed chair, or muscle strain due to carry heavy load, are some of the
occupation health hazards suffer by workers.
 According to the Occupational Safety and Health Act, companies with more
than five workers must have a safety policy. The safety policy should be
made available to all employees in the company. Briefings on the contents of
safety policy should be conducted so that all employees understand the
importance of working safely.
 A safety programme covers many safety-related issues. The top management
of the company should be committed to safety in their company. Only when
the top management is concerned with safety, then the middle management,
supervisors and workers will also take safety matters seriously.
 According to the Code of Practice on Preventing and Eradicating Sexual
Harassment in the Workplace 1999, the definition of sexual harassment is
„any unwanted conduct of a sexual nature having the effect of verbal, non-
verbal, visual, psychological or physical harassment.‰
 The company should ensure that the working environment is free of violence.
An act of violence or attempted violence is a major misconduct. Therefore, if
an employee is guilty of an act of violence or threat of violence, the company
should take disciplinary action against that person.
Occupational health Workplace safety policy and programme

Workplace accidents Workplace violence
Workplace sexual harassment
Maimunah Aminuddin. (2008). Human resource management: Principles and

practices. Selangor: Oxford University Press.
Topic  Legal
10 Environment
LEARNING OUTCOMES
1. Evaluate the legislation practices in Malaysia; and
2. Discuss the Employment Act 1955, Employees Provident Fund Act
1991 and EmployeesÊ Social Security Act 1969.
 INTRODUCTION
Welcome to Topic 10! This is the final topic for this module. This module will
discuss the legal environment in greater detail. There are a number of legislations
that govern human resource practices in Malaysia. The legislations are important
to safeguard the interests of employees as well as employers. They are needed to
protect the employees from possible unfair treatment by their employers. The
aim of this topic is to provide a better understanding on the important Acts
related to employment in Malaysia. The important Acts that you need to know
are:
 Employment Act 1955;
 Employees Provident Fund Act 1991; and
 EmployeesÊ Social Security Act 1969.
10.1 EMPLOYMENT ACT 1955

The Employment Act, 1955 is probably the most important legislation when it
comes to dealing with employment issues in Malaysia. However, this Act is
applicable to West Malaysia only. The Sarawak Labour Ordinance is used in
Sarawak while the Sabah Labour Ordinance is used for Sabah. Employment Act
TOPIC 10 LEGAL ENVIRONMENT  249
1955 forms the principle laws for both of these Ordinances. According to the Act,
an employee is defined as:
(i) A person, irrespective of his occupation, who has entered into a contract of
service with an employer where such person's wages do not exceed one
thousand five hundred ringgit a month.
(ii) Any person who, irrespective of the amount of wages he earns in a month,
has entered into a contract of service with an employer in which:
 He is engaged in manual labour including being an artisan or
apprentice;
 He is engaged in the operation or maintenance of any mechanically-
propelled vehicle operated for the transport of passengers or goods;
 He supervises other employees engaged in manual labour employed by
the same employer;
 He is engaged as a domestic servant.

Let us now look into the terms and condition for employment in more detail.

(a) Contract of Service
The Employment Act 1955 covers workers that have a contract of service
with their employers (Maimunah, 2007). The requirements needed for a
contract of service as stated in the Act are listed below:
(i) A contract of service exceeding one month or for the performance of a
specified piece of work, where the time required for the completion of
the work exceeds one month, shall be in writing. This contract of
service should be prepared by the employer.
(ii) In every written contract of service, a clause setting out the manner in
which such contract may be terminated by either the employer or the
employee should be mentioned.
(iii) Either party to a contract of service may at any time give to the other
party notice of his intention to terminate such contract of service.
(iv) The length of such notice shall be the same for both employer and
employee and shall be determined by a provision made in writing for
such notice in the terms of the contract of service. However if there is
no such provision in writing, it should not be less than:
 Four weeks' notice if the employee has been employed for less
than two years;
250  TOPIC 10 LEGAL ENVIRONMENT
 Six weeks' notice if he has been employed for two years or more
but less than five years;
 Eight weeks' notice if he has been employed for five years or
more.
(v) Where the termination of service of the employee is due to:
 The employer has ceased, or intends to cease to carry on the
business for the purposes of which the employee was employed;
 The employer has ceased or intends to cease to carry on the
business in the place at which the employee was contracted to
work;
 The requirements of that business for the employee to carry out
work of a particular kind have ceased or are expected to cease;
 The requirements of that business for the employee to carry out
work of a particular kind in the place at which he was contracted
to work have ceased or are expected to cease;
 The employee has refused to accept his transfer to any other place
of employment, unless his contract of service requires him to
accept such transfer; or
 A change has occurred in the ownership of the business for the
purpose of which an employee is employed.
(vi) Such notice shall be written, and the day on which the notice is given
shall be included in the period of the notice.
(vii) Either party to a contract of service may terminate such contract of
service without notice or, if notice has already been given without
waiting for the expiry of that notice, by paying to the other party an
indemnity of a sum equal to the amount of wages which would have
accrued to the employee during the term of such notice or during the
unexpired term of such notice.
(viii) Either party to a contract of service may terminate such contract of
service without notice in the event of any wilful breach by the other
party of a condition of the contract of service.
(ix) An employer may, on the grounds of misconduct inconsistent with
the fulfilment of the express or implied conditions of his service, after
due inquiry:
 Dismiss without notice the employee;
 Downgrade the employee; or
 Impose any other lesser punishment as he deems just and fit, and
where a punishment of suspension without wages is imposed, it
shall not exceed a period of two weeks.
(x) For the purposes of an inquiry, the employer may suspend the
employee from work for a period not exceeding two weeks but shall
pay him not less than half his wages for such period.
(xi) If the inquiry does not disclose any misconduct on the part of the
employee, the employer shall give to the employee the full amount of
wages that was withheld.
(xii) An employer has broken his contract of service with the employee if
he fails to pay wages to the employee.
(xiii) An employee has broken his contract of service with the employer if
he has been continuously absent from work for more than two
consecutive working days without prior leave from his employer.
However, if he has a reasonable excuse for such absence and has
informed or attempted to inform his employer of such excuse prior to
or at the earliest opportunity during such absence, then the employee
has not broken his contract of service with the employer.
(b) Wages
In the Employment Act 1955, wages is defined as all payments in cash
payable to an employee for work done in respect of his contract of service
with the employer. A contract of service for the employee shall specify a
wage period of not more than one month.
(i) Every employer shall pay his employees their wages not later than the
seventh day after the last day of the wage period, less lawful
deductions.
(ii) The wages does not include:
 The value of house accommodation, supply of food, fuel, light,
water, or medical attendance;
 Contribution paid by the employer on his own account to any
pension fund, provident fund, superannuation scheme,
retrenchment, termination, lay-off or retirement scheme;
 Travelling allowance;
 Gratuity payable on discharge or retirement;
 Anual bonus.
(iii) It is lawful for an employer to make the following deductions:

 Deductions to the extent of any overpayment of wages made
during the immediately preceding three months from the month
in which deductions are to be made, by the employer to the
employee by the employer's mistake;
 Deductions for the recovery of advances of wages provided no
interest is charged on the advances; and
 Deductions authorised by any other written law.
(c) Maternity Allowance

Now, let us look at the terms and condition for employment in maternity
allowance. Among them are:
(i) Every female employee is entitled to maternity leave for at least sixty
consecutive days for each confinement. She is entitled to receive a
maternity allowance from her employer.
(ii) If a female employee is entitled to maternity leave but not entitled to
receive maternity allowance from her employer, she may, with the
consent of the employer, commence work at any time if she has been
certified fit to resume work by a registered medical practitioner.
(iii) Maternity leave shall not begin earlier than a period of thirty days
immediately preceding the confinement of a female employee or later
than the day immediately following her confinement.
(iv) If the registered medical practitioner appointed by the employer
certifies that the female employee as a result of her advanced state of
pregnancy is unable to perform her duties satisfactorily, the employee
is required to commence her maternity leave at any time during a
period of fourteen days preceding the date of her confinement.
(v) If a female employee abstains from work to commence her maternity
leave on a date earlier than the period of thirty days immediately
preceding her confinement, such abstention is not treated as
maternity leave. She is not entitled to any maternity allowance for the
days during which she abstains from work in excess of the period of
thirty days immediately preceding her confinement.
(vi) A female employee is not entitled to maternity allowance if at the time
of her confinement she has five or more surviving children.
(vii) Any employer who dismisses a female employee from her
employment during her maternity leave commits an offence.

(d) Rest Day

Let us also look at the terms and condition for employment in rest day.
Among them are:
(i) An employee is allowed a rest day of one whole day for each week.
(ii) An employee is not compelled to work on a rest day unless he is
engaged in work that required to be carried on continuously or
continually by two or more shifts.
(iii) If an employee employed on a daily or hourly rate of pay works on a
rest day, he should be paid according to the following terms:
 If it does not exceed half his normal hours of work, one day's
wages at the ordinary rate of pay for work done on that day;
 If it is more than half but does not exceed his normal hours of
work, two days' wages at the ordinary rate of pay for work done
on that day.
(iv) If an employee employed on a monthly rate of pay works on a rest
day, he should be paid according to the following terms:
 If it does not exceed half his normal hours of work, wages
equivalent to half the ordinary rate of pay for work done on that
day;
 If it is more than half but does not exceed his normal hours of
work, one day's wages at the ordinary rate of pay for work done
on that day.
(v) For work carried out in excess of the normal hours of work on a rest
day by an employee, he shall be paid at a rate which is not less than
two times his hourly rate of pay.
(vi) If an employee employed on piece rate who works on a rest day, he
shall be paid twice his ordinary rate per piece.

(e) Hours of Work
Let us now study at the terms and condition for employment in hours of
work. Among them are:
(i) An employee is not required to work:
 More than five consecutive hours without a period of leisure of
not less than thirty minutes duration;
 More than eight hours in one day;
 In excess of a spread over period of ten hours in one day;
 More than forty-eight hours in one week.

(ii) An employee can be required by his employer to exceed the limit of
hours and to work on a rest day, if:
 Actual or threatened accident with respect to his place of work;
 The performance of work that is essential to the life of the
community;
 Work essential for the defence or security of Malaysia;
 Urgent work to be done to machinery or plant;
 An interruption of work that was impossible to foresee; or
 Work to be performed by employees in any industrial undertaking
essential to the economy of Malaysia.
(iii) "Overtime" means the number of hours of work carried out in excess
of the normal hours of work per day.
(iv) For overtime work carried out in excess of the normal hours of work,
the employee shall be paid at a rate not less than one and half times
his hourly rate of pay.

(f) Holiday
Let us also study at the terms and condition for employment in holiday.
Among them are:
(i) An employee is entitled to a paid holiday at his ordinary rate of pay

on ten gazetted public holidays in a year, four of which shall be:
 National Day;
 Birthday of the Yang di-Pertuan Agong;
 Birthday of the Ruler or the Yang di-Pertua Negeri of the State
where the employee works, or the Federal Territory Day, if the
employee works in the Federal Territory; and
 Labour Day.
(ii) If a gazetted public holiday falls on a rest day, the following working
day is a paid holiday.
(iii) If an employee is required by his employer to work on any paid

holiday, besides receiving the holiday pay, he is also entitled to:
 If the employee is employed on a monthly, weekly, daily, or
hourly rate of pay, he shall be paid two days' wages at the
ordinary rate of pay; or
 If the employee is employed on piece rates, he shall be paid twice
the ordinary rate per piece, even though the period of work done
on that day is less than the normal hours of work.
(iv) For overtime work carried out by an employee in excess of the normal
hours of work on a paid public holiday, the employee shall be paid
three times his hourly rate of pay.
(v) An employee who works on a holiday is entitled to a travelling
allowance for that day if payable to him under the terms of his
agreement with his employer. Hovever, the employee is not entitled
to receive an increased rate of housing allowance or food allowance.

(g) Annual Leave
Let us also look at the terms and condition for employment in annual leave
in greater detail:
(i) An employee is entitled to paid annual leave of:

 Eight days for every twelve months of continuous service with the
employer if he has been employed by the same employer for less
than two years;
 Twelve days for every twelve months of continuous service with
the employer if he has been employed by the same employer for
two years or more but less than five years; and
 Sixteen days for every twelve months of continuous service with
the employer if he has been employed by the same employer for
five years or more.
(ii) If he has not completed twelve months of continuous service with the
same employer during the year in which his contract of service
terminates, his entitlement to paid annual leave shall be in direct
proportion to the number of completed months of service.

(h) Sick Leave
Now, let us also look at the terms and condition for employment in sick
leave.
(i) An employee is entitled to paid sick leave, if after examination at the

expense of the employer.
 By a employer appointed registered medical practitioner; or
 By other registered medical practitioner, if there is no employer
appointed medical practitioner, or the services of the appointed
medical practitioner can not be obtained within a reasonable time
or distance.
(ii) If there is no hospitalisation, the number of sick leave days entitled is:
 Fourteen days in each year if the employee has been employed for
less than two years;
 Eighteen days in each year if the employee has been employed for
two years or more but less than five years;
 Twenty-two days in each year if the employee has been employed
for five years or more.
(iii) If hospitalisation is necessary, the number of sick leave days entitled
is sixty days in each year.
(iv) An employee is entitled to a paid sick leave after examination by a
dental surgeon.
(v) The employer shall pay the employee his ordinary rate of pay for sick
leave. A monthly paid employee has received his sick leave pay if
there is no pay deduction for the sick leave in his monthly wages.

(i) Local Employees
Finally, let us look at the terms and condition for employment in local
employees.
(i) An employer cannot terminate the contract of service of a local
employee to employ a foreign employee.
(ii) If an employer reduces his workforce due to redundancy, the
employer cannot terminate the services of a local employee unless he
has first terminated the services of all foreign employees employed by
him in a capacity similar to the local employee.
SELF-CHECK 10.1
1. Where is the Employment Act 1955 applicable?

2. Identify some of the provisions under Employment Act
1955 and explain each provision briefly.
10.2 EMPLOYEES PROVIDENT FUND ACT 1991

Let us now study the Employees Provident Fund Act 1991.
(a) The Employees Provident Fund (EPF) is a social security institution created
based on the Employees Provident Fund Act 1991 (Act 452). It provides
retirement benefits for its members through a prudent management of their
savings. Its members are private and non-pensionable public sector
employees.
(b) All employees and employers are required to pay monthly contributions.
The amount is calculated based on the monthly wages of an employee. The
current rate of contribution is 20% of the employee's wages of which 8% is
from the employee's monthly wage while 12% is contributed by the
employer.
(c) Contributions payable by the employer for himself and on behalf of the
employee shall be paid for the first and subsequent months' wages.
(d) The amount of any contribution payable by the employer on behalf of the
employee shall be recovered by deductions from the wages of the
employee.
(e) If an employer fails to pay the contributions on behalf of his employees to

EPF, he can face imprisonment for not more than three years or be fined for
not more than ten thousand ringgit or both.
(f) If an employer deducts the employee's contributions from the wages of an

employee and fails to pay such deducted sum to the EPF, he can face
imprisonment for not more than six years or be fined for not more than
twenty thousand ringgit or both.
(g) If an employer deducts from the wages of employee the whole or any part
of the employer's contribution, he can face imprisonment for not more than
six years or be fined for not more than twenty thousand ringgit or both.
(h) If an employer fails to pay contributions on time, the employer needs to pay
the contributions and dividends that would have accrued on such
contributions.
(i) The monthly contributions are invested in Malaysian Government

Securities, money market instruments, loans and bonds, equity and
property to generate income. The EPF guarantees a minimum of 2.5
percent dividend annually. The dividend rate declared by the EPF is based
on the returns from investments made in the approved instruments.
SELF-CHECK 10.2
List the punishments that the employer can face if he fails to pay
monthly contribution to the Employees Provident Fund (EPF).

10.3 EMPLOYEES’ SOCIAL SECURITY ACT 1969

Let us discuss the following are the Employees' Social Security Act 1969 now:
(a) The Social Security Organization (SOCSO) was created in 1971 under the
Human Resources Ministry to implement and administer the social security
schemes under the Employees' Social Security Act 1969 (Act 4), namely the
Employment Injury Insurance Scheme and the Invalidity Pension Scheme.
(b) Under this scheme, the employees are protected against industrial accidents
including accidents occurred while working, occupational diseases,
invalidity or death.
(c) The SOCSOÊs functions includes the registration of employers and

employees, collecting contributions, processing benefit claims from
employees and make payments to injured employees and their dependents.
SOCSO also provides vocational and physical rehabilitation benefits and
enhances occupational safety and health awareness of employees.
(d) Under this Act, the contribution payable to the Social Security Organisation
consists of the component payable by the employer and the component
payable by the employee.
(e) The contributions have two categories:

 The first category consists of contributions payable on behalf of the
employees insured against the contingencies of invalidity and
employment injury.
 The second category consists of contributions payable on behalf of
employees insured only against the contingency of employment injury.
(f) The contribution of the first category is shared by the employer and the
employee.
(g) The contribution of the second category is paid by the employer only.
(h) The insured persons and their dependants are entitled to the following
benefits, namely:
(i) Periodical payments to an insured person in case of invalidity
certified by a an appointed medical board (invalidity pension);
(ii) Periodical payments to an insured person suffering from disablement
as a result of an employment injury sustained as an employee
(disablement benefit);
(iii) Periodical payments to such dependants of an insured person who
dies as a result of an employment injury sustained as an employee
(dependantsÊ benefit);
(iv) Payments for funeral benefit or expenses on the death of an insured
person as a result of an employment injury sustained as an employee
or while he was in receipt of disablement benefit, or of an insured
person suffering from invalidity while in receipt of invalidity pension,
or of an insured person who has not attained 55 years of age but has
completed a full or reduced qualifying period (funeral benefit);
(v) Periodical payments to an insured person who is in receipt of
invalidity pension or disablement benefit if he is so severely
incapacitated or disabled as to constantly require the personal
attendance of another person (constant attendance allowance);
(vi) Medical treatment for and attendance on insured persons suffering
from disablement as a result of an employment injury sustained as an
employee (medical benefit);
(vii) Periodical payments to dependants of an insured person who dies
while in receipt of invalidity pension, or of an insured person who has
not attained 55 years of age but has completed a full or reduced
qualifying period for survivorsÊ pension (survivorsÊ pension).
(i) An accident has arisen out of and in the course of an insured personÊs
employment when the accident occurs while the insured person:
 Is travelling on a route between his place of residence and his place of
work;
 Is travelling on a journey made for any reason which is directly
connected to his employment; and
 Is travelling on a journey between his place of work and the place
where he takes his meal during any authorised recess.

SELF-CHECK 10.3
Describe the benefits to the insured employees under the EmployeesÊ

Social Security Act 1969.

 The Employment Act, 1955 is applicable to West Malaysia only. Below are
some of the provisions under this Act:
(a) An employee is defined as a person, irrespective of his occupation, who
has entered into a contract of service with an employer where such
person's wages do not exceed one thousand five hundred ringgit a
month
(b) Under the contract of service, it shall be in writing including setting out
the manner how the contract can be terminate by either party. Notice of
termination can be given at anytime.
(c) Wages is defined as all payments in cash payable to an employee for
work done in respect of his contract of service with the employer.
(d) Every female employee is entitled to maternity leave for at least sixty
consecutive days for each confinement. She is entitled to receive a
maternity allowance from her employer.
(e) An employee is allowed a rest day of one whole day for each week.
(f) An employee is not required to work:
- More than five consecutive hours without a period of leisure of not
less than thirty minutes duration;
- More than eight hours in one day;
- In excess of a spread over period of ten hours in one day; and

- More than forty-eight hours in one week.
(g) An employee is entitled to a paid holiday at his ordinary rate of pay on
ten gazetted public holidays in a year.
(h) An employee is entitled to paid sick leave, if after examination at the
expense of the employer:
- By a employer appointed registered medical practitioner; or
- By other registered medical practitioner, if there is no employer
appointed medical practitioner, or the services of the appointed
medical practitioner can not be obtained within a reasonable time or
distance.
(i) An employer cannot terminate the contract of service of a local
employee to employ a foreign employee.
 The Employees Provident Fund (EPF) is a social security institution created
based on the Employees Provident Fund Act 1991 (Act 452). It provides
retirement benefits for its members through a prudent management of their
savings. All employees and employers are required to pay monthly
contributions. The current rate of contribution is 20% of the employee's
wages of which 8% is from the employee's monthly wage while 12% is
contributed by the employer.
 The Social Security Organisation (SOCSO) was created in 1971 under the
Human Resources Ministry to implement and administer the social security
schemes under the Employees' Social Security Act 1969 (Act 4), namely the
Employment Injury Insurance Scheme and the Invalidity Pension Scheme.
Under this scheme, the employees are protected against industrial accidents
including accidents occurred while working, occupational diseases, invalidity
or death.The SOCSOÊs functions includes the registration of employers and
employees, collecting contributions, processing benefit claims from
employees and make payments to injured employees and their dependents.
SOCSO also provides vocational and physical rehabilitation benefits and
enhances occupational safety and health awareness of employees.
Annual leave Hours of work

Contract of service Local employees
Employment Act 1955 Maternity allowance
Employees Provident Fund Act 1991 Rest day
EmployeesÊ Social Act 1969 Sick leave
Holiday Wages
Employees provident fund. Retrieved June 1, 2010, from: http://www. kwsp.

gov.my/index.php
Laws Of Malaysia, Act 265, Employment Act 1955, Incorporating All

Amendments Up To 1 January 2006, Published By The Commissioner Of
Law Revision, Malaysia Under The Authority Of The Revision Of Laws Act
1968 In Collaboration With Percetakan Nasional Malaysia Bhd, 2006.
Laws Of Malaysia, Act 452, Employees Provident Fund Act 1991
Laws Of Malaysia, Act 4, EmployeesÊ Social Security Act 1969, Incorporating All
Amendments Up To 1 January 2006,Published By The Commissioner Of
Law Revision, Malaysia Under The Authority Of The Revision Of Laws Act
1968 In Collaboration With Malayan Law Journal Sdn Bhd And Percetakan
Nasional Malaysia Bhd, 2006.
Social security organisation. Retrieved June 1, 2010, from: http://www.

perkeso.gov.my/
MODULE FEEDBACK
MAKLUM BALAS MODUL
Should you have any comment or feedback, you are welcomed to:
1. E-mail your comment or feedback to modulefeedback@oum.edu.my
OR
2. Download and fill up the feedback questionnaire from

URL: http://lms.oum.edu.my/ via myVLE
and
e-mail to modulefeedback@oum.edu.my
Thank you.
Centre for Instructional Design and Technology

(Pusat Reka Bentuk Pengajaran dan Teknologi)
Tel No.: 03-27732273
Fax No.: 03-26978702

Bmhr5103 Human Resource Management

Transféré par

Informations du document

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

Bmhr5103 Human Resource Management

Transféré par

Droits d'auteur :

Formats disponibles

BMHR5103

Module Writers: Prof Dr Rusinah Siron

Dr Chew Kok Wai

Moderators: Dr Rosmah Mohamed

Developed by: Centre for Instructional Design and Technology

Printed by: Meteor Doc. Sdn. Bhd.

First Printing, December 2010

Copyright © Open University Malaysia (OUM), March 2011, BMHR5103

Version March 2011

Topic 1 Human Resource Management: A Perspective 1

Topic 2 Job Analysis and Human Resource Planning 20

2.3.4 Impact of Technology on Job Design 40

Topic 3 Recruitment and Selection 63

Topic 5 Training and Development 112

5.2 Steps in the Training Process 116

Topic 6 Performance Appraisal 162

Topic 7 Compensation and Benefits 185

Topic 8 Employee and Industrial Relations 204

Topic 9 Occupational Health and Safety 237

Topic 10 Legal Environment 248

What will you get from doing this course? iii

How can you get the most from this course? iv

Assessment Method viii

What support will you get in studying this course? viii

How should you study for this course? ix

WELCOME TO BMHR5103 HUMAN RESOURCE

WHAT WILL YOU GET FROM DOING THIS COURSE?

Aim of the Course

Course Learning Outcomes

HOW CAN YOU GET THE MOST FROM THIS COURSE?

Please ensure that you have all of these materials.

The Human Resource Management Structure

Organisation of Course Content

WHAT SUPPORT WILL YOU GET IN STUDYING THIS

MyVLE Online Discussion

HOW SHOULD YOU STUDY FOR THIS COURSE?

2. Proposed Study Strategy

• Read the topic overview showing the headings and subheadings

Academic Writing xxvi

Details about Assignments xxviii

Paraphrases: A closely reasoned argument of an author is paraphrased but

(ii) How Can I Avoid Plagiarism?

(b) Documenting Sources

 Direct Citation Simply having a thinking skill is no assurance

 Indirect Citation According to Wurman (1988), the new disease of

Journal Article DuFour, R. (2002). The learning-centred principal:

DETAILS ABOUT ASSIGNMENT

General Criteria for Assessment of FMA

• You have considered and appreciated different points of view, including

1.1 HUMAN RESOURCE MANAGEMENT

personnel administration or personnel management. However, some experts

Table 1.1: Definition of Human Resource Management

1.2 WHAT IS HUMAN RESOURCE MANAGEMENT?

For stakeholders, an effective human resources management system is essential

Human resources management is a way of management that links people-related

The primary goal of human resource management in any organisation is to

1.2.1 Why is Human Resource Management

1.3 RESPONSIBILITIES OF HUMAN RESOURCE

Let us discuss the details of each responsibility one by one.

(a) Analysing and Designing Jobs

(b) Recruiting and Hiring Employees

(c) Training and Developing Employees

(d) Managing Performance

(e) Planning and Administering Pay and Benefits