Topic 11

Topic 11 X Human
Resource
Management
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1. Describe the meaning of human resource management;
2. Review the needs of human resources;
3. Identify the methods in intriguing the interests of qualified
candidates;
4. Explore the ability of developing qualified employees; and
5. Formulate a method of maintaining qualified employees in the
organisation.
X INTRODUCTION
Every organisation needs people to plan and implement all its activities to
achieve the goals that have been set. Therefore, employees are one of the
resources needed by an organisation. If an organisation uses high technology,
sophisticated tools and equipment, and has strong financial resources but lacks
skilful, knowledgeable and capable human resources, it will still not succeed in
any field ventured.
Therefore, many organisations have altered their method to using human

resources as one of the tools to match their competitors. This method is
frequently implemented by organisations that offer products based on services to
their customers. In this condition, only human resources could provide
satisfaction to the customers.
TOPIC 11 HUMAN RESOURCE MANAGEMENT W 185
Thus, human resource in organisations must be managed properly. A properly

managed human resource will not only give advantage in competition but also help
the organisation to achieve its goals efficiently and effectively. Human resource
management is a process of obtaining, developing and maintaining a sufficient
number of qualified employees in order to achieve goals that have been set.
11.1 DETERMINING THE NEEDS OF HUMAN

RESOURCES
An organisation is a system where human resource acts as one of the functions in
moving the system. Human resource management needs to have a relationship
which is in line with the organisationÊs strategies which have been planned.
Therefore, human resource needs to be managed properly in helping the
implementation of the organisationÊs strategies and this is considered as the
process in human resource management. Thus, an efficient and effective human
resource management must undergo processes such as determining the needs of
human resources in organisations, obtaining qualified candidates, developing
employees and maintaining qualified employees.
The effort in determining the needs of human resources needed by organisations

must be examined as carefully as possible. Table 11.1 shows that the processes of
obtaining (recruitment and selection), developing (orientation, training and
performance evaluation) and maintaining or separating employees (granting of
rewards and separation) are interdependent conditions with one another. These
conditions will not be able to be managed properly without having orderly
planning in carrying out these processes. Hence, human resource planning is
highly required.
Table 11.1: Processes of Human Resource Management
Determining the needs of human • Human resource planning

resources
Attracting qualified candidates • Recruitment/Hiring
• Selection
Development of qualified employees • Orientation
• Training
• Performance appraisal
Maintaining qualified employees • Financial rewards and job benefits
• Employee separation
186 X TOPIC 11 HUMAN RESOURCE MANAGEMENT
Human resource management is a process of using the goals and strategies of

organisations in forecasting the needs of human resources in recruiting,
developing and maintaining a qualified workforce. An organisation that has poor
or no human resource planning will face a surplus in the workforce and be
forced to find a way to reduce it or it will face a shortage of workforce which will
lead to increase in overtime costs and inability to fulfil the demand for the
companyÊs products or services.
EXERCISE 11.1
Essay Question
What do you understand about the term „human resource

management‰?
Planning human resources begins with considering the mission, strategies and
objectives of an organisation. As stated before, human resource planning is
interdependent and needs to be viewed as a part of the strategic planning of the
organisation. Fundamentally, human resource planning consists of two main
components ă job analysis and forecasting.
EXERCISE 11.2
Essay Question
State the stages of human resource management.
11.1.1 Job Analysis
SELF-CHECK 11.1
What do you understand about job analysis?
A particular job area exists in an organisation as a result of the formation of goals

that need to be achieved. Job output or the combination of job outputs are the
ones that lead to the achievement of goals, that is, only if the job is performed
successfully. Thus, what is the way to ensure the success of a particular job? It is
simple ă by performing job analysis in order to find out about the job
requirements and selecting a workforce that is capable and qualified to perform

the particular job.
Job analysis is a detailed process regarding the related tasks of a particular job
and the quality of human resources needed to perform the job. As a result of that
definition, it can be summarised that job analysis seeks to gather four types of
information:
(i) Job activities, such as what activities employees carry out and how, when
and why they do them.
(ii) Tools and equipment used to perform the job.
(iii) The context of job in which it is implemented such as situation, workplace
environment or scheduling.
(iv) The needs of personnel in performing the job, meaning the knowledge,
skills and capabilities required for the particular job. (William, 2000)
Information regarding job analysis can be obtained by asking employees to make

a list of the tasks that need to be performed for a particular job, and the
importance of each task; getting the employees or supervisors to fill in
questionnaire forms; through observations of jobs; through interviews or through
the method of filming the tasks being carried out by the workers when they are
performing the job.
The results of the job analysis will form the job description and job specification.
Job description is a written statement that clearly explains the job, duties,
responsibilities, activities and performance results required from the job holder.
Job specification is a written statement stating the qualifications required from
the job holder. Qualifications here include level of academic achievements, work
experience, skills and abilities that need to be fulfilled by the future job holder.
Since the job analysis has described in detail about the description and
specifications required, each organisation needs to provide job analysis prior to
any recruitment. It will also be used during recruitment and selection in order to
match the qualifications of the applicants to the job requirements. Job analysis
also helps managers to prepare training programmes and acts as a comparative
resource in determining wages.
EXERCISE 11.3
Essay Question
Based on your understanding, give a brief description of the meaning of

job analysis.
11.1.2 Forecasting
Forecasting is a process of predicting the total number and types of employees
with the knowledge, skills and abilities needed by an organisation in the future.
There are two types of forecasting ă internal and external.
Internal forecasting pertains to the internal factors of the organisation which

influence the level of demand and supply of human resources in the
organisation. Factors such as the organisationÊs financial performance,
productivity level, mission and change in technology, retrenchment, promotion,
retirement and mortality are some of the examples of internal forecasting.
External forecasting pertains to the external factors of the organisation that affect
the level of demand and supply of its workforce in the future. The factors include
supply of labour in a particular area, economics (unemployment rate), labour
unions and demographics of the labour force (in the aspect of age), migration,
competition levels and growth in a particular business or market.
In order to forecast the demand and supply of human resources in an

organisation, a manager could use three methods of forecasting. These most
frequently used methods are best estimates, management input and statistical
ratios (historical ratios). These methods could predict how many types of skills
and abilities of employees are needed by the organisation in the future.
EXERCISE 11.4
Essay Question
State two types of forecasting of total number and types of employees

that you know.
11.2 RECRUITMENT/HIRING
SELF-CHECK 11.2
What are the elements that an employer should focus on when

recruiting a new employee?
The process of developing a group of candidates who are interested and

qualified for a position offered by an organisation is referred to as recruitment.
This effort is considered as a process because it involves steps such as searching
and capturing the interest of qualified candidates to apply for the position
offered. Recruitment can be carried out using two methods: internal recruitment
and external recruitment.
11.2.1 Internal Recruitment

Internal recruitment is the effort of developing a group of candidates who are
interested and qualified for a position offered from the existing employees in the
organisation. Internal recruitment also means promoting or moving existing
employees into a vacant position. Many organisations prefer this method because
it is able to boost the commitment, morale and motivation of the employees. It is
also able to reduce time and costs of employee development since the employee
has already understood the culture and procedures of the organisation. This will
be able to increase the probability of the employee performing successfully in the
position.
The way this method is being carried out differs from one organisation to
another. Some organisations practise closed recruitment systems where the
manager will only select a particular candidate or employee who is qualified to
apply for the position. This method is more inclined towards promotion. The
decision is made informally and in a subjective condition and depends more on
support from the employeeÊs leader. This closed system is very much preferred
especially by small companies since it is able to reduce time, energy and costs in
filling a vacant position in the organisation.
However, there are organisations that practise internal recruitment by setting up

an open recruitment system whereby the vacant position is announced to all the
employees in that organisation. Job posting is another method where the vacant
position is advertised to all employees in the organisation. Information regarding
the position such as qualifications and requirements needed, salary, working
hours and others will be notified. This information will be circulated by
displaying it on the companyÊs bulletin board, circulation letters, intranet system
or any other communication channels which could be accessed by employees of
the company. Employees who feel that they are qualified and fulfil the
requirements of the particular position are able to submit their applications. This
method helps the organisation to discover hidden talents, allows employees to be
more responsible towards their career development and solves the problem of
maintaining talented employees who are already bored with the position they are
currently holding and considering the possibility of leaving the company.
11.2.2 External Recruitment

External recruitment is a process of developing candidates from outside the
organisation who are interested and qualified for the position offered. The
method of external recruitment includes job advertising (newspapers, magazines,
letters, radio stations and television), employee referral (asking employees
whether there are any suitable candidates), walk-in (candidates themselves come
to apply), outside the organisation (universities, technical and vocational schools,
colleges and learning centres), government and private employment agencies,
career seminars and websites.
There are many ways to recruit externally but which one should be used? Studies
show that employee referrals, walk-in, newspaper advertising and government
employment agencies are frequently used to recruit candidates for positions such
as clerical and production operators or more popularly known as blue-collar
employees. For professional/technical levels or executives, newspaper
advertisements, private employment agencies and recruitment from learning
centres and universities are more frequently used. For recruiting candidates to
higher positions such as managers, organisations depend more on employee
referrals, advertising in magazines and newspapers as well as private
employment agencies.
ACTIVITY 11.1
In some organisations in Malaysia, some employers, managers or

recruiters are more inclined towards hiring their own friends to fill job
vacancies even if there are many other qualified candidates. What is your
opinion on this? Discuss this with your friends.
EXERCISE 11.5
Essay Question
Describe briefly two methods of recruitment that can be implemented by

organisations.
11.3 SELECTION OF QUALIFIED EMPLOYEES

When an organisation carries out the process of attracting the interest of
candidates to apply for the positions offered and later developing a group of
candidates, the process of gathering information for evaluation and then
selecting the best candidate for that particular position must then be performed.
This process is referred to as the process of selection. This process is very
important since hiring the wrong candidate will cause an adverse impact for the
organisation. In order to reduce this uncertainty, human resource experts have
suggested four methods of selection.
11.3.1 Application Forms and Resume

The first selection method is the application form and resume. Both contain the
same information about the candidate such as personal information, academic
background, working experience and so forth.
Usually, application form acts as a tool in obtaining information about the

candidate which is prepared by the organisation itself. Meanwhile, a resume is
prepared by the candidate himself following his own format.
Many organisations prefer the use of application forms since the form prepared
only relates to the information required. The information obtained will be
incorporated into the human resource information system which will be used as
the material for selection evaluation.
11.3.2 References and Background Checking

It can be said that all organisations require applicants to prepare their job
references such as former employer or colleagues, teacher or lecturers who can be
contacted in order to find out and obtain more information regarding the
candidate. The purpose of checking the candidateÊs background is to obtain
validity and accuracy of the information provided by the candidate as stated in
the application form or resume. This act of checking enables the organisation to
find out about any particular information, negative matters or job-related
background information which is not stated by the applicant. This checking is
usually conducted with learning centres, former employers, court records, police
records and government agencies and other resources through telephone calls,
letters or self-investigations.
11.3.3 Selection Tests

Why are some employees able to perform their job well while others are not? Job
performance of a particular candidate can only be acknowledged after he has
started working. However, selection tests help organisations in making the right
decision on the most qualified person to be hired. These selection tests measure
either directly or indirectly whether a particular candidate is able to perform the
job well. Table 11.2 shows all the seven types of selection tests used by
organisations.
Table 11.2: Selection Tests
Type of Test Description
Specific Ability This test measures the abilities needed to perform a particular job.
Test It is also referred to as aptitude test. This type of test is usually
used for job areas such as mechanical, clerical, sales and physical
work.
Cognitive Ability The purpose of this test is to measure perceptual speed, verbal
Test comprehension, numerical aptitude, general reasoning and spatial
aptitude. This test is able to indicate how fast and how well a
candidate could understand words, numbers, logic and spatial
dimensions. Ability test could forecast the job performance of
some job areas only but cognitive ability test could forecast the job
performance of all job areas.
Why does this happen? This is because the mental ability of a
candidate who performs well in his cognitive or ability test is
usually efficient in learning something new, able to process
complex information and able to solve problems and make
decisions well.
Biographical Data Biographical data or better known as biodata is an extensive study

on the personal background and experiences in the life of a
particular candidate. The basis of this study is the past behaviour
(personal background and life experiences) which is the best
forecast for the behaviour in the future.
Personality Test This is a test that measures the personality of the candidate
towards the job. This test is able to categorise whether the
candidate is in either one of the particular personality dimensions.
The series of tests conducted in assessment centres include in-basket training,

role playing, small group presentation and leaderless group discussion. In-basket
training is a written test where candidates are given matters related to the task of
a manager such as memos, telephone messages, organisation policy and other
forms of communication. Candidates only have limited time to read, prioritise
items and decide on the means of dealing with each of the items. An experienced
manager will evaluate and make comments and then provide suggestions.
Leaderless group discussion is a discussion in a group comprising six candidates

and they are given two hours to solve problems but none of the members is
elected to lead the group. Trained observers will monitor and make comments
for each candidate based on how far the candidate is able to discuss, listen, lead
and deal with others.
11.3.4 Interviews
SELF-CHECK 11.3
Before attending an interview, a candidate might prepare himself with
answers to potential questions. He would already have ready answers
before going into the interview room. In this scenario, what is your
opinion regarding the effectiveness of interviews for employers?
Each of us who applies for any particular position will not be able to avoid being
interviewed. If we had attended five interviews at different organisations, it
means we have already faced five different types of interview conditions.
This section will discuss the aspects of interviews in providing knowledge

regarding what is meant by interview, the methods used and its suitability with a
particular job position.
An interview is a method where company representatives will ask the candidate

a series of questions related to the job to determine whether he is qualified for the
job. There are a few types of interviews which are frequently used by
organisations ă unstructured, structured and semi-structured.
Unstructured interview is an interview where the company representatives ask

any questions to the candidate. In this type of interview, a candidate will face a
different set of questions from the other candidate.
Meanwhile, structured interview is an interview where the interviewer will ask a

standard set of questions which had been earlier prepared and drafted. Each
candidate will face the same questions like any other candidate. There are four
types of questions that are frequently asked during this type of interview:
(i) Situation-based questions: Questions that require the candidate to provide
answers on what he will do when faced with a particular situation (For
example: What will you do if⁄)
(ii) Background-related questions: Question that enquires about the candidateÊs
work experience, academic qualifications and other qualifications.
(iii) Behaviour-related questions: Questions on the candidateÊs former jobs.
(iv) Job-related questions: Questions which require the candidate to
demonstrate his job knowledge (For example, a question for a medical
doctor: „A particular medicine has been administered to a patient and he
shows negative feedback. How do you deal with the situation?‰)
EXERCISE 11.6
Essay Question
State the two main processes involved in the selection of qualified

candidates.
11.4 DEVELOPMENT OF QUALIFIED

EMPLOYEES
ACTIVITY 11.2
In order to strengthen the skills of an employee, the Malaysian Ministry of

Human Resources introduced a scheme known as „Suspend and Training
Scheme‰ for graduates and suspended workers. In your point of view, how
far is this scheme able to help in determining the training needs and training
methods needed by a particular organisation? Discuss this with your friends.
Through the process of selection, organisations will be able to obtain suitable

candidates to fill the positions offered. The next step that needs to be considered
by managers is to give an introduction regarding the organisation and their new
job. Training must be provided to strengthen existing skills, knowledge and
abilities of the employees with the job needs in the organisation. Then,
performance evaluation needs to be carried out in order to evaluate the
effectiveness of the training and performance of the employee. What have been
discussed earlier are the aspects that need to be considered by the management
in developing qualified employees in their respective organisations.
11.4.1 Orientation
Orientation is the process of introducing new employees to the programmes,
policies and culture of the organisation. Orientation helps them to learn about the
organisation and get used to the new environment. Sometimes, orientation only
focuses on simple matters such as working hours, parking priority and salary
payment schedules. Employees may only undergo orientation by watching films,
reading handbooks and being introduced to their colleagues.
Orientation is conducted by teaching employees about the corporate culture and

providing guidelines to succeed with the organisation. For some organisations,
orientation is also incorporated with training programmes. This is to ensure that
new employees have the basic knowledge and skills needed to perform the job
assigned.
11.4.2 Training
Training means providing opportunity for employees to develop working skills,
experience and knowledge they need in order to perform their job or upgrading
their job performance. Training is not only needed by new employees but also by
employees who have been working long with the organisation. Besides that,
training is also not only needed by lower-level employees but also by middle and
higher level management.
11.4.3 Determining the Needs for Training

Organisations should not hastily conduct training programmes for their
employees. If this happens, it can cause the organisations to bear high costs due
to the ineffectiveness of a particular training programme. This is because at that
point of time, training may no longer be needed. To avoid this, organisations
must determine the needs for training. This is a process of identifying and giving
priority to the learning needs of the employees. Needs for training can be carried
out by identifying performance ineffectiveness, listening to complaints from
customers, making observations on employees and managers, or assessing the
skills and knowledge of employees.
Furthermore, evaluation of training needs is an important tool in determining

who should or should not be attending the training programmes conducted. The
selection of candidates for training must be based on information related to a
particular job area.
• Developing Training Objectives

After training needs have been determined, training objectives must be
developed to fulfil the needs. Many training programmes are conducted
without objectives. Effective objectives must state what will happen to the
organisation, department or employees when training has been completed.
The expected results must be stated in writing. Training objectives can be
categorised as shown in Table 11.3:
Table 11.3: Categories of Training Objectives
Objective Categories Main Questions
Objective guidelines • What are the principles, facts or concepts that will be
learned in the training?
• Who will be taught?
• When will the teaching begin?
Department and organisation • What is the impact towards the organisation and
objectives department when work absenteeism, turnover, cost
reduction and productivity increase takes place?
Individual growth and • What are the effects of training on the behaviour and
performance objectives attitude of employees?
• What are the effects on the personnel development
of the particular employee?
When training objectives had been stated clearly and effectively, training
programmes can be implemented successfully and will be able to give results as
expected. A training programme that achieves the objectives will increase the
level of productivity, overcome inefficiency and help employees in the future
especially in career development.
11.4.4 Training Methods

Several training methods can be used to fulfil training needs and objectives.
Listed below are several training methods that are frequently used.
(a) On-the-job Training

This type of training is usually given by senior employees or supervisors.
Trainees will be shown how to perform a job and be allowed to perform it
under the supervision of the supervisor. One of the forms of on-the-job
training is job rotation (sometimes referred to as cross training). In job
rotation, employees will learn several different tasks in a particular unit or
department and perform the tasks in a particular period of time.
One of the advantages of job rotation is that it allows flexibility in a

particular unit or department. When an employee is absent from work, his
job can be done by another employee. One of the advantages of on-the-job
training is that it does not need any specific facility.
Besides that, new employees are able to perform productive jobs during the
learning process. One of the disadvantages of this method of training is that
the pressure at the workplace can cause the training to be dangerous or
easily forgotten.
(b) Apprentice Training

This is a training programme system that requires an apprentice to work for
a certain period before he is allowed to perform a job or specialisation in a
particular area. Trainees are given instructions and acquire experience
during work or outside work, in every practical and theoretical aspect
needed for a job. Usually, a trainee will be placed under the supervision of
a mentor who has a broad experience and has been long involved in that
particular job area. The mentor will give all the guidance and share his
experiences with the trainee, which hopefully will be able to help the
trainee progress towards a successful career.
(c) Off-the-job Training

Unlike on-the-job training, off-the-job training is done out of the location of
the job area. The location of training might be in a classroom with the same
facilities or in other different locations. This form of training allows the
demonstrator to focus on a particular education subject without any
interference and in a controlled environment. The downside of this form of
training is that it is unable to depict the real conditions of the workplace to
the trainees.
(d) Vestibule Training

The same procedure and tools used in the real working condition is
performed in a particular area known as vestibule. Trainees are taught how
to perform a job and use the relevant equipment by an experienced
employee. This will help the trainees to learn about the job areas in a
comfortable condition without any pressure from production scheduling.
The main advantage of this method is that trainers can emphasise on

theories and use the necessary techniques compared to the outputs and
trainees will learn how the real job is performed. However, this method
requires a high cost and employees still need to get used to the real working
environment. Vestibule training has been used to train word processing
operators, bank tellers, clerks and those in other related jobs.
ACTIVITY 11.3
Now that you have learnt about the methods of training available, use
your own understanding to list the advantages and disadvantages of
each training method. Give your answers in the form of a table.
EXERCISE 11.7
Essay Question
List the training methods that can be used by an organisation.
11.5 PERFORMANCE EVALUATION
ACTIVITY 11.4
In 1992, the Malaysian government introduced the „New Remuneration

Scheme‰ for civil servants? In 2002, the government introduced the
„Malaysian Remuneration Scheme.‰ The purpose of this scheme is to
evaluate the performance of their services.
You can obtain more information on this scheme at the website of the
Public Service Department of Malaysia as given below.
http://www.jpa.gov.my/ilmu/ssb/ssb.htm
After training is given to employees, they are released to perform the jobs
assigned to them, equipped with all the knowledge and guidance given. The next
step is to carry out performance evaluation. This is a process of evaluating job
performance and preparing feedback based on that evaluation. Performance
evaluation contributes towards two purposes. Firstly, the purpose of the
evaluation being carried out will help to inform the employees about their
performance level in comparison to the standard. Secondly, performance
evaluation could help in personnel development and preparation of future
training programmes.
Performance evaluation focuses on previous performance and measures it in

comparison to the standards fixed. The methods of performance evaluation must
fulfil the criteria of relevance and validity. In order to make it valid, the method
used must be consistent in giving results regardless of time or who the evaluator is.
What is actually being evaluated? This might be the question frequently playing
inside the mind of a manager. Basically, evaluation is conducted on three sets of
criteria ă job output, behaviour and attitude. Table 11.4 below clarifies the three
sets of evaluation criteria.
Table 11.4: Sets of Criteria for Evaluation
Set of Criteria Description

Individual Job Output If a job emphasises more on the calculation of job
output compared to the job purpose, the evaluation
needs to be conducted on the individual job output. By
using job output, a production manager needs to
evaluate on criteria such as quantity produced,
defaults made and cost per unit of product. This is
similar to evaluating the performance of a salesperson,
which is evaluating the overall total sales made based
on total number of units and ringgit, and the total of
new customers generated.
Behaviour In most cases, it is difficult to specifically identify the
output produced by an employee especially when a job
is a part of a group or department task. Evaluation for
group or department can be conducted easily but
evaluation of individual contribution is difficult. By
using the example above, the behaviour of a production
manager that can be used for the purpose of
performance evaluation are such as the accuracy and
frequency of report submission or the leadership style
shown by him. Meanwhile, the performance evaluation
of a salesperson may be related to the average number
of calls or meetings with customers in a day or the total
number of sick leaves taken for each year.
Attitude This is considered a weak set of criteria but is still

practised in some organisations. It is said to be weak
because this type of evaluation excludes from the
evaluation of the real job performance. Attitudes such
as having good manners, exhibiting confidence, able to
be independent or cooperative, trying to look busy or
having a broad experience, are subjects that might be
directly or indirectly proportional with the level of real
job performance.
11.5.1 Who Should Evaluate?
SELF-CHECK 11.4
In evaluating the performance of a particular employee of an
organisation, it is very important that the evaluation given is clear,
accurate and fair because the performance evaluation will become the
guidance and determinant for an employee. In your opinion, who is the
most appropriate person to conduct a performance evaluation of an
employee?
Performance evaluation of an employee can be done by these people:
(a) Supervisors
Many organisations practise this method. An employee is evaluated by the
person who supervises him. For example, an operator is evaluated by his
supervisor; an executive is evaluated by a senior executive or manager; and,
a general manager is evaluated by the board of directors of the company.
(b) Colleagues
Evaluation by colleagues is considered a reliable approach. This is because
colleagues are close to the employee being evaluated and his daily job
performance. Daily meetings and conversations provide comprehensive
views regarding the job performance of the employee being evaluated.
Evaluation by colleagues could augment the effectiveness of evaluation

made by supervisors. However, evaluation by colleagues can result in
matters that bring ineffectiveness towards the evaluation such as bias and
friendship.
(c) Subordinates
The fourth party that can become the performance evaluator are
subordinates. Subordinates can provide important and detailed information
regarding the behaviour of their superiors due to a close relationship. The
problem is that subordinates may be afraid to provide accurate evaluation
due to the power and retaliation from their superiors.
(d) 360 Degrees Evaluation

The final approach is the 360 degrees evaluation. It provides feedback on
performance from all parties related to the job of the employee being
evaluated which covers general workers, customers, colleagues and
managers.
11.5.2 Method of Performance Evaluation

This discussion focuses on who should conduct the performance evaluation of an
employee. Now, what are the methods that can be implemented in making
evaluations?
(a) Essay Writing

This is the simplest method in conducting performance evaluation. This
method requires the employee being evaluated to explain about the
strengths, weaknesses, earlier performances, potential and suggestions in
increasing performance. This essay writing does not require complex forms
or extensive exercises to be completed. But the results will usually portray
the ability of the writer. A good or bad performance is determined by the
writing skill and level of true performance of the evaluated employee.
(b) Critical Incidents

This is a form of evaluation that observes the behaviour that acts as the key
in differentiating between a good or bad work level. The evaluator will
write to explain what has been done by the employee and whether his job is
effective. Evaluation here is not only directed at behaviour but also involves
the personality of the employee. Statements regarding these critical
incidents could depict the behaviour required and identify what needs to be
improved.
(c) Measurement of Objective Performance

One of the ways to increase performance through evaluation is by
measuring objective performance. This is a simple and countable
performance measurement. Objective performances that are frequently
heard of are outputs, scraps, wastes, sales, customer complaints or level of
default.
ACTIVITY 11.5
You have been exposed to the methods of evaluation that are normally
used by performance evaluators. In your opinion, how fair and effective
are these methods to the employee being evaluated? In your view, what
other methods are suitable for evaluating the performance of an
employee? Discuss this with your friends.
EXERCISE 11.8
Essay Question
State who should be the performance evaluator for an employee in your

organisation.
11.6 RETAINING QUALIFIED EMPLOYEES

An employee works with an organisation to fulfil his personal objective, that is,
to earn money for his livelihood. An organisation could retain a talented
employee if it offers rewards that fit the job and needs of the employeeÊs personal
objectives. Employee reward refers to the payment granted to the employee as an
exchange for the job that is carried out. This reward may be financial or non-
financial. Generally, there are four types of decisions of reward granting ă
payment level, variable payment, payment structure and employee benefits.
The decision of payment level is a decision of making payment to employees

whether at a level below, above or at the same rate with the payment of salary in
the labour market. An organisation uses job evaluation to determine the payment
structure. Job evaluation determines the value or sum that must be paid for each
job by determining the market value for the knowledge, skills and needs
required to perform that particular job. After job evaluation has been carried out,
the organisation will usually make payments at the same rate as determined by
the market. There are some organisations that pay above the rate determined by
the market. This is to attract interest and retain the employees. A salary which is
higher than the level determined by the market will attract the interest of more
qualified candidates, increase the level of job acceptance, reduce recruitment
time, and increase the level of employee retention.
The decision of variable payment is a decision that focuses on how far the
payment of salary differs from the job performance of an individual employee
and organisation. The purpose of relating payment with organisation
performance is to increase motivation, effort and job performance of employees.
Piecework, sales commissions, profit-sharing and employee share ownership
plans are the options available in variable payment.
Piecework payment plan is the payment for something that can be counted. For
example, an employee will be paid a standard rate for each item produced and
payment will increase if production is increased (for example, RM0.35 per unit
for the first 100 products, and units of products that exceeds 100 units will be
paid at the rate of RM0.45 per unit).
Sales commission is the payment a salesperson receives. It is a percentage of the

value of the goods he sold. The more sales he makes, the more commission he
will receive. For example, a car salesperson receives a sales commission of RM500
for each car that he sells. The more cars he sells, the more commission he will
earn.
Since piecework and sales commission are based on individual performance, this
can reduce the incentive of employees to work in a team. Therefore,
organisations introduce group incentives to attract the interest of employees to
work in a group or team. Profit sharing is the payment taken from a part of the
organisationÊs profit. This payment is divided among the employees and is
usually above the level of reward that they normally receive. The more profit the
organisation makes, the more reward the employees will receive.
Employee share ownership plan grants employees with companyÊs shares in

addition to the rewards that they usually receive. Meanwhile, share option
provides the opportunity for employees to buy company shares at a fixed price
tier where the price is usually lower than the market value. For example, a
company offers its employees the price of RM5 per share while the market price
is RM10 per share.
Payment structure is decision related to internal payment distribution. This

brings meaning to how far individual employees in an organisation receive
different levels of salary. Individuals at the top level will receive a higher pay
compared to those at lower levels. For example, a director enjoys a higher
payment structure than the assistant director and a much higher structure than
his subordinate officers.
11.6.1 Employment Benefits

Rewards granted are not only in monetary form but also in the non-monetary
form, referred to as employment benefits. These are called as such because only
individuals working at a particular position or organisation will enjoy the
benefits. Employment benefit is the granting of rewards that cover anything
other than the salary. Many organisations offer various forms of benefit choices
to employees such as retirement and pension plans, paid leaves, sick leaves,
health insurance, life insurance, health treatment, discounts on products and
services of the company etc.
EXERCISE 11.9
Essay Question
Based on your understanding, state the differences between financial

rewards and employment benefits.
11.7 EMPLOYEE SEPARATION

At one point, an organisation has to be separated from its employees voluntarily or
by force. Employee separation means the loss of an employee by an organisation
either voluntarily or involuntarily. This separation is caused by various reasons.
Involuntary separation arises when an organisation decides to discontinue the
service of an employee or retrench an employee. Voluntary separation means that
the employee decides to leave or retire. Since this separation affects recruitment,
selection, training and granting of rewards, the organisation must be able to
forecast the number of employees who will be lost due to termination, dismissal,
turnover or retirement when making human resource planning.
11.7.1 Employee Termination
SELF-CHECK 11.5
The employee of an organisation was imposed disciplinary action due

to an act of breach of trust. In your view, if he promises to change his
behaviour and expresses regret over his actions, should he be given a
second chance? What is the most suitable and necessary action to take
in order to ensure that he will not repeat the mistake?
Terminating employees may be considered as a simple act but think about the
feelings of the employee being terminated. It is definitely hard to describe the
feelings of that employee. Therefore, the manager must do a few things to
minimise problems related to employee termination.
Firstly, in most situations, termination or dismissal cannot be the first choice. The
employee must be given a chance to change his behaviour when a problem
arises. The employee should receive a series of specific warnings on the matters
of what and how serious is the problem that he caused. After warning had been
given, the problematic employee must be given time to make changes or correct
his mistakes. If the problem continues, he needs to be given consultation on
employee performance, what needs to be done to increase it and the results that
will arise if the problem continues (for example, show-cause letter, warning
letter, suspension without payment or termination).
Secondly, the employee should be terminated based on sensible and rational

reasons. The termination of an employee without sensible reasons can result in
the employee taking court action, with a claim of wrongful discharge. This would
require the employer to state the job-related reasons for discontinuing the
services of the employee. The decision of termination needs to be done on job-
related factors such as disobeying or violating the companyÊs law or consistently
showing bad performance in the job.
Thirdly, the organisation needs to focus on the reaction of other employees when
one of them is terminated. This is because the issue of termination can affect the
performance and motivation of existing employees because it may raise the sense
of anxiety towards the security of their job. Besides that, the organisation must be
aware in discussing the cause or criticising the employee terminated since the
discussion and criticism can result in the organisation receiving summons from
the employee terminated.
11.7.2 Downsizing
Downsizing is the act of organised repealing of positions and jobs in the
organisation. Whether it is caused by the reduction of cost, decline in market
shares or being too aggressive in employing workers and growth, it is an event
that happens constantly in any organisation regardless of any economic
condition. Is downsizing effective? Theoretically, downsizing should bring an
increase in productivity and better performance profit and increase
organisational flexibility. A 15-year research on downsizing found that a
company implementing 10% downsizing of its labour use is only able to produce
a 1.5% reduction of its cost and 4.7% increase in share value for three years
compared to 34.3% in the situation where downsizing is not implemented. Not
only that, profitability and productivity levels generally are not increased
through downsizing. This clearly shows that downsizing is not the best strategy
to implement. Instead, effective human resource planning is the best act.
Downsizing needs to be taken as the final step.
However, if the organisation finds that the financial condition and strategies
implemented are not effective and downsizing is necessary for the survival of the
organisation, it must train its managers to be able to explain the needs of
downsizing to the employees. The most important is that the top-level
management must explain in detail why downsizing is needed and choose a
suitable time to inform the employees. The news of downsizing should be
delivered to the employees by the management of the company. The employees
should not have to find out from the media such as television and newspapers.
Besides that, the organisation must truly assist the affected employees by helping
them to find other jobs or providing centres for counselling services. These
centres serve to provide counselling to ease the feelings of the downsized
employees and lift their motivation. Counselling centres could also help to retain
a positive image of the organisation from the societyÊs point of view due to the
strategy of downsizing implemented. These measures will help the employees to
maintain their level of job productivity up until their final days with the
organisation.
11.7.3 Retirement
Retirement of an employee takes place when his retirement period arrives but
there are times when early retirement of employees could help the organisation.
In the effort to reduce the workforce in an organisation, implementation of early
retirement incentive programmes might help. These programmes offer financial
benefits for employees in order to encourage them to retire early. Not only does
this effort reduce the workforce but it also reduces cost by repealing a particular
position after the retirement of the employee, reduces cost by substituting a
highly paid retired employee with a lesser-paid new employee or by providing
opportunities to existing employees in the organisation.
The main problem related to this programme is in forecasting who and how
many employees are ready to accept this programme. The organisation may lose
talented employees and face a large number of employees who want to retire
early.
11.7.4 Employee Turnover

Employee turnover takes place when an employee voluntarily ends his service
with an organisation. Generally, an organisation tries to retain a low turnover
rate in order to reduce the processes of recruiting, employing, training and
replacement cost. However, not all turnovers harm the organisation. For
example, a functional turnover happens in the condition where an employee

with a bad performance level chooses to resign voluntarily. This enables the
organisation to replace an employee with poor performance with a new or better
employee.
On the other hand, dysfunctional turnover takes place when a high-performance

employee chooses to leave voluntarily. This condition adversely affects the
organisation and it will lose a talented employee. Thus, employee turnover needs
to be analysed carefully in order to determine who really chooses to leave the
organisation ă an employee with poor performance or an employee with a good
performance. If many high-performance employees leave a company, the
managers must find out the reasons and measures to reduce it. Methods such as
salary increment and offering benefits that might encourage or increase the
working condition for these skilled employees could help. One of the best ways
to influence functional turnover and dysfunctional turnover is by relating salary
payment with the level of performance demonstrated.
EXERCISE 11.10
Essay Question
1. List four ways of employee separation frequently faced by
employees and organisations.
2. Make a list and describe the four basis of reward granting
decision.
Multiple Choice Questions
1. _________ is a written statement regarding the qualifications

required for holding a particular position.
A. Job description
B. Job specification
C. Record system
D. Job analysis
2. An interview asking standard questions to all candidates, usually

questions regarding backgrounds, attitude and situation, and job-
related aspects is referred to as_______.
A. standard interview
B. structured interview
C. situation interview
D. semi-structured interview
3. The process of introducing the organisation to new employees

regarding organisational programmes, policies and culture is referred
to as ____________.
A. orientation
B. vestibule training
C. performance evaluation
D. apprentice training programme
4. __________ is a kind of payment where salesperson receives

percentage from the price value of goods sold.
A. Piecework
B. Share options
C. Sales commission
D. Profit sharing
5. Which of the following is NOT an example of employment benefits?
A. Health treatment facilities

B. Paid leaves
C. Health insurance
D. Share options
TRUE (T) or FALSE (F) Statements

1. Organisation strategies must be planned based on the condition of
human resource in the organisation.
2. Human resource management is a process of attracting the interest of
qualified candidates and maintaining or retaining qualified employees.
3. Job analysis is a study process regarding the duties related to a
particular job and the human qualities needed in performing the job.
4. Forecast towards factors such as economy, competition level
technology, residents demographic that influences the level of demand
and supply of organisationÊs workforce in the future are considered as
the internal forecasting of organisation.
5. Recruitment can be performed in two ways: internal recruitment and
external recruitment.
• Human resource is the most valuable resource for an organisation. Therefore,

it must be managed as properly as possible.
• Excellent human resource management could assist in the implementation of
organisational strategies at a high level of efficiency and effectiveness.
• Human resource management is a process that comprises four main
components: determining the needs of human resource and the organisation;
attracting the interest of qualified candidates; developing qualified
employees; and retaining qualified employees.
• These processes must be implemented with proper planning to ensure that
they make a significant contribution and fulfil the goals and objectives of the
organisation.
Apprentice training Job analysis

External recruitment Piecework payment plan
Internal recruitment Vestibule training

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Topic 11 X Human

Therefore, many organisations have altered their method to using human

Thus, human resource in organisations must be managed properly. A properly

11.1 DETERMINING THE NEEDS OF HUMAN

The effort in determining the needs of human resources needed by organisations

Table 11.1: Processes of Human Resource Management

Determining the needs of human • Human resource planning

Human resource management is a process of using the goals and strategies of

What do you understand about the term „human resource

State the stages of human resource management.

11.1.1 Job Analysis

What do you understand about job analysis?

A particular job area exists in an organisation as a result of the formation of goals

requirements and selecting a workforce that is capable and qualified to perform

Information regarding job analysis can be obtained by asking employees to make

Based on your understanding, give a brief description of the meaning of

Internal forecasting pertains to the internal factors of the organisation which

In order to forecast the demand and supply of human resources in an

State two types of forecasting of total number and types of employees

What are the elements that an employer should focus on when

The process of developing a group of candidates who are interested and

11.2.1 Internal Recruitment

However, there are organisations that practise internal recruitment by setting up

11.2.2 External Recruitment

In some organisations in Malaysia, some employers, managers or

Describe briefly two methods of recruitment that can be implemented by

11.3 SELECTION OF QUALIFIED EMPLOYEES

11.3.1 Application Forms and Resume

Usually, application form acts as a tool in obtaining information about the

11.3.2 References and Background Checking

11.3.3 Selection Tests

Table 11.2: Selection Tests

Type of Test Description

Biographical Data Biographical data or better known as biodata is an extensive study

The series of tests conducted in assessment centres include in-basket training,

Leaderless group discussion is a discussion in a group comprising six candidates

This section will discuss the aspects of interviews in providing knowledge

An interview is a method where company representatives will ask the candidate

Unstructured interview is an interview where the company representatives ask

Meanwhile, structured interview is an interview where the interviewer will ask a

State the two main processes involved in the selection of qualified

11.4 DEVELOPMENT OF QUALIFIED

In order to strengthen the skills of an employee, the Malaysian Ministry of

Through the process of selection, organisations will be able to obtain suitable

Orientation is conducted by teaching employees about the corporate culture and

11.4.3 Determining the Needs for Training

Furthermore, evaluation of training needs is an important tool in determining

• Developing Training Objectives

Table 11.3: Categories of Training Objectives

Objective Categories Main Questions

11.4.4 Training Methods

(a) On-the-job Training

One of the advantages of job rotation is that it allows flexibility in a

(b) Apprentice Training

(c) Off-the-job Training

(d) Vestibule Training

The main advantage of this method is that trainers can emphasise on

List the training methods that can be used by an organisation.

11.5 PERFORMANCE EVALUATION

In 1992, the Malaysian government introduced the „New Remuneration

Performance evaluation focuses on previous performance and measures it in

Table 11.4: Sets of Criteria for Evaluation

Set of Criteria Description