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INTRODUCTION

The researchers of this topic are greatly conscious on how the

Human Resource Management affects the organization as a whole.

Human Resource Management (HRM) is the function within an

organization that focuses on recruitment of, management of, and providing

direction for the people who work in the organization. The HRM plays a

vital role in the organization for they are the one who manages the most

important resource in the organization, the people. William R. Tracey, in

the Human Resources Glossary defines Human Resources as:

“The people that staff and operates an organization … as

contrasted with the financial and material resources of an

organization. The organizational function that deals with people ...”

There are many methods or techniques that had been used by several

corporations to have the most effective, efficient, and most importantly to

have a productive staff. Formerly, the traditional Human Resource

Management was used by the companies but the innovation and the

evolution of the HRM was created to be able to get with the flow of the

globalization. Traditional or technical HRM activities covers a wide

range of employment practices, including recruitment, selection,

performance appraisal, training and development and the administration of

compensation and benefits, while SHRM is a strategic approach to


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manage human resources of an organisation.

The objectives of this research is to know the significance and

comparison of the traditional and strategic approach in human resources

management and how this two approaches or techniques affect the

organization itself; to be able to contribute knowledge to the success of

most organization; to determine the advantages and disadvantages of this

two techniques; to know what was better to apply in the actual process of

the HRD; and also to identify the most widely used approach within the

companies of Paranaque and Makati City.

In this research paper, the readers will be able to know what is the

Traditional HRM; what will happen if the new concept of HRM will be

adapt; what the Strategically HRM can do; the advantages and

disadvantages of the Strategically HRM, if it will be used by the firms

nowadays; and what HRM practice was often used by the companies,

specially the large companies in Paranaque and Makati. This research

paper will answer all those questions and will lead to the clarification to all

issues between the implementation of the new concept of Strategic HRM

and if it would be better than the traditional practice of the HRM.


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THEORETICAL FRAMEWORK

The evolution and innovation of the modern concept of Human

Resource Management found its roots in the midst of last period of the

19th century and early 20th century. It was the principle of Frederick Taylor

known as the Development of Scientific Management became as the

basis of the creation of the new concepts and principles that will be helpful

in managing the struggling workforce of different companies. In this

principle, Taylor pointed out the managers to be the responsible in over-all

function of the Human Resource Management. The concept of Taylor was

emphasizing the role of manager in the over-all development and growth

of its current and upcoming workforce by the implementation of the

department's function such as selection of the right person for the job,

proper training to enable workers to gain the skills they require and good

rates of pay to offset the boredom of working in a fragmented and high

performance work environment.

“...the concept of human resource management began to

gain ground at the expense of personnel management (Storey,

2001). At the root of the new thinking about the management of

people in organisations was the perception of the increasing

competitiveness of the global economy (Best, 1990). “-Australian,

state and territory governments


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The human resource management practices which had been so

successful in Japan were also implemented in the other country (Wickens,

1987). The practices included:

• strict and rigorous selection and recruitment

• high level of training, especially induction training and on the job

training

• team working

• multiskilling

• Better management-worker communications

• Use of quality circles and an emphasis on right first time quality

• Encouragement of employee suggestions and innovation

• Single status symbols such as common canteens and corporate

uniforms.

The integration of these new HRM practices was to create a good

relationship between the organization and its workforce that will lead to the

development not only on the own career growth of the employees but also

for a more productive management.

There are arguments about what the Human Resources

Management does represents. Some of the specialists say that the

Human Resource Management is managing the workforce using the


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effective and old functional notion of personnel management with the

combination of the creation of a culture in the workplace that harnesses

the commitment of individuals to the organisation (Guest, 1987). Some of

the management specialist opposed and stated that; exasperated with the

endless definitional debate that seems to surround human resource

management, have argued that it is simply an illusion, a “hologram”

behind which we may see many techniques and practices in operation but

which is essentially determined by the observer (Keenoy, 1999). The

notion of employee commitment is one which appears to be integral to

many of the models and theories of human resource management that

have appeared. This notion of harnessing the commitment of employees

in organisations was first articulated strongly by Walton (1985) who

described how modern organisations were moving their management

styles from one based on control, to one based on commitment. Walton

elaborated his control to commitment model in a table that juxtaposed the

two models:

Management Control Commitment


practice
Job design Focused on the Focused on the team
individual
Performance Measured standards for Higher “stretch”
management minimum performance objectives
Management Top down and Flat organisation
structure hierarchical. Emphasis structure.
on management Minimum status
symbols differentials
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Compensation Individual pay linked to Pay linked to skills and


job evaluation mastery
Employment Employees viewed as Assurances that
variable cost participation will not
result in job losses
Employee voice Employee input allowed Employee participation
on a narrow agenda. enacted on a wide
range of issues
Labour Adversarial labour Mutuality with joint
management relations planning and problem
relations solving

Walton’s Control to Commitment Model

(Source: adapted from Walton (1985))

In Walton’s commitment model we can see many of the elements that

have become familiar in the modern practice of human resource

management including team working, flat organisation structures, pay

linked to skills and employee involvement. David Guest, a noted British

scholar in the human resource management debate, devised his

normative model of human resource management a few years after

Walton’s foray into commitment strategies. Guest (1987) defined four

outcomes for human resource management – strategic integration,

commitment, flexibility and quality. In Guest’s view these human resource

management outcomes would lead to higher levels of job performance,

higher levels of innovation and change whilst lowering turnover, absence

and employee grievance rates. This veritable nirvana of human resource

management has remained one of the most influential models in


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discussions about human resource management to this day :

Human resource Human resource Organisational


management policies management outcomes
outcomes
Organisation and job Strategic integration High job
design. performance
Management of change
Recruitment, selection Commitment High problem
and socialisation solving, change and
innovation
Appraisal, training and Flexibility/adaptability High cost-
development effectiveness
Reward systems Quality Low turnover,
Communication absence and
grievances

Guest’s normative model of human resource management

(Source: adapted from Guest (1987))

Guest’s model of human resource management is very useful in

that it defines the modern lexicon of human resource management. Gone

are the references to the functional areas of personnel management

described earlier. Human resource management clearly encompasses

these older regulatory hangovers, but goes much further in embracing the

management of change, job design, socialisation and appraisal as the key

levers to achieve organisational success. Guest’s model also sets the

agenda for what human resource management is trying to achieve –


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integration with the business strategy of the organisation, employee

commitment, flexibility and quality. These are still very much the aims of

human resource management. Taking commitment as a major element of

human resource management Storey (1995:5) came up with one of the

best original definitions of human resource management:

Human resource management is a distinctive approach to employment

management which seeks to achieve competitive advantage through the

strategic deployment of a highly committed and capable workforce using

an array of cultural, structural and personnel techniques.


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CONCEPTUAL FRAMEWORK

Traditional HRM
And
Strategic Partner/HRM

Job Organization and


Information

Acquisition

Maintenance

Development

Competitive Adavantage

Internal Effects

Productivity

Stability
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Shows the comparative description of Traditional and Strategic

HRM.The researcher would like to know how the Human Resources

Department from the firms of Paranaque and Makati City do their functions

such as the acquisition, maintenance and development whether they use

the traditional or strategic partner approach. And how this two practices

affect the competitive advantage, productivity and stability of a firm. Also

how it affect the organization as a whole.

STATEMENT OF THE PROBLEM

The following are the questions that the researchers would like to

know in this research paper:

1. What is Human Resource Management?

2. What is Traditional HRM?

3. What is Strategic Partner/ HRM

4. What is the role of HRM functions to the productivity of the

firm?

5. What are the similarities and differences of the traditional

and strategic HRM?

6. What are the advantages and disadvantages of the

traditional and strategic HRM?


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7. What is the rate of the companies in Paranaque City that

uses:

7.1 Traditional HRM

7.2 Strategic Partner/ HRM

8. What is the rate of the companies in Makati City that uses:

8.1 Traditional HRM

8.2 Strategic Partner/ HRM

Scope and Delimitation of the Study

This study aims to identify the most widely used approach by the

HRD, whether it is Traditional or Strategic HRM by the companies in

Paranaque and Makati City. It would also discuss the the nature of the two

approaches, their differences and similarities, as well as their advantages

and disadvantages. The study will also mention the overall HRM functions

and its role on the productivity of the firm.

The researchers will compare the rate of Traditional HRM with

Strategic HRM in different companies of the said cities in terms of its

practice and relevance. They would state the problems that will encounter

in using the two approaches and the possible solutions, findings and

conclusions. They will also come up with their own recommendations for

the improvement of the future generation.


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Significance of the Study

This study is significant to the following:

Human Resource Department. The study must serve as the basis

to know whether they will be using Traditional HRM or Strategic HRM for

the effectiveness and productivity of the firm.

Human Resource Managers. The study will serve as a guide on

how it can affect their decision-making.

Human Resource Students/Practitioners. The sudy will help them to

gain knowledge about the nature, functions and role of Human Resource

Management in ones' firm.

Firms/Company. The result of the study will help them to know the

importance of HRM and how it affects the overall organization with

regards to the productivity and decision-making.

Definition of Terms

HRM (Human Resource Management)-

Personnel Management-

Strategic HRM-

Traditional HRM-

Acquisition Function-

Maintenance Function- comprises motivation, compensation,


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administration, rewards and sanctions, performance evaluation, benefits,

services, maintenance of discipline and working conditions that are

necessary for worker retention. Industrial relations which to some extent

may also fall in the rubric of development function, is a very important

phase of this function.

Development Function- includes training and education that aim to

upgrade knowledge and skills and improve attitudes of both the managers

and the rank and file. It also includes career planning and counseling

which assists the individual path his growth and development in light of his

and organization's needs and values and gives guidance when beset with

problems. The personal, professiional, career growth and enhancement of

the employees in relation to changes within the organization and its

environment is, therefore, the main concern of the development function.

Job Design- one of the management practices;

Compensation-

REVIEW OF RELATED LITERATURE

CONCEPTUAL LITERATURE

Related Literature

Human Resources Management is the art and science of acquiring,

motivating, maintaining and developing people in their jobs in light of their

personal, professional and technical knowledge, skills, potentialities,


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needs and values and in synchronization with the achievement of

individual, organization and society`s goals.1

Human Resources Management goes beyond the policies and

practices of traditional personnel management. While there are some

overlaps, the former is broader in various aspects: scope of people

involved, hours of work, place of work, services and functions, staff

qualifications and goals. Personnel Management, therefore, is subsumed

under human resources management.2

The specific and technical duties of the human resources

department are complex and multifarious and are categorized according to

its five functions- job organization and information, acquisition,

maintenance, development and research on human resources.

Job organization and information is the analysis and evaluation of

each job that exists within the organization. It is a detailed, organized and

systematic study of jobs.3 Acquisition of human resources, this function

which has also been termed procurement has five phases: human

resources planning, recruitment, screening, selection and placement.4

Maintenance function is the supportive action program that encourages

continuance and stability of the organization. It includes orientation,

physical working conditions, motivation, compensation, administration,

performance evaluation, management- labor relations and movement.5


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The development function of human resources management considers

individual growth and process through training, career planning and

counseling.6 Research, a function of human resources management, is a

deliberate and scientific study of people within the organization- their

acquisition, maintenance, development and general treatment by

management.7

In Human Resource (HR) and management circles nowadays there

is much talk about Strategic Human Resource Management and many

expensive books can be seen on the shelves of bookshops. But what

exactly is SHRM (Strategic Human Resource Development), what are its

key features and how does it differ from traditional human resource

management?

SHRM or Strategic human resource management is a branch of Human

resource management or HRM. It is a fairly new field, which has emerged

out of the parent discipline of human resource management. Much of the

early or so called traditional HRM literature treated the notion of strategy

superficially, rather as a purely operational matter, the results of which

cascade down throughout the organisation. There was a kind of unsaid

division of territory between people-centred values of HR and

harder business values where corporate strategies really belonged. HR

practitioners felt uncomfortable in the war cabinet like atmosphere where


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corporate strategies were formulated.

Definition of SHRM

Strategic human resource management can be defined as the linking of

human resources with strategic goals and objectives in order to improve

business performance and develop organizational culture that foster

innovation, flexibility and competitive advantage. In an organisation SHRM

means accepting and involving the HR function as a strategic partner in

the formulation and implementation of the company's strategies through

HR activities such as recruiting, selecting, training and rewarding

personnel.

How SHRM differs from HRM

In the last two decades there has been an increasing awareness that HR

functions were like an island unto itself with softer people-centred values

far away from the hard world of real business. In order to justify its own

existence HR functions had to be seen as more intimately connected with

the strategy and day to day running of the business side of the enterprise.

Many writers in the late 1980s, started clamoring for a more strategic

approach to the management of people than the standard practices of

traditional management of people or industrial relations models. Strategic

human resource management focuses on human resource programs with

long-term objectives. Instead of focusing on internal human resource


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issues, the focus is on addressing and solving problems that affect people

management programs in the long run and often globally. Therefore the

primary goal of strategic human resources is to increase employee

productivity by focusing on business obstacles that occur outside of

human resources. The primary actions of a strategic human

resource manager are to identify key HR areas where strategies can be

implemented in the long run to improve the overall employee

motivation and productivity. Communication between HR and top

management of the company is vital as without active participation no

cooperation is possible.

Key Features of Strategic Human Resource Management

The key features of SHRM are

• There is an explicit linkage between HR policy and practices and

overall organizational strategic aims and the organizational

environment

• There is some organizing schema linking individual HR

interventions so that they are mutually supportive

• Much of the responsibility for the management of human

resources is devolved down the line


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Trends in Strategic Human Resource Management

Human Resource Management professionals are increasingly faced with

the issues of employee participation, human resource flow, performance

management, reward systems and high commitment work systems in the

context of globalization. Older solutions and recipes that worked in a local

context do not work in an international context. Cross-cultural issues play

a major role here. These are some of the major issues that HR

professionals and top management involved in SHRM are grappling with

in the first decade of the 21st century:

• Internationalization of market integration.

• Increased competition, which may not be local or even national

through free market ideology

• Rapid technological change.

• New concepts of line and general management.

• Constantly changing ownership and resultant corporate climates.

• Cross-cultural issues

• The economic gravity shifting from 'developed' to 'developing'

countries

SHRM also reflects some of the main contemporary challenges faced by


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Human Resource Management: Aligning HR with core business strategy,

demographic trends on employment and the labour market,

integrating soft skills in HRD and finally Knowledge Management.8

“Over the past decade a shift has occurred away from ideas of

‘personnel management’ towards HRM and concepts of people

management” (Pass, S. & Hyde, P., 2005) This shift has been essential,

as with the globalization of the market and more competitors, firms have

found it more and more difficult to gain competitive advantage. In order to

adapt to this changing environment, the firm’s traditional management

system evolved to a more strategic approach towards human resource

management. “Strategy is about building sustainable competitive

advantage that in turns creates above average financial performance”.

(Becker, B & Huselid, M., 2006) (Wielemaker, M. et al, 2005) states that

before the shift, firms were seeking competitive advantage from outside,

such as in costs of goods and trade prices. But a new belief argues that

the principal source of competitive advantage actually lies within the firm

itself. It is now thought that the main sources of competitive advantage are

dependent on people. This new ideology has caused the role of human

resources from being supportive, to being strategic.

As (Wielemaker, M. et al, 2005) stated the role of traditional personnel


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management was mainly supportive and repetitive. Tasks such as training,

recruiting and compensation were the usual roles of the human resources

department. (Pass, S. & Hyde, P., 2005), argues that now, with strategic

human resources management, the role of the human resources

department has become more one of to ensure strategic integration, long

term planning and a transfer from human resources responsibility to line

management. From this, it can be concluded that strategic human

resource management now focuses more on its internal people. It can

also be argued that it is now regarded as a significantly more important

role than previous, where the role of personnel management was seen as

an option, it is now seen as a crucial part of a firm’s success. 9

Related Study

Foreign Study

Strategic human resource management on the performance of

knowledge-based staff should be based on their strategic business

objectives, capacity characteristics, and the characteristics of industry

developing to form a series of targeted management policies of human

resources. The quality and level, stability and continuity of Human

resources management have had a major impact to the results of financial

operations and long-term development. In other words, the human

resources management is beneficial to motivate staff and improve staff


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capacity, which is the basis of enterprises to set up and maintain

competitive advantage. Strategic Human Resource Management is to

enable businesses to reach the goal by a series of planned behavior and

management of Human Resources Department, which is compared with

the traditional human resources management; it has the basic

characteristics as follows:

(1) The importance of human resources: the strategic human resources is

referred to those personnel in the human resources system who have

some special knowledge or professional knowledge, abilities and skills, or

have a certain core knowledge or critical knowledge and they are on

important or key positions in enterprise management system of, or some

on those human resources[7].Therefore, they are special and

irreplaceable.

(2)The development of human resources management: the relationship

between employees and enterprises on the strategic human resources

management are set up based on fair treatment and compact between the

business and employees[8].The business can treat the employees equally

to provide them enough development space and the corresponding return,

and then the staff will pay for the enterprise commitment and efforts to

achieve common growth of business and staff.

(3) The systemic features of human resource management: Strategic


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human resource management is referred to the enterprises take use of a

kind of strategic system including human resources management policies,

practices and methods, means and so on in order to obtain sustainable

competitive advantages[9].The various parts should be organically

combined to make mutual communication and co-operation, forming a

tight system, in order to create a synergy.

(4) A strategic feature of human resource management: strategic human

resource management should study human resources development,

training and using on a strategic perspective, and pay more attention to

the fitness of human resource management and corporate strategy,

including vertical fit, that is human resources management should

match business development strategies, and "horizontal fit", that is, the

entire human resources management system or the various components

and elements of it should have harmony.

(5) The feature of goal -oriented of human resource management: the goal

of strategic human resource management is to take use of the

organization structure to place human resources management in the

operating system of organizations in order to ensure the organization can

achieve the staff with good skills and good motivation, so that the

organization will have a continued competitive advantage, and promote

the maximization of overall performance.


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(6) The competition of Strategic Human Resource Management: the

strategic human resource management will focus on the development of a

sustainable competitive advantage of enterprises, which take the use of

the partnership role of human resources management in the enterprise to

develop strategies and implementation of the strategic to help enterprises

to establish competitive strategy.

Chapter III

METHODOLOGY

This chapter discusses the methods that were utilized in collecting

and analyzing data in evaluating the study entitled “The HRM and its role:

Traditional vs. Strategic, which is more preferred by the companies in

Parañaque and Makati City”. The following are the subject area that will be

discussed: research design, population and sampling, respondents of the

study, research instrument, validation of the instrument, data-gathering

procedure, and statistical treatment of data.

The researchers also gathered information from the following:

 Books

 Magazines
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 Internet

 Newspapers

 Journal

 Thesis/ Dissertation

 Other related information

The researchers also uses historical method to gather valid

information to make the study more specific and clear to be able to

give correct information based on the research.

Research Design

In order to achieve the purpose of the study, the researchers

used descriptive method. The purpose of this design is to obtain

information concerning the current status of the phenomena to

describe "what exists" with respect to variables or conditions in a

situation. The methods involved range from the survey which

describes the status quo, the correlation study which investigates

the relationship between variables, to developmental studies which

seek to determine changes over time.1 Descriptive design is a study

under investigation after survey of trends, practices and conditions

1
James P. Key, Research Design in Occupational Education, (Oklahoma State
University) Copyright 1997
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that relate to the phenomenon.

The researchers intended to describe the nature of Strategic

and Traditional HRM.

The researchers used quantitative research process that

defines as a focus on understanding and bearing down the different

parts of phenomenon. Therefore, quantitative method involved

collecting information that is specific and limited to the particular

parts of events or phenomenon being studied. However, the

quantitative research applied to the manipulation and control to the

phenomenon and verification of the results using empirical data

gathered through senses.

Quantitative research involves analysis of numerical data.2 It

is concerned with objective meaning of experienced to an

individual. This is a rigid control of research, situations and

generalization of findings.

Population and Sampling

Sample is defined as portion of a whole; it is widely used in

business as means of gathering useful information about

population.3 The sample will come from the companies of Kraft


2
http://www.ling.lancs.ac.uk/monkey/ihe/linguistics/corpus3/3qual.htm
3
Asuncion C. Mercado, Basic Statistics with Problem, (Quezon City, Levicon Press,
2001) p. 36
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Foods, TRM Sales Marketing, and Golden Doors Food Enterprises,

Teleperformance, and Zuelig Pharmaceutical in Paranaque City

and Pointwest, Red Crab Group of Restaurants, Toyota Motors

Corp., Wyeth Pharmaceutical, and Allied Banking Corp. in Makati

City. The respondents were selected through purposive sampling.

Purposive Sampling is a non-representative subset of some larger

population, and is constructed to serve a very specific need or

purpose. A researcher may have a specific group in mind, such as

high level business executives. It may not be possible to specify the

population -- they would not all be known, and access will be

difficult. The researcher will attempt to zero in on the target group,

interviewing whoever is available.4 This sampling technique simply

picked out the persons who were HR Managers/ HR Personnel of

the said companies.

The researchers will use clustered sampling. Clustered

Sampling is a sampling technique based on dividing the

whole population into groups ("clusters"), then using random

sampling to select elements from the groups.5

The researchers choose their most preferred location or


4
http://psychology.ucdavis.edu/sommerb/sommerdemo/sampling/types.htm

5
http://www.statistics.com/resources/glossary/c/csampling.php
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venue where they can conduct their study. The researchers

specified the place and time where they can collect their data.

Respondents of the Study

The respondents of the study were the selected HR

Managers/ HR Personnel from the companies of Kraft Foods, TRM

Sales Marketing, Teleperformance, Zuelig Pharmaceutical, and

Golden Doors Food Enterprises in Paranaque City and Pointwest,

Red Crab Group of Restaurants, Toyota Motors Corp., Wyeth

Pharmaceutical, and Allied Banking Corp. in Makati City. The

respondents were composed of two HR Managers and eight HR

Personnel/ Staff.

Research Instrument

The researchers utilized a self-made questionnaire drawn

from the various description obtained from different literatures. The

questionnaire will be sent out to the respondents after being

subjected to an expert in the field of Human Resources for testing

the instruments’ validity and reliability.

The instrument is a two-part questionnaire which took

account of the HR Managers/HR Personnel of Kraft Foods, TRM


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Sales Marketing, Teleperformance, Zuelig Pharmaceutical, and

Golden Doors Food Enterprises in Paranaque City and Pointwest,

Red Crab Group of Restaurants, Toyota Motors Corp., Wyeth

Pharmaceutical, and Allied Banking Corp. in Makati City.

The following tools are used namely:

Questionnaires. It can be used to obtain subjective

information about participants’ feeling as well as document

measurable results for use in an economic analysis. It is important

that questionnaires be designed properly to satisfy third intended

purposes.

Interview. There are two ways in conducting an interview.

This is considered as one of the most effective methods of

collecting data. This method allows greater flexibility since both

interviewer and interviewee present when the questions are asked

and answered.

The unstructured informal interview was used by the

researchers to support data gathered from the questionnaires.

Data-gathering technique in information systems development

relies on the interviewee to direct the conversation based on a

general truth.

Unstructured interview was conducted as secondary data


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gathering instrument. The interview was use in making the

questionnaire to gather the information and ideas in order for the

researchers to clearly understand and for the respondents to

answer the questions properly and effectively.

Internet. A world network of computers that allows access to

information and document from distant sources.

Library Technique. Researching data and gathering

information from publicly available sources. Library Technique was

used as the researchers gather data. This instrument provides

information regarding the study. A material such as books, journal

and thesis was used for their guide and to get some information in

making their study.

Validation of the Instrument

The first draft of the self-made questionnaire was submitted

to the professor for corrections, comments and suggestions with

regard to contents, form and style. Based upon the corrections and

suggestions that were made by the professor, the questionnaire

was put into its final form. The self-made questionnaire will be

subjected to three experts in the field of Human Resources for

validity of the questions. The researchers incorporated the


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suggestions to the final copy.

Data-Gathering Procedure

After validation and revision of the research, authorization

was asked from the research adviser of College of Business

Administration to distribute questionnaires to the HR Managers and

HR Personnel of Kraft Foods, TRM Sales Marketing,

Teleperformance, Zuelig Pharmaceutical, and Golden Doors Food

Enterprises in Paranaque City and Pointwest, Red Crab Group of

Restaurants, Toyota Motors Corp., Wyeth Pharmaceutical, and

Allied Banking Corp. in Makati City who wil serve as the

respondents of the study.

The researchers prepared a self-made questionnaire to

gather data and information leading to the evaluation of the study.

Ideas and different point of views coming from various authors that

are related to the present study were used as a good basis of the

study.

Statistical Treatment of Data

The data gathered from the respondents will be tabulated

and interpreted by the researchers using statistical tools. The


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statistical tools were as follows:

Frequency and Percentage Distribution. Obtained by

counting the occurrence of values or scores in the data

Formula:
F
P= ------------ x 100
N
Where:

P = Percentage

F = Frequency of responses

N = Total no. of respondents

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