 Human Resources Management

Just about every organisation today claims that their human resources are their most important
and valuable assets.


 So what is it about the staff, employees, workers, and operatives that make them so important to the
management of any organisation?

Human Resources Management involves the process of managing people to perform various tasks
within the organisation so as to achieve organisational goals.

Human resources managers are responsible for creating 'win-win' relationships for both the
individual employee and the organisation as a whole.

Employees are seen as the key to organisational success as they are the ones who
implement management's policies and practices and they are usually the ones at the
coalface dealing with customers or physically making the products.

If employee performance is not up to the benchmark, then the organisation will not be
working in synergy and will not be able to meet the standard set by the industry leader.

 Organisations have often tried to obtain a competitive advantage by various means - by use of
specialised natural resources, by use of technology and other capital resources, or by
 entrepreneurial resources or 'street smarts'.


 Today, the human resources factor is really the only viable choice to achieve that competitive edge
or advantage over corporate competitors

 Management Responsibilities
 Employee productivity (as measured by output per employee per time period) is important to every
organisation.

By developing policies that cover every aspect of the employment life cycle of an individual
employee, management hope to retain and maintain an employee within the organisation and lift
their performance level to the optimum level.

 Organisations must ensure that they comply with these laws and regulations otherwise they face a
fine, imprisonment or closure of the organisation.

Also, the Human Resources Manager must be sure that the policies and practices put into place are
consistent with the strategic long-term objectives of the organisation.

Organisational Objectives

There is a direct correlation between the management of the human resources of an organisation
and the achievement of organisational objectives.

The attainment of organisational objectives will require the co-operation of employees and a
concerted effort on their part to achieve the objectives.
Employment Legislation

Management must also take into account various legislative enactments which impact on the way
that employees are actually employed.

Laws dictate the minimum (or 'safety net') terms of employment and the conditions of employment:

• They dictate what employers can and can not do in the workplace;
• Whom they can and can not employ;
• The nature of the environment within which employees work and
• What happens when employees want to leave the workplace voluntarily or are forced to leave the
workplace by management.
Employee Productivity

Managers of organisations look to enhance employee performance in order to increase employee

productivity.

Enhancing employee performance means that management must look at every aspect of the
employment cycle of that employee. Management must ensure that employees are suitably
selected, correctly trained and also appropriately remunerated and motivated to stay on the job.

 Role of the Human Resources Manager

 In most organisations, the role of planning, organising, leading, controlling, creating, communicating,
and motivating employees has become the sole responsibility of the Human Resources Manager.
 The role of the formerly titled Personnel Manager has been extended and has moved beyond basic
data collection relating to such things as payroll, sick day entitlements and holidays taken.

 The role of the HR Manager involves every aspect of the employment cycle of each individual
employee and it involves the implementation of policies and practices designed to enhance the
performance of these employees.



HR Managers are mainly responsible for implementing change in workplace procedures and for
ensuring that employees are fully informed of the changes and are willing and able to accept the
changes being implemented.

In many organisations, this role is outsourced to external change agents or facilitators.

 Management of organisations can see that their relationship with employees is capable of giving
them a competitive edge over their competitors and, hence, an increase in their market share, if the
relationship is managed effectively.

Human Resource Managers of large-scale organisations need to be aware of the factors that
influence both the size and the quality of the workforce available to supply their services for
employment:


o The demographics of the local population

o The diversity of the workforce

o The skill level of the workforce

o The education level of the workforce

o The training made available to workers

o The motivation of the workforce to work full-time

o The provision of child-care facilities

o The working conditions

o The security associated with the employment contract

o The level of remuneration associated with the job

o General employment trends e.g. job sharing, tele-commuting etc.

o The role of technology in the workplace

Lesson Summary
 The key points from this module are:
 Human Resources Management involves the process of managing people to perform various tasks
within the organisation so as to achieve organisational goals.

Organisations have often tried to obtain a competitive advantage by various means - by use of
specialised natural resources, by use of technology and other capital resources, or by
entrepreneurial resources or 'street smarts'.

Today, the human resources factor is really the only viable choice to achieve that competitive edge
or advantage over corporate competitors

Employees expect the following the the workplace:


o A safe and secure working environment

o A career path

o Flexible working arrangements

o Personal satisfaction

o Open communication

o A team environment

 Employee productivity (as measured by output per employee per time period) is
important to every organisation. By developing policies that cover every aspect of
the employment life cycle of an individual employee, management hope to retain
and maintain an employee within the organisation and lift their performance level
to the optimum level.

 Organisations must ensure that they comply with these laws and regulations
otherwise they face a fine, imprisonment or closure of the organisation.

 In most organisations, the role of planning, organising, leading, controlling,
creating, communicating, and motivating employees has become the sole
responsibility of the Human Resources Manager.

 HR Managers are mainly responsible for implementing change in workplace
procedures and for ensuring that employees are fully informed of the changes
and are willing and able to accept the changes being implemented.

 In many organisations, this role is outsourced to external change agents or
facilitators.

1. Module 2: HR Consultants
Learning Outcomes
 On successful completion of this module, you will be
able to:

o List the reasons for using HR consultants.

o Explain why choosing a service provider is difficult.

o Describe the difficulties organisations are faced with in choosing a consultant.

o Distinguish between the advantages and disadvantages of approved lists from the perspective of the
provider and the purchaser.

Using HR Consultants
 Human Resources Consultant
 This section looks both at sub-contracting particular human resources services which could
otherwise be provided internally, and at change consultancy, where the consultant brings an external
 perspective which could not be obtained in any other way.





 Human resources consultants are often called in initially for their specific expertise but many find
that, even in this case, diagnosis is important, and there are often follow-on opportunities for broader
organisational development.

Using HR Consultants
 There are a number of reasons for using HR consultants. These include:

o The provision of interim or other temporary services, specialist expertise such as employment law,
and general support such as coaching.

o They also include more substantial involvement with change, either just at the diagnostic stage or
throughout the change process.

 There are different modes of consulting, of which the process mode is preferable whenever
problems are at all complex.

 Choosing a Human Resources Consultant
 Choosing a service provider tends to be far more difficult than choosing a supplier of goods.
While there may be tangible components in the service an HR consultant offers, what HR
consultants provide is largely intangible.
Imagine that you are considering using consultants for one of the reasons given in the introduction to
this topic. What issues would you want to consider before deciding to go ahead?


 There are major issues of control and risk to be taken into consideration. Thus you may have
raised questions similar to those which follow.

Issues to be addressed when deciding whether to employ consultants include the following:


o What risks are associated with use of a consultant? Where would the power lie in the
relationship?

o What expertise does the consultant bring that you lack?

o Would it be better to develop this expertise internally rather than seek it externally?

o How can you be sure that the consultant has the claimed expertise and will actually
deliver as promised?

o What other advantages are there to using a consultant and are there alternative
ways of achieving these?

 Organisations are faced with the following difficulties in choosing a consultant:


o Determining the precise nature of the consultant's services in advance - what exactly
is being offered?

o Comparing this service to the services offered by other providers (and identifying
these in the first place)

o Knowing what to pay

o Evaluating the service afterwards.

o Knowing the nature of the service that you wish to purchase

 While a good consultant, and one who is suitable for your context, can be hugely
successful, the cost of a poor choice may be substantial. A failed change
 intervention is not only more expensive than a bad haircut but seriously more
disastrous.

 Clients seeking HR consultancy often face real and urgent problems to which
they are expecting consultants to provide a solution. When major change
exercises are being planned, any changes made in the light of consultant
recommendations are likely to be extensive, expensive and irreversible.

 For this reason, evaluation of provision is important throughout the consultancy,
to allow for adjustments where necessary during the process, to ensure that the
consultant has delivered what was promised, to identify what else needs to be
done and, most importantly, to inform future involvement with consultants
Using Approvd HR Consultants
 Organisations are increasingly seeking to ‘rationalise’ provision of services. Such rationalisation
often includes keeping lists of ‘approved’ HR consultants from which choice must be made and
standardising procurement procedures.

There are potential advantages and disadvantages of such ‘approved lists’, from the perspective of
both purchaser and provider.


 Click on the tabs to learn about the advantages and disadvantages for providers and
purchasers:

o Advantages for Purchaser

Advantages for the organisation as purchaser may include:

 • Vetted suppliers

• Economies of scale

• Leading to potentially better deals

• Speedier provision of services as there are fewer stages in the tendering process

• Greater control over quality

• Increased bargaining power over costs


o Advantages for Provider

Advantages for the HR consultant as provider may include:

• Less time/cost spent in the tendering process

• Less time wasting as the purchaser more likely to buy from you
• The ability to build up knowledge of the client
• Greater likelihood of being paid if a formal agreement exists
• Improved forecasting/knowledge of where future business will come from

Disadvantages for the organisation as purchaser may include:

• Working from a list which features only the ‘big’ players - major names who tend to have a range of
fairly standardised packages that may not fit your particular needs

• Being faced with different consultants each time, even though you are using the same consultancy,
which makes it difficult to build a relationship

For a HR consultant as provider the disadvantages will depend on whether they are on or off the list!

Traditionally, there have been few barriers to entry to offering consultancy. A move towards
approved lists' constitutes a major barrier, which means that new entrants will need to focus on
organisations not operating such a list or on open invitations to tender.

 Assessing the Human Resources Consultant

 Once you have a reasonably clear idea of what you are looking for and have identified potential HR
consultants, you may need to find out more about them before you can choose.


Ideally, you will gather information from as many sources as possible, and, as with any such
information, evaluate its reliability and relevance to your particular context. The clearer you are about
the nature of the intervention that you require, and the key features of the context in which this will
occur, the better placed you will be to select an appropriate provider.
 A list of questions for your HR consultant would include:

o Can they do the task as described and do they add something extra beyond my own
staff?

o Can they listen as well as talk?

o Can they write well?

o Will they fit into the organisational culture? If not, can they be adapted or will I need
to find a ‘bridge'?

o Are their presentation skills good enough to be convincing in front of the most senior
levels of the organisation?

o Is the team of the right mix, and is there other expert back-up if necessary?

o Are they local enough that they can attend regular meetings? If not, have they good
electronic links?

 One of the more visible parts of the service many HR consultants offer is the model or
models on which they base their work. The HR consultant will normally start by trying to
understand the client perspective, but then seek to expand that perspective, using theory
and experience from elsewhere.
 

Such models may look superb in publicity material and may impress the majority of ‘naïve’
purchasers. You should be able critically to assess both individual models used and the
‘package’ they comprise.

 If a model does not make sense to you or feels ‘wrong’, and questioning does not enable you to
understand it, then it is unlikely to form a useful basis for working together.

Relevant questions include:


o Is the model meaningful?

o Does it make sense to you in the light of your own experience?

o Is there relevant and adequate empirical evidence for the model/theory?

o Does the proposed approach include an element of diagnosis?

o Is the model or set of models likely to include all the key elements in the situation which are likely to
need addressing?

o Having started to discuss the situation with the consultant, have I already come to understand it
better?
 HR Consultant as a Coach or Mentor
 HR Consultant as a Coach or Mentor
 A fast-growing area of HR consultancy in recent years has been coaching or mentoring.

Let us consider what is involved in choosing a consultant to work as a coach/mentor for a chief
executive.

You would clearly need to ensure that both parties felt they could work productively together, and
that the HR director or other selector was convinced that the coach had the credibility and
experience to be successful in the role.

 Click on the tabs below to review the nine stages of the selection process:

o Stage 1
 Identify and specify the exact issue to be addressed with the CEO (e.g. this might include their
management style).

o Stage 2

Identify consultancy firms who have experience of working successfully with top managers.

o Stage 3

Ask these consultancies to indicate how they work in general terms, how they would approach the
specific issue, and what they would charge.

o Stage 4

Draw up a shortlist of two or three possible coaches on the basis of this information.

o Stage 5

Interview the coaches on this shortlist and arranging for them to meet the CEO.

o Stage 6

The CEO selects their preferred coach.

o Stage 7

Give the chosen consultant a more in-depth briefing about the organisation and the issues, and
arrange for them to have a much longer meeting with the CEO.

o Stage 8

Go back to an earlier stage if at any point the HR personnel involved, the CEO or the consultant
have reservations about the possible success of the relationship and/or assignment.

o Stage 9

Once no reservations remain, draw up any necessary contractual arrangements, and arrange a first
session

Lesson Summary
 The key points from this module are:
 There are a number of reasons for using HR consultants. These include:

o The provision of interim or other temporary services, specialist expertise such as employment law,
and general support such as coaching.
o They also include more substantial involvement with change, either just at the diagnostic stage or
throughout the change process.

 There are different modes of consulting, of which the process mode is preferable whenever
problems are at all complex.

Choosing a service provider tends to be far more difficult than choosing a supplier of goods. While
there may be tangible components in the service an HR consultant offers, what HR consultants
provide is largely intangible.

While a good consultant, and one who is suitable for your context, can be hugely
successful, the cost of a poor choice may be substantial. A failed change intervention is
not only more expensive than a bad haircut but seriously more disastrous.

Organisations are increasingly seeking to ‘rationalise’ provision of services. Such

rationalisation often includes keeping lists of ‘approved’ HR consultants from which
choice must be made and standardising procurement procedures.

There are potential advantages and disadvantages of such ‘approved lists’, from the
perspective of both purchaser and provider.

One of the more visible parts of the service many HR consultants offer is the model or
models on which they base their work.

If a model does not make sense to you or feels ‘wrong’, and questioning does not
enable you to understand it, then it is unlikely to form a useful basis for working
together.
Learning Outcomes
 On successful completion of this module, you will be
able to:

o Explain why job design is critical to the success of an organisation.

o Describe in detail the elements of job design.

o Define what Taylorism is.

o List the principles of Taylorism.

o Distinguish between Socio-Technical Systems approach and the Job Characteristics Model.

o Define external and internal equity.

o List the three steps of the "point method".

 Job Design
 Elements to Job Design
 Job design is critical to the success of any organisation. For our purposes job design is defined as
the allocation of specific work tasks to individuals and groups.


 Allocating jobs and tasks means specifying the contents, method and relationships of jobs to satisfy
technological and organisational requirements as well as the personal needs of jobholders

Job Design
A task can be best defined as a piece of assigned work expected to be done within a certain time. It
is important to strictly and thoroughly identify tasks that need completion.
Motivation:
In addition individuals need to be compelled, excited, and passionate to do their work. Hence, it is
essential to design jobs that motivate employees. Motivation describes forces within the individual
that account for the level, direction, and persistence of effort expended at work.
Resources:

In job design it is necessary to identify and structure jobs in a way so that the company’s resources
are being efficiently used.

Resource allocation occurs when organisations decide to appropriate or allocate certain resources to
specific jobs, tasks or dilemmas facing the organisation.
Maximise efficiency
 Jobs need to be constructed so that efficiency of the worker or department is maximized.

Organisations need to use the resources and creativity of their employees effectively and efficiently.
Appropriate resource allocation allows large organisations to foster and develop innovation in their
workforce.
Reward systems

Reward systems also play a role in job design. Reward systems include compensation, bonuses,
raises, job security, benefits, and various other methods of reward for employees.

An outline or description of reward packages needs to be established while constructing jobs.

 Job Design Methodology

Steps to Effective Job Design

 Key to effectively crafting a meaningful job for an employee is starting the thought process by
looking at the values and strategy of the organisation. By framing the job in these contexts the job
design process is more likely to align potential employees with the purpose of the company.

Once you have this context the following steps will ensure both meaningful and effective job design:


o Assess skills, needs, abilities, and motivations of employees and the organisation.

o Design the job to meet those needs, abilities and motivations.

o Implement the new job design.

o Audit the success of the job design and begin with step one periodically as well as when problems
have been identified.

 Brief History of Traditional Approaches to Job Design


  Taylorism, also known as scientific management, is a foundation for management and
managerial decisions. Frederick Taylor developed this theory in an effort to develop a
“science” for every job within an organisation.

The principles of Taylorism are:

o Create a standard method for each job.

o Successfully select and hire proper workers.

o Effectively train these workers.

o Support these workers.

 Hertzberg's Motivation-Hygiene theory attempts to uncover psychological
needs of employees and enhance employee satisfaction. In regards to this theory
employers are encouraged to design jobs that enhance and motivate employees
beyond simply meeting a daily or weekly quota. This theory highlights the
importance of rewards systems and monitoring when and how employees are
rewarded. Simple recognition is often enough to motivate employees and
increase job satisfaction.

 More effective jobs can be created when specific goals are established. Goal
setting theory as described by Edwin Locke mainly focuses on the motivational
properties of task goals. Task goals can be highly motivating when set and
managed properly. If a company wants to implement goal setting theory with
regards to job design than a reasonable job criteria and description must be
established
 Current Approaches to Job Design
 Technology and the flattening of the global economy have contributed greatly to the changes
we now see in jobs and job content across the world. We now recognise that a person
presented with quality meaningful work is more likely to do that work well. Because of this
insight, job design now presently takes a couple of prominent forms.

The first of which is designed around the evolution from individual work to work-groups. This job
design practice is called Socio-Technical Systems (STS) approach.

Another modern job design theory is the Job Characteristics Model (JCM), which maintains five
important elements that motivate workers and performance.
 Socio-Technical Systems (STS) approach

This is designed around the evolution from individual work to work-groups. This approach has the
following guiding principles:


o The design of the organisation must fit its goals.

o Employees must be actively involved in designing the structure of the organisation.

o Control of variances in production or service must be undertaken as close to their source as

possible.

o Subsystems must be designed around relatively self-contained and recognisable units of work.

o Support systems must fit in with the design of the organisation.

o The design should allow for a high quality of working life.

o Changes should continue to be made as necessary to meet the changing environmental pressures.

 Job Characteristics Model (JCM)

This model maintains five important elements that motivate workers and performance:


o skill variety

o task identity

o task significance

o autonomy

o job feedback
 
 The individual elements are then proposed to lead to positive outcomes through three
psychological states:

o experienced meaningfulness

o experienced responsibility

o the knowledge of results

Determining Staff Pay

 Determining Staff Pay
 How do companies decide the pay associated with each job?

By following each of these four steps, a company will have a fair base pay system, which will lead to
attracting and retaining the best employees:


1. The company analyses the content of each job.

2. They assess the value each job contributes to the company.

3. They price each job in the market.

4. They look at the relationship between what they value internally and what the market values
externally.
Have you ever wondered how a company decides how much to pay for a particular job?
Imagine that you have seen a job posted on the Internet. It reads,

“Office Assistant Wanted. Will answer the phone and greet visitors. Some word
processing duties. Other duties as assigned. Start at USD 8.00 an hour”.
 How did the manager decide to pay USD 8.00 per hour? Why did she decide that was
fair?

In this section, we will cover the two types of “fairness” important in designing a base
pay system - Internal equity, and External equity.

 Internal Equity
 The first consideration is that the base pay system needs to be internally equitable. This means
that the pay differentials between jobs need to be appropriate. The amount of base pay assigned to
jobs needs to reflect the relative contribution of each job to the company’s business objectives.

In determining this, the manager should ask herself, “How does the work of the office assistant
described compare with the work of the office manager?”

Another question to be asked is, “Does one contribute to solutions for customers more than
another?”

Internal equity implies that pay rates should be the same for jobs where the work is similar and
different for jobs where the work is dissimilar. Determining the appropriate differential in pay for
people performing different work is a key challenge. Compensation specialists use two tools to help
make these decisions:job analysis and job evaluation.

 Job analysis is a systematic method to discover and describe the differences and similarities
among jobs. A good job analysis collects sufficient information to adequately identify, define, and
describe the content of a job. Since job titles may be misleading, for example, “systems analyst”
does not reveal much about the job, the content of the job is more important to the analysis than the
title.

In general, a typical job analysis attempts to describe the skill, effort, responsibility, and working
conditions of each job:


o Skill refers to the experience, training, education, and ability required by the job.

o Effort refers to the mental or physical degree of effort actually expended in the performance of the
job.

o Responsibility refers to the degree of accountability required in the performance of a job.

o Working conditions refer to the physical surroundings and hazards of a job, including dimensions
such as inside versus outside work, heat, cold, and poor ventilation.

 Job evaluation is a process that takes the information gathered by the job analysis and places a
value on the job. Job evaluation is the process of systematically determining the relative worth of
jobs based on a judgement of each job’s value to the organisation.

The most commonly used method of job evaluation in the United States and Europe is the “point
method”.

The point method consists of three steps:


1. defining a set of compensable factors

2. creating a numerical scale for each compensable factor

3. weighting each compensable factor


 Each job’s relative value is determined by the total points assigned to it.

 External Equity
 External equity refers to the relationship between one company’s pay levels in comparison to what
other employers pay.
Some employers set their pay levels higher than their competition, hoping to attract the best
applicants. This is called “leading the market”. The risk in leading the market is that a company’s
costs will generally be higher than its competitors’ costs.

Other employers set their pay levels lower than their competition, hoping to save labour costs. This
is called “lagging the market”. The risk in lagging the market is that the company will be unable to
attract the best applicants.

Most employers set their pay levels the same as their competition. This is called “matching the
market”. Matching the market maximises the quality of talent while minimising labour costs.

Defining your market: An important question in external equity is how you define your
market. Traditionally, markets can be defined in one of three ways.

One way to define your market is by identifying companies who hire employees with
the same occupations or skills. For example, if a company hires electrical engineers,
it may define its market as all companies that hire electrical engineers.

Another way to define a market is by identifying companies who operate in the same
geographic area. For example, if the company is in Denver, Colorado, the market
would be defined as all companies in Denver, Colorado.

A third way to define a company’s market is by identifying direct competitors, that is,
those companies who produce the same products and services. For example,
Shady Acres Veterinary Clinic may define its market as all other veterinary clinics.

Notice that these three characterisations can interact, that is, Shady Acres might define
its market as all veterinary clinics in Denver, Colorado that employ veterinary
technicians.

 Surveying compensation paid: Once you have defined your market, the next step is to
survey the compensation paid by employers in your market. Surveys can be done in a
variety of ways.

1. There are salary data publicly available through the Bureau of Labor Statistics in the
United States.
2. There are salary data publicly available through the Internet.
 3. Salary information can be obtained from a third party source, such as an industry
group or employer organisation, which has collected general information for a
geographic region or industry.
4. The company can hire a consulting organisation to custom design a survey.
5. A company can conduct their own survey.

 Combining Internal and External Equity

 A company that has performed appropriate research has two sets of data:

The first is pay structure, the output from the job evaluation.

The second is market data, the output from the market survey.

The next step will be to combine these two sets of data, to create a pay policy line.

The pay policy line can be drawn freehand, by graphing actual salaries and connecting the dots.
Alternatively, statistical techniques such as regression analysis are used to create a pay policy line.
Regression generates a straight line that best fits the data by minimising the variance around the
line. In other words, the straight line generated by the regression analysis will be the line that best
combines the internal value of a job (from job evaluation points) and the external value of a job (from
the market survey).

You can also enact a policy of “leading” the market by raising the line, and the policy of “lagging” the
market by lowering the line.

Lesson Summary
 The key points from this module are:
 Job design is critical to the success of any organisation. For our purposes job design is defined as
the allocation of specific work tasks to individuals and groups.
 Key to effectively crafting a meaningful job for an employee is starting the thought process by
looking at the values and strategy of the organisation. By framing the job in these contexts the job
design process is more likely to align potential employees with the purpose of the company.

Once you have this context the following steps will ensure both meaningful and effective job design:


o Assess skills, needs, abilities, and motivations of employees and the organisation.

o Design the job to meet those needs, abilities and motivations.

o Implement the new job design.

o Audit the success of the job design and begin with step one periodically as well as when problems
have been identified.
Taylorism, also known as scientific management, is a foundation for management and
managerial decisions.

Technology and the flattening of the global economy have contributed greatly to the
changes we now see in jobs and job content across the world. We now recognise that a
person presented with quality meaningful work is more likely to do that work well.
Because of this insight, job design now presently takes a couple of prominent forms.

The Socio-Technical Systems (STS) approach is designed around the evolution from
individual work to work-groups and should allow for a high quality of working life.

Internal equity implies that pay rates should be the same for jobs where the work is
similar and different for jobs where the work is dissimilar.

Job analysis is a systematic method to discover and describe the differences and
similarities among jobs. A good job analysis collects sufficient information to adequately
identify, define, and describe the content of a job.

Job evaluation is a process that takes the information gathered by the job analysis and
places a value on the job. Job evaluation is the process of systematically determining
the relative worth of jobs based on a judgement of each job’s value to the organisation.

External equity refers to the relationship between one company’s pay levels in comparison to what
other employers pay.
Leading the market, lagging the market, and matching the market are three techniques used by
employers in setting pay levels.

An important question in external equity is how you define your market. Once you have defined your
market, the next step is to survey the compensation paid by employers in your market. Surveys can
be done in a variety of ways.

Diploma in Human Resources: First Assessment