Bm Handbook Hrm

Higher Business Management

Business Decision Areas II:

Human Resources

Human Resource Management The role and importance of Human Resource Management Irrespective of the size or objectives of an organisation, the most valuable resource it possesses is its workforce. Without workers who are both efficient and effective, the long-term success of an organisation cannot be assured. The human resource of an organisation is its entire workforce – from managing director to part-time cleaner. Each person is employed to perform specified functions which play their part in the overall success or failure of an organisation. It is the human resources employed by an organisation which generate wealth through the provision of services or the production of goods. Consequently, just as machinery and buildings need to be protected if they are to work properly, time and care must be taken if an organisation is to secure and retain the human resources that it requires. It is the responsibility of the Human Resource Management department to devise and implement the organisation’s policies and strategies for managing its human resources in a way that will satisfy both the objectives of the organisation and the objectives of the human resources it employs.

Human Resource Management (HRM) refers to that part of an organisation’s activities designed to attract, train, develop and maintain an effective workforce.

Human Resource Management is a relatively new term and has only come into use over the last 20 years or so. Traditionally, the function of dealing with employees was described as Personnel Management. Many organisations, in fact, continue to use this term. In many cases, Human Resource Management and Personnel Management are used to mean the same thing. For example, some organisations which continue to use the term ‘personnel department’ describe its work as ‘managing the human resources of the organisation’. Despite this, HRM is often seen as different from Personnel Management: • HRM takes a more strategic view than Personnel Management. It is concerned with making sure that the management of people fits in with the strategic objectives of an organisation and, like all other departments’ is also involved with deciding what the organisation’s strategy should be. In the past, personnel departments often played no part in deciding strategic objectives. • HRM is more integrated than Personnel Management. It is responsible for bringing together all the elements of managing human resources and making sure that they fit

together in a coherent way. Traditionally, the various elements undertaken by a personnel department were seen as separate tasks. As a result, they were often carried out in isolation; for example, new employees would be recruited without any consideration being given to their future training and development. Overall, therefore, HRM differs from Personnel Management in that it takes a much more strategic and integrated approach, although the activities it performs are much the same. This is why the terms are often used interchangeably. In this text we shall use HRM because it is becoming the more widely used term.

The HRM function within organisations The range and nature of the skills and specialisms available within the Human Resource Management function of an organisation depend on a number of factors. These include: • • • •

the the the the

size of the organisation; nature of the labour force employed by the organisation; status of the HRM department in the organisation; values and expectations of senior management.

Normally all but the smallest organisations will have their own specialist Human Resource Management department. However, the management of the human resources of the organisation is not carried out solely by the HRM department. Line managers, such as team leaders, have responsibility for the activities of the workforce and work closely with them on a day-to-day basis. As a result, they undertake a range of Human Resource Management activities. The extent of these varies between organisations, but examples of HRM activities that line managers might undertake include: • • • • • • •

drawing up job descriptions, selecting new staff, training (e.g. induction training for new staff), performance appraisal, planning future staffing requirements, handling grievances, implementing HRM policy, e.g. equal opportunities (line managers are expected to be aware of all legal requirements affecting HRM).

Human Resource Management, therefore, is a central component in the duties of all managers irrespective of their job title or functional responsibility.

The HRM department in an organisation is likely to fulfil a number of different roles:

The executive role Here, the HRM department is seen as the ‘expert’ in matters relating to Human Resource Management and makes decisions about what should be done in this area. For example, the HRM department will ensure that organisational policies are developed in line with legal requirements, will decide to produce information booklets on training, etc. The audit role In this capacity, the HRM department monitors organisational activities to ensure that HRM policies are being properly implemented by all concerned. The facilitator role This role requires the HRM department to facilitate the work of other managers in the organisation and help them to acquire and use the skills, techniques and attitudes that they need to make sure that HRM policies are implemented throughout the organisation. For example, team leaders could be given training to help them respond to, and deal with, complex relationships between team members that may involve HRM issues such as grievances, equal opportunities, human resource planning, etc. The consultancy role In this role, the HRM department provides advice and guidance to managers at all levels on matters to do with the management of people. The service role This requires the HRM department to be the provider of useful information on HRM matters. This is most important in times of change when the organisation needs to make sure that it is up to date with what is happening, for example with changes in legislation on issues like equal opportunities, or with developments in HRM practice or 360-degree feedback.

TEAM ACTIVITY

Using these notes, any textbook and if access is granted, the internet, Prepare a short presentation answering the following question: “Explain the role and importance of Human Resources to an organisation of you choice.” Select an organisation you know well so you can share examples with everyone.

The activities of the Human Resource function The Human Resource function can be seen operating at 3 levels of management – strategic , tactical and operational .

Strategic activities Strategic activities are concerned with long-term planning. In order to achieve corporate objectives it will be necessary to: • formulate personnel policies that clearly state how things will be done across the organisation as a whole; • devise guidelines for the implementation of policy; • ensure that the work of the HRM department helps to achieve corporate goals, i.e. defining corporate culture, and cultivating and communicating this culture to employees.

Tactical activities Tactical (or advisory) activities refer to the provision of attainable pathways which when followed will enable an organisation to achieve its strategic objectives. Tactical activities include: • • • •

Human Resource planning; recruitment of particular groups of staff; staff training and development; promoting effective industrial relations.

Operational activities Operational activities refer to the ways in which policy is implemented on a dayto-day basis. For example, in order to implement a tactical activity such as ‘a programme for staff training and development’, it may be necessary to carry out the following operational activities: • • • • •

identify what the training needs are; invite employees to indicate their willingness to participate in training; select the most suitable applicants; arrange absence cover for trainees; develop training materials and deliver these.

The elements of Human Resource Management HRM covers a range of activities that can be described as the ‘elements’ of Human Resource Management. They include: • • • • • •

Human Resource planning; recruitment; selection; training and development; employee relations; development and monitoring of policies and procedures relating to human resources, e.g. discipline, grievance, appraisal, health and safety, terms and conditions of employment; • maintenance of personnel information and record keeping. Each will be discussed in turn.

Human Resource Planning (H.R.P) Human Resource Planning (H.R.P) is the process of forecasting the workforce requirements of the business for future years. It looks at how many employees the business will require in the future, as well as the type of employee that will be required (e.g. graduate trainees, skilled-manual and supervisors). H.R.P. also ensures that the ‘right’ employee is in the ‘right’ job, to ensure maximum efficiency and effectiveness of the workforce. Clearly the process of H.R.P. requires that the business make estimates of the number of workers that it believes it will require at all levels in the business in the future. This can be done in a number of ways: 1. Using past data (e.g. if the workforce has grown at 4% per year over the past 3 years, this trend may well continue). 2. Analysing the expected levels of customer demand and sales (e.g. more employees will be required if the number of customer orders is estimated to rise significantly). 3. Estimating the level of labour turnover. For example, if the number of employees that are expected to leave the business next year is 50 (due to retirement or transfers), then the business will have to recruit many new employees to replace those that are leaving. 4. The views of the management (the management are often in the best position to estimate the number of new employees that will be required in their department or division).

5. Expected changes in working practices. For example, if a manufacturing business is wishing to change its production technique from labour-intensive to capital-intensive, then it is not likely to require many new employees in the future. Business may decide to meet any requirements for employees at the supervisory and management levels from within the existing workforce. This can be done by promoting those employees who have already demonstrated their potential and effectiveness in their current posts. These employees have the advantage of already knowing about the systems and the routines of the business, but they would still require the relevant training and development in order to prepare them for their new, more senior positions. Alternatively, the business may decide to fill these (and more junior) positions from outside the business. FACTORS AFFECTING AVAILABILITY OF EXTERNAL LABOUR FOR A BUSINESS: 1. The rate of unemployment in the area. 2. The extent of the infrastructure in the area (e.g. price and availability of housing or availability of public transport). 3. Government incentives and subsidies (paying the training costs for the business). 4. The availability of workers with the necessary skills and qualifications. 5. The number of competitors in the area. PROBLEMS WITH HUMAN RESOURCE PLANNING ARE: 1. Will the ‘new’ employees mix effectively with the existing workforce? 2. Changes in the external environment (e.g. a recession) could lead to the business having to make redundant several of the recently-appointed employees. It will always be difficult for a business to accurately forecast the number of new employees that it will require, because both the business-world and the internal requirements of the organisation are very dynamic.

The Shamrock

Organisation, right, is a modern concept in business, whereby firms are made up of regular core workers which are supplemented by part-time staff and contractors.

New Working Patterns Manpower plans have to be amended to account for changes in working patterns. The traditional view of employment is of a full-time permanent contract with a single employer. Whilst this still applies to many firms and employees, increasing numbers are being employed under new working patterns. The labour market is more flexible nowadays, with 2 workers in 4 outside permanent employment. The benefits to a firm include lower total labour costs and a more flexible workforce. Trade union representation and negotiating power are also reduced. The following are the main new working patterns. Part-time Work – although part-time seasonal work is traditional in the agriculture and tourism industries, part-time work has grown in importance in the rest of the economy. Firms such as the Burton Group and British Home Stores have converted many full-time posts into part-time ones; up to two-thirds of the staff of Sears plc are now part-time. One UK worker in four is now a part-timer. Many ‘women returners’ are employed on a part-time basis: in 1992 only 6 per cent of men, but 45 per cent of women were part-time workers. People employed for less than 16 hours a week do not enjoy the same employment-related rights (eg redundancy payments) as full-time staff, employers can avoid NI contributions to low-paid part-time workers, and the existence of more parttimers and weaker unions has made it easier for firms to shed staff. Flexible hours – the number of workers of ‘flexitime’ has increased: a core time band (eg between 10 am and 4 pm) is established when all employees must be present, with the rest of their weekly hours being flexible to suit individuals themselves. Shift Work – continuous 24-hours operation is appropriate for many industries. Employees may rotate shifts or may be based on ‘permanent nights’. Although the hourly labour costs will rise the increased production helps account for fixed costs, and so unit costs still decrease. Job Sharing – two or more employees may decide to share a full-time post, with the employer’s agreement. One benefit to the firm is the likelihood of increase cover at times of sickness or absence. Fixed Contracts – a firm might recruit staff on a short-term contract, perhaps to carry out a project. This is often found in the construction industry and is now used in many other areas, for example in recruiting certain managers and senior staff. Benefits to the firm include greater control over labour costs, the opportunity to bring in ‘new blood’, and a highly motivated employee where the ‘carrot’ of a renewed contract exists. Firms may also employ people on a consultancy basis to complete a project. In such cases the person is self-employed and the consultancy will be terminated once the project is completed. Sub Contracting – this is when a firm lets out work to an external company. It is also referred to as Outsourcing. Types of jobs commonly subcontracted include printing and publishing, computer technical support, general cleaning, window cleaning, and security.

In-House - When work is carried out within the company. it does have several benefits: The in-house Why produce in-house? Keeping the work within the organisation does have several benefits: The firm has more control over costs (both wages and materials) and can cut their cloth accordingly. They also have control over quality and importantly, delivery dates. Relying on other people to meet deadlines always carries an element of risk. Look at the Scottish Parliament building: over-budget and delayed! Confidentiality is also kept within the firm since no outsiders are privy to information with regards to the company’s activities. Why use subcontractors? If a firm does sub-contract work out it may be due to several factors: the company may not be specialists in the work needed to be carried out; the cost of undertaking the task may be too expensive and is more cost effective to hire someone else’s services and/or equipment, in particular relating to ICT and Computer Technical Support within firms. The company may be working at the factory’s maximum capacity and rather than let orders go, they can use other firms to meet demand. If an order is a one-off and unlikely to be repeated, perhaps due to the size of the order, then again work may be carried out. Strengths of Subcontractor Normally the external firm will have more experience in the particular job or skill required, and properly trained individuals capable of higher performance than in-house employees. They also will have more up-to-date equipment and machinery. For example a school could produce its own Yearbook, but to save production costs and be guaranteed of a large order completed to a deadline by professionals, they may let a printing firm carry out the work. Benefits of outsourcing to the firm When firms use subcontractors they achieve other benefits in addition to having the task done more expertly. The firm can ‘stick to the knitting’, in other words concentrate on what they excel at. It also frees up workers’ time, especially managerial time, which can be spent on another project. Customer supply and demand can be matched better without resulting in excess capacity being left idle during quiet times. In terms of facilities it also means that they may not have to update machinery to do a particular job and again can free up resources within the factory. Stock levels can be reduced, as finished orders will be delivered at an agreed date to the customers. This can result in a Just-in-time system being used. Finally, the firm can diversify into other products by using the subcontractors’ strengths.

TCHART: define Outsourcing and then find + & Outsourcing Advantages

Disadvantage s

RECRUITMENT AND SELECTION The recruitment and selection process commences when the business realises that there is a vacancy in the organisational hierarchy which needs to be filled. People leave their posts due to getting promoted, getting a job with another organisation, getting fired, retiring or taking a career break due to personal circumstances. Firstly, job analysis has to be conducted to identify whether a position is needed at all. Then a job description needs to be written, this outlines the job title, as well as the tasks and the responsibilities that will be covered by the successful applicant. Once this is completed, then a job specification needs to be written, this goes beyond a description of the job, and it lists the physical and mental attributes that will be desirable or essential for the successful applicant (such as the level of intelligence, their disposition and their interests). The H.R.M. department will then need to write an advertisement for the job and to place it in a variety of media (newspapers, job centres, job agencies, the internet, radio, and internal notice-boards), in order to get as many people as possible to apply for the post. The advertisement will include the hours of work, the pay and fringe benefits, the job title, the relevant experience and qualifications that are required, and a contact name and address. It is likely that the job will be advertised within the business as well as through external media. The advantages of recruiting from within the existing workforce include the fact that a shorter training and induction period is necessary, as well as far less time and money being spent on the whole process. The H.R.M. department will then need to send out application forms to, and request Curriculum Vitae (CVs) from, all those people who write to the business expressing a desire to apply for the job. It is vitally important that the application form is tailored to the specific post that is being advertised, as well as asking questions that are relevant, legal, inoffensive and essential. Once these application forms have been completed and returned to the business (often with a CV and a covering letter) then the short-listing process will ensue, this involves analysing the CVs and the application forms and deciding which applicants appear to be most suitable for the post. Once this is done, then the H.R.M. department will contact the successful applicants and ask them to attend an interview. INTERVIEWS The interview process is very time-consuming but is, nevertheless, an essential factor in getting the ‘right’ person for the ‘right’ job. A good interviewer will have studied the job description, the job specification and the job advertisement before interviewing the applicants, as well as studying their application forms, CVs and covering letters in order to know as much information as possible about the applicants before the interview commences.

A good interview needs to be well structured, uninterrupted, and conducted in a friendly manner, with the use of open-ended questions which will give the applicants the chance to talk openly about themselves. The interviewer must listen carefully to the applicants’ comments and make notes as necessary. At the end of the interview, the applicants must be given the opportunity to ask questions about the job and about the business, and then the interviewer must inform the applicants when they will be notified of the decision. It is likely that applicants for a job will be interviewed by a number of people. This can be in sequence (i.e. the applicant will have one interview quickly followed by another) or it can be simultaneous (i.e. the applicant will be interviewed by a panel of people). Whichever method of interviewing is chosen, the purpose remains the same, to select and appoint the ’best’ applicant for the job. It is possible that the business may choose to use a variety of tests to complement the interview process, in order to measure the applicants’ intelligence, their performance in certain scenarios, and their personality traits. Once a business has selected the most suitable applicant for the available post (often involving much discussion between the different interviewers), then he/she will be appointed. This will involve the new employee being given a Contract of Employment, which is a written statement covering the terms and the conditions of employment (e.g. date employment commences, job title, pay, hours of work, holiday and pension entitlements), as well as the process for disciplinary and grievance procedures. Recruitment Process The Human Resources department is usually responsible for recruiting new staff and for training them to do their job. When job vacancies arise, it draws up documents for specific purposes, organises and runs interviews. The Human Resources department has to follow certain procedures before a job can be advertised. This page will explain these different stages in detail. Vacancy occurs - Three reasons why a vacancy may arise in a business: • retirement • promotion • to go to a new job The Human Resources manager then draws up a job description - The job description should contain these basic details about the vacancy: • the job title • the position in the organisation chart • a list of duties

Person specification drawn up - The person specification represents the ideal qualities of the person required to fill the vacancy: • qualifications • experience • personality The job is advertised- The Human Resources manager needs to consider the following: • what details need to go in the advert • where the advert should be placed Candidates apply for the job - The advert tells candidate what to send in: • a letter of application or a completed application form • a copy of their curriculum vitae or CV. The CV contains personal information about their qualifications and interests. Application forms filtered to create shortlist of candidates being considered - If you compare these documents you can assess whether the person has the right skills for the job: • the CV • the job application form • the job specification Arrange the interviews - Why are the candidates interviewed? Whether a person gets the job or not depends on their performance at interview The interview is held - What are the interviewers looking for? • good answers to all the questions • the candidates' attitude and dress • body language Follow up references - What is a reference? The names and addresses of people who can provide details of your performance with a previous employer or give evidence of your good character Appoint candidate to the job - What happens if references are not satisfactory? • the job offer will be withdrawn and offered to someone else • it might be necessary to re-advertise

RECRUITMENT AND SELECTION

The Apprentice: Recruitment and Selection The vacancy of Teacher of Business Education has arisen due to a member of staff leaving the school. You are a recently graduated Teacher who currently finds themselves unemployed. The class will be divided into two main categories:  Applicants  SMT The SMT will prepare the Job Description and the Person Specification while the Applicants prepare their CV. Once completed the Job Advert will appear and applicants will be given an application form to fill in. Once applications forms are completed they will be returned to the SMT who will then short-list the applicants and invite for interview. Unsuccessful candidates will form an audience and take notes on what they are going to witness. The Chair of the Panel will be a specially invited guest and whose decision is final. The interviewees will be rated on their appearance, their ability to answer questions and their body language. At the end of the interviews the candidates will be asked back in to be given feedback and one lucky person will get the job!

Job description: Teacher of Business Education

Organisation:

Hamilton Grammar High School

Job title:

Teacher of Business Education

Line manager:

Mr M McGowan

Hours:

Full-time

Duties 1.

To teach a range of Business Educuation subjects from S3-S6 (including ICT in S1-S2)

2.

To plan lessons and mark students’ work

3.

To set and mark tests and examinations for Business Education students

4.

To report on individual pupil progress to parents by attending parents evenings

5.

To take responsibility for a tutor group

6.

To attend all after school meetings as directed by the headteacher

7.

To undertake any other duties that are reasonably asked of the employee

Curriculum Vitae Name:

Address:

Date of Birth: Telephone Number:

Nationality:

National Insurance Nos:

Education School

Dates

Qualifications Subject

Exam Board

Date

Grade

Work Experience Place

Hobbies/Interests Referees:

Date

Details of Work

Standard Application Form

Candidate ref:

(SAF)

Employer applied to:

Personal Details (please print this section) Title

Surname

First Name(s) (indicate (*) the one you are known by

Home Address

Term Address

Postcode

Postcode

Telephone:

Telephone:

E-mail:

E-mail:

Dates at above:

Dates at above:

Nationality

Do you need a work permit for permanent employment in the UK? YES  NO  Do you have one? YES  NO  Do you hold a full UK driving licence? YES  NO 

Education - Professional, Postgraduate, First Degree/Diploma Please list all degrees/diplomas/professional qualifications etc held at or currently studied for, whether at first degree or postgraduate level. List most recent first and give all results known whatever the outcome. From

Month/year

To

Higher Education Institution

Award and Title of Award (HND/Degree/Dipl/Msc/ PhD etc) List main subjects below title

Results (expected/awarded)

Education - Prior to Higher Education Please list date (year)/qualification/subjects (grade) of all of the highest level examinations that qualified you for your Higher Education course(s) (A/AS Levels/Scottish Higher/Irish Leaving/Access/GNVQ/Baccalaureate etc). Include all examinations taken at this level whatever the outcome. Number of Standard Grade passes (Grade C & above)

Date(s) gained

Grade for Maths

Grade for English Language

Number of A/A* grades

Employment and Work Experience Please describe briefly any work (whether paid or unpaid) which you have undertaken. Highlight(*) the two most relevant and note what you achieved.. From

Month/year

To

Employer

Job Title/Responsibilities

Achievements

Personal Interests/Achievements Use the space below to describe with dates (year) any part-time activities. Include organising, leading or group activities. Those requiring initiative, creativity or giving intellectual development are also of interest.

Specific Evidence The following questions are designed to encourage you to provide specific abilities. Your examples can be taken from your education, work experience, placements or spare-time or other voluntary activities but do not write solely about course-work.

Planning, implementation and achieving results: Describe a challenging project, activity or event which you have planned and taken through to a conclusion. Include your objective, what you did, any changes you made to your plan and state how you measured your success.

Influencing, communication and teamwork: Describe how you achieved a goal through influencing the actions or opinions of others (perhaps in a team context). What were the circumstances? What did you do to make a difference? How do you know the result was satisfactory?

Analysis, problem solving and creative thinking: Describe a difficult problem that you have solved. State how you decided which were the critical issues, say what you did and what your solution was. What other approaches could you have taken?

Additional Information Please write here any additional information, not covered elsewhere which will strengthen your application.

Where did you hear of us/see an advertisement?

Specific Skills 1. List any languages that you know indicating level of proficiency (basic/working knowledge/fluent/mother tongue). 2. Specify your experience with any generic computer packages/programming languages (limited/working knowledge/extensive). 3. Indicate any other specific relevant skills (laboratory techniques, graphics skills etc).

Career Choice Explain why you have applied for the job function(s) that you noted on the first page. Offer evidence of your suitability (e.g. courses undertaken, work shadowing, skills, strengths and experiences). Emphasise why you consider yourself to be a strong candidate.

Health Declaration Please give details of any health matters of relevance to the work applied for (see note within Guidance Notes and Monitoring Data).

Referees Academic Referee

Other Referee

Name:

Name:

Position:

Position:

Address:

Address:

Telephone:

Telephone:

Declaration The statements made on this form are true. I understand any false statements may jeopardise my application and may lead to an offer being withdrawn. I have attached the Equal Opportunities Monitoring Data. Signed …………………………………..

Name (please print)…………………………………….…

Date……………………

Mock interview questions Job: teacher 1. What qualities do you feel you can bring to the job? 2. Are you good at managing classes or groups of pupils? 3. Do you enjoy forming relationships with pupils? 4. What do you think your strengths are for the job? 5. Have you had any experience or involvement with pupils already? 6. Do you have lots of patience? 7. When are you available to start? 8. In your opinion – what is the worst part of being a teacher? 9. Are you hard working? Can you give me an example of when you worked really hard towards a goal or deadline? 10. What motivates you in your everyday life? 11. What hobbies and interests do you have? 12. Tell me a little bit about yourself

Candidate interview sheet Interviewee name Comment on: 1) Presentation (tie, shirt, shoes) 2) First impressions 3) Quality of answers 4) Relationships between interviewer and interviewee

Overall comment

Interviewee name Comment on: 1) Presentation (tie, shirt, shoes) 2) First impressions 3) Quality of answers 4) Relationships between interviewer and interviewee

Overall comment

Interviewee name Comment on: 1) Presentation (tie, shirt, shoes) 2) First impressions 3) Quality of answers 4) Relationships between interviewer and interviewee

Overall comment

STAGES IN RECRUITMENT & SELECTION Name:

_________________Date:

1.

2.

3.

4.

5.

6.

7.

8.

9.

Selection Methods Once the job has been advertised and applications have flooded in, the next step is to filter out the people not suitable for the job. Then, when you have the right candidates, how do you eliminate the others to find the right candidate? The main selection methods used are: • • • • •

Mental and Physical Ability (IQ) Tests Achievement Tests Employment Interview Reference Checks Assessment Centres

Mental and physical ability tests (IQ) When properly applied, ability tests are among the most useful and valid tools available for predicting success in jobs and training across a wide variety of occupations. Ability tests are most commonly used for entry-level jobs, and for applicants without professional training or advanced degrees. Mental ability tests are generally used to measure the ability to learn and perform particular job responsibilities. Examples of some mental abilities are verbal, quantitative, and spatial abilities. Physical ability tests usually encompass abilities such as strength, endurance, and flexibility. •

•

General ability tests typically measure one or more broad mental abilities, such as verbal, mathematical, and reasoning skills. These skills are fundamental to success in many different kinds of jobs, especially where cognitive activities such as reading, computing, analysing, or communicating are involved. Specific ability tests include measures of distinct physical and mental abilities, such as reaction time, written comprehension, mathematical reasoning, and mechanical ability, that are important for many jobs and occupations. For example, good mechanical ability may be important for success in auto mechanic and engineering jobs; physical endurance may be critical for fire fighting jobs.

Although mental ability tests are valid predictors of performance in many jobs, use of such tests to make employment decisions often results in adverse impact. For example, research suggests that mental abilities tests adversely impact some racial minority groups and, if speed is also a component of the test, older workers may be adversely impacted. Similarly, use of physical ability tests often results in adverse impact against women and older persons.

Achievement tests Achievement tests, also known as proficiency tests, are frequently used to measure an individual's current knowledge or skills that are important to a particular job. These tests generally fall into one of the following formats: •

•

Knowledge tests typically involve specific questions to determine how much the individual knows about particular job tasks and responsibilities. Traditionally they have been administered in a paper-and-pencil format, but computer administration is becoming more common. Licensing exams for accountants and psychologists are examples of knowledge tests. Knowledge tests tend to have relatively high validity. Work-sample or performance tests require the individual to actually demonstrate or perform one or more job tasks. These tests, by their makeup, generally show a high degree of job-relatedness. For example, an applicant for an office-machine repairman position may be asked to diagnose the problem with a malfunctioning machine. Test takers generally view these tests as fairer than other types of tests. Use of these tests often results in less adverse impact than mental ability tests and job knowledge tests. However, they can be expensive to develop and administer.

Employment interviews The most common assessment tool, the interview can range from being totally unplanned, that is, unstructured, to carefully designed beforehand, that is, completely structured. The most structured interviews have characteristics such as standardized questions, trained interviewers, specific question order, controlled length of time, and a standardized response evaluation format. At the other end of the spectrum, a completely unstructured interview would probably be done "off the cuff," with untrained interviewers, random questions, and with no consideration of time. A structured interview that is based on an analysis of the job in question is generally a more valid predictor of job performance than an unstructured interview. Keep in mind that interviews may contain both structured and unstructured characteristics. Regardless of the extent to which the interview is structured or unstructured, the skill of the interviewer can make a difference in the quality of the information gathered. A skilful, trained interviewer will be able to ask job-relevant follow-up questions to clarify and explore issues brought up during the interview. It is unlawful to ask questions about medical conditions and disability before a conditional job offer. Even if the job applicant volunteers such information, you are not permitted to pursue inquiries about the nature of the medical condition or disability. Instead, refocus the interview so that emphasis is on the ability of the applicant to perform the job, not on the disability. In some limited circumstances, you may ask about the need for reasonable accommodation.

Where disability is concerned, the law requires that employers provide reasonable accommodations (meaning a modification or adjustment) to a job, the work environment or the way things are usually done so that qualified individuals with a disability are not excluded from jobs that they can perform. These legal requirements apply to all selection standards and procedures, including questions and rating systems used during the interview process. Following a structured interview format can help interviewers avoid unlawful or inappropriate inquiries where medical conditions, disability, and age are concerned. Reference checks Reference checks are often used to verify education, employment, and achievement records already provided by the applicant in some other form, such as during an interview or on a resume or application form. This is primarily done for professional and high-level jobs. These verification procedures generally do not help separate potentially good workers from poor workers. This is because they almost always result in positive reports. However, use of these measures may serve two important purposes • •

They provide an incentive to applicants to be more honest with the information they provide They safeguard against potential negligent hiring lawsuits.

Assessment centres In the assessment centre approach, candidates are generally assessed with a wide variety of instruments and procedures. These could include interviews, ability and personality measures, and a range of standardized management activities and problem-solving exercises. Typical of these activities and exercises are in-basket tests, leaderless group discussions, and role-play exercises. Assessment centres are most widely used for managerial and high level positions to assess managerial potential, promotability, problemsolving skills, and decision-making skills. •

•

•

In-basket tests ask the candidates to sort through a manager's "in-basket" of letters, memos, directives, and reports describing problems and scenarios. Candidates are asked to examine them, prioritise them, and respond appropriately with memos, action plans, and problem-solving strategies. Trained assessors then evaluate the candidates' responses. Leaderless group discussions are group exercises in which a group of candidates is asked to respond to various kinds of problems and scenarios, without a designated group leader. Candidates are evaluated on their behaviour in the group discussions. This might include their teamwork skills, their interaction with others, or their leadership skills. In role-play exercises, candidates are asked to pretend that they already have the job and must interact with another employee to solve a problem. The other employee is usually a trained assessor. The exercise may involve providing a solution

to a problem that the employee presents, or suggesting some course of action regarding a hypothetical situation. Candidates are evaluated on the behaviour displayed, solutions provided, or advice given. Assessors must be appropriately trained. Their skills and experience are essential to the quality of the evaluations they provide. Assessment centres apply the whole-person approach to personnel assessment. They can be very good predictors of job performance and behaviour when the tests and procedures making up the assessment centre are constructed and used appropriately. It can be costly to set up an assessment centre. Large companies may have their own assessment centres; mid-size and smaller firms sometimes send candidates to private consulting firms for evaluation.

Type of assessment instrument Mental Ability tests (IQ)

Achievement/ proficiency tests

Advantages and Disadvantages of Different Types of Assessment Instruments Advantages •

Are among the most useful predictors of performance across a wide variety of jobs

•

Use of ability tests can result in high levels of adverse impact

•

Are usually easy and inexpensive to administer

•

•

In general, job knowledge and worksample tests have relatively high validity Job knowledge tests are generally easy and inexpensive to administer

•

Physical ability tests can be costly to develop and administer Written job knowledge tests can result in adverse impact

•

•

Employment interviews

Reference checks

•

Work-sample tests usually result in less adverse impact than ability tests and written knowledge tests Structured interviews, based on job analyses, tend to be valid

•

Work-sample tests can be expensive to develop and administer

•

Unstructured interviews typically have poor validity Skill of the interviewer is critical to the quality of interview (interviewer training can help) Reports are almost always positive; they do not typically help differentiate between good workers and poor workers

•

May reduce adverse impact if used in conjunction with other tests

•

•

Can be used to verify information previously provided by applicants Can serve as protection against potential negligent hiring lawsuits

•

•

•

Assessment Centres

Disadvantages

•

•

May encourage applicants to provide more accurate information Good predictors of job and training performance, managerial potential, and leadership ability Apply the whole-person approach to personnel assessment

•

Can be expensive to develop and administer

•

Specialized training required for assessors; their skill is essential to the quality of assessment centres

Motivation Having a motivated workforce is vital for most businesses, since it can lead to higher rates of productivity, better quality output, and low rates of absenteeism and labour turnover. The main factors which affect the motivation of workers are pay levels, job security, promotional prospects, being given responsibilities, working conditions, fringe benefits, participation in decision-making and working in a team. FINANCIAL METHODS There are many different methods of payment that a business can choose from, each of which can have different effects on the level of motivation of the workforce. The main methods are: 1. Time-rate (‘flat rate’) schemes. This payment method involves the employee receiving a basic rate of pay per time period that he works (e.g. £5 per hour, £50 per day, £400 per week). The pay is not related to output or productivity. Any time that the employee works above the agreed number of hours per week may make him eligible for overtime payments, often at ‘time and a half’ (e.g. £7.50 per hour instead of £5 per hour). 2. Piece-rate schemes. This payment method involves the employee receiving an amount of money per unit (or per ‘piece’) that he produces. Therefore his pay is directly linked to his productivity level. However, it is possible that in order to boost his earnings, an employee may reduce the quality and craftsmanship per unit, so that he can produce more output in a given period of time. 3. Commission. This is a common method of payment for salesmen (e.g. insurance, double-glazing, telesales). The employee receives a very small percentage (say 0.5%) of the value of the goods that he manages to sell in a period of time. 4. Performance-related pay (PRP). This is a method of giving pay rises on an individual basis, related to the employee achieving a number of targets over the past year. This is common with managerial and professional workers. 5. Profit sharing. This involves each employee receiving a share of the profit of the business each year, effectively representing an annual pay rise. It aims to increase the levels of effort, motivation and productivity of each employee, since their annual pay-award will be related to the profitability of the business. However, if the business makes low profits (or even a loss) then this is likely to have a detrimental effect on the level of motivation of the employees.

6. Share ownership. A common form of payment in many PLCs is what is termed ‘share options’. This basically involves each employee receiving a part of each month’s salary in the form of shares (usually at a discounted price). This forms a profitable savings-plan for the employee, and he can sell them after a given period of time. This should motivate the employees to work harder and increase their efforts, since the share price will rise as the company becomes more profitable, therefore increasing the capital gain on their shares. Many of these different methods of pay are likely to be supplemented by fringe benefits (or ‘perks’) such as private health schemes, pension schemes, subsidised meals, discounts on holidays and travel, cheap mortgages and loans, company cars and discounts when buying the company’s products. The total package of pay plus fringe benefits is known as the remuneration package.

MASLOW, MOTIVATION AND NEEDS Most people work to satisfy needs of one kind or another. Abraham Maslow developed his hierarchy of needs based on research about what motivates people to work. He suggested that there were 5 levels of need that influence a person's behaviour. Basic needs: for food, drink and shelter Safety needs: protection against danger, threat, deprivation Social needs: the need for belonging, acceptance, friendship Self-esteem needs: reputation, status Self-actualisation: the need for realising one's own potential for continual self-development.

In a hierarchy the things at the top are more important than those at the bottom. Maslow said the lower levels have to be satisfied first. Only when these needs have been satisfied will the individual strive to satisfy the higher needs. For example, hungry, cold people will seek food and shelter first. Once they are well fed and comfortable, they will turn their attention to higher needs, for example the pleasure of being with colleagues. How can a business provide for these needs?

Basic needs: A fair wage, a meal and rest facilities. Safety needs: Job security, safe working conditions, pension schemes. Social needs: Met by introducing team work and perhaps providing social facilities like a club or sports pitch.

Self-esteem needs: This is about how others see us at work and can be provided for by rewarding staff with status symbols like cars, offices and new job titles. Allowing staff to gain qualifications at work can boost self-esteem too. Self-actualisation: Achieving your full potential. A business must ensure that promotion is possible and that there are opportunities to use initiative. NON-FINANCIAL METHODS There is no universal rule for motivating employees, and there are many methods which are used by different managers to achieve the goal of a motivated and satisfied workforce. These include: Delegation. This occurs when managers pass a degree of authority down the hierarchy to their subordinates. Empowerment. This involves a manager giving his subordinates a degree of power over their work (i.e. it enables the subordinates to be fairly autonomous and to decide for themselves the best way to approach a problem). Job enlargement. This involves increasing the number of tasks which are involved in performing a particular job, in order to motivate and multi-skill the employees. Job enrichment. This is a method of motivating employees by giving them more responsibilities and the opportunity to use their initiative. Job rotation. This involves the employees performing a number of different tasks in turn, in order to increase the variety of their job and, therefore, lead to higher levels of motivation. Quality circles. This is a group of workers that meets at regular intervals in order to identify any problems with quality within production, consider alternative solutions to these problems, and then recommend to management the solution that they believe will be the most successful. Teamworking. This is the opposite production technique to an assembly-line which uses an extreme division of labour. Teamworking involves a number of employees combining to produce a product, with each employee specialising in a few tasks. Cell production is an example of teamworking. Worker participation. This refers to the participation of workers in the decision-making process, asking them for their ideas and suggestions. Works council. This is a type of worker participation and it consists of regular discussions between managers and representatives of the workforce over such issues as how the business can improve its processes and procedures (in production or marketing, for example).

Worker-directors. These are workforce representatives who participate in the meetings held by the board of directors. Worker-directors are not very common in the UK, since employers often believe that they can slow down the decision-making process, as well as ‘leaking’ confidential information to employees. MOTIVATION PROBLEMS Symptoms of poor motivation amongst the workforce include high rates of absenteeism and labour turnover, poor timekeeping, high rates of waste, low quality output and an increasing number of disciplinary DOUGLAS McGREGOR: THEORYproblems. X and THEORY Y

Douglas McGregor describes different that employers towards employees. Whentwo a poor levelattitudes of motivation exists inhave a workforce, then the management should:

Theory X says that workers Theory Y says that workers x are lazy and don't want to work y like to work x can't be trusted y want responsibility a) Develop a strong corporate culture and team-spirit. x have no initiative or ambition y can be trusted b)x Ensure pay levels fair. must bethat watched all theare time and forced to y will work hard for rewards, which are not c)work Design more challenging jobs. only money d)x Introduce at lower levels in the organisation. work only decision-making for money

e) Give praise and recognition to employees for their efforts and achievements. advice to employers wasare thateffective if they treated all employees like theory Y workers, f)McGregor's Ensure that communication flows and that the relevant messages get to they willrelevant work harder and be more productive, because they are all naturally motivated. Theory Y says the personnel.

that workers have a strong desire to participate in the decision-making process, an attitude we see more and more in present day workers. If the employee is allowed to develop his potential, by making his work exciting and challenging, the result is an increase in the effectiveness of the business. Theory X style (authoritarian/autocratic) is suitable for factory supervisors or indeed army/police style hierarchies. X is obsessive about controlling and directing the workforce. Theory Y style is more prevalent in the creative arts and professions such as graphic designers, engineering, architects. Y offers more individual freedom, and indeed empowerment.

In the news… Motivation in Practice In and out of the news this year have been the large bonuses that are being paid out to executives and company staff. In February, banking firm HBOS was reported as paying each employee £7500 in bonuses (a total of £550m) after the achieving an 18% increase in sales over the year (BBC, 28th February 2007). In March, Wal-Mart, often criticised for the poor pay conditions provided to staff, was reported as paying out $529m (£270m) in bonuses to 800,000 of its US workers (BBC, 22nd March 2007). The clothing retailer, Next, was also reported as offering large bonuses to top staff. They were asked to match the £2 million they were collectively paid in bonuses with their own money. The Times reports the bonus system: “If the shares are below £20 in August next year — against the £15 when it was put in place — they lose everything. But if the stock tops £24.50 by August 2009, the scheme pays out fivefold, or ten times their personal stake” (The Times, March 23rd 2007). The incentives available to some staff are often complex to calculate. Search engine giant Google only paid its three executives salaries of 50p in 2006, accounts show (BBC, 4th April 2007). However these executives saw the value of the shares they own significantly increase to a massive $31.5bn by the end of the year, whilst they also saw benefits, such as the use of their own corporate jet. However motivation isn’t always about financial rewards. Nick Read, chief executive of Vodafone, recently spoke at a conference for talent-management professionals. He was reported as criticising the approach taken by many leaders in their management of people. He said: “They should remember that these talented people are not necessarily looking for material rewards. What they want is different types of experience. They want to be tested.” (The Sunday Times, 1st April 2007). In the Times 100 case study focusing on people management at Egg, the online bank, it describes how employees are given control over the planning of their career and the decisions made. Egg describes their approach to motivating their workforce as 'unleashing the power of people'. Study Questions: 1. With reference to relevant motivational theory, explain how: a) financial rewards might be able to motivate workers b) non-financial rewards might be as useful in a firm’s approach to motivate workers. 2. What types of non-financial reward might a firm use to motivate workers?

In the news … McJobs – an outdated definition The term McJob was coined by the Canadian novelist Douglas Coupland in his 1991 novel Generation X. It was used to describe a "low-prestige, low-dignity, low-benefit, no-future job in the service sector" and its increased usage in everyday language lead to the term being entered as a dictionary definition in 2003 (BBC, 9th November 2003). McDonald’s has complained about the use of the term ever since it was recorded in the dictionary, but now they have taken this a step further by launching a petition to get the definition changed (BBC, 23rd May 2007). McDonald's senior vice president David Fairhurst states: “The current definition is extremely insulting to the 67,000 people who work for us within the UK. It is also insulting for everyone else who works in the wider restaurant and tourism sectors.” There is support for McDonald’s petition from some academics. The Brighter Futures report, authored by Professor Adrian Furnham of University College London, suggests that McJobs are wrongly derided. The report suggests that many people in these jobs are often young and that this first experience of work can have a positive experience on their lives. The BBC suggests it can result in benefits ranging from “having increased self-esteem, to being cleaner around the house, the benefits are both personal and practical” (BBC, 8th June 2006). There is also evidence that McDonald’s is investing in its workforce. This includes branches of McDonald’s becoming exam centres, as the organisation offers qualifications equivalent to GCSEs in numeracy and literacy at work (19th September 2006). This could lead to improved motivation of its workforce with benefits such as improved recruitment and lower labour turnover. There does seem to be some evidence that the definition of a McJob is becoming outdated. However, there are other examples of service sector companies offering a wider range of benefits to their workers. The Times 100 presents a case study of the Total Reward system used at the Royal Bank of Scotland that includes financial and non financial rewards. Study Questions 1. What are the benefits to McDonald’s of having the definition of a McJob changed? 2. With reference to motivational theorists, how might the provision to earn qualifications at work increase motivation within the workforce? 3. What types of non-financial rewards are provided by the Royal Bank of Scotland to workers?

Training And Development Learning is not a spectator sport. D. Blocher Once a new employee has been appointed to a business, it is likely that they will receive induction training in order to help them settle into the new job. This induction training covers the basics of the new employee’s job, as well as the background details and the history of the business (e.g. number of employees and the range of products). However, training is not limited to the new employees of a business. Training courses are likely to be targeted at all employees in the business at various stages in their career (e.g. management training courses, training on how to use new machinery and technology). There are many reasons for the extensive use of training across the workforce of a business: 1. Training can improve employee productivity. 2. Training can create a multi-skilled, flexible workforce. 3. Training can increase the levels of job satisfaction and motivation of the employees.

promotion.

4. Training employees increases the chances of their

Training can be classified as either ‘on-the-job’ or ‘off-the-job’. ‘On-the-job’ training involves the employees receiving their training at the place of work (using such techniques as work-shadowing, apprenticeships, and mentoring). ‘Off-the job’ training involves the employees attending courses away from their workplace (e.g. at local colleges, conference centres and universities). OTHER TYPES OF TRAINING INCLUDE: “Sitting next to Nellie” – task demonstrated then trainee undertakes task Coaching – trainee taken through step by step by trainer Job Rotation – trainee learns tasks in different departments/jobs Self-paced/distance learning – trainee receives resources and works on their own

It is also imperative that all training courses that are attended by employees are evaluated in order to determine if the training course provides value for money for the business. This evaluation is often carried out by asking the employees to complete short questionnaires and provide feedback to the H.R.M. department. IN THE NEWS… British Energy Cuts Training Time in Half

British Energy has an acute shortage of experienced nuclear staff and has cut the time required to complete some of its basic training programmes by half. Some of the group’s training programmes have been trimmed from 18 to nine months (The Times – 29 November 2007). Jean McSorley, senior adviser to Greenpeace on nuclear issues said: “The idea that you can just cut that in half is something you have to question. It has to have a bearing on safety.” (The Times – 29 November 2007). British Energy, which operates eight nuclear power stations, denied that this means a lowering of standards, claiming that it puts safety at the centre of all its activities. It has hired a company called KorteQ to help it overcome its skills shortage. The Head of Operations at KorteQ said that its programme would g reatly reduce the length of time required to train British Energy staff to Suitably Qualified and Experienced Personnel (SQEP) level, a standard set by the Nuclear Installations Inspectorate (The Times – 29 November 2007). A spokesman for the Health and Safety Executive, which monitors the standards of staff at all nuclear sites, said that any doubts about their competence would lead to loss of operating licenses and possibly prosecution (The Times – 29 November 2007). Look at the Times 100 case studies on the work of National Grid and Marks & Spencer to see the role and value of training and development in major organisations. Study Questions:

1. Explain the value to an employer and to a new employee of ‘Induction Training’. 2. Discuss the importance of training and development programmes for its employees to a company like British Energy. 3. At times of downturn in the economy or recession, companies often cut back on training. Assess the long term effects of this for: a) the country b) a company c) an employee

STAFF APPRAISAL Appraisal – this is a report on how well an employee is progressing. It is usually carried out at regular intervals (normally once a year) by the employee’s line manager. The process may require the completion of an appraisal form by both parties which is then followed up with a formal interview. It is important that the employee does not feel that they are on trial, otherwise an element of distrust/resentment can enter the process. The appraisal may highlight training needs and the potential of an employee for possible promotion. A successful appraisal may determine if an employee will receive a bonus or be moved up the payscale. "Staff appraisal" is better called "performance and development review". The purposes of this review are generally stated as       

to assess performance over the review period and examine the scope for improvement to current performance to assess training & development needs to set performance objectives relating employee development objectives to unit objectives to support career planning and progression discussions (for probationers) to make retention decisions to discuss the potential for "promotability" and job change to assess/review "rewards" and motivation

It is a review stage of a process which begins with     

clarification of role and performance expectations and directions. involves a comparison of actual performance during the review period and discussion to set future directions and scope for personal development the review usually involves formal documentation for use in various employee reward, promotion and development decisions. the member of staff should be continously aware of their individual performance (related to expectations) throughout the review period. The review should not be the occasion for the member of staff to be confronted with how well he/she has performed or not performed or to discover that the "goal posts" have moved without being told during the review period.

It usually takes place between the employee and whoever he/she is responsible and accountable to - generally their direct line manager. The emphasis is on "the organisation" (through the manager) talking to each member of staff - as "an individual". Each manager, in essence, has to give time and attention to each member of staff he/she is responsible for. Even where there is a formal policy for giving systematic, job-related feedback on performance, many appraisal encounters between a boss/subordinate result in frustrating and problematic experiences for appraisers and appraisees. Yet

companies and many participants say they obtain considerable benefit from formal appraisal processes.

Types of Staff Appraisal Scheme Prescriptions : Rating and forms based focusing on employee    

competencies/behaviours Results-based (against "agreed" targets) 360° appraisal (stakeholder feedback to the manager) Self-appraisal and continuing professional development

Such prescriptions have origins in the work of Douglas McGregor and (for resultsbased appraisal) on the work of Peter Drucker. Of McGregor's - Theory X and Y, the Theory Y model stresses the importance of diagnosing the needs of individuals and integrating these with the needs of the organisation. By satisfying individual needs, the organisations capacity for performance is optimised. McGregor advised that processes of job/role definition, targeting and planning (within staff appraisal) coupled with a supportive, mutually evaluative bosssubordinate relationship - offer potential for improved individual performance and development. Employee energy is thus focused on business objectives as driven by competitive, quality, performance-based values. Theory Y purposes and performance-related criteria link the business's objectives and goals to job holder contribution. Employers are recommended to adopt and maintain staff appraisal policies and reap the assumed benefits   

a milestone in communication between manager and individuals in the staff group better linking of business and unit priorities to how the individual delivers on job performance nurturing of shared values, loyalties, motivation and commitment to work, personal identification.

STUDY QUESTIONS 1. What do you understand by the term ‘Appraisal’? 2. What are the benefits to both the employer and employee of an appraisal? 3. Explain the drawbacks of the appraisal system 4. In pairs, conduct an appraisal of your studies so far. Use the target booklet as a starting point for a discussion about how you think you are peforming

Trade Unions TYPES OF TRADE UNION A trade union is a group of workers who join together in order to protect their own interests and to be more powerful when negotiating with their employers. Each employee who wishes to join a trade union must pay an annual fee, which contributes towards the costs and expenses that the trade union incurs when it provides services to its members, and supports industrial action by the workers. Trade unions have a number of aims: 1. To improve the pay of its members. 2. To improve the working conditions and the working practices of its members. 3. To support the training and the professional development of its members. 4. To ensure that their members’ interests are considered by the employers when any decision is made which will affect the workforce. There are four main types of trade union in the UK: 1. General Unions. These are for skilled and unskilled workers performing different jobs in different industries (e.g. cleaners, clerical staff, transport workers). 2. Industrial unions. These are for different workers in the same industry (e.g. the National Union of Miners (N.U.M), covering workers at all levels in the hierarchy). 3. Craft Unions. These are fairly small unions for skilled workers, performing the same or similar work in different industries (e.g. musicians). 4. White-collar Unions. These are for ‘white-collar’ (or professional) workers who perform the same or similar tasks in different industries (e.g. teachers, scientists).

Industrial Relations The terms ‘labour relations’, ‘employee relations’ and ‘industrial relations’ refer to the relationship between employers and employees. Employers have historically been in a much stronger position – the ‘master and servant’ relationship, for example – which led to the growth of organised labour. Employers have realised the value of formal organisation and have responded by establishing their own associations. Trade Unions A trade union is an organisation of workers which has been established to represent their interests. Union rights UK legislation up to 1980 concentrated on protecting unions; since 1980 the emphasis has shifted to protecting the individual union member. Trade unions and their members have rights under several main items of legislation: The Trade Union and Labour Relations Act 1974 defines a union and a trade dispute. The Employment Acts 1980, 1982, 1988 and 1990 - require secret ballots to be held to get approval to take strike action, and for elections to union posts; - allow a member to prevent the union from strike action if no ballot has been held; - protect members from disciplinary action if they refuse to take part in a strike; - make ‘closed shops’ and all forms of secondary action illegal; - allow damages to be awarded against union members who are not involved in a dispute but who take secondary action. The Trade Union Act 1984 make a union liable for damages if it has not carried out a secret ballot to get approval from its members for strike action. The Trade Union Reform and Employment Rights Act 1992 makes it unlawful for employers to collect union dues without the written consent of workers. Union aims A trade union seeks to improve the working life of its members. To do this it: Advises, represents and protects members: - it advises on procedures following industrial accidents, represents employees at industrial tribunals, and gives general legal advice - it ensures that members receive sick pay and other benefits to which they are entitled

-

it helps protect against redundancy, unfair dismissal, disciplinary action, discrimination, etc.

Negotiates with employers for - improved pay and working conditions - improved pension and retirement arrangements - greater job satisfaction and better job security Seeks to influence others - as a pressure group influencing employers and governments on legislation and other matters - - regarding improved social objectives, such as full employment and better social security Union benefits Membership of a trade union brings a number of benefits to its members

Improved Working Conditions

Financial Insurance Services

Protection Against exploitation UNION MEMBERSHIP

Representation With employers Legal and technical

advice

CARD Improvements In pay

Training and Education services

Many employers recognise the benefits that unions bring, and gain themselves from only having to negotiate with a single body. Some industries had union membership agreements requiring all employees to join a union – a ‘closed shop’ agreement – but the 1988 Employment Act made it unlawful to dismiss an employee who refuses to join a union. (Employers are now free to also recruit workers who are not union members.) Pay Bargaining Trade unions are most closely associated with negotiating with the employers of a business on behalf of their members over the issue of pay. This is known as the ‘paybargaining process’, and it is an example of collective bargaining. The first stage in this process is for each side (the employer and the trade union) to decide on its objectives. As well as deciding the amount of a pay rise, both the trade union and the employer will also need to decide how the money will be distributed amongst the members of the trade union (i.e. will the pay rise be a ‘blanket’ coverage giving every employee a fixed percentage rise, or will different groups of workers receive different

percentage pay rises?). Further to this point, will the pay rise be awarded in a lump sum per employee, or will it be staggered over time? The second stage involves both sides (the trade union and the employer) presenting their arguments at a ‘pay-talk’ discussion. A trade union will put in a ‘pay claim’, which will be based on one or more of the following points: 1. An increase in the cost of living (i.e. inflation) requires that workers have a pay rise in order to maintain their purchasing power. 2. An increase in labour productivity rates will mean more sales revenue and profits for the business, this extra profit should be shared with the workers by giving them higher rates of pay. 3. A pay rise is required in order to recruit and retain the ‘best’ workers that the business can find. 4. If workers are using new machinery and working practices, then they need to be compensated for this extra work by being given a pay rise. The employer will put forward a ‘pay offer’, which they believe will reflect the current trends in the labour market (i.e. the rates of pay which are being offered by rival businesses), as well as maintaining the competitiveness of the business (i.e. not increasing their costs by a large percentage). The third and final stage involves a negotiation process between the trade union and the employer. In order for this to be a success, both sides will be required to compromise and be prepared to accept less than their original objectives. It must be remembered that there are many other issues that a trade union will negotiate for its members other than pay rises (e.g. length of the working week, working conditions, and proposed redundancies). Advisory Conciliation and Arbitration Service (A.C.A.S.) The Advisory Conciliation and Arbitration Service was set up by the government in 1975 as an independent body that helps to settle industrial disputes and claims of unfair dismissal by employees. As the name suggests, there are three main services that are offered by ACAS, advice, conciliation and arbitration. A.C.A.S. representatives can be invited into a business by the two feuding parties (employers and trade unions) in order to offer their advice to both parties on the industrial unrest and the ‘best’ way to proceed in order to settle the unrest. Conciliation is an attempt to get the two sides in an industrial dispute to resolve their differences. A conciliator listens to the arguments of both sides, and then tries to encourage the trade union and the employer to negotiate and compromise so that they can reach a solution that is acceptable to both parties.

Arbitration is the process of resolving an industrial dispute by using an independent person to decide the appropriate outcome. The arbitrator will look at the arguments put forward by both parties, and then he will arrive at a decision. The decision can be legally binding on both parties if this was agreed prior to the arbitrator’s decision. Pendulum arbitration is a type of arbitration in which the arbitrator will decide completely in favour of one party or the other, with no compromise or negotiation being allowed. It is likely, therefore, that both parties (the employers and the trade union) will make their demands more conservative and realistic than if the arbitrator was allowed to choose an outcome which was somewhere between the two.

In the news…Royal Mail Strike – End in sight The executive of the CWU (Communication Workers Union) agreed on 22nd October to back a deal with the Royal Mail. The offer includes a 6.9% pay increase over 18 months and is being put to a ballot of CWU members. If the members accept the offer, it will bring to a close the first national postal dispute for over a decade and an end to the series of strikes this autumn which has cost the Royal Mail ‘tens of millions’ of pounds and provoked anger among small businesses (The Guardian, 23rd October 2007). The dispute arose from issues of pay, pension reform and changes to working practices, which were central to Royal Mail’s plans to modernise its operations and make it competitive with other postal operators and other communications media (The Times, 4th October 2007). The CWU had believed it coul d lead to the loss of up to 40,000 jobs (The Times, 30th January 2006). Dave Ward, the CWU's deputy general secretary, said the agreement that had been reached reflected: ‘the fact that change in the company will only be managed with the union and the workforce. We have made significant gains on pay and related issues and the union's role in negotiating change in the workplace has been strengthened.’ (CWU, 22nd October 2007) John Hutton, the secretary of state for Business and Enterprise, urged CWU members to support their union's recommendation. He told the all-party Trade and Industry select committee that: ‘the dispute had caused “significant” damage to business and the wider economy’, adding that: ‘Some bulk customers may receive compensation. In relation to the Royal Mail we will not be clear about how permanent the damage has been for some time.’ Forbs.com/AFX News Limited, 22nd October 2007) Small businesses also welcomed the agreement. Nick Dines, head of communications at the British Chambers of Commerce, said: ‘This is good news for small businesses in the UK who have essentially been held at ransom by the CWU. The strike has shown that although in theory the monopoly on delivery has been broken, the reality is that there is no cost-effective alternative to Royal Mail. Management and the union must ensure that crippling strikes like this do not happen again.’ (The Guardian, 22nd October 2007)

Study Questions 1. What effects might arise for the public and the business community as a result of the series of strikes at Royal Mail? 2. What are the benefits to employees of being a member of a union? 3. Discuss the importance to large national companies of good industrial relations 4. Evaluate the effect of the series of postal strikes on a mail order business, both short term and long term.

Disputes and Grievance Procedures a) Collective –

involving issues taken up on behalf of the employees by their trade union representative (substantial or procedural). Usually described as ‘disputes’.

b) Individual –

involving an individual employee only. These are described as ‘grievances’.

Disputes have a far greater impact on employee relations than grievances and are concerned with disagreements between employees and their own employer and which are wholly or mainly about matter directly affecting their terms and conditions of employment. Grievances are disputes between an individual employees and his/her employer. To handle this kind of issue, organisations will establish grievance procedures as below. Such grievances are initiated by employees. Stages of a Typical Grievance Procedure Employees raises grievances with immediate supervisor

If matter not settled, it is taken to the next level of management, and the employee may be accompanied by a friend or trade union representative

If the matter is still not resolved, it is taken to a senior management level, and the employee may take a representative as before

If the employee is still not satisfied he may appeal to the Managing Director Discipline procedures are classed as individual disputes and are designed to provide fair treatment of ‘misbehaviour’ by employees. Discipline procedures are initiated by management.

Termination of Contracts The final role of the H.R.M. department is to make the termination of the employees’ contracts of employment as smooth and efficient as possible. There are a number of different ways in which employees can have their contracts of employment terminated, including: 1. Redundancy. It will be necessary at certain times (e.g. during a recession, or a decline in the industry) for a business to ‘downsize’ its workforce (make a certain proportion of them redundant). This process could be done in several ways, voluntary redundancy (where workers opt for a redundancy package), compulsory redundancy, ‘last-in-first-out’ (where the most recent appointments are the first to be made redundant), or retention by merit (where the least effective employees are made redundant). 2. Retirement. At the end of their working-life, employees will wish to retire and stop offering their services to the business. In return, they will often receive a lump-sum payout, as well as both their state pension and their private pension. 3. Transfers and Resignation. This occurs when an employee leaves the business and transfers their services to another business (the employee may apply for a more senior job at another business). 4. Dismissal. This is where the employee is deemed to have broken their contract of employment, and told that their services are no longer required by the business. Fair dismissal can be on the grounds of sexual harassment, racial harassment, bad timekeeping, sleeping on the job, and destruction of business property. However, if an employee feels that they have been unfairly dismissed (e.g. on the grounds of pregnancy, ethnic background, or union membership), they can apply to have the case heard at an industrial tribunal. This is a small court that deals with claims of unfair dismissal and discrimination from employees against their (former) employers. If the employee is successful in claiming that they have been unfairly dismissed, then they are eligible for re-instatement in their previous job, as well as a financial award (to cover loss of earnings, and pain and suffering).

Employee Participation Employee participation means many things to many people. Essentially it is about involving non-managerial staff in the decision-making process of an organisation. It is, however, the EXTENT of involvement in decision-making that is problematical. Choices in Employee Participation Consultation – Participation occurs when employees are consulted about decisions affecting their working lives. Job Enrichment – The employee is given more discretion to make decisions affecting his own job. Participative Management Style – The initiative for participation rests with open management who employ an ‘open’ approach to managing people where plant level councils may be set up where managers/employee representatives discuss and jointly decide a wide range of strategic issues. Collective Bargaining – Many people feel that collective bargaining should be extended to include forward planning issues. The adversarial nature of the process may militate against its use as a form of participation. Works’ Councils – This idea is based on the West German approach that confers on employee representatives the legal right of access to information from management on a wide range of issues and the right of joint decision-making on all personnel matters. Board Representation – This is participation at ‘policy-making level’. Employees can elect worker directors whose power and influence will depend on the number of such directors on the board. In Germany, Supervisory Boards include employee representation but there are no such members of the Management Board (Executive Board). The EC is a firm believer in employee participation at Board level. Quality Circle – This is a work group of 8-10 employees and supervisors who have a shared area of responsibility. They meet regularly – typically, once a week, on company time and on company premises – to discuss their quality problems, investigate causes of the problems, recommend solutions, and take corrective actions. They take over responsibility for solving quality problems, and they generate and evaluate their own feedback. But management typically retains control over the final decision regarding implementation of recommended solutions. Employee Stock Ownership Plans (ESOPs) – Employee stock ownership plans are companyestablished benefit plans in which employees acquire stock as part of their benefits. Approximately 20% of Polaroid, for example, is owned by its employees. Research has shown that ESOPs increase employee satisfaction. In addition, they frequently result in higher performance. ESOPs have the potential to increase employee job satisfaction and work motivation.

Legislation In all areas of the activities of the business, but especially it seems within Human Resource Management, the business must ensure that it abides by every piece of legislation, regardless of the stakeholder group which the legislation protects (e.g. employees and customers). The main pieces of legislation affecting the successful operations of the Human Resource Management department are: 1. The Employment Relations Bill, 1999 (stating that employees who have been in employment with the same business for a period of one year have the right not to be unfairly dismissed). 2. The Employment Rights Act, 1996 (covering unfair dismissal, redundancy and maternity). 3. The Public Interest Disclosure Act, 1998 (covering employees who disclose confidential information). 4. The Health & Safety at Work Act, 1974 (covering working conditions and the provision of safety equipment and hygiene). 5. The National Minimum Wage Act, 1999 (making it illegal for employers to pay less than £3.60 per hour to its full-time staff who are aged over 21). As of 2004 National Minimum Wage is £4.50 for 22 years and over; and £3.80 for 18-21 year olds. 6. The Equal Pay Act, 1970 (stating that pay and working conditions must be equal for employees of the opposite sex who are performing the same work). 7. The Sex Discrimination Act, 1975 (stating that it is illegal to discriminate against an employee, or an applicant for a job, on the grounds of their sex or their marital status). 8. The Race Relations Act, 1976 (stating that it is illegal for an employer to discriminate against an employee, or an applicant for a job, on the grounds of their ethnic background). 9. The Disability Discrimination Act, 1995 (stating that it is illegal for a business with 20 or more employees to discriminate against an employee, or an applicant for a job, on the grounds of their disability).

Create a Poster to be displayed outside the class that details the main elements of a piece of Legislation. In addition to the poster, be able to answer how you think the law affects firms (both positive and negative)

PAST PAPER QUESTIONS

1 Launching a new product or service may require the organisation’s existing staff to undergo training. (i) Identify the objective of such a training programme for the existing staff of an organisation. (5 marks) (ii) How does this type of training differ from an induction training programme? (5 marks) 2 (a) Describe how employees in a large manufacturing company might be involved in the decision-making process. (b) Analyse the benefits of this involvement for both the employee and the employer. (15 marks) 3 Some employees may feel that their employer is discriminating against them because all people doing the same job are not receiving the same pay. Explain the steps employees cant take to have the situation remedied. (9 marks) 4 What measures might an organisation introduce to develop good working relationships with employees and trade unions? (6 marks) 5 Describe the constraints legislation may impose on an organisation. (10 marks) 6 Errors sometimes occur in manufacturing, e.g. a supermarket is unhappy about the quality of one batch of lasagne which has been distributed throughout the UK. Explain the role of the Public Relations Officer in dealing with this situation. ( 5 marks) 7 (a) Name 2 laws relating to health and safety in the workplace.

(2 marks)

(b) Describe the ways that health and safety laws affect most organisations. (7 marks) 8 When recruiting staff, what is the purpose of an interview and how should it be conducted to be as effective as possible? (10 marks) 9 In addition to an interview, some firms give applicants special tests. Identify and describe 2 such tests. (6 marks) 10 (a) Give examples of a possible key field in a staff database and explain how it might be used. (2 marks)

(b) Explain the uses which a Human Resource department might make of a staff database. (7 marks) 11 Quality circles are an example of industrial democracy. What are they and how might they benefit an organisation? (6 marks)

**********TO DO – insert appriaisal activities for Grievance and Termination activities for Employee Participation include role plays, mind maps etc