Human Resource Management

Workforce diversity means the differences among employees in an organisation in terms of age, gender, ethnicity, religion, culture, disability, education, skills and background, which are recognised and valued to make full use of their abilities.

Human resource planning (HRP) is the process of forecasting an organisation's future demand for and supply of employees, and developing plans to ensure that the right number and kind of people are available at the right time and place to achieve its objectives.

A job specification is a written statement of the minimum qualifications, skills, knowledge, experience, personal traits and physical requirements that a person needs to perform a particular job successfully. It describes the person who should do the job, whereas a job description describes the job.

Career planning is the process by which an individual sets career goals, assesses his or her abilities and interests, and identifies the education, training and job experience needed to achieve those goals over the course of working life.

Extrinsic rewards are tangible rewards given to employees by the organisation for their work, which come from outside the job itself. They include pay, bonuses, benefits, promotions, job security and other perks.

The main outcomes of an HRM system are:

• High employee performance and productivity
• Employee satisfaction and motivation
• Low absenteeism and turnover
• Improved quality of work life and employee commitment
• Better organisational competitiveness and legal compliance

The three main actors of labour relations are:

1. Employees and their trade unions
2. Employers and their associations (management)
3. The government (state) and its agencies

A selection interview is a formal, structured conversation between an interviewer and a job candidate, held to assess the candidate's knowledge, skills, attitude and suitability for a vacant position, so that the best candidate can be selected.

Four problems in performance rating are:

1. Halo effect: one good (or bad) trait influences the rating on all other traits.
2. Leniency or strictness bias: the rater gives all employees very high or very low ratings.
3. Central tendency: the rater gives everyone an average rating to avoid extremes.
4. Recency effect (or personal bias): recent events or personal likes and dislikes outweigh the whole period's performance.

Four reasons for joining a trade union are:

1. To obtain better wages, benefits and working conditions
2. To gain job security and protection from unfair dismissal
3. To have a collective voice and bargaining power against management
4. To gain social recognition, a sense of belonging and protection of rights

Contemporary issues of HRM are the new challenges that modern organisations face in managing people. The main ones are:

1. Globalisation: Firms operate across borders, so HR must manage international staffing, cross-cultural differences and competition for talent.
2. Workforce diversity: Employees differ in gender, age, ethnicity, religion and ability, so HR must manage diversity and ensure inclusion and equal opportunity.
3. Technological change: HR information systems, e-recruitment, remote work and automation require new skills and continuous training.
4. Work-life balance: Employees want flexible schedules, work from home and family-friendly policies, to reduce stress and retain talent.
5. Talent attraction and retention: Skilled people are scarce and mobile, so firms must design attractive pay, careers and engagement programmes, and handle brain drain.
6. Ethics and legal issues: These include sexual harassment, discrimination, employee privacy and corporate social responsibility.
7. Outsourcing, downsizing and contingent workers: Organisations increasingly use temporary, contract and outsourced staff, which creates issues of morale and loyalty.
8. Employee empowerment and changing employee expectations: Employees expect participation, learning and meaningful work.

Succession planning is the process of identifying and developing employees who can fill key positions in the organisation when the present holders retire, resign, are promoted or leave for any other reason.

Purposes of succession planning:

1. Continuity of leadership: It ensures that key positions are never left vacant, so operations continue smoothly.
2. Identifying and developing talent: It spots high-potential employees early and prepares them through training, rotation and mentoring.
3. Reducing recruitment cost and risk: Filling posts from within is cheaper and less risky than hiring outsiders whose performance is unknown.
4. Motivation and retention: Employees see a clear career path, which raises morale, commitment and loyalty.
5. Preparing for change and growth: It helps the firm meet future skill requirements arising from expansion or restructuring.
6. Preserving organisational knowledge and culture: Knowledge passes from experienced managers to successors.
7. Supporting HR planning: It links forecasts of future needs with the present talent pool and highlights gaps to be filled.

Recruitment is the process of searching for and attracting potential candidates in sufficient numbers and quality to apply for vacant positions in an organisation. It creates the pool of applicants from which the selection is made.

Sources of recruitment

(a) Internal sources: Candidates are found within the organisation.

• Promotion: moving an employee to a higher post.
• Transfer: moving an employee to a similar post in another unit.
• Job posting and internal advertisement, employee referrals, and recall of retrenched or retired staff.

Merits: low cost, motivates staff, known performance, short training. Demerits: limited choice, no new ideas, possible internal conflict.

(b) External sources: Candidates are found outside the organisation.

• Advertisements in newspapers, radio, TV and websites.
• Employment agencies and executive search firms (head hunters).
• Campus recruitment from colleges and universities.
• Walk-ins, write-ins and unsolicited applications.
• Employee referrals, professional associations and social media or online job portals.
• Labour unions, deputation and contractors.

Merits: wider choice, fresh ideas and skills. Demerits: higher cost, longer process, may demotivate existing staff, and a new person needs time to adjust.

An organisation usually uses a mix of both, depending on the post, cost, time and policy.

Performance appraisal is the systematic and periodic evaluation of an employee's job performance and potential against pre-set standards or objectives, and the communication of the result to the employee.

Uses of performance appraisal

1. Compensation decisions: It provides the basis for pay increases, bonuses and incentives.
2. Promotion, transfer and demotion: It identifies the best performers for advancement and the poor performers for corrective action.
3. Training and development: It reveals strengths and weaknesses, so training needs can be identified.
4. Feedback and motivation: Employees learn how they are doing, which guides improvement and motivates them.
5. Selection validation and HR planning: It checks whether selection methods predict performance and helps to assess the talent available.
6. Career planning: It helps match employees' abilities with suitable career paths.
7. Legal and disciplinary documentation: Records support decisions on dismissal or termination and show fairness.
8. Better superior-subordinate relationship: Regular discussion improves communication and trust.

The Labour Act, 2074 (2017) of Nepal governs employment relations in enterprises. Its main provisions are:

1. Employment and appointment: Employers must issue appointment letters. Types of employment are regular, time-bound, work-based (project), casual and part-time. A probation period of up to 6 months is allowed.
2. Working hours and leave: Normal work is 8 hours a day and 48 hours a week. Overtime needs consent and pays 1.5 times the normal rate. There is a weekly holiday, public holidays, home leave, sick leave, maternity leave (with pay), paternity leave, mourning leave and others.
3. Remuneration: Wages cannot be below the minimum set by the government. Wages must be paid on time. An employee gets a bonus of 10 percent of profit, which is shared according to the rules.
4. Occupational safety and health: The employer must provide a safe workplace, safety equipment, first aid and medical facilities, and a health and safety committee.
5. Social security and benefits: Provision of provident fund, gratuity, insurance, and compensation for injury or death at work.
6. Women, children and special groups: Children under 14 cannot be employed, and 14 to 18 year olds are restricted from hazardous work. There are special provisions for women, such as maternity facilities and night work only with consent.
7. Trade unions and collective bargaining: Employees have the right to form unions. An enterprise with 10 or more workers may have a union, and the union with the required membership can bargain collectively.
8. Labour relations committee and dispute settlement: Grievances and disputes are settled through negotiation, mediation, arbitration or the labour court, and strikes and lockouts are regulated.
9. Termination and retrenchment: Termination needs a valid reason, notice or compensation, and the right of hearing. Disciplinary action and punishment are also specified.
10. Labour administration: Labour offices and inspectors monitor compliance, and there are penalties for violations.

Collective bargaining is the process in which representatives of employees (trade unions) and of employers negotiate to reach a written agreement on wages, benefits, working hours, working conditions and other terms of employment.

Process of collective bargaining

1. Preparation and identification of issues: Both sides collect data (wages, cost of living, financial position, past agreements) and decide their demands, priorities and limits. A bargaining team is formed.
2. Submission of the charter of demands: The union presents its demands to management.
3. Negotiation: The parties meet and discuss, exchange proposals and counter-proposals, and make concessions. Each tries to find common ground.
4. Reaching an agreement: When both sides accept the terms, a settlement is reached and written down as a collective agreement.
5. Ratification: The agreement is approved by union members and by top management or the board.
6. Implementation and administration: The terms are put into practice, and grievances about interpretation are handled through the agreed procedure.
7. Dispute resolution if negotiation fails: The parties turn to conciliation, mediation or arbitration, and, as a last resort, strikes or lockouts as the law allows.
8. Review and renewal: The agreement is reviewed and renegotiated when its term ends.

(a) HR-related problems Best Buy initially faced

• An increase in the number of employees quitting (high turnover).
• A rise in stress-related health claims.
• Low trust: employees felt supervisors did not trust them and were always watching over them (close supervision).
• Low motivation, morale and job satisfaction.
• A poor work-life balance for workers.

(b) Job design techniques used

Best Buy used mainly the following techniques:

• Flexible work arrangements (flexi-time and telecommuting/remote work): employees choose when and where to work.
• Job enrichment and empowerment: workers control how, when and where they do the job, with autonomy and responsibility.
• Results-based job design: the ROWE programme evaluates people on output, not on hours or presence at the office.

(c) Flexible working environment, merits and demerits

A flexible working environment is an arrangement in which employees have freedom over the time, place and manner of their work, as long as the required results are delivered. Examples are flexi-time, compressed work week, job sharing, working from home and ROWE.

Merits

1. Better work-life balance and lower stress.
2. Higher productivity and motivation. At Best Buy, productivity rose 41 percent.
3. Lower turnover and absenteeism. Turnover fell 90 percent, which saves large costs.
4. Greater loyalty, trust and job satisfaction.
5. Savings on office space and costs, and the ability to attract and retain talent.

Demerits

1. It is harder to supervise, coordinate and control employees.
2. Team work and communication may suffer, and employees may feel isolated.
3. Some employees may misuse the freedom and be less disciplined.
4. It does not suit every job (for example, shop-floor or customer-facing roles).
5. Problems of data security, technology cost and unequal treatment of those who cannot use it.

(d) Advantages of job design in light of the case

• It increased employee motivation and satisfaction, because workers felt trusted and in control.
• It improved productivity (up 41 percent).
• It reduced turnover (down 90 percent) and so the cost of replacing staff (about $120,000 per employee).
• It improved work-life balance and relationships with family and friends.
• It raised loyalty to the company and made employees more focused and energized.
• It improved the company's image, so it could recommend the programme to others and extend it to retail stores.