Professional Documents
Culture Documents
BBPB2103
BBPB2103
HUMAN RESOURCE
MANAGEMENT
Dr Siti Zubaidah Othman
Nor Azimah Chew Abdullah
Wan Din Wan Daud
Tang Swee Mei
Hj Yaakob Ibrahim
Dr Ho Jo Ann
Project Directors:
Module Writers:
Moderators:
Peter Johnson
Assoc Prof Dr Khulida Kirana Yahaya
Universiti Utara Malaysia
Developed by:
Printed by:
Table of Contents
Course Guide
Topic 1
Topic 2
xi xvi
4
7
8
11
15
19
19
Legal Environment
2.1 Employment Act 1955
2.1.1 Contract of Service
2.1.2 Payment of Wages
2.1.3 Recruitment of Women
2.1.4 Maternity Coverage
2.1.5 Normal Hours of Work
2.1.6 Rest Day, Holidays and Leaves
2.2 Industrial Relations Act 1967
2.2.1 Protection of Rights
2.2.2 Recognition and Scope of Trade Unions
2.2.3 Collective Bargaining and Agreements
2.3 Trade Unions Act 1959
2.4 Occupational Safety and Health Act (OSHA) 1994
2.5 Employees Social Security Act 1969
2.6 Human Resource Development Act 1992
2.7 Employees Provident Fund Act 1991
2.8 Workmens Compensation Act 1952
Summary
Key Terms
20
21
23
24
24
25
25
26
29
30
30
31
31
32
34
36
37
39
42
42
1
2
2
iv
TABLE OF CONTENTS
Topic 3
43
44
48
52
54
55
56
58
59
60
64
67
67
Topic 4
68
69
69
70
75
82
83
84
90
90
Topic 5
Selection
5.1 Selection Process
5.2 Information Reliability and Validity
5.2.1 Information Reliability
5.2.2 Information Validity
5.3 Selection Methods
5.3.1 Information Sources
5.3.2 Employment Test
5.3.3 Job Interview
5.3.4 Reaching Selection Decision
Summary
Key Terms
91
92
93
93
94
96
97
99
101
105
110
111
Topic 6
Performance Evaluation
6.1 Definition of Performance Evaluation
6.2 Purpose and Uses of Performance Evaluation
6.3 Main Causes of Performance Evaluation Failure
6.4 Performance Evaluation Process
112
113
113
115
116
TABLE OF CONTENTS
6.5
6.6
Responsibility of Evaluating
Performance Evaluation Method
6.6.1 Trait Methods
6.6.2 Behavioural Methods
6.6.3 Result Methods
6.7 Errors in Performance Evaluation
6.8 Performance Interview
Summary
Key Terms
120
123
123
125
128
130
133
136
136
Topic 7
Compensation Administration
7.1 Definition of Compensation
7.2 Types of Compensation
7.3 Strategic Compensation Planning
7.4 Factors That Influence Wage Rate
7.5 Compensation Administration Components
7.5.1 Achieving Internal Equity: Job Evaluation
7.5.2 Achieving External Equity: Market Survey
7.5.3 Achieving Individual Equity
7.6 Compensation Administration Issues
Summary
Key Terms
137
138
138
140
142
145
146
151
154
155
158
158
Topic 8
159
160
160
161
161
162
162
168
169
171
176
177
Topic 9
178
179
180
181
182
184
vi
TABLE OF CONTENTS
9.2.4
9.2.5
9.2.6
9.2.7
Summary
Key Terms
Topic 10
Topic 11
189
190
192
193
196
197
198
199
200
201
201
202
202
203
204
207
208
209
211
214
214
215
216
217
217
218
223
224
227
228
229
229
231
231
231
233
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234
TABLE OF CONTENTS
vii
235
237
240
240
Answers
241
References
270
COURSE GUIDE
INTRODUCTION
BBPB2103 Human Resource Management is one of the courses offered by the
Faculty of Business and Management at Open University Malaysia (OUM). This
course is worth three credit hours and should be covered over 8 to 15 weeks.
COURSE AUDIENCE
This is a core subject for students of the Bachelor of Management and Bachelor of
Business Administration programmes. It is also a fundamental major course for
students taking the Bachelor of Hospitality Management programme. For
students taking the Bachelor of Human Resource Management programme, this
course is a core major subject.
As an open and distance learner, you should be able to learn independently and
optimise the learning modes and environment available to you. Before you begin
this course, please confirm the course material, the course requirements and how
the course is conducted.
STUDY SCHEDULE
It is a standard OUM practice that learners accumulate 40 study hours for every
credit hour. As such, for a three-credit hour course, you are expected to spend
120 study hours. Table 1 gives an estimation of how the 120 study hours can be
accumulated.
xii
COURSE GUIDE
Study
Hours
60
10
Online participation
12
Revision
15
20
120
COURSE OUTCOMES
By the end of this course, you should be able to:
1.
2.
Explain the roles of the human resource manager in designing the course of
an organisation; and
3.
COURSE SYNOPSIS
This course is divided into 11 topics. The synopsis for each topic is presented
below:
Topic 1 is an introduction to human resource management. Discussion starts
with the definition of human resource management. Students are then exposed to
the importance of human resource management and the environment of human
resource management in Malaysia. Aside from that, students are also exposed to
the five main functions of human resources, as well as the challenges and issues
faced in human resource management.
COURSE GUIDE
xiii
xiv
COURSE GUIDE
Topic 9 discusses two main topics which are employees rights and discipline.
Discussion begins with the rights of employees and employers. Next, students
will be exposed to issues related to employee discipline such as recognising
problematic workers and the types of misconduct which exist in an organisation,
as well as looking at some disciplinary approaches that can be practised. Apart
from that, students are exposed to misconduct outside of an organisation and the
techniques used to solve them. Disciplinary issues, alternative conflict resolution
procedure and the procedure for termination of contract due to misconduct will
also be explained. The end of the topic gives some guidelines in carrying out a
fair disciplinary action.
After understanding employees rights and discipline, the next discussion will
touch on the dynamics of employee relations.
Topic 10 talks about workers union in Malaysia and why employees participate
in unions, as well as the functions and structure of a union. The discussion ends
by looking at the bargaining process, which is usually carried out when issues
arise in trade.
Topic 11 ends this course by discussing work safety and health. In this topic,
students are exposed to the laws and hazards related to safety and health at the
workplace. Also discussed are related issues. At the end of the topic, students are
given some ideas on how to create a safe and healthy work environment.
COURSE GUIDE
xv
PRIOR KNOWLEDGE
There is no prerequisite requirement for learners prior taking this subject.
ASSESSMENT METHOD
Please refer to myINSPIRE.
REFERENCES
Alex K. B. Yong. (1996). Malaysian human resource management. Malaysian
Institute of Management.
Armstrong, M. (2012). Armstrong's Handbook of Human Resource Management
Practice (12th ed.). London: Kogan Page.
Copyright Open University Malaysia (OUM)
xvi
COURSE GUIDE
human
resources
Topic
Introduction
to Human
Resource
Management
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1.
2.
3.
4.
5.
INTRODUCTION
From the amazing economic experience two decades ago, among countries
that before had limited natural resources, it is clear that the most important
resources to a country are talent, skills, creativity and the effort of its people.
Brain power is a source that is much more valuable than natural resources.
People are our main resources. Without doubt, in the 1990s and beyond,
Malaysia must give its utmost attention towards the growth of this very
crucial resource.
Vision 2020 - Tun Dr Mahathir Mohamad,
Former Prime Minister of Malaysia
TOPIC 1
At one time, many observers were of the opinion that machines would take over
the functions and roles of employees in an organisation. However, the opposite
happened. Like what Tun Dr Mahathir said, human resources are becoming
more important in todays organisations, especially in knowledge-based
industries such as software and information services.
The success or failure of an organisation most of the time relies on the
knowledge, skills and ability of its employees. Many experts feel that an
organisation is able to achieve greater advantage if it has valuable human
resources which are difficult to acquire, imitate and well-managed.
Human resource management is one of the most important management
functions in an organisation as it is able to obtain and develop dynamic and
qualified employees.
1.1
1.1.1
There are some who are of the opinion that personnel management and human
resource management are the same. They view human resource management as
a modern version of personnel management due to technological changes in the
current work environment and a shift in social values.
Copyright Open University Malaysia (OUM)
TOPIC 1
However, there are other groups who think that personnel management and
human resource management differ in terms of the roles they play, their scope
and their actions. Human resource management portrays a much wider
perspective, which includes:
(a)
(b)
Industrial relations;
(c)
(d)
(b)
(c)
Hiring employees;
(d)
Paying employees;
(e)
(f)
TOPIC 1
Personnel Management
Proactive
Reactive
Facilitates an organisations positive Does not take into account the effects
culture
of culture
Source: Adapted from Yong, A. K. B. (1996). Malaysian human resource management.
Kuala Lumpur: Malaysia Institute of Management.
EXERCISE 1.1
1.2
1.
2.
TOPIC 1
Apart from that, it is able to influence and increase employees commitment, and
motivate them at the same time. This, in hand, will increase the organisations
performance through an increase of employees productivity.
At one time, human resource management was not related to an organisations
profit. Due to that, it did not play an important role in the organisations strategic
planning. Now, human resource management is starting to gain more attention
in the development of strategic planning to most organisations, due to the effects
of human recognition in an organisation. Moreover, the main human resource
management strategy is integrated in the organisation strategy.
Human resource management strategy views organisation strategy on employee,
profit and effectiveness as a whole. Effective human resource management
activities and programmes ensure an effective organisation; therefore, it helps an
organisation achieve competitive advantage.
Human resource management is also responsible for managing any changes that
happen in an organisation due to merging activities, business downsizing and
various workforce cultures. Figure 1.1 shows a few of the main roles of the
human resource management department.
(a)
Planner
Plans matters related to staffing, such as planning manpower needs,
recruitment and employee selection.
(b)
Facilitator
Prepares training opportunities and career development for employees and
conducts orientation sessions for new employees.
Copyright Open University Malaysia (OUM)
TOPIC 1
(c)
Coordinator
Coordinates matters related to employee health and safety, amenities and
benefit.
(d)
Auditor
Oversees employee performance and controls compensation offers such as
rewards and benefits to employees and evaluates accident and injury reports.
(e)
Mediator
Human resource management division acts as the middleman in matters
pertaining to employee disciplinary issues, consultation with workers
union, conflict handling and employee dissatisfaction.
(b)
(c)
(d)
(e)
(f)
(g)
(h)
ACTIVITY 1.1
If you are the Head of the Human Resource Department in your
organisation, what do you think are the important roles of your
department?
TOPIC 1
1.3
Since the 1980s, management teams in Malaysian firms have shown an increase
in the usage of the term human resource management to replace the term
personnel management. This is in line with the development of human
resource management in the international level. Besides that, Malaysian
authorities have embraced this change by taking the initiative in replacing the
Ministry of Labour with the Ministry of Human Resources in 1990.
In order to achieve Vision 2020 and ensure that Malaysia become a developed
country by 2020, various efforts have been planned to develop the human capital
resources. Among them are:
(a)
(b)
(c)
(d)
1.4
TOPIC 1
TOPIC 1
(a)
Staffing
Staffing involves human resource planning process, job analysis,
recruitment and selection of manpower.
(i)
(ii)
Job Analysis
Human resource management department conducts job analysis to
develop specific requirements for a job in an organisation. It is a
process of gathering information on a particular job by identifying the
responsibilities and duties related to the post. Information from the
job analysis will be used to develop jobs, prepare job details and job
specifications.
(iii) Recruitment
Recruitment is a process of identifying and encouraging interested
and potential job candidates to apply for available posts in an
organisation. Task details and job specifications provide information
on candidates eligibility and explanation on job requirements.
(iv) Selection
Selection is a process of identifying the most suitable candidate to fill
a vacant post whereby the candidate is chosen from a group of
applicants obtained from the recruitment process. Some of the
procedures usually practised in the selection process include checking
the application form and rsum (curriculum vitae), checking the
candidates background, conducting interviews and conducting
selective tests such as physical and personality tests.
(b)
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TOPIC 1
(d)
(e)
Work Relations
Work relations is also known as industrial relations or business relations. It
refers to the relationship between employer and employee or workers
union that represents employees. A harmonious employer and employee
relationship ensures the stability and strength of an organisation. The
human resource management department needs to act as a medium
between the organisation and the workers union. A workers union
represents employees in matters regarding collective consultation,
disciplinary conduct and employee complaints.
TOPIC 1
11
EXERCISE 1.2
List five main roles of human resource management. Elaborate
briefly on each function based on your working environment.
1.5
We often read in the newspapers about sexual harassments, misconducts and the
misuse of power in the workplace. There are many challenges faced by human
resource management nowadays. Among them include:
Globalisation
Challenges in technology
Managing change
Human resource development
Market reaction
Cost reduction
Economic climate
Legal system
(a)
Globalisation
Mergers, takeovers and competition among international industries and
businesses are expanding. To remain and compete in the market, more
firms are starting to explore the global market. Indirectly, this causes them
to face issues such as culture, legal and business practice differences.
An organisation has to identify a human resource manager who is able to:
(i)
(ii)
(iii) Make changes to the compensation plan to ensure fair and suitable
payment scheme cutting across different geographical areas and
different costs of living.
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TOPIC 1
ACTIVITY 1.2
Read the following journal article and discuss the impact of
globalisation on HRM and employment relation. The journal article
can be found in OUM Digital Library.
Hunter, L. W., & Katz, H. C. (2012). The impact of globalization in
human resource management and employment relations in the US
automobile and banking industries. The International Journal of
Human Resource Management, 23(10), 1983-1988.
(b)
Challenges in Technology
Progress in technology has done a lot to influence human resource
management. From manual employees to knowledgeable employees,
innovation in technology has caused a sudden change in form, structure and
employment needs. Knowledgeable employees need to be equipped with
skills to enable them to make plans and decisions, identify problems and solve
them. In many cases, employees need to be retrained to enable them to carry
out responsibilities and their new roles. Therefore, an organisation needs to
prepare training and development programmes to help employees increase
their skills in order to fulfil the demands of a knowledgeable employee.
Aside from that, the use of human resource information technology has
influenced a lot of todays human resource management practices, such as:
(c)
(i)
(ii)
Managing Change
Technology and globalisation are two main factors that force change to happen
in an organisation. An organisation that always maintains its status quo will
not be able to compete in a market that is fast developing and competitive.
Ordinarily, an organisation has to adjust the way it operates to maintain the
effectiveness of its business. This can be done through total quality
programmes, downsizing, re-engineering, outsourcing and mergers.
Changes can happen reactively or proactively:
(i)
A reactive change is due to external influences.
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TOPIC 1
(ii)
13
Knowledgeable;
(ii)
Skilful; and
(iii) Experienced.
Staffing programmes must identify, recruit and select quality candidates.
Training programmes complement the staffing process to increase
employees skills. In addition, employees need their own career
development opportunities. Therefore, the human resource management
department needs to arrange suitable programmes to develop its human
resources, as well as to ensure that employees duties and needs are
flexible, thus allowing for a continuous learning process and employee
development to happen.
(e)
Market Reaction
Fulfilling customers expectations and needs is important for an
organisation to be able to compete in the local and foreign markets. Some of
the approaches often used to respond to the markets are:
(i)
(ii)
Re-engineering process.
Employee motivation;
14
TOPIC 1
(ii)
Cost Reduction
Some of the important elements to enable an organisation to have
competitive advantage and to maximise its effectiveness are cost reduction
and increase in productivity. Human resource cost is one of the biggest
expenditure components in an organisation, especially organisations that
specialise in knowledge and services.
Ordinarily, organisations will have to rearrange their firms to reduce labour
costs through activities such as:
(i)
Downsizing;
(ii)
Outsourcing; and
(iii) Mergers.
Most of the time, these actions cause employee surplus, which then forces
the management to reduce the number of employees through the process of
laying off staff. This issue needs to be handled wisely and fairly by the
human resource management team to avoid problems and employee
dissatisfaction that might affect the organisations performance.
(g)
Economic Climate
The economic environment will influence the financial standing of an
organisation, and the organisation must change its business strategy to
remain or compete in the market. Consequently, an organisations human
resource strategy must also change to be in line with the business strategy,
especially human resource planning.
In the event of economic growth, demand for labour force will increase due
to an increase in production. In these circumstances, organisations will
experience a situation whereby the labour market is limited.
On the other hand, when an economic depression occurs, the organisations
business is affected and the number of employees needs to be reduced
through some approaches such as forced or voluntarily termination and
early retirement.
(h)
Legal System
Organisations must be sensitive to the legal system of the place where it
operates. Any changes and job implementation must be given attention in
order to avoid any legal actions. In Malaysia, there are a few Acts related to
Copyright Open University Malaysia (OUM)
TOPIC 1
15
ACTIVITY 1.3
Choose one of the eight human resource management challenges.
Obtain information from the human resource manager in your
workplace about the challenge you have chosen.
1.6
(b)
16
TOPIC 1
the number of employees (aged 55 and above) that are supposed to retire is
increasing and is believed to reach 23.9% in 2018. On the other hand, in the
same year, the number of younger workforce (16 to 24) is expected to slip to
12.7%. This will cause a gap in the labour force for that particular year. An
unbalanced employee age distribution in the labour market will complicate
human resource management processes, especially human resource
planning, recruitment, training and career development.
(c)
(ii)
(e)
Employee Rights
From time to time, authorities will give serious attention to employee
rights. A number of rules and laws have been enacted to ensure the rights
of employees are looked after. Some of them are:
(i)
(ii)
TOPIC 1
17
Personal Issues
Personal issues are starting to get attention from employees and their
employers. It is the responsibility of the manager and staff from the human
resource management department to manage all employee information
well so that employees personal information is not circulated and misused
by irresponsible people.
(g)
(h)
ACTIVITY 1.4
If you are a human resource manager and most of your employees
are women, which issue would be important for you to consider?
Why?
18
TOPIC 1
EXERCISE 1.3
Multiple Choice Questions
1.
2.
3.
4.
5.
TOPIC 1
19
Essay Questions
1.
2.
3.
4.
Staffing
Personnel management
Work relations
Topic
Legal
Environment
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1.
2.
3.
INTRODUCTION
EMPLOYMENT ACT (AMENDMENT) 2000
SETTING DATE OF PRELIMINARY ENFORCEMENT
In delivering the power vested by subsection 1(2) Employment Act
(Amendment) 2000 [Act A1085], the Minister has established 1 October 2000
as the date the Act to be enforced. Dated 28 September 2000.
Tan Sri Dr Fong Chan Onn
Former Minister of Human Resources
TOPIC 2
LEGAL ENVIRONMENT
21
The passage shows the Employment Act (Amendment) 2000, which was
announced by Tan Sri Dr Fong Chan Onn, former Minister of Human Resources.
The laws and regulations concerning employment and work relations enacted by
the authorities are regularly amended to fulfil current needs.
These laws and regulations influence policies, activities and human resource
management programmes formed by an organisation. The organisations
management team, especially the human resource management unit, needs to
create policies and procedures which abide by the law, so that all actions taken
will be according to the law.
Among the Acts related to human resource management in Malaysia are the:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
2.1
The Employment Act 1955 was enacted with the purpose of protecting
employees from being exploited by employers, and became the legal
foundation in highlighting the minimum conditions and terms related to
work that need to be followed by management.
22
TOPIC 2
LEGAL ENVIRONMENT
A few amendments have been made to the Act since it was enforced and the
latest amendments were made in the year 2011. This act is referred to as the
Employement (Amendment) Act 2012. Some of the amendments found in this act
included:
(a)
(b)
(c)
(d)
Contractors, principals and contractors for labours (Part VII, Section 33A);
(e)
(f)
(g)
(h)
(i)
(j)
(b)
Not taking into account their monthly total earing and work as a:
(i)
Manual labourer; or
(ii)
TOPIC 2
LEGAL ENVIRONMENT
23
2.1.1
Contract of Service
(b)
The Employment Act 1955 also allocates a few prohibitions towards the contract
of service such as:
(a)
(b)
Apart from that, the end of a contract of service notice needs to be stated in the
contract of service. If the notice period is not set in the contract of service, the
minimum period of notice that is allocated under the Employment Act 1955 is as
shown in Table 2.1.
Table 2.1: End of Service Notice
Period of Employment
Period of Notice
4 weeks
6 weeks
5 years or more
8 weeks
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24
TOPIC 2
LEGAL ENVIRONMENT
ACTIVITY 2.2
Even though a contract of service can be made verbally or in
writing, what are the terms that need to be given to an employee in
writing or before he or she starts working?
2.1.2
Payment of Wages
The period of payment of wages cannot extend to more than a month and
employers need to pay their employees no later than the seventh day after the
last day of payment period. However, as the meaning of wages include overtime,
the organisations found it difficult to calculate overtime payments in time to
meet the seventh day requirement. Therefore, the new amendments in the
Employment (Amendment) Act 2012 under section 19(2) stated that employers
are allowed to pay wages for work done on a rest day, public holiday and
overtime not later than the last day of the next wage period. As such, the
employer can pay the employees their wages for the month by the seventh of the
following month and make payment for work done on a rest day, public holiday
and overtime with the following month's wages.
It is the right of employers to stop making any payments to the employees if the
employees are not present at work due to imprisonment or attending court
unless their attendance in court is as witness to the employers.
ACTIVITY 2.3
If your payment period is from the 14th to the 13th of the next month,
according to the Employment Act 1955, what is the last day that your
employer needs to pay your fee?
2.1.3
Recruitment of Women
TOPIC 2
2.1.4
LEGAL ENVIRONMENT
25
Maternity Coverage
Female employees have the right to maternity leave of at least 60 days for every
delivery; and a maternity allowance at the rate of a normal fee or their monthly
salary if they have already been employed by the employer:
(a)
At any time in the four months immediately before their confinement; and
(b)
For a period of, or periods amounting in the aggregate to, at least 90 days
during the nine months immediately before their confinement; and
(c)
However, female employees who have five or more living children are not
eligible to maternity allowance. Apart from that, female employees have the right
to take 30 days of maternity leave prior to or right after the delivery.
Previously, a female employee who is not within the scope of the Employment
Act 1955 was not entitled to maternity coverage unless the contract of service
stipulates otherwise. However, with the Employment (Amendment) Act 2012
under Section 44A, the scope of maternity coverage has been extended to all
female employees who are employed under a contract of servise irrespective of
wages.
2.1.5
Figure 2.2 shows the normal work hours according to the Employment Act 1955. The
Employment Act 1955 states that work hours cannot exceed five hours without
being given any rest of at least 30 minutes. For example, if work hours are from 8am
to 5pm, employees must be given rest 30 minutes before 1pm or, at the latest, 1pm.
26
TOPIC 2
LEGAL ENVIRONMENT
Figure 2.2: Normal Hours of work according to the Employment Act 1955 (Section 60A)
Apart from that, the employees should not be required under their contract of
service to work more than eight hours a day (not including rest period). If an
employees work hours are from 9am to 6pm (nine hours), he needs a rest from
1pm to 2pm (one hour).
The total working hours in one week should not be more than 48 hours.
However, employees are allowed to work overtime. The maximum number of
overtime allowed for an employee is 104 hours in one month, unless exempted
by the Minister under section 2B.
ACTIVITY 2.4
Go online and find out three types of eligible unused sabbatical
leave during employment.
TOPIC 2
2.1.6
LEGAL ENVIRONMENT
27
Every employee has the right to enjoy a minimum number of rest days, hours of
work, holidays and other conditions of service under the contract of service as
enacted in the Employment Act 1955. Among the holidays covered in this Act
are:
(a)
Rest Days
Employees shall be allowed whole day of rest in a week. However in cases
where they are required to continually engage in work on a rest day (due to
the nature of the job), he shall be paid accordingly as shown below:
(i)
Wages
(ii)
Wages
(iii) For work done exceeding normal hours of rest day in (i) or (ii), he
shall be paid no less than 2 times his hourly rate of pay.
(iv) For these employed on piece rates who works on rest day, he shall be
paid 2 times his ordinary rate per piece.
(b)
Weekly Leave
Employees have the right to enjoy one day of leave every week. In certain
situations, such as when the workplace is far away and travelling takes a
long time, employees are allowed to group their weekly leave on the
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28
TOPIC 2
LEGAL ENVIRONMENT
condition that the employers ask for permission from the Minister of
Human Resources.
(c)
Public Holidays
Employees have the right to enjoy 11 days of gazetted public holiday which
are set for that particular year. The 11 public holidays must cover these five
days:
(i)
National Day;
(ii)
Malaysia Day.
Annual Leave
Employees have the right to obtain a minimum number of annual leave
according to their service period, as allocated in the Employment Act 1955,
shown in Table 2.3:
Table 2.3: Annual Leave Entitlements
Employment Period
8 days
12 days
5 years or more
16 days
Employees who are absent from work without permission from employers
and without any appropriate reason, and whose absence exceeds 10% of
working days for 12 months continuously are not eligible to get annual
leave for the duration concerned.
(e)
Sick Leave
The minimum sick leave for all employees allocated under the Act is as
shown in Table 2.4.
Table 2.4: Sick Leave Entitlements
Employment Period
14 days
18 days
5 years or more
22 days
Copyright Open University Malaysia (OUM)
TOPIC 2
LEGAL ENVIRONMENT
29
Employees also have the right to enjoy 60 days of medical leave if they are
hospitalised. However, this 60-day eligibility will be reduced to follow the
number of standard medical leave that has already been utilised. For example, if
an employee who is hospitalised has taken 10 days of medical leave earlier, then
his right to medical leave due to hospitalisation is only 50 days.
Find out online what actions can be taken against employees who often take sick
leave and emergency leave which exceed the limit.
EXERCISE 2.1
2.2
1.
2.
3.
4.
The Industrial Relations Act 1967 is an act that emphasises on employeremployee relations and their trade union.
This Act is also intended to prevent any differences or disputes that arise from
this relationship, as well as to deal with any trade disputes and related matters.
The purpose is to creat industrial harmony. Among the aspects covered in the
Act include protection for all parties, recognition and trade union scope, and
collective bargaining and agreements. Figure 2.3 shows the items contained in
the Industrial Relations Act 1967.
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TOPIC 2
LEGAL ENVIRONMENT
2.2.1
2.2.2
Give recognition; or
(b)
(c)
Withdrawn made by Trade Union and the Director General has been
notified; and
(b)
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2.2.3
LEGAL ENVIRONMENT
31
After receiving recognition from the management, the trade union can invite the
management to hold a collective bargaining in writing together with proposals
for a collective agreement. The management has to reply in writing within 14
days of receipt of the invitation. Next, a collective bargaining needs to be held
within 30 days of receipt of the reply accepting the invitation.
EXERCISE 2.2
1.
2.
2.3
(b)
32
TOPIC 2
LEGAL ENVIRONMENT
(c)
(d)
(e)
A trade union must be registered within one month from its establishment date.
However, a period of registration of not more than six months is allowed if it is
deemed appropriate.
Among the membership conditions which are allocated in this Act are:
(a)
(b)
Members under 18 years old are not eligible to vote in these matters:
Organising strikes;
Dissolving the union;
Amendment concerning member liabilities and benefits.
(c)
Members under 21 years old are not allowed to hold any post in the union.
EXERCISE 2.3
TRUE (T) or FALSE (F) Statements
2.4
1.
2.
3.
4.
This Act was enforced throughout Malaysia for all industries except the armed
forces and shipping related employments which are protected under the
Merchant Shipping Ordinance 1952 and the Merchant Shipping Ordinance 1960
for Sabah and Sarawak.
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LEGAL ENVIRONMENT
33
(b)
Protect others that are present at the workplace from any accidents that
might be triggered by workers activities;
(c)
(d)
This Act requires the management to establish a safety and health committee if it
has 40 or more employees in the workplace or if directed by the Director General.
(ii)
EXERCISE 2.4
1. State the objectives of the Occupational Safety and Health Act 1994.
2. What are the employers requirement on safety and health
committee at the workplace as stipulated under OSHA (1994)?
Copyright Open University Malaysia (OUM)
34
TOPIC 2
2.5
LEGAL ENVIRONMENT
(a)
(b)
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LEGAL ENVIRONMENT
35
(b)
(c)
(d)
A person whose wages exceed RM3,000 a month and has never been
covered before.
(ii)
Government employees.
Self-employed persons.
EXERCISE 2.5
1.
The Social Security Act 1969 protects all employees that are
employed under one contract of service with a salary of not
more than RM___________.
2.
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2.6
LEGAL ENVIRONMENT
Criteria
on Employee Fee
1%
0.5%
1%
Under this Act, the Human Resource Development Fund must be spent on:
(a)
(b)
(c)
(d)
(e)
Bearing any administration costs for the Fund as well as the cost of
implementing the Act.
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LEGAL ENVIRONMENT
37
Apart from that, the Human Resource Development Act 2001 also allots aspects
on the functions of the Human Resource Development Council:
(a)
Evaluates and determines the types or levels of training that is in line with
the industrys human resource needs;
(b)
(c)
2.7
1.
2.
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LEGAL ENVIRONMENT
The contribution rate allocated under this Act is based on the following:
(a)
A worker aged less than 60 years. Full contribution is 24% (13% employers,
11% employee) for employee paid RM 5,000 and below. 23% (12%
employees and 11%) for employee paid exceeding RM 5,000 a month.
(b)
Effective 1 January 2007, the contributors account is divided into two types
Account 1 and Account 2. All contributions are divided into the two accounts
according to fixed percentages, namely, 70 percent into Account 1 and 30 percent
into Account 2.
These accounts are created for different purposes and different types of
withdrawals are applicable to each account:
(a)
Account 1
The savings here are for the purposes of retirement and cannot be fully
withdrawn before the age of 55 or passed away, or loses his capacity and
intends to leave Malaysia permanently.
(b)
Account 2
The savings in this account are meant to help you to make early
preparations for a comfortable retirement. Withdrawals are allowed for the
purposes of:
(i)
(ii)
(iii) Settling the balance of your housing loan for your first house;
(iv) Financing education for yourself and that of your children; and
(v)
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LEGAL ENVIRONMENT
39
ACTIVITY 2.5
Visit http://www.kwsp.gov.my and find information on these
questions:
1.
2.
EXERCISE 2.7
According to the Employees Provident Fund Act 1991, members
accounts are divided into two different accounts with different
percentages. State the percentages from the total contribution allocated
to each account and explain the purposes of each account.
2.8
This Act aims to compensate employees who are injured or contract illnesses
caused by their work.
In the early stages, this Act covered all manual workers in the private sector, and
non-manual workers in the private sector with a salary of not more than RM500 a
month. In 1977, the scope of the Act was extended to include non-manual workers
in the public sector with a salary of not more than RM400 a month.
The next amendment was made in 1993 where it gave protection to all foreign
workers in the private sector, whereas all local workers in the private sector were
covered under the Employees Social Security Act 1969. However, in 1996, this
Act was amended so that it only gives protection to non-manual workers in the
public sector with a salary of not more than RM400, while foreign workers are
protected under the Foreign Workers Compensation Scheme 1952.
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LEGAL ENVIRONMENT
EXERCISE 2.8
Fill in the Blanks
To test your knowledge of the legal environment in human resource
management, answer the questions below:
1.
2.
2.
3.
4.
TOPIC 2
LEGAL ENVIRONMENT
5.
6.
Essay Questions
1.
2.
State four public holidays that have been set and be made
compulsory in the calendar year.
3.
4.
5.
41
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LEGAL ENVIRONMENT
Contract of service
Maternity coverage
Employer-employee relations
Payment of wages
Human Resource Development Act
1992
Recruitment of women
Industrial Relations Act 1967
Leave
Topic
Job Analysis
and Design
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1.
2.
3.
4.
INTRODUCTION
Job analysis and job design are two important elements that form the foundation
for effective human resource planning. Job analysis determines the requirements
in a job. Job design helps employees achieve organisation objectives and at the
same time gives satisfaction to employees performing their jobs.
The main purpose for an organisation to conduct job analysis is to improve its
performance and productivity. It is necessary to identify the skills, knowledge,
experience and other requirements necessary to do a job. Job analysis helps
organisations to fulfil the legal needs and regulations set by the government.
Usually, the human resource department is responsible for conducting job
analysis.
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3.1
JOB ANALYSIS
The outcome of the analysis is used to develop job description and specification.
Before carrying out a job analysis, the requirements for a particular job must be
determined.Questions such as the following should be asked so that a more
accurate job requirement can be determined:
(a)
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(b)
(c)
45
Figure 3.2 briefly explains how a job analysis can be used to produce job
description and specification.
46
(a)
TOPIC 3
Job Analysis
It is important for HR department to analyse, reanalyse and document
information about a job. It is used during the hiring process and also for
training and performance appraisal.
Job analysis is thus, necessary and it is a procedure or method that examine
the skills, knowledge, experience and other requirement necessary to do a
job well.
The outcomes of the job analysis will be the job description and the job
specification.
(b)
(c)
Job Description
It is a document that outlines a job. According to Maimunah (2008) a
typical caption is as follows:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Job Specification
Sometimes it is known as person description. A document that explains
how an individual fits into a job. It also assists the HR personnel to recruit a
qualified candidate for a position.
According to Maimunah (2008), job specification should include the
following:
(i)
(ii)
(iii)
(iv)
(v)
Career path.
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47
48
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Description
A number of activities and duties that are inter-related.
Different duties and responsibilities performed by an
employee.
A group of different jobs with similar characteristics.
A group of job elements coordinated and combined to produce
results.
The smallest unit of a job or task.
Statement on the knowledge, skills and capabilities needed by
an employee to perform a job.
Statement on the duties, obligations and responsibilities
needed to perform a job.
ACTIVITY 3.1
Working with a group of three or four students, collect at least three
different job descriptions from organisations of your choice. Compare
the descriptions, highlight similarities and differences.
3.1.1
Qualitative Methods
The following are some of the qualitative methods often used:
(i)
Interview
A job analyst will question employees, supervisors and managers
individually regarding the work that is being analysed.
(ii)
Survey
A job analyst will distribute to every employee a questionnaire on the
work that is being analysed. Each employee must fill up the
questionnaire. The data gathered is on employees duties and
responsibilities, work goals, suitability of workplace, requirements to
perform work (skills, education, experience, physical and mental
needs), equipment and materials needed, and requirements on
employees health and safety.
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49
(iii) Observation
A job analyst can obtain information on jobs by observing employees
of particular positions while they are performing their tasks.
Observation is based on standard work activities. The result of the
observation will be recorded in an observation form.
(iv) Journal and Record
The employer will be requested by the analyst to record all activities
in a journal throughout the employees work cycle. Usually, the notes
are made in 30 minutes or one hour intervals for each cycle or work
shift, and the time frame is usually between two and four weeks.
Apart from the methods above, there are other methods or approaches in
data collecting that are quantitative in nature.
(b)
Quantitative Methods
Among the popular quantitative approaches in job analyses are as follows:
(i)
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Humans
Things
0 Synthesising
0 Mentoring
0 Starting
1 Coordinating
1 Negotiating
2 Analysing
2 Giving instructions
and thoroughly
3 Arranging
3 Supervising
2 Operating controlling
4 Calculating
4 Diverting attention
3 Steering operating
5 Copying
5 Persuading
4 Manipulating
6 Comparing
6 Talking in signs
5 Attending
7 Servicing
6 Feeding
7 Handling
off bearing
to
the
way
employees
acquire
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51
Mental process
Mental process refers to the process of reasoning, decision making
and planning applied to perform a job.
Work result
Work result refers to the types of equipment and physical
activities utilised to perform a job.
Relationship with others
Relationship with others refers to the types of relationship
expected in order to perform a job.
Work contexts
Work contexts refer to the physical and social contexts where the
job is performed.
Other work characteristics
Other work characteristics refer to activities, occurrences or other
characteristics aside from the five characteristics listed above.
The score from respondents answers will be analysed by a computer
and the result will be used to determine the characteristics of a job.
(iii) Critical Incident Method
Through this method, important work duties are identified to
determine the success of a job. Information on critical duties can be
obtained through interviews with employees and managers or
through written reports by the position holder. Data obtained will be
analysed. The result is a clearer or more understandable report on the
important tasks in a job.
(iv) Computer Job Analysis
Human resource information system helps a lot in the job analysis
process. Now, there are many software designed specifically to
analyse jobs and come up with job descriptions and specifications
based on the analysis. Managers and employees have to only choose
statements on duties related to the job being analysed to determine
the importance level of the duties.
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EXERCISE 3.1
TRUE (T) or FALSE (F) Statements
1.
2.
3.
4.
5.
3.1.2
Data on a job obtained from a job analysis will be used to develop the job
description and specification.
(a)
Job Description
A job description is a written description of a job and it covers the
duties that need to be performed.
Most job descriptions contain at least three parts, namely, position, work
introduction and work duties and obligations. Table 3.3 presents the
important areas of a job description.
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53
Description
Represents the duties and level of the post in an organisation.
Psychologically, the position name can represent a jobs status.
The position name should also explain the duties that need to be
performed in a job.
Work
Introduction
Duties or
Obligations
Job Specification
A job specification is a certain eligibility needed to perform tasks and fulfil
the responsibilities of a job. A job specification usually consists of two
things, i.e.:
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(i)
(ii)
ACTIVITY 3.2
Based on your experience in the workplace, what are the problems
that may be faced by the management and employees in the
process of preparing a job description report?
3.1.3
The result of the job analysis process helps the human resource manager to carry
out human resource management functions (refer to Figure 3.2). These functions
are recruitment, selection, training and development, performance evaluation
and compensation management.
(a)
Recruitment
The recruiter must have knowledge of the job specification before hiring an
employee to fill the post.
(b)
Selection
The manager and supervisor will use the job description and job
specification to select and orientate the employees.
(c)
(d)
Performance evaluation
The requirements contained in a job description can be used as the criteria
to evaluate the post holders performance.
(e)
Compensation management
The management must consider requirements in terms of the employees
skills, efforts and responsibilities, as well as workplace environment and
hazards in determining the payment rate for workers so that it is equal to
the work performed.
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TOPIC 3
55
EXERCISE 3.2
TRUE (T) or FALSE (F) Statements
3.2
1.
2.
3.
4.
5.
JOB DESIGN
Before you proceed with the discussion on job design, make sure you are not
confused between job design and job analysis.
A job analysis involves a study on a job that is being performed by an employee.
A job design is an expansion of the job analysis aiming at improving a job
through people and technology, so that the organisations efficiency and job
satisfaction can be achieved. A job design involves job structuring, including job
enlargement, reengineering and job enrichment.
Job design involves the emerging of five factors (Bohlander, 2001):
(a)
Organisational objectives;
(b)
(c)
(d)
(e)
Employee contribution.
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3.2.1
Behavioural Matters
There are two approaches that influence employee behaviour when performing a
job. They are job enrichment and job characteristics.
(a)
Job Enrichment
Job enrichment is to stimulate a job by increasing meaningful tasks and
obligations to give more satisfaction to employees.
Job enrichment for employees can be done through these methods:
(i)
(ii)
(iii)
to
maintain
authority
and
(iv) Increasing new tasks that require training and development; and
(v)
Job enrichment is only effective for certain jobs. There are employees who
are unhappy when their job descriptions are changed, but there are also
others who see it as a challenge and something stimulating.
(b)
Job Characteristics
A job characteristics model states that there are three psychological states
where an employee shows an improvement in his or her work performance,
internal motivation, decrease in absenteeism and turnover.
The three psychological circumstances are:
(i)
(ii)
Skill Variety
Explains the range of skills and activities necessary to complete the
job. The more an employee is challenged to use a wide variety of
skills, the more satisfying the job is likely to be.
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TOPIC 3
(ii)
57
Task Identity
Measures the degree to which a person can complete an activity or job
in full. Employees who are able to take an activity from start to finish
are usually more satisfied.
Feedback
Measures the amount of information an employee receives about his
or her performance, and the extent to which he or she can see the
impact of the work. The more that people are told about their
performance, the more interested they will be in doing a good job.
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ACTIVITY 3.3
In your opinion, what will happen if an employees duties and
responsibilities are increased but he or she is not psychologically
ready to accept the job enrichment?
3.2.2
ACTIVITY 3.4
Think about the industrial engineerings strengths and weaknesses in
terms of work process and employees. Based on your working
environment, list the strengths and weaknesses of industrial
engineering.
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3.2.3
59
Ergonomic Matters
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ACTIVITY 3.5
In this developing era, females are able to perform tasks that were formerly
monopolised by men. However, there are parties who feel that jobs such as
labourers are only suitable for men. Give your views. If you agree, do you
think you are discriminating against female employees?
EXERCISE 3.3
TRUE (T) or FALSE (F) Statements
1.
2.
Richard Hackmans
model suggests that
circumstances that
internal motivation,
and dismissal.
3.
4.
3.2.4
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61
(b)
Employee Teams
An employee team is a technique where work functions are delegated to
groups and not to individuals. Members of a group are given the freedom
to use their own intelligence in managing working in a team and
individually. Each team member is responsible for improving the work
environment in the organisation. The team also assumes that each member
is responsible for the performance of their group. The management sees each
group as a unit that reacts to solve problems related to the organisation.
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Cross-functional Teams
A cross-functional team is a team that consists of multiple expertise
and is established to achieve a specific objective. Membership in the
cross-functional team is upon appointment and not voluntary.
(ii)
Project Teams
A project team is a team that is established to design a new product or
service. Membership is upon appointment by the management based
on the ability of the employee to contribute to the achievement of a
project. The team will be disbanded when all tasks are completed.
Process-improvement Teams
A process-improvement team comprises employees who are
experienced in various departments or functions. They are in charge
of improving quality, reducing wastage, or increasing productivity in
the processes that involve all related departments or functions. Team
members are usually appointed by the management.
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63
Employee teams will change the way the management and employees
communicate with each other. The manager faces problems in acting as a
head whereby traditionally managers have always acted as supervisors. The
manager will feel threatened by the empowerment given to employee teams,
which indirectly lessens the managements power.
On the other hand, employees face problems in adapting to the new
supervisory role. To prevent these problems, members in employee teams
have to be trained throughout the four stages of team formation. These
stages are: formation, conflict, standards, and execution. The complete
training includes important skills in:
Team leadership.
Formation of the mission or objective.
Chairing a meeting.
Team decision making.
Conflict resolutions.
Effective communication.
Awareness of team diversity.
SELF-CHECK 3.1
What are the similar characteristics present in the techniques to
increase employee contribution in an organisation?
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3.2.5
The suitability of work timetable is not actually a part of job design. This is
because employees duties and responsibilities are not changed. However, the
suitability of work timetable will change employees normal working time.
Among the usual work timetable options are compressed workweek, flexi time,
job sharing, and telecommuting.
(a)
Compressed Workweek
In compressed workweek, the total work days a week are reduced but the
total work hours a day are increased. This maintains the total work hours
per week.
(b)
Flexi Time
Flexi time enables employees to choose the start and end of work time that
is suitable for them, as long as the total work time per day or per week is
maintained. However, it is compulsory for all employees to be at the
workplace at a certain period of time, such as between 10am and 3.30pm.
(c)
Job Sharing
Job sharing refers to two temporary workers performing one job which is
supposedly manned by one full-time employee. They acquire a fee equal to
the total number of hours they work.
(d)
Telecommuting
Telecommuting is the utilisation of micro computers, networks, and other
communication technologies such as facsimile machines when working at
home, whereby these tasks were previously done in the office or at the
workplace.
TOPIC 3
EXERCISE 3.4
TRUE (T) or FALSE (F) Statements
1.
2.
3.
4.
5.
Job analysis
(e)
Job specification
(c)
Job description
(f)
Position
1.
2.
3.
4.
5.
6.
65
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TOPIC 3
2.
Human resource management uses the data from the job analysis
to develop ____________________.
A. An attitude and behaviour survey
B.
A job description and specification
C. A job analysis function and ergonomic issues
D. Employee agreement and workers union
3.
4.
5.
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6.
67
Essay Questions
1.
2.
Job analysis and job design play an important role in the development of an
organisation.
In relation to that, organisations give specific importance to both aspects.
Through job analysis, job description and specification are developed. A
wrong analysis will produce an inaccurate description and specification.
This in turn gives a bad effect to the organisations performance.
Ergonomics
Job description
Job design
Industrial engineering
Job specification
Job analysis
Topic
Planning and
Employee
Recruitment
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1.
2.
3.
4.
INTRODUCTION
Organisations compete with one another based on the skills and abilities of their
manpower. Therefore, manpower or human resource planning becomes very
important so that present and future employees will be a competitive workforce.
Organisations need to be careful when recruiting, selecting, developing and
maintaining their employees. To fulfil the requirements when performing human
resource management functions, effective human resource planning must be
carried out.
In this topic, we will discuss two processes of human resource management,
namely, human resource planning and recruitment. Human resource planning is
Copyright Open University Malaysia (OUM)
TOPIC 4
69
the basis for staffing in an organisation, whereas recruitment initiates the action
process in fulfilling whatever has been planned by the organisation.
4.1
4.1.1
(a)
Recruitment
Changes in the employee environment and composition require the
manager to be more involved in human resource planning. The manager
must plan a more effective recruitment method so that the aim to hire
capable employees will be achieved.
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70
TOPIC 4
(b)
(c)
(d)
SELF-CHECK 4.1
Through human resource planning, an organisation plans its
employees movement into, within and out of the organisation. If you
have your own company, will human resource planning be important
to your organisation? Explain.
4.1.2
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71
Figure 4.2: Relationship between human resource planning and strategic planning
(a)
72
TOPIC 4
Figure 4.3: The relationship between the human resource planning process and the
strategic planning process
ACTIVITY 4.1
Based on Figure 4.3, between strategic planning and human
resource planning, which should come first? Discuss with your
coursemates.
(b)
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73
(i)
(ii)
74
(c)
TOPIC 4
(ii)
(ii)
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75
EXERCISE 4.1
TRUE (T) or FALSE (F) Statements
1.
2.
3.
4.
5.
4.1.3
Through human resource planning, an organisation can forecast and prepare for
human movement into, within and out of the organisation. Therefore, the steps
involved in human resource planning are:
Environmental scanning;
Predicting manpower/human resource needs;
Predicting manpower/human resource supply; and
Balancing human resource supply and requirement.
(a)
Environmental Scanning
Environmental scanning systematically detects the external forces that
influence the organisation. The external forces or factors often scanned are:
(i)
(ii)
Competitive
innovations.
trends,
including
processes,
services
and
new
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TOPIC 4
(i)
Quantitative Approach
Quantitative approach involves the use of statistical and mathematical
techniques. This approach is often used by professional planners. One
of the examples of the quantitative method is trend analysis.
Copyright Open University Malaysia (OUM)
TOPIC 4
77
Year
Business Factors
(Sales in RM
000)
Labour
Productivity
(Sales/
Employees)
Human
Resource Needs
(Number of
Employees)
1995
2351
14.33
164
1996
2613
11.12
235
1997
2935
08.34
352
1998
3306
10.02
330
1999
3613
11.12
325
2000
3748
11.12
337
2001
3880
12.52
310
2002*
4095
12.52
327
2003*
4283
12.52
342
2004*
4446
12.52
355
* forecasted
figures
Source: Adapted from Bohlander, Snell & Sherman. (2009). Managing human
resources (15th ed.). Ohio: South-western College Publishing
In Table 4.1, the business factor that is taken into account in predicting
human resource needs is the total annual sales for each year. Labour
productivity is obtained by calculating the average number of sales of
an employee in the financial year. The total number of employees can
be predicted by dividing the value of business factor with labour
productivity.
Apart from total sales, other business factors that can be used to
predict human resource needs are interest rates, Gross National
Income and income expenditure.
Other quantitative methods that can be used to predict human
resource needs are regression analysis, ratio analysis and timeline
analysis.
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TOPIC 4
ACTIVITY 4.2
Refer to Table 4.1. If the sales result in 2005 was RM4,546,000 and
the labour productivity maintained as in 2004, what would be the
human resource needs in 2005?
(ii)
Qualitative Approach
A qualitative approach does not involve much statistics but takes into
consideration employees' interests, abilities and aspirations in
fulfilling future staffing requirements. In this method, the human
resource manager predicts employee needs through considerations.
Among the qualitative methods often used are management
forecasting and the Delphi Technique.
Management forecasting is opinions, considerations or proposals
from supervisors, department managers, experts or those with
knowledge in human resource requirements for the organisation
in the future.
The Delphi Technique is a technique of obtaining and
summarising proposals or considerations from chosen experts on
employee needs in an organisation. This technique reduces
biasness as the final prediction is a combination of experts
predictions.
ACTIVITY 4.3
Look at the human resource planning in your workplace. Are the
management predictions and Delphi Technique used? If yes, give
an example on how the planning is implemented.
(c)
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79
There are various methods to detect and predict the total number of
internal employees. Among these methods are:
(i)
Staffing Schedule
A staffing schedule gives a graphic display on all jobs in an
organisation, including existing number of employees involved in the
jobs. It also contains employees' needs for the future.
(ii)
Markov Analysis
This analysis detects the pattern of employee movement through
various types of jobs. It shows the percentage and actual figure of
employees who still remain in a particular job, and employees who
are promoted, demoted, transferred or removed from the
organisation. Through the Markov Analysis, an employee movement
matrix can be developed and the supply of internal human resources
can be predicted. For example, refer to Table 4.2.
Table 4.2: Example of the Use of Markov Analysis to Predict Internal Human Resource
Supply
Year
2002
Categories
and job levels
A1
A2
B1
B2
Categories
and job levels
Year
A1
2002
A2
B1
B2
Predicted supply
A1
A2
B1
B2
Out
.60
.05
.05
.00
.10
.60
.00
.00
.20
.00
.60
.00
.00
.00
.05
.80
.10
.35
.30
.20
Out
10
7
60
3
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TOPIC 4
from the total number of employees that are maintained in level A1 divided
by the total number of employees in that level from the previous year.
Then, the total number of promotions to A2 in the current year is divided
by the total number of employees in level A1 from the previous year. The
same goes for the total number of employees that have moved to B1,
promoted to B2, and was removed from the organisation. The total of all
percentages must add up to 1 (or 100%). For example, at level A1= 0.60 +
0.10 + 0.20 + 0.00 + 0.10 = 1.00.
In part b (predicting supply), in the year 2002, the total number of salespeople
(A1) is 100. It is expected that in 2003, 60 people will remain as salespeople (A1),
10 people will be promoted to sales manager (A2), 20 people will be moved to
the position of customer service agent (B1), there will not be any promotion to
customer service manager (B2), and 10 people will be removed from the
company. In the year 2003, the company is expected to supply 71 salespeople, 22
sales managers, 140 customer service agents and 22 customer service managers.
ACTIVITY 4.4
Refer to Table 4.2. Say in 2002, the number of customer service
agents (B1) was 280. How many of them would be promoted to
customer service managers?
(i)
Skill Inventory
Skill inventory consists of employees personal files that contain
information on education, experience, interests, skills and others. Skill
inventory enables the manager to promptly match the suitable
positions with employees backgrounds.
(ii)
Replacement Chart
A replacement chart consists of a list of current position holders, and
those who have the probability to replace a position, should the
position be vacant. This chart gives information on the employees or
the managers current performance and the probability of a
promotion.
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There are a few external factors that influence the labour market. Among
them are demographic changes, economy, manpower level of education,
requirements for certain skills, population movement and government
policies. The unemployment rate at the national and state levels often
becomes the benchmark to detect the labour force or employee supply.
(d)
(ii)
SELF-CHECK 4.2
Based on the human resource planning definition in subtopic 4.1
and your experiences in the workplace, what are the steps involved
in human resource planning?
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TOPIC 4
EXERCISE 4.2
TRUE (T) or FALSE (F) Statements
4.2
1.
2.
3.
4.
5.
RECRUITMENT
In the recruitment process, effort is put into informing applicants about the
qualification requirements in performing a job, as well as job opportunities that
are offered by an organisation to its workers.
Recruitment that will be made, whether internally or externally, depends on the
supply of existing personnel, the organisations human resource policy and
important matters involved in a particular job.
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TOPIC 4
4.2.1
83
Internal Recruitment
Internal candidates who are most qualified have to be identified so that no issues
will arise regarding regulations and laws, and that the organisations needs and
employees aspirations can be fulfilled.
The effectiveness of internal sources can be further strengthened by giving the
opportunity to employees who feel that they are qualified to apply for the
position offered. Internal candidates who are suitable can be detected through
the human resource information system and job posting and bidding.
(a)
(b)
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(ii)
The performance records of employees who are offered a new job are
more reliable when compared to that of a new employee who is hired
from outside the organisation.
(ii)
(iii) It is difficult for the organisation to encourage free flow of new ideas
among existing employees, as well as tackle their existing negative
attitudes.
(iv) The organisation has to face the risk of employee cloning, i.e.
employees who maintain repetitive work behaviour and attitude.
4.2.2
External Recruitment
There are many sources and places where an organisation can recruit employees
from the outside. However, the source of recruiting professional and skilful
employees such as accountants is not the same as the source of recruiting skilled
employees such as a flour mixer operator in a bread factory.
Among the sources of external recruitment are:
(a)
Advertising
Advertising is the most popular source of attracting applicants. The
advertising mediums that are often used by organisations are newspapers,
radio and television commercials, posters, billboards and business journals.
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85
Internal Application
Organisations often receive applications from internal candidates without
having to advertise. However, the percentage of internal applicants is low.
Even though the percentage is low, organisations cannot ignore self
applicants as they might prove to be good employees at a later date.
(c)
Proposed by Staff
Existing staff can suggest candidates who are qualified. Organisations may
encourage them to continue the effort of searching for the right candidate
by giving a bonus for each successful employment. The risk of this sort of
employment is nepotism, which is the tendency to propose ones own
family member.
(d)
(e)
(f)
Professional Organisations
Usually, professional organisations help its members get jobs as this is one
of the benefits of joining such organisations.
(g)
(h)
(i)
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(j)
Employee Leasing
In employee leasing, an employee who has been retrenched or dismissed by
an organisation is hired by another company that offers employee leasing
services to interested companies.
(k)
Internet Recruitment
The Internet is a source of recruitment that is increasingly popular.
Applicants can surf websites to register online.
(l)
Employees Union
The employees union is a good source to obtain employees for certain
positions in the supporting level.
(b)
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(b)
External recruitment is done for the purpose of injecting new influence into
an organisation so that the existing work culture can be stimulated.
ACTIVITY 4.5
From research, it is found that employees hired through referrals and
self applications stay on longer in an organisation and show better
performance compared to employees hired through normal methods,
such as advertising. Based on your work experience, do you agree?
Discuss.
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EXERCISE 4.3
TRUE (T) or FALSE (F) Statements
1.
2.
3.
4.
5.
2.
3.
(c)
4.
TOPIC 4
2.
3.
4.
Essay Question
1.
qualitative
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TOPIC 4
External recruitment
Internal recruitment
Strategic planning
Topic
Selection
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1.
2.
3.
4.
5.
INTRODUCTION
We are often exposed to news on deviation, misuse of power and sexual
harassment in the workplace. Therefore, the selection of suitable candidates is
very important to ensure the success of an organisation.
If in recruitment, an organisation tries to obtain as many applicants for a
position; in selection, the number of candidates is reduced by selecting the most
eligible candidates.
The main purpose of selection is to maximise the accuracy of selecting qualified
employees and to avoid not taking qualified employees. Even though the human
resource department is responsible in carrying out the selection process, the
decision to hire a candidate is usually done by the departments manager.
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TOPIC 5
5.1
SELECTION
SELECTION PROCESS
(b)
(c)
(d)
(e)
(f)
Team/supervisor interview.
(g)
(h)
Recruitment result.
From the steps above, we can see that an organisation uses various ways to
obtain information about applicants. Among the methods used are application
forms, interviews, employment tests, medical check-up and background checks
on applicants/candidates.
ACTIVITY 5.1
In your opinion, why are some applicants exempted from certain
steps in the selection process while other applicants have to go
through the whole selection process?
Visit www.hr-guide.com/selection.htm to obtain information on how the
selection process is carried out and how information on employees is obtained.
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5.2
SELECTION
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5.2.1
Information Reliability
Reliability means the level where an interview, test and other selection
procedures show consistent data every time, even when using other
methods of measurement.
Reliability, thus, means how far a selection tool is able to give consistent data.
Table 5.1 and Table 5.2 are examples of stable and consistent reliabilities.
Table 5.1: Reliability as Stability over Time
Applicant
Ahmad
Chin
Rama
Kuntum
Applicant
Ahmad
Chin
Rama
Kuntum
A. High Reliability
Test score
90
65
110
80
B. Low Reliability
Test score
90
65
110
80
Re-test score
93
62
105
78
Re-test score
72
88
67
111
Source: Adapted from Bohlander, Snell & Sherman. (2009). Managing human resources
(15th ed.). Ohio: South-western College Publishing.
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SELECTION
Evaluator 1
Evaluator 2
Evaluator 3
9
5
4
8
8
6
5
8
8
5
5
8
Ahmad
Chin
Rama
Kuntum
B. Low Reliability
Applicant
Evaluator 1
Evaluator 2
Evaluator 3
9
5
4
8
5
9
2
4
6
4
7
2
Ahmad
Chin
Rama
Kuntum
Source: Adapted from Bohlander, Snell & Sherman. (2009). Managing human resources
(15th ed.). Ohio: South-western College Publishing.
5.2.2
Information Validity
Criterion-related validity;
(b)
(c)
Construct validity.
Figure 5.1 shows how a test score is validated by applying the criteria evaluation
(one type of information validity).
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95
(a)
Criterion-related Validity
Criterion-related validity is the level where selection tools which are chosen
are able to forecast or have a correlation with the main elements of work
behaviour (Bohlander, Snell and Sherman, 2004). The performance from a
certain test will be compared to the actual production records, supervisors
evaluation, result from training, and different success measurements which
are suitable to a particular job. For example, the criteria for a job in the
production sector are quality and product quantity, whereas the criterion
for a salespersons job is total sales.
Criterion-related validity can be divided into two types:
(i)
Concurrent Validity
Concurrent validity means how far a test score or other forecasted
information matches the criteria data obtained from existing
employees. For example, a supervisor carries out a work evaluation
on a few clerks by giving them aptitude tests on clerical matters. Test
scores will be compared to the supervisors evaluation to see whether
or not a relationship exists between the test scores and the
supervisors evaluation.
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TOPIC 5
(ii)
SELECTION
Predictive Validity
Predictive validity means how far the score of a test done by an
applicant before he or she was hired matches the data obtained from
the applicant or the employee after they are hired, after a certain
period.
Cross validation can be done to strengthen the validity of a test. Cross
validation strengthens the validation of a particular validity result by
running a test on a different sample from the same population.
(b)
Content Validity
Content validity measures how far a selection tool, such as a type of test, is
able to sample knowledge and skills which are needed to perform a certain
job. The higher the relationship between the test contents and the actual
work requirements, the higher the content validity. For example, a test to
become a kindergarten teacher should not contain activities on solving
accounts problems.
(c)
Construct Validity
Construct validity measures how far a selection tool is able to measure
construct or potential employees characteristics theoretically. Construct
examples are intelligence, an understanding in mechanical matters and
anxiety.
ACTIVITY 5.2
Refer to Table 5.2. How does Table 5.2 relate the three validity
concepts?
5.3
SELECTION METHODS
(b)
Test candidates for the purpose of identifying those who are most qualified
for a particular job;
(c)
(d)
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5.3.1
SELECTION
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Information Sources
When you apply for a job, do you have to fill in your personal information? What
are the methods used at that time?
There are a few methods which are trusted and valid in order to obtain
information about candidates. Figure 5.2 shows a few techniques of obtaining
information in the selection process and its effectiveness.
Application Form
An application form provides information as to whether an applicant has
experience and educational background, and other matters related to the
job. Information from the application form will be made the basis, by the
interviewer, for questions about the applicants background and checks on
references provided by the applicant. Among the items included in an
application form are date of application, educational background,
experience, criminal records, nationality and disabilities.
(b)
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(c)
TOPIC 5
SELECTION
(ii)
Polygraph Test
A polygraph test is an equipment to detect lies. It measures changes in
breathing rate, blood pressure and an individuals pulse when the person is
being questioned. Questions asked often include matters involving drug
abuse, theft or criminal offences that are not detected by others.
(e)
(f)
Graphology
Graphology refers to a system that analyses handwriting. Through a
candidates handwriting, a graphologist makes an assumption of the nature
of his or her intelligence, energy level, organisational abilities and emotions.
ACTIVITY 5.3
For which job should a candidate be tested by using graphology?
(g)
Health Examination
A health examination is done to ensure that the applicants health level
fulfils the job requirements.
(h)
Drug Test
A drug test aims at ensuring future employees are free from hazardous
drugs. The sampling method is usually implemented.
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TOPIC 5
SELECTION
99
EXERCISE 5.1
TRUE (T) or FALSE (F) Statements
1.
2.
The more related the contents of a selection tool with the actual
work sample, the higher the value of content validity.
3.
4.
5.
5.3.2
Employment Test
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SELECTION
(b)
(c)
(d)
Extroversion
Extroversion projects the external characteristics, i.e. at a level where
an individual talks a lot, is sociable, active, aggressive and cheerful.
(ii)
Agreeableness
Agreeableness is a level where an individual can be trusted, is warm,
generous, able to compromise, honest, cooperative and able to discuss.
(iii) Conscientiousness
A level where an individual can be depended on, is rule abiding and
perseveres in carrying out duties.
(iv) Emotional Stability
Emotional stability is a level where an individual feels secure, is calm,
independent and autonomous.
(v)
Open to Experience
This involves being open to new experiences, i.e. an individuals level
of intelligence, philosophy, in-depth understanding, creativity, artistic
abilities and curiosity.
ACTIVITY 5.4
In the personality and interest inventory, there are five personality
dimensions. Which one reflects your personality, and based on
your personality, what type of job would be suitable for you?
(e)
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SELECTION
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ACTIVITY 5.5
Classify these job tests according to their categories (aptitude test
or achievement test).
Type of test
Cognitive Ability Test
Job Knowledge Test
Work Sample Test
Personality and Interest Test
Physical Ability Test
5.3.3
Category
Job Interview
Non-directive Interview
During a non-directive interview, an applicant has the freedom to
give his or her opinion. The interviewer tries not to influence any
opinions offered by the candidate. Usually, the interviewer will ask
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SELECTION
Structured Interview
This type of interview contains a set of standard questions together
with pre-determined answers. The questions are based on a job
analysis that has been carried out beforehand. Information from a
structured interview is able to reduce unfairness in the perspective of
the law.
Panel Interview
Through panel interview, a group of interviewers will question and
observe the candidate. The number of interviewers is between three
and five people. The interviewers will compare their observations and
reach a consensus concerning the candidate. This method has a high
level of validity.
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SELECTION
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(c)
ACTIVITY 5.6
Bias can occur during an interview process. The interviewer is
often influenced by negative information about the candidate. In
your opinion, what should be done by interviewers to prevent this
from happening?
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SELECTION
(ii)
Standardise Questions
Ask the same questions to all candidates that are interviewed for the
same position. This can increase reliability and avoid discrimination.
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SELECTION
105
EXERCISE 5.2
TRUE (T) or FALSE (F) Statements
1.
2.
3.
4.
5.3.4
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SELECTION
Decision Strategy
The decision strategy used in hiring personnel differs according to the
different job categories. For example, the strategy used to hire a manager is
different from the strategy used to hire a clerk.
Some factors need to be observed by the management before any decision
on staff intake is made. They are as follows:
(i)
(ii)
What is the starting fee for the individual that is offered a particular job?
(iii) Is selection based on the candidates suitability for the job, or does it
take into account the candidates career opportunities in the
organisation?
(iv) How far would those who are less qualified be put under
consideration?
(v)
(vi) What are the effects of a candidates intake on the regulations and
employee diversity in an organisation?
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TOPIC 5
SELECTION
107
Clinical Approach
Through clinical approach, those involved in the selection process will
go through all data on the candidates again. Decision will be made
based on the interviewers understanding of a particular job, and their
observations of the individuals who are successful in that particular
job. The clinical approach is subjective in nature but is often practised
in most organisations.
(ii)
Statistical Approach
The statistical approach is more objective in nature and is better
compared to the clinical approach. The data obtained about the
candidates will be considered in detail and the forecaster will be
identified statistically.
There are a few models in the statistical approach. They are as follows:
Compensatory model
Through the compensatory model, the high score that a candidate
obtains in one particular part of a test will be able to assist a lower score
obtained in another part.
Multiple cut-off model
Through the multiple cut-off model, a candidate must reach a particular
level or a minimum score for all selection dimensions.
Multiple hurdle model
Through the multiple hurdle model, candidates who obtain high scores
in the entry test will be allowed to go to the next stage. This can save
cost if the selection cost is high.
The number of sufficient candidates is important so that the selection
process runs smoothly. If the number of candidates for a particular position
is not enough, the selection method can be questioned. There may be
circumstances where an unqualified candidate is hired as the organisation
does not have other choices.
A selection ratio is able to illustrate the effectiveness of a selection process.
A selection ratio is the number of applicants hired compared to the number
of applicants who applied (Mondy. Noe and Premeaux, 2002).
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SELECTION
ACTIVITY 5.7
(c)
Final Decision
After going through the pre-selection process, a candidate who is qualified
will be referred to sections or units where there are vacancies to be filled
up. The manager or supervisor in these sections or units will interview the
candidate and decide whether or not he or she can fill the vacancy. The
human resource department is responsible for delivering the result of the
candidates application, as well as providing work details of the job if the
candidate is offered the job.
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SELECTION
EXERCISE 5.3
Fill in the Blanks
(a)
(b)
Selection
Multiple hurdle model
(c)
(d)
Aptitude test
Validity
1.
2.
3.
4.
2.
3.
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4.
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SELECTION
Essay Question
1.
The selection process is supposed to give reliable and valid information about
an applicant. An interview is one of the methods used to obtain information
about an applicant.
The interview method can be used together with application form,
biographical information blanks, references, background check, cognitive test
and job sample test.
A job test is more objective than an interview and is able to give a wider
behaviour sample.
Each type of test has a specific purpose, such as the work knowledge and
work sample tests which are designed to determine whether a person
requires training or not.
A variety of methods can be used in the interview process. An interview can
be performed structurally or non-structurally, as well as on a one-on-one
basis or with a panel.
In the process of deciding whether a candidate will be offered a post, factors
that are taken into account are what the candidate can do, and what he or she
will be able to do. The recruitment section may use a clinical or statistical
approach.
TOPIC 5
Reliability
Employment test
Validity
SELECTION
Graphalogy
111
Topic
Performance
Evaluation
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1.
2.
3.
4.
5.
Examine
the
characteristics.
effective
performance
evaluation
system
INTRODUCTION
The previous topics focused more on how an organisation can attract and
develop productive, flexible and motivated human resources. This topic will
focus on the aspects of maintaining human resource productivity in an
organisation. Although, initially, all supervisors or managers will observe their
employees work behaviour, and evaluate their performance at the end of the
year, they must also focus on the non-cost value increase to the organisation. The
unconcerned attitude of supervisors and managers is a challenge to the human
resource department to develop supervisors and managers who are able to
motivate employees to improve their performance. Supervisors and employees
acceptance of and commitment to performance improvement are critical in order
to determine the productivity increase in the organisation. Due to this problem,
performance evaluation is seen as a complicated activity but is important to the
organisations competitiveness in the market.
TOPIC 6
PERFORMANCE EVALUATION
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SELF-CHECK 6.1
What is performance evaluation?
6.2
Development
Determines which employees need training. This will enhance employeesupervisor relationship and encourage the supervisor to contribute to the
reinforcement process of employee behaviour.
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PERFORMANCE EVALUATION
(b)
Motivation
Encourages attempts, develops responsibilities and propels efforts towards
improving performance.
(c)
(d)
Communication
Acts as a basis for discussion between the supervisor and employees
regarding work matters through daily interaction.
(e)
Compliance to Regulations
Acts as a valid foundation for promotions, transfers, rewards and employee
terminations.
(f)
Apart from general and specific purposes listed above, performance evaluation
can also be used for administrative and employee development purposes
(Bohlander, 2001). From the administrative aspect, performance evaluation is an
input that can be used in human resource management activities while the
development aspect focuses on feedback of employees strengths and
weaknesses, and stresses on performance improvement. Among the uses of
performance evaluation for administrative and development purposes are as
follows:
(a)
Administrative Purposes
(i)
Salary administration
(ii)
Promotion
Development Purposes
(i)
Performance feedback
(ii)
TOPIC 6
PERFORMANCE EVALUATION
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ACTIVITY 6.1
Based on your experience, has performance evaluation helped in
your career? Explain.
6.3
(b)
(c)
The supervisor or manager does not have the skills to evaluate employee
performance.
(d)
(e)
(f)
(g)
(h)
(i)
Employees feel that the organisation does not allocate sufficient resources
for performance rewards.
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PERFORMANCE EVALUATION
employees annual salary movement. The disagreement that exists and the
misunderstanding of performance evaluation have caused the performance
evaluation process to fail. Therefore, support from the top management is
important in order for performance evaluation to succeed so that the
organisation will be able to compete in the market.
SELF-CHECK 6.1
How far is the precision of an employees performance evaluation?
EXERCISE 6.1
6.4
1.
2.
3.
evaluation
from
the
Figure 6.1 shows the steps involved in the performance evaluation process:
Identifying performance evaluation objectives.
Developing performance standards.
Monitoring employee work performance.
Evaluating performance.
Discussing evaluation with employees.
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PERFORMANCE EVALUATION
117
(a)
(b)
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PERFORMANCE EVALUATION
(i)
Strategic Relevance
The standards that are developed must be related to the
organisations strategic objectives. Indirectly, the organisations
strategic objectives need to be translated into the performance
standards. For example, 95% of customer complaints must be solved
on the same day. With this in mind, employees who are in contact
with the customers must take into account this strategic objective
when developing their standards.
(ii)
Criteria Contamination
Criteria contamination happens when factors that are out of the
employees control influence their performance. For example, a typist
needs a computer to type and produce quality output. If the
organisation only has a typewriter, then the quality produced may not
be as good as the output quality produced by a computer. Therefore,
the computer becomes a factor that contaminates the typists
performance.
(iii) Reliability
Reliability refers to the consistency of the standards that are
developed. Consistency means how far an employee is able to
maintain a level of performance in a particular timeline. For example,
the evaluation comparison done by two managers on an employee,
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TOPIC 6
PERFORMANCE EVALUATION
119
(d)
Evaluating Performance
Usually, at the end of the year, employee performance will be evaluated to
ensure that the organisations strategic objectives are achieved. The real
performance shown by employees will be compared to the standards that
have been developed.
(e)
Discussion on Performance
Employees and managers will review the employees performance together
based on set standards. A performance discussion will determine how far
the employee is able to achieve the organisations strategic objectives,
identify the problems that obstructed the achievement and find alternatives
to solve the problems. This discussion will also include developing
objectives for the next year.
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PERFORMANCE EVALUATION
ACTIVITY 6.2
State whether you agree or disagree on the following issues
regarding performance evaluation, and give a solid reason for
your answers.
1.
2.
3.
EXERCISE 6.2
6.5
1.
2.
RESPONSIBILITY OF EVALUATING
TOPIC 6
(a)
PERFORMANCE EVALUATION
121
Immediate Supervisor
This traditional method stresses that performance evaluation must be done
by an employees immediate supervisor. A supervisor is the most eligible
person to observe and evaluate his or her employees work performance,
and he or she is also responsible for the management of the unit or
department. Since the immediate supervisor will evaluate the employees, it
goes without saying that the training and development aspects of the
employees become important elements that should be focused on.
If seen from a negative perspective, the immediate supervisor may stress on
certain performance aspects and ignore other performance aspects. For
example, he or she may only stress on the quantity aspect and ignore the
quality aspect.
(b)
Self Evaluation
If an employee understands the objectives that must be achieved and is
involved in the development of performance standards, then he or she is
qualified to evaluate himself or herself. This is because the employee knows
what has to be done and how to carry out the task effectively. Moreover, an
employees involvement in the performance evaluation process is critical so
that an increase in productivity is possible.
From the negative perspective, an employee is more keen to illustrate his or
her strengths and try to cover up his or her weaknesses. With this in mind,
self-evaluation is more suitable to be used for self-development and not as a
basis for promotion or salary increments.
(c)
Subordinates
The most suitable people to evaluate a manager are his or her subordinates.
This method is effective because the subordinates are the best source to
observe the effectiveness of the manager. Moreover, the subordinates are
always in contact with the manager. This type of evaluation is more for the
managers self-development so that he or she is able to rectify his/her
weaknesses. The negative aspect of this evaluation is that the subordinate
may either give a good evaluation of his or her manager if they have a good
working relationship, or evaluate the manager poorly if they are at odds
with each other.
(d)
Peers
Peers can be an effective evaluation approach as peers often interact and are
able to identify their colleagues strengths and weaknesses. Peer evaluation
can also give an accurate and valid input.
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Customer Evaluation
Customer satisfaction determines the success of an organisation. Based on
this idea, most organisations feel that they should obtain their employees
performance input from customers. Basically, there are two types of
customers, namely, internal and external customers. Internal customers are
employees from a certain department who depend on the output or other
employees work results for their input. For example, output that is
produced by employee A from Department A is an input for employee B
from Department B. In this case, employee B is the customer of employee A.
External customers are outside people who use the products or services
produced by an organisation.
(f)
360-degree Evaluation
Apart from the sources stated above, an organisation may also use the 360degree evaluation method to assess their employees. This approach is very
popular and is an alternative to the traditional method as the organisation
gets complete information about employees performance. This is important
to increase the organisations competitiveness in the market. Basically, the
360-degree method uses a combination of various evaluation sources as
stated above. Usually, an organisation uses this method for the purpose of
employees development only. The restrictions of this method are that it is
expensive and takes a long time as it involves many parties in the
evaluation process.
SELF-CHECK 6.2
Who is involved in an employees performance evaluation?
EXERCISE 6.3
Explain briefly the sources involved in evaluating employee
performance.
TOPIC 6
PERFORMANCE EVALUATION
123
Visit
http://www.work911.com/performance/particles/stupman.htm
for
information on the ten negative things a manager does in his or her employees
performance evaluation.
6.6
There are a few methods or approaches that can be used to evaluate employee
performance. The selection of certain methods depends on the purpose of the
performance evaluation system of an organisation. If emphasis is placed on
promotions, trainings and rewards based on merit, then a method like rating
scale is more appropriate. In fact, a combination of a few methods is more
appropriate to develop employee performance and help them produce a more
effective performance. There are three main methods that can be used by an
organisation, i.e.:
(a)
Trait
(b)
Behaviour
(c)
Result
6.6.1
Trait Methods
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Evaluation
Factor
Below Average
(Needs
Average
Excellent
Poor
Good
improvement as
(Fulfils
(Exceeds
(Does not meet
(Often exceeds
requirements
requirements
requirements
requirements)
requirements)
are often not
consistently)
consistently)
met)
Work Quantity
Work Quality
Commitment
to Work
Initiative
Cooperation
SUITABILITY OF PROMOTION
Capable and able for promotion according to circumstances
Given priority for promotion due to high capabilities and abilities
Not suitable for promotion due to few capabilities and abilities
(b)
Essay
This method is the easiest method because supervisors only have to write
statements depicting employees performances. Supervisors will talk about
the strengths and weaknesses of employees behaviours and give
recommendations to improve on the weaknesses. Even though this method
is easy, it takes a long time, and is too subjective as the supervisor needs to
illustrate employees overall yearly performance.
(c)
Forced-choice Method
This approach needs the appraiser to choose a few statements which are
provided to differentiate between good and bad performances. Figure 6.4
shows the statements which have to be chosen by appraisers. These
statements are developed by experts in the human resource field and
appraisers need to determine the statements which depict the effectiveness
of work behaviour demonstrated. Neutral statements are sometimes
included in the choices. Appraisers not only choose statements which
depict employees work behaviour but also arrange the statements from
good to poor.
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125
Good
Not good
ACTIVITY 6.3
Do you agree that rewards need to be stressed during the
performance evaluation process? State the reasons for your
answer.
6.6.2
Behavioural Methods
This method focuses on behaviour aspects based on a scale that illustrates certain
behavioural descriptions. These descriptions enable appraisers to identify
employee performance based on certain behaviours from weak to excellent. Some
of the methods included in the behaviour method are:
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(a)
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(b)
(i)
(ii)
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_____
_____
_____
_____
127
PERFORMANCE EVALUATION
Weight
10.0
8.7
6.5
8.8
(c)
128
(d)
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12345
Often done
12345
Often done
12345
Often done
12345
Often done
12345
Often done
6.6.3
Result Methods
Aside from behaviour and trait methods, an organisation can also utilise the
result method to evaluate their employees performance. This method enables
supervisors to evaluate the results achieved by employees. Therefore, it is more
quantitative in nature, objective and empowerment can be present. This in turn
will lessen bias. This technique also stresses that employees be responsible for all
results achieved. There are two techniques which can be categorised in this
group, i.e.:
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(a)
PERFORMANCE EVALUATION
129
Productivity Measures
There are many measurement techniques to evaluate the performance of an
employee. A salesperson will be measured through his or her sales volume
(in unit and ringgit) whereas a production operators performance will be
measured through output produced and the volume of scrap found. In fact,
each measurement is directly related to the achievement shown by an
employee. Indirectly, the performance achieved by an employee is related
to the organisations strategic objectives and employee objectives.
Even though this measurement technique seems easy, it may be influenced
by criteria pollution because performance result may be tainted by factors
which are out of the employees control. For example, a production
operator may not achieve his or her target as the raw materials needed are
insufficient.
In addition, measurement based on result may be short term and
employees may ignore the organisations long-term strategy objectives.
Aside from that, factors such as cooperation, initiative and suitability in
teams are important in achieving set targets. Therefore, to achieve an
effective evaluation, result and process have to be taken into account in the
evaluation.
(b)
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EXERCISE 6.4
Explain briefly the three main methods which can be used in
evaluating employee performance.
6.7
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131
(a)
Halo Effect
This effect happens when an appraiser conducts a total evaluation based on
only one aspect of performance. For example, an appraiser who places
importance on the quantity aspect will give a high value to an employee
without considering other aspects such as communication, involvement
and quality. In other words, an appraiser sees the employee as being
efficient in all his or her work aspects when he or she is able to meet the
quantity required by the organisation.
(b)
Central Tendency
Central tendency happens when an appraiser awards the same evaluation
to all evaluated employees. The appraiser is inclined to give an average
evaluation to all employees with the excuses of maintaining good working
relationship with everyone so that friction does not occur.
(c)
Recency Error
The recency error is one of the problems in the performance evaluation
process. An appraiser often focuses on work performance that is close to the
evaluation period as it is difficult to remember work performance in the
beginning of the year.
(d)
Contrast Error
This error happens when a manager compares an employees performance
with another colleague who has already been evaluated, and not based on
set standards. For example, employee A is seen as innovative and
participates actively in his or her work; when employee Cs turn for
evaluation comes up, his or her performance will be compared to employee
As performance, and not based on the set standards.
(e)
Leniency/Strictness Error
Leniency error is an error made by an appraiser when he or she gives a
high rating to the employee being evaluated because the appraiser does not
have the heart to give a low rating. Strictness error happens when an
appraiser awards a low rating to the employee being evaluated because he
or she feels that none of the employees deserve a high rating.
(f)
Similar-to-me Error
This error happens when an appraiser gives a high rating because the
employee who is being evaluated has similar personal characteristics with
the appraiser. For example, an appraiser awards a high mark to the
employee because they both like to drink tea.
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In order to ensure a manager or supervisor does not make the same mistakes, he
or she has to be given training on how to evaluate their employees effectively
and fairly, as well as focusing only on the employees work performance. This
training aims to increase the appraisers skills in observing and giving feedback
to employees. Employees also need to give support by giving information which
is needed by the appraiser in order to ensure that the evaluation is done justly.
SELF-CHECK 6.3
What are the factors which cause errors in performance
evaluation?
ACTIVITY 6.4
State whether you agree or disagree on the following issues
regarding performance evaluation and give one reason for your
answer.
1.
2.
EXERCISE 6.5
Explain briefly the mistakes or errors which are often made by
appraisers when they evaluate their employees.
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6.8
PERFORMANCE EVALUATION
133
PERFORMANCE INTERVIEW
(b)
(c)
(d)
An effective interview has to be planned and structured well in order for the
supervisor and employees to view the interview as a problem-solving session
and not as a fault finding session (Mondy, 1999). A supervisor has to ensure
that these three elements are considered when planning a performance interview,
i.e. the discussion must:
(a)
(b)
(c)
Give suggestions and help to achieve objectives which have been set as well
as gain support from top management.
Apart from that, Stone (1998) stated that an effective performance interview
needs to consider these three factors:
(a)
(b)
(c)
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ACTIVITY 6.5
Visit
http://www.performance-appraisal.com/intro.htm
for
information on four performance evaluation methods which are listed.
Then, visit http://www.opm.gov/perform/articles/pdf8.htm and
elaborate on the methods used in evaluating group performance.
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PERFORMANCE EVALUATION
EXERCISE 6.6
Multiple Choice Questions
1.
2.
3.
4.
5.
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Essay Questions
1.
2.
3.
Performance evaluation
Result
Trait
Topic
Compensation
Administration
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1.
2.
3.
4.
INTRODUCTION
Compensation administration is one of the most important functions in human
resource management. Even though it is the most difficult and challenging
activity, it helps strengthen the culture and the important values of an
organisation. Policies and practices in an organisation which emphasise on
rewards based on results are able to strengthen employees behaviour so that
they are more dedicated to increasing their productivity (Stone, 1998). Indirectly,
compensation administration is an important tool to increase employee
motivation in improving work performance so that the organisations strategic
objectives are achieved. Compensation administration policies should not only be
able to motivate employees, but they should also attract and retain competitive
employees. Therefore, employees expect that the compensation system of an
organisation is just and fair in providing a reward system that is at par with the
skills and performance demonstrated.
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7.1
COMPENSATION ADMINISTRATION
DEFINITION OF COMPENSATION
7.2
TYPES OF COMPENSATION
Nankervis (1999) stated that employees will focus on a few compensation factors
such as those shown below:
(a)
(b)
(c)
(d)
(e)
What are the incentives and benefits which I will be able to receive?
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COMPENSATION ADMINISTRATION
139
Monetary rewards can be in the form of cash such as wages, salary, commission
and bonus; or benefits such as insurance, annual leave, medical leave and flexible
working hours.
Non-monetary rewards, on the other hand, can be the satisfaction the employee feels
as a result of his or her position or from the work environment mentioned (Mondy,
1999).
Direct monetary rewards are in the form of cash, such as wages, salary,
commission and bonus, whereas indirect monetary rewards are in the form of
benefits and others.
Non-monetary rewards from the work aspects are interesting jobs, challenging
job responsibilities, acknowledgement and career development.
Non-monetary rewards from the work environment aspects are good policies
and practices, competent supervisors, congenial colleagues and a safe and
healthy work environment.
Visit http://www.hr-guide.com/compensation.htm for additional information
on compensation administration.
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7.3
COMPENSATION ADMINISTRATION
(b)
(c)
(d)
(e)
(f)
Organisation
(i)
(ii)
(iii) Strengthen the main values and culture desired by the organisation.
(iv) Encourage and strengthen work behaviour as desired by the
organisation.
(v)
Employee
(i)
(ii)
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141
Corporate mission;
(b)
Business strategies;
(c)
(d)
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ACTIVITY 7.1
State your view on whether you agree or disagree on the following
issues and give a valid reason for your answer.
1.
2.
EXERCISE 7.1
Explain two types of compensation which can be offered by an
organisation to its employees.
7.4
Nankervis (1999) stated that external and internal factors influence the wage rate
developed by an organisation. These factors are as shown in Figure 7.3, which
include the legal environment, market surveys, work values, compensation
administration strategies and personal factors.
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(a)
COMPENSATION ADMINISTRATION
143
Legal Environment
The compensation policy in every organisation has to be aligned with the legal
labour requirements in a country. Among the issues related to wage rate are:
(i)
(ii)
Market Survey
Organisations have to conduct environmental scanning in the labour
market to review the relationship between demand and qualified
manpower supply. Besides, organisations have to take note of other
information before a certain salary policy is set. The information includes:
(i)
The differences between local wage rate and city and suburban wage rate;
(ii)
The different wage rates for works from the same work groups;
Work Values
Each organisation has its own benchmark in recognising and rewarding
employee's performance. Incentives can be in various forms which act as
motivation factor.
In this competitive environment, work values or sometomes known as job
worth are mostly grounded on market value or job evaluation programme.
However, using total value basis is more objective for the organisation.
Among the work values that need to be focused on by an organisation are
as follows:
(i)
(ii)
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(ii)
Individual Factors
Other factors that need to be considered are factors involving individual
performance which are as important in creating more motivated employees
to carry out work exceptionally. A few factors that have to be thought of are:
(i)
(ii)
ACTIVITY 7.2
How can legal factors influence wage rate in our country?
TOPIC 7
7.5
COMPENSATION ADMINISTRATION
145
COMPENSATION ADMINISTRATION
COMPONENTS
There are three important components in setting the salary system as follows:
(a)
Internal equity;
(b)
(c)
Individual equity.
Figure 7.4 shows the steps in setting the salary system. The steps in each level are
related to one another.
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7.5.1
COMPENSATION ADMINISTRATION
The element in this first process is job evaluation to determine the relative value
of a certain job. The goal of job evaluation is to achieve internal equity during the
salary system formation. Job evaluation is a systematic method to determine the
relative value of a certain job compared to other jobs to ensure different jobs are
given a different wage rate (Stone, 1998). Job evaluation focuses on the high or
low of a certain job based on a few pre-determined work factors. Information
on job evaluation is set as a basis for the formation of a fair salary system.
Theoretically, job evaluation utilises information in job analysis to categorise jobs
according to a relative value hierarchy of a specific job compared to other jobs
(DeCenzo, 1999). For example, the post of an account manager needs more skills
and responsibilities as compared to an account trainee post. By this, the account
managers salary will be higher than the account trainees salary. Job evaluation
conducted focuses on three main questions, which are:
(a)
(b)
(c)
There are four steps involved in determining internal equity, which are:
(a)
(b)
Skills;
(ii)
Responsibilities;
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147
starting from high to low. The job hierarchy is arranged according to types
of task in the same group. For example, the position of a secretary, senior
clerk, clerk, typist, receptionist and computer operator can be categorised
into one group, which is clerical position.
(d)
Comparison Scope
Qualitative Method
Quantitative Method
Job vs Job
Job Arrangement
Method
Factor Comparison
Method
Job vs Scale
Job Classification
Method
Score System
Source: Nankervis, Compton & McCarthy (1999). Strategic human resources management
(3rd ed.). Australia: Nelsom-Thompson Learning.
(i)
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Order
Job
General Manager
Marketing Manager
Operations Manager
Accounts Manager
Engineer
Accountant
Sales representative
Supervisor
Source: Adapted from Stone, R. S. (1998). Human resources management (3rd ed.).
Brisbane: John Wiley & Sons Australia.
(ii)
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149
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The restriction in the factor comparison method is the difficulty in using the predetermined criteria to compare all jobs against the chosen benchmark.
Selection Method
Each job evaluation method has its strengths and weaknesses. According to Stone
(1998), since there is no one method that can be said as being the best, human
resource managers have to evaluate a few factors prior to selecting. These factors are:
(a)
(b)
Organisation size
A small organisation will utilise a simple method such as job classification
whereas a large organisation will utilise an expensive method such as factor
comparison or score system.
(c)
Organisation resources
Organisations need to consider cost and time to carry out a job evaluation.
Organisations are able to request their own employees or use the services of
a consultant to conduct a job evaluation.
(d)
(e)
Corporate culture
The selection of job evaluation has to be in line with the existing corporate
culture so that it is conducted effectively. For example, a small organisation
need not choose a complex method utilised by most large organisations.
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(f)
COMPENSATION ADMINISTRATION
151
Employee behaviour
A job evaluation method chosen has to be informed to all employees so that
it can be accepted by them and the chosen method is perceived as just and
fair.
Visit http://www.hr-guide.com/ for the definition of job evaluation and the four
importance of the job evaluation process. Next, visit http://www.jobanalysis.net/ for the four steps involved in the job analysis process.
7.5.2
The purpose of a market survey is to identify the wage range for each grade
formed. The steps involved in a market survey are benchmarking and the
establishment of wage policy.
(a)
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(b)
Jobs with similar relative values will be categorised under the same
grade; and
(ii)
The methods that can be utilised to obtain information from outside are
wage survey, wage curve and salary grade range.
(i)
Wage Survey
Wage survey is a set of facts related to practices in wage structure
which are obtained from other organisations in the same labour
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COMPENSATION ADMINISTRATION
153
Wage Curve
After an organisation has obtained information on wage rate from
other organisations, it will connect the information with the result
from a specific job relative value. Information on wage rate and job
size is based on score marks and is plotted to obtain a wage curve.
The plotted graph as shown in Figure 7.7 is a wage rate survey
distribution graph. A straight line will be formed to obtain the desired
wage curve.
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7.5.3
After an organisation has structured its wage policy, the organisation has to
determine the wage rate that will be received by a particular employee based on
the salary grade range according to the position held. Normally, an employees
salary rate is determined by taking into account issues such as experience related
to his or her service and performance. For example, a clerk with no work
experience in other organisations will receive a starting pay of RM520 whereas a
clerk who has work experience in another organisation will be offered RM720.
The main objective of this step is to achieve individual equity. Individual equity
refers to the fairness in determining wage payment for employees in the same
position.
ACTIVITY 7.3
Elaborate on the components involved in the formation of a salary
system.
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155
EXERCISE 7.2
What is meant by job evaluation? State the methods which can be
used to evaluate a particular job.
7.6
COMPENSATION ADMINISTRATION
ISSUES
(b)
(c)
Wage Assurance
A strategic compensation administration is able to motivate employees to
increase their performance. Various compensation plans have to be
developed to create wage payment assurance including basic salary
assurance, service allowance or living expenses, and other financial benefits
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COMPENSATION ADMINISTRATION
that need to be increased from time to time such as housing allowance. The
wage rate developed also has to be revised so that an increase in basic
salary follows the increase in living costs.
ACTIVITY 7.4
Do you agree or disagree with the following statements? Give a valid
reason for your choice.
1.
2.
3.
4.
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COMPENSATION ADMINISTRATION
EXERCISE 7.3
Multiple Choice Questions
1.
2.
3.
4.
Essay Questions
1.
2.
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3.
4.
5.
6.
Compensation
Individual equity
External equity
Internal equity
Topic
Incentives and
Benefits
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1.
2.
3.
4.
INTRODUCTION
The major factors that determine the reward payment rate of a certain job are
workload and job importance. However, wage payment that is only based on
these factors often fails to motivate employees to reach their full potential. In
other words, an equitable salary is not an assurance that employees will produce
high productivity. In this case, incentives and benefits are believed to be a major
influence that can help increase productivity, encourage employees to fully
utilise their skills and knowledge in carrying out their jobs, as well as encourage
them to work as a team.
Therefore, awarding incentives and benefits to employees is another very critical
aspect that needs to be planned and managed by the management, especially the
human resource management unit. In this topic, we will discuss both incentives
and benefits.
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8.1
TOPIC 8
INCENTIVES
ACTIVITY 8.1
In your opinion, should employers give incentives to their
employees? Imagine what would happen if employers did not
award any incentives to their employees.
8.1.1
Global competition and the restructure of the global economy require a business
to be more productive. Payment strategies and payment systems used previously
are already outdated, causing organisations to be unable to compete at the
international level. In addition, the traditional payment system often fails to
connect payment to performance or productivity effectively. Therefore, more and
more organisations are beginning to offer incentive plans to their employees, in
addition to the existing basic salary structure.
Among the main reasons an organisation carries out an incentive plan is so that it
focuses on payment for performance and is able to connect rewards to the
organisations goals. Therefore, an employee will be more loyal and faithful to
his or her job and thus able to increase his or her overall effort and job
performance.
Apart from that, it is said that incentives can also encourage employees to work
harder in completing their tasks. Therefore, monetary incentives are offered to
employees with the hope that productivity and quality can be sustained or
improved, thus enabling an organisation to compete globally.
In addition, a competitive labour market also forces the organisation to compete
and offer various interesting incentive plans to attract and retain quality
employees in the organisation.
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EXERCISE 8.1
Give two reasons why the management carries out incentive plans.
8.1.2
(b)
(c)
(d)
(e)
8.1.3
(b)
(c)
(d)
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(e)
(f)
8.1.4
Usually, an effective incentive plan is able to decrease direct labour cost, but for
an organisation that wants to enjoy the full benefit of the incentive plan, it needs
to be thoroughly planned and carried out carefully. An effective incentive plan
administration has to take into account these following issues:
(a)
(b)
(c)
8.1.5
There are many types of incentive plans that can be practised by an organisation
and each organisation usually has their own incentive plan. Generally, an
incentive plan can be divided into three categories:
Individual incentive plan;
Group incentive plan; and
Industrial incentive plan.
(a)
Unit of Work
Unit of work is one of the earlier forms of incentive plans introduced.
There are two types of unit of work incentives, which are:
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163
RM500
20
520
Differential piece-rate
Through this, employees are given a higher incentive payment
rate for their overall work if their production surpasses the
standard production level which has been set by the management
as compared to the rate paid to them when they do not surpass the
standard level.
Example:
Say the standard level which has been set by the company is 1,000
units per month. The incentive payment rate for production which
surpasses the standard level is RM0.30 per unit. On the other
hand, the incentive rate for production that does not surpass the
standard level is RM0.10 per unit. If Ali and Chandra both manage
to produce 1,200 and 900 units in a particular month, how much is
the incentive that they will receive?
Incentive for Ali
Incentive for Chandra
(ii)
RM0.30
RM0.10
1,200 = RM360
900 = RM90
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Example:
The standard time set to finish a painting job is 10 hours with the
incentive payment rate of RM10.00 per-hour. If worker A used 9 hours
to complete the work, then the incentive payment that the worker will
receive is:
Standard hour (10 hours) x Incentive rate (RM10.00) = RM100
On the other hand, if worker A has used more time to complete the
task, say 20 hours, worker A will be paid an incentive of RM100 only.
(iii) Bonus
Bonus is one of the payment incentives given to the employee as an
addition to their basic salary. Bonus can be awarded based on cost
saving, increase in performance quality or criteria that are identified
by the organisation. Besides, organisations can utilise spot bonus
which is bonus given on the spot in acknowledging employees
efforts or contributions which are indirectly related to the standard
performance set. For example, an employee is given spot bonus for
his or her effort in working extra hours to entertain a lot of customers.
(iv) Merit Payment
Merit payment is a salary increment programme that is based on
employees performance achievement in carrying out tasks through
the performance evaluation process. To ensure the effectiveness of the
merit payment plan, evaluation on the employee has to be done
objectively and employee performance is measured based on objective
and fair criteria.
(v)
Sales Incentive
Monetary incentives are usually used by organisations to motivate
sales personnel and encourage the increase in sales in the competitive
market. The salespersons salary scheme usually contains two parts
which are basic salary and commission. Commission is the total of
sales incentive which is calculated based on the percentage of total
sales garnered by a salesperson at a certain period.
Example:
Syarikat Vena offers sales commission of 2% to its salespeople based
on total sales each month. If Samy is able to achieve RM10,000 sales in
March, how much is the sales commission he will receive?
Commission: 2%
RM10,000 = RM 200
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165
(b)
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Earning-at-risk
Earning-at-risk is an incentive plan which places risk on part of an
employees basic salary. Nevertheless, employees are given the
opportunity to obtain a higher pay if they are able to achieve the
goals set by management. The purpose of this programme is to
make the employees realise that they are facing a risk due to their
poor performance, while at the same time expecting a generous
reward.
Example:
Say the basic salary of worker A is RM1,200. RM200 from the basic
salary is being held back and put as a risk wage. If worker A is
unable to achieve the set goals, then he or she is not eligible to
receive a salary of RM1,000; but if worker A is able to achieve the
goal, he or she may be paid an additional incentive aside from his
or her basic salary of RM1,200.
(c)
Profit Sharing
Each employee in an organisation enjoys profit sharing by receiving a
certain additional sum aside from his or her basic salary, whether in
the form of cash or backdated payment. The purpose of this plan is to
give an opportunity for employees to enjoy additional income
through their contributions or efforts in helping the organisation
achieve profit growth. Among these contributions are increase in
product quality, decrease in operation cost and improvement in work
methods.
(ii)
Share Ownership
Share ownership programme is one of the incentives that offer an
organisations shares to its employees at a certain offered price in a
certain period. It is believed that by allowing employees to purchase
and own organisations share, employees productivity can be
increased.
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SELF-CHECK 8.1
Try to think of the factors that may influence the development of
an incentive plan offered by an organisation.
ACTIVITY 8.2
We have discussed the three types of incentive plan, which are
individual, group incentive and industrial incentives that can be
offered by an organisation to its employees. What are the
differences between the three incentive plans?
EXERCISE 8.2
8.2
1.
2.
BENEFITS
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8.2.1
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(ii)
(c)
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(d)
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Flexible Planning
In order to fulfil the needs of different individuals, the management has to
offer more flexible benefit packages such as providing a cafeteria plan. A
cafeteria plan is a benefit programme which allows individuals to choose
the benefit which is most suited to his or her needs from a number of
benefits offered by the organisation. This prevents wastage from occurring
in the benefit package due to unsuitability of employee needs.
However, basic or main benefits are provided by the management to all of
its employees such as health insurance, medical leave, day offs and others.
Aside from the basic benefits package, employees are allowed to choose a
number of extra benefits provided by the management with a specific predetermined cost limit, say RM500 for each employee.
(e)
Print distribution;
(ii)
ACTIVITY 8.3
Explain why an organisation chooses to offer the cafeteria benefit
plan to its employees.
EXERCISE 8.3
List five characteristics of an effective benefit programme.
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8.2.2
171
Most organisations offer various benefit packages to their employees. Part of the
benefit package provided by an employer is based on the voluntary concept
rather than force. However, there are also benefits which are compulsory or need
to be provided by the management due to legal requirements. In other words,
there are two types of benefit programmes, which are:
Mandated benefits programme; and
Non-mandated benefits programme.
(a)
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Annual Leave
8 days
12 days
5 years or more
16 days
Sick Leave
Under Section 60F of Employment Act (1955), an employee is
eligible to enjoy a number of minimum medical leave according to
his or her service period as shown in Table 8.2:
Table 8.2: Sick Leave Based on Service Period
Service Period
(ii)
Sick Leave
14 days
18 days
5 years or more
22 days
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(b)
Employer
Worker
1.25%
0.5%
0.5%
Insurance Scheme
A collective insurance scheme for employees is one of the benefits
which are usually provided by employers. It usually includes life
insurance, which assures benefit payment on death to the employees
next of kin, or protects employees in the event of accidents or injuries.
Premium insurance cost is borne by employers and employees are
usually allowed to make additional purchase at their own expense.
(ii)
Healthcare
This is a benefit package that has gained serious attention from
employers since healthcare cost is becoming very high. In addition,
employees nowadays emphasise more on healthcare as compared to
employees before. The benefit package usually consists of medical
expenses, surgery and oral expenses.
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Food Service
Food service is provided for employees convenience as well as to
encourage employees to always be in the workplace vicinity. The food
provided is either sold at cost price or lower than cost, which is due to
employer subsidy.
SELF-CHECK 8.2
What is the importance of benefits to an employee? What are the
forms of benefits that are usually given by employers to their
employees?
ACTIVITY 8.4
What are the differences between mandated benefits and nonmandated benefits?
TOPIC 8
EXERCISE 8.4
TRUE (T) or FALSE (F) Statements
1.
2.
3.
4.
3.
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4.
5.
Essay Questions
1.
2.
3.
4.
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Topic
Employee
Rights and
Discipline
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1.
2.
3.
4.
INTRODUCTION
If we look at the job scenario these days, we will find many employers who have
taken the steps to terminate the services of their employees as a way to reduce
the operation cost. Through mergers and restructuring, many organisations offer
voluntary separation scheme (VSS) as a means to reduce the number of
employees they already have. Nevertheless, there are also employees who have
been terminated without receiving any compensation and valid reasons. Apart
from using the economic crisis as an excuse, employers also use excuses like
indiscipline and work performance to sack employees. There are employees who
are given hard punishment for a small mistake and there are some who are not
given the chance to defend themselves after they have been accused. However,
not many are brave enough to come forward and lodge a report for they do not
know their rights as employees.
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Thus, in this topic, we will discuss two main issues which are rights and
discipline. Both issues relate to one another especially in increasing the quality
relationship between an employer and a worker.
9.1
Protected from
discrimination
Contract of service
A safe work
environment
Implied contracts/
employment policies
Trade union
Other Rights
Receive ethical
treatment
Privacy (limited)
Freedom of speech
(limited)
In Malaysia, there are many rights of employees that have been listed out in
various Acts such as Workmens Compensation Act 1952, Employment Act 1955,
Employees Provident Fund Act 1991, Human Resource Development Act 2001
and Occupational Safety and Health Act 1994. It is proposed that employees need
to study a little bit about the Acts related to them so that they are not easily
oppressed by employers. All of these Acts have been discussed in Topic 2.
From the aspect of the management or employer, they have the right to handle
business and to maintain the profits gained. Shareholders and the company
owner usually control their company by giving out power to the company
managers.
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(b)
Recruiting employees;
(c)
Promotion;
(d)
(e)
Discipline; and
(f)
Terminating employees.
However, the rights that are directly related to the employees will usually be
aligned according to the employees rights. The employers rights are usually
influenced by the rights of the important teams with vested interests in making
decision at the workplace. For example, an employer has the right to decide on
the employees salary scale, but with the presence of the trade union, the
employer must pay according to what have been agreed in the contract between
the employer and the trade unions.
SELF-CHECK 9.1
List out the rights of workers and employers.
9.2
EMPLOYEES DISCIPLINE
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the employees control like punishing the employees for not doing their work
because of lack of raw materials or shortage of electricity. In brief, discipline can
only be taken if the manager can prove that the problem which arises has been
caused by the employee himself/herself.
9.2.1
Problematic employees are always related to their bad work performance or they
usually create a lot of problems at the workplace. According to Ivancevich (2001),
problematic employees can be classified into four main categories which are:
(a)
(b)
An employee who has personal problems which affect the productivity and
the focus of his work. For example, family problem, alcohol and drug
addiction.
(c)
An employee who breaks the laws at the workplace such as stealing the
companys property and attempting to attack other employees like fighting.
(d)
An employee who keeps breaking the rules and regulations of the company
and disobeying the managers instruction.
The above classification makes it easier for the employer to take suitable actions
or list appropriate training programmes that can help the employees to improve
their work performance.
Due to unknown causes with problematic employees, many take the easy route
of sacking those deemed problematic.
In reality, there are many factors that can cause misconduct among the
employees such as the attitude of the employee or the interaction between the
two parties. Miner (Ivancevich, 2001) had devised a method to analyse the
deficient behaviours of employees by way of producing a checklist of suspected
causes of the problems. Among the causes are:
(a)
(b)
Emotional problems
(c)
Motivational problems
(d)
Physical problems
(e)
Family problems
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(f)
(g)
(h)
(i)
9.2.2
(b)
Supervisors believing that their actions will not have the backing of the
upper management.
(c)
(d)
(e)
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Clearly distributed to all employees and not to be taken for granted that all
of them had been informed.
(b)
(c)
(d)
In written form.
(e)
Reasonable.
(f)
(g)
ACTIVITY 9.1
In your opinion, what attributes to the rising of offences within
organisations nowadays?
EXERCISE 9.1
True (T) or False (F) Statements
1.
If employees are found to have not been doing their work due
to insufficient funds, disciplinary action can be taken against
them.
2.
3.
4.
5.
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9.2.3
Disciplinary Approaches
Employers are actually able to use any disciplinary approaches which were
considered appropriate when discovering that employees committing an offence.
For this topic, the following are the normal three approaches used by
organisations. Furthermore, we can also notice the mistakes committed by
supervisors and those who are responsible to maintain discipline.
(a)
(ii)
Instant in Nature
Immediate disciplinary action is taken as soon as an investigation is
concluded. With this, the employees will immediately understand the
correlation between the effects of their offences through the penalties
meted out upon them.
(iii) Consistency
Consistency in discipline means that each employee will be punished
if they commit an offence, and the same type of punishment will be
applied to the same type of offences for all the employees.
Implementing a consistant disciplinary action is not an easy task
because it involves personal issues. It cannot be denied that supervisors
can fail to notice offences made by favoured employees.
(iv) Non Personal Manner
Disciplinary actions should not be taken in a personal manner but
more in the form of correcting certain inappropriate behaviour of
employees. This can be done by way of corrective discipline whereby
with this approach, supervisors will address employee misconduct in
a mature manner by providing a conducive environment for
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Verbal Warning
For employees who have committed their first offences, warnings are
given verbally by their supervisors. The supervisor will then warn
that the punishment will be more severe should the same offence be
repeated in future.
(ii)
Formal Warning
Should the employee commit the same offence, a formal warning by
way of a letter of warning will be given. The offence will be
documented in their files and the employee will once more be told
that a stricter punishment will be taken should it occur again.
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(c)
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Counselling
Counselling can be used as part of the disciplinary process for it
allows the manager or supervisor an opportunity to identify
employees problems and also a solution to the problem. The objective
of counselling is to enable the employee to understand the rules and
regulations of the company or organisation. At the first meeting of
this stage, both parties are expected to discuss the problems at hand
and to find the appropriate solution.
(ii)
Written Documentation
Should the employees fail to improve their performance or repeat the
same offence, both parties are expected to meet once more and discuss
the reason(s) why the solution did not materialise. Another solution is
expected to be found at this stage and a contract will be made
whereby the causes and solutions are documented with the
concurrence of both parties.
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Punitive Discipline
Punitive discipline is also referred as negative discipline. This usually
involves threatening and blackmailing employees. This type of error
was commonly practised during the early 20th century but is now
rarely used as many employees are protected by the trade unions.
Besides, employers are more aware of the need for positive employeremployee relationship.
(ii)
Negative Feedback
Certain supervisors only present negative feedback when the
employees are unable to display good performance. Feedback should
be both, positive and negative. Praises need to be given when
employees perform well and exhort is necessary when employees
commit an offence.
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ACTIVITY 9.2
If you were the supervisor making the incorrect disciplinary action,
what would you do?
TOPIC 9
9.2.4
189
(b)
Period of work
If the employee has served long enough in the company and the offence
committed is only of minor nature, then a second opportunity is
appropriate. But if the same goes to a new employee, then employers can
fire the employee instantly.
(c)
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ACTIVITY 9.3
With close reference to your working experience, can you
differentiate the approaches taken at your workplace with those
learnt in this topic?
EXERCISE 9.2
True (T) or False (F) Statements
1.
2.
3.
4.
5.
9.2.5
Step-review System
This system is an examination of complaints in a step-by-step manner.
Unlike organisations with employees union, this system does not need to
appoint a third person to judge the complaints. In most step-review
systems, a president, chief executive, vice president or a human resource
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(b)
Peer-review System
Peer-review system (also known as the complaints committee) is a system
consisting of the employees representative and the employer himself. The
numbers of representative from both parties are of equal number. They act
as jurors who would judge the evidence and justification. The board would
then take a vote on the matter. This system can be used to solve employees
complaints and problems by itself or it can be used alongside the stepreview system.
(c)
Hearing Officer
Hearing officers are normally elected by the organisation but his function is
neutral in nature when judging a case. Usually, employees are the ones
who request hearing officers to judge a case. After looking into the evidence
and facts that have been presented, a judgement will be made. The result is
usually final and an agreement is forced on both the employer and
employee. As is the case with the peer-review system, it can be used by
itself or alongside the step-review.
(d)
Open Policy
In open policy (which is traditional in nature), employees will look for
certain managers (or those more senior than the supervisors) who can be
trusted to forward their complaints. Normally, the director of the human
resource department will act as the final solution to judge a case.
The disadvantages of this system are:
(i)
(ii)
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(iii) There is no certainties that the decision made is consistent among all
the managers.
(iv) The management committee will usually favour the supervisors for
fear of losing authority and this policy has no credibility in the eyes of
the employees.
(e)
Ombudsman System
The ombudsman system is a system that elects a group of representatives to
handle all complaints. The ombudsman will usually listen to the complaints
and mediates fair settlement between the employer and employee. Since
this system does not have the authority to pass a judgement or a solution,
cooperation and compromise between the two parties is essential.
(f)
Arbitration
Arbitration is usually used to solve the problems relating to discrimination
such as sex, age, sexual harassment and even racial prejudices. This will be
specifically discussed in the next topic.
9.2.6
According to the Employment Act 1955, an employer can terminate the services
of an employee after an investigation has proven that the employee has
committed an offence. During the duration of the investigation, the employer can
suspend the employee for a duration of not more than two weeks. The
suspension however, has to see to it that the employee receives at least half of his
or her salary. Should the investigation prove that the employee is not liable, then
he or she is entitled to receive full payment of his or her salary during the
suspension.
It has to be reminded that during the investigation of the misconduct, the
employer has to document all the employees offences in detail to avoid making
the wrong decision. Among the items needing documentation are:
(a)
(b)
(c)
(d)
(e)
(f)
The reaction of the employee on the actions taken against him or her.
(g)
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If employers intend to terminate the employees, the following are a few tips
provided by Bohlander, Snell and Sherman (2001):
(a)
(b)
(c)
(d)
9.2.7
The following are several guidelines that can be used in the process of
determining the kind of disciplinary action to be taken:
(a)
(b)
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(c)
(d)
Obtain Information
The management should collect necessary evidence before framing any
charges against the person responsible.
(e)
(f)
(g)
(h)
Give Warning
In some cases, employees will either be suspended or lose their job if they
have committed serious offence. However, a warning via letter or given
verbally will be set for first time and second time offences. This is important
to ensure that none of the employees will accuse the organisation for
terminating them without giving any warning.
(i)
(j)
(k)
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(l)
195
EXERCISE 9.3
TRUE (T) or FALSE (F) Statements
1.
2.
3.
4.
5.
2.
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3.
4.
Essay Questions
1.
2.
List out all the important things that should be considered when
outlining the discipline rules and set of laws.
It is the responsibility of all employees to know their rights in order for them
to know certain things that should not be done by the management and
organisation that they are working with.
In Malaysia, the employees rights are presented in various Acts such as the
Employment Act 1955, the Occupational Safety and Health Act 1994, the
Workmens Compensation Act 1952, etc.
However, the employer has the right to elect employees, promote and
discipline them, as well as terminate them from their respective post.
Other than employees and manager rights, discipline is also another
important issue in an organisation.
Unfortunately, it is not the most favourite aspect that is focused by the
employers even though it is crucial to motivate employees to follow the
existing performance pace.
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Arbitration
Open policy
Hearing officer
Peer-review system
Ombudsman
Step-review system
Topic
10
Employee
Relations
Dynamics
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1.
2.
3.
INTRODUCTION
Industrial relationship is also known as the relationship between employer and
his employees in a working field. For most of the local organisation, the rapport
or relationship that exists is based on the workers welfare management.
Three important aspects in an industrial relationship are the rapport between
employer and the workers, employment laws and discipline procedure, as well
as the termination of services contract. Apart from that, the industrial relation is
also focused on the effect of the set of laws and rules on the working
environment, term and work surrounding, employers right and responsibility as
well as employees and the process involved in creating the rules and term.
Generally, the industrial relation system involves three respective parties which
are the employer, workers and the government. This situation is being practised
in Malaysia even though there are a few foreign organisations that influence the
industrial relationship system such as the International Labour Organisation
(ILO). Apart from that, several other Acts are also responsible for influencing the
system as well.
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For workers, the trade union is utilised as the base to highlight their rights. It is
important to know that industrial relation will not exist without the trade unions.
Thus, in the next section, we will be discussing the scenario in trade unions as
well as the procedure in handling disputes.
10.1
The Trade Unions Act 1959 (section 2) defines trade unions as any organisation
or a combination of employee and employer whose workplace is in Peninsular
Malaysia, Sabah or Sarawak, whether in a certain or similar employment or
industry and whether temporarily or permanently.
The first trade union in Malaysia was identified in the 1920s, during the
development of the agricultural and tin mining era. Even though the trade union
development in Malaysia was slightly slower compared to the Western countries,
we must understand the employees conditions at that point in time. The
majority of employees working in Malaysia at that particular time were here on a
temporary basis, as most of their family members were in China or India. Half of
their salaries would be sent home to their families and they would return to their
motherland when they had successfully saved a certain amount of money. As
they were really in need of employment, they decided not to join any trade union
which at that time was strongly opposed by employers. Interestingly, history
seems to repeat itself around the 1990s when we saw many illegal immigrants
coming to work in Malaysia.
After the 1920s, the Malaya Communist Party succeeded in encouraging
unskilled employees to form trade unions. The employees organised several
strikes in the 1930s and at that time, there were no laws related to trade union
and its activities until 1940. However, it could not be carried out because Japan
attacked Malaya. Only in 1946 did the government have a chance to intervene by
taking steps such as establishing the Trade Union Advisory Department and the
Trade Union Enactment. In this enactment, three main clauses were approved,
i.e.:
(a)
(b)
All national trade unions formed must be in the same industry; and
(c)
The trade union officers elected must have already served in the industry
for at least three years.
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These laws are designed to prevent the Communist Party from intervening in the
trade union, to limit the unions size and power as well as to control their
movement by making it compulsory for them to register with the newly elected
trade union Registry officer. As a result, there were more than 100 trade unions
that were revoked and cancelled at that time. Currently, the number of trade
union has shown an increase. In 1998 alone, 531 trade unions were registered as
compared to only 386 unions in 1984.
ACTIVITY 10.1
Based on the statistics from the Workers Union Affairs
Department, there were 592 workers unions in Malaysia up to
December 2001 that represented the private sector, the government,
and local statutory bodies and employers. Why were these unions
established?
10.1.1
Some employees join a trade union because they realised that if they fight for
their rights for better work conditions individually, they may fail. But by joining
a trade union and acting as a group, employers may consider their demands.
Moreover, a trade union will usually take steps to protect its members.
According to Bohlander, Shell and Sherman (2001), among the reasons why
employees are interested in joining a trade union include:
(a)
(b)
(c)
To increase status;
(d)
To socialise;
(e)
(f)
(g)
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SELF-CHECK 10.1
Do you know why employees choose to become members of a
trade union?
10.2
10.2.1
Many are of the opinion that trade union is an outdated concept and do not see it
as necessary nowadays. They feel that employees who join trade union are not
showing loyalty to the organisation.
Some employers feel that trade unions disrupt the decision making and
processes of management in the organisation, thus contributing to the
organisations inability to reach the set objectives. Whatever reasons given,
employers need to accept the fact that employees will continue to join a trade
union as they are more aware of its functions. Some of the functions of a trade
union are:
(a)
(b)
(c)
(d)
(e)
ACTIVITY 10.2
In your opinion, do we need to establish a trade union?
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10.2.2
Do you know the terms and conditions required to establish a trade union?
A trade union can be established if there are seven or more employees working
in the similar trade, occupation, or industry, and employees must either all be in
the private sector or all of them are in the public sector. For those who plan to
establish a trade union, they must first send their registration application to the
Director General of Trade Union in order to get an approval to operate legally in
the period of one month. If the period is insufficient, they can request from the
Director General of Trade Union (DGTU) that the period be extended to six
months.
The application form that needs to be sent must be enclosed with a fee and a
printed copy of the rules and regulations for the union that is being established.
The application also has to have details such as the union's name as well as its
address, the names, addresses and positions of all its members, and the name,
age, address and position of the elected union officer.
In processing the application form, the DGTU has the authority to reject any
trade union registration which in his or her opinion may be used for illegal
purposes. Registration is usually rejected if the managing director finds that:
(a)
(b)
A part of the trade unions regulations clashes with the Trade Union Act;
(c)
The name of the trade union that is being established may bring problems
in the future, or is similar to another existing union, or the name given is
found to be suspicious; or
(d)
The trade union that is being established will be used for illegal purposes.
If there are two or more registered trade unions and they represent a group of
employees in the same trade, occupation, industry or workplace, the DGTU has
the authority to revoke any unions that have a small number of members or
order the union to not register the membership of the employee involved.
10.2.3
According to Maimunah (2000), all employees aged 16 and above have the right
to join a suitable trade union such as those representing employees in their trade
or industry sectors and covers employees whether in Peninsular Malaysia, or in
Sabah and Sarawak (but not a combination of these territories). However, those
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aged between 16 and 21 years old have a limited opportunity in some trade
union activities such as competing in the election for the post of union executive
or participating in a strike until they reach the age of 18.
Employees in the public sector can only become a member of the trade union that
is formed by employees within the same occupation, department, or ministry.
However, management level staff in public service who are interested in joining
trade unions have to obtain permission from the Government Chief Secretary.
However, the police, the army and prison officers are not allowed to join any
trade union.
SELF-CHECK 10.2
Who is allowed to become a member of a trade union?
10.2.4
When employees are accepted as trade union members, they have to pay a
registration fee and a monthly fee of between RM3.00 and RM8.00. The money
collected will be used for purposes such as those set in the Trade Union Acts
(section 50) and regulations that have been outlined by the trade union.
According to the Act, trade union fund can only be used for purposes such as:
(a)
(b)
(c)
(d)
(e)
Allowance for members and their family due to death, ailment, accident
and unemployment;
(f)
(g)
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10.2.5
In Malaysia, trade unions can be divided into two categories, namely, trade
union for employees in the private sector and trade union for employees in the
public sector. For employees in the private sector, there are two types of union,
which are, national and district trade union as well as company union.
(a)
75,000
30,000
20,000 members.
19,000
8,000 members.
Some trade unions have members who are limited to one district only.
For example, employees in Sabah and Sarawak are not allowed to join
unions in Peninsular Malaysia. In addition, there are trade unions that
only enrol members from certain areas such as the Perak Textile and
Garment Industry Trade Union which limits the intake of members to
employees from the Perak state only (Maimunah, 2000).
Visit http://www.nutp.org/ to obtain information on the services
offered by the National Union for Teaching Professionals to its
members.
(ii)
In-house Union
An in-house union is a union established by employees working
under one employer. This indicates that employees from different
occupations can join this type of union as long as their employers are
the same.
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There are 221 trade unions in the public sector in 1997 and this figure
includes several of Malaysias biggest unions such as the Malayan Union
for Teaching Professionals, Malayan Nursing Union, and Malayan
Technical Service Union as well as smaller unions such as the Dentistry
Technician Union with 242 members and the Pulau Pinang Port Senior
Commissioner Officers Union with a total number of 116 members.
Recently, the number of union members seemed to have decreased and this
is not caused by loss of interest but due to the governments privatisation
policy which has caused bigger unions to become private sector unions.
(c)
Employers Association
Besides employees having their own trade unions, employers, on the other
hand, tried to build a network by establishing an employers association
from similar organisations to fight for their rights and welfare. With this
network or association, employers are more prepared and able to react to
the demands of the trade union. The employer association also plays the
role of balancing the employee market condition and the reward offers or
salary as well as being involved in matters regarding decision making or
discussions with the central or state government or agencies representing
the government.
Through this network or association, employers can share techniques and
strategies to handle demands from employees trade unions. A few
techniques often used by employers in controlling the influence and
demands from trade unions are to offer rewards and wages as well as
competitive service benefits, to invest in developing a cooperative
workforce or human resources, to increase communications flow, to create
more opportunities for employee involvement in decision making and also
to increase employees commitment to the organisation. The following are
examples of large employers associations:
(i)
(ii)
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EXERCISE 10.1
TRUE (T) or FALSE (F) Statements
1.
2.
3.
4.
The trade union fund can be used for purposes such as reports
and news printing, compensation to members during trade
disputes and also for office related expenses.
5.
10.3
COLLECTIVE BARGAINING
ACTIVITY 10.3
In your opinion, who determines the wages and benefits for each
employee or work group in an organisation?
The decision on wages and benefits can be made either one-way or two-way. In
both public and private sectors which do not have trade unions, decision is made
one-way which is set by employers. But in the private sectors that have trade
union, the collective bargaining process is used by both employers and trade
union in determining wage and other work terms.
Collective bargaining can be defined as a method to determine work terms and
conditions as well as to control work relations through the negotiation process
between employers and employees in the hope of achieving an agreement
(Salamon, 1998).
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For employees, collective bargaining can be seen as a good method for them to
increase wages and benefits as well as to reduce the total working hours. Even
though the main objective of collective bargaining is to agree upon the accepted
work contract by both employees and employers, trade union has two other
objectives, which are to protect employees rights through allocation
development which will monitor the use of power or any actions which are
unfair towards employees and secondly to enable employees to be involved in
the decision making on matters which involve them.
10.3.1
The bargaining process can only be practised in the private sector because in the
public sector, wages and all conditions will be decided by the employer. Besides
that, it is important to remember that the bargaining process cannot be carried
out if the employer does not recognise the trade union formed.
Only when the recognition is received, then the employees can only use the
union to voice out any dissatisfaction or to solve any disputes. In other words,
this can be seen as a policy for trade unions to improve any employee service
terms with employers. For employees who are not members of a trade union,
they will not be discriminated because the trade union not only negotiates for its
members but for all employees in the company.
In many cases, the bargaining process carried out is between employers and
trade unions. However, for employers who have their own associations such as
banks, the bargaining process carried out is between the employers association
and the trade union. This is to ensure that all benefits are standardised for all
employees in that industry and also to reduce the number of employees who like
to job hop from one company to another. All bargaining processes carried out are
controlled by the Industrial Relations Act 1967.
The bargaining process begins when one of the parties, whether the employer or
the trade union, recommends a set of proposals for mutual agreement and
requests for negotiation to begin. The response on whether the invitation to
negotiate is accepted or not has to be sent within 14 days. If the employer refuses
to begin the process, a trade dispute will occur. However, it is important to
remember that employers who have recognised the establishment of the trade
union have to be involved in this process.
The number of meetings that needs to be held depends on the relationship
between them and the number of disagreements. Normally, in their first meeting,
both parties will discuss issues pertaining to the disagreements. If there are any
matters left out and not discussed, they will be tabled in the next meeting. But if
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an agreement is still not achieved, the matter will be reported to the Industrial
Relations Department and if necessary, they will be trialed by the Industrial Court.
If an agreement is reached between the employer and trade union, the next
process is to bind the mutual agreement as a valid contract. For this, it needs to
be done in writing and signed by both parties involved.
The validity date of the agreement must also be stated and normally it does not
exceed three years. After the period ends, a new bargaining process has to be
carried out. Meanwhile, all agreements reached have to be sent to the Industrial
Court within one month from the date they were signed. The court will then
examine the agreement made to ensure that it follows the legal requirements
before accepting it as a valid contract.
ACTIVITY 10.4
Visit http://202.190.197.23:8080/documents/10179/58539/2012-0727%20Relevant%20Acts%20The%20Industrial%20Relations%20Act
%201967_v3.pdf and list ten important parts included in the
Industrial Relations Act.
10.3.2
Industrial Actions
Picket/Protest
According to Maimunah (2000), employees who are members of trade
unions and have trade disputes with their employers can hold a picket in or
near their workplace in the condition that:
(i)
(ii)
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Employees protest for the purpose of giving publicity about the dispute to
employees who are not directly involved and to the public. By protesting
peacefully, they hope to convince their employers to approve of their
claims. Picketing is a great tactic if employers are conscious of the
organisations public image.
(b)
Strikes
In Malaysia, strikes are only allowed for employees from registered trade
unions if trade disputes are still unsolved. Political strikes and sympathy
strikes are prohibited. Before employees go on a strike, those involved in
the dispute must first have a secret ballot to determine the percentage of
those who agree and disagree to the strike.
A strike is only allowed if the voting result shows two-thirds of the
employees agree to it. The voting result must be sent to the DGTU who has
the power to order the trade union not to have a strike if it is found that
certain necessary procedures are not followed.
A strike is only valid to be held after seven days, which is after the calm
period. During the calm period, validity confirmation can be done to enable
the parties involved to change their minds as well as to give an opportunity
for the government to intervene.
Apart from that, it must be reminded that the result of the ballot is only
valid for 90 days. Therefore, a strike must be organised within the 90-day
period from the voting date and if not, voting must be done again.
For employees in essential services such as banking, transportation,
electrical, postal, public health and supply and distribution of fuel, they too
must follow procedures as stated above, apart from giving notice of their
wishes to go on strike. Employers will then have to inform this to the
DGTU. After referring to the Industrial Relations Act 1967, illegal strikes
will be identified and the Ministry of Human Resources has the power to
prevent it. A strike is considered illegal if:
(i)
(ii)
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Lock-out
Lock-out is a way for employers to force employees to accept their
demands. Through this, employers will not allow employees to work until
the dispute between them is solved. This includes taking actions such as
closing the workplace, stopping work or refusing to give wage to any
employee until they agree to the work conditions imposed. Similar to a
strike, the requirements to a lock-out are also subject to the law.
ACTIVITY 10.5
In your opinion, should pickets, strikes and lock-outs be carried
out? State your reasons.
10.3.3
When disputes occur, employers and employees are not advised to picket, riot or
implement lock-out, because it in a way can affect the nations economy and
other public specialties. Due to that, the Industrial Relations Act 1967 has
underlined several procedures to solve the arguments.
(a)
Direct Negotiation
In direct negotiation, only the trade union and employers will be involved
in the process of solving the arguments. Usually, they will sit together in a
calm and respectful manner. In such cases, the DGTU cannot force both
sides to make peace if the direct negotiation is a failure.
(b)
Conciliation
When the process of solving the arguments through direct negotiation is a
failure, employers and trade union can report the matter to DGTU. He will
suggest them to hold a meeting of peace to solve the arguments. It is a
process whereby the Industrial Relations Department will help to solve the
arguments between both sides (Maimunah, 2000).
(c)
Mediation
This method has similarity with arbitration but the mediator who is being
appointed is not from the government or Industrial Relations Department.
The mediator is the outsider who is appointed and agreed by both sides.
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(d)
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Arbitration
Arbitration is used after the previous three methods have been a failure.
Similar to the method of using mediation, the arbitration method uses the
third party which is the Industrial Court. Under the Industrial Relations Act
1967, the Industrial Court is empowered to solve trade disputes.
The functions of the Industrial Court are:
(i)
(ii)
The decision which is made by the Industrial Court cannot be altered unless
there is a matter related to law.
EXERCISE 10.2
TRUE (T) or FALSE (F) Statements
1.
2.
3.
4.
5.
direct
are a
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2.
3.
4.
Essay Questions
1.
2.
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In this section, we have discussed the aspects of industrial relations and trade
union.
Thus, we should have understood what is industrial relationship and trade
union, why employees should join trade union, the roles, terms and
conditions of the formation, who can be the member, how and the purpose of
the unions fund as well as the types of union available in Malaysia.
Arbitration
Mediation
Collective bargaining
Negotiation
Conciliation
Picket
Direct negotiation
Strikes
Industrial actions
Trade unions
Lock-out
Topic
Employee
Safety and
Health
11
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1.
2.
3.
Discuss the security and work health Acts and the purpose of the
formation of those Acts.
INTRODUCTION
According to the International Labour Organisation (ILO), it is estimated that
more than 1.2 million workers do not enjoy their right to work in a secure and
safe environment because of accidents and diseases which are related to their
jobs. Based on the statistics gained from the ILO at the 16th APOSHO
Convention in Mauritius (April 2000), it was found that:
(a)
Employers from all over the world suffered because of more than 250
million accidents every year;
(b)
(c)
More than 1.2 million deaths happened every year because of accidents and
diseases related to jobs and the total is higher than the total caused by road
accidents every year from all over the world;
(d)
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11.1
ACTIVITY 11.1
We always hear the words safety and health but what do they
mean if applied in our workplace?
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11.2
217
Government intervention in the issue of industry safety started since early 1878
with the appointment of the first pemeriksa dandang. The first law related to
safety formed in 1892 was Steam Boiler Enactment (Maimunah, 1999).
When Malaysia was in the process of becoming an industrialised country in the
1960s, one Act was introduced to oversee the safety and health of work. It was
the Factories and Machinery Act 1967. Another Act, the Occupational Safety and
Health Act, was introduced in 1994 when it was found the previous had its
weaknesses. Our discussion here will be on these two Acts.
ACTIVITY 11.2
Why are laws related to safety and health of workers important?
What would happen to workers if there were no laws like this in
our country?
11.2.1
For over 30 years, the Factories and Machinery Act 1967 played its role to
overcome safety and health issues in this country. The Factories and Machinery
Act emphasised on safety in factories and its enforcement was under the control
of the Department of Factory and Machinery (now known as the Department of
Occupational Safety and Health). Among the provisions in this Act included the
following:
(a)
The power was given to the Department of Factory and Machinery, or the
appointed examiner to ensure safe construction and design of factories and
well-conditioned machines and to ensure safe usage including providing
appropriate training to workers;
(b)
(c)
Providing safety tools such as fire extinguisher and first aid box; and
(d)
Even though this Act had been used for a long time in Malaysia, it received a lot
of criticisms regarding the effectiveness of its provisions and implementation.
Among the criticisms were that it:
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(a)
Only protected workers who worked in factories and this only accounted to
about 25 to 30% of the entire workforce in Malaysia;
(b)
(c)
(d)
ACTIVITY 11.3
1.
The construction sector was the sector that reported the highest
amount of accidents in 1998, that is, 38,718 (43.8%) compared to
other sectors such as commerce (14.7%), services (10.4%) and the
shipping sector (4.6%). In your opinion, why did the construction
sector contribute to the increasing number of accidents in 1998?
2.
Visit http://www.dosh.gov.my/index.php?option=com_content
&view=article&id=531&Itemid=360&lang and list six important
parts in the Factories and Machinery Act 1967.
11.2.2
The Occupational Safety and Health Act 1994 was approved by the Parliament in
1993 and announced on 24 February 1994. It was established to overcome
weaknesses in the Factories and Machinery Act 1967 but not replacing it. With
this Act recorded in writing, about seven million workers in all industries and
sectors are protected except for those in the armies and those working in the
shipping industries which are dominated by the Merchant Shipping Ordinance.
The following industries are protected by this Act, namely, the manufacturing
sector; mining and quarry; construction, agriculture, forestry and fishery; utilities
such as electric, gas, water and sanitary services; transportation, storage and
communication; retail trading; hotel and restaurant; financial, insurance,
property and business services; public services and authority statute.
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The main aim of this Act is to increase awareness and to promote safety and
health culture among all workers in Malaysia. The objectives of this Act are:
(a)
(b)
To protect other individuals, apart from workers, in the workplace who are
exposed to risks from the work activities.
(c)
(d)
To ensure that the organisation maintain or fix the standards of safety and
health by implementing rules and industry practices that have been
approved and in accordance with the provisions of the Act.
Some of the provisions in this Act include the needs of forming the National
Council for Occupational Safety and Health and provisions that set the duties of
the employer and the self-employed, designer, manufacturer, supplier and
workers.
Visit http://www.dosh.gov.my/index.php?option=com_content&view=article&
id=531&Itemid=360&lang=en and find the four main aims of setting the
Occupational Safety and Health Act 1994.
(a)
(ii)
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In sum, council members need to meet from time to time to discuss and
make suggestions on issues related to:
(i)
Changes that are relevant to the Occupational Safety and Health Act;
(ii)
(ii)
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(v)
221
Maintaining the workplace areas so that they are safe without risking
health by providing sufficient facilities for employees welfare.
Any employer who fails to follow these instructions will be fined not more
than RM50,000 or jailed for not more than two years or both.
Apart from that, employers are also responsible for formulating policies on
occupational safety and health in written form and informing all workers
about them. These policies are looked into frequently to ensure that they
are suitable for current conditions. However, there are a few weaknesses in
the Occupational Safety and Health Act 1994. It does not set out what is
important in the occupational safety and health policy and it also does not
state by which manner the policy need to be conveyed to the workers. This
may cause the organisation to be unable to carry out these responsibilities
properly.
For employers who have more than 40 employees, they need to form an
Occupational Safety and Health Committee in their own organisation. The
functions of the committee is to help implement a safe and healthy
environment in the workplace, explore the effectiveness of the
programmes, give suggestions on any changes in order to improve the
situation and carry out inspections once every three months.
Visit http://www.dosh.gov.my/index.php?option=com_content&view
=article&id=531&Itemid=360&lang=en for information about the four
duties of each worker and punishment if the duties are not carried out.
ACTIVITY 11.4
In your opinion, why do many accidents still occur in the
workplace even though various precautions have been taken such
as the enactment of Acts and laws related to workers safety and
health?
(c)
Ensure that the plant or materials are safe without any risks to health
when being used;
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(ii)
Ensure the plant that has been built is safe for use.
Failure to obey these rules can cause the designer, manufacturer and
supplier to be fined not more than RM20,000 or jailed not more than two
years or both.
(d)
(ii)
Cooperate with employers or other persons who are given roles under
the Act and its regulations;
(ii)
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223
(iv) Occupational Safety and Health (Safety and Health Officer) 1997;
(v)
EXERCISE 11.1
TRUE (T) or FALSE (F) Statements
1.
2.
3.
4.
5.
11.3
ACTIVITY 11.5
List a few types and causes of accidents in your workplace.
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Have you ever had a headache as a result of staring at the computer screen for
too long? Or have you seen your friend injured because he was crushed by heavy
things? All of these are examples of accidents that can happen while we work,
according to Aini Hayati (Faizuniah, et al., 2002)
Safety towards danger is an occupational aspect that has the potential to cause
injuries (such as sudden loss of sight, loss of fingers or hands, fall from a
building) or death to workers at a fast rate. Usually, safety towards danger is
related to tools or machines that are not safe to be used, unsafe work
environments, and exposure to dangerous chemicals.
Health towards danger refers to occupational aspects that can give negative
effects to employees health gradually. Continuous stress caused by workloads,
becoming deaf because of exposure to noisy work environment, having chest
pain and the eyes becoming blur because of exposure to chemicals are among
some of the examples of emotional and physical illnesses caused by work.
Next, we will look at a few safety and health categories regarding the danger in
workplace such as accidents in the workplace, the danger of chemicals, air
quality in the building, video screen terminal and repetitive injuries.
11.3.1
In September 1996, the government launched the Towards a Safe and Healthy
Working Culture campaign to increase awareness among employers, employees
and societies regarding safety in the workplace. Even though the rate of accidents
in the workplace has decreased since 1997, the amount is still quite worrying.
ACTIVITY 11.6
Visit http://www.perkeso.gov.my/
following:
for
information
1.
2.
3.
on
the
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225
Workers
Environment
Employer
Example
Damaged machines unable to work properly.
Obsolete unable to work properly.
Dangerous occupation
for example, working at an
underground tunnel, exposed to dangerous chemicals.
Not focusing on their work.
Playful.
Drink alcohol or take drugs.
Mistake or miscalculation when analysing moving objects.
Lack of experience.
Too confident because they have experience.
Poor sight and hearing.
Inexperienced in handling tools no training.
Breaking safety instructions such as not wearing goggles.
Age: too young (clumsy) or too old (careless or incompetent).
Have personal problems cannot give full attention to work.
Exposure to high temperature, electrical equipment and
chemicals.
Environment that is too noisy.
Exposed to smoke and dust.
Infection.
Poor supervision.
Did not provide safety tools or gadgets for employees.
Did not give training to employees on how to use safety tools.
Safety rules and policy not implemented strictly.
Source: Adapted from Faizuniah Panggil et al., (2002). Pengurusan sumber manusia.
Malaysia: McGraw-Hill, pg. 148.
These problems can be overcome if every person plays their own roles. The
objective to ensure zero accident cannot be achieved if workers did not make use
of safety gadgets provided by the employer or the employer did not take any
action even though the employees had lodged complaints regarding the damage
of the safety gadgets provided.
Table 11.2 shows a few examples of roles that can be played by the employer,
employees, trade unions and the Occupational Safety and Health Committee in
minimising accidents in the workplace.
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Table 11.2: The Role of the Responsible Agent to Decrease Accidents in the Workplace
Responsible
Agent
Employer
Employee
Role
Formulate a health and safety policy.
Apply all the rules and procedures that have been laid down.
Hold immediate investigation once an accident has occurred.
Provide private safety equipment such as helmets, gloves and so on.
Hold safety campaigns from time to time.
Make sure the work environment is safe.
Maintain a safe work system.
Create a procedure for reporting and investigating accidents.
Form and hold safety practices.
Select efficient workers.
Establish an incentive system. Employees or departments who
can avoid accidents will be rewarded.
Provide clothes and safety equipment.
Establish a non-workplace such as a dangerous area.
Provide a clear warning such as CAUTION and NONSMOKING ZONE.
Provide leave and appropriate rest to workers who need extra rest.
Get input regarding the problems from the workers.
Get feedback from employees after an accident had happened.
Obey all the rules and procedures regarding safety.
Cooperate with the employer (self regulation).
Form a safety at workplace attitude.
Immediately report if the machines or tools are damaged.
Do not use any damaged tools that can endanger the employees
safety.
Trade
Unions
Health and
Safety
Committee
The Occupational Safety and Health Act 1994, Section 30 (a) states
that it is compulsory for a company which has 40 or more employees
to form a health and safety work committee. This committee is to
study all the steps to ensure the safety of workers at the workplace.
Source: Adapted from Faizuniah Panggil et al., (2002). Pengurusan sumber manusia.
Malaysia: McGraw Hill.
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11.3.2
227
Why do many of us not realise the danger we put ourselves in when we are
exposed to chemical substances on a regular basis?
The negative effect from the chemicals will not immediately be visible. The effect
will be visible when the disease has become chronic. Refer to Table 11.3 to
understand how serious the effect can be on some people.
Table 11.3: Ten Types of Danger in the Workplace
Potential Risk
The Disease
Arsenic
Asbestos
Benzene
Bichloromethylether (BCME)
Lung cancer
Coal dust
Cotton dust
Lead
Radiation
Vinyl Cloride
Sources: Adapted from Byars, L. L. & Rue, L. W.(2000). Human resource management
(6th ed.). Boston: McGraw-Hill.
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Find out more information about the Occupational Safety and Health Act (The
Prohibition of Chemical) 1999 at http://www.dosh.gov.my/index.php?
option=com_content&view=article&id=531&Itemid=360&lang=en. Are you
exposed to these restricted materials?
11.3.3
ACTIVITY 11.7
Is the air in your work area good? If not, what are the factors that
contribute to air quality in your workplace?
In order to save energy, the techniques in construction of commercial buildings
have been changed to increase the effect of heating power, air and air
conditioned system. These include decreasing the flowing out of the air by
closing entire windows and any hole in the building. As a result, many workers
experience the sick building syndrome or lack of fresh air. Those who have this
syndrome will feel itchiness on the eyes, ears, throat and skin (Bohlander, Snell,
Sherman, 2004).
Moreover, workers in closed buildings are easily exposed to air pollution due to
bad air flowing system. According to research by the National Institute of
Occupational Safety and Health in the United States, air pollution in the building
is due to cigarette smoke and emission from office equipment such as ozone,
hydrocarbon from computers, photocopy machines, laser printers and fax
machines. Dust from carpets, papers and wood are among the contributors too
(O Connell and Motavalli, 1995 and Bohlander, Snell and Sherman, 2004).
To overcome the lack of fresh air in the building, the American Lung Association
has provided four recommendations: remove cigarette smoke with good air
flowing, prevent workers from smoking in air conditioned rooms, supervise the
air flowing system frequently and remove the sources of pollution from the
building (Bohlander, Snell and Sherman, 2004).
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11.3.4
229
ACTIVITY 11.8
Is it safe to use computers in our daily work? In your opinion, what is
the problem caused by using the computer for a long time?
In order to keep up with the current technological development, organisations
make full use of computers in their daily work. However, the widely usage of
computers is a cause for worry among employees due to the danger of the
computer monitor. Usage of computers for a long period can create the following
problems:
(a)
Vision problems such as weakening of the vision, eye strain, and itchy eyes.
(b)
(c)
(d)
Work stress due to pressure, bad posture, noise, lack of practice, workload
and routine.
Dr James Sheddy (Bohlander, Snell and Sherman, 2004) gave some advice to
minimise the negative effect of the computer:
(a)
Put the computer screen between four and nine inches from the users eye
vision level.
(b)
(c)
(d)
(e)
Use screen-shades to decrease the light from the window to the screen.
11.3.5
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One of the injuries is the carpal tunnel. The carpal tunnel refers to the hand bone
known as the carpal. These bones form a tunnel full of flexible tendons
(Ivancevich, 2001). According to research by NIOSH, the carpal tunnel syndrome
is related to the industrial sectors involved in cutting, forming, sewing and
cleaning.
One of the ways to avoid the injuries is by providing a good work environment
in line with the physical needs of the workers or known as ergonomics. This
word originated from Greek which is divided into ergon or work and omics
which means management of something (Mathis and Jackson, 2000).The job of
the ergonomist is to study the aspects of work physiology, psychology and
engineering such as fatigue, lighting, equipment and control.
The importance of ergonomic study:
(a)
The employer can use the result of the study to provide a conducive work
environment such as providing chairs, shoes, desks and any other suitable
equipment to the employees according to their size and height.
(b)
The employer can adjust the room temperature, lighting and level of noise
so that they do not affect the employees' performance.
(c)
Focus on personal space. Small or packed space will lead to stress and
cause health problems to the workers.
EXERCISE 11.2
TRUE (T) or FALSE (F) Statement
1.
2.
3.
4.
5.
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11.4
231
11.4.1
11.4.2
Work Stress
Stress can be classified into three types: neustress, distress and eustress or
positive pressure. (Schafer, 2000)
(a)
Neustress is neutral pressure where it does not bring any benefit or harm.
(b)
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(c)
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Eustress or positive stress refers to the moderate level of worry that will
work as a drive to do something.
Unsettled conflicts;
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
A few steps can be taken to reduce the negative effects of pressure. They are as
follows:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
Stop for a while or rest before proceeding the work to avoid boredom.
SELF-CHECK 11.1
Have you ever felt stressed? What are the factors leading to stress?
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11.4.3
233
What would your reaction be if you found out that your workmate was HIV
positive? Are you going to stay away from him or her because you are afraid to
get infected or will you accept him or her as usual? If you were an employer,
what would your reaction be? Would you fire the individual or help him or her
deal with it?
Whatever action you take, the important question is: do you understand what
HIV/AIDS is and its implications on workers, the job and the surrounding?
AIDS is a condition where the bodys immune system becomes weak or
destroyed and the patient cannot fight the infected disease. According to
statistics received from the Ministry of Health, after the first cases were reported
in 1986 till the end of December, 2008, 84,630 Malaysian citizens had tested
positive for HIV, resulting in a total of 11,234 deaths. That figure increases every
year.
Most of the AIDS patients like to isolate themselves from the society because of
embarrassment and fear of being discriminated by family and society. What is
important is that they do not want to lose their jobs. This is because awareness of
this disease among employers is still low. According to research by the
Department of Safety and Health (DOSH) carried out in 154 factories, most of the
employers stated that:
(a)
(b)
(c)
(d)
Although there is no specific provision in the Occupational Health and Safety Act
1994 with regard to AIDS, Section 15(1) stated, It can be assured that the
employer is responsible to take care of the workers welfare from any HIV
infection and at the same time responsible to take care of them no matter what
health condition they are in.
Unfortunately, the worries and misconceptions of the employer and the
employee towards the patient of HIV/AIDS have obstructed the effort to create a
safe work environment. Geotsch (1996) has suggested three solutions to help the
employers in handling the problem.
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(a)
Through Education
The educational programme can be organised by professionals in
occupational safety and health with support by the employer to increase the
awareness of AIDS to all the employees. The programme explains the
disease, the risk and how it can infect others and this can help the
employees to increase their awareness of this disease and how to handle it
in the future.
(b)
(c)
11.5
11.5.1
One of the ways the employer can overcome the issue of occupational safety and
health environment is by creating the Employee Aid Programme or EAP.
According to Gloria Cunningham in French (1998), the EAP was accepted and
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understood as the programme that provides direct services to workers who have
many personal problems or problems related to work.
With this programme, employees who have problems such as alcoholic and drug
addictions, stress, human relationship problem (usually between the worker and
the supervisor), family and marriage problem, and financial problem will be
given counselling.
The EAP also provides services like career counselling, education regarding
AIDS and health, counselling on mental stress, counselling for employees who
are going to be retired and those to be terminated. (Mathis and Jackson, 2000).
11.5.2
Safety Programmes
A safe work environment can be created by the employer through careful safety
planning. Although, most of the programmes held by the organisation focus on
the aspect of accident, the main objective is to make sure the employees always
take priority of their safety while working.
Generally, the Human Resource Department is responsible for conducting safety
programmes. However, the success of this programme depends on the
commitment by the managers and top management. Besides, the employees
factor whereby they focus on the the importance of safety while working also
contributes to the success. The Human Resource Department only works as the
programme administrator, supervises the safety record and cooperates with the
managers and supervisors in order to ensure the success of the programme.
In promoting a safe work culture, there are many things an employer can do,
such as:
(a)
(b)
(c)
Displaying the safety statistics such as the monthly report on the notice
board or in the monthly bulletin for the workers to remind the employees
of the importance of safety at the workplace.
(d)
Using the notice board in the organisation to promote safe work culture.
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(e)
(f)
Gomez-Mejia, Balkin and Cardy (2001) supports this matter as they believe that
an effective safety programme usually possesses the following characteristics:
(a)
(b)
(c)
(d)
(e)
Enforcing safety rules. For employees who break or do not follow safety
rules, action can be taken against them;
(f)
TOPIC 11
237
ACTIVITY 11.9
Visit http://www.dosh.gov.my/index.php?option=com_content
&view=article&id=531&Itemid=360&lang=en and explain the aims
and objectives of the establishment for each of the following
sector/department:
1.
2.
3.
4.
5.
Department of administration
11.5.3
Health Programme
ACTIVITY 11.10
In your opinion, why does a good health programme need to be held
in an organisation?
Certain organisations are so concerned about their employees health that they
organise various programmes such as exercises, healthy diet campaigns, football
tournaments, netball, badminton and so on, monitor weight problems and avoid
things that are harmful to health. This kind of organisation will provide facilities
such as gymnasium and aerobic classes. For organisations that wish to organise
health programmes, they can start their programme with the following:
(a)
(b)
(c)
Include family members and those who had retired into the health
programme;
(d)
(e)
238
TOPIC 11
(f)
(g)
EXERCISE 11.3
TRUE (T) or FALSE (F) Statements
1.
2.
3.
4.
5.
1.
2.
50 workers or more
B.
40 worker or more
C.
75 workers or more
D.
TOPIC 11
3.
4.
5.
Essay Questions
1.
2.
239
240
TOPIC 11
Carpal Tunnel
Neustress
Distress
Occupational accidents
Ergonomics
Eustress
Safety
Health
Work stress
Answers
TOPIC 1: INTRODUCTION TO HUMAN RESOURCE
MANAGEMENT
Exercise 1.1
1.
2.
Human Resource Management
Personnel Management
Proactive
Reactive
Exercise 1.2
Five roles of human resource management are:
Planner
Facilitator
Coordinator
242
ANSWERS
Auditor
Mediator
Refer to the explanation in subtopic 1.2.
Exercise 1.3
Multiple Choice Questions
1.
2.
3.
4.
5.
Essay Questions
1.
Globalisation
Challenges in technology
Managing change
Human resource development
Market reaction
Cost reduction
Economic climate
Legal system
(Any six of the above)
2.
Part-time job
Work sharing
Maternity leave
Flexible working hours
Child nursing leave
Telecommunication services
(Any four of the above)
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243
ANSWERS
3.
4.
5.
Helping the organisation achieve its targets.
Fully utilising the skills and ability of the workforce.
Providing the organisation with trained and motivated employees.
Increasing employees job satisfaction.
Developing and
environment.
maintaining
the
quality
of
employee
work
The payment fee cannot be later than the seventh day after the last day of
payment period.
2.
6 weeks
244
ANSWERS
3.
60 days
4.
No. The Employment Act 1955 prohibits employers from setting conditions
on how employees spend their fee.
Exercise 2.2
1.
After receiving the application, the management must take these actions
within 21 days:
Give recognition; or
Reject the application and present the reasons in writing; or
Apply to the Director General to verify employees membership in the
union and to give a written notice to the workers union.
2.
14 days
Exercise 2.3
1.
True
2.
True
3.
False
4.
False
Exercise 2.4
1.
2.
ANSWERS
245
Exercise 2.5
1.
RM2,000
2.
Exercise 2.6
1.
Under this Act, the Human Resource Development Fund must be spent on:
Encouraging development and growth of employees skills by
designing, developing, increasing or monitoring training amenities;
Preparing financial aid through loans or subsidies to employers to train
or re-train their employees;
Organising or implementing activities or programmes aimed at retraining employees who have been or will be laid off due to
downsizing;
Bearing the cost of managing the Human Resource Development
Council including payment and allowances for council officers; and
Bearing any administration costs for the Fund as well as the cost of
implementing the Act.
2.
Exercise 2.7
Effective 1 January 2007, the contributors account is divided into two types
Account 1 and Account 2. All contributions are divided into the two accounts
according to fixed percentages, namely, 70 percent into Account 1 and 30 percent
into Account 2.
246
ANSWERS
These accounts are created for different purposes and different types of
withdrawals are applicable to each account:
(a)
Account 1
The savings here are for the purposes of retirement and cannot be fully
withdrawn before the age of 55 or passed away, or loses his capacity and
intends to leave Malaysia permanently.
(b)
Account 2
The savings in this account are meant to help you to make early
preparations for a comfortable retirement. Withdrawals are allowed for the
purposes of:
(i)
(ii) Owning a house or making the downpayment for your first house;
(iii) Settling the balance of your housing loan for your first house;
(iv) Financing education for yourself and that of your children; and
(v) Medical expenses for yourself and that of your children.
Exercise 2.8
Fill in the Blanks
1.
12 days
2.
48 hours
2.
3.
4.
5.
6.
ANSWERS
247
Essay Questions
1.
Amin is not entitled to normal medical leave because he has used up all the
sick leave which has been given to him.
2.
National Day
Birthday of the Yang di-Pertuan Agong
Birthdays of the Sultan and Yang di-Pertuan Negeri or Federal Territory
Day
Labour Day
3.
Weekly leave
Medical leave
Annual leave
Public holidays
4.
5.
(b)
The Invalidity
This scheme gives a 24-hour protection to employees against
accidents or fatalities without considering the cause. The management
must contribute 0.5% of the employees salary, and the employee
must also contribute 0.5% of his or her salary.
248
ANSWERS
True
2.
False
3.
True
4.
True
5.
False
Exercise 3.2
1.
True
2.
False
3.
True
4.
False
5.
False
Exercise 3.3
1.
True
2.
True
3.
True
4.
False
Exercise 3.4
True (T) or False (F) Statement
1.
True
2.
False
3.
True
4.
True
5.
True
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ANSWERS
249
2.
3.
4.
5.
6.
2.
3.
4.
5.
6.
Essay Questions
1.
Job requirements that are formally written help managers in almost every
aspect of employee management.
By understanding job requirements, managers can select, orientate and
train employees to further succeed in their tasks.
An accurate job requirement has to follow rules and regulations and be
related to the job. Thus, managers have a valid reason in making decisions
while evaluating employees in the performance evaluation process.
2.
250
ANSWERS
Exercise 4.2
1.
True
2.
True
3.
False
4.
True
5.
True
Exercise 4.3
True (T) or False (F) Statements
1.
False
2.
True
3.
False
4.
False
5.
True
2.
3.
4.
C
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ANSWERS
251
TOPIC 5: SELECTION
Exercise 5.1
1.
False
2.
True
3.
True
4.
True
5.
False
252
ANSWERS
Exercise 5.2
1.
True
2.
False
3.
True
4.
False
Exercise 5.3
Fill in the Blanks
1.
2.
3.
4.
2.
3.
4.
Essay Question
1.
Criterion refers to the level of which the selection tools chosen and able to
forecast or correlate with the main elements in work behaviour.
Examples are: in sales job will be sales figures and in production job will be
the quality, quantity of output.
ANSWERS
2.
253
3.
Exercise 6.2
1.
254
2.
ANSWERS
(b)
(c)
(d)
(b)
(c)
ANSWERS
(d)
255
Evaluating performance
Usually, at the end of the year, employee performance will be
evaluated to ensure that the organisations strategic objectives are
achieved. The real performance shown by employees will be
compared to the standards that have been developed.
(e)
Discussion on performance
Employees and managers will review the employees performance
together based on set standards. A performance discussion will
determine how far the employee is able to achieve the organisations
strategic objectives, identify the problems that obstructed the
achievement and find alternatives to solve the problems. This
discussion will also include developing objectives for the next year.
Exercise 6.3
The six sources to evaluate employees performance are:
(a)
(b)
(c)
Subordinates: The most suitable people to evaluate a manager are his or her
subordinates. This method is effective because the subordinates are the best
source to observe the effectiveness of the manager. Moreover, the
subordinates are always in contact with the manager. This type of
evaluation is more for the managers self-development so that he or she is
able to work on their weaknesses.
(d)
256
ANSWERS
(e)
(f)
Exercise 6.4
Three main methods to evaluate employees performance are:
(a)
(b)
(c)
ANSWERS
257
Exercise 6.5
Three common mistakes made by the evaluator are:
(a)
(b)
(c)
(d)
(e)
(f)
Exercise 6.6
Multiple Choice Questions
1.
2.
3.
4.
5.
258
ANSWERS
Essay Questions
1.
2.
3.
(b)
(c)
(d)
(e)
(f)
Meaning of terms:
(a)
(b)
(c)
ANSWERS
(b)
259
Monetary Rewards
A direct monetary reward is in the form of cash, salary, commission and
bonus
An indirect monetary reward is in the form of benefits such as
insurance, annual leave, medical leave, flexible working hours and
others.
Exercise 7.2
The goal of work evaluation is to achieve internal equity during the salary
system formation. Work evaluation is a systematic method to determine the
relative value of a certain job compared to other jobs to ensure different jobs are
given a different wage rate.
Four methods to evaluate jobs are:
Job arrangement;
Job classification;
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260
ANSWERS
Exercise 7.3
Multiple Choice Questions
1.
2.
3.
4.
Essay Questions
1.
The two challenges that need to be faced by the human resource manager in
developing an effective salary structure are:
(a)
(b)
2.
3.
ANSWERS
261
Insurance
or others as shown in Table 7.1
4.
5.
6.
(b)
262
ANSWERS
Exercise 8.2
1.
Maturity curve
2.
Through this plan, the incentive rate paid is based on the standard time set
by the organisation to complete a certain task without taking into account
the actual time taken by the employee to complete the task. If the employee
is able to complete the task less than the standard time, the employee is still
paid an incentive based on the standard time. This plan is suitable for jobs
or operations that take time or need a lot of time to be completed.
Exercise 8.3
The five characteristic of an effective benefit programme are:
Forming a specific objective;
Allowing input from employees;
Re-designing employee benefits;
Flexible planning; and
Conveying information about benefits to employees.
Exercise 8.4
True (T) or False (F) Statement
1.
False
2.
True
3.
True
4.
False
2.
3.
4.
5.
ANSWERS
263
Essay Questions
1.
Employer RM8.75
Employee RM2.50
2.
3.
4.
264
ANSWERS
False
2.
True
3.
True
4.
False
5.
False
Exercise 9.2
1.
False
2.
True
3.
True
4.
False
5.
False
Copyright Open University Malaysia (OUM)
ANSWERS
265
Exercise 9.3
True (T) or False (F) Statements
1.
False
2.
False
3.
True
4.
True
5.
False
2.
3.
4.
Essay Questions
1.
The hot stove method characteristics are such as utilising the warning
system, having an immediate attitude, and being done consistently and not
privately. Through this method, the workers are usually being informed
about the types of punishment that they will receive if they make mistakes
before each problem arises. If the workers are found guilty, punishment
will be immediately carried out so that the worker or other workers can see
the relationship of cause and effect from the mistakes make. In this method,
the implementation of punishment is also being done consistently where
workers who make the same mistake will receive the same punishment.
Next, this method is not personal, meaning the discipline action taken is not
aimed at the workers but more at finding solutions to unpleasant behaviour
problems.
2.
A few things that need attention when planning discipline rules include:
Distributed to all workers and cannot assume that they know it;
Needed to be investigated again from time to time;
Explain reasons for each rule;
Done in written form;
Logical;
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266
ANSWERS
True
2.
False
3.
False
4.
True
5.
True
Exercise 10.2
True (T) or False (F) Statements
1.
False
2.
True
3.
True
4.
False
5.
False
2.
3.
4.
ANSWERS
267
Essay Questions
1.
2.
False
2.
True
3.
False
4.
True
5.
True
268
ANSWERS
Exercise 11.2
1.
True
2.
False
3.
True
4.
False
5.
True
Exercise 11.3
True (T) or False (F) Statements
1.
False
2.
True
3.
False
4.
True
5.
True
2.
3.
4.
5.
Essay Questions
1.
ANSWERS
269
The following are the ways that employers can use to reduce the rate of
accidents in workplace:
Create a safety and health policy;
Implement all rules and procedures that have been set;
Investigate immediately when accidents happen;
Provide protection tools such as helmets, gloves and so on;
Organise awareness campaigns to reduce accidents from time to time;
Make sure that workplace surroundings are always safe;
Organise a safe work system;
Establish a procedure of reporting and investigating accidents;
Create and provide safety training;
Choose proficient workers;
Incentive system. Workers or departments who can avoid accidents in
the workplace would be rewarded;
Cooperate with government examiners;
Provide safety uniforms and safety tools;
Establish work areas and non-work areas such as dangerous areas;
Provide clear warning signboards such as smoking is prohibited,
restricted area, be careful;
Give ample holiday and rest to workers who need more rest compared
to others;
Get input from workers about their problems; and
Get feedback from workers every time an accident occurs.
(Choose any five of the above)
270
REFERENCES
References
Aminuddin, M. (1997). Human resource management (2nd ed.). Shah Alam: Fajar
Bakti.
Armstrong, M. (2012). Armstrong's Handbook of Human Resource Management
Practice (12th ed.). London: Kogan Page.
REFERENCES
271
272
REFERENCES
Schafer, W. (2000). Stress management for wellness (4th ed.). Orlando: Harcourt
College Publishers.
Stone, R. J. (1998). Human resource management (3rd ed.). Brisbane: John Wiley
& Sons Australia, Ltd.
Yong, A. K. B. (1996). Malaysian human resource management. Kuala Lumpur:
Institut Pengurusan Malaysia.
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