What this Module is about?

Managing Human Resource is all about the preparation for

choosing an employees in a company, they are the once who selects the
best candidate for a certain positions. Their function is to find employees,
oversee their training, evaluate and compensate them.

What you are expected to learn?

In this module you are expected to:

1. Know what Human Resource Management is.
2. The responsibilities of the HR Department.
3. The steps in Planning Human Resource.
4. The methods that recruiters used in selecting employees.
5. The six stages of hiring process.

How to learn from this module?

I’d like you to imagine yourself applying in a prestigious company. Do you have
a strong desire to work their?
In this module you’ll know what the processes that will are gave you the
opportunity to get a certain position in a company.
Answer the activity and self-check exercises for you to be able to know all about Human
Resource Management. Let us work and help each other!
 Let’s answer the pre-test below.
Direction: Read each item carefully and select the best answer.

1. It is a specialized function of planning how to find employees?

a. Forecasting Demand c. Recruiters
b. Human Resource Management d. Career Builders
2. It calculates the number and kind of employees that the company will require?
a. Forecasting Supply c. Forecasting Demand
b. HR department d. Recruiters
3. A worker is regularly scheduled 37-40 hours per week qualifies as a ________?
a. Part-time employees c. Temporary employees
b. Full-time employees d. Managers
4. These are the people hired by the company for limited time to perform specific task?
a. Part-time employees c. Managers
b. Temporary employees d. Full-time employees
5. This is a statement of task involved in the job, and the expected work conditions?
a. Job specification c. Recruiters
b. Headhunters d. Job description
6. These are HR specialists who find the right employees for open company positions?
a. Recruiting c. Recruiters
b. Managers d. Managers
7. It is the process of attracting appropriate applicants to an organization jobs?
a. Job fair c. Employment agencies
b. Recruiting d. Referrals
8. These are the recruiters who attract employees away from other firm?
a. Employment agencies c. Job fair
b. Headhunters d. Job analysis
 9. It is the fastest growing method of recruiting?
a. Internet advertising c. Employment agencies
b. Job fair d. Referrals
10. How many stages does hiring process have?
a. 5 c. 7
b. 6 d. 8

Does the pre-test interesting? Let’s proceed to the discussion.

MANAGING HUMAN RESOURCE

Human Resource Management (HRM) is a specialized function of planning how to find

employees, oversee their training, evaluate, and compensate them. HR departments are
responsible for these six roles:
• Planning for staffing needs
• Recruiting and hiring
• Training and development
• Appraising performance
• Administering compensation and benefits
• Overseeing changes in employment status
Planning for staffing needs is the first of the six HR roles. It is important to keep the number
of employee’s level with the work demand. Employing too few workers will result in customer
dissatisfaction. Having too many employees reduces profit, and may result in layoffs. The
planning function has two steps:
1. Forecasting
• Demand
• Supply
2. Evaluating job requirements
• Perform job analysis
• Write job descriptions
• Write job specifications

Forecasting demand calculates the number and kind of employees that the company will
require. Forecasting supply is estimating the availability of employees with the skills that the
company needs. A company may find what they need among current employees. If the supply is
not present within the company, then the HR manager must decide how to recruit employees.
Options to traditional hiring of full-time employees are hiring temporary employees, hiring
part-time employees, or outsourcing. The definition of who qualifies as a full-time employee
varies. Typically, a worker is regularly scheduled 37-40 hours per week qualifies as a full-time
employee. Part-time employees are those that work less than half time or 20 hours per week.
Temporary employees are people hired by the company for a limited time to perform specific
tasks. Once the tasks are complete, the company's obligation to those employees is complete.
The Bureau of Labor Statistics forecasts the temporary market will grow 200% from 1997 to
2006. Technical fields comprise the fastest growing segment of temporary employees.
Temporary employees include systems analysts, technical writers, accountants, doctors,
recruiters, CEOs, and other diverse positions.

In the mid-1990s, companies used temporary workers to fill occasional vacancies; today
temporary workers are included in long-term plans. Some companies routinely require
candidates to work on a contract or temporary basis before hired for full-time permanent
employment. Almost 30% of workers employed by temporary (temp) agencies remain on job
assignment for a year or more. These people are permatemps. Permatemps often perform the
same work as permanent employees, but do not qualify for benefits like insurance. Outsourcing,
first discussed in chapter eight, is another alternative to hiring full-time, permanent employees.
The second step in human resource planning is evaluating job requirements. HR management
studies the needs to determine the tasks required for each job. This is job analysis. HR
representatives ask supervisors and current staff these questions to analyze job requirements:
• What is the purpose of the job?
• What tasks are involved in the job?
• What qualifications and skills are required?
• Where will the work be performed?
• How much public contact will be needed?
• What is the level of stress the employee should expect?
Once HR completes the job analysis, then HR develops a job description. This is a
statement of the tasks involved in the job, and the expected work conditions. The HR will
develop a statement describing the kind of person who would be best for a given job-including
the skills, education, and previous experience that the job requires. This is the job specification.
Recruiting is the process of attracting appropriate applicants to an organization's jobs. This is the
second role of HR. Recruiting matches job descriptions and specifications with candidates.
Companies with excellent recruiting and retention policies provide nearly 8% higher return to
shareholders that to those who have poor HR results. Recruiters are HR specialists who find the
right employees for open company positions. Headhunters are recruiters who attract employees
away from other firms. The fastest growing method of recruiting is internet advertising.
Recruiters use both the company's website, and job posting boards like Monster, FlipDog,
CareerBuilder, and Net-temps. Some of the popular methods that recruiters use are:
 Job fairs
 Internal searches
 Newspaper and internet advertising
 Employment agencies
 Union hiring halls
 College campuses
 Career offices
 Trade shows
 Referrals
 Professional organizations
 The recruiter normally will use several methods to find a good group of prospective
employees or candidates. HR can spend months on the six stages of the hiring process.
Stage Description
Small number of candidates is selected from the hiring pool.
1. Application This can be done by HR junior staff or by computer scanning
program that searches on keywords.
 Prescreening questions are asked to clarify background
and discover any missing information
 Communication skills are analyzed
2. Prescreen
 Personality is evaluated
 Skills tests may be required
 Some candidates are eliminated
 HR conducts an in-depth interview
 Higher-level positions may require several interviews
3. Interview with managers, co-workers, and potential subordinates
 This stage can take weeks
 Some candidates are eliminated
 Supervisor evaluates remaining candidates
4. Evaluation
 All but one or two candidates are eliminated
 Reference checks are performed
 Background checks are performed
5. Reference
 Credit checks and driving record investigations may be
check
required
 Drug testing may be required
 Supervisor selects best candidate
6. Selection
 HR makes job offer

Employers are increasing the depth of prescreening employees with background checks.
More than one million physical assaults and thousands of assaults occur in the workplace each
year. Employers can be liable if they fail to prevent "preventable violence’s." Common
background checks, listed in order of popularity are employment verifications, criminal records
check, drug screen, reference checks, education verification, and motor vehicle record check.

Employers must follow state and federal regulations in relation to hiring. Employers must
ensure compliance with EEOC by avoiding discrimination. The wording of application forms,
interviews, and testing processes are some of the covered areas. Unless there is a valid
occupational qualification involved, EEOC requires that employers avoid questions related to:
• Marital status
• Age
• Religious preferences
• Citizenship
• Sexual preference
• Children
• Home ownership
• Union membership
• Physical disability
• School graduation dates
The Immigration Reform and Control Act of 1986 forbids almost all U.S. companies from
hiring illegal aliens. At the same time, this act forbids discrimination based on national origin or
citizenship status. Obeying both parts of this act is tricky.
Some HR managers administer tests to gauge the qualifications of applicants. These tests assess
work attitudes, aptitudes, skills, and abilities. Some believe that these tests can be discriminatory.
The most common pre-employment testing is the job skills test. Drug presence testing is also
common because substance abusers have two to four times as many workplace accidents as
people who do not use drugs. Over forty percent of industry fatalities link to substance abuse.
Other common prescreen tests include IQ testing, personality profiling, physical conditioning
testing, mental competency testing, and drug presence testing.
The third role of HR is training and development. When employees are first hired, they often
attend a session or procedure for acclimating to the organization. This is the orientation
program. The orientation can help the employee learn about the company:
• History
 • Values and culture
• Structure and organization
• Equal opportunity practices
• Safety regulations
• Standards of conduct and dress
• Compensation and benefits
• Work schedules
Most companies offer additional training for continuing employees. The more employees
participate in training, the more likely they will want to stay, because training gives them a sense
of direction and group inclusion. Employees can receive training on soft-skills or technical
subjects. HR offers soft-skills training. Another department usually handles the technical
training, which can be even more important to the employees' career and integration to the
company.
HR managers develop a system to evaluate employees objectively by set standards. This
is a performance appraisal. The goal of performance appraisals is to improve employee
performance. Employees need fast feedback so they can correct their deficiencies in a timely
manner, so managers hold performance appraisals more often than in previous generations. The
supervisor is often the only evaluator in performance appraisals, but the 360-degree evaluation
provides feedback from peers and subordinates too. The biggest problem of performance
appraisals is finding an accurate way to evaluate productivity. This is particularly difficult when
employees work in teams.
Compensation includes money, benefits, and services paid to employees for their work.
Administering compensation and benefits is the fifth roll of HRM. Any employee that receives
compensation based on the number of hours worked or number of units produced is receiving
wages. Employers in the U.S. must comply with the Fair Labor Standards Act of 1938 that sets a
minimum hourly wage for most employees, and mandates overtime pay for employees who work
longer than 40 hours per week. Most states have minimum wages laws to protect employees not
covered by federal laws or that set a higher minimum wage.
Fixed weekly, monthly, or yearly cash compensation for work is a salary. Salaried employees do
not receive extra compensation for working more than 40 hours per week. Both wages and
salaries are supposedly based on the contribution of a particular job to a company. Some CEOs
in the U.S. are the best-paid employees on the planet.
Incentives are cash payments to employees who produce at an optimal level or whose division
produces at or above a preset level. These are common types of incentive:
• Bonuses - cash payment, in addition to the regular wage or salary, that serves as a reward
for achievement
• Commissions - payments to employees equal to a certain percentage of sales made
• Profit sharing - system for distributing a portion of the company's profits to employees
• Gain sharing - similar to profit sharing. Ties rewards to profits or cost savings achieved
by meeting goals.
• Pay for performance - like gain sharing. It requires employees to accept a lower base
salary and rewards them with bonuses, commissions, or stock options if they achieve
targets.
• Knowledge pay - this is skill based pay. Compensation is tied to the skills and knowledge
of an employee rather that the job title. Pay increases if skills increase.
• Broadbanding - like knowledge pay. Gives pay raises without promoting employees. It is
designed for today's flatter organizations.
Employee benefits are compensation other than wages, salaries, and incentive programs.
Common employee benefits include:
• Insurance - health, dental, disability
• Vacation pay
• Paid holidays
• Pension plans
• Discounts
Companies offer benefits either in a fixed package, or as flexible benefits. Flexible
benefits or cafeteria plans allow employees to pick which benefits are best for them, based on a
maximum cost. Insurance is the most popular employee benefit. Despite that, only about 62% of
employees work under a company health plan. The employees who do qualify for benefits often
must pay a portion of the insurance premium. Companies often exclude temporary and part-time
workers from receiving benefits to save costs.
The federal government created the Social Security system after the Great Depression of the
1930s. This created basic support for those people who could not accumulate retirement money.
The Social Security tax withheld in most paychecks pays for this benefit. At companies with
more than 500 workers, 72% of workers have some form of company-sponsored retirement
coverage. Pension plans are the most accepted company-sponsored retirement plan. Three
pension plan types are popular: defined contribution plans, defined benefit plans, and 401(k)
plans. ERISA is the federal agency that insures assets of pension plans.
Plan Type Description
 Similar to savings plan
Defined  Provides a future benefit based on annual
contribution employer contributions, employee-matching
contributions, and accumulated investment earnings
 Less popular
Defined  Formula-based plans based on employee's
benefit retirement age, final average salary, and years of
service
 Allows eligible participants to contribute pretax
dollars to a tax-qualified retirement plan
 Deferral of federal and state income taxes and
social security taxes on contributions, up to $10,500,
401(k) until time of withdrawal
 Employee has burden to set aside money and
invest it wisely
 Many employees foolishly invest all into their
employer's stock - example: Enron

Another employee benefit that some companies offer is the employee-stock-ownership

plan (ESOP). This program enables employees to become partial owners of the company. The
company places a certain amount of its stock in trust for some or all of its employees, with each
employee entitled to a certain share. Employees can later purchase the shares at a fixed price.
Unfortunately, ESOPs are not effective performance motivators; employees cannot sell their
shares until they retire or quit.
A stock option is a contract that allows the holder to purchase or sell a certain number of shares
of a particular stock at a given (exercise) price during a particular timeframe. Options typically
vest, or transfer ownership over five years at a rate of 20% annually. In other words, an
employee can purchase another 20% of the stock each year, or in five years the employee can
purchase the whole amount they were allotted. If the stock market price exceeds the exercise
price, the option holder can exercise the option and sell the stock at a profit. If the stock's price
falls below the exercise price, the options are worthless. Stock options cost very little for the
company to offer, and provide a long-term incentive to retain employees. Because employees
have an interest in making the company succeed, employees will be more productive.
Employers with 50 or more employees are required to provide up to 12 weeks of unpaid leave
per year for childbirth, adoption, or the care of oneself, a child, a spouse, or a parent with a
serious illness according to the Family Medical and Leave Act (FMLA). The problem is that
most people cannot afford this long period of unpaid leave. Other employee benefit related to the
family include day-care and eldercare.
According to the U.S. Labor Department, 48% of all employers with more than 100 workers now
offer employee assistance programs (EAPs). This program provides counseling to employees
who need help on issues like drugs, alcohol, finances, stress, family, and other personal
problems. The average cost for EAP services runs from $12 to $20 per employee, but saves
between $5 and $16 for each dollar spent in improved safety, productivity, and employee
turnover.
The sixth role for HR management is overseeing changes of employment status. There are four
reasons that an employee's status may change. An employ may:
• Change positions within the company
• Retire
• Resign
• Be fired
There are several reasons for employers to fill jobs by promoting or reassigning employees rather
than hiring new workers. The results of hiring from within gives a:
• Reward to employees
 • Productivity boost
• Lift to morale
• Demonstration that employees can advance
The problem with transferring current employees is that those promoted to jobs beyond their
capabilities will quit or be fired. For example, a productive technical person may not be suited
for managing a technical group, because managing takes another skill set. If promoting the
employee is a mistake, then the company risks losing the employee. One way for the company to
ease the transition from one job to another is to provide training and support.
Termination is the dismissing an employee through layoff or firing. Employers fire workers if
they have violated company rules, procedures, or standards. They lay off employees for business
or economic reasons. Many companies provide laid-off employees with job-hunting assistance.
This can include outplacement aids like a resume-writing course, career counseling, office space,
secretarial help, or job skills testing. Some companies avoid large-scale layoffs by cutting
expenses like eliminating travel, freezing wages, postponing new hiring, implementing job-
sharing programs, or encouraging early retirement. Others adopt a no-layoff, or guaranteed-
employment policy. Further, employees could move to other functions, accept reduced hours,
and/or reduced pay.
The aging U.S. population presents two challenges: to give job opportunities to people who are
willing and able to work, but are beyond traditional retirement age; and to find ways to
encourage older employees to retire early. Mandatory retirement is the required dismissal of an
employee who reaches a certain age. The Age Discrimination in Employment Act of 1967
outlawed discrimination of employees between 40 and 65 years. In 1986, Congress amended the
act to also prohibit mandatory retirement for most employees and forbid discontinuing benefit
contributions or accruals due to age. Alternatively, employers can offer older employees
financial incentives to resign. Incentives include enhanced retirement benefits or one-time cash
payments. Worker buyout is distribution of financial incentives to employees who voluntarily
depart, usually offered to reduce payroll costs. Buying out a worker is more expensive than firing
or laying-off that employee.
 Now you know already the responsibilities of the Human Resource Management. Let’s
now do some activity.

Activity 1
HUMAN BRIDGE
Instruction: The class will be divided into 2 groups. Each group has 5
representatives. The 5 representative will form a straight line. The goal is: each
member should reach the end of the line without touching the floor.
How did you find the activity? Was it enjoyable? Hope you like it.!

Let’s see whether you have learned from the discussion. Answer the post test exercise that
follows.

Post Test
Direction: Read each item carefully and select the best answer.
1. It is a specialized function of planning how to find employees?
a. Forecasting Demand c. Recruiters
b. Human Resource Management d. Career Builders
2. It calculates the number and kind of employees that the company will require?
a. Forecasting Supply c. Forecasting Demand
b. HR department d. Recruiters
3. A worker is regularly scheduled 37-40 hours per week qualifies as a ________?
a. Part-time employees c. Temporary employees
b. Full-time employees d. Managers
 4. These are the people hired by the company for limited time to perform specific
task?
a. Part-time employees c. Managers
b. Temporary employees d. Full-time employees
5. This is a statement of task involved in the job, and the expected work conditions?
a. Job specification c. Recruiters
b. Headhunters d. Job description
6. These are HR specialists who find the right employees for open company
positions?
a. Recruiting c. Recruiters
b. Managers d. supervisor
7. It is the process of attracting appropriate applicants to an organization jobs?
a. Job fair c. Employment agencies
b. Recruiting d. Referrals
8. These are the recruiters who attract employees away from other firm?
a. Employment agencies c. Job fair
b. Headhunters d. Job analysis

9. It is the fastest growing method of recruiting?

a. Internet advertising c. Employment agencies
b. Job fair d. Referrals
10. How many stages does hiring process have?
a. 5 c. 7
b. 6 d. 8

ANSWER KEY FOR THE PRETEST AND POSTTEST

 1. B

2. C

3. B

4. B

5. D

6. C

7. D

8. D

9. D

10. B

REFERENCES

Internet

www.google.com

Fundamentals of Business and Economics, Chapter 11

SALCEDO, SHANE E.

BBTE 3-2