Business Studies
HUMAN CAPITAL/RESOURCES &
INDUSTRIAL RELATIONS
DEFINITION, IMPORTANCE & AIM OFF THE HR
DEPARTMENT
DEFINITION
Human resources was renamed to Human Capital function
Determines the current & future value of each employee to the business & rewards them fairly &
enhances the future value of the employee through training and development.
HR management = all activities & decisions intended to improve the effectiveness of employees
& of business as a whole.
IMPORTANCE & AIM
● Work performance of employees is one of the most important factors
● Aim is to bridge the gap between management goals & needs of the workforce.
● Task of personnel function = manage employees & to maximize their potential, enabling
the business to achieve its mission.
● The following should be the focus of the HR function:
○ Interpretation of employer/employee needs
○ Coordination of management & staff requirements
○ Implementation of the various activities of personnel management (manpower
planning, recruitment, selection, placement, induction, training, keeping records
and implementing relevant administration systems such as fair remuneration)
HUMAN RESOURCES ACTIVITIES
MANPOWER PLANNING
● Top-down process
● Strategic plan will determine which skills are needed to achieve the goals of the business,
manpower planning will acquire the necessary skills
● Identifies manpower shortages and determine:
○ How many employees does the business need?
1
, ○ What skills do these employees have?
○ When will these employees be needed?
The following techniques should be applied during manpower planning:
Work load analysis:
Job analysis:
Job description (about the job):
Job specification (about the worker):
Manning table:
Determining employee requirements:
RECRUITING
● Recruiting seeks to attract job applicants with the necessary skills & motivation to cover
manpower shortages. There are two sources of new employees:
○ within the firm where people can be appointed to new positions (transfer,
upgrade or promotion)
○ outside the business - appointing people from other businesses, schools,
colleges and universities
● Recruitment planner (agent) must decide what channel of communicating the recruiting
message will be, whether recruiting will be done from inside or outside the organisation,
or both.
● The whole recruitment process may be observed by staff representatives
INTERNAL RECRUITING
JOB POSTING - employer notifies all present employees of the vacancies that exist & those who
think they may qualify put forward their name to be considered for specific vacancies. (Word of
mouth, intranet, notice boards)
SKILLS INVENTORIES - organisation searches its files for potentially qualified candidates by
looking at skills inventories & candidates that are identified are contacted & asked if they want to
apply.
HYBRID COMBINATION - recommendations by present employees of somebody outside the
business is a hybrid of an internal and partly external source.
● ADVANTAGES
○ Improves morale – opportunities for promotion
○ Cost effective
○ Past performance and attitude of past employees is already known
2
,EXTERNAL SOURCES
When organisations cannot find the right person from among their own employees, they must
recruit in the outside labour market.
External recruiting creates the opportunity to bring new and fresh skills into the organisation.
The suitability of external sources will depend on the type of job to be filled, the skills needed as
well as the location of the firm.
● THEY INCLUDE:
○ Advertising in newspapers, trade journals, radio, window displays, notice boards.
○ Schools, colleges, universities & other educational institutions.
○ Private and public employment agencies.
○ Casual applicants/“walk-ins” – (fast food industry)
○ Internet recruitment businesses.
○ Head hunting – employee currently working for a competitor is identified & asked
to apply
● ADVANTAGES:
○ New ideas and skills brought in
○ Opportunity to employ affirmative action candidates to meet requirements of
Employment Equity targets
○ Head hunting – insight into competitors operations
○ No competing among present employees for the position
SELECTION
Involves screening applicants & choosing most suitable candidate in 8 steps
Selection activity is negative because it is aimed at excluding unsuitable applicants whose
skills/experience do not match requirements as per job specification.
A good selection process could result in lower turnover of staff & production costs, less training &
higher productivity
STANDARD SELECTION PROCEDURES INCLUDE:
RECEIPT OF THE APPLICATION FORMS/CV’s:
● Once a vacant post has been advertised, the business must be available to answer
queries from applicants.
● After the closing date, a list of application forms should be drawn up.
● Documentation received from applicants should be checked.
3
, INITIAL SCREENING:
● Purpose – to identify applicants who do not meet minimum requirements of the job & to
inform them accordingly.
● Businesses often state that if an applicant hasn’t received a response by a certain date
then their application was unsuccessful.
● Applicants who are suitable for consideration are referred to the next step.
CV/JOB APPLICATION EVALUATION:
● A selection panel evaluates the CV’s of applicants who meet the minimum requirements.
● A predetermined set of criteria will be used (7-point scoring system to evaluate applicants
in each category)
● Applicants are then ranked according to total scores achieved on CV evaluation.
● A short list of applicants is then drawn up.
● This step ensures that the selection process is objective.
REFERENCE AND BACKGROUND CHECKS:
● Applicants on the short list are potential new employees & info supplied in the CV needs
to be verified.
● Employment records & qualifications will be checked & personnel managers
communicate with referees to ask relevant, standardised questions about the applicant
which may not be included in the CV.
● If necessary for the position, credit and criminal records are checked.
INTERVIEW OF CANDIDATES ON THE SHORT LIST:
May be carried out by one person or a panel.
Important that the same person or panel interviews all applicants to ensure consistency and fair
labour practice. (Using a predetermined set of questions)
● PURPOSE
○ to get more info from the applicant to assess his/her suitability for job
○ to give more info about the firm, the job, & the conditions of employment to the
applicant.
■ Allows them to ask any questions relating to the position or the business.
TESTS AND EXAMINATIONS:
TESTS:
4
HUMAN CAPITAL/RESOURCES &
INDUSTRIAL RELATIONS
DEFINITION, IMPORTANCE & AIM OFF THE HR
DEPARTMENT
DEFINITION
Human resources was renamed to Human Capital function
Determines the current & future value of each employee to the business & rewards them fairly &
enhances the future value of the employee through training and development.
HR management = all activities & decisions intended to improve the effectiveness of employees
& of business as a whole.
IMPORTANCE & AIM
● Work performance of employees is one of the most important factors
● Aim is to bridge the gap between management goals & needs of the workforce.
● Task of personnel function = manage employees & to maximize their potential, enabling
the business to achieve its mission.
● The following should be the focus of the HR function:
○ Interpretation of employer/employee needs
○ Coordination of management & staff requirements
○ Implementation of the various activities of personnel management (manpower
planning, recruitment, selection, placement, induction, training, keeping records
and implementing relevant administration systems such as fair remuneration)
HUMAN RESOURCES ACTIVITIES
MANPOWER PLANNING
● Top-down process
● Strategic plan will determine which skills are needed to achieve the goals of the business,
manpower planning will acquire the necessary skills
● Identifies manpower shortages and determine:
○ How many employees does the business need?
1
, ○ What skills do these employees have?
○ When will these employees be needed?
The following techniques should be applied during manpower planning:
Work load analysis:
Job analysis:
Job description (about the job):
Job specification (about the worker):
Manning table:
Determining employee requirements:
RECRUITING
● Recruiting seeks to attract job applicants with the necessary skills & motivation to cover
manpower shortages. There are two sources of new employees:
○ within the firm where people can be appointed to new positions (transfer,
upgrade or promotion)
○ outside the business - appointing people from other businesses, schools,
colleges and universities
● Recruitment planner (agent) must decide what channel of communicating the recruiting
message will be, whether recruiting will be done from inside or outside the organisation,
or both.
● The whole recruitment process may be observed by staff representatives
INTERNAL RECRUITING
JOB POSTING - employer notifies all present employees of the vacancies that exist & those who
think they may qualify put forward their name to be considered for specific vacancies. (Word of
mouth, intranet, notice boards)
SKILLS INVENTORIES - organisation searches its files for potentially qualified candidates by
looking at skills inventories & candidates that are identified are contacted & asked if they want to
apply.
HYBRID COMBINATION - recommendations by present employees of somebody outside the
business is a hybrid of an internal and partly external source.
● ADVANTAGES
○ Improves morale – opportunities for promotion
○ Cost effective
○ Past performance and attitude of past employees is already known
2
,EXTERNAL SOURCES
When organisations cannot find the right person from among their own employees, they must
recruit in the outside labour market.
External recruiting creates the opportunity to bring new and fresh skills into the organisation.
The suitability of external sources will depend on the type of job to be filled, the skills needed as
well as the location of the firm.
● THEY INCLUDE:
○ Advertising in newspapers, trade journals, radio, window displays, notice boards.
○ Schools, colleges, universities & other educational institutions.
○ Private and public employment agencies.
○ Casual applicants/“walk-ins” – (fast food industry)
○ Internet recruitment businesses.
○ Head hunting – employee currently working for a competitor is identified & asked
to apply
● ADVANTAGES:
○ New ideas and skills brought in
○ Opportunity to employ affirmative action candidates to meet requirements of
Employment Equity targets
○ Head hunting – insight into competitors operations
○ No competing among present employees for the position
SELECTION
Involves screening applicants & choosing most suitable candidate in 8 steps
Selection activity is negative because it is aimed at excluding unsuitable applicants whose
skills/experience do not match requirements as per job specification.
A good selection process could result in lower turnover of staff & production costs, less training &
higher productivity
STANDARD SELECTION PROCEDURES INCLUDE:
RECEIPT OF THE APPLICATION FORMS/CV’s:
● Once a vacant post has been advertised, the business must be available to answer
queries from applicants.
● After the closing date, a list of application forms should be drawn up.
● Documentation received from applicants should be checked.
3
, INITIAL SCREENING:
● Purpose – to identify applicants who do not meet minimum requirements of the job & to
inform them accordingly.
● Businesses often state that if an applicant hasn’t received a response by a certain date
then their application was unsuccessful.
● Applicants who are suitable for consideration are referred to the next step.
CV/JOB APPLICATION EVALUATION:
● A selection panel evaluates the CV’s of applicants who meet the minimum requirements.
● A predetermined set of criteria will be used (7-point scoring system to evaluate applicants
in each category)
● Applicants are then ranked according to total scores achieved on CV evaluation.
● A short list of applicants is then drawn up.
● This step ensures that the selection process is objective.
REFERENCE AND BACKGROUND CHECKS:
● Applicants on the short list are potential new employees & info supplied in the CV needs
to be verified.
● Employment records & qualifications will be checked & personnel managers
communicate with referees to ask relevant, standardised questions about the applicant
which may not be included in the CV.
● If necessary for the position, credit and criminal records are checked.
INTERVIEW OF CANDIDATES ON THE SHORT LIST:
May be carried out by one person or a panel.
Important that the same person or panel interviews all applicants to ensure consistency and fair
labour practice. (Using a predetermined set of questions)
● PURPOSE
○ to get more info from the applicant to assess his/her suitability for job
○ to give more info about the firm, the job, & the conditions of employment to the
applicant.
■ Allows them to ask any questions relating to the position or the business.
TESTS AND EXAMINATIONS:
TESTS:
4
