CH 4 – HUMAN RESOURCE/HUMAN CAPITAL FUNCTION
Status of employees has changed, regarded as assets.
Business has to determine current & future value of employees and reward them in a fair
manner.
o Knowing future value of employees should be enhanced through investment in training and
development.
o Reason for change in name to human capital function.
Department responsible to ensure all requirements regarding labor legislation are met.
1. MANPOWER PLANNING AS PREREQUISITE FOR RECRUITMENT & SELECTION
Manpower planning = top-down process
o Meaning strategic plan of business determines what skills are needed to achieve goals of
business.
o Skills acquired via manpower planning & training.
Manpower planning refers to:
o Estimating number of employees.
o Assessing range of skills required for business to operate.
o Calculating time frame of employment needs of business.
Accurate manpower planning = each position analyzed, described, specified:
o Job analysis: determine tasks & responsibilities of each job.
o As a result, job description done to specify job title, summary of job, duties etc. and degree
of supervision needed for job.
o Job specification: “interprets” the job description necessary to perform the job. Used as a
guide during recruitment/selection processes.
Once categories/skills identified, HC function has to ascertain if skills gap is evident.
Difference between skills available & skills needed.
Recruitment & selection processes aim to eliminate skills gap.
2. THE PROCESS OF PROCURRING THE FINEST TALENT FOR THE BUSINESS:
1. RECRUITMENT
- The main focus of the recruitment process is to attract the most competent talent
- Task of agent: determine most effective communication channels for recruitment message.
Internal recruitment - done by transferring an existing employee to a new position or promoting
existing employee.
- The business may invite existing suitable employees to apply for job. This is done by searching
employee files to identify potential candidates based on skill, qualifications and experience.
- Post positions available on notice boards within the business and to invite interested staff.
- Current employees recommend someone from outside the business for the position = combination
of int. and ext. recruitment.
ADVANTAGES OF INTERNAL RECRUITMENT:
- The employee morale is improved if they know there is an opportunity for
promotion
- It is more cost effective
, - The employees past performance and attitude to the business is known
External recruitment - from outside the company
- The position is advertised via an employment agency
- They may advertise in newspapers, trade journals or trade shows
- The business may approach certain places for suitable candidates e.g. varsities
- Suitable employees may be sourced by looking at CV’s of casual applicants
- Employees may be head hunted - competitors may be identified and asked
ADVANTAGES OF EXTERNAL RECRUITMENT:
- New ideas and skills are brought into the business
- When an employee is head hunted then they can give information about the competitors plans
- No infighting occurs among employees for the position
1. SELECTION
Once the recruitment process is complete the selection process begins by identifying the most
suitable candidates
- CV’s are checked to ensure all pertinent information has been received from candidates
- Evaluate CV’s to see which candidates meet the prescribed criteria
- Compile a short list of candidates who met the criteria
- A background and reference check is completed
- Interviews are conducted
→ Ensures complete impartiality
→ They can obtain additional information
→ Employee can ask questions about position/organization.
- Candidates may undergo tests
→ Work sample tests
→ Medical examination
- The candidates are ranked highest to lowest - the candidate at the top is selected for the job.
Offered to next person if declined.
- A contract is signed by employer and employee - details may include:
- Full details of the employer and employee
- Detail regarding the job title
Selection process favors most desirable candidates. Unsuitable applications
disregarded.
2. PLACEMENT
- The employee is placed in the position where he applied.
- Business may re-negotiate remuneration and other benefits.
- Correct placement ensures the employee is optimally utilized in the best interests of both the
individual and the business.
3. INDUCTION
Induction is training, given to all new employees to help them to become productive role players in
the business as soon as possible
Things included in effective induction program:
- A written copy of the businesses policies and procedures
- Organizational chart to identify the various role players in the organization
- A face to face introduction to the manager and other staff members in the department
- A tour of the facilities to show the new employee where the bathrooms, meeting rooms, canteen, etc.
, - Precise instructions outlying how the new staff member should perform certain tasks must be issued
- Allocating the new employee a buddy or mentor in case of any questions
The advantages of a well-structured induction program:
- Helps reduce stress and anxiety experienced by the employee
- Ensures that the new employee starts off with the correct information to do the job
- It prevents the business wasting time and money because the employee learns the correct
procedure immediately
- The new employee easily adapts to the business culture
- Higher staff retention if well organised induction plan is in place
4. REMUNERATION AND EMPLOYEE BENEFITS
Employees awarded for their hard work through money:
- Permanent or temporary workers may earn salaries.
Salary = fixed amount paid to the employee monthly on a predetermined date
- Wages paid on a daily/weekly basis.
- May be fixed sum according to amount of hours worked or at piece rate (according to output).
- Commission = form of remuneration used to motivate the employee to ] deliver more.
- Incentive to improve performance
Overtime remuneration:
- Additional remuneration may be payed in the form of a bonus
- A bonus may qualify as a 13th cheque
- Better performance, higher remuneration
According to the Basic Conditions of Employment Act (BCEA) the employer may not deduct any money
from an employee’s remuneration, unless it is:
- A voluntary deduction being made, e.g. membership for a trade union or to contribute towards a
staff fund etc.
- A legal requirement such as Unemployment Insurance (UIF) or income tax (PAYE) since income tax is
progressive.
Methods of structuring salaries:
- Cost plus Benefits = business pays a basic salary and then makes additional contributions towards
certain fringe benefits. These may include
o Pension
o Medical aid
o Housing
o Meals
o Accommodation
• If the salary package is structured as cost to company, it means the employer offers the employee a
salary, but there after no additional contributions will be made by the employer.
5. Training and skills development
• Training refers to the process of ensuring that employees have the specific skills
needed to perform the job.
• Skills development targets the broader range of skills or even attitudes that are not job
specific. This may include: management skills, communication skills
5 step process for effective skills development and training:
Status of employees has changed, regarded as assets.
Business has to determine current & future value of employees and reward them in a fair
manner.
o Knowing future value of employees should be enhanced through investment in training and
development.
o Reason for change in name to human capital function.
Department responsible to ensure all requirements regarding labor legislation are met.
1. MANPOWER PLANNING AS PREREQUISITE FOR RECRUITMENT & SELECTION
Manpower planning = top-down process
o Meaning strategic plan of business determines what skills are needed to achieve goals of
business.
o Skills acquired via manpower planning & training.
Manpower planning refers to:
o Estimating number of employees.
o Assessing range of skills required for business to operate.
o Calculating time frame of employment needs of business.
Accurate manpower planning = each position analyzed, described, specified:
o Job analysis: determine tasks & responsibilities of each job.
o As a result, job description done to specify job title, summary of job, duties etc. and degree
of supervision needed for job.
o Job specification: “interprets” the job description necessary to perform the job. Used as a
guide during recruitment/selection processes.
Once categories/skills identified, HC function has to ascertain if skills gap is evident.
Difference between skills available & skills needed.
Recruitment & selection processes aim to eliminate skills gap.
2. THE PROCESS OF PROCURRING THE FINEST TALENT FOR THE BUSINESS:
1. RECRUITMENT
- The main focus of the recruitment process is to attract the most competent talent
- Task of agent: determine most effective communication channels for recruitment message.
Internal recruitment - done by transferring an existing employee to a new position or promoting
existing employee.
- The business may invite existing suitable employees to apply for job. This is done by searching
employee files to identify potential candidates based on skill, qualifications and experience.
- Post positions available on notice boards within the business and to invite interested staff.
- Current employees recommend someone from outside the business for the position = combination
of int. and ext. recruitment.
ADVANTAGES OF INTERNAL RECRUITMENT:
- The employee morale is improved if they know there is an opportunity for
promotion
- It is more cost effective
, - The employees past performance and attitude to the business is known
External recruitment - from outside the company
- The position is advertised via an employment agency
- They may advertise in newspapers, trade journals or trade shows
- The business may approach certain places for suitable candidates e.g. varsities
- Suitable employees may be sourced by looking at CV’s of casual applicants
- Employees may be head hunted - competitors may be identified and asked
ADVANTAGES OF EXTERNAL RECRUITMENT:
- New ideas and skills are brought into the business
- When an employee is head hunted then they can give information about the competitors plans
- No infighting occurs among employees for the position
1. SELECTION
Once the recruitment process is complete the selection process begins by identifying the most
suitable candidates
- CV’s are checked to ensure all pertinent information has been received from candidates
- Evaluate CV’s to see which candidates meet the prescribed criteria
- Compile a short list of candidates who met the criteria
- A background and reference check is completed
- Interviews are conducted
→ Ensures complete impartiality
→ They can obtain additional information
→ Employee can ask questions about position/organization.
- Candidates may undergo tests
→ Work sample tests
→ Medical examination
- The candidates are ranked highest to lowest - the candidate at the top is selected for the job.
Offered to next person if declined.
- A contract is signed by employer and employee - details may include:
- Full details of the employer and employee
- Detail regarding the job title
Selection process favors most desirable candidates. Unsuitable applications
disregarded.
2. PLACEMENT
- The employee is placed in the position where he applied.
- Business may re-negotiate remuneration and other benefits.
- Correct placement ensures the employee is optimally utilized in the best interests of both the
individual and the business.
3. INDUCTION
Induction is training, given to all new employees to help them to become productive role players in
the business as soon as possible
Things included in effective induction program:
- A written copy of the businesses policies and procedures
- Organizational chart to identify the various role players in the organization
- A face to face introduction to the manager and other staff members in the department
- A tour of the facilities to show the new employee where the bathrooms, meeting rooms, canteen, etc.
, - Precise instructions outlying how the new staff member should perform certain tasks must be issued
- Allocating the new employee a buddy or mentor in case of any questions
The advantages of a well-structured induction program:
- Helps reduce stress and anxiety experienced by the employee
- Ensures that the new employee starts off with the correct information to do the job
- It prevents the business wasting time and money because the employee learns the correct
procedure immediately
- The new employee easily adapts to the business culture
- Higher staff retention if well organised induction plan is in place
4. REMUNERATION AND EMPLOYEE BENEFITS
Employees awarded for their hard work through money:
- Permanent or temporary workers may earn salaries.
Salary = fixed amount paid to the employee monthly on a predetermined date
- Wages paid on a daily/weekly basis.
- May be fixed sum according to amount of hours worked or at piece rate (according to output).
- Commission = form of remuneration used to motivate the employee to ] deliver more.
- Incentive to improve performance
Overtime remuneration:
- Additional remuneration may be payed in the form of a bonus
- A bonus may qualify as a 13th cheque
- Better performance, higher remuneration
According to the Basic Conditions of Employment Act (BCEA) the employer may not deduct any money
from an employee’s remuneration, unless it is:
- A voluntary deduction being made, e.g. membership for a trade union or to contribute towards a
staff fund etc.
- A legal requirement such as Unemployment Insurance (UIF) or income tax (PAYE) since income tax is
progressive.
Methods of structuring salaries:
- Cost plus Benefits = business pays a basic salary and then makes additional contributions towards
certain fringe benefits. These may include
o Pension
o Medical aid
o Housing
o Meals
o Accommodation
• If the salary package is structured as cost to company, it means the employer offers the employee a
salary, but there after no additional contributions will be made by the employer.
5. Training and skills development
• Training refers to the process of ensuring that employees have the specific skills
needed to perform the job.
• Skills development targets the broader range of skills or even attitudes that are not job
specific. This may include: management skills, communication skills
5 step process for effective skills development and training:
