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Human Resource Management
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Learning Objectives
• Understand the importance of Human Resource Management to the organization
• Appreciate the key functions associated with Human Resource Management
• Implement a Human Resource Planning Process
• Understand the importance of Recruitment and Selection
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Learning Objectives
• Detail the main types of Compensation and Benefits Systems
• Implement an effective Performance Appraisal Process
• Understand the function of Training and Development and its importance to the organization
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HRM & The Organization
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What is Human Resource Management?
• Basic Definition– ‘managing the employment relationship’
(Tyson, 1987)
• Key Assumption– Employees are the most important asset of
the organization
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Key Functions
Human Resource Planning
Recruitment & Selection
Compensation & Benefits
Performance Appraisals
Training & Development
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Human Resource Planning
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What is Human Resource Planning?
• “an effort to anticipate future business and environmental demands upon and organization and to provide personnel to fulfil that business and satisfy that demand”
(Bowey, 1974)
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Human Resource Planning
• Human resource planning must be integrated within the organizations strategic plans
• Senior management must emphasize the importance of human resource planning
• Human resource planning must be based on the most accurate information available
Source: Adapted from Tyson & York, 1992
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Human Resource Planning
• Human resource planning must be assigned or located within a central unit
• A clear plan must be developed with associated time-spans and scope of activity
Source: Adapted from Tyson & York, 1992
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Human Resource Planning Process
Demand AnalysisDemand Analysis
Supply AnalysisSupply Analysis
Estimate Deficits/SurplusesEstimate Deficits/Surpluses
Develop Action PlanDevelop Action Plan
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Demand Analysis
• Emerges from a clear understanding of the organizational strategy– Technological Changes– Products– Workforce Requirements
• Skills• Qualifications• Experience• Gender
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Demand Analysis
• Managerial Estimates (Subjective)– Planned changes versus workforce requirements
• Work Study– Systematic analysis of work
• People• Skills• Resources (materials & machines)
– Man hours per output unit
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Demand Analysis
• Statistical Techniques– Regression Analysis– Econometric Models
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Supply Analysis
• Amount of human resources that will be available to the organization
• Sources– Internal Labor Market– External Labor Market
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Internal Recruiting
• Internal Advertising
• Self Applicants
• Employee Referrals– Supervisor/Manager Recommendations
• Succession Planning
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External Recruiting
• Existing Candidate Pool
• Newspaper/Internet– General– Specialized Recruitment Magazines/Internet Sites– Professional Associations
• Employment Agencies– Executive Search Agencies– Campus Recruiting
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Estimate Deficits/Surpluses
• Does the supply of labor match the demand for labor?
• How many employees will be required?– Can they be secured from internal sources?– What are the challenges of securing employees
from an external source?
• How many employees will have to be let go?– For how long?– Can they be re-recruited quickly, if required?
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Develop Action Plan
• From the deficits/surpluses analysis a plan that ensures that the day-to-day operational human resource needs of the organizational are catered for
• This plan includes specific detail on the management of – Recruitment & Selection– Compensation & Benefits– Performance Appraisals– Training & Development
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Recruitment & Selection
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The Recruitment Process
Job Analysis & Job Description
Source Candidates
The Recruitment Interview
Psychometric Testing
Reference Checks & Making an Offer
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Job Analysis
• ‘The process of examining a job in detail in order to identify its component tasks The detail and approach may vary according to the purpose for which the job is being analyzed’
(Department of Employment Glossary of Training Terms, 1971)
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Job Description - Key Elements
• Purpose of the Job
• Core Functions & Responsibilities– Duties– % of Time Spent on Activities– Other
• Other Functions & Responsibilities
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Job Description - Key Elements
• Supervisory Responsibilities– Number of Staff– Type of Employees– Level of Authority to Hire
• Knowledge & Skills– Required– Preferred– Desirable
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Job Description - Key Elements
• Fiscal Responsibility– Budgeting– Approval Privileges– Reporting & Auditing Functions
• Public Contact
• Physical Demands & Working Conditions
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Seven Point Plan
1. Physical make-up; health, physique, appearance
2. Attainments; education, qualifications, experience
3. General intelligence
4. Special aptitudes
5. Interests
6. Disposition
7. Circumstances
Source: Rodgers (1952)
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Five Fold Grading System
1. Impact on others; physical make-up, appearance, speech
2. Acquired qualifications; education, training, experience
3. Innate abilities
4. Motivation
5. Adjustment
Source: Munro Fraser (1954)
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Job Description - ExampleJOB
Title ………… ResponsibilityLocation ……… ……………………… No of Subordinates … Budget ………………
AUTHORITY
Responsible to …………… …Responsible for ………… ……
RESPONSIBILITIES
60% of time …………… …25 % of time ………… ……15 % of time ………… ……
WORKING ENVIRONMENT
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Sourcing Candidates
• Internal Recruiting
• External Recruiting
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Internal Recruiting
• Advantages
• Disadvantages
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External Recruiting
• Advantages
• Disadvantages
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Screening Resumes
• Relevance of Education & Experience– Is the candidates experience and educational
record appropriate for the position on offer?
• Interests & Abilities– What are the candidates interests and abilities?– Will these interests and abilities contribute to their
performance on the job?
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Efficiency of the Recruitment Interview
• Highly effective if based on a detailed job description
• Structured interviews, based on pre-set questions, are more effective than unstructured interviews
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Functions of the Interview
Mutual Preview
Assessment
Negotiation
Source: Adapted from Anderson & Shackelton (1993)
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Mutual Preview - Function
• Informal discussion that explains the selection process and the job on offer
• Provision of a detailed and Realistic Job Preview
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Interviewer’s Objectives
• To ‘set the scene’ for the candidate and the organization
• To inform the candidate of the organization’s selection procedures
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Candidate’s Objectives
• To understand what the selection procedure will be and what will be involved during each stage of the procedure
• To obtain an indication of what the job will entail so that they can also decide their suitability and interest in the position
• To get a better ‘feel’ for the organization
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Assessment - Function
• Formal discussion guided by job description and a number of pre-set questions
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Interviewer’s Objectives
• To document answers to pre-set questions
• To probe candidate further on critical aspects of the job
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Candidate’s Objectives
• To provide the interviewer with sufficient information to guide and influence their decision
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Negotiation - Function
• Negotiation of outstanding points
• Can be directed and led by both interviewer and candidate
• May take place during interviewer or at the offer stage of the recruitment process
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Interviewer’s Objectives
• To ensure that the offer is mutually acceptable to the candidate and the organization and that all potential areas of conflict are resolved
• To smooth the transition from job to role
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Candidate’s Objectives
• To expand and agree all contractual and non-contractual terms and conditions
• To smooth the transition from job to role
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The Recruitment Interview - Advantages
• Quick and relatively easy to perform
• Perceived by the candidate as a natural part of the recruitment process
• Allows the organization to get to know a candidate
• Allows the candidate to find out more about the organization
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The Recruitment Interview - Disadvantages
• Open to errors• Difficult for interviewer to discriminate
between relevant and irrelevant information• Different conclusions can be reached
dependent on the type of interview conducted• Early impressions can negatively and
inappropriately influence the interviewer’s judgement
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Psychometric Testing
• Cognitive Tests– General Intelligence– Spatial Ability– Numerical Ability
• Personality Tests– 16PF (Cattell et al , 1970)– Occupational Personality Questionnaire (Saville &
Holdsworth, 1984)
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Validity
• Face– Does the test look right?– Is it acceptable to th candidate and the
organization?– Will it produce useful and relevant
information?– Does the test come from a recognizable
source?
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Validity
• Construct– Does the test measure what it sets out to
measure?– Does it correlate with other tools that
measure the same thing?
• Predictive– Does the test predict how well an individual
is going to perform within the job?
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Reference Checking
PreparationPreparation
Data CollectionData Collection
InterpretationInterpretation
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Preparation
• Ensure that questions are relevant to the position on offer
• Verify information already received– Qualifications– Length of Service– Duties– Responsibilities
• Look for factual information
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Data Collection
• Establish a rapport with the referee and explain the purpose of the reference check
• Ensure that you follow pre-set questions
• Keep to the facts
• Be alert to the responses given by the referee
• Document all answers
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Interpretation
• Be careful not to accept all information at face value
• Use the information in conjunction with that gathered from other sources to evaluate the candidate
• If any doubt exists seek other references
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Checking References - Key Points
• Be Consistent
• Ask the same questions about each applicant
• Ask questions relating to the candidate’s ability to perform the job
• Cross-Check References from several sources
• Document all information received
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Giving References - Key Points
• Be Honest• Verify the identity of the individual seeking the
reference• Reply directly to the questions being asked• Keep your answers to job related activity• Make sure that any negative information
given can be supported by documented evidence
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Compensation & Benefits
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Major Compensation Schemes
Flat Rate OnlyFlat Rate Only
Flat Rate Plus Payment By ResultsFlat Rate Plus Payment By Results
Merit PayMerit Pay
Profit/Gain SharingProfit/Gain Sharing
PieceworkPiecework
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Flat Rate Only
• Most popular compensation option for organizations
• Easy to administer, understand an provides stability of earnings for employees– Hourly– Weekly– Monthly
• Best used where performance criteria difficult to define
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Flat Rate Plus Payment By Results
• Growing in popularity
• Mix of flat rate and bonus payments
• Immediacy of reward increases motivation levels
• Can be difficult to administer
• Often hard to find an accurate measure of performance
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Merit Pay
• Bonuses paid on the basis of a systematic assessment of performance
• Performance evaluated against set objectives and from this a bonus or merit payment is paid
• Often hard to find an accurate measure of performance
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Profit/Gain Sharing
• Bonuses are paid on the basis of overall company performance
• Bonus paid either on the basis of monetary or in terms of company shares
• Profit/Gain Sharing increases employees awareness of the overall performance of the organization
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Piecework
• Employees are paid only for the work that they have completed
• Can cause considerable conflict with employees as it does not gaurantee a minimum income
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Performance Appraisals
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Why Have Performance Appraisal?
• Performance Appraisal offers several advantages at the level of the:– Individual
• Recognition of past effort• Developmental requirements can be uncovered
– Team• Alignment of effort with objectives• Motivation of team members
– Organization• Development of staff• Achievement of key objectives• Best and focused utilisation of human resources
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Plan Work & Identify Skills
Observe & Document
Performance
Observe & Document
Performance
Performance Appraisal
Discussion
Performance Appraisal
Discussion
Development ReviewDevelopment Review
Performance ReviewPerformance Review
Reward ReviewReward Review
ProductionSales
ServiceProfits
Productivity
ProductionSales
ServiceProfits
Productivity
Business PlanJob Description
Performance Goals
Business PlanJob Description
Performance Goals
PAST
PRESENT
FUTURE
Appraisal Overview
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The Appraisal Process
• Components
– People• Manager• Employee• Peers
– Information• Facts• Opinions
– Emotion• Positive• Negative
Preparation
Involvement
CommunIcatIon
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Appraisal Procedure
• Agree Objectives
• Monitor Performance
• Give Sufficient Notice
• Prepare Necessary Documentation
• Prepare Location
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Appraisal Procedure
• Conduct Appraisal
• Complete Documentation
• Implement Plans
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Eight Appraisal Techniques
1. Ranking
2. Paired Comparisons
3. Critical Incident
4. Free-Form/Narrative
5. Self-Assessment
6. Assessment Centre
7. Performance
8. Rating
Source: Adapted from Gunnigle & Flood , 1990
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Ranking
• Appraiser ranks employees from the worst to the best based on specifica characteristics or on overall job performance
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Ranking
• Strengths– Simple– Facilitates comparisons
• Weaknesses– Subjective– Poor basis for decisions– Degree of difference between employees
difficult to specify
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Paired Comparisons
• Appraiser ranks employees two at a time and decisions on which is superior are included in the final ranking order for the whole organization
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Paired Comparisons
• Strengths– Simple– Ease of decision making
• Weaknesses– Complicated within a large workforce– Challenges asociated with ranking
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Critical Incident
• Appraiser observes incidents of good and bad performance and employs this information for judging and leading the performance appraisal
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Critical Incident
• Strengths– More objective than previous techniques– Job related
• Weaknesses– Time consuming– Requires skilled observation
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Free-Form/Narrative
• General free-written evaluation by the appraiser
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Free-Form/Narrative
• Strengths– Flexible
• Weaknesses– Comparisons challenging– Subjective
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Self-Assessment
• Appraisee evaluates themselves based on a particular template that has been supplied by the organization
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Self-Assessment
• Strengths– Promotes self-analysis– Participative– Facilitates discussion
• Weaknesses– Appraisee may be more lenient– Conflict can occur between appraiser and
appraisee
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Assessment Centre
• Appraisee receives a series of assessments supplied, performed and evaluated by specialized external assessors
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Assessment Centre
• Strengths– Objective– Range of techniques employed– Range of demensions analyzed
• Weaknesses– Expensive– Not necessarily job specific
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Performance
• Appraiser evaluates the degree to which the appraisee has achieved specific objectives
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Performance
• Strengths– Objective– Job related– Participative
• Weaknesses– Requires awareness of measurable targets
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Rating
• Appraiser specifies on a scale to what degree relevant characteristics are possessed by the appraisee
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Rating
• Strengths– Ease of comparison– Capacity to assess characteristics from the
very simple to the complex
• Weaknesses– Subjective– Personality and behavioral traits difficult to
measure
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Training & Development
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What is Training?
Training refers to the acquisition of knowledge, skills and abilities
required to perform effectively in any given role
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Knowledge, Skills & Abilities
• Knowledge is information specific and particular to a subject, enabling a person to understand a subject to an acceptable level
• Skill is a developed aptitude or ability in a particular intellectual or physical area
• Attitude is an internal state which affects one’s choice of action towards some objects, persons or events
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Training & Development Perspectives
FragmentedFragmented
FormalizedFormalized
FocusedFocused
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The Fragmented Approach
• Training is not linked to organizational goals• Training is perceived as a luxury• Non systematic approach to training• Training is directive and delivered by trainers• Training occurs with the training department• Knowledge-based courses• Focus on training not development
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The Formalized Approach
• Training is directly linked to human resource needs
• Systematic developmental training linked to appraisals
• Knowledge based courses broadened to skill based
• Line manager involvement in the development of the course content
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The Formalized Approach
• Training still performed by trainers but the range of skills required increases
• Pre- and post - course activities increase
• Training linked to individual needs
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The Focused Approach
• Training and continuous development by employees is now perceived as essential for organizational survival and an integral part of organizational strategy
• Training becomes a source of competitive advantage
• On-the-job development• Self selection for specialized training courses
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The Focused Approach
• Training non-directive with the exception of knowledge based training courses
• New forms of training delivery explored, such as open courses and e-learning
• Measurement of learning becomes critical to the organization
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The Training Cycle
IDENTIFYIDENTIFY
DEVELOPDEVELOPEVALUATEEVALUATE
IMPLEMENTIMPLEMENT
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The Training Cycle
• IDENTIFY– Identify issues affecting the business
performance– Caution: Not all those identified can be
resolved via training
• DEVELOP– Prioritise those identified and develop
training objectives
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The Training Cycle
• IMPLEMENT– Employ training solution
• EVALUATE– Compare employee/team performance
before and after training
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Training Needs Analysis
The systematic process of determining and ordering training goals, measuring
training needs and deciding on priorities for training action
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Training Need
• The difference between the actual and required human performance in some specific areas of operations, where improved training is the most economical way of eliminating the difference
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Not Everything is a Training Need!
Business Need
Training Need
Work Environment Need
Performance Need
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Benefits of Training Needs Analysis
• Organisational Focus on Performance
• Identifies Routes to Closing Organisational Performance-Gaps
• Through Involvement Builds Internal Commitment To Achieving Organisational Targets
• Separates Non-Training Needs - ‘Training Not the Only Panacea’
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Difficulties with Training Needs Analysis
• Time-Consuming
• Generates High Expectations
• Requires Top-Level Support & Understanding
• May Isolate Certain Categories of Staff
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Training & Development
Accepted Core Competencies• Identify and analyse the learning, training &
development needs of employees
• Plan, recommend, implement and monitor the effectiveness of learning and development initiatives that meet the present and emerging business needs of the organisation and its employees
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Training & Development
New Core Competencies• Recognise developments and trends in HRM and within
the organisation’s external and internal business environment that are significant to both the organisation and the employees
• Develop, implement, forecast and monitor effective placement, deployment and release processes, to meet the organisation’s needs
• Build internal capacity and lead change
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Summary
• An appreciation of Human Resource Management offers considerable benefits to the organization
• Human Resource Planning emerges from a clear understanding of the organizational strategy
• Ownership of the Recruitment and Selection Process must reside within the organization
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Summary
• There are five main Compensation and Benefits Systems– Flat Rate Only– Flat Rate Plus Performance By Results– Merit Pay– Profit/Gain Sharing– Piecework
• Performance Appraisal offers several advantages at the level of the:– Individual– Team– Organization
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Summary
• Training refers to the acquisition of knowledge, skills and abilities required to perform effectively in any given role
• Remember Not Everything is a Training Need