MOI UNIVERSITY EMBA PROGRAMME

MBA 820: HUMAN RESOURCE MANAGEMENT

2.0 MEETING HUMAN RESOURCE REQUIREMENTS

This topic discusses the process of meeting the human resource needs of an organization in
terms of quantity and quality. It will focus on three main stages of the process:
• Human resource planning
• Job analysis
• Recruitment and selection

2.1 HUMAN RESOURCE PLANNING (HRP)

Objectives:
• Explain the meaning of human resource planning
• Discuss the importance of human resource planning
• Discuss the factors that influence human resource planning
• Examine the effects of labour turnover on organizational performance

2.1.1 Meaning of Human Resource Planning:

HRP is the process by which a firm predicts the quantity and quality of employees required in
the future. It is a strategy for the acquisition, utilization, improvement and retention of HR
and an integral part of the broader process of corporate planning. It is achieved by comparing
the organization’s current employees with the likely future needs.
HRP ensures that the organization has the right kind and number of people at the right places
at the right time doing work for which they are economically most useful.

HRP is the key link between a firm’s strategic plan and its HRM function as shown in figure
1 below.

Strategic
Overall strategic human Human resource
plan resource management
planning function

Organizations can make choices on the extent to which to use HRP. These can be categorized
as:

Proactive or reactive – anticipate needs and plan in advance or react as they arise
Narrow or broad focus – planning in only a few key HR areas or all areas of HR
Informal or formal - choosing to have an unwritten plan (in the heads of managers) or a
written formal plan with documentation, data
Loosely or closely tied to business plan – degree of integration to strategic plan
Inflexible or flexible- degree to deal with contingencies
These are depicted in figure 2 below.

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 Reactive Proactive

Narrow Broad

Informal Formal

Loosely tied to Closely tied to

strategic plan strategic plan

Inflexible Flexible

2.1.2 Importance of making a Human Resource Plan

Human resource plans enable organizations to make correct estimates of HR requirements by

forecasting the future needs. These are discussed below.

Demand forecasting – This involves the assessment and prediction of the future labour
needs of the organization. The HR manager does this by collecting information/data from key
members of departments or sections. These would include:
• Expected number of personnel within each occupation, their quality, education
and skills
• Expected turnover of employees through age retirement, resignations,
dismissals and death
• Formal qualifications for entrance into certain occupations
• Plans for managerial succession

Supply forecasting – This involves assessing the HR retention capability of the organization.
To estimate the organization’s HR retention capability, many factors have to be considered.
For example, in western countries, labour turnover is high and organizations have to
introduce many incentives to retain labour. Developing countries on the other hand,
experience high rates of unemployment hence, low rates of labour turnover due to few
alternative employment opportunities. Retaining employees to reduce labour turnover is
important and the factors that cause it have to be assessed and ways of overcoming them
found.

Recruitment potential forecasting – This refers to the process of assessing the

organization’s ability to attract different types of personnel. To estimate recruitment
potential, the HR manager would have to consider the following:
• Local labour market situation e.g. current and future competition for personnel
from other employers e.g. TV stations in Kenya or radio stations.
• Local unemployment levels

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 • Availability of special skills locally
• Output from the educational system and training institutions.
• Pattern of immigration and emigration (e.g. doctors in Kenya)
• Attractiveness of area as a place to live (e.g. lake Magadi)
• Attractiveness of the company to work in in terms of prestige, image, security
etc
• Local housing, shopping etc
• Impact of government employment regulations
• Recruitment practices – e.g. sourcing, realistic job information, follow up of
applications, interview methods etc.

Organizations also benefit from human resource planning in the following ways:
• Ability to cope with change – changes in competitive forces, markets, technology and
law tends to generate changes in individual employees’ skills and knowledge.
• Leads to strategic planning – evaluation of organization, environment, strength and
weaknesses of firm
• Ability to manage HR according to organization’s needs – anticipates HR needs thus
avoids surpluses and shortages of employees.
• Helps in recruitment and selection - predicting labour market changes,
unemployment levels and population changes
• Maintaining production levels – foresees and reduces effects of absenteeism, labour
turnover, illness etc by estimating these hazards thus maintaining production levels.
• Formulation of an effective employee development programme - forecasting
succession, career prospects and skill levels

2.1.3 Factors influencing HRP

• Economic factors at national level – unemployment; monetary and fiscal policies and
level of economic activity
• Level of absenteeism
• Labour turnover rate
• Philosophy of top management
• Advancements in technology
• Government Laws/policies on training and education, labour etc.
• Labour Market factors - characteristics of labour force; supply and demand of skills
• Nature and composition of existing workforce
• Corporate strategy of the firm - the firm’s long-range business plans

How do the factors listed above affect human resource plans?

Examples:
The firms long-range plan
A firm’s future plans to expand its business venture into new areas or develop new
products would require actions in the present HRP to ensure an adequate supply of the
required personnel five years or so years down the road. For example, if Kenya
Airways vision is to expand its destinations to other parts of the world, then it’s HRP
must reflect the need for more staff to manage the new routes.

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 Demographics/ population change

Fluctuations in population change affect labour supply available in various age

categories. For example, in Kenya, 1970’s and 1980’s had high growth rate of 4%.
People in the 20 –40 age group have difficulty entering the job market now – for the
organization there is an over-supply of new entrants but a higher demand for the 45
and above age group.

The personnel manager faces competition for jobs for new entrants and labour
shortage for middle aged and older people in high level jobs. The forecast would be
an oversupply of new entrants for the next two decades and a decline thereafter as
population growth reduces to 2 - 2.5%. The reverse applies to developed
industrialized that have a low supply of new entrants and high supply of labour in the
senior levels.

The economy

Fluctuation from depressions to booms and back in the national economy and
internationally poses a problem for the HRP manager. Predicted future boom means
high sales and increased production hence more categories of personnel needed.
Future declines mean layoffs and freezing of employment. Drought may affect
agricultural-related firms.

Technological trends

Technology can create new jobs and render others obsolete. For example, computer
technology resulted in the decrease of bookkeepers and an increase in the number of
computer programmers. Technology is being used to replace labour e.g. ATMs mean
fewer tellers in banks.

2.1.4 Labour turnover and HRP

• Labour turnover is the movement of people into and out of the firm.
• Labour turnover rate is the rate of displacement of the personnel employed in an
organization due to resignation, retirement or retrenchment (referred to as separation).
• This movement is an indicator of the stability of the workforce. When experienced
workers go out and new workers come in who need training, work suffers and cost of
labour goes up.
• Past turnover rates are useful in predicting the future. If this rate is high, it is a sign of
instability and affects the firm’s efficiency and profitability.

Causes of labour turnover

Causes can be avoidable or unavoidable. The avoidable factors include: unfriendly working
atmosphere; lack of proper facilities and amenities; low wages; poor management and
redundancy due to lack of planning or foresight. Unavoidable factors include: personal
betterment; illness or accident; death or retirement; dismissal due to insubordination and
relocation.

Measurement of labour turnover rate:

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There are two methods for measuring labour turnover:

1. Separation rate method which expresses the number of separations during a given period
(usually one year) as a percentage of the number employed during same period. Thus:

Number of separations in a period

x 100
Average number of workers in the period

OR
Number of workers who left in period
X 100
Average number of workers in the period

2. Replacement method – expressed in terms of number of new employees as a percentage

of average number of workers in a given period.

Number of replacements in a period

X 100
Average number of workers in period

3. Fluctuation rate method – expressed in terms of number who left plus number of
replacements as a percentage of average number of employees in period.

Number of separations + Number of replacements

X 100
Average number of workers in the period

Turnover rate is significant in HRP as it helps management in preparing HR inventory for

the future

Costs of labour turnover

(a) Hiring costs in terms of time, advertising costs, interviewing, selection etc
(b) Training costs
(c) The pay of a learner is in excess of what is produced
(d) Accident rates of new employees are often higher
(e) Loss of production in the interval between separation of old employee and
new employee
(f) Scrap and waste rise due to inexperience of new employee
(g) Increase in overtime costs during interval

Activity: Using examples, can you explain how these factors may affect the
performance of an organization?

2.2 JOB ANALYSIS

Objectives:
• Explain the meaning of job analysis
• Discuss the importance of conducting a job analysis in organizations

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 • Describe the process of job analysis
• Outline the challenges encountered in the process of job analysis
• Discuss the significance of job descriptions and job specifications

2.2.1 Meaning of job analysis

Job analysis refers to the detailed and critical analysis of a specific job or position. It involves
a detailed examination of its various elements and it provides the groundwork for
determining the value of a job.

2.2.2. Importance of job analysis

Job analysis forms the cornerstone of all HR functions. Information obtained from this
process can be used for:
• The recruitment and selection of the most suitable candidates for a job
• The determination of the training needed by employees
• Determination of work performance standards
• The redesign of jobs
• The maintenance of good industrial relations as employees will know what is
expected of them (creates standardization in work)
• The determination of the value of a job and subsequently the remuneration level
• Career development provides employees with information on training and career
development
• Provides the means by which individual performance can be evaluated

2.2.3 The process of job analysis

This involves data collection by use of methods such as:

• Questionnaires
• Interviews
• Observations
• Written narratives
• Self description
• Checklists and inventories
• Diaries

Activity: Explain the appropriateness of each data collection method for a given
situation

The choice of method depends on;

• Effectiveness of the method – some methods are effective than others in obtaining the
required information. The most appropriate should be selected.
• Degree of expertise – different methods require different levels of expertise conduct
the job analysis
• The resources – human and finances and amount of time available
• Extent of employee involvement – more involvement means acceptance, ownership
and trust in results, but can lead to inflation of importance of jobs. Solution is to
triangulate the job incumbents to enable double checking of accuracy of responses.

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 • Level of detail – depends on purpose of the results e.g. pay needs less detail while
training needs more detail
• When to conduct – when jobs have changed due to methods, technology or enlarged
or enriched or when turnover is high – may indicate job is too difficult.
• Traditional or future oriented analysis – traditional focuses on current performance
while future oriented focuses on future performance. Latter is useful in rapidly
changing jobs due to technology

The information to look for in the process of job analysis includes:

• Overall purpose of the job i.e. why the job exists and what the jobholder is expected
to contribute.
• Job content: i.e. nature and scope of the job in terms of tasks and operations
• Performance criteria: measures or indicators, which enable evaluation to be carried
out.
• Competences: the skills knowledge and personal qualities required to perform the job.
• Developmental factors: career prospects training etc
• Environmental factors: e.g. health and safety and working conditions

2.2.4 Problems in job analysis

Job Analysis is affected by many factors.

• When technology changes or products become obsolete, jobs have to be redesigned. It
is therefore a continuous process.
• Negative employees’ perception of the job analysis process which may be negative
hence reluctant to give information due to fear of layoff
• Normal resistance to change

2.2.5 Job descriptions and job specifications

The essence of job analysis is the application of systematic methods to the collection of
information about jobs. It distinguishes people issues (job specification) and job issues (job
description), which are the end products of the job analysis process. These are the end
products of job analysis.

A job description is a statement containing items such as: Job title; tools to use; place of
job; supervision/reporting line; job summary and working conditions.
A job specification also known as person specification is a statement spelling out the
human capacities needed for the task. This includes: experience; education; judgment;
initiative; physical skills and emotional characterization.

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Difference between job description and job specification
JOB DESCRIPTION JOB SPECIFICATION
Provides basic information on the overall A statement of the human qualifications
purpose of the job and on the jobholder’s necessary to do the job.
basic accountabilities.
Describes the amount of various
Defines the place of the job in the qualification factors that the job holder
organization and clarifies to jobholders and must possess in order to accomplish the
others the contribution the job makes to assigned task adequately.
achieving organizational objectives The contents include:

Provides job information to job applicants Educational qualifications,

Experience, Training
Provides a basis for the contract of Special skills
employment Special aptitude
Initiative
Job title i.e. name of the job e.g. Economic Responsibility
analyst, Project manager, Executive Analysis and judgment ability
secretary, Lecturer, Telephone operator, Mental and visual demand
Senior registrar etc. Adaptability
Emotional characteristics
Shows the reporting line i.e. person whom Physical attributes/stamina
job holder is reporting to e.g. personnel Verbal or written expression
manager or chief accountant and who /communication
reports to the job holder Demographic characteristics e.g. gender,
age, race, marital status,
Overall responsibilities - the broad picture nationality/citizenship etc.
of the job and distinguishing it from other
jobs

Limits of main duties and responsibilities

Detailed statement of work to be performed
Tools, equipment and materials used
Working conditions
Hazards
Relation of job to other jobs

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 Activity:
• Explain the characteristics of a good job description
• Look at a newspaper job advertisement and identify its components. How do
they relate to what you have learnt about job descriptions and job
specifications?
• If you were given the responsibility of carrying out a job analysis in your
organization, what methods would you use and why

2.3 RECRUITMENT AND SELECTION

After determining the type and number of employees needed through HRP and
determining/identifying the various elements of a job through a job analysis, the next problem
of the HRM is to procure the employees.

Objectives:
• Distinguish between recruitment and selection
• Discuss the relationship between organizational strategy and recruitment and selection
options
• State and discuss the various sources of recruitment
• State and discuss the methods used to select prospective employees.

2.3.1 Defining recruitment and selection

The overall aim of recruitment and selection is to obtain at a minimum cost the number and
quality of employees required to satisfy the human resource needs of the organization.

Recruitment: Refers to the first part of the process of filling a vacancy. It is the process of
searching for prospective employees and stimulating them to apply for a job in an
organization. It includes an examination of the vacancy by getting information on the job –
job description and job specifications, then considering the various sources of employees or
suitable candidates, making contact with them and attracting applications from them.

Selection: Refers to the process of choosing the individuals who possess the necessary skills,
abilities and personality to successfully fill the vacancies. It involves sifting through
applications, assessing candidates, making a choice and offering employment.

2.3.2. Strategic Choices in recruitment and selection

Organizations can choose a buy or make strategy when recruiting.

Make strategy – means hiring less skilled workforce and investing more in training and
development
Buy strategy – is hiring skilled or professional labour who possess necessary skills to begin
working immediately. However the amount of money required to attract such labour may
outweigh the benefits

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 ORGANIZATIONAL STRATEGY AND RECRUITMENT AND SELECTION
An organization faced with environmental change can adopt one or several strategic postures
with the environment. Miles and Snow’s (1978) typologies of defenders, prospectors,
analyzers and reactors explain business strategic choices of organizations. The four types of
organizations are based on observed patterns of response to market conditions.
Defenders strongly defend their position in the market against any forces whether
competitors, government or trade unions. They depend on a narrow line of products that
caters for a niche market and tend to rely on established and stable technology. They would
rather improve efficiency of existing operations than search for new opportunities when faced
with change.
In terms of human resource management response, Anthony and colleagues (1996) explain
that defenders prefer aggressively trained specialists in the industry in order to produce
and market a narrow line of products. Top managers tend to be highly expert in their
limited area of operation. When confronted with change, defender organizations are more
likely to focus on internal efficiency-enhancing strategies which may mean adopting cost-
cutting measures such as downsizing, reducing product lines, developing high quality
workforce through specific training, introducing performance related pay, avoiding trade
unions and collective bargaining and adopting numerical flexibility in its employment
patterns. From HRM theory, the hard HRM aspects are likely to be stronger than the soft
aspects as defenders appear to operate along Taylorist lines where efficiency, tight controls,
avoidance of collective bargaining and performance pay are practiced. Defenders prefer
stability and are more likely to ‘make’ their own employees by recruiting new job entrants
and offering specific training that fits with the organizational strategy and culture. During
selection they would look for people with high capacity to learn.
Prospectors on the other hand are described as organizations that are always looking for
new market opportunities and aggressively seeking to develop new products and new
markets. They have a strong concern for product and market innovation. When
confronted with environmental change, they are more likely to experiment with potential
responses to emerging trends. Prospectors usually take the lead, forcing competitors to
respond, hence acting as creators of change and uncertainty. Because of constant
shuffling of products and markets and the need to monitor a wide range of environmental
conditions, trends and events, thus spreading their efforts and resources, prospectors tend to
be inefficient. In addition, prospector organizations are characterized by loose controls,
devolution of power and authority, decentralized systems, less bureaucracy and easy
communication.
In terms of human resource management, prospectors look for aggressive, entrepreneurial
people who are willing to take risks to develop new products. They maximize functional
flexibility by training people on a wide range of skills so that they can be moved easily to
new projects. While innovative and highly qualified individuals are valued and rewarded,
investment in general skills that are easily transferable to other projects or even other
organizations are offered. Expertise and technologies tend to be embedded in people
rather than systems and routine mechanical operations. As such, workforce diversity is
encouraged to tap a wide range of skills and talents. The human resource management role
therefore, is one of facilitating rather than controlling organizational operations. From the
foregoing, prospector organizations can be said to practice soft HRM as emphasis is on
people oriented outcomes rather than production and efficiency. Prospectors prefer ready
made employees hence a ‘buy’ recruitment strategy. In selection they are more likely to use

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sophisticated techniques and elaborate screening to ensure only the most qualified candidates
in their fields are selected. They prefer people who can take risks and have high tolerance for
change and ambiguity.

Analyzers are organizations with a split personality. They have one product in a changing
market and another in a stable market. In terms of human resources, analyzers value both
stability and innovation in employees. For this type of organization, balance is important.
When change occurs, they may resort to hiring a numerically and functionally flexible
periphery workforce while retaining a specialized core set of employees to provide stability
and continuity. Because they possess characteristics of both the defender and prospector
organizations, analyzers can be said to practice either soft or hard HRM depending on
whether the change is perceived as a threat or an opportunity.

Finally reactors are organizations whose managers may perceive major changes in their
environment but have difficulties adapting quickly. Miles and Snow describe such
organizations as unstable and ineffective. The causes for such dysfunction may be either the
failure of top management to articulate the organization’s strategy or inability to shape the
organization’s structure to fit strategy or resistance to change by management. In terms of
human resource management, reactors prefer employees who are less resistant to change and
would help the organization move along a chosen path. As their decisions are erratic it is
rather difficult to predict the response of reactors.
Sources of recruitment
Sources can be internal or external.

Internal sources: i.e. ‘promotion from within.’ It is considered the best method for recruiting
for top and middle level managers. The methods for internal sourcing include:
• Company newsletter
• Internal e-mail
• Circulars to all staff
• Noticeboards
• Meetings
• Company conferences
Benefits of internal recruitment
• Builds employee loyalty
• Ensures ability and continuity in the organization
• Creates a state of sincerity and trust among employees
• Encourages hard work and good performance in the lower ranks as they look forward
to promotion
• Cheap and quick to obtain employees
• Reduces costs of induction training
• Inside employees know the organization and its policies
• Have proved their ability and loyalty
• Promotion from within is a positive moral builder
• One vacancy filled results in upgrading of several employees and hiring a new person
to fill the vacant position at the bottom
• Better utilization of employees in different jobs

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 • A present employee who is promoted is more likely to stay with the organization than
a new employee.
• Quicker and cheaper than external recruitment

Disadvantages of recruiting internally

• Narrow area of selection
• Leads to stagnation of service and perpetuates conservatism
• Stifles new ideas
• Does not compel employees to keep abreast of new development in their fields.

External sources: - External sources are usually used whenever a vacancy falls vacant.
Even when an internal candidate is transferred or promoted in the organization, the final
result is external sourcing elsewhere in the organization. Sources are many and some are
more costly than others. Some of the sources are:

• Former employees: those who worked with the organization but left for various
reasons with a good record. They know the organization culture and policies and are
likely to stay with the organization
• Friends and relatives of present employees: Although it may be seen as nepotism, –
their recommendation supports the candidates character.
• Schools and colleges: provides young and new entrants to the job labour market. But
require training.
• Advertising: used for high level HR. It gives more information e.g. job description
and specifications, salary, benefits etc. Reaches a wide audience.
• Employment agencies: collects curriculum vitae’s and pass on to organizations
looking for particular skills.
• Casual applications – unsolicited: cheap for the organization – usually cover a wide
array of skills and have to be sorted.
• Labour unions: creates good industrial relations with management and labour unions
• Professional organizations e.g. IPM, KIM, KASNEB or LSK (recently used for
recruiting judges in Kenya) etc
• Recruitment consultants: e.g. Hawkins & associates, Manpower services etc

Benefits of external sources

• Fresh ideas are attracted as employees bring in new experiences from outside
• Possess varied and broad experiences
• New employees can help break old habits

Disadvantages of external recruitment

• Brings in people with no administrative/managerial experience
• Huge expenditure on long training
• Reduced incentive to good performance among present employees – they see no
chance of promotion

Choice of method for recruitment depends on:

• The type of job to be filled
• Relative difficulty of attracting candidates by the organization
• Geographical location of the organization

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 • Time available to fill the position
• Past success or failure in using different methods
• Size of the organization
• Calibre of present employees
• Attitude of top management
• Recruitment strategy of the organization

Costs of recruitment
Recruitment is a costly personnel management function. The costs include:
• Management time used in job analysis
• Drafting advertisements and displaying
• Assembling and sorting applications
• Preparing an sitting in interviews for selection
• Postage to unsuccessful candidates

2.3.3 Selection

This is the second stage in the procurement process. It is determining which applicants best
fit the job applied for. It involves: sifting through applications; inviting candidates;
interviewing; testing; assessing; obtaining references; offering employment and preparing
contracts of employment. It is a series of activities for securing basic information about
applicants, which is compared with the job specification – the standard qualifications
required for the job.

Methods of employee selection

Activity: Using your own experience, state the different types of methods organizations use to
select employees from a list of applicants?

The interview
The interview is widely used as a selection tool or technique and it holds a central position in
the recruitment and selection function.

Definition:
An art of conversation through which fitness of a person for a particular job is
measured. The interviewer looks for behaviors that indicate fitness or unfitness for a
job. The information he obtains helps to fill out the details of a mental picture, which
he is trying to complete. It is a picture, which either fits the applicant onto the job or
rules him out.

Aims of interviews
• To verify written information given by the applicant
• Clarify any written details about the candidate or the firm
• To measure/assess the personality of the candidate
• To test the expression power, social skills and physical attributes of the candidate
which cannot be obtained in writing.
• Obtain additional information through direct contact.

The interview process can be divided into:-

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 1) The pre-interview stage - This involves arrangements for interviews such as:
- Setting the time, inviting the candidates, giving them directions, serving
refreshments, informing receptionists or security to expect the interviewees
- Selecting a quite and comfortable waiting room, providing reading material
and access to the cloak room
- Book interviewing room, arrange, brief interviewers/panelists, meals etc.
- Comfortable sitting arrangements such as a round table – no barriers

2) The interview stage

This is the face-to-face conversation. Purpose is to obtain any information
about a candidate which will enable a valid prediction to be made of his or her
future performance on the job in comparison with other candidates. It involves
processing and evaluating evidence about capabilities of a candidate in
relation to the job specification

An interview should be planned around the job specification and questions should
cover all the factors e.g.
- qualifications
- Experience
- Knowledge
- Skills
- Physical and personality characteristics etc

The approach:
Use a biographical approach – e.g. tell us about yourself
Welcoming remarks
Explain plan of the interview
Biographical interview
Allow for probing questions
Summarise with employment conditions, pay, fringe benefits etc

The following should be done by the interviewer.

- Plan for the interview
- Establish rapport with candidate
- Encourage the candidate to talk
- Cover all the areas as planned
- Probe where necessary
- Maintain control over the direction and time taken by the interview
- Listen.
Don’t:-
• Start the interview unprepared
• Plunge too quickly into demanding questions
• Ask leading questions
• Jump to conclusion on inadequate evidence
• Pay too much attention to isolated strengths or weaknesses
• Talk too much
• Ask negative questions or tricky questions which can disorient the candidate e.g. Do
you smoke or drink, ethnic etc

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3) The post – interview stage

After the interviews have been done, the last stage is to assess the candidates.
The criteria could be a standardized format drawn in advance of the interview stage with
several criteria’s for assessing and selecting the best candidates.
The criteria accrued normally conform with the factors in the job application i.e.
• Qualifications and training
• Experience
• Knowledge and skills – as acquired, training or natural
abilities
• Overall impression – appearance, manner and speech,
physique, health etc.
• Personality characteristics – leadership, drive,
dependability, persistence, self-reliance, sociability etc.
Types of interviews

1. Individual interviews – where only one interviewer is present

2. Panel interviews – where more than two interviewers are present to interview
the candidate.
3. Selection Boards – Large and involves people with different interests
4. Group selection – up to 6-8 candidates face a panel and involve exercise and
tests e.g. of typists, computer specialists etc.

Characteristics of a good interview

• Proper conduct – polite, friendly, listen, give candidate attention and be in control
of interviews.
• Show interest in each applicant
• Patience – not interrupting a candidate who is slow in responding.
• Concentration – not intolerant and impulsive - may not assess candidate fairly.
• Timing for interview – convenient e.g. not at night or holiday.
Closing – good summary at end of the interview.

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