BBPB2103 Human Resources Management - Esept21

BBPB2103
Human Resource Management
Copyright © Open University Malaysia (OUM)

BBPB2103
HUMAN RESOURCE
MANAGEMENT
Dr Siti Zubaidah Othman
Nor Azimah Chew Abdullah
Wan Din Wan Daud
Tang Swee Mei
Hj Yaakob Ibrahim
Dr Ho Jo Ann

Third edition 2021
Second edition 2013
First edition 2008
Developed by Centre for Instructional Design and Technology, OUM.

Copyright © Open University Malaysia (OUM), BBPB2103
All rights reserved. No part of this work may be reproduced in any form or by any means without
the written permission of the President of Open University Malaysia (OUM).
www.oum.edu.my

Table of Contents
Course Guide xiăxvii
Topic 1 Introduction to Human Resource Management 1

1.1 Definition of Human Resource Management 2
1.1.1 Differences between Personnel Management and 3
Human Resource Management
1.2 Importance of Human Resource Management 5
1.2.1 Roles of Human Resource Management Department 5
1.2.2 Human Resource Management in Malaysia 7
1.3 Functions of Human Resource Management 8
1.4 Challenges of Human Resource Management 12
1.5 Human Resource Management Issues 16
Summary 21
Key Terms 21
References 22
Topic 2 Legal Environment 23

2.1 Importance of Legal Environment in Human Resource 24
Management
2.2 Employment Act 1955 25
2.2.1 Contract of Service 27
2.2.2 Payment of Wages 28
2.2.3 Recruitment of Women 29
2.2.4 Maternity Allowance 29
2.2.5 Normal Hours of Work 30
2.2.6 Rest Days, Hours of Work, Holidays and Other 31
Conditions of Service
2.3 Industrial Relations Act 1967 (Revised 1976) 34
2.3.1 Protection of Rights of Workmen, Employers and 34
Trade Unions
2.3.2 Recognition and Scope of Representation of Trade 35
Unions
2.3.3 Collective Bargaining and Agreements 35
2.4 Trade Unions Act 1959 36
2.5 Occupational Safety And Health Act 1994 37
2.6 EmployeesÊ Social Security Act 1969 38
2.7 Human Resource Development Act 2001 40
2.8 Employees Provident Fund Act 1991 (Amendment 2006) 42

iv  TABLE OF CONTENTS
2.9 WorkmenÊs Compensation Act 1952 44

Summary 47
Key Terms 47
Topic 3 Human Resource Planning, Job Analysis and Design 48

3.1 Importance of Human Resource Planning 49
3.2 Human Resource Planning and Strategic Planning 51
3.3 Human Resource Planning Process 55
3.4 Job Analysis 66
3.4.1 Job Analysis Approach 70
3.4.2 Job Description and Specification 74
3.4.3 Uses of a Job Analysis 76
3.5 Job Design 77
3.5.1 Behavioural Matters 78
3.5.2 Industrial Engineering Matters 81
3.5.3 Ergonomic Matters 81
3.5.4 Job Design to Increase Employee Contributions 83
3.5.5 Suitability of Work Timetable 87
Summary 91
Key Terms 91
References 92
Topic 4 Employee Recruitment 93

4.1 Internal Recruitment 94
4.2 External Recruitment 96
4.3 Social Media Recruitment 100
Summary 104
Key Terms 104
Reference 104
Topic 5 Selection 105

5.1 Selection Process 106
5.2 Information Reliability and Validity 107
5.2.1 Information Reliability 107
5.2.2 Information Validity 108

TABLE OF CONTENTS  v
5.3 Selection Methods 111

5.3.1 Information Sources 111
5.3.2 Employment Test 114
5.3.3 Job Interview 116
5.3.4 Reaching Selection Decision 121
Summary 126
Key Terms 127
References 127
Topic 6 Employee Training and Development 128

6.1 Definition of Employee Training and Development 129
6.2 Advantages of Conducting Training and Development 130
6.3 Methodical Approach in Conducting Training and 132
Development Programmes
6.3.1 Who Requires Training and Development? 132
6.3.2 Training Needs Analysis 133
6.3.3 Defining Training Objectives 135
6.3.4 Designing Training Programmes 135
6.4 Factors in Selecting Training Methods 139
6.5 Online Training Programmes 141
6.6 Evaluating Training Programmes 143
Summary 146
Key Terms 146
Topic 7 Performance Evaluation 147

7.1 Definition of Performance Evaluation 148
7.2 Purposes and Uses of Performance Evaluation 148
7.3 Main Causes of Performance Evaluation Failure 150
7.4 Performance Evaluation Process 152
7.5 Responsibility of Evaluating 156
7.6 Performance Evaluation Methods 158
7.6.1 Trait Methods 158
7.6.2 Behavioural Methods 161
7.6.3 Results Methods 164
7.7 Errors in Performance Evaluation 167
7.8 Performance Interview 169
Summary 172
Key Terms 172
References 173

vi  TABLE OF CONTENTS
Topic 8 Employee Compensation 174

8.1 Definition of Compensation 175
8.2 Types of Compensation 175
8.3 Strategic Compensation Planning 177
8.4 Factors that Influence Wage Rate 180
8.5 Compensation Fairness 183
8.6 Incentive 184
8.6.1 Importance of Incentive Plan 185
8.6.2 Characteristics of an Effective Incentive Plan 186
8.6.3 Types of Incentive Plans 186
8.7 Benefits 191
8.7.1 Characteristics of an Effective Benefit Programme 192
8.7.2 Types of Benefit Programmes 194
Summary 200
Key Terms 201
References 201
Topic 9 Employee Relations 202

9.1 Understanding Rights of Employees and Employers 203
9.2 Employee Discipline 204
9.2.1 Problematic Employees and Misconduct in an 205
Organisation
9.2.2 Procedures and Discipline 206
9.2.3 Disciplinary Approaches 208
9.2.4 Inappropriate Disciplinary Action 212
9.2.5 Guidelines in Implementing Fair Disciplinary 214
Action
9.3 Employee Participation in Trade Unions 216
9.3.1 Purposes of Trade Union Participation 216
9.3.2 Becoming a Trade Union Member 217
9.3.3 Trade Union Funds 218
9.3.4 Types of Trade Unions 218
9.3.5 Collective Bargaining and Collective Process 222
9.3.6 Industrial Actions 224
9.3.7 Procedure to Solve Disputes 226
Summary 228
Key Terms 229
References 230

TABLE OF CONTENTS  vii
Topic 10 Employee Safety and Health 231

10.1 Understanding Concept of Occupational Safety and 232
Health
10.2 Laws Related to Occupational Safety and Health 233
10.2.1 Factories and Machinery Act 1967 233
10.2.2 Occupational Safety and Health Act 1994 234
10.3 Safety and Health at Work 239
10.3.1 Accidents at the Workplace 240
10.3.2 Risk of Chemical Substances 243
10.3.3 Air Quality in the Building 244
10.3.4 Video Terminal Appearance 245
10.3.5 Injuries of Frequent Movement 246
10.4 Issues Related to Safety and Health 247
10.4.1 Violent and Dangerous Work Environment 248
10.4.2 Work Stress 248
10.4.3 HIV/AIDS at the Workplace 250
10.5 Forming a Safe and Healthy Work Environment 251
10.5.1 Employee Aid Programme 252
10.5.2 Safety Programmes 252
10.5.3 Health Programme 254
Summary 256
Key Terms 257
References 257
Answers 259

viii  TABLE OF CONTENTS

COURSE GUIDE  xi
COURSE GUIDE DESCRIPTION

You must read this Course Guide carefully from the beginning to the end. It tells
you briefly what the course is about and how you can work your way through
the course materials. It also suggests the amount of time you are likely to spend
in order to complete the course successfully. Please keep on referring to the
Course Guide as you go through the course materials as it will help you to clarify
important study components or points that you might miss or overlook.
INTRODUCTION
BBPB2103 Human Resource Management is one of the courses offered at Open
University Malaysia (OUM). This course is worth 3 credit hours and should be
covered over 8 to 15 weeks.
COURSE AUDIENCE
This is a core subject for learners in the Bachelor of Management and Bachelor of
Business Administration programmes. It is also a fundamental major course for
learners taking the Bachelor of Hospitality Management programme. For learners
taking the Bachelor of Human Resource Management programme, this course is
a core major subject.
As an open and distance learner, you should be able to learn independently and
optimise the learning modes and environment available to you. Before you begin
this course, please ensure that you have the correct course materials, understand
the course requirements, and know how the course is conducted.

xii  COURSE GUIDE
STUDY SCHEDULE
It is a standard OUM practice that learners accumulate 40 study hours for every
credit hour. As such, for a 3 credit hour course, you are expected to spend
120 study hours. Figure 1 shows the student learning time (SLT).
Figure 1: Student Learning Time
COURSE LEARNING OUTCOMES

By the end of this course, you should be able to do the following:
1. Describe the functions of human resource management in an organisation.
2. Explain the roles of the human resource manager in designing the course of
an organisation.
3. Evaluate the effects of change and development in an organisation on

human resource management.

COURSE GUIDE  xiii
COURSE SYNOPSIS
This course is divided into 10 topics. The synopsis for each topic is listed as
follows:
Topic 1 is an introduction to human resource management. Discussion starts

with the definition of human resource management. Learners are then exposed to
the importance of human resource management and the environment of human
resource management in Malaysia. Aside from that, learners are also exposed to
the five main functions of human resources, as well as the challenges and issues
faced in human resource management.
Topic 2 discusses the legal environment that affects human resource

management practices in Malaysia. Learners are exposed to some major Acts
which are closely related to human resource management practices. Among the
Acts discussed are Employment Act 1955, Industrial Relations Act 1967, Trade
Unions Act 1959, Occupational Safety and Health Act 1994, EmployeesÊ Social
Security Act 1969, Human Resource Development Act 1992, Employee Provident
Fund Act 1991, and Workmen's Compensation Act 1952.
Topic 3 touches on human resource planning. It discusses how an organisation

tracks the movement of its employees into, within, and outside its organisation.
The topic also explains job analysis and job design. In job analysis, the aim and
methods of analysis are discussed. The results of the process are job description
and specification. Meanwhile, job design is concerned with how an organisation
designs jobs to cater to its establishment and employees.
Topic 4 talks about recruitment activities. It describes in broad terms two

traditional sources of recruitment which attract potential applicants to apply
for job openings. As organisations are now operating in the Information Age,
this topic also discusses best practices in using social media as a source of
recruitment.
Topic 5 discusses how an organisation selects qualified candidates to join its

organisation. The selection method involves the process of gathering information
about candidates, and the process of deciding whether the candidate would be
accepted or rejected for the post.
Topic 6 focuses on the importance of conducting training and development

systematically, also known as the methodical approach. Factors in selecting the
right training method are discussed and learners will also learn about how to
conduct and evaluate training programmes.

xiv  COURSE GUIDE
Topic 7 covers the performance evaluation process, the sources and methods
to evaluate employeesÊ performance, and the performance discussion process.
This topic also explains how managers or supervisors can make errors while
evaluating employees.
Topic 8 discusses the types of compensation offered by an organisation to

motivate employees to work. It explains the three significant components
in determining the salary scale of an organisation, which are internal equity,
external equity, and individual equity, as well as factors that influence wage
levels. Various types of incentives and benefits, including the characteristics of an
effective incentive plan, are discussed.
Topic 9 deals with employee relations, rights, discipline, and participation

in a trade union. The topic starts by explaining the rights of employees and
employers, and then describes problematic employees and misconduct. Then,
learners will learn about disciplinary procedures including disciplinary
approaches and guidelines for implementing fair disciplinary actions. The later
part of this topic focuses on employee participation in trade unions.
Topic 10 ends this course with discussion on work safety and health. In this
topic, learners are familiarised with laws that govern safety and health at the
workplace and the associated hazards. At the end of the topic, some ideas on
how to create a safe and healthy work environment are suggested.
TEXT ARRANGEMENT GUIDE

Before you go through this module, it is important that you note the text
arrangement. Understanding the text arrangement will help you to organise
your study of this course in a more objective and effective way. Generally, the
text arrangement for each topic is as follows:
Learning Outcomes: This section refers to what you should achieve after you
have completely covered a topic. As you go through each topic, you should
frequently refer to these learning outcomes. By doing this, you can continuously
gauge your understanding of the topic.

COURSE GUIDE  xv
Self-Check: This component of the module is included in strategic locations

throughout the module. It may be located after one subtopic or a few subtopics.
It usually comes in the form of a question. When you come across this
component, reflect on what you have already learnt thus far. By attempting to
answer the question, you should be able to gauge how well you have understood
the subtopic(s). Most of the time, the answers to the questions can be found
directly in the module itself.
Activity: Similar to Self-Check, the Activity component is also placed at various

locations or junctures throughout the module. This component may require you
to answer questions, explore short case studies or conduct an observation or
research. It may even require you to evaluate a given scenario. When you come
across an Activity, you should try to reflect on what you have gathered from
the module and apply it to real situations. You should, at the same time, engage
in Higher Order Thinking skills (HOTs) i.e. analysing, synthesising and
evaluating instead of only recalling and defining.
Summary: You will find this component at the end of each topic. It summarises
various important parts of each topic and helps you to recap the whole topic.
By going through the summary, you should be able to gauge your knowledge
retention level. Should you find points in the summary that you do not fully
understand, it would be a good idea for you to revisit the details in the module.
Key Terms: This component can be found at the end of each topic. You should
go through this component to remind yourself of important terms or jargon used
throughout the module. Should you find terms here that you are not able to
explain, you should look for the terms in the module.
References: A list of relevant and useful textbooks, journals, articles, electronic

contents and sources can be found in this section. The list may appear in a few
locations such as in the Course Guide (in the References section), at the end of
every topic or at the back of the module. You are encouraged to read or refer to
the suggested references to obtain additional information and enhance your
overall understanding of the course.

xvi  COURSE GUIDE
PRIOR KNOWLEDGE
Learners are required to have completed BBPP1103 Principle of Management.
ASSESSMENT METHOD
Please refer to myINSPIRE.
REFERENCES
Byars, L. L., Rue, L. W., & Ibrahim, N. (2015). Human resource management
(11th ed.). McGraw-Hill.
Dessler, G. (2016). Human resource management (15th ed.). Pearson.
Ivancevich, J. M., Konospaske, R., & Matteson, M. (2013). Human resource

management (10th ed.). McGraw-Hill.
Maimunah Aminuddin (2013). Malaysian employment law and industrial

relations (8th ed.). McGraw-Hill.
Snell, S. A., Morris, S. S., & Bohlander, G. W. (2015). Managing human resource
(17th ed.). South-Western.
TAN SRI DR ABDULLAH SANUSI (TSDAS)

DIGITAL LIBRARY
The TSDAS Digital Library has a wide range of print and online resources for
learners. This comprehensive digital library, which is accessible through the
OUM portal, provides access to more than 30 online databases and several of
them are shown in Figure 2. As an OUM learner, you are encouraged to make
full use of the resources available through this library.

COURSE GUIDE  xvii
Figure 2: Among the Online Databases Available at TSDAS Digital Library

xviii  COURSE GUIDE

Topic  Introduction
to Human
1 Resource
Management
LEARNING OUTCOMES
By the end of this topic, you should be able to do the following:
1. Define human resource management.
2. Explain the importance of human resource management.
3. Discuss the functions of human resource management.
4. Examine challenges faced by human resource management.
5. Evaluate issues related to human resource management.
 INTRODUCTION
MalaysiaÊs fourth and seventh Prime Minister Tun Dr Mahathir Mohamad
(1981ă2003; 2018ă2020), once said the following:
From the amazing economic experience two decades ago, among countries that
before had limited „natural resources‰, it is clear that the most important
resources to a country are talent, skills, creativity, and the effort of its people.
Brain power is a source that is much more valuable than natural resources.
People are our main resources. Without doubt, in the 1990s and beyond,
Malaysia must give its utmost attention towards the growth of this very crucial
resource.
(Mahathir, 1991)

2  TOPIC 1 INTRODUCTION TO HUMAN RESOURCE MANAGEMENT
At one time, many observers were of the opinion that machines would take over
the functions and roles of employees in an organisation. The same opinion persists
in the era of Industry Revolution 4.0. However, the opposite has happened. Like
what Tun Dr Mahathir said, human resources are becoming more important in
todayÊs organisations, especially in knowledge-based industries such as software
and information services.
The success or failure of an organisation most of the time relies on the knowledge,
skills, and ability of its employees. Many experts feel that an organisation is able
to achieve greater advantage if it has valuable human resources which are difficult
to acquire and imitate and are well-managed.
Human resource management is one of the most important management functions

in an organisation as it can obtain and develop dynamic and qualified employees.
1.1 DEFINITION OF HUMAN RESOURCE

MANAGEMENT
Human resource management consists of philosophies, policies, programmes,
practices, and decisions related to employee management in an organisation. Its
aim is to simplify and increase the usage of employees effectively in order to
achieve organisational and employee goals.
Human resource management focuses on managing the workforce in order to

take care of employee and employer relations, especially in using employees
productively to reach the organisationÊs strategic business objectives and fulfill
employee needs.
In the past, human resource management was also known as personnel

management. However, the term was changed to human resource management in
the 1970s, which is widely used today. This development is in line with changes at
the international level, which recognises human resources as a major source in an
organisation. Nevertheless, there are still groups that refer to human resource
management as personnel management.

TOPIC 1 INTRODUCTION TO HUMAN RESOURCE MANAGEMENT  3
1.1.1 Differences between Personnel Management

and Human Resource Management
There are some who are of the opinion that personnel management and human
resource management are the same. They view human resource management as a
modern version of personnel management due to technological changes in the
current work environment and a shift in social values.
There are also other groups who think that personnel management and human
resource management are different in terms of their roles, scope, and actions.
Human resource management portrays a much wider perspective, which includes:
 issues pertaining to employee safety and health;
 industrial relations;
 stress in the workplace; and
 employee satisfaction in increasing an organisationÊs effectiveness.
Human resource management recognises the importance of manpower and sees

employees as valuable assets to an organisation. Employees are complex resources
that can be driven and developed progressively for the benefit of the organisation
and the employees themselves. Human resource management looks at employee
needs in the perspective of the organisation and takes into account external
influences in the business environment. It also acts as a change agent for an
organisation.
Personnel management is said to be more operational in nature, and it stresses on

the micro level as opposed to human resource management. It focuses solely on
employee administration. It provides support services to maintain employees in
the present organisational structure by:
 determining the sufficient number of employees;
 assigning suitable tasks and responsibilities to employees;
 hiring employees;

 paying employees;
 managing matters concerning promotions; and
 monitoring employee discipline.
Personnel management does not contribute to the organisationÊs strategic

planning. It is more reactive in nature and ensures the everlasting status quo in
an organisation. Table 1.1 simplifies the differences between human resource
management and personnel management.
Table 1.1: Differences between Human Resource

Management and Personnel Management
Human Resource Management Personnel Management
Handles macro issues Handles micro issues
Planned and long term Ad hoc and short term
Proactive Reactive
Involves ongoing strategies to manage and More administrative in nature

develop an organisationÊs workforce
Reports to the Chief Executive Officer Reports to the line manager
Plays a role in decision making Plays no role in decision making
Acts as a change catalyst Maintains status quo
Facilitates an organisationÊs positive Does not take into account the effects of
culture culture
Adapted from Yong (1996)
EXERCISE 1.1
1. Give the definition of human resource management.
2. What are the differences between human resource management and

personnel management?

1.2 IMPORTANCE OF HUMAN RESOURCE

MANAGEMENT
Human resources are an important resource for an organisation as technological
resources are limited. Therefore, human resource management is essential so as
to manage and conduct employees effectively in order to help the organisation
achieve competitive advantage.
Human resource management also plays an important role in identifying human

resource problems in a firm and providing solutions to the firm. Apart from that,
it is able to influence and increase employeesÊ commitment and motivate them
at the same time. This will increase the organisationÊs performance through an
increase of employeesÊ productivity.
At one time, human resource management was not related to an organisationÊs

profit. Therefore, it did not play an important role in the organisationÊs strategic
planning. Now, human resource management is starting to gain more attention in
the development of strategic planning for most organisations, due to the effects
of human recognition in an organisation. Furthermore, the main human resource
management strategy is integrated in the organisational strategy.
1.2.1 Roles of Human Resource Management

Department
Human resource management strategy views organisational strategy for
employees, profit, and effectiveness as a whole. Effective human resource
management programmes and activities ensure an effective organisation; these
help an organisation to achieve competitive advantage.
Human resource management is also responsible for managing any changes that
happen in an organisation due to merging activities, business downsizing, and
various workforce cultures. Figure 1.1 shows a few of the main roles of the human
resource management department.
Figure 1.1: Roles of Human Resource Management Department

(a) Planner
Plans matters related to staffing, such as planning manpower needs,
recruitment, and employee selection.
(b) Facilitator
Prepares training opportunities and career development for employees and
conducts orientation sessions for new employees.
(c) Coordinator
Coordinates matters related to employee health and safety, amenities, and
benefits.
(d) Auditor
Oversees employee performance and controls compensation offers such as
rewards and benefits to employees and evaluates accident and injury reports.
(e) Mediator
The human resource management division acts as a middleman in matters
pertaining to employee disciplinary issues, consultation with workerÊs
unions, conflict handling, and employee dissatisfaction.
Human resource management is essential to ensure the organisationÊs

perpetuation and effectiveness. Some of human resource managementÊs
contributions in achieving an organisationÊs effectiveness are as follows:
 helping the organisation achieve its targets;
 fully utilising the skills and abilities of the workforce;
 providing the organisation with trained and motivated employees;
 increasing employeesÊ job satisfaction;
 developing and maintaining the quality of employee work environment;
 delivering human resource management policy to every employee;
 helping to maintain social responsibility and ethical conduct; and
 managing changes to benefit employees and the organisation.

ACTIVITY 1.1
Assuming that you are the head of the human resource department in
your organisation, what do you think are the important roles of your
department? Share your thoughts in the myINSPIRE forum.
1.2.2 Human Resource Management in Malaysia

Since the 1980s, management teams in Malaysian firms have shown an increase
in the usage of the term „human resource management‰ to replace „personnel
management‰, in line with the development of human resource management at
the international level. Malaysian authorities embraced this change by replacing
the Ministry of Labour with the Ministry of Human Resources in 1990.
In order to achieve Vision 2020 and ensure that Malaysia became a developed
country by 2020, various efforts were planned to develop human capital resources.
Among them are:
 rearranging the education system;
 allocating the Human Resource Development Fund under the Human

Resource Development Act 1992;
 encouraging the involvement of public and private sectors in contributing to

education and training; and
 encouraging continuous learning.
In Malaysia, human resource management is a field that is expanding swiftly,

especially in training and development. This is a result of the governmentÊs efforts
to encourage training and development, particularly in the manufacturing sector.
A Human Resource Development Fund was created under the Human Resource
Development Act 1992 by collecting levy from registered employers. These
employers then utilise the fund to train and retrain their employees.

There are a few more Acts that influence human resource management practices
in Malaysia. Among these are Employment Act 1955, Industrial Relations Act 1967,
and Occupational Safety and Health Act 1994. All the Acts related to the human
resource management environment in Malaysia will be discussed further in
Topic 2.
1.3 FUNCTIONS OF HUMAN RESOURCE

MANAGEMENT
Human resource management functions as a reference towards the
implementation of task and responsibility of providing and coordinating human
resources in an organisation. Usually, most human resource management
functions of a small organisation are carried out by the owner or the operations
manager, apart from other business activities.
A medium-sized organisation usually employs a human resource manager or

personnel to conduct all matters pertaining to human resource. Most of the time,
the human resource manager does not specialise in any human resource functions.
On the other hand, a larger organisation will have its own human resource
management department which is responsible for carrying out all the functions of
human resources. Each human resource function is managed by human resource
experts specialising in a field.
Human resource management functions are not only about keeping records and
updating files. They involve a holistic and integrated approach that includes
various activities designed to contribute to the effectiveness of an organisation.
Figure 1.2 shows the main functions of human resource management in an
organisation.

Figure 1.2: Functions of Human Resource Management
(a) Staffing
Staffing involves human resource planning process, job analysis, recruitment
and selection of manpower.
 Human Resource Planning

Human resource planning is a forecasting process or a requirement
needed by an organisation to achieve its objectives, aside from
developing and implementing activities to fulfil organisational needs.

It is used to ensure that the organisation has ample workforce and

suitable employees at the right time and place. Human resource planning
is important so that there will not be any surplus or insufficient
manpower. This is also to ensure that employees are able to carry out
their duties efficiently.
 Job Analysis
The human resource management department conducts job analysis
to develop specific requirements for a job in an organisation. It is a
process of gathering information on a particular job by identifying the
responsibilities and duties related to the post. Information from the
job analysis will be used to develop jobs, prepare job details, and job
specifications.
 Recruitment
Recruitment is a process of identifying and encouraging interested and
potential job candidates to apply for available posts in an organisation.
Task details and job specifications provide information on candidatesÊ
eligibility and explanation on job requirements.
 Selection
Selection is a process of identifying the most suitable candidate to fill a
vacant post whereby the candidate is chosen from a group of applicants
obtained from the recruitment process. Some of the procedures usually
practised in the selection process include checking the application form
and résumé (curriculum vitae), checking the candidateÊs background,
conducting interviews, and conducting selective tests such as physical
and personality tests.
(b) Human Resource Development

Human resource development is a process aimed at producing employees
who are well informed, skilful, and understand their goals as well as the
organisationÊs goals. In addition, human resource development is designed
to help employees contribute positively to the organisation through excellent
and satisfactory work performance.
Activities in human resource development include conducting orientations

for new employees, and identifying, designing, and carrying out training
programmes to increase employeesÊ skills and abilities. These are also aimed
at producing a culture that appreciates and rewards continuous learning
efforts.

Employee performance is evaluated after a training programme to monitor

the effectiveness of the training. Human resource development also stresses
on employeesÊ career development in the organisation by equipping them
with new skills and abilities which are needed in their job scope, as well as
helping them to develop their own career plans.
(c) Compensation and Benefits

Compensation and benefits are part of human resource management
functions which are related to rewards, whether they are financial rewards
or non-financial rewards. They are given to employees as part of work
relations. The human resource management department is responsible for
designing and implementing a compensation and benefits system for every
employee. Apart from that, it needs to ensure that the compensation and
benefits system is fair and consistent.
(d) Safety and Health

The human resource management team needs to be sensitive towards
creating a work environment that can prevent any safety and health hazards.
Hazard refers to a potential circumstance which can cause injury to an
employee, therefore lessening his or her ability. Thus, the human resource
management department is responsible for designing and implementing
health and safety programmes to ensure the safety of employees.
(e) Work Relations

Work relations is also known as industrial relations or business relations.
It refers to the relationship between employer and employee or workersÊ
union that represents employees. A harmonious employer and employee
relationship ensures the stability and strength of an organisation. The human
resource management department needs to act as a medium between
the organisation and the workersÊ union. A workersÊ union represents
employees in matters regarding collective consultation, disciplinary conduct,
and employee complaints.
EXERCISE 1.2
List five main roles of the human resource management department.

Elaborate briefly on each role and relate it to your own working
environment.

1.4 CHALLENGES OF HUMAN RESOURCE

MANAGEMENT
We often read in the newspapers about sexual harassment, misconduct, and
misuse of power at the workplace. There are many challenges faced by human
resource management nowadays. These include:
Ć globalisation
Ć challenges in technology
Ć managing change
Ć human resource development
Ć market reaction
Ć cost reduction
Ć economic climate
Ć legal system
(a) Globalisation
Mergers, takeovers, and competition among international industries and
businesses are increasing. To remain and compete in the market, more firms
are starting to explore the global market. Indirectly, this causes them to face
issues such as cultural, legal, and business practice differences.
An organisation has to identify a human resource manager who is able to:
 perform his duties in a foreign country;
 design training programmes and development opportunities to increase

his understanding of foreign work practice and culture; and
 make changes to the compensation plan to ensure a fair and suitable

payment scheme cutting across different geographical areas and costs of
living.

ACTIVITY 1.2
Read the following journal article and discuss the impact of globalisation
on human resource management and employment relations. The journal
article can be found in OUMÊs TSDAS Digital Library.
Hunter, L. W., & Katz, H. C. (2012). The impact of globalization in

human resource management and employment relations in the US
automobile and banking industries. The International Journal of
Human Resource Management, 23(10), 1983ă1988.
(b) Challenges in Technology

Progress in technology has done a lot to influence human resource
management. From manual employees to knowledgeable employees,
innovation in technology has caused a sudden change in form, structure, and
employment needs. Knowledgeable employees need to be equipped with
skills to enable them to make plans and decisions, and identify problems and
solve them. In many cases, employees need to be retrained to enable them to
carry out responsibilities and new roles. Therefore, an organisation needs to
prepare training and development programmes to help employees increase
their skills in order to fulfil the demands of a knowledgeable employee.
Aside from that, the use of human resource information technology has
influenced a lot of todayÊs human resource management practices, such as:
 providing up-to-date information to aid the human resource

management department in forecasting, overseeing and making
decisions; and
 changing the method of information gathering on employment; speeding

up the processing of information and increasing internal and external
communication processes.
(c) Managing Change

Technology and globalisation are two main factors that force change to
happen in an organisation. An organisation that always maintains its status
quo will not be able to compete in a fast-developing and competitive market.
Ordinarily, an organisation has to adjust the way it operates to maintain
the effectiveness of its business. This can be done through total quality
programmes, downsizing, re-engineering, outsourcing, and mergers.

Changes can happen reactively or proactively:
 A reactive change is due to external influences.
 A proactive change is the managerÊs initiative to grab available

opportunities, especially in a fast-changing industry, such as the
technology industry.
However, changes do not happen spontaneously. This is because most of

us are resistant to changes. Therefore, the human resource management
department plays a role in helping the change process in the organisation.
(d) Human Resource Development

An organisation needs to manage its human resources well if it intends to
compete in the global market. Human resources that have economic value
by way of knowledge, skills, and ability have a huge impact on the
organisation. In order to form a valuable team, an organisation needs to
strategise to ensure its resources are:
 knowledgeable
 skilful
 experienced
Staffing programmes must identify, recruit, and select quality candidates.

Training programmes complement the staffing process to increase
employeesÊ skills. In addition, employees need their own career development
opportunities. Therefore, the human resource management department
needs to arrange suitable programmes to develop its human resources, as
well as to ensure that employeesÊ duties and needs are flexible, thus allowing
for a continuous learning process and employee development to happen.
(e) Market Reaction

Fulfilling customersÊ expectations and needs is important for an organisation
to be able to compete in local and foreign markets. Some of the approaches
often used to respond to the markets are:
 implementing a total quality management programme; and
 a re-engineering process.

Both approaches have direct implications for human resources. To ensure the
effectiveness of the programmes, the management team needs to make some
drastic changes to its human resource management programmes to focus on
issues such as:
 employee motivation
 changes to organisational culture
 employee education
(f) Cost Reduction

Some important elements to enable an organisation to have a competitive
advantage and to maximise its effectiveness are cost reduction and increase
in productivity. Human resource cost is one of the biggest expenditure
components in an organisation, especially organisations that specialise in
knowledge and services.
Ordinarily, organisations will have to rearrange their firms to reduce labour

costs through activities such as:
 downsizing
 outsourcing
 mergers
Most of the time, these actions cause employee surplus, which then forces
the management to reduce the number of employees through the process
of laying off staff. This issue needs to be handled wisely and fairly by
the human resource management team to avoid problems and employee
dissatisfaction that might affect the organisationÊs performance.
(g) Economic Climate

The economic environment will influence the financial standing of an
organisation, and the organisation must change its business strategy to
remain or compete in the market. Consequently, an organisationÊs human
resource strategy must also change to be in line with the business strategy,
especially human resource planning.
In the event of economic growth, demand for labour force will increase
due to increase in production. In these circumstances, organisations will
experience a situation whereby the labour market is limited.

On the other hand, when an economic depression occurs, the organisationÊs

business is affected and the number of employees needs to be reduced
through approaches such as voluntary or forced termination and early
retirement.
(h) Legal System

Organisations must be sensitive to the legal system of the place where they
operate. Any changes and job implementation must be given attention in
order to avoid legal action. In Malaysia, there are a few Acts related to the
work environment such as Employment Act 1955, Occupational Safety and
Health Act 1994, and Industrial Relations Act 1967.
ACTIVITY 1.3
Choose one of the eight human resource management challenges. Obtain

information from the human resource manager in your workplace about
the challenge you have chosen. Share your research in myINSPIRE.
1.5 HUMAN RESOURCE MANAGEMENT

ISSUES
Apart from facing challenges in managing human resources as discussed in the
previous subtopic, organisations must also be aware of issues related to human
resource management such as:
 diversity in the workforce
 employee age distribution
 women and dual-income families
 increase in education level
 employee rights

 personal issues
 attitude change towards work
 balance between career and family
(a) Diversity in the Workforce

This strategy can have a distinct effect on an organisation. An organisation
which practises this particular strategy is usually seen as one that performs
its social responsibility and thus acquires satisfying returns on the products
and services it offers to its customers. However, workforce diversity does
not affect human resource management in terms of strategic planning,
recruitment, training, and health. There is no ideal method or formula for
managing diversity in the workforce.
(b) Employee Age Distribution

Fluctuation of birth rates causes a change in the employee age distribution
pattern in the labour market. For example, in the United States, the number
of employees aged 55 and above who are supposed to retire is increasing and
is believed to have reached 23.9% in 2018. In the same year, the number of
younger workers aged 16 to 24 was expected to slip to 12.7%. This would
have caused a gap in the labour force for that particular year. An unbalanced
employee age distribution in the labour market complicates human resource
management processes, especially human resource planning, recruitment,
training, and career development.
(c) Women and Dual-income Families

WomenÊs involvement in the working world has shown a sharp increase.
Statistics have shown that two-thirds of married couples come from dual-
income groups. This phenomenon has a big implication for working couples
and employers in the aspects of recruitment and placement. One spouseÊs
career change will affect the other spouseÊs career. For example, if a husband
is transferred to another place due to a promotion, his wife has to decide
whether to follow him or remain at her workplace, thus resulting in them
living apart.

In addition, many working women have toddlers and need the services
of a nursery. Employers, especially the human resource management
department, need to prepare suitable amenities to fulfil their needs and
arrange for:
 flexible working hours;
 handling of sexual harassment issues; and
 equal pay without gender discrimination.
(d) Increase in Education Level

The education level of the labour force has shown a sharp increase with
the presence of an improved education system. Highly educated employees
often have high hopes for their employment and seek challenging and
interesting careers. Therefore, the management team has to carry out
continuous evaluation to ensure that employeesÊ talents and abilities are
fully utilised, the jobs offered are challenging, and employees are given the
opportunity to develop their careers.
(e) Employee Rights

Authorities must give serious attention to employee rights. A number of
rules and laws have been enacted to ensure that the rights of employees are
looked after, such as:
 Employment Act 1955
 Employee Social Security Act 1969
 Occupational Safety and Health Act 1994
As a result, the human resource management team needs to be familiar with

these rules and laws, and keep abreast of their development to protect the
organisation from any legal action.

(f) Personal Issues

Personal issues are starting to get attention from employees and employers.
It is the responsibility of the human resource management department
manager and staff to manage all employee information well so that
employeesÊ personal information is not circulated and misused by
irresponsible people.
(g) Attitude Change Towards Work

Employees nowadays value lifestyle satisfaction which can be achieved by
balancing challenges with rewards rather than the relationship between
work and lifestyle. Employees are also more attracted to interesting jobs, and
opportunities to develop themselves through the tasks offered to them. This
change has prompted human resource management to come up with ways
to manage and motivate employees. Consequently, the roles of human
resource management are becoming more complex as opposed to previous
situations whereby employees were only concerned about the economic
value of their jobs to support their families.
(h) Balance between Career and Family

Finding a balance between career and family is an issue faced by employees
nowadays. Some are no longer willing to work overtime even though they
are offered higher pay because they would rather spend time with their
family. As a result, family-friendly concepts have been introduced by many
organisations.
Among the family-friendly programmes introduced are part-time jobs, work

sharing, maternity leave, flexible working hours, child nursing leave, and
telecommunication services. However, these programmes have not been
well received by single employees as they do not get to enjoy any of the perks
and benefits of the programmes.
ACTIVITY 1.4
If you are a human resource manager and most of your employees are
women, which issue would be important for you to consider? Why?
Discuss with your coursemates on myINSPIRE.

EXERCISE 1.3
Multiple Choice Questions
1. In order to enable an organisation to compete in the

21st century, human resource management needs to focus on
_____________.
A. developing production planning
B. rationalising scientific management principles
C. using the Howthorne test
D. developing a skilful and flexible workforce
2. Below are the main activities of the human resource management

department EXCEPT _____________.
A. directing the operations manager
B. providing services, advice, and counselling
C. developing and implementing organisational policies
D. administering recruitment and training programmes
3. The key to quality products and services for an organisation

depends on how it manages _____________.
A. budgets
B. projects
C. labour unions
D. employees
4. The human resources of an organisation can be used to compete if

the resources are _____________.
A. paid special attention
B. well looked after
C. well managed
D. given attractive rewards
5. Which of the following is NOT one of the main technological effects

on human resource management?
A. Technology has changed the methods used to gather
information on employee transfer.
B. Technology has sped up employee intake data processing.
C. Technology has eliminated supervising roles in employee
management.
D. Technology has improved internal and external
communication processes.

Essay Questions
1. List six challenges often faced by a human resource management

department in achieving competitive advantage.
2. List four programmes that can be introduced by an organisation

to help its employees reduce conflict between career and family
responsibilities.
3. Employees nowadays have shown an attitude change towards

employment. Briefly discuss this issue.
4. Human resource management activities are important to ensure

the effectiveness of an organisation. List five human resource
management contributions in helping to achieve an organisationÊs
effectiveness.
 Uncertain economic circumstances and shift from an industrial community to

an informative community have made the importance of human resources in
an organisation more distinct.
 Organisations need to update their human resource management strategy to

ensure their business effectiveness.
 An organisation with an effective human resource management could merge

its diverse and different human resources to achieve its general target, and
at the same time, tackle the challenges and issues of human resource
management efficiently and effectively.
Compensation and benefits Safety and health

Human resource management Staffing
Personnel management Work relations

Mahathir Mohamad (1991, February 28). Vision 2020: The way forward
[Conference presentation]. Malaysian Business Council Meeting, Kuala
Lumpur, Malaysia.
Yong, A. K. B. (1996). Malaysian human resource management. Malaysian Institute

of Management.

Topic  Legal
Environment
2
LEARNING OUTCOMES
1. Identify Acts that influence human resource management.
2. Describe the importance of the legal environment in human resource
management.
3. Explain the aspects in each Act that influence human resource
management.
4. Discuss the purpose of each work-related Act enacted by the
Malaysian government.
 INTRODUCTION
The Employment (Amendment) Act 2000 [Act A1085] was enforced on 1 October
2000 while the Employment (Amendment) Act 2012 [Act A1419] took effect on
9 February 2012. They are part of the Employment Act 1955, which comprises
laws and regulations concerning employment and work relations enacted by the
authorities and are regularly amended to fulfil current needs.
These laws and regulations influence the policies, activities, and human resource
management programmes formed by an organisation. The organisationÊs
management team, especially the human resource management unit, needs to
create policies and procedures which abide by the law, so that all actions taken will
be according to the law.

24  TOPIC 2 LEGAL ENVIRONMENT
Among the Acts related to human resource management in Malaysia are:
 Employment Act 1955
 Industrial Relations Act 1967
 Trade Unions Act 1959
 Occupational Safety and Health Act 1994
 EmployeesÊ Social Security Act 1969
 Human Resource Development Act 2001
 Employees Provident Fund Act 1991
 WorkmenÊs Compensation Act 1952
2.1 IMPORTANCE OF LEGAL ENVIRONMENT

IN HUMAN RESOURCE MANAGEMENT
Can you imagine what could have happened if there were no laws to regulate
employment issues in Malaysia? Are you willing to work for more than 8 hours
with little pay and poor working conditions?
Each organisation has objectives to achieve and engages people to work on them.
Therefore, people are important assets to all types of businesses. Although new
technologies may change the employment landscape, people are still an integral
part of business success. Organisations may exploit their employees intentionally
or unintentionally to achieve their organisational objectives. The organisations also
may be harmed through unethical conduct by their employees or their negligence.
Therefore, laws were introduced to regulate the conduct of all parties in

organisations. These laws are important to:
 protect employees from exploitation by their employers;
 create work-life balance for the people working in the organisations;
 regulate employee grievances;

TOPIC 2 LEGAL ENVIRONMENT  25
 provide a medium for employeesÊ future savings;
 compensate employees for work-related injuries; and
 enhance employeesÊ job and career development by means of skills and

knowledge acquisition using a special fund.
2.2 EMPLOYMENT ACT 1955
ACTIVITY 2.1
Before exploring the legal aspects of work relations, consider what could
have happened to work relations between an organisationÊs management
and its employees if there were no legal system enacted to protect the
rights of both parties. Discuss with your coursemates in myINSPIRE.
The Employment Act 1955 was enacted to protect employees from

exploitation by employers, and became the legal foundation in highlighting
the minimum conditions and terms related to work that need to be followed
by management.
A few amendments were made to the Act since its enforcement and the latest
amendments were made in 2011. This Act is referred to as the Employment
(Amendment) Act 2012. Some of the amendments found in this Act include:
 new definitions of „contractor for labour‰, „part-time employee‰, and „sexual

harassment‰ (Part I, Section 2)
 payment of wages (Part III, Section 19 & 22)
 system of payment of wages (Part V, Section 25)
 contractors, principals and contractors for labours (Part VII, Section 33A)
 maternity protection (Part IX, Section 44A)

 domestic servants (Part XI, Section 57A & 57B)
 public holidays (Part XII, Section 60D)
 employment of foreign employees (Part XIIB, Section 60K)
 complaints and inquiries (Part XV, Section 69B)
 sexual harassment (Part XVA)
The Employment Act 1955 focuses on employees who are contractually bound to
the management and:
(a) their monthly salary is not over RM2,000; or
(b) not taking into account their monthly total earnings, are working as a:
 manual labourer
 supervisor to manual labourers
 person involved in handling motor vehicles
 domestic employee
In this topic, we will only discuss a few important elements of work relations
mentioned in the Employment Act 1955 as shown in Figure 2.1.
Figure 2.1: Employment Act 1955

2.2.1 Contract of Service

A contract of service is an agreement whereby employers agree to employ a
worker to work and the worker agrees to serve as an employee. This can be done
verbally or in writing, explicitly or implicitly. In certain instances, such as the
following, the contract of service needs to be done in writing:
 work that involves a duration of more than one year; or
 an apprenticeship contract that is not less than two years.
The Employment Act 1955 also allocates a few prohibitions towards the contract
of service such as:
 Barring employees from participating in any trade union activities and

associations; and
 Setting conditions on how employees spend their fee.
Apart from that, the end of a contract of service notice needs to be stated in the
contract of service. If the notice period is not set in the contract of service, the
minimum period of notice that is allocated under the Employment Act 1955 is as
shown in Table 2.1.
Table 2.1: End of Service Notice
Period of Employment Period of Notice
Less than 2 years 4 weeks
2 years or more, but less than 5 years 6 weeks
5 years or more 8 weeks

ACTIVITY 2.2
Even though a contract of service can be made verbally or in writing,

what are the terms that need to be given to an employee in writing or
before he or she starts working? Discuss with your coursemates in
myINSPIRE.
2.2.2 Payment of Wages

The period of payment of wages cannot extend to more than a month and
employers need to pay their employees no later than the seventh day after the last
day of the payment period. However, as the meaning of wages includes overtime,
organisations found it difficult to calculate overtime payments in time to meet the
seventh day requirement. Therefore, the new amendments in the Employment
(Amendment) Act 2012 under section 19(2) stated that employers are allowed to
pay wages for work done on a rest day, public holiday, and overtime not later than
the last day of the next wage period. As such, an employer can pay employees their
wages for the month by the seventh of the following month and make payments
for work done on a rest day, public holiday, and overtime with the following
monthÊs wages.
It is the right of employers to stop making any payments to the employees if the
employees are not present at work due to imprisonment or attending court unless
their attendance in court is as witness for the employers.
ACTIVITY 2.3
If your payment period is from the 14th of this month until the 13th of
the next month, according to the Employment Act 1955, what is the last
day that your employer needs to pay your fee? Share and check your
answer with your coursemates in myINSPIRE.

2.2.3 Recruitment of Women

According to the Employment Act 1955, female employees working in the
industrial and agricultural fields are not allowed to work from 10pm to 5am.
However, employers can apply to the Director-General of the Labour Department
to enable female employees to work at these times.
Study the Employment Act 1955: Part VIII and find the protections that need to be
given by employers to female employees.
2.2.4 Maternity Allowance

Female employees have the right to maternity leave of at least 60 days for every
delivery, and a maternity allowance at the rate of a normal fee or their monthly
salary if they have informed the employer four months before their confinement
and have already been employed by the employer:
 at any time in the four months immediately before their confinement; and
 for a period of, or periods amounting in the aggregate to, at least 90 days
during the 9 months immediately before their confinement.
However, female employees who have five or more living children are not eligible
for maternity allowance. Apart from that, female employees have the right to take
30 days of maternity leave prior to or right after the delivery.
Previously, a female employee who was not within the scope of the Employment
Act 1955 was not entitled to maternity allowance unless the contract of service
stipulated otherwise. However, with the Employment (Amendment) Act 2012
under Section 44A, the scope of maternity allowance was extended to all female
employees who are employed under a contract of service irrespective of wages.

2.2.5 Normal Hours of Work

Figure 2.2 shows the normal work hours according to the Employment Act 1955.
The Employment Act 1955 states that work hours cannot exceed 5 hours without
being given any rest of at least 30 minutes. For example, if work hours are from
8am to 5pm, employees must be given rest 30 minutes before 1pm or, at the latest,
1pm.
Figure 2.2: Normal Hours of Work According to the Employment Act 1955 (Section 60A)
Apart from that, employees should not be required under their contract of service
to work more than 8 hours a day (not including rest period). If an employeeÊs work
hours are from 9am to 6pm (9 hours), he needs a rest from 1pm to 2pm (1 hour).
The total working hours in 1 week should not be more than 48 hours. However,
employees are allowed to work overtime. The maximum number of overtime
allowed for an employee is 104 hours in a month, unless exempted by the Minister
under Section 2B.

ACTIVITY 2.4
Go online and find out three types of eligible unused sabbatical leave
during employment. Share your findings in myINSPIRE.
2.2.6 Rest Days, Hours of Work, Holidays and Other

Conditions of Service
Every employee has the right to enjoy a minimum number of rest days, hours of
work, holidays, and other conditions of service under the contract of service as
enacted in the Employment Act 1955. Among the holidays covered in this Act are:
(a) Rest Days

Employees shall be allowed a whole day of rest in a week. However, in cases
where they are required to continually engage in work on a rest day (due to
the nature of the job), they shall be paid accordingly as shown below:
 Employees employed on daily, hourly or other similar rates (Table 2.2):
Table 2.2: Daily/Hourly Wages for Rest Days
No. of Hours of Work Wages
Does not exceed half of normal hours of 1 day wage at ordinary rate
work.
More than half but does not exceed the 2 days wages at ordinary rate
normal hours of work.
 Employees employed on a monthly or weekly rate of pay (Table 2.3):
Table 2.3: Monthly/Weekly Wages for Rest Days
No. of Hours of Work Wages
Does not exceed half the normal hours of work. Half day of ordinary rate
More than half but does not exceed the normal 1 day of ordinary rate
hours of work.
 For work done exceeding normal hours of rest day in (i) or (ii), they shall
be paid no less than 2 times their hourly rate of pay.
 For those employed on piece rates who work on rest day, they shall be
paid 2 times their ordinary rate per piece.
(b) Weekly Leave

Employees have the right to enjoy a day of leave every week. In certain
situations, such as when the workplace is far away and travelling takes
a long time, employees are allowed to group their weekly leave on the
condition that the employers ask for permission from the Minister of Human
Resources.
(c) Public Holidays

Employees have the right to enjoy 11 days of gazetted public holiday which
are set for that particular year. The 11 public holidays must cover these
5 days:
 National Day
 Birthday of the Yang di-Pertuan Agong
 Birthdays of the Sultan and Yang di-Pertuan Negeri or Federal Territory

Day
 Labour Day
 Malaysia Day
(d) Annual Leave

Employees have the right to obtain a minimum number of annual leave
according to their service period, as allocated in the Employment Act 1955,
as shown in Table 2.4:
Table 2.4: Annual Leave Entitlements
Employment Period Number of Days Allowed
Less than 2 years 8 days
2 years or more, but less than 5 years 12 days
5 years or more 16 days
Employees who are absent from work without permission from employers
and without any appropriate reason, and whose absence exceeds 10% of
working days for 12 months continuously are not eligible for annual leave
for the duration concerned.

(e) Sick Leave

The minimum sick leave for all employees allocated under the Act is as
shown in Table 2.5.
Table 2.5: Sick Leave Entitlements
Employment Period Number of Days Allowed
Employees also have the right to 60 days of medical leave if they are
hospitalised. However, this 60-day eligibility will be reduced to follow
the number of standard medical leave that has already been utilised. For
example, if an employee who is hospitalised has taken 10 days of medical
leave earlier, then his right to medical leave due to hospitalisation is only
50 days.
Find out online what actions can be taken against employees who often take sick
leave and emergency leave which exceed the limit.
EXERCISE 2.1
1. When do wages need to be paid by employers to their employees?
2. How long a period must a resignation/end of contract of service

notice be given if an employee has served for 2 years and 5 months?
3. If an employee experiences a critical illness that requires

hospitalisation, how many medical leave is he or she entitled to
under the Employment Act 1955?
4. Can a contract of service put any conditions on how employees

should spend their earnings? Explain.

2.3 INDUSTRIAL RELATIONS ACT 1967

(REVISED 1976)
The Industrial Relations Act 1967 is an Act that emphasises employer-

employee relations and their trade union.
This Act is intended to prevent any differences or disputes that arise from this
relationship, as well as to deal with any trade disputes and related matters. The
purpose is to creat industrial harmony. Among the aspects covered in the Act
include protection for all parties, recognition, and trade union scope, and collective
bargaining and agreements. Figure 2.3 shows the items contained in the Industrial
Relations Act 1967.
Figure 2.3: Industrial Relations Act 1967
2.3.1 Protection of Rights of Workmen, Employers

and Trade Unions
Employees or employers cannot be forced or stopped from being involved in trade
union activities. Furthermore, the management is prohibited from setting any
conditions in the contract of service that is intended to prevent employees from
being involved in any trade union activities. However, employees who plan to join
any activities related to the union must first present a written application to their
employers to obtain approval for leave.

2.3.2 Recognition and Scope of Representation of

Trade Unions
Trade unions that plan to represent employees must present an application of
recognition to the organisation. After receiving the application, the management
must take these actions in the period of 21 days:
 give recognition;
 reject the application and present the reasons in writing; or
 upon recognition, the employer or trade union of employers should notify the
Director-General.
If a certain trade union representing an employee has been given recognition, then
other unions intending to represent the particular employee are not allowed to
make any recognition claims except if:
 the trade union withdraws and the Director-General is notified; and
 the minister decides not to accord recognition.
2.3.3 Collective Bargaining and Agreements

After receiving recognition from the management, the trade union can invite the
management to hold collective bargaining in writing together with proposals for
a collective agreement. The management has to reply in writing within 14 days of
receipt of the invitation. Next, collective bargaining needs to be held within 30 days
of receipt of the reply accepting the invitation.
EXERCISE 2.2
1. State the actions that need to be taken by employers after receiving

an application for recognition from a workersÊ union planning to
represent their employees.
2. What is the time period allocated, under the Industrial Relations Act
1967, for the management to reply to a request from workers to set
up a trade union in the company?

2.4 TRADE UNIONS ACT 1959
The right to form an association is a right guaranteed by Article 10 of the

Federal Constitution and this is also emphasised in both the Employment
Act 1955 and the Industrial Relations Act 1967.
Bound under the category of Employment Relations, this Act governs the
registration of a trade union. Any newly formed trade union is required to
apply for registration within a month of its formation.
The Act covers membership criteria and the rights, powers, and
responsibilities of a trade union and its managerial prerogatives for any
collective bargaining.
The purpose of the Trade Unions Act 1959 is to:
 encourage industrial relations, amend work terms, improve social and

economic status, and increase productivity;
 underline the relationship between employees and employers;
 represent employees or employers in any trade disputes;
 promote or organise any legitimate industrial-related issues; and
 plan and support any actions such as industrial strike.
A trade union must be registered within 1 month of its establishment date.

However, a period of registration of not more than 6 months is allowed if it is
deemed appropriate.
Among the membership conditions which are allocated in this Act are as follows:
(a) Anyone planning to be a member of a union must be above 16 years old.
(b) Members under 18 years old are not eligible to vote in these matters:
 organising strikes;
 dissolving the union; and
 amendments concerning member liabilities and benefits.
(c) Members under 21 years old are not allowed to hold any post in the union.

EXERCISE 2.3
TRUE (T) or FALSE (F) Statements
1. Anyone above 16 years old can join a trade union.
2. Those under the age of 18 have limited participation in union

activities.
3. Those above 18 years old can be officers in a workersÊ union.
4. The management has the right to stop its employees from joining
workersÊ union activities.
2.5 OCCUPATIONAL SAFETY AND HEALTH

ACT 1994
The Occupational Safety and Health Act (OSHA) 1994 was enforced throughout
Malaysia for all industries except the armed forces and shipping related
employments which are protected under the Merchant Shipping Ordinance 1952
and the Merchant Shipping Ordinance 1960 for Sabah and Sarawak.
Among the objectives of this Act are to:
 ensure the safety, health, and welfare of employees at the workplace;
 protect others who are present at the workplace from any accidents that might
be triggered by workersÊ activities;
 ensure that the work environment is conducive; and
 enable related legalities be replaced in stages by industrial rules and

regulations which are approved and practised by all in order to maintain and
increase the standard of safety and health at the workplace.
This Act requires the management to establish a safety and health committee if it
has 40 or more employees in the workplace or if directed by the Director-General.

Under OSHA 1994, employers must comply with the following:
 Ensure the safety of employees at the workplace;
 Draft and disseminate a safety policy;
 If an organisation has more than 40 staff, it is required to appoint a safety

committee;
 Appoint a dedicated safety and health officer (under scope of relevant

regulation);
 Provide training, supervision, and information on safe work practices; and
 Report serious accidents to the Department of Occupational Safety and Health.
Further discussion of OSHA 1994 will be provided in Topic 11.
Visit http://www.dosh.gov.my for information on the rules listed in OSHA 1994.
EXERCISE 2.4
1. State the objectives of OSHA 1994.
2. What are the employersÊ requirements for a safety and health

committee at the workplace as stipulated under OSHA 1994?
2.6 EMPLOYEES’ SOCIAL SECURITY ACT 1969

The Social Security Organisation (SOCSO) is an organisation set up to administer,
enforce, and implement the EmployeesÊ Social Security Act 1969 and the
EmployeesÊ Social Security (General) Regulations 1971.
SOCSO is known in Malay as Pertubuhan Keselamatan Sosial (PERKESO).

Initially, it was a government department which was converted into a statutory
body in 1985.
The Social Security Scheme aims to protect employees from unexpected

occurrences such as disasters, accidents, and death at the workplace. This scheme
ensures that benefits are paid to employees and their dependants through two
protection schemes as shown in Figure 2.4.

Figure 2.4: EmployeesÊ Social Security Act 1969 Protection Scheme
(a) Employment Injury Insurance Scheme

This scheme protects employees from disasters at work including industrial
accidents, accidents that occur during business-related travels, and service
illnesses, which are illnesses caused by employment. Under this scheme,
only employers are required to make monthly contributions to every
employee with the rate of 1.25% of their monthly salaries.
(b) Invalidity Pension Scheme

This scheme gives 24-hour protection to employees against accidents or
fatalities without considering the cause. The management must contribute
0.5% of the employeeÊs salary, and the employee must also contribute 0.5%
of his or her salary.
Information about contribution to SOSCO is as follows:
(a) An employee employed under a contract of service or apprenticeship and

earning a monthly wage of RM3,000 and below must compulsorily register
and contribute to SOCSO regardless of whether the employment status is
permanent, temporary or casual in nature.
(b) An employee must be registered with the SOCSO irrespective of age.
(c) SOCSO only covers Malaysian workers and permanent residents. Foreign
workers are protected under the WorkmenÊs Compensation Act 1952.
(d) SOCSO does not cover the following categories of individuals:
 a person whose wages exceed RM3,000 a month and has never been
covered before

 government employees
 domestic servants employed to work in a private dwelling which

includes chefs, gardeners, house servants, watchmen, washerwomen,
and drivers
 employees who have attained the age of 55 only for purposes of

invalidity but if they continue to work, they should be covered under the
Employment Injury Insurance Scheme
 self-employed persons
 foreign workers
EXERCISE 2.5
1. The Social Security Act 1969 protects all employees who are
employed under one contract of service with a salary of not more
than RM___________.
2. The amount of contribution that needs to be made by both the

employer and the employee under the Invalidity Pension Scheme
is _____________.
2.7 HUMAN RESOURCE DEVELOPMENT

ACT 2001
This Act aims to increase employee training by imposing and collecting

human resource development levies, apart from establishing Human
Resource Development Councils and Human Resource Development Funds
for this purpose.
Every employer registered with the Human Resource Development Council has
to pay a human resource development levy for every employee based on their
wages. Registered employers that have made the payment are entitled to apply for
financial aid or the services allocated in this Act for the purpose of encouraging
employee training. Table 2.6 shows the levy rate imposed according to the set
criteria in the Human Resource Development Act 2001.

Table 2.6: Levy Rate According to Sector
Levy Rate Based

Criteria
on Employee Fee
Manufacturing sector with 50 or more employees 1%
Manufacturing sector with employees more than 10 and not

exceeding 50 employees with a paid-up capital of RM2.5 million and 0.5%
above
Service sectors with 10 or more employees 1%
Under this Act, the Human Resource Development Fund must be spent on:
 encouraging development and growth of employeesÊ skills by designing,

developing, increasing or monitoring training amenities;
 preparing financial aid through loans or subsidies to employers to train or re-

train their employees;
 organising or implementing activities or programmes aimed at re-training

employees who have been or will be laid off due to downsizing;
 bearing the cost of managing the Human Resource Development Council

including payment and allowances for council officers; and
 bearing any administration costs for the Fund as well as the cost of
implementing the Act.
Apart from that, the Human Resource Development Act 2001 also allots aspects
on the functions of the Human Resource Development Council:
 evaluates and determines the types or levels of training that are in line with the
industryÊs human resource needs;
 increases manpower training; and
 establishes the conditions for loans or financial aid.
Visit http://www.hrdcorp.gov.my to obtain information on the roles of the

Human Resource Development Corporation.

EXERCISE 2.6
1. Describe the purposes of the Human Resource Development Fund

under the Human Resource Development Act 2003.
2. State the functions of the Human Resource Development Council as

set under the Human Resource Development Act 2003.
2.8 EMPLOYEES PROVIDENT FUND ACT 1991

(AMENDMENT 2006)
The Employees Provident Fund (EPF), also known as Kumpulan Wang Simpanan
Pekerja (KWSP), is a government organisation in charge of social security or
retirement planning for legally employed workers in Malaysia.
All employers must register their employees with the Employees Provident Fund
immediately upon employment.
The Employees Provident Fund (EPF) is aimed at encouraging employee

savings for the purpose of retirement.
Figure 2.5 shows the EPF contribution rate.
Figure 2.5: EPF Mandatory Contribution Rates

The contribution rate allocated under this Act is based on the following:
 A worker aged less than 60 years: Full contribution is 24% (13% employers,
11% employee) for employees paid RM 5,000 and below. It is 23%
(12% employees and 11%) for employees paid exceeding RM 5,000 a month.
 A worker aged 60 and above up to 75 years: The contribution rate is 50% of the
statutory contribution of workers aged under 60 years in the amount of wages.
Effective from 1 January 2007, the contributorÊs account is divided into

two types: Account 1 and Account 2. All contributions are divided into the
two accounts according to fixed percentages, namely, 70% into Account 1 and 30%
into Account 2.
These accounts are created for different purposes and different types of
withdrawals are applicable for each account:
(a) Account 1
The savings here are for the purposes of retirement and cannot be fully
withdrawn before an employee reaches the age of 55 or passes away, or loses
capacity and intends to leave Malaysia permanently.
(b) Account 2
The savings in this account are meant to help employees to make early
preparations for a comfortable retirement. Withdrawals are allowed if they:
 attain the age of 50 years;
 are owning a house or making the down payment for a first house;
 settling the balance of their housing loan for their first house;
 financing education for themselves and their children; and
 paying medical expenses for themselves and their children.

ACTIVITY 2.5
Visit http://www.kwsp.gov.my to answer these questions:
(a) How much can be withdrawn from Account 2 to pay for a house?
(b) What actions can be taken by an employee if the management does

not make any EPF contribution?
EXERCISE 2.7
According to the Employees Provident Fund Act 1991, membersÊ

accounts are divided into two different accounts with different
percentages. State the percentages from the total contribution allocated
to each account and explain the purposes of each account.
2.9 WORKMEN’S COMPENSATION ACT 1952
This Act is aimed at compensating employees who are injured or contract

illnesses caused by their work.
In the early stages, this Act covered all manual workers in the private sector and
non-manual workers in the private sector with a salary of not more than RM500 a
month. In 1977, the scope of the Act was extended to include non-manual workers
in the public sector with a salary of not more than RM400 a month.
The next amendment was made in 1993 when it gave protection to all foreign
workers in the private sector, whereas all local workers in the private sector were
covered under the EmployeesÊ Social Security Act 1969. However, in 1996, this Act
was amended so that it only gives protection to non-manual workers in the public
sector with a salary of not more than RM400, while foreign workers are protected
under the Foreign Workers Compensation Scheme 1952.

EXERCISE 2.8
Fill in the Blanks

To test your knowledge of the legal environment in human resource
management, answer the questions below.
1. Halim has worked with CBA Company for 4 years. Therefore, the
number of annual leave he is eligible for under the Employment
Act 1955 is ___________ days.
2. Employers are prohibited from asking or demanding that an
employee work more than ___________ hours a week.

1. Below are the items contained in the Employment Act 1955
EXCEPT ___________.
A. hours of work
B. annual leave
C. procedure of settling dissatisfaction
D. payment of fee
2. Below are statements of hours of work alloted for an employee
under the Work Act 1955 EXCEPT _____________.
A. working not more than 8 hours in a day
B. employees must be given a rest period of at least 45 minutes
C. working not more than 5 hours without rest
D. working not more than 48 hours in a week
3. MembersÊ accounts are divided into two accounts under the
Employees Provident Fund Act 1991. Account 1 can be withdrawn
when the member is _____________.
A. settling a loan
B. purchasing a house
C. handicapped and can no longer work
D. settling medical expenses
4. The purpose of establishing the Human Resource Development
Fund is to _______________.
A. develop employeesÊ skills through training
B. prepare start-up business loans for employers
C. implement financial crisis reinstallation activities or projects
for an organisation
D. pay all organisational expenses to acquire business from its
competitors

5. Which of these is NOT TRUE regarding female employees under

the Employment Act 1955?
A. Female employees have the right to 60 days of consecutive
maternity leave.
B. Female employees are not allowed to work between 10pm
and 5am.
C. Female employees are only allowed to perform light jobs that
do not include handling machineries.
D. Female employees are eligible to maternity allowance if they
inform the management 4 months before the due date.
6. Below are the functions of the Human Resource Development

Council EXCEPT:
A. Deciding on the conditions in giving aid and financial loans
B. Increasing manpower training
C. Evaluating and determining the types of training that are
suitable for industrial needs
D. Helping an organisation solve employeesÊ disciplinary
problems
Essay Questions
1. Amin has worked in Syarikat Teguh for 5 years. He was admitted

to the hospital for 60 days due to a road accident. How many days
of standard medical leave can he take after the accident in that
particular year?
2. State four public holidays that have been set and be made
compulsory in the calendar year.
3. What are the types of leave specified in the Employment Act 1955?
4. Are all employers and employees required to contribute to SOCSO?

Explain.
5. Elaborate briefly on the types of schemes introduced under the

EmployeesÊ Social Security Act 1969.

Ć Overall, it is clear that legal systems influence work relations formed between
employers and employees.
Ć The Industrial Relations Act 1967, which has been discussed in this topic,
should be able to give you a more comprehensive picture about the importance
of having a systematic and organised human resource management system.
Ć This can ensure a harmonious working relationship between employers and

employees.
Ć In addition, this can help an organisation reach competitive advantage in the

local and global markets.
Contract of service Maternity allowance

EmployeesÊ Social Security Act 1969 Normal hours of work
Employer-employee relations Occupational Safety and Health Act
1994
Employment Act 1955
Payment of wages
Human Resource Development Act
1992 Recruitment of women
Industrial Relations Act 1967 Trade Unions Act 1959
Leave WorkmenÊs Compensation Act 1952

Topic  Human
Resource
3 Planning, Job
Analysis and
Job Design
LEARNING OUTCOMES
1. Define human resource planning.
2. Identify the advantages of combining human resource planning
with an organisationÊs strategic planning.
3. Describe the human resource planning process.
4. Discuss different approaches in predicting employee needs.
5. Describe the steps involved in job analysis.
6. Explain the key issues in job description and specification.
7. Discuss the relationship between job requirements and human
resource management functions.
8. Explain the factors that need to be taken into account when designing a
job.

TOPIC 3 HUMAN RESOURCE PLANNING, JOB ANALYSIS AND JOB DESIGN  49
 INTRODUCTION
Organisations compete with one another based on the skills and abilities of their
manpower. Therefore, manpower or human resource planning becomes very
important so that present and future employees will be a competitive workforce.
Organisations need to be careful in recruiting, selecting, developing, and

maintaining their employees. To fulfil the requirements in performing human
resource management functions, effective human resource planning must be
carried out.
In this topic, we will discuss a process of human resource management, namely,

human resource planning. It is the basis for staffing in an organisation.
Job analysis and job design are two important elements that form the foundation
of effective human resource planning. Job analysis determines the requirements of
a job. Job design helps employees achieve an organisationÊs objectives and at the
same time, gives satisfaction to employees in performing their jobs.
The main purpose for an organisation to conduct job analysis is to improve its
performance and productivity. It is necessary to identify the skills, knowledge,
experience, and other requirements necessary to do a job. Job analysis helps
organisations to fulfil the legal needs and regulations set by the government.
Usually, the human resource department is responsible for conducting job
analysis.
3.1 IMPORTANCE OF HUMAN RESOURCE

PLANNING
Human resource planning is a process of forecasting and preparing human
movement into, within, and out of an organisation.
The aim of human resource planning is to utilise human resources effectively so

that an organisationÊs goals can be achieved. Human resource planning also
ensures that the organisation has the correct total and type of employees.

50  TOPIC 3 HUMAN RESOURCE PLANNING, JOB ANALYSIS AND JOB DESIGN
The importance of human resource planning can be seen from different

perspectives as shown in Figure 3.1.
Figure 3.1: Importance of Human Resource Planning
(a) Recruitment
Changes in employee environment and composition require a manager to be
more involved in human resource planning. The manager must plan a more
effective recruitment method in order to hire capable employees.
(b) Reducing Non-visible Costs

Human resource requirements that are effectively planned will reduce an
organisationÊs losses. For example, a job vacancy that is immediately filled
will not disrupt the organisationÊs operations; the quality of products or
services will be maintained; and the organisationÊs losses can be avoided.
(c) Employee Career Planning and Development

Any weakness in human resource planning will have a negative effect on an
employeeÊs career, as the opportunities to further himself or herself in a job
and position may be limited.
(d) Effectiveness of Human Resource Management Programmes

Human resource planning is the basis for the standardisation of human
resource management functions. Let us say an employee from Section B has
resigned, but an employee is being hired to work in Section A even though
it does not need a new employee. This shows that the human resource
management functions are not performed effectively.

SELF-CHECK 3.1
Through human resource planning, an organisation plans its employeesÊ

movement into, within, and out of the organisation. If you have your
own company, will human resource planning be important to your
organisation? Explain.
3.2 HUMAN RESOURCE PLANNING AND

STRATEGIC PLANNING
For the purpose of future organisational planning, a human resource manager
must combine human resource planning with the organisationÊs strategic
planning. There are three methods how human resource planning and strategic
planning can be related.
Figure 3.2 shows these methods.
Figure 3.2: Relationship between Human Resource Planning and Strategic Planning
(a) Relating the Strategising and Implementation Process
Strategic planning enables an organisation to determine its main

objectives and develop a comprehensive plan to achieve the objectives.
Human resource planning is related to strategic planning at the beginning

and final stages. At the beginning, human resource planning is the input in
the strategising process. Human resource planning will address what can be
done. At the final stage, strategic planning and human resource planning are
related in terms of their implementation. When the strategies are set, the
management must decide on the division of source, including matters
involving structure, process, and human resources.

The combination of human resource planning and strategic planning is

effective when both plans assist each other. In this matter, the top
management must understand that decisions made in strategic planning will
affect human resource planning, and vice versa. The human resource
manager is seen as part of the management team in the organisationÊs
strategic planning.
Figure 3.3 shows the relationship between the human resource planning
process and strategic planning process.
Figure 3.3: Relationship between the Human Resource and Strategic Planning Processes
Adapted from Bohlander et al. (2009)
ACTIVITY 3.1
Based on Figure 3.3, between strategic planning and human resource

planning, which should come first? Discuss with your coursemates.

(b) Determining the Types of Human Resources Present in the Organisation

The strategies planned can be related to human resources in terms of an
employeeÊs basic efficiency. Employees can be divided into four categories
based on their skills and the strategic values given to them by the
organisation. Refer to Figure 3.4 to know how an organisation determines
the types of employees.
Figure 3.4: Determining Types of Employees in an Organisation
 Employees with Core Knowledge

This refers to employees with special skills and high strategic values.
An organisation needs to give a high commitment to these employees
by giving them training and opportunities to develop. Examples of
employees with core knowledge are accountants and computer
programmers.
 Employees with Traditional Tasks

This refers to employees who have skills which are not unique. Usually,
an organisation does not give much training and opportunities for these
employees to develop their careers. Examples of these employees are
salespeople and drivers.

 Contract Labourers
This refers to employees who are readily available and with limited
tasks, such as clerks and furniture restorers.
 Affiliates
Affiliates have unique skills but are not related to the organisationÊs
basic strategies. An organisation tries to promote a good relationship
with their affiliates and invests in the exchange of information and
knowledge. Examples of affiliates are lawyers, consultants, and lab
researchers.
(c) Ensuring the Suitability and Flexibility of Human Resource Planning

Practices
Another way of relating human resource planning and strategic planning is
by suiting the policies, programmes, and practices of human resource
planning to the organisationÊs strategic requirements.
Human resource planning policies and practices must achieve two types of
adaptation, i.e., external adaptability and internal adaptability.
 External adaptability focuses on the relationship between business

objectives and the main human resource efforts. For example, to achieve
a low operational cost, human resource planning policies and practices
must support the direction of low operational costs.
 Internal adaptability is a human resource planning practice that is suited

between one another to produce a symbiotic relationship. For example,
job design and training focus on the same behavioural target, such as
efficiency and creativity in work.
When changes take place in the working environment, human resource

planning must be flexible and able to withstand the changes. This will
increase an organisationÊs ability to act and change in the efforts to maintain
the organisationÊs competitive advantage. Flexibility can be achieved in two
ways, i.e., coordination flexibility and source flexibility.
 Coordination flexibility happens through a swift resource change to fulfil

new or changed requirements. For example, through human resource
planning, a manager can predict economic trends and competitorsÊ pace.

 Source flexibility happens when employees are able to perform many

different tasks in many different ways. For example, an employee
can work as a team or switch tasks, and is flexible in terms of job
responsibilities.
EXERCISE 3.1
1. Knowledgeable employees often get more attention from the

management in terms of commitment and training opportunities to
increase their knowledge and skills.
2. Apart from visible and non-visible costs, ineffective human

resource planning can cause employees to face problems in
planning their careers in an organisation.
3. Generally, contract labourers and temporary workers have a

lower strategic value of knowledge and skills compared to
knowledgeable employees and full-time employees.
4. A human resource manager must become a part of the planning

committee of an organisation.
5. Human resource planning is related to an organisationÊs strategies

when an organisation is performing strategic analysis, strategic
formation, and strategic implementation.
3.3 HUMAN RESOURCE PLANNING PROCESS

Through human resource planning, an organisation can forecast and prepare for
human movement into, within, and out of the organisation. The steps involved in
human resource planning are as follows:
(a) Environmental Scanning

Environmental scanning systematically detects external forces that influence
the organisation. The external forces or factors often scanned are:
 economic factors, including local and global economy;
 competitive trends, including processes, services, and new innovations;

 technological changes, including robotic technology and office

automation;
 political and legal issues, including laws and administration;
 social matters, including childcare and education; and
 demographic trends, including age, composition, and literates.
Aside from scanning the external environment, internal scanning is also

carried out. A cultural audit is the scanning of organisational culture and
work life quality in an organisation.
(b) Predicting Human Resource Needs

Based on the human resource planning model shown in Figure 3.5, there are
two types of approach to predict employee needs in an organisation. The
approaches are quantitative approach and qualitative approach.
Figure 3.5: Human Resource Planning Model

(i) Quantitative Approach

The quantitative approach involves the use of statistical and
mathematical techniques. This approach is often used by professional
planners. One example of the quantitative method is trend analysis.
Trend analysis is a quantitative approach to predict labour needs based

on an index e.g., sales result (refer to Table 3.1).
Table 3.1: Predicting Human Resource Needs with the Trend Analysis Method
Human Resource
Business Factors Labour Productivity
Year Needs (Number of
(Sales in RM Â000) (Sales/Employees)
Employees)
1995 2351 14.33 164

1996 2613 11.12 235
1997 2935 08.34 352
1998 3306 10.02 330
1999 3613 11.12 325
2000 3748 11.12 337
2001 3880 12.52 310
2002* 4095 12.52 327
2003* 4283 12.52 342
2004* 4446 12.52 355
* forecast figures
In Table 3.1, the business factor that is taken into account in predicting
human resource needs is the total annual sales for each year. Labour
productivity is obtained by calculating the average number of sales of
an employee in the financial year. The total number of employees can
be predicted by dividing the value of business factor with labour
productivity.
Apart from total sales, other business factors that can be used to predict
human resource needs are interest rates, gross national income and
income expenditure.

Other quantitative methods that can be used to predict human resource

needs are regression analysis, ratio analysis, and timeline analysis.
ACTIVITY 3.2
Refer to Table 3.1. If the sales result in 2005 was RM4,546,000 and the
labour productivity was maintained as in 2004, what would be the
human resource needs in 2005?
(ii) Qualitative Approach

A qualitative approach does not involve much statistics but takes
into consideration employeesÊ interests, abilities, and aspirations in
fulfilling future staffing requirements. In this method, the human
resource manager predicts employee needs through considerations.
Among the qualitative methods often used are management
forecasting and the Delphi Technique.
 Management forecasting is opinions, considerations or proposals

from supervisors, department managers, experts, and those with
knowledge in human resource requirements for the organisation in
the future.
 The Delphi technique is a technique of obtaining and summarising

proposals or considerations from chosen experts on employee
needs in an organisation. This technique reduces bias as the final
prediction is a combination of expertsÊ predictions.
ACTIVITY 3.3
Look at the human resource planning in your workplace. Are the

management predictions and Delphi technique used? If yes, give an
example on how the planning is implemented. Share and compare your
answer with your coursemates in myINSPIRE.

(c) Predicting Human Resource Supply

After an organisation predicts employee needs, it has to determine whether
the number and types of current employees will be sufficient for the future.
This process involves detecting the level of current and future supply,
whether inside or outside the organisation.
There are various methods to detect and predict the total number of internal
employees. Among these methods are:
 Staffing Schedule
A staffing schedule gives a graphic display on all jobs in an organisation,
including the existing number of employees involved in the jobs. It also
contains employeesÊ needs for the future.
 Markov Analysis
This analysis detects the pattern of employee movement through various
types of jobs. It shows the percentage and actual figure of employees
who still remain in a particular job, and employees who are promoted,
demoted, transferred or removed from the organisation. Through
Markov Analysis, an employee movement matrix can be developed and
the supply of internal human resources can be predicted. For an example,
refer to Table 3.2.
Table 3.2: Example of the Use of Markov Analysis to

Predict Internal Human Resource Supply
(a) Transition Probability Matrix
Year 2003 (Expected)
Categories and
A1 A2 B1 B2 Out
Job Levels
Year A1 .60 .10 .20 .00 .10

2002
A2 .05 .60 .00 .00 .35
B1 .05 .00 .60 .05 .30
B2 .00 .00 .00 .80 .20

(b) Predicting Supply
Year 2003 (Expected)
Categories and Current

A1 A2 B1 B2 Out
Job Levels Workforce
Year A1 100 60 10 20 0 10
2002
A2 20 1 12 0 0 7
B1 200 10 0 120 10 60
B2 15 0 0 0 12 3
Predicted supply 71 22 140 22
Based on Table 3.2, suppose A1 is a salesperson, A2 is a sales manager, B1 is

a customer service agent, and B2 is a customer service manager.
The percentage data in part a (transition probability matrix) for all categories
and job levels were obtained based on previous yearsÊ calculations. Refer to
the salesperson level (A1). The percentage is derived from the total number
of employees who are maintained in level A1 divided by the total number
of employees in that level from the previous year. Then, the total number of
promotions to A2 in the current year is divided by the total number of
employees in level A1 from the previous year. The same goes for the total
number of employees who moved to B1, were promoted to B2, and were
removed from the organisation. The total of all percentages must add up to
1 (or 100%). For example, at level A1 = 0.60 + 0.10 + 0.20 + 0.00 + 0.10 = 1.00.
In part b (predicting supply), in 2002, the total number of salespeople (A1)

is 100. It is expected that in 2003, 60 people will remain as salespeople (A1),
10 people will be promoted to sales manager (A2), and 20 people will
be moved to the position of customer service agent (B1). There will not
be any promotion for customer service manager (B2), and 10 people will be
removed from the company. In 2003, the company is expected to supply
71 salespeople, 22 sales managers, 140 customer service agents, and
22 customer service managers.

ACTIVITY 3.4
Refer to Table 3.2. Say in 2002, the number of customer service agents
(B1) was 280. How many of them would be promoted to customer service
managers?
 Skills Inventory
A skills inventory consists of employeesÊ personal files that contain
information on their education, experience, interests, skills, and others.
A skills inventory enables a manager to promptly match suitable
positions with employee backgrounds.
 Replacement Chart
A replacement chart consists of a list of current position holders and
those who could fill in a position if it becomes vacant. This chart provides
information on the employeesÊ or managerÊs current performance and
the probability of a promotion.
 Succession Planning
Succession planning identifies, develops, and detects important
individuals for executive positions.
When an organisation experiences a shortage of internal sources for

promotion, or for new positions at the beginning or lower level, the manager
must look at an external work source or labour supply from outside the
organisation.
There are a few external factors that influence the labour market. Among
them are demographic changes, economy, manpower level of education,
requirements for certain skills, population movement, and government
policies. The unemployment rate at the national and state levels often
becomes the benchmark to detect the labour force or employee supply.

(d) Balancing Human Resource Supply and Requirements

Through human resource planning, an organisation balances between
employee need and supply. The demands towards employees are based on
trend forecasting in an organisationÊs business activities.
An offer involves determining where and how potential employees can

be found in order to fill expected vacancies. Matters become difficult if a
particular job needs specific training, and this will require more thorough
planning.
If there is a job vacancy, whether aiming at replacing an employee who has

resigned or due to the existence of a new position, an organisation must
employ a new worker. The organisation can recruit a full-time or part-time
employee, depending on its requirements.
An organisation can also re-hire employees who have resigned if the

organisation feels that it is appropriate. For short-term and temporary
actions, the organisation can encourage its employees to work overtime in
order to fulfil the organisationÊs current requirements.
When an organisation experiences a surplus of manpower, a few actions can

be taken to reduce the existing number of employees, such as:
 limiting the intake of new employees, unless really necessary;
 not replacing employees who resign, retire or die; and
 asking employees to share a job or task, demoting employees, advising

employees to retire, terminating employees from service or laying off
employees if really necessary.
However, all actions by the organisation must follow existing regulations

and laws.

SELF-CHECK 3.2
Based on the human resource planning definition in Subtopic 3.1 and
your experience at the workplace, what are the steps involved in human
resource planning?
EXERCISE 3.2
1. Various organisational factors, including competitive strategy,

technology, structure, and productivity, can influence an
organisationÊs requirements towards its employees.
2. When human resource planning shows a surplus of workers, an

organisation can use termination, job sharing, dismissal, demotion
methods, or force so that employees resign in order to achieve a
balance in the number of employees for the organisationÊs actual
needs.
3. The qualitative technique of forecasting human resources generally

uses sophisticated analytical models.
4. The Delphi Technique is very suitable for an organisation that is

having staffing problems due to sudden technological changes.
5. The unemployment rate at the national and state levels can become
the benchmark in identifying the external human resource supply.

EXERCISE 3.3
1. External adaptability requires that human resource planning

policies and practices are aligned with business objectives.
2. Environmental scanning allows organisations to identify external

forces that can affect their human resource planning.
3. Total sales are the only business factor that should be used to
predict human resource needs.
4. The qualitative approach helps a human resource manager to

predict employeesÊ needs by considering their interests, abilities,
and aspirations in fulfilling future staffing requirements.
5. A staffing schedule presents a graphic display on employeesÊ needs

for the future.
Match the Concepts with Suitable Statements
1. Predicting manpower needs based A. Human resource

on the organisationÊs index. planning
2. An area where applicants can be B. Labour market

recruited.
3. The processes of forecasting and C. Succession

preparing employee movement planning
into, within, and out of the
organisation.
4. Identifying, developing, and D. Trend analysis

detecting important individuals
for executive positions.

1. Human resource planning aims at utilising human resources

effectively so that:
A. the organisationÊs goal can be achieved
B. the teamÊs goal can be achieved
C. individual performance can be enhanced
D. none of the above
2. Human resource planning and strategic planning are related by:

A. relating both human resource planning and strategic
planning processes
B. determining the types of employees who exist in the
organisation
C. ensuring the suitability and flexibility of human resource
planning in an organisationÊs strategy
D. all of the above
3. Through human resource planning, an organisation strives to

balance requirements and human resource supply. Human
resource requirements are based on ___________.
A. where candidates can be obtained
B. how candidates can be obtained
C. when applicants can be employed
D. trend forecasting in business activities
4. The method that enables an organisation to detect patterns of

employee movement through various types of jobs is called
______________.
A. Delphi technique
B. trend analysis
C. staffing schedule
D. Markov analysis
Essay Question
Differentiate between the quantitative approach and qualitative
approach in the forecast of human resource needs.

3.4 JOB ANALYSIS
Job analysis is the process of obtaining information about a particular

job by determining the responsibilities, duties, skills, and experience of a
prospective employee.
Job analysis should be executed by following a systematic approach as shown in

Figure 3.6.
Figure 3.6: Six Important Steps in Job Analysis

The outcome of the analysis is used to develop job description and specification.
Before carrying out a job analysis, the requirements for a particular job must
be determined. Questions such as the following should be asked so that a more
accurate job requirement can be determined:
 What kind of work will be done by the employee?
 How will the employee perform the job?
 Why will the employee be performing the job?
Figure 3.7 briefly explains how job analysis can be used to produce job description
and specification.
Figure 3.7: Job Analysis, Description, and Specification

(a) Job Analysis

It is important for a human resource department to analyse, reanalyse, and
document information about a job. It is used during the hiring process and
also for training and performance appraisal.
Job analysis is, thus, necessary and it is a procedure or method which

examines the skills, knowledge, experience, and other requirements
necessary to do a job well.
The outcomes of the job analysis will be job description and job specification.
(b) Job Description

It is a document that outlines a job. According to Maimunah (2008), a typical
description should contain the following information:
 job title, location and grading;
 relationships – organisational hierarchy;
 brief statements on the purpose of the job;
 list of duties and responsibilities;
 terms and conditions of employment to be given to the job-holder; and
 negative aspects of the job.
(c) Job Specification

It is sometimes known as person description. It is a document that explains
how an individual fits into a job. It also assists human resource personnel in
recruiting a qualified candidate for a position.
According to Maimunah (2008), job specification should include the

following:
 knowledge, skills and abilities required to do the job;
 educational qualifications and work experiences required;
 physical requirements of the job, if any;
 personality requirements, where relevant; and
 career path.

Next, refer to Figure 3.8 for the job analysis process.
Figure 3.8: Job Analysis Process
Before we engage in further discussion on job analysis, we must first understand

some terms that are closely related to job analysis. These terms are shown in
Table 3.3.

Table 3.3: Basic Job Terms
Term Description
Job A number of activities and duties that are inter-related.
Position Different duties and responsibilities performed by an employee.
Job group A group of different jobs with similar characteristics.
Duties A group of job elements coordinated and combined to produce results.
Element The smallest unit of a job or task.
Job Statement on the knowledge, skills, and capabilities needed by an

specification employee to perform a job.
Job Statement on the duties, obligations, and responsibilities needed to

description perform a job.
ACTIVITY 3.5
Search online listings for jobs with job descriptions. Pick three or four
from different organisations, compare these descriptions with your
coursemates, and make notes of similarities and differences between
them.
3.4.1 Job Analysis Approach

We can use various methods to obtain data or information on a job. These methods
can be categorised as qualitative or quantitative methods.
(a) Qualitative Methods

The following are some of the qualitative methods often used:
 Interview
A job analyst will question employees, supervisors, and managers
individually regarding the work that is being analysed.

 Survey
A job analyst will distribute to every employee a questionnaire on
the work that is being analysed. Each employee must fill up the
questionnaire. The data gathered is on employeesÊ duties and
responsibilities, work goals, suitability of workplace, requirements to
perform work (skills, education, experience, physical and mental needs),
equipment and materials needed, and requirements for employeesÊ
health and safety.
 Observation
A job analyst can obtain information on jobs by observing employees of
particular positions while they are performing their tasks. Observation is
based on standard work activities. The result of the observation will be
recorded in an observation form.
 Journal and Record

The employer will be requested by the analyst to record all activities in a
journal throughout the employeeÊs work cycle. Usually, the notes are
made in 30-minute or 1-hour intervals for each cycle or work shift, and
the time frame is usually between 2 and 4 weeks.
Apart from the methods above, there are other methods or approaches in
data collecting that are quantitative in nature.
(b) Quantitative Methods

Among the popular quantitative approaches in job analyses are as follows:
(i) Functional Job Analysis (FJA)
FJA is a quantitative approach to job analysis. It utilises the

inventory of a jobÊs activities or functions.
FJA assumes that every job involves the execution of a specific

employeeÊs functions, i.e., functions related to data, humans, and
things.
Each function has a difficulty level that has been relatively set. The total
value of the difficulty level will determine a jobÊs content and help to
prepare the job description and specification. Table 3.4 shows an
example of a FJA application.

Table 3.4: Sample of a Functional Job Analysis Application
Level of Difficulty of EmployeesÊ Functions
Data Humans Things
0 Synthesising 0 Mentoring 0 Starting

1 Coordinating 1 Negotiating 1 Working efficiently and
thoroughly
2 Analysing 2 Giving instructions 2 Operating ă controlling
3 Arranging 3 Supervising 3 Steering ă operating
4 Calculating 4 Diverting attention 4 Manipulating
5 Copying 5 Persuading 5 Attending
6 Comparing 6 Talking in signs 6 Feeding ă off bearing
7 Servicing 7 Handling
8 Receiving orders ă
helping
Adapted from US Department of Labor (1991)
Based on the example presented in Table 3.2, if a clerk needs to copy

data, talk to customers and lift things, the difficulty levels of his or her
functions are 5, 6, and 7 respectively. This means the total difficulty
level for the clerk is 18.
If the difficulty levels for an assistant psychiatrist in a hospital in terms

of handling data, humans, and things are 1, 7, and 5 respectively, then,
the total level of difficulty is 13.
The lower the score of the difficulty level, the higher the difficulty level
function. Jobs that have the same score are grouped together and paid
the same salary rate.
(ii) Position Analysis Questionnaire (PAQ)
PAQ is a quantitative survey method that covers 194 items on

employee-oriented duties.

This technique uses a scale of 0 to 5 to determine the degree of work

duties or elements that need to be carried out in a job. The 194 items are
classified in six groups, i.e:
Ć Information Input
This refers to the way employees acquire information on a job.
Ć Mental Process
This refers to the process of reasoning, decision making, and
planning applied in performing a job.
Ć Work Result
This refers to the types of equipment and physical activities utilised
to perform a job.
Ć Relationship with Others

This refers to the types of relationship expected in order to perform
a job.
Ć Work Contexts
This refers to the physical and social contexts where a job is
performed.
Ć Other Work Characteristics

This refers to activities, occurrences or other characteristics aside
from the five characteristics listed above.
The score from respondentsÊ answers will be analysed by a computer

and the result will be used to determine the characteristics of a job.
(iii) Critical Incident Method

Important work duties are identified to determine the success of a job.
Information on critical duties can be obtained through interviews with
employees and managers or through written reports by the position
holder. The data obtained will be analysed. The result is a clearer or
more understandable report on the important tasks in a job.
(iv) Computer Job Analysis

A human resource information system helps a lot in the job analysis
process. Now, there are many software designed specifically to analyse
jobs and come up with job descriptions and specifications based on the
analysis. Managers and employees have to only choose statements on
duties related to the job being analysed to determine the importance
level of the duties.

EXERCISE 3.4
1. Job analysis is the process of obtaining information on a job by

determining the obligations, duties, and activities of the job.
2. The responsibility of carrying out a job analysis is the main

responsibility of a line manager.
3. The usual methods of gathering information for a job analysis are

interviews, questionnaires, observations, and journals.
4. The functional job analysis approach is an inventory of a jobÊs

various functions and work activities.
5. The main objective of the critical incident method approach in

performing a job analysis is to identify the 194 items in the position
analysis questionnaire list.
Visit http://www.job-analysis.net for information on job analysis approaches

other than those already mentioned.
3.4.2 Job Description and Specification

Data on a job obtained from a job analysis will be used to develop the job
description and specification.
(a) Job Description
A job description is a written description of a job and it covers the

duties that need to be performed.
Most job descriptions contain at least three parts, namely, position, work
introduction, and work duties and obligations. Table 3.5 presents the
important areas of a job description.

Table 3.5: Important Parts of a Job Description
Job Description
Description
Term
Position Name  It represents the duties and level of the post in an

organisation.
 Psychologically, the position name can represent a jobÊs
status.
 The position name should explain the duties that need to
be performed in a job.
Work  It differentiates a job from another job.

Introduction
 Items that need to be included in a work introduction
include work location in an organisation, to whom the
position holder should report, and when was the last time
the job description was revised.
Duties or  A statement on job obligations and duties is often arranged

Obligations according to its significance.
 A job statement should show the weight or value of a task
in a particular job. Often, the total time utilised to perform
a task will become the main weight.
 A job statement covers responsibilities in performing
duties and results that should be achieved. It also covers
the equipment or tools needed by employees to perform
the job.
 The management must ensure that job duties and
obligations do not go against laws and regulations.
A job description is important to employees because it helps them to learn

their duties and obligations in a particular job and reminds them of the
results they must achieve.
On the managementÊs side, a job description becomes a base to reduce

any misunderstanding between employers and employees in the job
requirements. It is also a basis for the management to take corrective actions
when a task or obligation is not performed well.

(b) Job Specification

A job specification is a certain eligibility needed to perform tasks and
fulfil the responsibilities of a job. A job specification usually consists of two
things, i.e.:
 Skill requirements in performing a job. This includes education or

experiences, specialised training, personal characteristics or abilities, and
manipulative abilities.
 Physical requirements in performing a job. Physical requirements

include requirements to walk, stand up, reach, lift or speak while
performing a job. Physical requirements also take into consideration
an employeeÊs endurance towards the physical environment of the
workplace and the hazards that need to be faced.
ACTIVITY 3.6
Based on your experience at the workplace, what are the problems that
may be faced by the management and employees in the process of
preparing a job description report? Discuss with your couesemates in
myINSPIRE.
3.4.3 Uses of a Job Analysis

The results of the job analysis process help the human resource manager to carry
out human resource management functions (refer to Figure 3.2). These functions
are recruitment, selection, training and development, performance evaluation, and
compensation management.
(a) Recruitment
The recruiter must have knowledge of the job specification before hiring an
employee to fill the post.
(b) Selection
The manager and supervisor will use the job description and job specification
to select and orientate employees.
(c) Training and Development

Training equips employees with the knowledge, skills, and abilities
necessary to perform their tasks.

(d) Performance Evaluation

The requirements contained in a job description can be used as criteria to
evaluate a post holderÊs performance.
(e) Compensation Management

The management must consider requirements in terms of an employeeÊs
skills, efforts, and responsibilities, as well as workplace environment and
hazards in determining the payment rate for the worker so that it is equal to
the work performed.
EXERCISE 3.5
1. In preparing a job description report, the selection of a job title is

important in determining the employeeÊs status.
2. When writing a job description report, it is logical to use terms that

are loose, unclear, and comprehensive.
3. When there is a gap between knowledge, skills, and abilities and

the requirements needed to fulfil the job description and
specification, the position holder must be given training.
4. The requirements in a job description can be used as criteria to

evaluate the position holderÊs performance. It is known as job
evaluation.
5. In determining the payment rate of a job, the relative value of the

job does not hold much importance.
3.5 JOB DESIGN

Before you proceed with the discussion on job design, make sure you are not
confused between job design and job analysis.
A job analysis involves a study on a job that is being performed by an employee.

A job design is an expansion of the job analysis aiming at improving a job through
people and technology, so that the organisationÊs efficiency and job satisfaction can
be achieved. A job design involves job structuring, including job enlargement,
reengineering, and job enrichment.

Job design involves the merging of five factors (Bohlander et al., 2009):
 organisational objectives;
 matters related to behaviour;
 matters related to industrial engineering;
 ergonomic matters; and
 employee contribution.
3.5.1 Behavioural Matters

There are two approaches that influence employee behaviour when performing a
job. These are job enrichment and job characteristics.
(a) Job Enrichment

Job enrichment stimulates a job by increasing meaningful tasks and
obligations to give more satisfaction to employees.
Job enrichment for employees can be done through these methods:
 increasing the difficulty level and the responsibilities of a job;
 giving employees opportunities to maintain authority and empowerment

of their work;
 conducting a one-on-one work performance report with the employee;
 increasing new tasks that require training and development; and
 assigning particular tasks individually so that employees become

experts.
Job enrichment is effective only for certain jobs. Some employees become
unhappy when their job description is changed while others see it as a
challenge and a stimulating change.

(b) Job Characteristics

A job characteristics model states that there are three psychological states
where an employee shows an improvement in his or her work performance
and internal motivation, and a decrease in absenteeism and turnover.
The three psychological circumstances are:
 feeling a sense of meaningfulness towards the work performed;
 feeling responsible for work results; and
 knowing or understanding the work that has been done.
If there is a decrease in one of the three psychological circumstances, it will

affect the internal motivation of an employee.
According to Hackman and Oldham (1976), five job characteristics influence

the three psychological circumstances. These are skill variety, task identity,
task significance, autonomy, and feedback.
 Skill variety refers to the range of skills and activities necessary to

complete the job. The more an employee is challenged to use a wide
variety of skills, the more satisfying the job is likely to be.
 Task identity refers to the degree to which a person can complete an

activity or job in full. Employees who are able to take an activity from
start to finish are usually more satisfied.
 Task significance focuses on the impact and influence of a job. Jobs are
more satisfying if employees believe that they make a difference, and are
adding real value to colleagues, the organisation or the larger
community.
 Autonomy describes the amount of individual choice and discretion

involved in a job. More autonomy leads to more satisfaction.
 Feedback measures the amount of information an employee receives

about his or her performance, and the extent to which he or she can see
the impact of the work. The more that people are told about their
performance, the more interested they will be in doing a good job.

Figure 3.9 shows Hackman and OldhamÊs job characteristics model.
Figure 3.9: Hackman and OldhamÊs Job Characteristics Model
Adapted from Hackman & Oldham (1976)
ACTIVITY 3.7
In your opinion, what will happen if an employeeÊs duties and

responsibilities are increased but he or she is not psychologically ready
to accept the job enrichment? Share your thoughts in the myINSPIRE
online forum.

3.5.2 Industrial Engineering Matters
Industrial engineering is a field that is closely related to analysing work

methods and determining the standard work duration. It involves a study
on the work process cycle and determines the work elements that need to be
changed, merged, rearranged or eliminated so that the work duration
needed to complete the work process cycle can be lessened.
Through industrial engineering, the standard work duration for each work
element is merged and matched by taking into account an employeeÊs skills and
efforts while performing a particular job. The time duration on matters that
interrupt employees when working is also considered. Therefore, the total time
that has been changed is considered the standard time to perform a work cycle.
Industrial engineering involves a disciplined and objective approach. However,

employeesÊ behavioural matters must be considered. This is because a job design
that is only seen from the industrial engineeringÊs point of view as being efficient
and organised may not be psychologically suitable for the employee.
ACTIVITY 3.8
Think about the industrial engineeringÊs strengths and weaknesses

in terms of work process and employees. Based on your working
environment, list the strengths and weaknesses of industrial engineering.
Post your list in myINSPIRE.
3.5.3 Ergonomic Matters
Ergonomics is a disciplinary approach in designing equipment with a system

that can be used easily and effectively by employees.
The overall system is suited to the characteristics that are present in humans.
Factors such as job types, work environment, machines, equipment, and processes
must be suitable for employees who are performing a particular job. Briefly, we
try to fit machine to man, and not fit the man to the machine.

In other words, ergonomics tries to lessen negative impacts such as carelessness,

negligence, and other weaknesses that can cause defects to products and damages
to the equipment. Most importantly, it is to avoid employee injuries and accidents
as well as fatalities when performing work. See Figure 3.10 for an example.
In designing equipment, the employeesÊ physical abilities and their reaction

towards stimulation must be considered. An employeeÊs ability to react by way of
seeing, hearing, touching, and discovering equipment is important. Apart from
being appropriate for the workplace, the equipment or machine must be suitable
for employees, specifically female employees.
Figure 3.10: Sample of Ergonomics Checklist at a ClerkÊs Workstation
ACTIVITY 3.9
In this developing era, females are able to perform tasks which were
formerly monopolised by men. However, there are parties who feel that
jobs such as labourer are only suitable for men. Give your views in
myINSPIRE. If you agree, do you think you are discriminating against
female employees?

EXERCISE 3.6
1. There are two methods in job design, namely, job enrichment and
job characteristics. Both methods combine employee behavioural
needs when they are performing their jobs.
2. Richard HackmanÊs and Greg OldhamÊs job characteristics model

suggests there are three employee psychological circumstances that
will improve work performance and internal motivation, and
decrease employee non-attendance and dismissal.
3. The result of industrial engineering scientific management is a

work method analysis to determine a standard work time.
4. Ergonomics is about designing equipment that considers the

operatorÊs mental ability to operate the equipment, as well as react
through sight, hearing, and touch towards the information from the
equipment.
3.5.4 Job Design to Increase Employee Contributions

All techniques used to increase employee contribution in an organisation have two
similarities, namely, to increase cooperation and standardisation among group
members.
Research shows that working in a group promotes a sense of responsibility

towards achieving organisational goals. It also increases employee acceptance
towards decisions made, and encourages a cooperative approach in performing
tasks in the workplace.
Among the cooperation techniques that increase employee involvement in the

organisation are employee involvement groups and employee teams.

(a) Employee Involvement Groups

An employee involvement group is a group of employees that often meets
to solve problems and give suggestions for the purpose of organisational
improvement. Each group may consist of 5 to 10 employees and each
employee has similar or related duties or tasks in the organisation. In general,
employee involvement groups give suggestions to the management, which
decides whether or not to execute the suggestion. If the suggestion is
accepted, the results will be measured and the group members will be
rewarded for their contribution.
An employee involvement group usually meets 4 or 5 hours a month and is

chaired by a head. The head has no power and acts only as a facilitator.
Figure 3.11 shows the employee involvement group process.
Figure 3.11: Employee Involvement Group Process

(b) Employee Teams

An employee team is a technique where work functions are delegated to
groups, not individuals. Members of a group are given the freedom to use
their own intelligence in managing working in a team and individually. Each
team member is responsible for improving the work environment in the
organisation. The team also assumes that each member is responsible for the
performance of their group. The management sees each group as a unit that
reacts to solve problems related to the organisation.
Employee teams can operate in different forms or structures, and each

structure has its own strategy.
 Cross-functional Teams
A cross-functional team is a team that consists of multiple expertise and
is established to achieve a specific objective. Membership in a cross-
functional team is upon appointment and not voluntary.
 Project Teams
A project team is a team that is established to design a new product or
service. Membership is upon appointment by the management based on
the ability of the employee to contribute to the achievement of a project.
The team will be disbanded when all tasks are completed.
 Self-directed Teams
A self-directed team consists of those who are trained to perform tasks
related to the work unit. Group members opt for the majorityÊs
agreement in carrying out each of their obligations, such as problem
solving and liaising with customers from inside or outside the
organisation.
 Task Force Teams

A task force team is a team that is established by the management to solve
major problems immediately. This team is responsible for developing a
long-term plan to solve major problems, including carrying out the
solutions.

 Process-improvement Teams
A process-improvement team comprises employees who are experienced
in various departments or functions. They are in charge of improving
quality, reducing wastage, and increasing productivity in the processes
that involve all related departments or functions. Team members are
usually appointed by the management.
 Virtual Teams
A virtual team is a team where its members are far away from each
other and communicate through computers and other communication
technology.
Employee teams will change the way the management and employees
communicate with each other. The manager faces problems in acting as a
head whereby traditionally managers have always acted as supervisors. The
manager will feel threatened by the empowerment given to employee teams,
which indirectly lessens the managementÊs power.
On the other hand, employees face problems in adapting to the new

supervisory role. To prevent these problems, members in employee teams
have to be trained throughout the four stages of team formation. These stages
are: formation, conflict, standards, and execution. The complete training
includes important skills in:
Ć team leadership
Ć formation of the mission or objective
Ć chairing a meeting
Ć team decision making
Ć conflict resolutions
Ć effective communication
Ć awareness of team diversity

SELF-CHECK 3.3
What are the similar characteristics present in the techniques to increase

employee contribution in an organisation?
3.5.5 Suitability of Work Timetable

The suitability of a work timetable is not actually part of job design. This is because
employeesÊ duties and responsibilities are not changed. However, the suitability
of a work timetable will change employeesÊ normal working time.
Among the usual work timetable options are compressed workweek, flexi time,
job sharing, and telecommuting.
(a) Compressed Workweek

The total work days a week are reduced but the total work hours a day are
increased. This maintains the total work hours per week.
(b) Flexi Time

Employees can choose the start and end of work time that is suitable for
them, as long as the total work time per day or per week is maintained.
However, it is compulsory for all employees to be at the workplace for a
certain period, such as between 10am and 3.30pm.
(c) Job Sharing

Two temporary workers perform a job that is supposed to be done by one
full-time employee. They are paid a fee equal to the total number of hours
they work.
(d) Telecommuting
Micro computers, networks, and other communication technologies such as
facsimile machines are used to perform tasks which were previously done at
the office or workplace.

EXERCISE 3.7
1. Cooperation and standardisation techniques are among the

techniques in job design that aim at increasing group or employee
productivity.
2. Permanent groups that consist of 5 to 10 employees who perform

the same task and often meet to identify, analyse, and propose
solutions for problems are known as taskforce teams.
3. Employee teams can operate in different organisational structures,

each with a specific strategy and goal.
4. Flexi time allows employees to choose their own start and end of
work time as long as they work for a certain total number of hours
per day or per week.
5. Telecommuting utilises micro computers, networks and different

communication technologies such as facsimile machines to work from
home, instead of at the workplace.
A. Job D. Job design

B. Job analysis E. Job specification
C. Job description F. Position
1. A statement on the need for oneÊs knowledge, skills, and abilities in

order to perform a job.
2. Extension and expansion of job analysis that improve a job, and are
related to job structure to increase organisational efficiency and an
employeeÊs job satisfaction.

3. Different tasks and responsibilities carried out by an employee.
4. The process to obtain information on a particular job by

determining the obligations, tasks or activities in the particular job.
5. A group of related activities and tasks.
6. A statement on the tasks, obligations, and responsibilities of a

particular job.
1. A job specification determines the qualification needed for an

applicant. It plays an important role in _______________.
A. recruitment functions
B. the functions of a job analysis
C. a job characteristics model
D. selection function
2. Human resource management uses the data from job analysis to

develop ____________________.
A. an attitude and behaviour survey
B. a job description and specification
C. a job analysis function and ergonomic issues
D. employee agreement and workersÊ union
3. In a job description, the area that gives information on the location

of a certain job and to whom the work result should be reported is
known as __________________.
A. task identity
B. skill variety
C. position title
D. job specification

4. Below are the characteristics present in the job characteristics model

EXCEPT _____________________.
A. skill variety
B. task identity
C. task significance
D. group decision making
5. Those involved in employee involvement groups must receive

training in identifying problems, analysing problems, and
identifying various decision-making tools such as _______________.
A. planned or unplanned decisions
B. quality groups and self-managed teams
C. centralised and decentralised power
D. statistical analysis and cause and effect diagrams
6. On behalf of employers, flexi time is really helpful in ____________.

A. forecasting employee dismissal rate
B. recruiting and retaining employees
C. developing job sharing
D. developing a flexible timetable that is easy to follow
Essay Questions
1. Imagine that you are a manager in a service department. How do

job requirements which have been formally written help managers
in managing their units?
2. Clarify how industrial engineering and ergonomics can relate

to their own advantages, and at the same time suit each other in
designing a certain job.

 In planning an organisationÊs future, the top management and strategic

planner must realise that strategic planning decisions will affect human
resource planning and vice versa.
 Human resource planning can be reactive and proactive towards an

organisationÊs human resource needs.
Ć Human resource planning is a systematic process involving the forecasting

process of human resource needs, implementation of human resource supply
analysis, and balancing existing supplies and the actual needs of human
resource.
Ć Job analysis and job design are important in the development of an

organisation so organisations give specific importance to both aspects.
Ć Through job analysis, job description and specification are developed. A

wrong analysis will produce an inaccurate description and specification. This
will have a bad effect on the organisationÊs performance.
Delphi technique Job description

Ergonomics Job design
Functional job analysis Job specification
Human resource planning Markov analysis
Industrial engineering Position analysis questionnaire
Job analysis Strategic planning
Job characteristics model

Bohlander, G. W., Snell, A. W., & Sherman, S. A. (2009). Managing human

resources (15th ed.). South-Western College Publishing.
Hackman, J. R., & Oldham, G. R. (1976). Motivation through the design of work:
Test of a theory. Organizational Behavior & Human Performance, 16 (2),
250ă279.
Maimunah Ismail. (2008). Career plateau: Constructs, consequences and coping

strategies. European Journal of Social Sciences, 5 (4), 111–120.
US Department of Labor. (1991). The revised handbook for analyzing jobs.

Topic  Employee
Recruitment
4
LEARNING OUTCOMES
1. Describe the source of recruitment within an organisation.
2. Examine the source of the external recruitment process.
3. Discuss the strengths and weaknesses of employee recruitment
methods.
4. Explain the best practices of social media recruitment.
 INTRODUCTION
Human resources are dynamic. People can choose to stay in or leave an
organisation. Employees are more likely to leave when they have options to do
so, especially if it comes with better opportunities. Even when employees choose
to stay, they will leave an organisation when they come to the age of retirement.
As a result, an organisation will always be looking for replacements.
All businesses compete within the same labour market. Globalisation has opened
the door for businesses to look for potential employees beyond geographical
regions. However, the same factor allows people to have more employment
options. Therefore, organisations are compelled to find job candidates who are
able and willing to do the assigned jobs.

94  TOPIC 4 EMPLOYEE RECRUITMENT
In the recruitment process, effort is put into informing applicants about the
qualification requirements in performing a job, as well as job opportunities that
are offered by an organisation to its workers. Recruitment that will be made
depends on the supply of existing personnel, the organisationÊs human resource
policy, and important matters involved in a particular job.
This topic discusses an important function of human resource management, which

is recruitment. Discussions will be structured around three types of recruitment,
namely, internal, external, and social media recruitment, as we are now living in
the age of the Internet.
ACTIVITY 4.1
What is the purpose of recruitment? Discuss with your coursemates in

the myINSPIRE online forum.
4.1 INTERNAL RECRUITMENT

When an employee is promoted or resigns from an organisation, his or her position
must be filled. If a replacement is chosen from within the organisation, it is easier
for the organisation to assess the successorÊs capability. Furthermore, it can
motivate staff to stay longer in a company. Internal candidates who are most
qualified have to be identified so that no issues will arise regarding regulations
and laws, and the organisationÊs needs and employeesÊ aspirations can be fulfilled.
The effectiveness of internal sources can be further strengthened by giving the

opportunity to employees who feel that they are qualified to apply for the position
offered. Internal candidates who are suitable can be identified through the human
resource information system and job posting and bidding.
(a) Human Resource Information System (HRIS)

Information technology enables an organisation to create a database that
contains records and qualifications of each of its employees. A manager can
obtain information about candidates and identify those who have potential
to fill the position offered.
The existing data can also be used to forecast employeesÊ career path and
predict when and where the opportunity for promotion will be announced.
However, the data has to be updated and there has to be a systematic method
to update the data.

TOPIC 4 EMPLOYEE RECRUITMENT  95
(b) Job Vacancy Advertisement and Recruiting

The management announces the existence of a job vacancy while at the same
time retaining a list of employees who are trying for a better position. The
announcement can be made through a bulletin board, the organisationÊs
bulletin, special handouts, public address, and other appropriate methods.
Sometimes, announcements can also be made through computer systems
such as e-mails.
Job vacancy advertisement methods can be seen as beneficial when

employees are confident regarding the fairness of the system. It is more
effective when these methods are seen as part of the career development
programme for employees.
Among the advantages of recruiting from within the organisation are as

follows:
 Most organisations give priority to existing employees to fill in vacant

positions which are higher than their current positions. The offer to fill in
a certain position or job is considered a promotion. By this, organisations
can get back returns from the recruitment, selection, training, and
development initiated for their employees.
 A promotion in an organisation can act as a reward for an employeeÊs

performance. The result is an increase in employee morale and
motivation.
 By recruiting existing employees in an organisation, costs related to

orientation and training can be reduced. This is because employees are
already familiar with the organisationÊs work environment.
 In certain situations, internal recruitment can save employees from being

terminated and upgrade their working experience through transfers.
 The performance records of employees who are offered a new job are
more reliable when compared to that of a new employee who is hired
from outside the organisation.
However, recruiting employees from within the organisation has its weaknesses
and limitations, as follows:
 Job requirements cannot be matched by existing employees, especially for

those higher-ranking positions.

 Organisations do not have the opportunity to acquire the knowledge and

expertise of employees who have been trained by other organisations.
 It is difficult for organisations to encourage free flow of new ideas among

existing employees and tackle their existing negative attitudes.
 Organisations have to face the risk of employee cloning, i.e., employees who
maintain a repetitive work behaviour and attitude.
4.2 EXTERNAL RECRUITMENT

There are many sources and places where an organisation can recruit employees
from the outside. However, the source of recruiting professional and skilful
employees such as accountants is not the same as the source of recruiting skilled
employees such as a flour mixer operator in a bread factory.
Among the sources of external recruitment are:
(a) Advertising
Advertising is the most popular source of attracting applicants. The
advertising mediums that are often used by organisations are newspapers,
radio and television commercials, posters, billboards, and business journals.
The types of advertisements used by the organisation depend on the type of
job vacancy that needs to be filled and the type of labour market. It also
depends on the cost that the organisation is willing to bear.
(b) Internal Application

Organisations often receive applications from internal candidates without
having to advertise. However, the percentage of internal applicants is low.
Even though the percentage is low, organisations cannot ignore self-
applicants as they might prove to be good employees at a later date.
(c) Proposed by Staff

Existing staff can suggest candidates who are qualified. Organisations may
encourage them to continue the effort of searching for the right candidate by
giving a bonus for each successful employment. The risk of this sort of
employment is nepotism, which is the tendency to propose oneÊs own family
members.

(d) Executive Search Firms

This source assists employers in searching for a suitable employee to fill the
job offered. The fee rate is normally 30% to 40% of the annual salary of the
position that needs to be filled. For senior executive positions, payment is
usually made by the organisation engaging the particular executive search
firm.
(e) Higher Learning Institutions (Public and Private)

The potential candidates are young and formally trained but have less
experience.
(f) Professional Organisations

Usually, professional organisations help their members get jobs as this is one
of the benefits of joining such organisations.
(g) Public Employment Agencies

Public employment agencies such as the Labour Department help job
applicants to look for jobs which are suited to their qualifications.
(h) Private Employment Agencies

Normally, private employment agencies charge a certain fixed rate to help
applicants look for jobs. The fee may be paid by the job seeker or potential
employer.
(i) Agencies Providing Temporary Will

Normally, these types of agencies provide temporary workers to employers
who require temporary workers such as letter dispatchers.
(j) Employee Leasing

In employee leasing, an employee who has been retrenched or dismissed by
an organisation is hired by another company that offers employee leasing
services to interested companies.
(k) Internet Recruitment

The Internet is a source of recruitment that is increasingly popular.
Applicants can surf websites to register online.
(l) EmployeesÊ Union

The employeesÊ union is a good source to obtain employees for certain
positions at the supporting level.

ACTIVITY 4.2
When you applied for your current job, which recruitment method did
you go through? Share your experience in myINSPIRE.
EXERCISE 4.1
1. Records and qualifications of each employee are stored in the

Human Resource Information System (HRIS) for easy retrieval in
identifying which employees have the potential to fill in positions
which are offered.
2. The announcement about job openings can be circulated to existing

employees only through email.
3. Organisations should seek potential applicants from external

sources when existing employees cannot match the job
requirements.
4. Suggestion about qualified candidates for job openings from

internal employees is one of the external recruitment methods.
5. Executive search firms assist organisations in searching for suitable

senior executive positions for free.
Sometimes, it can be difficult for organisations to determine the effectiveness of

their sources in identifying suitable candidates at a minimum cost. However, there
are a few things that can be done by a manager to overcome the problem.
Some of the steps that can be taken to increase the effectiveness of external
recruitment are:
(a) Calculating Result Ratio

Result ratio is the percentage of applicants from one source who are qualified
to go to the next level from the selection process. The result ratio will show
the most effective recruitment source.

An example of how to calculate recruitment cost is as shown below:
SC/H = (AC + AF + RB + NC)/H
Whereby:
SC/H = source cost for every intake of recruiter

AC = advertising cost
AF = agency fee
RB = recommenderÊs bonus
NC = non-cost intake
H = total number of employee intakes
(b) Training Organisation Recruiters

In a big organisation, the recruitment process will be performed by
professional human resource staff. In a small organisation, this process is
carried out by the human resource manager, unit manager or supervisor.
The recruiter can influence a candidate whether to accept or reject a job

offer. Therefore, the recruiter must be trained so that he or she is capable
of attracting more qualified applicants.
(c) Realistic Job Previews (RJP)

Through RJP, a candidate is provided with information on all job aspects,
whether positive or negative. Those who practise RJP believe that applicants
who are given explanation on their jobs will stay on longer and be more
successful in their jobs.
External recruitment has a few advantages. Among these are as follows:
 Attracting external applicants will have the advantage of getting talented or

high-performing workers who are not easily available.
 External recruitment is done for the purpose of injecting new influence into an
organisation so that the existing work culture can be stimulated.
However, in implementing the external recruitment process, the position of the

labour market, be it tight or loose, and a candidateÊs preparedness to transfer must
be considered. The labour market is an area where candidates can be recruited. To
attract the interest of applicants, the organisation must identify the types of jobs
and their suitability to the applicants.

ACTIVITY 4.3
Research has found that employees hired through referrals and self-
applications stay on longer in an organisation and show better
performance than those hired through normal methods, such as
advertising. Based on your work experience, do you agree? Discuss.
4.3 SOCIAL MEDIA RECRUITMENT

With the advent of technology, a new recruitment approach has gained popularity.
Platforms such as Facebook, Twitter, and LinkedIn were once used to
communicate with others and showcase employeesÊ professional profile.
However, the same platforms are now being used to recruit job candidates from
all over the world. This recruitment approach is called social media recruitment.
Many organisations in different industries have started to engage in social media

recruitment. Madia (2011) provided some guidelines on the best practices in using
social media recruitment:
 Social media should be used as an extension of existing recruitment strategies.

Information about recruitment on an organisationÊs website must be up to date
and the website must be capable of handling traffic visits.
 Organisations must make sure that they have the resources to engage
immediately the channels that they create. It includes readiness to respond
immediately and availability to interact frequently.
 Social media recruitment relies heavily on content strategy. Organisations

must spend a reasonable amount of time to work on the contents to ensure
their relevance to the intended recruitment.
 Employees who are in charge of social media recruitment must understand

applicantsÊ expectations, possess the right tone and communication style, be
cognizant of the types of information that can be shared, and act within a given
legal parameter.

 Choose a social media that suits the intended recruitment. LinkedIn, for
example, serves as one of the best recruitment platforms to attract professional
applicants.
 Social media pages should reflect the overall corporate image. In this situation,
an organisation must be willing to spend some resources to hire a designer or
programmer.
Although organisations engage in the suggested best practices when they want to
use social media recruitment, they also need to know important characteristics that
define recruitment attractiveness among potential applicants. According to Madia
(2011), the attributes include:
 updated information about the recruiting organisation;
 complete and current biography and profile of the recruiter;
 a link to a corporate website;
 natural and unrehearsed contents that reflect the corporate culture;
 the organisationÊs relevance in the marketplace;
 personality of the hiring people;
 consistency of the brand image of the organisation through regular updates;

and
 relevant and interesting content.
ACTIVITY 4.4
Do you think organisations in Malaysia are ready to fully adopt social

media recruitment? Give three reasons for your answer. Share and
compare your answer with your coursemates in myINSPIRE.

EXERCISE 4.2
1. Recruitment refers to the method of attracting a pool of candidates

from outside the organisations only.
2. It is usual for competing companies such as those in a high-

technology field to try and get secrets from their competitors by
persuading their competitorsÊ employees to work for them.
3. It is better to avoid using employee referrals as a recruitment source

as the applicantsÊ quality may be questioned.
4. The result ratio helps an organisation to identify which recruitment

source is least effective in producing qualified candidates.
5. The person who should perform recruitment depends on the size

of the organisation. For a large company, a professional human
resource officer should be chosen and trained to find new
employees.
1. A method that is used to identify A. Social media

the percentage of applicants from recruitment
one area who are qualified to go
to the next level from the
selection process.
2. An area where applicants can be B. Labour

recruited. market
3. A recruitment approach that uses C. Realistic job

social media to recruit job preview
candidates from all over the
world.
4. Informing applicants on all D. Result ration.

matters pertaining to the job,
including positive and negative
matters.

1. There is a relationship between the successes of recruitment

through advertising and the _______________.
A. accuracy and total nature of the advertisement
B. simplicity of the advertisement
C. positive characteristics of the advertisement
D. coverage of the advertisement
2. Human resource planning and strategic planning are related by:

A. relating both human resource planning and strategic
planning processes
B. determining the types of employees who exist in an
organisation
C. ensuring the suitability and flexibility of human resource
planning in an organisationÊs strategy
D. all of the above
3. Through human resource planning, an organisation strives to

balance requirements with human resource supply. Human
resource requirements are based on ___________.
A. where candidates can be obtained
B. how candidates can be obtained
C. when applicants can be employed
D. trend forecasting in business activities
4. Methods that enable an organisation to identify qualified internal

candidates include all these, EXCEPT ______________.
A. announcement of job vacancies
B. re-hiring of employees who have been retrenched
C. a computerised record system
D. word of mouth
Essay Question
Explain how an organisation can engage in social media recruitment
successfully.

 In implementing recruitment functions, a management will find that internal

recruitment offers a lot of advantages to the organisation and its employees.
 Through internal recruitment, the management can reimburse all expenditures

invested in employees during employee training and development.
 For the employees, it is seen as an encouragement to further improve

themselves in the company. However, internal recruitment can cause
employee cloning.
 External recruitment has to be carried out when there is no internal candidate

eligible to fill a vacancy.
 Recruiting employees outside the organisation can help the organisation to

acquire new ideas.
 The recruitment sources used by an organisation depend on the types of jobs

and the labour market.
 Social media recruitment is becoming an important source of attracting

applicants to fill in job openings across geographical boundaries.
External recruitment Realistic job preview

Internal recruitment Social media recruitment
Madia, S. A. (2011). Best practices for using social media as a recruitment strategy.
Strategic HR Review, 10 (6), 19ă24.

Topic  Selection
5
LEARNING OUTCOMES
1. State the objectives of an employee selection process.
2. Identify the types of information sources that can be used in the
selection process.
3. Describe types of employment tests.
4. Discuss approaches in carrying out job interviews.
5. Examine strategies for achieving results in selection.
 INTRODUCTION
We are often exposed to news on deviance, misuse of power, and sexual
harassment in the workplace. Therefore, the selection of suitable candidates is very
important to ensure the success of an organisation.
In recruitment, an organisation tries to obtain as many applicants as possible for a

position. In selection, the number of candidates is reduced by selecting the most
eligible candidates.
The main purpose of selection is to maximise the accuracy of selecting qualified

employees and to avoid not taking qualified employees. Even though the human
resource department is responsible for carrying out the selection process, the
decision to hire a candidate is usually done by the departmentÊs manager.

106  TOPIC 5 SELECTION
5.1 SELECTION PROCESS

What do you understand about the selection process?
Selection is a process of selecting individuals who possess suitable

qualifications to fill an existing or future job vacancy.
Selection is an ongoing process and involves a few steps, which are as follows:
 completing the application form;
 preliminary interview at the human resource department;
 employment test (cognitive aptitude test, achievement test);
 investigating the candidateÊs background;
 preliminary selection at the human resource department;
 team/supervisor interview;
 medical check-up/drug test; and
 recruitment result.
From the steps above, we can see that an organisation uses various ways to
obtain information about applicants. Among the methods used are application
form, interview, employment test, medical check-up, and background check on
applicants.
ACTIVITY 5.1
In your opinion, why are some applicants exempted from certain steps
in the selection process while other applicants have to go through the
whole selection process? Discuss in myINSPIRE.
Visit www.hr-guide.com/selection.htm to obtain information on how the selection

process is carried out and how information on employees is obtained.

TOPIC 5 SELECTION  107
5.2 INFORMATION RELIABILITY AND

VALIDITY
Information on job applicants must be accurate, reliable, and valid. This is to
ensure the selection purpose, which is to hire employees who are really eligible
and to avoid not hiring those who are eligible, can be fulfilled.
5.2.1 Information Reliability
Reliability means the level where an interview, test, and other selection
procedures show consistent data every time, even when using other
methods of measurement.
Reliability, thus, means how far a selection tool is able to give consistent data.
Tables 5.1 and 5.2 are examples of stable and consistent reliabilities.
Table 5.1: Reliability as Stability over Time
A. High Reliability
Applicant Test Score Re-test Score
Ahmad 90 93
Chin 65 62
Rama 110 105
Kuntum 80 78
B. Low Reliability
Applicant Test Score Re-test Score
Ahmad 90 72
Chin 65 88
Rama 110 67
Kuntum 80 111

Table 5.2: Reliability as Consistency
A. High Reliability
Applicant Evaluator 1 Evaluator 2 Evaluator 3
Ahmad 9 8 8
Chin 5 6 5
Rama 4 5 5
Kuntum 8 8 8
B. Low Reliability
Applicant Evaluator 1 Evaluator 2 Evaluator 3
Ahmad 9 5 6
Chin 5 9 4
Rama 4 2 7
Kuntum 8 4 2
5.2.2 Information Validity
Validity means the level where a selection test or procedure is able to

measure a personÊs characteristics.
There are three types of information validity, which are:
 criterion-related validity
 content validity
 construct validity

Figure 5.1 shows how a test score is validated by applying criterion-related

validity.
Figure 5.1: Valid Test and Invalid Test
(a) Criterion-related Validity

Criterion-related validity is the level where the chosen selection tools are able
to forecast or have a correlation with the main elements of work behaviour
(Bohlander et al., 2004). Performance in a certain test will be compared to the
actual production records, supervisorÊs evaluation, result of training, and
different success measurements which are suitable for a particular job. For
example, the criteria for a job in the production sector are quality and product
quantity, whereas the criterion for a salespersonÊs job is total sales.

Criterion-related validity can be divided into two types:
 Concurrent Validity
Concurrent validity means how far a test score or other forecast
information matches the criteria data obtained from existing employees.
For example, a supervisor carries out a work evaluation on a few clerks
by giving them aptitude tests on clerical matters. Test scores are
compared to the supervisorÊs evaluation to see whether or not a
relationship exists between the test scores and the supervisorÊs
evaluation.
 Predictive Validity
Predictive validity means how far the score of a test done by an applicant
before he or she was hired matches the data obtained from him or her
after he or she was hired, after a certain period.
Cross validation can be done to strengthen the validity of a test. Cross

validation strengthens the validation of a particular validity result by
running a test on a different sample from the same population.
(b) Content Validity

Content validity measures how far a selection tool, such as a type of test, is
able to sample knowledge and skills which are needed to perform a certain
job. The higher the relationship between the test contents and the actual work
requirements, the higher the content validity. For example, a test to become
a kindergarten teacher should not contain activities on solving accounts
problems.
(c) Construct Validity

Construct validity measures how far a selection tool is able to measure
construct or potential employeesÊ characteristics theoretically. Construct
examples are intelligence, understanding of mechanical matters, and anxiety.
ACTIVITY 5.2
Refer to Table 5.2. How does Table 5.2 relate the three validity concepts?
Post your answer to myINSPIRE.

5.3 SELECTION METHODS

Through selection methods, we will discuss how to:
 obtain information about applicants and potential job candidates;
 test candidates for the purpose of identifying those who are most qualified for
a particular job;
 obtain information through effective interviews; and
 decide on determining qualified candidates for a job offer.
5.3.1 Information Sources

When you applied for a job, did you have to fill in your personal information?
What were the methods used at that time?
There are a few methods which are trusted and valid in order to obtain information
about candidates. Figure 5.2 shows a few techniques of obtaining information in
the selection process and its effectiveness.
Figure 5.2: Effectiveness of Selection Methods

The following are some types of information sources which are usually used by an
organisation to obtain information about a job candidate:
(a) Application Form

An application form provides information as to whether an applicant has
experience and educational background, and other matters related to the job.
Information from the application form will be the basis for the interviewer to
ask questions about the applicantÊs background and to check on references
provided by the applicant. Among the items included in an application form
are date of application, educational background, experience, criminal
records, nationality, and disabilities.
(b) Biographical Information Blank (BIB)

In BIB, the questions asked are more on family life, interests or hobbies, club
membership, and experience in sales and investments. Therefore, the BIB is
able to give a general description of the applicantÊs behaviour.
(c) Investigating CandidateÊs Background

When an interviewer feels that a candidate has potential to be employed,
some of the information obtained from previous employers or other
information given by the candidate will be investigated. Among the methods
are:
 calling the previous managers;
 writing a letter to get information;
 obtaining a written permission from the candidate so that the interviewer

can get information from previous employers; and
 going through credit reports to look at the applicantÊs financial position.
(d) Polygraph Test

A polygraph test is an equipment to detect lies. It measures changes in
breathing rate, blood pressure, and an individualÊs pulse when the person is
being questioned. Questions asked often include matters involving drug
abuse, theft or criminal offences that are not detected by others.
(e) Honesty and Integrity Tests

Honesty and integrity tests are usually used by an organisation where its
employees have access to money and sales items. Questions asked often
relate to values and attitudes towards issues such as theft and punishment
for thieves. A total analysis will become an assumption of work performance
and disciplinary problems.

(f) Graphology
Graphology refers to a system that analyses handwriting. Through a
candidateÊs handwriting, a graphologist makes an assumption of the nature
of his or her intelligence, energy level, organisational abilities, and emotions.
ACTIVITY 5.3
For which job should a candidate be tested using graphology? Explain

and post your answer in the myINSPIRE online forum.
(g) Health Examination

A health examination is done to ensure that the applicantÊs health level fulfils
the job requirements.
(h) Drug Test

A drug test aims at ensuring future employees are free from hazardous
drugs. The sampling method is usually implemented.
EXERCISE 5.1
1. The selection procedure does not have to be validated before use.
2. The more related the contents of a selection tool with the actual
work sample, the higher the value of content validity.
3. Construct validity is a level where a certain selection tool is able to

measure characteristics or constructs theoretically.
4. Most organisations require application forms to be filled because

these forms provide fast and systematic information about the
applicants.
5. To filter and select applicants as well as predict their performance,

organisations have to go through applicantsÊ information through
their source of reference.

5.3.2 Employment Test

Another method of obtaining information about candidates is through
employment tests. Some organisations employ consultants to perform these tests.
An employment test is an objective and standard way to measure knowledge,
skills, abilities, and other candidatesÊ characteristics.
Employment tests can be categorised into two, which are:
 Aptitude Test
An aptitude test measures an individualÊs capacity or ability to learn and
master new skills.
 Achievement Test
An achievement test measures what an individual knows or is able to do in a
time frame.
Among the types of employment tests are:
(a) Cognitive Aptitude Test

This test measures an individualÊs mental abilities such as aptitude, fluency,
calculating ability, reasoning ability, thinking, and drawing conclusions. It is
believed to be able to represent an individualÊs general intelligence.
(b) Job Knowledge Test

This test measures an individualÊs knowledge and understanding of a job.
(c) Work Sample Test

This test requires applicants to perform tasks that are part of the duties for
the position applied. For example, a test on reading maps for traffic officer
candidates, and judgement and decision making tests for an administrative
officer candidate.
(d) Personality and Interest Inventory

This test measures an individualÊs disposition and temperament.

There are five dimensions that reflect an individualÊs personality, which are:
 extroversion ă Extroversion projects external characteristics, i.e., at a level

where an individual talks a lot, is sociable, active, aggressive, and
cheerful.
 agreeableness ă Agreeableness is a level where an individual can be

trusted and is warm, generous, able to compromise, honest, cooperative,
and able to discuss.
 conscientiousness ă This is a level where an individual can be depended

on, is rule abiding, and perseveres in carrying out duties.
 emotional stability ă Emotional stability is a level where an individual

feels secure, is calm, independent and autonomous.
 open to experience ă This involves being open to new experiences, i.e.,

an individualÊs level of intelligence, philosophy, in-depth understanding,
creativity, artistic abilities, and curiosity.
(e) Physical Ability Test

This test is aimed at examining an individualÊs physical abilities in
performing a task in a particular job. Risky jobs such as those of firefighter
and lorry driver need physical strength and endurance. This limits
applications from women and people with disabilities.
ACTIVITY 5.4
In the personality and interest inventory, there are five personality

dimensions. Which one reflects your personality, and based on your
personality, what type of job would be suitable for you?

ACTIVITY 5.5
Classify these job tests according to their categories (aptitude test or

achievement test).
Type of Test Category
Cognitive ability test
Job knowledge test
Work sample test
Personality and interest test
Physical ability test
5.3.3 Job Interview

Information about candidates can be obtained through a job interview.
An interview, traditionally, is the main tool for most organisations to gather

information about candidates. Even though many researchers are still sceptical
about its validity, this method remains the main choice when conducting a
selection process. This is because:
 An interview is easy to carry out, especially when the number of applicants is

small.
 Apart from gathering information, it is also aimed at getting to know the

candidate better.
 Recruiters believe and are confident that it enables them to judge the
candidates.

In a job interview, one should be aware of three important factors:
 types of interview;
 variables that influence an interview; and
 guidelines for the interviewer.
(a) Types of Job Interviews

There are several types of job interviews, such as the following:
 Non-directive Interview
During a non-directive interview, an applicant has the freedom to give
his or her opinion. The interviewer tries not to influence any opinions
offered by the candidate. Usually, the interviewer will ask general
questions such as the candidateÊs experience in his or her previous
company.
 Structured Interview
This type of interview contains a set of standard questions together
with pre-determined answers. The questions are based on a job analysis
that has been carried out beforehand. Information from a structured
interview can reduce unfairness from the legal perspective.
 Situational Interview
Through this interview, the applicant is given a situation or an event to
which he or she needs to respond. The feedback given will be evaluated
based on standardised answers. This type of interview is a part of
structured interview.
 Behavioural Interview
Through this interview, applicants will be asked their response in dealing
with specific circumstances. For example, from an applicantÊs previous
experience, what were the actions taken against employees who
practised truancy. This approach is based on the critical incident method
of job analysis.

 Panel Interview
Through panel interview, a group of interviewers will question and
observe the candidate. The number of interviewers is between three and
five people. The interviewers will compare their observations and reach
a consensus concerning the candidate. This method has a high level of
validity.
 Computer Interview
Through this interview, candidates are required to answer multiple
choice questions (75 to 125 questions) that are related to the job. The
answers given will be compared to an answer profile developed from
previous candidatesÊ answers. A computer interview is usually used as
an additional interview for a common or conventional interview.
(b) Variables in a Job Interview

An interview process is influenced by the interviewer, the applicant, and
the interview context. Figure 5.3 shows these variables and the processes
involved in a job interview.
Figure 5.3: Variables in a Job Interview

(c) Guidelines for the Interviewer

A job interviewer can influence candidates on whether to accept or reject a
job offer. Therefore, an organisation must be careful in choosing interviewers.
An interviewer needs to have attributes such as humility, objectivity,
maturity, and composure. Communication skills are also needed. The
interviewer should not talk too much, be excessive in giving opinions or
show bias.
Some of the guidelines that can be observed by interviewers are as follows:
 Set Interview Plans

Go through the purpose of the interview and determine the subjects and
questions that will be asked. Get related information.
 Determine and Maintain Rapport

This can be done by welcoming the candidate, explaining the interview
purpose, and showing interest in the candidate.
 Be a Good Listener
Try to understand what the candidate means.
 Pay Attention to Body Language

Observe the candidateÊs facial reactions, head and hand movements,
body positions, and other movements that can indicate attitude and
feelings. Interviewers must be careful with their own body language too.
 Give Information Properly and Sincerely

Answer the candidateÊs questions properly and sincerely. Provide a clear
picture of the job offered.
 Use Questions Effectively

Avoid questioning a candidate while he or she is still answering a
question. Give opportunities to the candidate to guess what must be
answered.
 Separate Facts from Opinions

During an interview session, interviewers need to note down facts. An
interviewerÊs conclusion can then be compared with those of the other
interviewers.

 Identify between Bias and Stereotypes

Most often, bias happens during an interview when interviewers easily
accept candidates who are compatible with them. Stereotyping also
happens during interviews. A candidate is often judged based on race
and appearance.
 Control Interview Direction

Follow what has been planned. Give opportunities for candidates to
speak. However, interviewers need to monitor the situation so that the
objective of the interview is achieved.
 Standardise Questions
Ask the same questions to all candidates who are interviewed for the
same position. This can increase reliability and prevent discrimination.
ACTIVITY 5.6
Bias can occur during an interview process. The interviewer is often

influenced by negative information about the candidate. In your opinion,
what should be done by interviewers to prevent this from happening?
Discuss in myINSPIRE.
EXERCISE 5.2
1. Even though it has good potential, a physical ability test can have a
negative effect on women and people with disabilities.
2. An achievement test requires applicants to carry out tasks that are

part of the actual work.
3. In using a non-directive interview approach, the interviewer listens

attentively and does not interrupt candidates or change topics
suddenly.
4. A panel interview involves three to five interviewers interviewing

a group of future employees at the same time.

5.3.4 Reaching Selection Decision

When the necessary information is obtained, the process to determine the
candidate to be offered the job is done. At this level, there are three important
things to be observed:
 simplify a candidateÊs information
 decision strategy
 final decision
This level is important as it involves cost. Therefore, there has to be an information

checklist on the candidates, as well as strategy options in selecting a candidate.
(a) Simplify Candidate Information

The management is usually interested to know what can and will be done by
a candidate in a job. The management must take these two factors into
account when evaluating candidates. Factors of what candidates are able to
do include knowledge, skills, and ability to gain new knowledge and skills.
Factors of what candidates will do include motivation, interest, and other
personality traits (refer to Figure 5.4).
Figure 5.4: „Able to Do‰ and „Will Do‰ Factors

An employee who has the ability to do something but has no interest to do it

is better than an employee who has interest but not the ability. It is easier to
measure what an applicant is able to do rather than what he or she will do.
Test scores can be used as a tool to measure a candidateÊs abilities. The result
of the interview can be a basis to assume what the candidate will be able to
do in the future.
(b) Decision Strategy

The decision strategy used in hiring personnel differs according to job
category. For example, the strategy used to hire a manager is different from
the strategy used to hire a clerk.
Some factors need to be observed by the management before making any

decision on staff intake. These are as follows:
 Is the hiring of a particular individual based on the personÊs ability or the

organisationÊs needs?
 What is the starting fee for the individual who is offered a particular job?
 Is selection based on the candidateÊs suitability for the job or does it take
into account the candidateÊs career opportunities in the organisation?
 How far would those who are less qualified be given consideration?
 Will an individual who is more than qualified for the post be considered
and offered the job?
 What are the effects of a candidateÊs intake on the regulations and

employee diversity in an organisation?
The management must also determine the type of approach to take in

deciding to hire an individual for a particular job. The approach can be
clinical or statistical.

 Clinical Approach
Those involved in the selection process will go through all data on the
candidates again. A decision will be made based on the interviewersÊ
understanding of a particular job, and their observations of the
individuals who are successful in that particular job. The clinical approach
is subjective and often practised in most organisations.
 Statistical Approach
This is a more objective approach and is better than the clinical approach.
The data obtained about the candidates will be considered in detail and
the forecaster will be identified statistically.
There are a few models in the statistical approach. These are as follows:
 Compensatory Model
The high score that a candidate obtains in one part of a test can assist a
lower score obtained in another part.
 Multiple Cut-off Model

A candidate must reach a particular level or minimum score for all
selection dimensions.
 Multiple Hurdle Model

Candidates who obtain a high score in the entry test will be allowed to
go to the next stage. This can save cost if the selection cost is high.
The number of sufficient candidates is important so that the selection process

runs smoothly. If the number of candidates for a particular position is not
enough, the selection method can be questioned. There may be circumstances
where an unqualified candidate is hired as the organisation does not have
other choices.
A selection ratio can illustrate the effectiveness of a selection process. A

selection ratio is the number of applicants hired compared to the number of
applicants who applied (Mondy et al., 1999).

ACTIVITY 5.7
Figure 5.5: Test Score Distribution with Hypothetical Cutoff
Based on Figure 5.5, candidates from Quadrants 1 and 2 will be hired to

work. What will the effect be if the acceptance cutoff is moved to the left
to increase the number of eligible candidates when the number of
manpower is still insufficient?
(c) Final Decision

After going through the pre-selection process, a candidate who is qualified
will be referred to sections or units where there are vacancies. The manager
or supervisor in these sections or units will interview the candidate and
decide whether or not he or she can fill the vacancy. The human resource
department is responsible for delivering the result of the candidateÊs
application, as well as providing work details of the job if the candidate is
offered the job.

EXERCISE 5.3
Fill in the Blanks
A. Selection C. Aptitude test

B. Multiple hurdle model D. Validity
1. _______________: the process of selecting a qualified individual to

fill a vacancy at present and in the future
2. _______________: a continuous strategy whereby only applicants

who obtain the highest scores in the preliminary test are allowed to
proceed to the next test
3. _______________: measures an individualÊs ability to learn or

acquire new skills
4. _______________: how far a test or selection procedure measures a

personÊs characteristics
1. Generally, the selection procedure is the responsibility of the human

resource department. However, the decision to hire someone to
work in a unit or section is made by __________________.
A. operations personnel
B. the department manager
C. the staff manager
D. a management consultant
2. To save cost, _________________ is performed as a final step in the

selection process.
A. an interview
B. a background check
C. a job test
D. a medical check up

3. A tool to measure mental abilities such as intelligence, eloquence,

ability to calculate, and ability to rationalise is the _______________.
A. personality test
B. achievement test
C. Cognitive test
D. Evaluation centre
4. Even though every step in the selection process is important, the

most critical is the decision to _________________.
A. accept or reject candidates
B. implement a job test
C. use application forms
D. check references
Essay Question
What is meant by the term „criterion‰ as it is used in selecting personnel?
List some examples of criteria used for jobs that you know of.
 The selection process is supposed to give reliable and valid information about
an applicant. An interview is one of the methods used to obtain information
about an applicant.
 The interview method can be used together with application form,

biographical information blanks, references, background check, cognitive test,
and job sample test.
 A job test is more objective than an interview and is able to give a wider
behaviour sample.
 Each type of test has a specific purpose, such as the work knowledge and work
sample tests which are designed to determine whether a person requires
training.

 A variety of methods can be used in the interview process. An interview can

be performed structurally or non-structurally, as well as on a one-on-one basis
or with a panel.
 In the process of deciding whether a candidate will be offered a post, factors

that are taken into account are what the candidate can and will be able to do.
The recruitment section may use a clinical or statistical approach.
Biographical information blank (BIB) Reliability

Employment test Validity
Graphalogy

Mondy, R. W., Noe, R. M., & Premeaux, S. R. (1999). Human resource management
(7th ed.). Prentice Hall.

Topic  Employee
Training and
6 Development
LEARNING OUTCOMES
1. Describe employee training and development.
2. Determine the advantages of training and who needs training.
3. Discuss the methodological approach in organising employee
training and development programmes.
4. Identify the steps in the training needs analysis.
5. Illustrate the types of training programmes.
 INTRODUCTION
All employees in an organisation need continuous training to remain qualified or
equip themselves with new work practices. We will begin this topic by discussing
the definition and scope of training and development and the importance of
training and development to an organisation. This topic also discusses how to
carry out staff training and development programmes. We will end the discussion
on staff training and development by outlining the training programmes that can
be carried out by an organisation.

TOPIC 6 EMPLOYEE TRAINING AND DEVELOPMENT  129
6.1 DEFINITION OF EMPLOYEE TRAINING

AND DEVELOPMENT
The most important investment of an organisation is to provide training to its
employees. However, a lot of money has been spent on training with little
effectiveness. Therefore, some organisations have withdrawn their budget for
training during the countryÊs economic crisis. As training is essential to increase
employeesÊ skills, organisations should adopt a methodological approach in
conducting training programmes. As training is an important component in an
employeeÊs development, who is responsible for training? It is a shared
responsibility between every department in an organisation, especially the human
resource department. Although this department conducts training programmes, it
should be supported through feedback from other departments regarding the
types of training to be conducted for the benefit of the employees.
EmployersÊ reactions towards training is one of the challenges to address. Some

organisations allocate a high budget for employee training throughout the year
and some even offer training services to other companies. For example, Malaysia
Airlines (MAS) set up MAS Academy in Kelana Jaya, Selangor, for training
activities. MAS also offers its training services to other airlines. On the other hand,
there are also employers who allocate a minimal budget for training. They avoid
spending too much money on it with the belief that their staff might leave the
organisation after completing their training. These companies can afford to pay
high wages while saving on the training cost. This is a short-term move, as
employees will eventually leave to work in another company that can give a better
offer.
Training is an important activity which is conducted to improve employeesÊ

performance or transform them. This is done through a learning process to enable
them to perform their duties more effectively. For example, an employee who
normally uses a computer keyboard is trained to use the multi-touch interface of a
tablet. The employee is expected to change after the training. To see changes, the
training programme must be effective.

130  TOPIC 6 EMPLOYEE TRAINING AND DEVELOPMENT
Whilst training is defined as the process of teaching new and current employees
the basic skills they need to perform their jobs, development involves lessons
to advance an employeeÊs skills for present and future responsibilities. Training
and development is a continuous effort carried out by the management of
an organisation to improve employeesÊ skills and the performance of the
organisation. Examples of employee development programmes include camps or
retreats for team-building or morale-building activities.
SELF-CHECK 6.1
Based on your understanding, explain what is meant by:

 training
 development
ACTIVITY 6.1
In your opinion, why is a training and development programme
important to you as a new employee? Discuss with your coursemates.
6.2 ADVANTAGES OF CONDUCTING TRAINING

AND DEVELOPMENT
Generally, training and development have many advantages even though the
cost involved cannot be measured financially. To calculate the cost incurred in
conducting a training programme is easy but to calculate the output of the training
is very complicated. Although it is difficult to measure the advantages in ringgit,
the benefits that can be noticed include:
(a) Increase in Employee Productivity

Training and development increase the productivity of employees by
enhancing their skills to perform their current job. Although an employee
may improve his or her performance by learning through mistakes, an
organisation should avoid mistakes. An effective training programme may
accelerate the learning process of new employees to enable them to carry out
their duties as soon as they are hired. It increases the output and quality of
work.

(b) Increase in Job Satisfaction

Through training and development, employees acquire new and more
knowledge and skills, which are helpful in performing their jobs. As a result,
their productivity will increase. A productive employee is always satisfied
with his or her work and the organisation he or she works for. This reduces
the desire to find another job and reduces the rate of employee turnover. An
employee who is satisfied and passionate in his or her work is respected
because of his or her ability to carry out job-related duties. A productive
employee will also experience a lower stress level. This indirectly creates
healthy workers and subsequently reduces medical costs.
(c) Updating of Employee Knowledge to Always Be Ahead

Technology and the business environment never stop changing. Whatever
skills an employee has learnt is outdated and cannot be used at present.
Therefore, an employee should be given training and development when
new equipment is used; new procedures, rules and regulations are
introduced; the business environment is changing; or an employee is
promoted and required to carry out new duties. It is useless to spend
thousands of ringgit to buy new tools if no one knows how to use them.
(d) Increase in Employee Motivation

Development programmes and lessons may be used as a tool to motivate
employees. Although training and development programmes should be
secured for employees who need it, employees who are hardworking,
diligent, and willing to work overtime should also be considered for the
programmes, as a form of reward. Through training and development, they
will be able to upskill and reskill their existing competencies.
ACTIVITY 6.2
Draw a mind map that shows the advantages of training and
development. Share your mind map in the myINSPIRE forum.
EXERCISE 6.1
Why should organisations provide training and development for their

employees?

6.3 METHODICAL APPROACH IN

CONDUCTING TRAINING AND
DEVELOPMENT PROGRAMMES
Training and development are an important investment for an employer. As with
any other investment, a reasonable rate of return is expected. However, some
organisations conduct training programmes for the sake of training, without
taking into account the costs and returns involved. Therefore, a methodical
approach is needed to ensure effective training and development.
Before conducting a training and development programme, an analysis of training

and development requirements should be conducted. Two important questions
should be answered:
 Who needs training and development?
 What are the weaknesses of the employees?
Training and development should not be conducted on the basis that they appear
to be a good thing or without considering whether the employees need them.
Essentially, it is not wise to secure a training and development programme for an
employee who does not need it as this can cause dissatisfaction in the employee.
A participant who is not happy might cause trouble during the training
programme. For example, the participant might refuse to cooperate, making other
participants lose focus. This will result in the overall ineffectiveness of the training
programme.
6.3.1 Who Requires Training and Development?

Executives who are responsible for training should work closely with the heads of
departments and use the employee performance appraisal system to identify
employeesÊ training needs. Teams that need training are also identified. Apart
from employees with unsatisfactory performance, new employees, those who take
over new duties, and those who have been recently promoted or transferred also
need training.

Therefore, training and development is needed when:
 employees face difficulties in performing their duties satisfactorily;
 new employees are hired;
 new technology and procedures are introduced;
 external changes require employees to upskill and reskill; and
 individuals are transferred or promoted.
ACTIVITY 6.3
Discuss the benefits of training and development in the following

circumstances:
(a) A new employee is recruited.
(b) New technology and procedures are introduced.
6.3.2 Training Needs Analysis

Most of the time, the deficiencies and weaknesses of employees cannot be clearly
identified. A manager may complain that an employeeÊs performance is
unsatisfactory. These types of complaints are ambiguous since the source of the
problem cannot be identified. Therefore, a training needs analysis must be
conducted. It includes the following steps:
 identify performance problems;
 decide whether a problem is serious enough for action to be taken;
 identify the cause of the problem;
 determine the action to be taken to solve the problem; and
 choose the best training option.

Most of the steps in the training needs analysis are ordinary steps. However,
it is one of the most effective problem-solving methods. It should be understood
that not all problems can be resolved through training and development
programmes. For example, an employee facing a personal problem should be
referred to the counselling division and not to the training and development team.
Since there are no shortcuts in conducting an effective training and development

programme, the training needs analysis should be conducted continuously. Those
who are responsible for conducting a training needs analysis, for example a human
resource manager or department manager, should focus on the needs of the
organisation because many of them prefer to handle the modules they are familiar
with and ignore the suitability of the programme. If training is needed to improve
an employeeÊs performance, the programmes conducted must be flexible and
contain modules which meet the organisational needs that have been identified.
ACTIVITY 6.4
Draw a flowchart that shows the steps in a training needs analysis.

Present and explain your flowchart to your coursemates in myINSPIRE.
EXERCISE 6.2
1. Training and development can be used to improve employee

performance.
2. Changes in the external environment such as the Covid-19

pandemic do not require employees to upskill through training and
development.
3. Training and development can be provided to employees without

identifying the cause of a problem.
4. Training can be initiated by a human resource manager or

department manager.

6.3.3 Defining Training Objectives

Generally, the purpose of training is to improve an employeeÊs ability and
performance in his or her duties. Each training programme being offered should
have clear objectives. These objectives should be measurable because they are the
guidelines of what is expected from the participants. The objectives of a training
programme should have these characteristics:
(a) Terminal Behaviour

Terminal behaviour is a statement that identifies the minimum requirements
expected from the training. The trainer must identify in detail what should
be done by the participants during the training programme. Terminal
behaviour usually sounds like, „at the end of this course, participants should
be able to ⁄‰ Ambiguous words such as „know‰ and „understand‰ should
be avoided. Words that produce a measurable behaviour such as „identify‰,
„describe‰, and „assess‰ should be used.
(b) Standards to Be Attained

It is useful to state clearly the standards to be achieved by the participants.
Without these standards, evaluation cannot be carried out effectively. In
schools, the passing mark for examinations is usually set at 40% or 50%,
which indicates the standard a student needs to achieve to pass an
examination. In industrial training, the standard is different. When an
employeeÊs performance is unsatisfactory, he or she needs additional
training. Sometimes, the standard is set at 100%. For example, a bank clerk
should have the skills to identify counterfeit money. Therefore, he or she
should never fail to identify counterfeit money whenever he or she is shown
one.
6.3.4 Designing Training Programmes

To conduct a successful training programme, adequate time and focus should
be given to designing the programme. It is a difficult task due to several factors.
The factors to be considered include the allocation of expenditure, number of
employees involved, venue, facilitator, and training methods. Two main factors
need to be considered in designing a training programme. The first is the place of
training. In general, the place of training can be divided into during or outside
working hours. The second factor, the method to be used, follows the place of
training.

Training programmes may be carried out during or outside working hours. The
methods used are as follows:
(a) Training During Working Hours

Training during working hours involves all types of training offered by an
organisation. Training is conducted at the employeesÊ workplace where they
perform their duties.
This type of training is normally conducted for new employees. Since it is

often conducted, some organisations do not consider this type as a training
method. It is often conducted because it is low in cost, no special tools or
equipment are needed, it requires no space or special area, and no full-time
trainers are needed. Therefore, problems may arise if such training is poorly
conducted.
If it is well conducted, employees can perform their tasks well. The success
of the method depends on the trainers. Many organisations allocate these
duties to senior employees with experience. It is important to choose the
right trainer. He or she should be able and willing to train new employees.
Therefore, he or she should be an individual who is skilled in the field and
able to explain how to do the work. Most of us could be skilled in our work
but lack communication skills and the ability to foster interpersonal
relationships to teach others. A trainer should be a good teacher with
patience and able to help other people. To ensure the success of this
technique, a trainer should be given reasonable incentives and benefits for
his or her commitment. Trainers should undergo „training technique‰
programmes before training other people. Finally, a trainer should at least be
exposed to some training techniques as follows:
Step 1: Divide the work into different parts
Step 2: Give an overall overview of the duties
Step 3: Show a part of the work to trainees
Step 4: Allow trainees to try what has been shown
Step 5: Rectify any mistakes that is made
Step 6: Allow the trainees to self-train

Determining the place of training is also important. Not all training activities
can be done on the job. Sometimes, training activities involve risks which
can be harmful to employees or require special high-technology bulky
equipment. Therefore, organisations must provide special training areas.
Similarly, it is wise to establish a training centre to house training equipment
when high-attendance training programmes are regularly conducted. An
example of an organisation that has an allocation for training centres are
banks and MAS.
Although training centres are helpful in training a large number of

employees, the costs involved in establishing training centres could be huge.
Another weakness of training centres is that they differ from the actual work
environment. As this is an off-the-job training approach, employees may not
be able to use the acquired skills when they return to work in actual working
situations. This is because the training conditions may be dissimilar
to the actual working conditions. Therefore, training conditions and actual
working conditions should be similar.
SELF-CHECK 6.2
List two advantages and two disadvantages of conducting training

during working hours.
Advantages Disadvantages
(b) Training Outside Working Hours

Another form of off-the-job training is a training programme that is
conducted outside working hours. Off-the-job training refers to training
programmes that are conducted away from the workstation that could be
done during working hours, whereas outside working hours training
programmes refer to training activities that employees attend outside of their
typical working hours. It is common to make a mistake when discussing
these types of training programmes but the difference can be seen from the
definitions of the two concepts.

Typically, training programmes conducted outside working hours are

offered by external organisations. Government bodies like the National
Institute of Public Administration (INTAN), professional bodies like the
Malaysian Institute of Management (MIM) and private sector companies
such as General Assembly Malaysia offer various seminars, workshops,
conferences, and courses. There are also organisations that offer study leave
with scholarship for employees to complete a certificate, diploma, degree or
postgraduate studies. In todayÊs digital era, employees can also join training
programmes provided by various organisations, including well-known
universities around the world, through online learning. Some of these
programmes are offered for free and some others are paid courses. Platforms
that provide online learning include edX (https://www.edx.org/),
Codecademy (https://www.codecademy.com/), Google Analytics
Academy (https://analytics.google.com/analytics/academy/), and
Malaysian Digital Economy Corporation (MDEC) Sdn Bhd
(https://mdec.my/digitalskillstrainingdirectory/).
The advantages of this training include the opportunity for individuals

to interact with others from similar industries and the experience gained
may be beneficial for the future of the employee and organisation. When
employees participate in global online learning courses, they will be able to
interact with participants from other countries. This interaction expands
their ideas and knowledge beyond geographical and cultural boundaries.
However, training outside working hours may be costly. The cost incurred
for this training method is very high. The effectiveness of this training
depends on who is sent for the training and the efficiency of the organisation
in conducting these training programmes.
EXERCISE 6.3
List four advantages of training during working hours.

6.4 FACTORS IN SELECTING TRAINING

METHODS
A training method does not only involve delivering and receiving lectures. Other
common methods include case study, simulation, business games, self-directed
learning, and team training. Trainers may use these various methods when
conducting a programme. The choice of training method depends on these factors:
(a) Financial Allocation

A small organisation must be realistic. The purchase of comprehensive and
modern computer equipment must be well considered.
(b) TrainerÊs Skills

Not everyone is skilled in using all methods. A trainer must avoid using
unfamiliar methods until he or she has learned how to employ them.
(c) Objectives of the Programme

The method used has certain objectives. Some methods are suitable for
teaching new skills and knowledge and some to change habits. Therefore,
the methods used must be suitable with the objectives of the programme.
(d) Trainees
The satisfaction of trainees who receive the training differs from one person
to another. It depends on the level of his or her previous training. The
number of trainees has to be considered. Some methods are suitable for
individual training and some for teamwork training.
(e) Learning Principles

It is necessary to decide whether a training programme is successful based
on lesson principles that define certain questions. This includes, „How does
one learn?‰ Therefore, a trainer must learn the methods of educating adults
so that training programmes can achieve higher success rates.

These are issues to consider in training adults:
 A Learner Must Have the Desire to Learn

Human beings cannot be forced to learn. Attention should be given
to encourage employees who have the desire to continue learning
and acquire new knowledge. Although individuals may receive
encouragement in the same way, benefits are normally received after the
training programme is concluded. Employees are given certificates of
appreciation or publicity in organisational bulletins.
There are also delayed benefits. Promotions are given to those who have
successfully gone through several levels of courses, but remember that
empty promises should be kept to a minimum. If a training is not
intended to lead to a promotion, employees should not be given the
impression that it will.
Clarifying the objectives and purposes of a training programme can

motivate employees. They will learn better if they know that learning a
new skill is important.
To encourage a comprehensive learning process, the training module

should be interesting. No one can learn in dull conditions. It is important
for creative trainers to ensure that a variety of presentation methods and
techniques are used and not repeated.
 Active and Passive Learning

Attention should be given to ensure that trainees participate in active
training processes. A tennis player may not play well by just reading the
best book on techniques of playing tennis or listening to lectures from the
best tennis coaches. One of the methods is perform, make mistakes,
rectify, and try again. A passive method is when an employee just listens
to what is being said by the trainer. There must be a balance between
active and passive learning.
 Feedback
Trainers should provide feedback to trainees as to whether they have
learned what they should know. The more feedback they receive, the
better they can improve their performance.

Last but not least, before a training programme is conducted, proper planning
should be done. The facilities should be booked, the trainer chosen, the training
schedule given, and the training materials printed for distribution later. Matters
that usually seem trivial, like room temperature and food, must be given due
attention because these could interrupt the running of the training. Therefore, a
checklist of items should be prepared.
ACTIVITY 6.5
In your opinion, what are the principles that should be taken into account
in conducting a learning programme for adults? Search for an online
article on adult learning principles for further knowledge on this issue.
Discuss your findings with your coursemates.
6.5 ONLINE TRAINING PROGRAMMES

With the advent of technology, training may also be provided through online
platforms. There are two common online training approaches:
(a) Asynchronous Training Approach

This training allows employees to access training contents at their own
time. It is suitable for employees who have a busy schedule. Employees
are expected to read the training materials, listen to recorded podcasts,
and watch assigned videos. They may also have to do assignments,
including quizzes and tests, in each module. One of the weaknesses of
the asynchronous training approach is that its success depends on the
motivation of the employees. If they are not motivated to complete the
training module, the training objective will not be fulfilled. Therefore,
conducting this training programme requires full commitment from the
employees and support from the organisations.
(b) Synchronous Training Approach

Many organisations are moving towards this approach due to the availability
of suitable computer programmes such as Zoom, Cisco WebEx, Microsoft
Teams, and Google Meet. This training approach allows both employees and
trainers to communicate in real time, just like a traditional face-to-face
training method.

Trainers should practise the following best practices when conducting a

synchronous training programme to ensure its effectiveness:
 Determine an Objective
The trainer should inform the trainees about the training objective so
that they know the reason and expectations for attending the training
programme. It is also an important point of reference when measuring
the outcome of the training programme.
 Share Training Materials Used During the Session

The trainer may have extra materials not shared beforehand with the
trainees. All the materials used during the training session must be
shared with the trainees so that they can refer to the materials when
needed.
 Welcome Everyone
Conducting a synchronous online session may be tiring. When the
number of trainees is large, the trainer must make sure that everyone
feels welcome. A trainer must not focus on a certain group of trainees
only. He or she must address other trainees, too, by calling random
names and acknowledging them during the session.
 Keep the Training Slots Short

A long training slot may be tiresome for trainees. They can lose focus and
not be able to understand the information delivered. Therefore, it is best
to keep a slot short for about 60 to 90 minutes. The trainer should also
consider giving a short break of about 10 to 15 minutes between the slots.
 Encourage Everyone to Participate

Some trainees may be too shy to speak up to express their ideas, while
others may dominate the discussion. In this situation, the trainer must
encourage everyone to participate in the discussion actively. It is also a
good idea to have multiple engaging activities during the training
session, such as interactive quizzes and online team games, so that
everyone will feel free to interact.
 Record the Training Session

An advantage of online training is that it allows a training programme to
be recorded. However, this must be done with everyoneÊs consent. It is
best to inform the trainees beforehand that the session will be recorded.
Those who refuse will have the option of not joining the training. It is also
a good idea to inform them the purpose of the recording, who can have
an access to it, and rules on circulating the record.

There are more best practices to create an effective synchronous online

training but the six points mentioned above are the common ones.
ACTIVITY 6.6
One of the factors that may result in a successful training programme

is the attitude of the facilitator. List down and explain four important
features required from a trainer.
1. ____________________ 3. ____________________
2. ____________________ 4. ____________________
6.6 EVALUATING TRAINING PROGRAMMES

Every training programme must be evaluated because there are no other methods
to make sure that the training investment is justified. Training programmes should
be evaluated to improve their effectiveness and standardisation. Evaluation
should also be conducted to articulate the advantages and importance of the
training programmes to the management of an organisation so that support is
channelled for the training. Once the evaluation is done, four factors should be
considered:
(a) What are the Reactions of Trainees Towards the Training Programme?
The trainer will ask for feedback from trainees about their feelings towards
the training module. Questionnaires are distributed to seek opinions about
the delivery of the trainer, the atmosphere of the venue, and the effectiveness
of the materials used. To obtain fair feedback, trainees are required to answer
questions that need open feedback but not required to give their names. Most
of the time, useful feedback and criticism will be received.
(b) What Has Been Learned by Trainees?

Trainees should be able to evaluate whether they have learned anything from
the training programme organised. This may be done by comparing the
objectives set before the programme began. If the training programme was
designed to see whether a new skill had been learned, the trainee must be
able to show it. However, if the dissemination of information happens to be
the main objective, written or oral tests must be conducted.

(c) What Behavioural Differences Can Be Seen in Trainees After the Training?
Department managers should know the types of training that trainees have
received. The manager must work closely with the trainer to make sure what
is learned is practised at work. It is important to note behavioural or skill
differences after the training programme.
(d) What Benefit Does an Organisation Receive from a Training Programme?

The last step appears to be the most important and difficult step because it
determines whether an organisation should continue a training programme.
Trainers and supervisors should evaluate how far the organisation has
benefited financially. One evaluation method is to compare two groups: one
group has received the training and the other has not. The first group should
show a higher level of output or good quality within a shorter period.
EXERCISE 6.4
1. The type of training provided by an organisation depends on its

financial allocation.
2. All trainers are qualified to conduct a training programme for

employees.
3. An interesting training module will encourage learners to learn.
4. Synchronous learning allows employees to study training modules

in their own time.
5. A training programme does not need to be evaluated as long as the

trainees know the training objectives.
1. Which of the following statements is CORRECT?

A. An employee who learns through mistakes does not have to
undergo training.
B. An employee who is satisfied with his or her job as a
consequence of successful training typically will job hop.
C. Whenever an organisation purchases a high-tech machine, it
must train the employees who will use the machine.
D. Training is not a form of reward for hardworking employees
because they are already motivated to work.

2. Training and development is required when ________________.

A. employees face difficulties in performing their duties
satisfactorily
B. existing employees are performing their duties well
C. no new technology and procedures are introduced
D. no individuals are transferred or promoted within the
organisation
3. Training needs analysis includes all the following steps EXCEPT

________________.
A. identifying performance problems
B. finding out which department is at fault
C. determining the actions that need to be taken
D. choosing the best training options
4. Which of the following factors is not relevant in selecting a training

method?
A. Financial allocation
B. TrainerÊs skills
C. Objectives of the training programme
D. Training module
5. Being a host during an online training programme requires the

trainer to __________________.
A. make everyone feel welcome
B. keep the training slots short
C. share the training materials used during the session
D. encourage everyone to participate
Essay Questions
1. Explain the techniques that a trainer should use in conducting a

training.
2. Describe best practices in conducting an online training.

 Training is an important activity that is conducted to improve employeesÊ

performance or to transform them.
 Development involves lessons to advance an employeeÊs skills for future

responsibilities.
 Training and development have the advantages of increasing employee

productivity, increasing job satisfaction, updating employeesÊ knowledge for
optimal performance, and motivating employees.
 A methodical approach is needed to ensure effective training and

development.
 Before conducting a training and development programme, it is important to

determine who needs the programme, conduct a training needs analysis,
define training objectives, and focus on the programme design.
 Trainers may use various methods in conducting a training programme, taking

into consideration financial allocations, trainerÊs skills, objectives of the
programme, trainees, and learning principles.
 Proper planning should be done before a programme is implemented and it

should be evaluated afterwards to determine its success.
Asynchronous training approach Terminal behaviour

Synchronous training approach Training needs analysis

Topic  Performance
Evaluation
7
LEARNING OUTCOMES
1. Explain the roles of performance evaluation.
2. Describe the processes of performance evaluation.
3. Discuss the main sources to evaluate employee performance.
4. Compare the main methods to evaluate employee performance.
5. Examine the characteristics of an effective performance evaluation
system.
 INTRODUCTION
The previous topics focused more on how an organisation can attract and develop
productive, flexible, and motivated human resources. This topic will focus on the
aspects of maintaining human resource productivity in an organisation. Although,
initially, all supervisors or managers will observe their employeesÊ work
behaviour, and evaluate their performance at the end of the year, they must also
focus on the non-cost value increase to the organisation. The unconcerned attitude
of supervisors and managers is a challenge to the human resource department,
which needs to develop supervisors and managers who are able to motivate
employees to improve their performance. Supervisors and employeesÊ acceptance
of and commitment to performance improvement are critical in order to increase
productivity in the organisation. Thus, performance evaluation is a complicated
activity but it is important to an organisationÊs competitiveness in the market.

148  TOPIC 7 PERFORMANCE EVALUATION
7.1 DEFINITION OF PERFORMANCE

EVALUATION
Before we start our discussion on the performance evaluation system, we need to
know what is meant by performance and performance evaluation. We can define
performance as carrying out a task with the result of being able to reach the job
goals or certain activities throughout the duration given.
Bernardin and Russell (1998) more specifically stated that performance is „a record
of outcomes that result in the specification of functions or work activities over a
certain period of time‰. Meanwhile, Mondy et al. (1999) stated that performance
evaluation is a formal system that examines and evaluates employee performance
periodically, that it is also a process that measures employee performance whereby
employee performance is the degree to which an employee completes all the work
requirements given. Cardy and Dobbins (1994) defined performance evaluation
as a process of identifying, observing, measuring, and developing employee
performance in an organisation. Therefore, performance evaluation not only
functions as a tool to measure performance but also as a tool to develop employees.
Many terms can be used to refer to performance evaluation. Some of the more often
used are performance rating, performance study, and merit rating.
SELF-CHECK 7.1
Can you define performance evaluation?
7.2 PURPOSES AND USES OF PERFORMANCE

EVALUATION
Performance evaluation basically aims to increase employee and organisation
productivity effectively, but specifically, the roles played by performance
evaluation are much more than that. According to Ivancevich (2001), among the
roles played by performance evaluation are:
(a) Development
Performance evaluation determines which employees need training. This
will enhance employee-supervisor relationship and encourage the supervisor
to contribute to the reinforcement process of employee behaviour.

TOPIC 7 PERFORMANCE EVALUATION  149
(b) Motivation
Performance evaluation encourages attempts, develops responsibilities, and
propels efforts towards improving performance.
(c) Human Resource Planning

Performance evaluation functions as a valuable input to human resource
planning activities.
(d) Communication
Performance evaluation acts as a basis for discussion between the supervisor
and employees regarding work matters through daily interaction.
(e) Compliance to Regulations

Performance evaluation acts as a valid foundation for promotions, transfers,
rewards, and employee terminations.
(f) Human Resource Management Research

Performance evaluation verifies methods or techniques used in human
resource management activities. For example, during the selection activity,
improving or selecting the effective selection test.
Apart from the general and specific purposes listed above, performance evaluation
can be used for administrative and employee development purposes (Bohlander
et al., 2009). From the administrative aspect, performance evaluation is an input
that can be used in human resource management activities while the development
aspect focuses on feedback of employeesÊ strengths and weaknesses, and stresses
on performance improvement. Among the uses of performance evaluation for
administrative and development purposes are as follows:
(a) Administrative Purposes
 salary administration
 promotion
 decisions to terminate or transfer employees
 reinforce authority structure
 human resource planning
 documentation on human resource decisions

(b) Development Purposes
 performance feedback
 identify the strengths and weaknesses of employeesÊ performance
 acknowledge employeeÊs outstanding performance
 identify training needs
 determine employee development programmes
ACTIVITY 7.1
Based on your experience, has performance evaluation helped in your

career? Share and discuss your experiences with your coursemates
through the myINSPIRE online forum.
7.3 MAIN CAUSES OF PERFORMANCE

EVALUATION FAILURE
Basically, the performance evaluation process is a simple process whereby a
supervisor or manager only needs to observe the work performance of staff and
give feedback on their performance from time to time. In reality, this process is not
that simple. The supervisor or manager as well as the staff often have different
opinions on performance evaluation. Some of the factors that lead to the failure of
the performance evaluation process, according to Bohlander et al. (2009), are:
 The supervisor or manager does not have sufficient information about

employeesÊ real work performance.
 The standard of measuring performance is not clear.
 The supervisor or manager does not have the skills to evaluate employee
performance.
 The supervisor or manager is not prepared to evaluate employee performance,

as he or she does not want to be seen as a judge who is giving out an unfair
sentence.

 Employees do not receive constant performance feedback.
 The supervisor or manager is not sincere during the performance evaluation

process.
 Performance evaluation is not focused on employee development.
 The supervisor or manager uses language that is unclear to the employees

during the performance evaluation process.
 Employees feel that the organisation does not allocate sufficient resources for
performance rewards.
These factors can influence the effectiveness of the performance evaluation process
and create a gap in the relationship between supervisor and staff. Performance
evaluation activities are often annual activities and focus more on employeesÊ
annual salary movement. The disagreement that exists and the misunderstanding
of performance evaluation have caused the performance evaluation process
to fail. Therefore, support from the top management is important in order for
performance evaluation to succeed so that the organisation will be able to compete
in the market.
SELF-CHECK 7.2
Can you recall the factors that lead to the failure of an employeeÊs
performance evaluation?
EXERCISE 7.1
1. What is meant by performance evaluation?
2. State the uses of performance evaluation from the administrative

aspect.
3. State five reasons a performance evaluation process might fail to be

implemented successfully.

7.4 PERFORMANCE EVALUATION PROCESS

Figure 7.1 shows the steps involved in the performance evaluation process.
Figure 7.1: Performance Evaluation Process
Adapted from Mondy et al. (1999)
(a) Identifying Performance Evaluation Objectives

The performance evaluation process begins by developing performance
evaluation objectives. The development of objectives must be related to
the organisationÊs objectives so that there will be an increase in work
performance by employees. For example, some organisationsÊ philosophy is
to focus on employee development aspects while other organisations focus
on the administrative aspects such as salary standardisation.
(b) Developing Performance Standards

After the performance evaluation objectives are set, a standard performance
will be developed. The purpose is to make comparison between real work
performance and the organisationÊs expected work performance easier.
Basically, performance standards must be developed based on a particular
workÊs requirements and these requirements result from the job analysis. A
good performance standard is able to translate an organisationÊs strategic
objectives to a particular work. Figure 7.2 shows four important elements
that must be present when developing performance standards.

Figure 7.2: Performance Standard Development
 Strategic Relevance
The standards that are developed must be related to the organisationÊs
strategic objectives. Indirectly, the organisationÊs strategic objectives
need to be translated into performance standards. For example, 95% of
customer complaints must be solved on the same day. With this in mind,
employees who are in contact with the customers must take into account
this strategic objective when developing their standards.
 No Criteria Contamination
Criteria contamination happens when factors out of employeesÊ control
influence their performance. For example, a typist at an organisation
needs a computer to type and produce quality output. If the organisation
only has a typewriter, then the quality produced will not be as good as
the output quality of a computer. Therefore, the computer becomes a
factor that contaminates the typistÊs performance.

 Reliability
Reliability refers to the consistency of the standards that are developed.
Consistency means how far an employee is able to maintain a level
of performance in a particular timeline. For example, the evaluation
comparison done by two managers on an employee, for a promotion, will
determine the reliability of the employeeÊs performance.
 No criterion deficiency
The development of performance standards must take into account all
the responsibilities of the employee. If the standard that is developed
only takes one aspect of the job, then criterion deficiency occurs. For
example, a salespersonÊs performance evaluation is only measured
through his or her sales volume without taking into account another
important criterion, i.e., customer satisfaction.
(c) Monitor Work Performance

After developing performance standards, the next step is to monitor
employeesÊ work performance so that the performance demonstrated is in
line with the standards set. If the real performance shown by employees
deviates far from the set standards, then the standards developed must be
re-analysed to ensure that they are clear, attainable, measurable, and state
the time period to be carried out. An unclear standard must be altered so that
employees are able to carry out their duties effectively.
(d) Evaluating Performance

Usually, at the end of the year, employee performance will be evaluated
to ensure that the organisationÊs strategic objectives are achieved. The real
performance shown by employees will be compared to the standards that
have been developed.
(e) Discussion on Performance

Employees and managers will review the employeesÊ performance together
based on the standards set. A performance discussion will determine how
far an employee is able to achieve the organisationÊs strategic objectives,
identify the problems that hindered achievement, and find alternatives to
solve the problems. This discussion will also include developing objectives
for the next year.

ACTIVITY 7.2
State whether you agree or disagree on the following issues regarding

performance evaluation, and give a solid reason for your answers.
1. Performance evaluation is the managementÊs technique to control

employee behaviour.
(a) Agree
(b) Disagree
2. Performance evaluation creates employee groups who are

individualistic and selfish.
(a) Agree
(b) Disagree
3. Performance evaluation helps employees to improve their

performance.
(a) Agree
(b) Disagree
Post and check your answers with your coursemates in myINSPIRE.
EXERCISE 7.2
1. State the main elements of an effective performance standard.
2. Explain the key steps involved in the performance evaluation

process.

7.5 RESPONSIBILITY OF EVALUATING

Usually, the manager of a department or unit will be responsible for the evaluation
of his or her employeesÊ work performance. The work difficulties today have
caused some managers to be unable to monitor or evaluate their employeesÊ work
performance. If a department or unit has a small number of employees, then there
is a possibility that only one manager is needed to evaluate his or her employeesÊ
performance. However, for a department or unit with a large number of
employees, the responsibility to evaluate can be assigned to other sources such as
colleagues, self-evaluation, customers, and subordinates.
(a) Immediate Supervisor

This traditional method stresses that performance evaluation must be done
by an employeeÊs immediate supervisor. A supervisor is the most eligible
person to observe and evaluate his or her employeesÊ work performance, and
he or she is also responsible for the management of the unit or department.
Since the immediate supervisor will evaluate the employees, it goes without
saying that the training and development aspects of the employees become
important elements that should be focused on.
If seen from a negative perspective, the immediate supervisor may stress on

certain performance aspects and ignore other performance aspects. For
example, he or she may only stress on the quantity aspect and ignore the
quality aspect.
(b) Self-evaluation
If an employee understands the objectives that must be achieved and is
involved in the development of performance standards, then he or she is
qualified to evaluate himself or herself. This is because the employee knows
what has to be done and how to carry out the task effectively. Moreover, an
employeeÊs involvement in the performance evaluation process is critical so
that an increase in productivity is possible.
From the negative perspective, an employee is more keen to illustrate his or

her strengths and try to cover up his or her weaknesses. With this in mind,
self-evaluation is more suitable for self-development and not as a basis for
promotion or salary increments.
(c) Subordinates
The most suitable people to evaluate a manager are his or her subordinates.
This method is effective because the subordinates are the best source to
observe the effectiveness of the manager. Moreover, the subordinates are

always in contact with the manager. This type of evaluation is more for the
managerÊs self-development so that he or she is able to rectify his/her
weaknesses. The negative aspect of this evaluation is that the subordinate
may give a good evaluation of his or her manager if they have a good
working relationship and evaluate the manager poorly if they are at odds
with each other.
(d) Peers
Peers can be an effective evaluation approach as peers often interact and are
able to identify their colleaguesÊ strengths and weaknesses. Peer evaluation
can also give an accurate and valid input.
However, peer evaluation will also create problems if it is used as a basis to

give favours or seek revenge. For example, employee A often helps employee
B carry out his duties. When the time comes for evaluation, employee B will
give high marks to employee A in return for all the assistance given.
(e) Customer Evaluation

Customer satisfaction determines the success of an organisation. Based on
this idea, most organisations feel that they should obtain their employeesÊ
performance input from customers. Basically, there are two types of
customers, internal and external. Internal customers are employees from a
certain department who depend on the output or other employeesÊ work
results for their input. For example, output that is produced by employee A
from Department A is an input for employee B from Department B. In this
case, employee B is the customer of employee A. External customers are
outside people who use the products or services produced by an
organisation.
(f) 360-Degree Evaluation

Apart from the sources stated above, an organisation may also use the
360-degree evaluation method to assess its employees. This approach is very
popular and an alternative to the traditional method as the organisation gets
complete information about employeesÊ performance. This is important to
increase the organisationÊs competitiveness in the market. The 360-degree
method uses a combination of various evaluation sources as stated above.
Usually, an organisation uses this method for the purpose of employee
development only. The restrictions of this method are that it is expensive and
takes a long time as it involves many parties in the evaluation process.

SELF-CHECK 7.3
Who is involved in an employeeÊs performance evaluation?
EXERCISE 7.3
Explain briefly the sources involved in evaluating employee

performance.
Visit:
http://performance-
appraisals.org/Bacalsappraisalarticles/articles/stupman.htm for information on
the 10 mistakes managers make in evaluating employees.
7.6 PERFORMANCE EVALUATION METHODS

There are a few methods or approaches that can be used to evaluate employee
performance. The selection of certain methods depends on the purpose of the
performance evaluation system of an organisation. If emphasis is placed on
promotion, training, and reward based on merit, then a method like rating scale is
more appropriate. A combination of methods is more appropriate to develop
employee performance and help them produce more effective performance. Three
main methods can be used by an organisation, namely, trait, behaviour, and result.
We shall discuss more on these in the following subtopics.
7.6.1 Trait Methods

Trait methods measure how far an employee is able to acquire certain
characteristics such as creativity, innovation, leadership, and dependency that are
seen as important in carrying out oneÊs work. Some of the trait methods are as
follows:
(a) Graphic Rating Scale

The graphic rating scale focuses on employee evaluation that is based on a
scale or certain characteristics that have been developed, and employees will
be evaluated on how far they have acquired each skill in that particular scale.
The graphic rating scale is shown in Figure 7.3. This method is easy to use as
the evaluation and measurement characteristics are given.

Figure 7.3: Graphic Rating Scale
Adapted from Mondy et al. (1999)
(b) Essay
This is the easiest method because supervisors only have to write statements
depicting employeesÊ performance. Supervisors will talk about the strengths
and weaknesses of employeesÊ behaviour and give recommendations to
improve on the weaknesses. Even though this method is easy, it takes a long
time, and is too subjective as the supervisor needs to illustrate employeesÊ
overall yearly performance.
(c) Forced-Choice Method

This approach needs the appraiser to choose a few statements which are
provided to differentiate between good and bad performance. Figure 7.4
shows the statements which have to be chosen by appraisers. These
statements are developed by experts in the human resource field and

appraisers need to determine the statements which depict the effectiveness

of the work behaviour demonstrated. Neutral statements are sometimes
included in the choices. Appraisers not only choose statements which depict
employeesÊ work behaviour but also arrange the statements from good to
poor.
Figure 7.4: Forced-Choice Method
Adapted from Ivancevich (2006)
ACTIVITY 7.3
Do you agree that rewards need to be stressed during the performance

evaluation process? State the reasons for your answer and discuss with
your coursemates.

7.6.2 Behavioural Methods

This method focuses on behavioural aspects based on a scale that illustrates
certain behavioural descriptions. These descriptions enable appraisers to identify
employee performance based on certain behaviours from weak to excellent. Some
of the behavioural methods are as follows:
(a) Critical Incident Method

The critical incident method technique needs the appraiser to keep records
or log books on employeesÊ behaviour. The supervisor needs to observe the
employeesÊ critical behaviour all year long and record them in a log book.
When an action demonstrated by an employee affects the effectiveness of the
department, the supervisor has to record it, whether positive or negative.
Indirectly, the supervisor has to record workersÊ behaviour that is seen as
critical and can influence the departmentÊs effectiveness.
During the evaluation period, the supervisor will use the records together
with other information to evaluate employeesÊ performance. The advantage
of this method is that it illustrates the employeesÊ overall real performance
whereas the disadvantage is that the supervisor has to observe the critical
work behaviour of all of his or her employees. If there are many employees
in the supervisorÊs department, the observation will require a long time.
Examples of the critical incident method which are positive and negative in
nature are as follows:
 First Critical Incident

4 January 2020: Ali patiently listened to a complaint from his customer,
answered each of the customerÊs questions, took back the product, and
refunded the customer. Ali was very polite to the customer, prompt, and
showed interest in listening to the customerÊs problems.
 Second Critical Incident

20 April 2020: Today was a very busy day due to product inventory. Even
though it was a hectic day, Ali went to the canteen for 15 minutes.
Throughout the time he was at the canteen, the store manager called him
three times asking about the inventory in the store.

(b) Behavioural Checklist and Weighted Checklist

These are easy approaches to utilise as these checklists are statements
describing characteristics of work behaviour. The supervisor only has to
mark the statements which describe the work behaviour demonstrated by
the employees. If the statements given do not show employeesÊ work
behaviour, then the supervisor need not mark the allocated space.
Supervisors can also weigh each work behaviour demonstrated. Then, each
mark is totalled. An example of the weighted checklist is shown in Figure 7.5.
Figure 7.5: Weighted Checklist
(c) Behaviourally Anchored Rating Scale (BARS)

This technique is based on critical incidents. Evaluation is done based on a
scale of 1 to 9, for example, and each scale has a description of certain
behaviour, be it positive or negative. An example of the use of this technique
for a teacherÊs evaluation is shown in Figure 7.6.

Figure 7.6: Behaviourally Anchored Rating Scale (BARS)

(d) Behaviour Observation Scale (BOS)

This technique is also based on critical incident just like BARS which
identifies a few behaviour dimensions critical in a certain job. The obvious
difference between BARS and BOS is that BOS focuses more on the frequency
of a particular behaviour throughout the year. An example of BOS is shown
in Figure 7.7.
Figure 7.7: Behaviour Observation Scale (BOS)
Adapted from Ivancevich (2006)
7.6.3 Results Methods

Aside from behavioural and trait methods, an organisation can also utilise results
methods to evaluate employee performance. These methods enable supervisors to
evaluate the results achieved by employees. Therefore, these are more quantitative,
objective, and enable empowerment. This will lessen bias. These methods also
stress that employees are responsible for all the results achieved. There are two
techniques in this category:

(a) Productivity Measures

There are many measurement techniques to evaluate employee performance.
A salespersonÊs performance is measured through his or her sales volume (in
unit and ringgit) whereas a production operatorÊs performance is measured
through the output and scrap volume. Each measurement is directly related
to the achievement of an employee. Indirectly, the performance of an
employee is related to the organisationÊs strategic objectives and employee
objectives.
Even though this measurement technique seems easy, it may be influenced

by „criteria pollution‰ because performance result may be tainted by factors
which are out of the employeeÊs control. For example, a production operator
may not achieve his or her target as the raw materials needed are insufficient.
In addition, measurements based on results may be short term and

employees may ignore the organisationÊs long-term strategy objectives.
Aside from that, factors such as cooperation, initiative, and suitability in
teams are important in achieving targets. Therefore, to achieve an effective
evaluation, results and process have to be taken into account in the
evaluation.
(b) Management by Objectives (MBO)

This technique can be used as an alternative to prevent problems in the
productivity measurement technique. MBO stresses that each employee form
his or her performance objective at the beginning of the year through
discussions with the supervisor. The objectives act as a standard which will
be used to evaluate the employeeÊs performance at the end of the year.
Figure 7.8 shows the performance evaluation cycle based on the MBO
method. After the setting of objectives is agreed upon by the supervisor and
employee, duties are carried out and the supervisor needs to observe the
employeeÊs work behaviour. An interim study has to be carried out, usually
in the middle of the year, to make sure the objectives formed are suitable and
achievable.

If the objectives are not clear and difficult to achieve, the supervisor and
employee will formulate other objectives which are more realistic and
achievable. At the end of the year, performance will be evaluated based on
the set objectives. After that, the organisationÊs performance will be reviewed
based on the overall employee performance. If the performance shows no
improvement, then the organisationÊs goals need to be studied and changed
in order to be more realistic.
Figure 7.8: Management by Objectives (MBO)
EXERCISE 7.4
Briefly explain three main methods to evaluate employee performance.

7.7 ERRORS IN PERFORMANCE EVALUATION

In the efforts to increase effectiveness in the performance evaluation system,
various human errors will emerge. In theory, performance evaluation is easy but
in reality it is not. This is because appraisers are often exposed to errors during the
performance evaluation process. Some of these errors are as follows:
(a) Halo Effect

An appraiser conducts a total evaluation based on only one aspect of
performance. For example, an appraiser who places importance on the
quantity aspect will give a high value on an employee without considering
other aspects such as communication, involvement, and quality. The
appraiser sees the employee as being efficient in all his or her work aspects
when he or she is able to meet the quantity required by the organisation.
(b) Central Tendency

An appraiser awards the same evaluation to all evaluated employees. The
appraiser is inclined to give an average evaluation to all employees with the
excuse of maintaining a good working relationship with everyone so that
friction does not occur.
(c) Recency Error

An appraiser often focuses on work performance that is close to the
evaluation period as it is difficult to remember work performance at the
beginning of the year.
(d) Contrast Error

A manager compares an employeeÊs performance with that of another
colleague who has been evaluated, and not based on the standards set. For
example, employee A is seen as innovative and participating actively in her
work. When employee CÊs turn for evaluation comes up, her performance is
compared to employee AÊs performance, and not based on the standards set.
(e) Leniency/Strictness Error

Leniency error happens when an appraiser gives a high rating to an
employee because the appraiser does not have the heart to give a low rating.
Strictness error happens when an appraiser awards a low rating to an
employee because the appraiser feels none of the employees deserve a high
rating.

(f) Similar-to-Me Error

An appraiser gives a high rating because the employee being evaluated has
similar personal characteristics with the appraiser. For example, an appraiser
awards a high mark to an employee because they both like to drink tea.
In order to ensure that managers or supervisors do not make these mistakes, they
have to be given training on how to evaluate employees effectively and fairly,
and to focus only on employeesÊ work performance. This training is aimed at
increasing the appraiserÊs skills in observing and giving feedback to employees.
Employees also need to provide support by giving information which is needed
by the appraiser in order to ensure that the evaluation is done justly.
SELF-CHECK 7.4
What factors cause errors in performance evaluation?
ACTIVITY 7.4
State whether you agree or disagree on the following issues regarding

performance evaluation and give one reason for your answer.
1. The performance evaluation process should be conducted as often

as possible so that employees know about their strengths and
weaknesses.
(a) Agree
(b) Disagree
2. All employees need to be informed about their performance

evaluation marks.
(a) Agree
(b) Disagree
Discuss your answers with your coursemates.

EXERCISE 7.5
Explain briefly the mistakes or errors often made by appraisers in

evaluating employees.
7.8 PERFORMANCE INTERVIEW

A performance interview is an important process in the performance evaluation
system as appraisers need to give effective feedback about the employeesÊ
performance achievement. Apart from that, appraisers also need to ensure that
employee performance improvement occurs. Managers or supervisors need to
conduct formal performance interviews at the end of each year even though they
face a lot of problems in evaluating their employeesÊ work performance.
The success of a performance interview depends on how the manager or

supervisor continuously interacts with the employees, focuses on responsibilities
in the development of employees, and receives support from the top management.
Stone (1998) stated that performance interviews are conducted for the purposes of:
 studying employeesÊ work responsibilities together;
 evaluating employee performance together;
 exploring the alternatives together to ensure that performance improvement

happens; and
 studying the short-term and long-term objectives together.
An effective interview has to be planned and structured well in order for the
supervisor and employees to view the interview as a problem-solving session and
not as a fault-finding session (Mondy et al., 1999). A supervisor has to ensure that
these three elements are considered when planning a performance interview, i.e.,
the discussion must:
 be based on the employeesÊ performance and not their personality;
 help employees set work objectives and career development plan; and
 give suggestions and help to achieve objectives which have been set as well as
gain support from top management.

Apart from that, Stone (1998) stated that an effective performance interview needs
to consider three factors. A supervisor needs to:
 possess information about employeesÊ performance and work;
 give support and assistance to employees at all times; and
 involve employees during performance discussions.
Before the performance interview session, the supervisor needs to inform

employees about the date of interview so that the employees have an opportunity
to re-examine their job description, analyse any problems faced, and compare their
real performance with the standards set.
The supervisor needs to collect information about employees whose work

performance is being evaluated, study the job description of every employee to
ensure they are still correct, read the performance report to identify matters that
need to be focused on, compare their real performance with the performance
standards set, list matters that need to be discussed, and ensure that the time
allocated is sufficient and no disturbance occurs during the interview process.
The supervisor must realise that there are differences among individuals. The
supervisor must know how to criticise an employeeÊs weakness and praise when
necessary so that there is no dissatisfaction between the supervisor and employee.
This way, a fair and transparent performance evaluation can be presented to the
employee who is being evaluated. Performance improvement can then occur after
the interview session.
The performance evaluation process does not end after the performance interview
session. In fact, a supervisor needs to ensure that all the alternatives which were
proposed are carried out effectively and monitor employeesÊ performance from
time to time by giving feedback.

EXERCISE 7.6
1. All of the following are administrative roles in evaluating

performance EXCEPT:
A. Compensation
B. Termination
C. Career planning
D. Promotion
2. An appraiser will give an average rating for all dimensions that are
being evaluated so that all employees will not be dissatisfied. By
this, the appraiser has committed the mistake of ________________.
A. attribution
B. leniency error
C. recency error
D. central tendency
3. Which one of the following are steps in the performance evaluation

process?
A. Conduct job analysis, set standards, evaluate performance,
reassess performance
B. Set objectives and standards, monitor performance, evaluate
performance, performance discussion
C. Set standards, conduct job analysis, evaluate performance,
reassess evaluation
D. Evaluate performance, set objectives, conduct job analysis, set
standards, reassess performance
4. The criteria which must be present in an effective performance

evaluation system are as follows EXCEPT:
A. A clear objective
B. Monitor performance
C. Performance interview
D. End-of-the-year checking system
5. The performance evaluation method which lists descriptive

statements on a particular work behaviour is __________________.
A. rating scale
B. checklist
C. forced choice
D. critical incident

Essay Questions
1. Discuss the six roles of performance evaluation.
2. Explain these terms:

(a) strategic relevance
(b) criteria contamination
(c) criteria deficiency
3. Explain the preparations which need to be made by supervisors

BEFORE a performance interview process.
 Performance evaluation is a critical activity in human resource management as

it is important in increasing an organisationÊs competitiveness.
 Performance evaluation is a process to evaluate work performance in a

particular duration, in order to determine that the level of achievement is based
on the organisationÊs strategic objectives.
 The performance evaluation system must motivate employees to improve their

performance, thus increasing the organisationÊs productivity.
 An effective performance evaluation system ensures that all parties, be it

management or employees, benefit from it.
 This will strengthen the position of and ease human resource management,
and help to achieve organisational objectives and goals.
Behaviour Observation Scale Performance evaluation

Behaviourally Archored Rating Scale Result
Management by Objectives Trait

Bernadin, H. J., & Russell, J. E. A. (1998). Human resource management: An

experiential approach. Irwin/McGraw-Hill.

Cardy, R. L., & Dobbins, G. H. (1994). Performance appraisal: Alternative

prespectives. South-Western Publishing.
Ivancevich, J. M. (2006). Human resource management (10th ed.). McGraw-

Hill/Irwin.
Stone, R. J. (1998). Human resource management (3rd ed.). John Wiley & Sons.

Topic  Employee
Compensation
8
LEARNING OUTCOMES
1. Explain the types of rewards which exist in a compensation
administration system.
2. Describe strategic compensation planning.
3. Discuss factors which influence wage setting.
4. Compare individual, group, and industrial incentive programmes.
5. Differentiate between mandated and non-mandated benefits.
 INTRODUCTION
Employee compensation is one of the most important functions in human resource
management. Employees offer their labour and competencies in exchange for
appropriate compensation. However, administering compensation is challenging.
Organisations must make sure that the compensation offered is appropriate
for the job and at the same time, can fulfil the psychological and actual needs
of the employees. Although many people think of money when referring to
compensation, it has three important components, which are compensation,
incentives, and benefits. We shall discuss each component in this topic.

TOPIC 8 EMPLOYEE COMPENSATION  175
8.1 DEFINITION OF COMPENSATION

Compensation is the total of all rewards provided to employees in return for their
services (Mondy et al., 1999). Ivancevich (2006) defined compensation as all forms
of financial rewards and benefits as well as clear and apparent services which
are accepted by employees as part of work relations. There are two components
in compensation administration, fixed and variable. A fixed component is in the
form of basic salary whereas a variable component is the payment based on
performance such as bonus or profit sharing and benefits such as health insurance
and annual leave.
8.2 TYPES OF COMPENSATION

Rewards offered to employees can be in the form of monetary or non-monetary
rewards. Monetary rewards can be in the form of cash such as wages, salary,
commission, and bonus or benefits such as insurance, annual leave, medical leave,
and flexible working hours. Non-monetary rewards, on the other hand, can be
the satisfaction employees feel as a result of their position or from the work
environment mentioned (Mondy et al., 1999).
Direct monetary rewards are in the form of cash, such as wages, salary,
commission, and bonus, whereas indirect monetary rewards are in the form of
benefits and others.
Non-monetary rewards from the work aspects are interesting jobs, challenging
job responsibilities, acknowledgement, and career development. Non-monetary
rewards from the work environment aspects are good policies and practices,
competent supervisors, congenial colleagues, and a safe and healthy work
environment.

176  TOPIC 8 EMPLOYEE COMPENSATION
Figure 8.1 shows some examples of monetary and non-monetary rewards.
Figure 8.1: Types of Rewards
Adapted from Stone (1998)
Visit http://www.hr-guide.com/compensation.htm for additional information

on compensation administration.

8.3 STRATEGIC COMPENSATION PLANNING

Strategic compensation administration is one way of offering a compensation
package to employees to increase their motivation and at the same time, align their
efforts to be in line with the organisationÊs objectives, philosophies, and culture.
A compensation administration policy is one way of supporting strategic
compensation administration. A compensation administration policy must:
 focus on business objectives and strategies;
 attract and retain competent, motivated, and qualified employees;
 encompass organisational reward principles and philosophies;
 prepare a wage allocation outline;
 strengthen the work values and culture desired by the organisation; and
 relate to all employees.
Each compensation administration policy formed has to benefit both the

organisation and its employees. According to Stone (1998), compensation
administration objectives are as follows:
(a) Organisation
 Attract and retain quality and the desired employee participation.
 Motivate employees to improve their work performance to achieve the

organisationÊs strategic objectives.
 Strengthen the main values and culture desired by the organisation.
 Encourage and strengthen the work behaviour desired by the

organisation.
 Ensure that compensation is maintained at a competitive level.

 Control compensational costs.
 Ensure optimum returns on each ringgit spent.
 Abide by legal requirements.
(b) Employee
 Prepare fair and just rewards.
 Give out rewards equivalent to the performance as demonstrated.
 Prepare a flexible wage structure based on performance, promotion,

transfer, and changes in the environment.
 Reassess the compensation structure by taking into account the effects of

equity.
The development of a compensation policy has to be consistent with an

organisationÊs strategic objectives. It involves four phases as shown in Figure 8.2,
which are:
 corporate mission
 business strategies
 human resource strategies
 compensation administration strategies
The compensation administration strategy explains the organisationÊs

compensation goals and states the rewards which will be given by the organisation
based on its human resource strategies, business strategies, and corporate mission.
Corporate mission, business strategies, and compensation administration strategy
are directed towards the formation of the compensation administration strategy.

Figure 8.2: Relationship between Organisational Objectives and Compensation

Administration Strategies
Adapted from Nankervis et al. (1998)
ACTIVITY 8.1
State your views on whether you agree or disagree with the following
statements and give a valid reason for your answers.
1. All employees are eligible for an annual salary increment without

taking into account their performance.
(a) Agree
(b) Disagree
2. An unattractive salary and benefit package decreases employeesÊ

motivation to excel in their work.
(a) Agree
(b) Disagree
Share, compare, and discuss your answers with your coursemates in

myINSPIRE.

EXERCISE 8.1
Explain two types of rewards which can be offered by an organisation to

its employees.
8.4 FACTORS THAT INFLUENCE WAGE RATE

Nankervis (1999) stated that external and internal factors influence the wage
rate developed by an organisation. These factors, shown in Figure 8.3, include the
legal environment, market surveys, work values, compensation administration
strategies, and personal factors.
Figure 8.3: Factors which Influence Payment Rate
(a) Legal Environment

The compensation policy in every organisation has to be aligned with the
legal labour requirements of a country. Among the issues related to wage
rate are:
 minimum wage rate;
 fixed wage component; and
 variable wage component
For example, the Minimum Wages Order 2020 was gazetted on 10 January
2020 and took effect on 1 February 2020. Within the 16 city councils and
40 municipal councils in Malaysia as stated in the Schedule of 2020 Order,
the minimum monthly wage is set at RM1,200. In other areas outside the
aforementioned councils, the minimum monthly wage is set at RM1,100.

(b) Market Survey

Organisations have to conduct environmental scanning in the labour market
to review the relationship between demand and qualified manpower supply.
They also have to take note of other information before implementing a
certain salary policy. This information includes the:
 differences between local wage rate and city and suburban wage rate;
 different wage rates for work from the same work groups;
 different wage rates in the same industry; and
 economic environment including inflation, unemployment, manpower

participation level, increase in education status, lack of specific skills, and
others.
(c) Work Values

Each organisation has its own benchmark in recognising and rewarding
employeesÊ performance. Incentives, which can be in various forms, act as a
motivation factor.
In this competitive environment, work values, sometimes known as job

worth, are mostly grounded on market value or job evaluation programmes.
However, using a total value basis is more objective for an organisation.
Among the work values that need to be focused on by an organisation are as
follows:
 possessing the latest knowledge and experience;
 easily solving complex tasks;
 problem solving as a path towards excellent work performance;
 responsibilities in managing resources are important so that all

employees are equipped with sufficient sources to carry out their work
effectively;
 using people skills to interact effectively; and
 working effects towards organisation.

(d) Compensation Administration Strategies

Compensation administration strategies seek to achieve organisational
strategic objectives. The development of these strategies has to be focused on:
 the purpose of giving rewards to employees ă the relationship between

rewards and the results achieved by the organisation;
 the employerÊs ability to give rewards to employees;
 the types of employee desired by employers;
 a combination of rewards that employers want to offer to employees ă

fixed cost such as basic salary and variable cost such as incentive
programmes and bonuses;
 the frequency of salary structure revision; and
 wage management ă scattered or centralised.
(e) Individual Factors

Other factors that need to be considered are factors involving individual
performance, which are as important in increasing employee motivation to
carry out exceptional work. A few factors that have to be thought of are:
 individual contribution towards the organisation;
 real performance compared to forecast performance;
 skill development or competency; and
 individual power or collective negotiation in looking out for employee

welfare.
ACTIVITY 8.2
How do legal factors influence the wage rate in our country? Discuss.

8.5 COMPENSATION FAIRNESS

It is important for each organisation to ensure fairness in compensating employees.
Employees who feel they have not received fair payment will not be satisfied with
their job and will have low work motivation. In compensation management, such
fairness is known as compensation equity. There are three types of compensation
equity as listed below:
(a) Internal Equity

Ensuring fairness in the pay structure among employees is important.
Internal equity aims to fulfil this expectation by calculating the relative value
of each employee. It is done through job evaluation, which is a systematic
method to determine the relative value of a certain job compared to other
jobs to ensure that different jobs are given a different wage rate (Stone, 1998).
Job evaluation focuses on the highs or lows of a certain job based on a few
pre-determined work factors. Information on job evaluation is set as a basis
for the formation of a fair salary system.
(b) External Equity

Every employee expects equal treatment from the employer. Not only is this
expectation formed among employees working in the same organisation, but
also those in the same job in different organisations. External equity refers to
an employeeÊs perceived compensation treatment from his or her employer
compared to compensation treatment from other organisations for the same
job.
(c) Individual Equity

This type of equity is almost similar to internal equity. However, an
important element to be considered is an employeeÊs work experience in
relation to his or her job. Individual equity refers to fairness in determining
wages for employees in the same position. For example, a clerk with no work
experience from other organisations receives a lower starting pay than a clerk
who has work experience from another organisation.

ACTIVITY 8.3
Find an online resource on external equity in compensation

management. Describe how external equity in compensation can be
established. Share your findings in myINSPIRE.
EXERCISE 8.2
What is meant by compensation fairness? Differentiate between the three

types of compensation fairness.
ACTIVITY 8.4
In your opinion, should employers give incentives to their employees?

Imagine what would happen if employers did not award any incentives
to their employees. Discuss.
8.6 INCENTIVE
An incentive programme is also known as a variable pay plan. Incentive payment
to employees is often seen as an additional dimension to the salary structure or
compensation. Let us look at the current situation whereby a salary increase in a
salary scheme often cannot compete with increase in living costs. Without an
interesting incentive plan, what will happen to employees and their overall
organisational performance? We will now explore the incentive plans offered by
organisations.

8.6.1 Importance of Incentive Plan

Global competition and the restructuring of the global economy require businesses
to be more productive. Payment strategies and systems used previously are
already outdated, causing organisations to be unable to compete at the
international level. In addition, the traditional payment system often fails to
connect payment to performance or productivity effectively. Therefore, more
organisations are beginning to offer incentive plans to their employees, in addition
to the existing basic salary structure.
Incentives are also important for the following reasons:
 Incentives enable employees to focus on their specific job performance target.

They provide motivation to the employees, thus producing satisfactory results.
 Incentives are variable costs that can be related to result achievement, which
encourages increase in output.
 Incentives can be directly related to operational achievement whereby if the

performance objective is met, incentives will be given. If employees fail to fulfil
the performance objective, no incentives are given.
 Incentives encourage employees to work as a team and increase dependency

as payment for individuals depends on a groupÊs achievement.
 Incentives encourage success sharing among those involved in achieving the

performance.
EXERCISE 8.3
Give two reasons why a management carries out incentive plans.

8.6.2 Characteristics of an Effective Incentive Plan

To carry out a successful incentive plan, an organisation has to develop an
attractive incentive plan and convince its employees of its advantages. Among the
characteristics of an effective incentive plan are as follows:
 It involves employees in the development and administration of the incentive

plan, which can then increase employeesÊ acceptance;
 Employees can clearly notice the relationship between the incentive payment
they receive with their work performance;
 It emphasises that incentives are received through employeesÊ efforts and not
due to rewards which all employees are eligible to enjoy;
 Incentive programmes are fair to all employees;
 The standard quality or productivity used as a benchmark in awarding

incentives has to be challenging but achievable for employees; and
 The incentive payment formula introduced has to be simple and easily

understood by employees.
8.6.3 Types of Incentive Plans

Incentive plans that can be practised by organisations are many and each
organisation usually has its own kind of incentive plan. Generally, an incentive
plan can be divided into three categories:
(a) Individual Incentive Plan

There are a few incentive plans that can be developed to reward individual
employees for excellent work performance. These are as follows:
(i) Unit of Work

Unit of work is one of the earlier forms of incentive plans introduced.
There are two types of unit of work incentives, which are:
 Straight Piece Work

Employees are given incentives based on a certain fixed rate for
each unit produced in a particular time besides their basic salary.

 Differential Piece-rate
Employees are given a higher incentive payment rate for their
overall work if their production surpasses the standard production
level which has been set by the management compared to the rate
paid to them when they do not surpass the standard level.
(ii) Standard Hour Plan

The incentive rate is based on the standard time set by the organisation
to complete a particular task without taking into account the actual
time taken by the employee to complete the task. If the employee is able
to complete the task in less than the standard time, the employee is still
paid an incentive based on the standard time. This plan is suitable for
jobs or operations that need a lot of time to be completed.
(iii) Bonus
Bonus is one of the payment incentives given to employees as an
addition to their basic salary. A bonus can be awarded based on cost
saving, increase in performance quality or criteria identified by the
organisation. In addition, organisations can utilise „spot bonus‰, which
is bonus given on the spot to acknowledge employeesÊ efforts or
contributions which are indirectly related to the standard performance
set. For example, an employee is given a spot bonus for working extra
hours to entertain a lot of customers.
(iv) Merit Payment

Merit payment is a salary increment programme based on employeesÊ
performance achievement in carrying out tasks through the
performance evaluation process. To ensure the effectiveness of the
merit payment plan, employees have to be evaluated objectively and
employee performance is measured based on objective and fair criteria.
(v) Sales Incentive

Monetary incentives are usually used by organisations to motivate
sales personnel and encourage an increase in sales in the competitive
market. The salespersonÊs salary scheme usually contains two parts,
basic salary and commission. Commission is the total of sales incentive,
which is calculated based on the percentage of total sales garnered by
a salesperson in a certain period.

(vi) Maturity Curve

Also known as career curve, maturity curve is often used as a basis in
salary increment to professional employees. As shown in Figure 8.4, the
curves illustrate the annual salary rate, which is based on experience
and employeesÊ work performance.
A different curve is formed to illustrate a different performance level

and information on related annual salary increment. The curve that
shows a higher salary increment rate depicts a higher job performance
and is able to obtain a higher annual salary compared to the curve
which depicts a poor job performance.
Figure 8.4: Maturity Curve
(b) Group Incentive Plan

Various group incentive plans are getting the attention of management due
to the practice of total quality management and cost savings in achieving
competitiveness. Group incentive plans are also given when individual effort
is difficult to identify or when management wants to encourage overall
cooperation in the organisation.

A group incentive plan can encourage cooperation and teamwork, and

reward employees for collective contribution towards the organisation.
Among the group incentive plans are as follows:
(i) Team Incentive Plan

This incentive plan awards each team member a bonus incentive
payment when the team successfully achieves the performance
standards set. Since there are various types of teams that can be formed
such as cross-functional team and process improvement team, it is
difficult to form one method of payment or a standard calculation
formula for team incentives. Therefore, organisations need to take the
following steps in developing team incentive schemes:
 Determine team performance evaluation criteria such as increase in

production, capabilities or quality, or decrease in material and
labour cost.
 Set the maximum level of total incentive that can be given. For
example, the total incentive cannot exceed 10% of the basic salary.
 Set an incentive calculation formula and give a clear explanation to

employees.
(ii) Profit-sharing Incentive Plan

This plan is developed by organisations to increase productivity or
decrease labour cost, and to share profits with employees. Incentives
are paid according to a formula that compares a set performance
with actual productivity within a certain period. This incentive plan
is designed to increase productivity through the effective use of
organisational resources. There are four types of profit-sharing
incentive plans, which are:
 Scanlon Plan
This plan combines employee and management efforts to further
reduce production cost. The philosophy behind this plan is that
employees need to give opinions and suggestions to increase
productivity, and incentives will be given to the employees as a
reward for their efforts. Monetary incentives offered under this
plan are based on a formula, which is derived from the increase of
employee productivity and reduced labour cost.

 Rucker Plan
The Rucker plan is usually utilised for employees in the operations
section. Incentives are paid based on the relationship between the
total wages per hour obtained by employees with the production
value they produce. For example, an employee will receive a
1% bonus from his or her salary for each 1% increase in the
production value that he or she achieves.
 Improshare
Improshare is the short form for „improved productivity through
sharing‰, which refers to increase in productivity through sharing.
Bonus is paid based on overall productivity achieved by work
teams, which is the number of products produced by work teams
within a certain period.
 Earning-at-risk
Earning-at-risk is an incentive plan that places risk on part of an
employeeÊs basic salary. Nevertheless, employees are given the
opportunity to obtain a higher pay if they are able to achieve the
goals set by management. The purpose of this programme is to
make employees realise that they are facing a risk due to their poor
performance, while at the same time expecting a generous reward.
(c) Organisational Incentive Plan

This plan is different from individual and group incentive plan, whereby it
involves all the employees in the organisation. It rewards all employees
based on the organisationÊs profit in a certain period. The purpose of this
plan is to create a culture of cooperation and teamwork among the employees
in the organisation. Among the organisational incentive plans are as follows:
(i) Profit Sharing

Each employee in the organisation enjoys profit sharing by receiving a
certain additional sum aside from his or her basic salary, whether in
the form of cash or backdated payment. The purpose of this plan is to
give an opportunity for employees to enjoy additional income through
their contributions or efforts in helping the organisation achieve profit
growth. Among these contributions are increase in product quality,
decrease in operation cost, and improvement in work methods.

(ii) Share Ownership

This is one of the incentives that offer an organisationÊs shares to its
employees at a certain price in a certain period. It is believed that by
allowing employees to purchase and own a share of the organisation,
their productivity can be increased.
SELF-CHECK 8.1
Differentiate between the three types of incentive plans usually offered

by organisations.
ACTIVITY 8.5
We have discussed the three types of incentive plan ă individual,

group incentive and industrial incentives ă that can be offered by an
organisation to its employees. What are the differences between the three
incentive plans? Share your thoughts on this in myINSPIRE.
EXERCISE 8.4
1. State the type of individual incentive plan used by an organisation

to give salary increments to its professional employees based on
their experience and performance.
2. Explain briefly the standard hour plan.
8.7 BENEFITS
In general, most organisations provide various benefits to their employees as an
addition to their salary or as wages paid to the employees. An employee benefit
programme is a form of indirect reward with the purpose of improving work
quality and employeesÊ personal lifestyle. By providing benefits, the management
hopes that employees will be more productive and loyal to the organisation.

8.7.1 Characteristics of an Effective Benefit

Programme
Usually, various benefits are offered by employers to their employees due to
pressure and demands from workersÊ unions, or according to current trends.
However, how far benefits can contribute to the human resource management
programme depends on the attention given to the following matters:
(a) Have a Specific Objective

Employee benefit programmes have to be based on a specific objective. The
objective formed by an organisation depends on many factors such as size of
the firm, location, and degree of workersÊ union involvement. However, the
specific objective of the benefit programme has to be in line with the
organisationÊs compensation management strategic plan.
Among the main objectives of a benefit programme are to:
 increase employee satisfaction;
 fulfil employeesÊ safety and health needs;
 attract and motivate employees;
 retain the organisationÊs competitiveness; and
 consider the issue of cost restrictions
(b) Allow Input from Employees

Before introducing a new benefit programme, an organisation has to identify
the need for the benefit programme through negotiations or discussions with
employees, and carry out a survey on employeesÊ opinions.
(c) Redesign Employee Benefits

In line with the purpose of offering this programme, employee benefit
programmes have to be updated constantly so that it is suitable for the
changes that occur in society and the environment, especially changes in
composition and employeesÊ lifestyles. These changes force the management
to offer new benefits to fulfil these needs. For example, due to an increase in
the number of women employees, the type of benefit package offered must
be family-friendly to enable women employees to play their role well in the
organisation.

(d) Flexible Planning

In order to fulfil the needs of different individuals, the management has to
offer more flexible benefit packages such as a cafeteria plan. A cafeteria plan
is a benefit programme which allows individuals to choose the benefit which
is most suited to his or her needs from a number of benefits offered by the
organisation, subject to a specific pre-determined limit. This prevents
wastage from occurring in the benefit package due to unsuitability of
employee needs. However, basic or main benefits such as health insurance,
medical leave, and day offs are provided by the management to all of its
employees.
(e) Convey Information about Benefits to Employees

Information on benefits must be spread and conveyed to employees to
ensure that they understand and are clear about the benefits provided, and
thus avoid misunderstanding and confusion about the package offered by
the employer. There are many ways to convey information about benefits to
employees. Among them are:
 print distribution
 employee handbook
 organisational bulletin and others
The human resource management can use this opportunity to answer any
uncertainty about benefit programmes, which arises during the orientation
programme, training programme, and others.
ACTIVITY 8.6
Explain why an organisation chooses to offer the cafeteria benefit plan to

its employees. Share and compare your response with your coursemates
in myINSPIRE.
EXERCISE 8.5
List five characteristics of an effective benefit programme.

8.7.2 Types of Benefit Programmes

Most organisations offer various benefit packages to their employees. Part of the
benefit package provided by an employer is based on the voluntary concept rather
than force. However, there are also compulsory benefits that companies are legally
required to provide. In other words, there are two types of benefit programmes,
mandated and non-mandated.
(a) Mandated Benefits Programme

A mandated benefits programme is set by the labour system. It is the
most minimum allotment on employee rights and has to be provided by
employers. Among the mandated benefits include:
(i) Payment for Time Off
 Weekend Time Off

Employees have the right to enjoy a one-day leave each week as
allocated under Section 59(1) of the Employment Act 1955.
 Public Holiday
According to Section 60D(1) of the Employment Act 1955,
employees are eligible for 10 days of public holiday in a year and
will still be paid the basic salary rate. The 10 days allocated need to
include the following 4 days:
 Independence Day
 Birthday of the Yang di-Pertuan Agong
 Birthday of the Sultan or Yang di-Pertua Negeri or Federal

Territory Day
 Labour Day
 Annual Leave
Under Section 60E of the Employment Act 1955, an employee is
eligible for a minimum of annual leave according to his or her
service period as shown in Table 8.1.

Table 8.1: Annual Leave Based on Service Period
Service Period Annual Leave
 Sick Leave
Under Section 60F of the Employment Act 1955, an employee is
eligible for a minimum of medical leave according to his or her
service period as shown in Table 8.2.
Table 8.2: Sick Leave Based on Service Period
Service Period Sick Leave
(ii) Maternity Leave Protection

Under Section 37 of the Employment Act 1955, every female employee
is entitled to at least 60 days of maternity leave each time she gives
birth. She will also enjoy maternity allowance for five living offspring.
(iii) Contribution to the Employee Provident Fund (EPF)

As allocated under the Employee Provident Fund Act 1991, both the
employee and employer have to contribute to the employeeÊs account
in the EPF. This is to encourage employee saving for their retirement.
(iv) Social Safety Scheme

This scheme is allocated under the EmployeesÊ Social Safety Act 1969
and is managed by SOCSO. The purpose of this scheme is to provide
protection to employees in case of any disasters, injuries or death
during work. There are two types of protection scheme, Work Disaster
Insurance Scheme and Accidents Pension Scheme. Both employer and
employee make a certain contribution based on the employeeÊs salary
as shown in Table 8.3.

Table 8.3: Social Safety Scheme Contribution Rate
Contribution based on
EmployeeÊs Salary
Employer Worker
Work Disaster Insurance Scheme 1.25% ă
Accidents Pension Scheme 0.5% 0.5%
(b) Non-mandated Benefits Programme

Non-mandated benefits are benefits offered by employers to employees
voluntarily and without force. These are usually offered to attract new
employees with potential and talent from outside the organisation as well as
to increase employeesÊ satisfaction and motivate them. Among these benefits
which are usually provided by employers to employees are:
(i) Insurance scheme

A collective insurance scheme for employees is among the benefits
usually provided by employers. It usually includes life insurance,
which assures benefit payment upon the death of an employee to the
employeeÊs next of kin, or protects employees in the event of accidents
or injuries. The premium insurance cost is borne by employers, and
employees are usually allowed to make additional purchases at their
own expense.
(ii) Healthcare
This benefit package has gained serious attention from employers
since healthcare cost is becoming very high. In addition, employees
nowadays emphasise more on healthcare compared to employees
before. The benefit package usually consists of medical expenses,
surgery, and oral expenses.
(iii) Employee Aid Programme

This programme is designed to help employees handle various
problems that might affect their work performance. Among the
services offered under this programme include advice and treatment
for drug and alcohol abuse as well as emotional disorder.

(iv) Children Daycare Centre

An increase in female employees and dual-income families has forced
employers to provide another amenity in the workplace that is more
family-friendly, which is the child daycare centre. The preparation cost
for this centre is borne entirely by the employers or they only provide
the amenity while employees utilising the amenity have to pay for the
operational costs.
(v) Food Service

Food service is provided for employeesÊ convenience and to encourage
employees to remain in the workplace vicinity. The food provided is
sold at cost price or lower than cost, due to employer subsidy.
(vi) Transportation Service

Transportation to and from the workplace is provided by the employer.
This not only lessens traffic in the firmÊs parking space but is also said
to decrease fatigue and absenteeism.
(vii) Education Amenities

Most organisations offer scholarships or study loans to employees who
are interested in furthering their studies in specific fields. This is in line
with the organisationÊs effort to create knowledgeable employees and
to encourage a continuous learning culture.
(viii) Loan Amenities

There are also organisations that offer financial loan amenities to
their employees without charging any interest or by charging a much
lower interest rate compared to financial institutions outside the
organisation. The financial loan is for the purpose of purchasing houses
and vehicles.
SELF-CHECK 8.2
What is the importance of benefits to an employee? State the types of

benefits that employers usually provide to their employees.
EXERCISE 8.6
What are the differences between mandated and non-mandated benefits?

ACTIVITY 8.7
Do you agree or disagree with the following statements? Give a valid

reason for your choice.
1. Do you agree that a top executive be given a high salary compared

to lower position employees and does this show a fair
organisational compensation administration system?
(a) Agree
(b) Disagree
2. Has the government enforced the minimum wage?

(a) No
(b) Yes
3. Payment based on performance is only a fantasy in an organisation.

(a) Agree
(b) Disagree
4. Annual increment has to be based on the performance

demonstrated.
(a) Agree
(b) Disagree
5. An employee has to see the relationship between the incentive

payment which they receive and their work performance to ensure
the effectiveness of an incentive plan.
(a) Agree
(b) Disagree
6. Incentive payment under the Scanlon Plan is based on an increase

in an organisationÊs total product sales.
(a) Agree
(b) Disagree

EXERCISE 8.7
1. Which one of the following is a direct monetary reward?

A. Flexible work timetable
B. Bonus
C. Insurance
D. Annual leave
2. The compensation administration policy developed has to consider

the following elements EXCEPT:
A. Focus on organisational objectives
B. Retain employees
C. Be connected to all employees
D. The wage structure does not change
3. An effective incentive system is when ___________________.

A. the standard of performance is not stated clearly
B. employees see incentives as a must
C. the manager evaluates incentives based on differences in
performance
D. the cost related to the incentive plan is difficult to determine
4. The following are the characteristics of an effective benefit

programme EXCEPT:
A. A flexible benefit programme plan
B. The distribution of benefits information to employees
C. The development of a general benefit programme objective
D. Allowing input from employees
5. The following are profit-sharing incentive plans EXCEPT:

A. Earning-at-profit plan
B. Rucker plan
C. Improshare plan
D. Scanlon plan

Essay Questions
1. Explain two key challenges faced by human resource managers in

developing an effective salary structure.
2. What is meant by compensation?
3. List the factors which need to be considered in developing a

compensation administration policy.
4. What is meant by individual equity? State factors which need to be

considered in individual equity.
5. Identify three non-mandated benefit programmes. You may

discuss any of the three programmes with your coursemates.
 Compensation administration is a critical activity in managing human

resources and has to be more focused on giving consistent rewards to
encourage employee behaviour consolidation.
 This will then increase employee performance and loyalty so that they will
remain in the company for a long time.
 The compensation administration strategy has to be flexible to ensure rapid

response towards change and compensation administration trends in the
labour market.
 The basic purpose of compensation administration is to gain high returns from

the investment made by the organisation for its employees, in the form of
salary.
 The rewards offered have to ensure that both organisations and employees
benefit from them.

 An effective compensation administration system impact is when employees

practise a work culture that emphasises on contribution compared to payment
acceptance for being present at the workplace.
 Incentive plan and benefits management nowadays are extremely challenging,

complex, and require thorough planning to ensure the effectiveness of both
types of rewards.
 A human resource manager especially needs to ensure that both incentives and
benefits are designed and implemented well in order to achieve both rewardsÊ
original goals.
Compensation Industrial incentive plan

External equity Internal equity
Group incentive plan Mandated benefits programme
Individual equity Non-mandated benefits programme
Individual incentive plan

Hill/Irwin.
Nankervis, A. R., Compton, R. L., & McCarthy, T. E. (1998). Strategic human

resource management, (3rd ed.), Nelson-Thomson Learning.
Stone, R. J. (1998). Human resource management (3rd ed.). John Wiley & Sons.

Topic  Employee
Relations
9
LEARNING OUTCOMES
1. Explain the rights of employees and employers.
2. Discuss categories of problematic employees.
3. Compare the hot stove, progressive disciplinary, and positive
disciplinary approaches.
4. Evaluate the steps that should be taken into consideration when
carrying out disciplinary action.
5. Explain the importance of trade unions.
6. Discuss the process of collective bargaining.
7. Describe important industrial actions in Malaysia.
 INTRODUCTION
Maintaining employee productivity at work requires organisations to manage
their relationship with employees. Managing employee relations is more critical
these days because of external pressures such as the introduction of advanced
technologies, new management thinking, pandemic outbreak, and economic
crises. Some organisations have started to reduce the number of head counts
through downsizing, restructuring, merger and acquisition, retrenchment, and
lay-offs. Although organisations may offer a termination compensation, there are
employees who have been terminated without valid reasons and are not receiving
any compensation.

TOPIC 9 EMPLOYEE RELATIONS  203
In this topic, we will discuss three main issues in employee relations. The issues
are employee rights, discipline, and participation in a trade union. All these issues
relate to each other in increasing the quality of relationship between an employer
and an employee.
9.1 UNDERSTANDING RIGHTS OF EMPLOYEES

AND EMPLOYERS
Bohlander et al. (2009) defined employeesÊ rights as a guarantee that employees
will get fair treatment from the employer throughout their service. Gomez-Mejia
et al. (2013) classified employeesÊ rights into three, which are employeesÊ rights as
outlined by statutes, rights gained through a contract or agreement, and other
rights, as stated in Table 9.1.
Table 9.1: Categories of EmployeesÊ Rights
Rights Gained from a

Rights Governed by Statutes Other Rights
Contract/Agreement
 Protected from  Contract of service  Receive ethical

discrimination treatment
 Trade union
 A safe work environment  Privacy (limited)
 Implied contracts/
 The right to form a trade employment policies  Freedom of speech
union (limited)
In Malaysia, employee rights are listed in various Acts, such as WorkmenÊs

Compensation Act 1952, Employment Act 1955, Employees Provident Fund Act
1991, Human Resource Development Act 2001, and Occupational Safety and
Health Act 1994. Employees need to study the Acts related to them so that they
are not easily oppressed by employers. All of these Acts have been discussed in
Topic 2.
From the aspect of the management or employer, they have the right to handle a
business and maintain the profits gained. Shareholders and the company owner
usually control their company by giving out power to the company managers.
According to Gomez-Mejia et al. (2013), management rights include:
 managing the workforce
 recruiting employees

204  TOPIC 9 EMPLOYEE RELATIONS
 promotion
 placement of employees
 discipline
 terminating employees
The rights that are directly related to the employees are usually aligned with the
employersÊ rights. The employerÊs rights are usually influenced by the rights of the
important teams with stakes in decision making at the workplace. For example, an
employer has the right to decide on the employeesÊ salary scale, but with the
presence of the trade union, the employer must pay according to what have been
agreed in the contract between the employer and the trade union.
SELF-CHECK 9.1
List out the rights of workers and employers.
9.2 EMPLOYEE DISCIPLINE

Even though discipline is very important to an organisation, it is a very challenging
field in the human resource management function. The main objective of discipline
is to motivate employees to obey the standard performance set by the organisation.
Discipline is also used to develop or maintain respect and trust between the
employer and employees. If this is not well managed, it can lead to problems like
decreasing employeesÊ motivation, provoking employeesÊ anger, and creating
animosity between the employer and employees.
Effective discipline management will not only increase job performance by the
employees but also reduce the number of disciplinary problems in the future.
Nonetheless, any disciplinary action cannot be simply carried out. For employees
who are undergoing training or learning how to do the work required, it is not
reasonable to suggest them for disciplinary action. Disciplinary action also cannot
be carried out on problems which are out of employeesÊ control like punishing
them for not doing their work because of lack of raw materials or shortage of
electricity. In brief, disciplinary action can only be taken if a manager can prove
that a problem has been caused by an employee.

9.2.1 Problematic Employees and Misconduct in an

Organisation
Problematic employees are always related to bad work performance or they
usually create a lot of problems at the workplace. According to Ivancevich (2006),
problematic employees can be classified into four main categories, which are:
 An employee whose work is not satisfactory in terms of quality and quantity

due to lack of training, motivation, and ability.
 An employee who has personal problems which affect the productivity and
focus of his work, e.g., family problem, alcohol abuse, and drug addiction.
 An employee who breaks the laws at the workplace such as by stealing

company property or attempting to attack other employees, like fighting.
 An employee who keeps breaking the rules and regulations of the company
and disobeying the managerÊs instructions.
The above classification makes it easier for the employer to take suitable actions or
list appropriate training programmes that can help the employees to improve their
work performance.
Due to unknown causes with problematic employees, many take the easy route of
sacking those deemed problematic.
In reality, many factors can cause misconduct among employees, such as the
attitude of the employee or the interaction between the two parties. Miner (in
Ivancevich, 2006) devised a method to analyse the deficient behaviours of
employees by way of producing a checklist of suspected causes of the problems.
The causes include:
 problems related to the employeeÊs knowledge of the occupation;
 emotional problems;
 motivational problems;
 physical problems;
 family problems;
 problems with colleagues;

 problems caused by the companyÊs policy;
 problems related to the societyÊs value; and
 problems in terms of occupational context (such as economic pressure).
Within an organisation, misconduct can be categorised into two, minor and

major. Bohlander et al. (2009) and Gomez-Mejia et al. (2013) stated that minor
misdemeanour included incompetence, frequent tardiness, violation of rules and
dress code, misuse of company property, chitchatting during work hours, and not
following safety procedures in handling working equipment.
Meanwhile, major misconduct included those along the lines of intentionally

violating company codes, aggressive behaviour, sleeping during work hours,
alcohol consumption, gambling, disturbing others, drug possession, sabotaging
company operations, and being absent without a valid reason.
9.2.2 Procedures and Discipline

Each organisation should construct a procedure and platforms of discipline to help
it in taking disciplinary actions and guarding the rights of employees. Employers
are within their rights to determine the regulations in relation to employeesÊ
actions during work hours but they cannot go beyond the Employment Act 1955.
This Act is the base in maintaining the efficiency of the disciplinary system and is
used to control the actions of employees in accordance with company regulations.
Failure of the employer to penalise employees will result in frequent misconduct
in the future. It would paint an image of employeesÊ misdemeanours as being
tolerable. Among the causes identified as reasons for supervisors not punishing
employeesÊ misconduct are:
 supervisors not making any records of employeesÊ misconduct;
 supervisors believing that their actions will not have the support of the upper
management;
 supervisors being unsure whether the misconduct needs to be punished;
 supervisors wanting to maintain consistency because employees were not

punished previously; and
 supervisors wanting to main a good relationship with their subordinates.

Therefore, an effective regulation requires planning and application within an

organisation. Aspects that requires attention when making regulations related to
discipline include the following:
 the regulations must be clearly distributed to all employees and it is not to be

taken for granted that all of them had been informed;
 the regulations need to be revised from time to time;
 there is explanation on each regulation;
 the regulations are in written form;
 the regulations are reasonable;
 the regulations are implemented and the employees are reminded of them; and
 the employees acknowledge that they understand the regulations.
ACTIVITY 9.1
In your opinion, what factors have caused a rise in offences within

organisations nowadays? Share your thoughts in myINSPIRE.
EXERCISE 9.1
True (T) or False (F) Statements
1. If employees are found to have not been doing their work due to
insufficient funds, disciplinary action can be taken against them.
2. Ahmad frequently makes mistakes when asked to submit financial

reports. Hence, it is justified to categorise him as a problematic
employee.
3. Misconduct can be caused by physical problems.
4. Violation of regulations and dress code can be deemed as major

offences.
5. When devising regulations relating to discipline, employers are not

advised to refer to the Employment Act 1955.

9.2.3 Disciplinary Approaches

Employers can use any disciplinary approaches which are considered appropriate
if they discover that their employees have committed an offence. The following list
identifies the typical three approaches used by organisations.
(a) Hot Stove Approach

Certain quarters believe this approach is more effective than the others
as it applies the concept of taking necessary precautions. This approach has
the characteristics of a warning, is instant, consistent, and not personal. If
analysed closely, it is similar to the positive discipline approach.
The following are explanations on the hot stove approach as stated in

Ivancevich (2006) and Carrell et al. (1995).
 Applies the Warning System

An effective supervisor would usually inform all employees regarding
the warning system, be it in written or oral form. Since the supervisor is
closest to the employees, it is thus his or her responsibility to remind the
employees from time to time.
 Instant
Immediate disciplinary action is taken as soon as an investigation is
concluded. As a result, the employees will immediately understand the
correlation between the effects of their offences through the penalties
meted out upon them.
 Consistent
Each employee is punished if they commit an offence, and the same
type of punishment is applied to the same type of offences for all the
employees. Implementing a consistent disciplinary action is not easy
because it involves personal issues. It cannot be denied that supervisors
can fail to notice offences made by favoured employees.

 Non-Personal Manner
Disciplinary actions should not be taken in a personal manner but more
in the form of correcting certain inappropriate behaviour of employees.
This can be done through corrective discipline. Under this approach,
supervisors will address employee misconduct in a mature manner by
providing a conducive environment for employees to change their ways.
The emphasis should be on corrective discipline and not termination.
(b) Progressive Disciplinary Approach

This approach, as shown in Figure 9.1, treats disciplinary problems in
phases whereby the punishment is more severe if the same offence is
committed again. Unlike the hot stove approach, progressive discipline
gives employees the opportunity to change their behaviour before facing
punishment such as termination. This approach indirectly motivates
employees to improve their conduct on a voluntary basis.
 Verbal Warning
For first-time offenders, verbal warnings are given by their supervisors.
The supervisor will warn them of a more severe punishment if the
offence is repeated.
 Formal Warning
Employees who repeat an offence will receive formal warning through a
letter of warning. The offence will be documented in their file and they
will once more be told that stricter punishment will be meted out if they
repeat the offence.
 Suspension Without Pay

If the employees still fail to adhere to instructions, they will be suspended
from work without pay. They will be given a final warning and if they
fail to address the problem, termination is the most likely punishment.
 Termination
This is the last resort if the employees still do not follow the instructions
given.

Figure 9.1: Progressive Discipline Approach
Source: Mathis and Jackson (2000)
(c) Positive Disciplinary Approach

In most cases, disciplinary actions will not motivate employees to change
their attitude. In fact, they just make the employees afraid and they will keep
a distance from the supervisor instead of receiving the punishment. To
avoid such complications, employees would resort to fraudulence instead of
correcting their mistakes. Therefore, many organisations choose to convert
progressive discipline into positive discipline. This approach is built upon
the promise that offences can be rectified and do not require any sort of
punishment. Hence, although the two approaches share the same processes,
positive discipline replaces punishments with counselling sessions between
supervisors and employees.
Counselling sessions are used to raise employeesÊ awareness of their offences

and find ways to overcome the problem. However, just like the progressive
disciplinary approach, the positive disciplinary approach is used to
terminate the services of employees who commit major offences.
According to Gomez-Mejia et al. (2013) and Mathis and Jackson (2000), there
are four steps in this approach.

 Counselling
Counselling can be used as part of the disciplinary process. It allows
the manager or supervisor to identify employeesÊ problems and also
solutions to the problems. The objective of counselling is to enable
employees to understand the rules and regulations of the company or
organisation. In the first meeting, both parties are expected to discuss the
problems at hand and to find the appropriate solution.
 Written Documentation
If the employees fail to improve their performance or repeat the same
offence, both parties are expected to meet once more and discuss the
reasons why the solution did not materialise. Another solution is
expected to be found at this stage and a contract is made whereby the
causes and solutions are documented with the concurrence of both
parties.
 Final Warning
If employees still fail to adhere to the written agreement as previously
agreed upon, they will be called and given a final warning. The manager
or supervisor will stress the importance of improving the quality of work
or addressing the mistakes made. The implication of failure to comply
with the warning is also stressed upon. Certain organisations offer a day
off with pay to give the employee time to ponder whether to continue
working in the organisation or otherwise.
 Termination
Failure to improve oneÊs work performance or a repetition of the same
offence will result in the termination of the employee.
One of the positive aspects of this approach is that it focuses on problem

solving. Employees prefer to be treated with respect and are usually more
receptive to change after counselling sessions compared to the progressive
disciplinary approach. In certain cases, counselling sessions can create a
more productive work environment between employer and employee.
Employees are active participants in the process so it helps in absolving
employers from being blamed for unfair dismissal.
However, this approach requires a huge financial cost in training managers

and supervisors to be effective counsellors. Furthermore, the counselling
sessions involve a longer period and is conducted in stages. These deter
employers and supervisors from applying this approach.

9.2.4 Inappropriate Disciplinary Action

Whether it is intentional or not, certain managers do err in their disciplinary
actions. It may happen due to inexperience in handling such matters or they were
just unaware of making an error. According to Carrell et al. (1995), there are
six types of errors that are commonly committed by managers when taking
disciplinary action.
(a) Punitive Discipline

Punitive discipline is also referred to as negative discipline. This usually
involves threatening and blackmailing employees. This type of error was
commonly practised during the early 20th century but is now rarely used as
many employees are protected by trade unions. Furthermore, employers are
more aware of the need for a positive employer-employee relationship.
(b) Negative Feedback

Certain supervisors only present negative feedback when employees are
unable to display good performance. Feedback should be both positive and
negative. Praise needs to be given when employees perform well and
exhortation is necessary when employees commit an offence.
(c) Late Determent

It might be said that late determent is actually procrastinated discipline but,
in this context, supervisors normally allow a problem to worsen and take
action only when it reaches a critical stage. The problem might be a minor
misconduct at first but becomes a major misconduct when disciplinary action
is delayed.
(d) Inadequate Definition

During the counselling session, the supervisor might state that the employee
concerned was „uncooperative, disloyal to the organisation or simply not
functioning as a team player‰. When in discussion with the employee, the
supervisor cannot state the problem in muddled terms that can lead to
confusion and worsen the situation. This is because the employee might
misinterpret the employerÊs meaning.
(e) Labelling Employees, Not Behaviour

Employees might be labelled by supervisors as lazy, irresponsible, and
uncaring when they fail to perform at an acceptable level. In taking such an
action, the supervisor has created two major problems.

First, employees might bring that label upon themselves to the point of it
becoming a self-fulfilling prophecy. They will become demotivated due to
the supervisorÊs lack of efficacy. Second, the label is tagged to the employee
and not to the attitude when in reality, it is the attitude that needs to be
changed.
(f) Misplaced Responsibility

Supervisors have to be aware that at times, problems happen because of
them. When the responsibility to change attitude is in the hands of the
employees, and they fail to change, they are charged with disciplinary action.
However, we need to remember that employees will not change their
attitude if the supervisors fail to change and this will create problems.
ACTIVITY 9.2
If you were a supervisor carrying out an incorrect disciplinary action,

what would you do? Explain yourself and share it on myINSPIRE.
EXERCISE 9.2
1. The progressive disciplinary approach usually involves four stages,

one of which involves a counselling session.
2. Under the hot stove approach, disciplinary action is usually

implemented instantly and consistently.
3. One of the common mistakes done by supervisors when taking

disciplinary action is frequently giving negative feedback towards
employees.
4. The positive disciplinary approach allows late determent when

employees commit an offence for the first time.
5. Employers should avoid delaying a disciplinary action so that the

problem is dealt with when it is still not a major problem.

9.2.5 Guidelines in Implementing Fair Disciplinary

Action
The following are guidelines that can be used in the process of determining the
kind of disciplinary action to take:
(a) Prioritise Rules, Not Personal Interest

Rules must be based on consistency and reliability. Thus, effective discipline
is due to clear guidelines and does not involve any personal interest.
(b) Respect EmployeesÊ Self-Importance

Employees have the right to know what kind of punishment they will get.
Efforts must be made to avoid any embarrassment or negative work
environment in meting out the punishment.
(c) Ensure the Action is Unbiased and Objectively True

The documentation process should be free from any bias that will protect the
organisation from any kind of unfairness such as fabricating false evidence
to blame other people. It is essential to keep track of all positive and negative
records for further analysis.
(d) Obtain Information

The management should collect necessary evidence before framing any
charges against the person responsible.
(e) Provide Clear Explanation on the Error Made

The employer should explain thoroughly what sort of punishment and
offences have been committed before action is taken against the person
involved.
(f) Avoid Acting While Angry

Not many of us can act objectively and reasonably when we are angry. Thus,
the best time to discipline employees is when we are in a calm and peaceful
mood.
(g) Avoid Heavy Punishment

The type of punishment should be appropriate for the offence committed.
Otherwise, the organisationÊs objective to change employeesÊ attitude cannot
be achieved.

(h) Give Warning

In some cases, employees will be suspended or lose their job if they have
committed a serious offence. However, a verbal or written warning will be
given for first-time and second-time offences. This is important to ensure that
no employee will accuse the organisation of terminating them without giving
any warning.
(i) Ensure the Disciplinary Act is Just and Fair

Equality is important when carrying out certain punishments to ensure
that all employees get the same punishment for the same action. This is to
prevent any extreme punishment, inconsistent regulations, bias, and other
discrimination that will result in dissatisfaction.
(j) Obtain Information from Both Parties

Allowing employees to explain and defend themselves is a reasonable way
to create a positive environment. It will help the organisation to carry out the
necessary actions effectively.
(k) Be Bold if You Are Right

If the management is certain that they are truthful, they should not allow the
party who had committed the misconduct to go free. This is to ensure that
the rules set up by the organisation are firm and strict.
(l) Do Not Relate Discipline to Personal Interest

An effective manager and supervisor will not penalise other people out
of revenge or for any kind of personal interest. It should be carried out
rationally and not based on emotional factors that might disrupt employeesÊ
respect and loyalty.
SELF-CHECK 9.2
Research online on ways to obtain evidence for a disciplinary action.

Identify their advantages and disadvantages.

9.3 EMPLOYEE PARTICIPATION IN TRADE

UNIONS
Another important component in employee relations is industrial relations. While
employee relations refer to the analysis and management of work involving
individual employees, industrial relations refer to the relationship between
employer and employee collectively through their trade unions. In Malaysia, the
industrial relation system is known as tripartite as it involves three parties,
employer, employee, and the government. When discussing industrial relations, it
is common to refer to employees as workers.
Industrial relations govern several important issues pertaining to workers. Some

of these issues are defined in the Trade Union Act 1959, which include promoting
a good work relationship between the employer and workers, improving working
conditions for the workers, and representing either the employer or workers in a
trade dispute. Other Acts that are relevant to industrial relations include
Employment Act 1955 and Industrial Relations Act 1967.
9.3.1 Purposes of Trade Union Participation

Section 2 of the Trade Unions Act 1959 defines a trade union as „any association
or combination of workmen or employers, being workmen whose place of work is
in West Malaysia, Sabah or Sarawak as the case may be, or employers employing
workmen in West Malaysia, Sabah or Sarawak, as the case may be, within any
particular establishment trade, occupation or industry or within any similar trades
occupations or industries, and whether temporarily or permanently‰. The same
legal provision defines the objectives of a trade union.
Why do employees join a trade union? The common reason is because they realise
that if they fight for their right to better work conditions individually, they might
fail. In contrast, if they joined a trade union and acted as a group, the employer
might consider their demands. Moreover, a trade union will usually take steps to
protect its members. According to Bohlander et al. (2001), among the reasons why
employees are interested in joining a trade union are the following:
 to protect their rights;
 to increase their negotiation power;
 to increase status;

 to socialise;
 to increase employee welfare;
 peer pressure; and
 dissatisfaction with current conditions such as workplace conditions, policies,

wages, and others.
ACTIVITY 9.3
From the list of reasons for joining a trade union, choose three which
would be the most important for you if you were to become a trade union
member. Discuss with your coursemates.
9.3.2 Becoming a Trade Union Member

According to Maimunah (2000), all employees aged 16 and above have the right to
join a suitable trade union such as those representing employees in their trade or
industry sectors and cover employees in Peninsular Malaysia, Sabah, and Sarawak
(but not a combination of these territories). However, those aged between 16 and
21 years old have a limited opportunity in some trade union activities such as
competing in elections for the post of union executive, while those under 18 may
not participate in a strike.
Employees in the public sector can become a member only of a trade union that
is formed by employees within the same occupation, department or ministry.
Management-level staff in public service who are interested in joining trade unions
must obtain permission from the Government Chief Secretary. Police, army and
prison officers are not allowed to join any trade union.
SELF-CHECK 9.3
Why are police, army and prison officers not allowed to become
members of a trade union?

9.3.3 Trade Union Funds

When employees are accepted as trade union members, they have to pay a
registration fee and a monthly fee of between RM3 and RM8. The money collected
will be used for purposes such as those set in the Trade Union Act (Section 50) and
regulations outlined by the trade union. According to the Act, trade union funds
can be used only for:
 expenses related to the salaries of the trade union employees;
 expenses related to the office;
 expenses related to solving trade disputes;
 compensation for members during trade disputes such as strike allowance;
 allowance for members and their family due to death, ailment, accident, and
unemployment;
 expenses related to reports and news printing; and
 expenses related to the management of social, sports, education, and welfare

activities of members.
9.3.4 Types of Trade Unions

In Malaysia, trade unions can be divided into two categories, namely, trade unions
for employees in the private sector and trade unions for employees in the public
sector. For employees in the private sector, there are two types of unions, which
are national and district trade unions and company unions.
(a) Trade Unions for Employees in the Private Sector
(i) National and District Trade Unions

Employees who become members in these trade unions come from
different companies but work in the same industry, or are employees
in the same trade or occupation. According to Maimunah (2000), most
main industries have a national trade union, such as:
 National Union for Plantation Workers (NUPW)
 National Union for Teaching Professionals (NUTP)

 National Union for Bank Employees (NUBE)
 National Union for Telecom Employees (NUTE)
 Transportation Workers Union (TWU)
Some trade unions have members who are limited to one district only.
For example, employees in Sabah and Sarawak are not allowed to join
unions in Peninsular Malaysia. In addition, there are trade unions that
only enrol members from certain areas such as the Perak Textile and
Garment Industry Trade Union, which limits the intake of members to
employees from the Perak state only (Maimunah, 2000).
(ii) In-house or Company Unions

An in-house union is established by employees working under one
employer. Employees from different occupations can join this type of
union as long as their employers are the same.
Even though the national trade union is against the establishment of

this type of union, employers and the government encourage them. If
employers find out their employees are planning to join a national
trade union, they will take immediate action to encourage employees
to establish an in-house trade union instead. This is because the
employers are aware of the weaknesses of this type of trade union.
According to Latiff Sher Mohamed (in Maimunah, 1999), in-house

unions have these weaknesses:
 Limited membership and focus on employees in one company

only, resulting in this type of union being not very strong;
 The union leader is easily exploited by the employer because

selection is made by union members whose numbers are limited;
 Limited financial resources makes it difficult to carry out union-

based activities;
 Union leaders are worried about becoming victims in terms

of promotion, retrenchment, transfer, and distribution of
responsibilities, which are set by their employers; and
 These unions are unable to provide many benefits to their members

due to the limited number of members.

Even though this type of union is opposed by national and district

unions, in-house unions have shown an increase and are predicted to
keep on increasing in the future. Some examples of these trade unions
that have existed for more than 20 years are the Cold Storage
Employees National Trade Union and Rothmans Employees Trade
Union.
(b) Trade Unions for Employees in the Public Sector

The public sector consists of public services, statutory bodies, and local
authorities. Public servants are only allowed to establish a union if they are
in the same ministry, department or occupation. Issues related to wages and
other terms of services are normally discussed at the national level between
government authorities and the Congress of Union of Employees in the
Public and Civil Services (CUEPACS).
There were 253 trade unions in the public sector in September 2017 and this
figure includes several of MalaysiaÊs biggest unions such as the Malayan
Union for Teaching Professionals, Malayan Nursing Union, and Malayan
Technical Service Union as well as smaller unions such as the Dentistry
Technician Union and the Pulau Pinang Port Senior Commissioner Officers
Union. Despite having better employment relationship nowadays, the
Department of Trade Union Affairs Malaysia reported an increase in the
number of union members from 889,718 in 2012 to 930,790 in August 2019.
(c) EmployersÊ Associations

While employees have trade unions, employers have a network of employers
from similar organisations to fight for their rights and welfare. With this
network or association, they are more prepared and able to respond to the
demands of trade unions. EmployersÊ associations balance the employee
market condition with reward offer or salary and are involved in matters
regarding decision making or discussions with the central or state
government or agencies representing the government.
Through these associations, employers can share techniques and strategies

to handle demands from trade unions. A few techniques often used by
employers in controlling the influence of trade unions and their demands
are to:
 offer competitive rewards, wages, and service benefits;
 invest in developing a cooperative workforce or human resources;

 create more opportunities for employee involvement in decision making;

and
 increase employeesÊ commitment to the organisation.
The following are examples of large employersÊ associations:
 Malayan Commercial Banks Association (MCBA)
 Malayan Agricultural Producers Association (MAPA)
 Electrical Industry EmployersÊ Association (EIEA)
 Engineering Machinery EmployersÊ Association (EMEA)
ACTIVITY 9.4
Visit the Malaysia Open Data Portal at https://www.data.gov.my/.

Find out the recent number of trade unions in Malaysia and its total
membership. Share your findings in myINSPIRE.
EXERCISE 9.3
1. One of the reasons why employees join trade unions is that they
want to increase their status.
2. The Transportation Workers Union (TWU) is an example of a

company union.
3. An in-house trade union has stronger influence in protecting the

rights of its members than a national trade union because of
member similarity.
4. EmployersÊ associations help employees fight for their rights and

welfare.
5. Trade union funds can be used for reports and news printing,
compensation to members during trade disputes, and office-
related expenses.

ACTIVITY 9.5
In your opinion, who determines the wages and benefits for each
employee or work group in an organisation? Share and discuss your
response with your coursemates in myINSPIRE.
9.3.5 Collective Bargaining and Collective Process

Decisions on wages and benefits can be made either one-way or two-way. In public
and private sectors that do not have trade unions, there is one-way decision-
making by employers. In private sectors that have trade unions, a collective
bargaining process is used by employers and trade unions to determine wages and
other work terms.
Collective bargaining can be defined as a method to determine work terms and

conditions as well as to control work relations through the negotiation process
between employers and employees in the hope of achieving an agreement
(Salamon, 1998).
For employees, collective bargaining can be seen as a good method for them to
increase their wages and benefits as well as to reduce their total working hours.
Even though the main objective of collective bargaining is to agree upon the
accepted work contract by both employees and employers, trade unions have
two other objectives. The first objective is to protect employeesÊ rights through
allocation development, which will monitor the use of power or any actions that
are unfair towards employees. The second objective is to enable employees to be
involved in decision making on matters that involve them.
The bargaining process can only be practised in the private sector because wages
and all conditions in the public sector are decided upon by the employer. Besides
that, it is important to remember that the bargaining process cannot be carried out
if the employer does not recognise the trade union formed.
Only when recognition is received can the employees use the union to voice out
dissatisfaction or solve disputes. In other words, this can be seen as a policy
for trade unions to improve any employee service terms with employers. For
employees who are not members of a trade union, they will not be discriminated
against because the trade union not only negotiates for its members but also for all
employees in the company.

In many cases, the bargaining process is carried out between employers and trade
unions. However, for employers who have their own associations, such as banks,
the bargaining process is carried out between the employersÊ association and the
trade union. It is to ensure that all benefits are standardised for all employees in
the industry and also to reduce the number of employees who like to job hop from
one company to another. All bargaining processes carried out are controlled by the
Industrial Relations Act 1967.
The bargaining process begins when one of the parties, whether the employer or
the trade union, recommends a set of proposals for mutual agreement and requests
for negotiations to begin. The response on whether the invitation to negotiate is
accepted or not has to be sent within 14 days. If the employer refuses to begin the
process, a trade dispute will occur. However, it is important to remember that
employers who have recognised the establishment of the trade union have to be
involved in this process.
The number of meetings that need to be held depends on the relationship between
them and the number of disagreements. Normally, in their first meeting, both
parties will discuss issues pertaining to the disagreements. If there are any matters
left out and not discussed, they will be tabled in the next meeting. If an agreement
is still not achieved, the matter will be reported to the Industrial Relations
Department and if necessary, they will be trialled by the Industrial Court.
If an agreement is reached between the employer and trade union, the next process
is to bind the mutual agreement in a valid contract. It needs to be done in writing
and signed by both parties involved.
The validity date of the agreement must also be stated and normally it does not
exceed 3 years. After the period ends, a new bargaining process has to be carried
out. Meanwhile, all agreements reached have to be sent to the Industrial Court
within a month from the date they are signed. The court will then examine the
agreement made to ensure that it follows the legal requirements before accepting
it as a valid contract.
ACTIVITY 9.6
Visit the Industrial Relations Department Malaysia at

https://jpp.mohr.gov.my/panduan/perkhidmatan-utama and retrieve
the guidelines on trade disputes and the settlement process, and trade
union recognition claims process. Identify the process involved in
solving a trade dispute.

9.3.6 Industrial Actions

Even though cooperation and understanding between employers and trade unions
are encouraged during negotiations, disputes still happen. The industrial relations
system usually has ways to solve the disputes. Sometimes, one party would rather
use a direct method by pressuring the other party to bow to its demands. In
Malaysia, the law has allocated two ways that can be used by employees, namely,
picket and strike, while employers can employ the lockout method.
(a) Picket/Protest
According to Maimunah (2000), employees who are members of trade unions
and have trade disputes with their employers can hold a picket in or near
their workplace in the condition that:
 they do not obstruct the entrance and exit doors;
 they do not threaten anyone; and
 their activities are carried out peacefully.
Employees protest for the purpose of giving publicity about the dispute to
employees who are not directly involved and to the public. By protesting
peacefully, they hope to convince their employers to approve their claims.
Picketing is a great tactic if employers are conscious of the organisationÊs
public image.
(b) Strikes
In Malaysia, strikes are only allowed for employees from registered trade
unions if trade disputes remain unsolved. Political strikes and sympathy
strikes are prohibited. Before employees go on a strike, those involved in the
dispute must first have a secret ballot to determine the percentage of those
who agree and disagree to the strike.
A strike is only allowed if the voting result shows that two-thirds of the
employees agree to it. The voting results must be sent to the Director-General
of Trade Unions (DGTU) who has the power to order the trade union not to
have a strike if it is found that certain necessary procedures are not followed.
A strike is only valid to be held after 7 days, which is after the calm period.
During the calm period, validity confirmation can be done to enable the
parties involved to change their minds and give an opportunity for the
government to intervene.

Apart from that, it must be reminded that the result of the ballot is only valid
for 90 days. Therefore, a strike must be organised within the 90-day period
from the voting date and if not, voting must be done again.
For employees in essential services such as banking, transportation,

electrical, postal, public health, and supply and distribution of fuel, they too
must follow the procedure stated above, apart from giving notice of their
wish to go on strike. Employers will then have to inform this to the DGTU.
After referring to the Industrial Relations Act 1967, illegal strikes will be
identified and the Ministry of Human Resources has the power to prevent
them. A strike is considered illegal if:
 it is on questions pertaining to the recognition of a trade union;
 it is on matters contained in the collective agreement, which have been

given cognisance by the Industrial Court;
 it is on management matters related to employee hiring, transfer,

promotion, termination, and job distribution; and
 the trade dispute has been referred to the Industrial Court for arbitration.
The Ministry of Human Resources has the power to prevent a strike and
enforce the use of other procedures in solving disputes.
(c) Lockout
Lockout is a way for employers to force employees to accept their demands.
Through this method, employers will not allow employees to work until the
dispute between them is solved. It includes taking actions such as closing
the workplace, stopping work, and refusing to give wages to any employee
until they agree to the work conditions imposed. Similar to a strike, the
requirements for a lockout are also subject to the law.
ACTIVITY 9.7
In your opinion, should pickets, strikes, and lockouts be carried out?

State your reasons and post them in myINSPIRE.

9.3.7 Procedure to Solve Disputes

When disputes occur, pickets, riots, and lockouts are not advised as these can affect
the nationÊs economy and public interest. The Industrial Relations Act 1967 has
underlined a procedure to solve the arguments, which is as follows:
(a) Direct Negotiation

Only the trade union and employers are involved in the process of solving
an argument. Usually, they will sit together in a calm and respectful manner.
The DGTU cannot force both sides to make peace if the direct negotiation
fails.
(b) Conciliation
If the process of solving the argument through direct negotiation fails, the
employer and trade union can report the matter to the DGTU. He will
suggest that they hold a meeting of peace to solve the argument. The
Industrial Relations Department will help them to solve the argument
(Maimunah, 2000).
(c) Mediation
This method is similar to arbitration but the mediator appointed is not from
the government or Industrial Relations Department. The mediator is an
outsider who is appointed and agreed upon by both sides.
(d) Arbitration
Arbitration is used after the previous three methods fail. Similar to the
mediation method, the arbitration method uses a third party, which is the
Industrial Court. Under the Industrial Relations Act 1967, the Industrial
Court is empowered to solve trade disputes.
The functions of the Industrial Court are to:
 hear and hand down decisions or awards in industrial disputes referred

to it by the Minister or directly by the parties; and
 grant cognisance to collective agreements which have been jointly

deposited by the employers or employersÊ association and the trade
union of employees.
Decisions made by the Industrial Court cannot be altered unless there is a

matter related to law.

EXERCISE 9.4
1. A strike is valid to be conducted only after 3 days, which is after the

calm period.
2. Employers can implement a lockout to force employees to fulfil

their demands.
3. Arbitration is usually used after three methods ă direct negotiation,

conciliation, and mediation ă fail.
4. The process of collective bargaining can be conducted even though

the employer does not establish a workersÊ union.
5. A collective agreement can be a verified contract if it is done orally

while being witnessed by representatives from the workersÊ union
and the employers.
1. One of the guidelines that can be followed when implementing

certain punishment is__________.
A. giving heavy punishment
B. focusing on personal interest rather than a set of laws
C. giving warnings
D. responsibility is up to the workers
2. Effective law or rules must ___________.

A. be created through documentation
B. focus on the management only
C. explain the reason for every punishment
D. be analysed once in 10 years

3. All of the following statements are true about the collective

bargaining process EXCEPT:
A. The bargaining process can only be practised in the private
sector.
B. The bargaining process can be carried put even when the
employer does not recognise the trade union formed.
C. In the bargaining process, employers may be represented by
their own association if they have any.
D. The bargaining process begins when one of the bargaining
practices recommends a set of proposals for mutual
agreement and requests for negotiations to begin.
4. Who are eligible to join trade unions?

A. Workers from different jobs, departments or ministries
B. Workers who reach the age of 18
C. Police, soldiers and prison officers
D. Management workers in civil services who have obtained
approval from the head of department
Essay Questions
1. Briefly explain the details of the hot stove process.
2. List all the important things that should be considered in planning

disciplinary rules and laws.
3. Explain the weaknesses of an in-house trade union.
4. Why are some strikes considered illegal? Discuss.
 All employees must know their rights so that they are aware of what their
organisation and its management should not do.
 In Malaysia, employeesÊ rights are presented in various Acts such as

Employment Act 1955, Occupational Safety and Health Act 1994, and
WorkmenÊs Compensation Act 1952.

 An employer has the right to hire, promote, discipline, and terminate

employees.
 Besides employeesÊ and managersÊ rights, discipline is another important issue

in an organisation even though it is not the most favoured aspect that is
focused on by the employers. Discipline is crucial in motivating employees to
follow the pace of existing work performance.
 The employment relationship between employer and employees can be

categorised into two types.
 Employee relations refers to the analysis and management of work involving

individual employees while industrial relations refers to the relationship
between employers and employees collectively through their trade unions.
 Each employee must understand what is industrial relationship and trade

union, why they should join a trade union, who can be a member of a trade
union, how and the purpose of the unionÊs funds, as well as the types of unions
available in Malaysia.
Arbitration Mediation
Collective bargaining Negotiation
Conciliation Picket
Direct negotiation Positive disciplinary approach
Hot stove approach Progressive disciplinary approach
Industrial action Strike
Incorrect disciplinary approach Trade union
Lock-out


Carrell, M. R., Elbert, N. F., & Hatfield, R. D. (1995). Human resource management:
Global strategies for managing a diverse workforce. Prentice Hall.
Gomez-Mejia, L. R., Balkin, D. B., & Cardy, R. L. (2013). Managing human

resources (7th ed.). Pearson.

Hill/Irwin.
Maimunah Aminuddin. (1999). Malaysian industrial relations and employment

law. McGraw-Hill.
Maimunah Aminuddin. (2000). Human resource management. Fajar Bakti.
Mathis, R. L., & Jackson, J. H. (2000). Human resource management (9th ed.).
South-Western Thomson Learning.
Salamon, M. (1998). Industrial relations: Theory and practice (3rd ed.). Prentice
Hall.

Topic  Employee
Safety and
10 Health
LEARNING OUTCOMES
1. Compare and contrast the concepts of security and health.
2. Examine the types of security and health towards danger in the
workplace.
3. Discuss security and work health Acts and the purpose of the
formation of those Acts.
4. Explain actions taken towards forming a safety and health work
environment.
 INTRODUCTION
According to the International Labour Organisation (ILO), it is estimated that more
than 1.2 million workers do not enjoy their right to work in a secure and safe
environment because of accidents and diseases which are related to their jobs.
Based on ILO statistics presented at the 16th Asia-Pacific Occupational Safety and
Health Organization (APOSHO) Convention in Mauritius in April 2000, it was
found that:
 Employers from all over the world suffered because of more than 250 million
accidents every year.
 More than 160 million employees suffered illnesses as a result of exposure to

dangerous chemicals at the workplace.

232  TOPIC 10 EMPLOYEE SAFETY AND HEALTH
 More than 1.2 million deaths happened every year because of accidents and
diseases related to jobs and the total is higher than the total caused by road
accidents every year from all over the world.
 More than 10 million employers suffered injuries and diseases resulting in

permanent disabilities and loss of source of income.
Compared to death rates in developed countries, those in most developing

countries are five to six times higher. In Malaysia, on the other hand, much effort
was made to reduce workplace accident rates such as implementing the
Occupational Safety and Health Act 1994 and forming enforcement agents such as
the Department of Occupational Safety and Health (DOSH) and the National
Institute of Occupational Safety and Health (NIOSH) as well as conducting
programmes to create awareness among employees and employers of the
importance of creating a safe and healthy work environment.
10.1 UNDERSTANDING CONCEPT OF

OCCUPATIONAL SAFETY AND HEALTH
Occupational safety and health at the workplace means as follows:
Safety
An issue that has to do with protecting workers from injuries or accidents
while they are working. Injuries related to job include wound, fracture,
sprain and amputation caused by work accidents or caused by exposure that
involves an incident in the workplace.
Health
A condition that gives protection to workers from emotional disturbance and
any types of physical illness caused by their job. Disease caused by work,
such as exposure to occupational surrounding factors, can bring all types of
unusual circumstances or disturbance. This condition includes chronic acute
illnesses such as stress, burnout, heart problem and death which may be
caused by breathing and absorbing or being exposed directly to toxics or
harmful means.
(Bernardin & Russel, 1998)

TOPIC 10 EMPLOYEE SAFETY AND HEALTH  233
ACTIVITY 10.1
We always hear the words „safety and health‰ but what do they mean if
applied in our workplace? Go on the myINSPIRE forum to discuss with
your coursemates.
10.2 LAWS RELATED TO OCCUPATIONAL

SAFETY AND HEALTH
Government intervention in the issue of industry safety started since early 1878
with the appointment of the first pemeriksa dandang (inspector of boiler). The first
law related to safety formed in 1892 was Steam Boiler Enactment (Maimunah,
1999).
When Malaysia was in the process of becoming an industrialised country in the

1960s, an Act was introduced to oversee the safety and health of work. It was the
Factories and Machinery Act 1967. The Occupational Safety and Health Act was
introduced in 1994 when it was found that the earlier Act had weaknesses. Our
discussion here will be on these two Acts.
ACTIVITY 10.2
Why are laws related to safety and health of workers important? What
would happen to workers if there were no laws like this in our country?
Share your thoughts in myINSPIRE.
10.2.1 Factories and Machinery Act 1967

For over 30 years, the Factories and Machinery Act 1967 played a role in resolving
safety and health issues in this country. The Act emphasised safety in factories and
its enforcement was under the control of the Department of Factory and Machinery
(now known as DOSH). The provisions in this Act include the following:
 Power is given to the Department of Factory and Machinery, or an appointed

examiner, to ensure the safe construction and design of factories and
well-conditioned machines and to ensure safe usage including providing
appropriate training to workers.

 WorkersÊ welfare is emphasised by ensuring that employers provide health

facilities and a comfortable workplace.
 Safety tools such as fire extinguisher and first aid box are provided.
 The procedure to report accidents in the workplace is explained.
Even though this Act had been used for a long time in Malaysia, it received a lot
of criticism regarding the effectiveness of its provisions and implementation.
Among the criticisms were that it:
 only protected workers who worked in factories and this only accounted to
about 25 to 30% of the entire workforce in Malaysia;
 had a limited scope;
 failed to take note of technological development; and
 emphasised the governmentÊs responsibility to resolve safety and health issues

without involving employers and employees.
ACTIVITY 10.3
In 1998, the construction sector was the sector that reported the highest
number of accidents, 38,718 (43.8%), compared to other sectors such as
commerce (14.7%), services (10.4%), and shipping (4.6%).
In your opinion, why did the construction sector contribute to the high
number of accidents in 1998? Have there been improvements since then?
Do some online research and present your findings in myINSPIRE.
10.2.2 Occupational Safety and Health Act 1994

The Occupational Safety and Health Act 1994 was approved by the Parliament in
1993 and announced on 24 February 1994. It was established to overcome
weaknesses in the Factories and Machinery Act 1967 but not replace it. With this
Act recorded in writing, about seven million workers in all industries and sectors
are protected except for those in the army and working in the shipping industries
which are regulated by the Merchant Shipping Ordinance.

The following industries are protected by this Act, namely, manufacturing;

mining and quarry; construction, agriculture, forestry, and fishery; utilities
such as electricity, gas, water, and sanitary services; transportation, storage, and
communication; retail trading; hotel and restaurant; financial, insurance, property,
and business services; public services and statutory authority.
The main aim of this Act is to increase awareness and promote a safety and health
culture among all workers in Malaysia. The objectives of this Act are to:
 ensure the safety, health, and welfare of workers in the workplace;
 protect other individuals, apart from workers, in the workplace who are
exposed to risks from work activities;
 encourage a conducive work environment that meets the physiological and

physical needs of the workers; and
 ensure that the organisation maintains or fixes the standards of safety and
health by implementing rules and industry practices that have been approved
and in accordance with the provisions of the Act.
Some of the provisions in this Act include the need to form the National Council
for Occupational Safety and Health and provisions that set the duties of the
employer and the self-employed, designer, manufacturer, supplier, and workers.
(a) National Council for Occupational Safety and Health

The National Council for Occupational Safety and Health is an advisory
body which comprises 12 to 15 members appointed by the Ministry of
Human Resources. Similar to other bodies involved in an occupational
relationship, this council comprises the following parties:
 three members from the organisation that represents the employer;
 three members from the organisation that represents the workers;
 three members or more from the ministry or department responsible for

occupational safety and health; and
 three or more members from the organisation or professional bodies

related to occupational safety and health and at least one of them must
be a woman.

Members of the council are required to carry out investigations when

requested by the Minister of Human Resources, submit reports, and give
suggestions on any cases related to occupational safety and health. The
yearly report has to be submitted to the Human Resources Minister by 30
June each year.
In sum, council members need to meet from time to time to discuss and make
suggestions on issues related to:
 changes that are relevant to the Occupational Safety and Health Act;
 ways to improve administration and enforce the Act;
 ways to foster cooperation between employers and employees regarding

the safety, health, and welfare of employees in the workplace;
 safety, health and welfare problems encountered by women, people with

disabilities, and other groups in society;
 formulating suitable methods to control the use of chemicals in the

workplace;
 analysing statistics regarding deaths and accidents;
 resources for health facilities at the workplace;
 ways to encourage forming codes of practice in relation to the safety,

health, and welfare of employees; and
 reviving plans and facilities to assist individuals injured while working.
(b) General Duty of the Employer and Self-employed

It is the responsibility of all employers and those who are self-employed to
ensure the safety, health, and welfare of themselves, their employees, and
other people in the vicinity during work hours. To achieve that aim,
employers need to provide safe occupational surroundings which does not
threaten employeesÊ health. According to the Act, employers are responsible
for the following:
 managing and maintaining the plant to ensure a safe work system

without any risk hazard;

 making sure the usage or operational handling, storage, and

transportation of materials are safe without any health risk;
 providing sufficient information, instruction, training, and supervision

to ensure safety and health at the workplace;
 maintaining safety at the workplace without risking health including

entry and exit to facilities; and
 maintaining workplace areas so that they are safe without risking health
by providing sufficient facilities for employeesÊ welfare.
Any employer who fails to follow these instructions will be fined not more
than RM50,000 or jailed for not more than 2 years or both.
Apart from that, employers are also responsible for formulating policies on
occupational safety and health in written form and informing all workers
about them. These policies are looked into frequently to ensure that they are
suitable for current conditions. However, there are a few weaknesses in the
Occupational Safety and Health Act 1994. It does not set out what is
important in the occupational safety and health policy or state in which
manner the policy needs to be conveyed to workers. This may cause the
organisation to be unable to carry out these responsibilities properly.
Employers who have more than 40 employees need to form an occupational

safety and health committee in their organisation. The functions of the
committee are to help implement a safe and healthy environment at the
workplace, explore the effectiveness of the programmes, give suggestions on
any changes in order to improve the situation, and carry out inspections once
every 3 months.
ACTIVITY 10.4
In your opinion, why do many accidents still occur at the workplace even
though various precautions have been taken such as the enactment of
Acts and laws related to workersÊ safety and health? Share your thoughts
on the matter.

(c) General Duty of the Designer, Manufacturer, and Supplier

The responsibility to ensure employeesÊ safety and health also depends
on the designer, manufacturer, and supplier of the plant, machinery,
equipment, and materials used while working. Therefore, the Occupational
Safety and Health Act 1994 requires all designers, manufacturers, and
suppliers to:
 ensure that the plant or materials are safe without any risks to health
when being used;
 arrange for or carry out appropriate tests and examinations on the plant
or materials;
 provide sufficient information regarding the use of the plant or materials

so that it is safe without any risk to health if used properly;
 carry out research to prevent or minimise risks to safety or health that

might exist from the design of the plant; and
 ensure that the plant which has been built is safe for use.
Failure to obey these rules can cause the designer, manufacturer, or supplier
to be fined not more than RM20,000 or jailed not more than 2 years or both.
(d) General Duty of Workers

Besides employers, designers, manufacturers, and suppliers, you as an
employee are also responsible for ensuring your own safety and health.
There is no use for employers to provide various safety tools at the workplace
if these are not used. To make sure that everyone takes the responsibility to
maintain safety and health at the workplace, the Occupational Safety and
Health Act 1994 highlighted a few instructions which need to be followed by
employees:
 have the appropriate concentration while working to ensure the safety of

themselves and others;
 cooperate with employers or other persons who are given roles under the
Act and its regulations;

 use protective tools or wear protective attire; and
 obey any order on occupational safety and health measure listed in the
Act or its regulations.
Employees who fail to obey these rules will be fined not more than RM1,000
or jailed not more than 3 months or both.
EXERCISE 10.1
1. The Occupational Safety and Health Act 1994 was established to

replace the Factories and Machinery Act 1967.
2. One of the objectives of the Occupational Safety and Health Act

1994 is to encourage a work environment that is suitable for the
physiological and psychological needs of workers.
3. One criticism received about the Factories and Machinery Act 1967
was that it only protected those who work in farms.
4. One of the roles of the committee members of the National

Council for Occupational Safety and Health is to improve the
administration and implementation of OSHA 1994.
5. Employers that have more than 50 workers are required to establish

an occupational safety and health committee.
10.3 SAFETY AND HEALTH AT WORK
ACTIVITY 10.5
List a few types and causes of accidents at your workplace. Share and
compare your list with your coursemates.

Have you ever had a headache as a result of staring at the computer screen for too
long? Or have you ever seen a friend injured because he was crushed by a heavy
thing? These are examples of accidents that can happen while we work, according
to Aini Hayati (in Faizuniah et al., 2002)
Safety towards danger is an occupational aspect that has the potential to cause
injuries (such as sudden loss of sight, loss of fingers or hands, fall from a building)
or death to workers at a fast rate. Usually, safety towards danger is related to tools
or machines that are not safe to be used, unsafe work environments, and exposure
to dangerous chemicals.
Health towards danger refers to occupational aspects that can have negative
effects on employeesÊ health gradually. Continuous stress caused by workloads,
becoming deaf because of exposure to a noisy work environment, and having chest
pain and blurry eyes because of exposure to chemicals are some examples of
emotional and physical illnesses caused by work.
Next, we will look at a few safety and health categories regarding danger at the
workplace such as accidents, the danger of chemicals, air quality in buildings,
video screen terminals, and repetitive injuries.
10.3.1 Accidents at the Workplace

In September 1996, the government launched a „Towards a Safe and Healthy
Working Culture‰ campaign to increase awareness among employers, employees,
and societies regarding safety at the workplace. Even though the rate of accidents
at the workplace has decreased since 1997, the number is still quite worrying.
ACTIVITY 10.6
Visit http://www.perkeso.gov.my/ for information on the following:
 the objective of establishing SOCSO
 the sector with the highest rate of accidents in 2018
 the amount of compensation paid by SOCSO in 2018

Generally, accidents at the workplace can be caused by the characteristics of the

work, the workers, employers, and the environment, as listed in Table 10.1.
Table 10.1: Causes of Accidents at the Workplace
Cause Example
Occupation  Damaged machines ă unable to work properly

 Obsolete ă unable to work properly
 Dangerous occupation ă for example, working in an underground
tunnel, exposed to dangerous chemicals
Workers  Not focused on their work

 Playful
 Drink alcohol or take drugs
 Make mistakes or miscalculations when analysing moving objects
 Lack experience
 Too confident because they have experience
 Have poor sight and hearing
 Inexperienced in handling tools ă no training
 Break safety instructions such as not wearing goggles
 Age: too young (clumsy) or too old (careless or incompetent)
 Have personal problems ă cannot give full attention to work
Environment  Exposure to high temperature, electrical equipment, and chemicals.

 Environment is too noisy
 Exposed to smoke and dust
 Infection
Employer  Provide poor supervision

 Do not provide safety tools or gadgets for employees
 Do not provide training to employees on how to use safety tools
 Do not implement safety rules and policy strictly
Adapted from Faizuniah Panggil et al. (2002)

These problems can be overcome if every person plays his or her role. The objective
of ensuring zero accidents cannot be achieved if workers do not use the safety
gadgets provided by employers or employers do not take action if employees
lodge complaints about damage to the safety gadgets provided.
Table 10.2 shows a few examples of roles that can be played by employers,
employees, trade unions, and the occupational safety and health committee in
minimising accidents at the workplace.
Table 10.2: Role of the Responsible Agent in Reducing Accidents at the Workplace
Responsible
Role
Agent
Employer  Formulate a health and safety policy.

 Apply all the rules and procedures that have been laid down.
 Conduct an investigation immediately when an accident has
occurred.
 Provide private safety equipment such as helmets and gloves.
 Hold safety campaigns from time to time.
 Make sure the work environment is safe.
 Maintain a safe work system.
 Create a procedure for reporting and investigating accidents.
 Form and hold safety practices.
 Select efficient workers.
 Establish an incentive system. Reward employees or departments
who can avoid accidents.
 Provide safety attire and equipment.
 Establish areas where certain work are not allowed such as a
„danger zone‰.
 Provide clear warnings such as „CAUTION‰ and „NON-
SMOKING ZONE‰.
 Provide leave and appropriate rest to workers who need extra rest.
 Get input regarding problems from workers.
 Get feedback from employees after an accident has happened.

Employee  Obey all the rules and procedures regarding safety.

 Cooperate with the employer (self regulation).
 Form a „safety at workplace‰ attitude.
 Immediately report if machines or tools are damaged.
 Do not use any damaged tools that can endanger employee safety.
Trade Union  Voice out the rights of employees to the management. If all this
while the effort is more on increasing incentives, then the focus
now should be on the safety and health of the employees.
 Be involved as a workersÊ representative in the health and safety
committee.
Health and  Section 30(a) of the Occupational Safety and Health Act 1994 states
Safety that it is compulsory for a company with 40 or more employees to
Committee form a health and safety work committee. This committee is to
study all the steps to ensure the safety of workers at the workplace.
Adapted from Faizuniah Panggil et al. (2002)
10.3.2 Risk of Chemical Substances

Why do many of us not realise the danger we put ourselves in when we are
exposed to chemical substances on a regular basis?
The negative effects of the chemicals will not be immediately visible. The effects
will be visible when it becomes a chronic disease. See Table 10.3 to understand
how serious the effects can be for some people.
Table 10.3: Ten Types of Dangers at the Workplace
Potential Risk Diseases
Arsenic Lung cancer, lymphoma

Asbestos White lung disease, lung cancer, and other organ
cancers
Benzene Leukaemia, aplastic anaemia
Bichloromethylether (BCME) Lung cancer
Coal dust Black lung disease
Emission from coke oven Lung and kidney cancer

Cotton dust Brown lung disease, bronchitis, and emphysema

Lead Kidney disease, anaemia, malfunction of the main
system, and abnormality
Radiation Thyroid cancer, lung and bone cancer, leukaemia,
effect on productivity (miscarriage or genetic damage)
Vinyl Cloride Lung and brain cancer
Adapted from Byars and Rue (2000)
The Malaysian government is aware of the risks posed by certain chemical

substances. It provided an order in the Occupational Safety and Health Act 1994
which prohibits the use of materials such as benzene, benzidine, crocidolite,
carbon disulfide, white phosphorus, and other chemical substances that are
dangerous to safety at the workplace. This Act has been enforced since 2 August
1999.
Other than that, the Occupational Safety and Health Act 1994 also contains the
rules to classify, package, and label chemical substances and determine the use and
exposure of dangerous chemical substances.
10.3.3 Air Quality in the Building
ACTIVITY 10.7
Is the air in your work area good? If not, what are the factors that
contribute to the air quality in your workplace? Discuss.
In order to save energy, the construction techniques for commercial buildings were
changed to increase the effects of heating power, air, and air-conditioning systems.
These included reducing the outflow of air by closing entire windows and any
holes in the building. As a result, many workers experience the sick building
syndrome or lack of fresh air. This syndrome causes itchiness on the eyes, ears,
throat, and skin (Bohlander et al., 2009).

Workers in closed buildings are also easily exposed to air pollution due to a bad
airflow system. According to a research by the National Institute of Occupational
Safety and Health in the United States, air pollution in buildings is due to cigarette
smoke and emission from office equipment such as ozone, hydrocarbon from
computers, photocopy machines, laser printers, and fax machines. Dust from
carpets, paper, and wood are among the contributors, too (OÂConnell & Motavalli,
1995; Bohlander et al., 2009).
To overcome the lack of fresh air in buildings, the American Lung Association
made four recommendations: remove cigarette smoke with good airflow, prevent
workers from smoking in air-conditioned rooms, supervise the airflow system
frequently, and remove sources of pollution from the buildings (Bohlander et al.,
2009).
ACTIVITY 10.8
Is it safe to use computers in our daily work? In your opinion, what is

the problem caused by using a computer for a long time? Read up
on ergonomics at the workplace and share your findings with your
coursemates.
10.3.4 Video Terminal Appearance

In order to keep up with current technological developments, organisations make
full use of computers in their daily operations. However, the wide usage of
computers is a cause for worry among employees due to the dangers posed by the
computer monitor. Usage of computers for long periods can cause the following
problems:
 vision problems such as weakening of vision, eye strain, and itchy eyes;
 radiation which leads to cataract formation in eyes and pregnancy problems

such as miscarriage and abnormality due to high exposure to radiation (video
terminal display);

 muscle pain (back, neck, and shoulders); and
 work stress due to pressure, bad posture, noise, lack of practice, workload, and
routine.
Dr James Sheddy, as quoted in Bohlander et al. (2009), gave the following advice
to minimise the negative effects of using computers:
 Place the monitor in line with the eye vision level and at about 10 to 20cm away
from the eyes.
 Sit on an adjustable chair, adjust the height according to preference, and use a
copyholder attached to the computer or desk.
 Use suitable screen light which is not harmful to the eyes.
 Use screen shades to reduce light from the window to the screen.
10.3.5 Injuries of Frequent Movement

Repetitive motion injuries or cumulative trauma disorder are usually experienced
by workers who perform repetitive actions such as finger and hand movements.
They include butchers, fish cutters, chefs, textile workers, violin players, stewards,
and stewardesses.
One of the injuries is carpal tunnel syndrome. The carpal tunnel involves the hand
bones known as the carpal. These bones form a tunnel full of flexible tendons
(Ivancevich, 2006). According to research by NIOSH, the carpal tunnel syndrome
is related to industrial sectors involved in cutting, forming, sewing, and cleaning.
One way to avoid these injuries is by providing a good work environment in line
with the physical needs of the workers, which is known as ergonomics. This term
originated from the Greek words ergon which means work and omics which
means management of something (Mathis & Jackson, 2000). An ergonomist studies
aspects of work physiology, psychology, and engineering such as fatigue, lighting,
equipment, and control.

An ergonomic study is important for the following reasons:
 The employer can use the results of the study to provide a more conducive
work environment such as by providing chairs, shoes, desks, and any other
suitable equipment for the employees according to their size and height.
 The employer can adjust the room temperature, lighting, and level of noise so
that these do not affect the employeesÊ performance.
 The employer can focus on providing personal space. Small or packed spaces
lead to stress and cause health problems to workers.
EXERCISE 10.2
1. One of the causes of accidents at the workplace is machinery

failure.
2. Continuous stress felt by employees is one of the examples of

workersÊ safety.
3. The manufacturing sector has the highest number of accidents.
4. The effects of chemical substances are immediately visible.
5. The carpal tunnel syndrome is caused by continuous injuries and

cumulative trauma injuries.
10.4 ISSUES RELATED TO SAFETY AND

HEALTH
After understanding occupational safety and health hazards at the workplace, we
are going to look at some of the issues related to occupational safety and health.

10.4.1 Violent and Dangerous Work Environment

Violence at the workplace can be moderate or serious. Moderate violence includes
vandalism, sabotage, fighting, violation of company rules, quarrels (with
customers, workmates or the supervisor), and theft. Serious violence includes
rape, murder, running amok, burning, and attacks.
Security guards or those involved in money exchange and valuable assets such as
bank tellers and cashiers are exposed to violence. Those who work until late at
night or in isolated places are also exposed to this type of risk.
Besides visible threats, workers also face hidden threats such as bullying by other
workmates which may progress to a more serious stage such as murder.
One example of hidden violence is sexual harassment. The number of sexual

harassment cases reported in Malaysia is low because not many of the victims
lodge a report. However, this does not mean sexual harassment is not serious.
Some steps can be taken to overcome violence at the workplace such as by vetting
workersÊ applications, and forming a basic procedure for safety at the workplace.
This procedure includes prohibiting workers from bringing in any weapons and
banning any practice that can pose a threat to the work environment.
10.4.2 Work Stress

Stress can be classified into three types: neustress, distress, and eustress (Schafer,
2000).
 Neustress is neutral pressure which does not bring any benefit or harm.
 Distress happens when there is too much or too little stimulation such as
overworrying, and becoming sad and angry easily.
 Eustress or positive stress refers to a moderate level of worry which drives a

person to do something.
Although stress has been proven to increase the productivity and creativity of
workers, negative stress or distress is one of the examples of occupational illness
that can lead to physical injuries, heart disease, bone aches, asthma, and gastric
problems. It is the main source of workersÊ disability (French, 1998).

According to Faizuniah, et al. (2002), these factors cause stress:
 unsettled conflicts;
 high expectations set by leaders or managers;
 disturbance by other workers;
 too many responsibilities;
 stiff competition among employees;
 short time span to complete tasks;
 failure to control the sources of stress e.g. finances;
 lack of control in the job and role conflicts; and
 unrealistic goals.
A few steps can be taken to reduce the negative effects of pressure. These are as
follows:
 Have a good relationship with other employees.
 Openly voice out feelings or problems to the supervisor or workmates.
 Get ready to face any changes in the future.
 Do not perform something that is beyond your ability.
 Set realistic deadlines which are easy to reach.
 Take quick action to solve problems before they become worse.
 Stop for a while or rest before continuing work to avoid boredom.
SELF-CHECK 10.1
Have you ever felt stressed? What factors led to your stress?

10.4.3 HIV/AIDS at the Workplace

How would you react if you were to find out that a workmate is HIV positive?
Would you stay away from the person out of fear that you would get infected or
would you behave as usual? If you were an employer, how would you react if one
of your employees were HIV positive? Would you fire or help the worker in
dealing with this affliction?
Whatever action you take, the important question is: Do you understand what
HIV/AIDS is and its implications on workers, the job, and the surroundings?
AIDS is a condition whereby the bodyÊs immune system becomes weak or is

destroyed and the afflicted person cannot fight the disease. According to statistics
received from the Ministry of Health, after the first cases were reported in 1986
until the end of December 2008, a total of 84,630 Malaysian citizens had tested
positive for HIV. Out of this number, 11,234 died. These figures increase every
year.
Most people living with HIV/AIDS isolate themselves from society out of
embarrassment and fear of discrimination by family members and society. They
fear losing their jobs because awareness of this disease among employers is still
low.
According to a DOSH research in 154 factories, most employers stated that

HIV/AIDS:
 would not have a great impact on business, productivity, expenses, health care,
and absence at the workplace;
 has not affected the work field;
 is only contracted by non-expert and lowly educated employees; and
 is not an issue for organisations but the country.
Although there is no specific provision in the Occupational Health and Safety Act
1994 with regard to AIDS, Section 15(1) stated, „It can be assured that the employer
is responsible to take care of workersÊ welfare from any HIV infection, and at the
same time, responsible to take care of them no matter what health condition they
are in.‰

Unfortunately, the worries and misconceptions of employers and employees

towards people living with HIV/AIDS have obstructed efforts to create a safe
work environment. Geotsch (1996) suggested three solutions to help employers in
handling the problem:
(a) Through Education

Educational programmes can be organised by occupational safety and health
professionals with support from employers to increase awareness of AIDS
for all employees. These programmes can explain the disease, the risks, and
how a person can be infected. This can help employees to be more aware of
this disease and learn how to deal with it.
(b) Formulating an AIDS-Related Policy

Although AIDS has proven to have a negative effect on the work
environment, minimal steps have been taken to overcome it. While
discussing how American companies handle this problem, Minetos (1998)
found that only 5% of all employers have a written corporate policy on AIDS.
Malaysia should take this matter seriously.
(c) Protecting Employees from AIDS

Employees involved in handling blood or any bodily fluid are likely to be
exposed to the danger of AIDS infection. Therefore, they require adequate
training before they start working. The employers should also provide
enough equipment and tools to prevent employees from being exposed to
injuries.
10.5 FORMING A SAFE AND HEALTHY WORK

ENVIRONMENT
A safe and healthy work environment is important to an organisation. It increases
employeesÊ productivity and has a positive effect on the organisation especially in
terms of reducing costs related to accidents and compensation. To have a safe
and healthy work environment, a few steps can be taken, such as by requesting
workers to help in organising safety and health programmes.

10.5.1 Employee Aid Programme

One way employers can improve the occupational safety and health environment
is by creating an Employee Aid Programme (EAP). According to Cunningham
in French (1998), the EAP provides direct services to workers who have many
personal or work problems.
Under this programme, employees who face problems such as alcohol or drug
addiction, stress, human relationship problems (usually between workers and
supervisors), family and marital problems, and financial problems are provided
with counselling.
The EAP also provides services like career counselling, education on AIDS and
health, and counselling on mental stress, as well as counselling for employees who
are going to retire or be terminated (Mathis & Jackson, 2000).
10.5.2 Safety Programmes

Employers can create a safe work environment through careful safety planning.
Although most programmes conducted by organisations focus on accidents, the
main objective is to make sure that employees always prioritise their safety while
working.
Generally, the human resource department is responsible for conducting safety

programmes. However, the success of these programmes depend on the
commitment given by top management and managers. EmployeesÊ focus on the
importance of safety while working also contributes to the success. The human
resource department only acts as a programme administrator, supervises safety
records, and collaborates with managers and supervisors to ensure the success of
the programmes.
In promoting a safe work culture, an employer can do many things, such as:
 making the work as interesting as possible. Uninteresting work will make

workers feel bored and tired easily, which will lead to accidents;
 forming a safety committee which includes representatives from the employer

and employees. The responsibility of this committee is to check, supervise
work, investigate accidents and make recommendations to overcome a
problem;

 displaying safety statistics such as a monthly report on the noticeboard or in

the monthly bulletin for workers to remind them of the importance of safety at
the workplace;
 using a notice board in the organisation to promote a safe work culture;
 encouraging workers and supervisors to practise a safe work culture. The

employer needs to recognise every positive action taken by workers in
maintaining a safe way of working by providing rewards; and
 organising meetings and safety training from time to time.
Gomez-Mejia et al. (2013) suggested the following steps to increase workplace

safety:
 Form a safety committee which comprises every department in the

organisation. Encourage employees to take part in decision making on safety
issues and consider ideas contributed by employees to improve workplace
safety.
 Convey safety messages to employees through different media such as

lectures, films, posters, and brochures.
 Train supervisors on how to convey safety messages to employees and how to

handle safety tools so that they can train their subordinates.
 Use incentives, rewards, and positive reinforcement to encourage employees

to practise working safely. Offer rewards to employees who provide feedback
or suggestions on safety. Reward employees who maintain a good safety
record.
 Enforce safety rules and take action against employees who break or do not
follow safety rules.
 Deploy a safety director or committee to investigate and identify places in the

workplace that are not safe, find out why accidents happen, and find solutions
to overcome them.

ACTIVITY 10.9
Visit http://oshacc.dosh.gov.my/ and describe how employers can

estimate workplace accident costs and use the information to create
awareness on the importance of safety and health to their employees.
Create an estimation of your own for the industry you are in. Share and
compare your work with your coursemates in myINSPIRE.
10.5.3 Health Programme
ACTIVITY 10.10
In your opinion, why does a good health programme need to be held in

an organisation? Discuss.
Some organisations show concern for their employeesÊ health by organising

programmes such as exercises, healthy diet campaigns, and football/netball/
badminton matches. They help employees monitor weight problems and avoid
things that are harmful to health. These organisations provide facilities such as a
gymnasium and exercise classes. Organisations that wish to conduct a health
programme can start it with the following steps:
 Organise health assessment sessions for high-risk employees.
 Identify illnesses that incur large medical expenses.
 Include family members and those who had retired in the health programme.
 Seek advice from food technologists regarding healthy ways of eating.
 Prohibit smoking at the workplace.
 Obtain discount prices from health clubs to encourage employees to join and
enjoy the facilities.
 Start a health bulletin.

EXERCISE 10.3
1. Burnout is one of the service illnesses that is closely related to

HIV/AIDS.
2. Sexual harassment and bullying are two examples of concealed

threats at the workplace.
3. According to a DOSH research, employers in Malaysia have a high

awareness of the HIV/AIDS issue.
4. One of the problems tackled by a workers aid programme is

financial problem.
5. Displaying the figure of accidents at the workplace can help

employers to promote a culture of working safely.
1. The Occupational Safety and Health Act 1994 obligates the

establishment of a committee of safety and health if there are:
A. 50 workers or more
B. 40 workers or more
C. 75 workers or more
D. 100 workers or more
2. A condition caused by injury to the wrist is known as:

A. carpal tunnel syndrome
B. repetitive stress injury
C. cumulative trauma disorder
D. all of the above are true
3. Which of the following is NOT workersÊ responsibility towards

safety and health?
A. Obey all standards set by the Occupational Safety and Health
Act
B. Report any dangerous situation
C. Obey all safety and health rules set by employers
D. Use discretion in handling safety tools

4. _________ is related to the protection of workers from injuries or

accidents caused by work.
A. Health
B. Trauma
C. Safety
D. Disability
5. The __________ syndrome can be caused by cigarette smoke and

emissions from office equipment such as ozone and hydrocarbon
produced by computers, photocopy machines, laser printers, and
fax machines, and also dust from carpets, paper, and wood.
A. carpal tunnel
B. sick building
C. ergonomics
D. burnout
Essay Questions
1. If you were given the responsibility of promoting a safe work

culture at your workplace, what steps would you take?
2. State five ways an employer can reduce accidents at the workplace.
Ć Workplace safety and health is everybodyÊs concern. Therefore, everyone has

to be responsible in ensuring that a workplace is safe and does not cause any
illness.
Ć The varied aspects of safety and health are the reasons for the Occupational
Safety and Health Act 1994 to exists. The Act specifies the responsibilities
of employers, the self-employed, workers, designers, manufacturers, and
suppliers in ensuring a safe and healthy workplace.

Carpal tunnel Neustress

Distress Occupational accidents
Ergonomics Occupational safety and health
Eustress Safety
Health Work stress
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Maimunah Aminuddin (1999). Malaysian industrial relations and employment

law. McGraw-Hill.
Mathis, R. L., & Jackson, J. H. (2000). Human resource management (9th ed.).
South-Western Thomson Learning.
Minetos, P. (1998). Corporate America vs AIDS. Safety & Health, 158(6), 38.
Schafer, W. (2000). Stress management for wellness (4th ed.). Harcourt College
Publishers.

ANSWERS  259
Answers
TOPIC 1: INTRODUCTION TO HUMAN
RESOURCE MANAGEMENT
Exercise 1.1
1. Human resource management consists of philosophies, policies, programmes,
practices, and decisions related to employee management in an organisation.
2.
Human Resource Management Personnel Management
Handles macro issues Handles micro issues
Planned and long term Ad-hoc and short term
Proactive Reactive
Involves ongoing strategies to manage More administrative in nature

and develop an organisationÊs workforce
Reports to the Chief Executive Officer Reports to the line manager
Plays a role in decision making Plays no role in decision making
Acts as a change catalyst Maintains status quo
Facilitates an organisationÊs positive Does not take into account the effects
culture of culture
Exercise 1.2
The five main roles of the human resource management department are planner,
facilitator, coordinator, auditor, and mediator.
Elaborate based on explanation in Subtopic 1.2.1.

260  ANSWERS
Exercise 1.3
1. D
2. A
3. D
4. C
5. C
Essay Questions
1. Globalisation, challenges in technology, managing change, human resource

development, market reaction, cost reduction, economic climate, and legal
system (any six of these).
2. Part-time job, work sharing, maternity leave, flexible working hours, child
nursing leave, and telecommunication services.
(Any four of the above)
3. Employees nowadays value lifestyle satisfaction which can be achieved

by balancing challenges and rewards rather than the relationship between
work and lifestyle. They are also more attracted to interesting jobs and
opportunities to develop themselves through the tasks offered to them. This
change has prompted human resource management to come up with ways
to manage and motivate employees. Consequently, the roles of human
resource management are becoming more complex as opposed to previous
situations whereby employees were only concerned about the economic
value of their jobs to support their families.
4.  Helping the organisation achieve its targets
 Fully utilising the skills and abilities of the workforce
 Providing the organisation with trained and motivated employees
 Increasing employeesÊ job satisfaction

ANSWERS  261
 Developing and maintaining the quality of the employeesÊ work

environment
 Delivering human resource management policy to every employee
 Helping to maintain social responsibility and ethical conduct
 Managing changes to benefit employees and the organisation
(Any five of the above)
TOPIC 2: LEGAL ENVIRONMENT
Exercise 2.1
1. The payment fee cannot be later than the seventh day after the last day of the
payment period.
2. 6 weeks
3. 60 days
4. No. The Employment Act 1955 prohibits employers from setting conditions
on how employees spend their earnings.
Exercise 2.2
1. After receiving the application, the management must take these actions
within 21 days:
 give recognition; or
 reject the application and present the reasons in writing; and
 upon recognition, notify the Director-General.
2. 14 days

262  ANSWERS
Exercise 2.3
1. True
2. True
3. False
4. False
Exercise 2.4
1. Among the objectives of this Act are to:
 ensure the safety, health, and welfare of employees at the workplace;
 protect others who are present at the workplace from any accidents that
might be triggered by workersÊ activities;
 ensure that the work environment is conducive; and
 enable related legalities be replaced in stages by industrial rules and

regulations which are approved and practised by all in order to maintain
and increase the standard of safety and health at the workplace.
2. Forty or more employees are working at the workplace or if ordered by the

Director-General.
Exercise 2.5
1. 2,000
2. 0.5% of the employeeÊs salary
Exercise 2.6
1. Under this Act, the Human Resource Development Fund must be spent on:
 encouraging development and growth of employeesÊ skills by designing,

developing, increasing, and monitoring training amenities;
 preparing financial aid through loans or subsidies to employers to train

or re-train their employees;

ANSWERS  263
 organising or implementing activities or programmes aimed at

re-training employees who have been or will be laid off due to
downsizing;
 bearing the cost of managing the Human Resource Development Council,

including payments and allowances for council officers; and
 bearing any administration costs for the Fund and the cost of
implementing the Act.
2. The functions of the Human Resource Development Council are:
 evaluating and determining the types or levels of training that are in line
with the industryÊs human resource needs;
 increasing manpower training; and
 establishing conditions for loans or financial aid.
Exercise 2.7
Effective from 1 January 2007, the contributorÊs account is divided into two,
Account 1 and Account 2. All contributions are divided into the two accounts
according to fixed percentages, namely, 70% into Account 1 and 30% into Account 2.
These accounts are created for different purposes and different types of
withdrawals are applicable for each account, as follows:
(a) Account 1
The savings here are for retirement and cannot be fully withdrawn before an
employee reaches the age of 55, passes away, loses capacity, or intends to
leave Malaysia permanently.
(b) Account 2
The savings in this account are meant to help employees prepare for a
comfortable retirement. Withdrawals are allowed in these cases:
 an employee reaches the age of 50 years;
 to own a house or make a downpayment on a first house;
 to settle a housing loan for a first house;
 to finance own or childrenÊs education; and
 to pay own or childrenÊs medical expenses.

264  ANSWERS
Exercise 2.8
Fill in the Blanks
1. 12
2. 48
1. C
2. B
3. C
4. A
5. C
6. D
Essay Questions
1. Amin is not entitled to normal medical leave because he has used up

all the sick leave given to him.
2. National Day, Birthday of the Yang di-Pertuan Agong, Birthdays of the

Sultan and Yang di-Pertuan Negeri or Federal Territory Day, and Labour
Day.
3. Weekly leave, medical leave, annual leave, and public holidays.
4. No. Only employees with a salary of not more than RM3,000.
5. There are two protection schemes, which are:
 Employment Injury Insurance Scheme

This scheme protects employees from disasters at work including
industrial accidents, accidents that occur during business-related travels,
and service illnesses, which are illnesses caused by employment. Only
employers are required to make monthly contributions for every
employee at a rate of 1.25% of their monthly salaries.

ANSWERS  265
 Invalidity Pension Scheme

This scheme gives 24-hour protection to employees against accidents
or fatalities without considering the cause. The management must
contribute 0.5% of the employeeÊs salary, and employees must contribute
0.5% of their salary.
TOPIC 3: HUMAN RESOURCE PLANNING, JOB

ANALYSIS AND JOB DESIGN
Exercise 3.1
1. True
2. False
3. True
4. True
5. False
Exercise 3.2
1. True
2. False
3. True
4. True
5. False
Exercise 3.3
1. True
2. True
3. True
4. False

266  ANSWERS
Exercise 3.4
True (T) or False (F) Statement
1. True
2. False
3. True
4. True
5. True
Match the Concepts to the Suitable Statements
1. E
2. D
3. F
4. B
5. A
6. C
1. A
2. B
3. A
4. D
5. D
6. B

ANSWERS  267
Essay Questions
1. Job requirements that are formally written help managers in almost every
aspect of employee management. By understanding job requirements,
managers can select, orientate, and train employees to further succeed in
their tasks. An accurate job requirement has to follow rules and regulations
and be related to the job. Thus, managers have a valid reason in making
decisions while evaluating employees in the performance evaluation process.
Industrial engineering involves the process of analysing and designing jobs

based on a specific work cycle and standard working hours. An industrial
engineer may design a specific job to increase efficiency and simplify ways
but ignore human factors. Ergonomics, on the other hand, focuses on human
characteristics suitability with job requirements. Ergonomics may provide a
job that may not be viewed as efficient from the aspect of industrial
engineering standard, but can increase human needs and employeesÊ job
satisfaction. When both parties cooperate, their disciplines can be combined
to achieve efficiency and job satisfaction.
Exercise 3.5
1. True
2. True
3. True
4. True
5. True
Exercise 3.6
1. True
2. True
3. False
4. True
5. True

268  ANSWERS
Exercise 3.7
1. True
2. True
3. False
4. True
5. True
1. D
2. B
3. A
4. C
1. A
2. D
3. D
4. D
Essay Questions
A quantitative approach is a top-to-bottom approach which fulfils management

needs. It is used by experts who are trained in statistical and mathematical
techniques. It is related to balancing demand and supply of human resources to
fulfil an organisationÊs objectives. A qualitative or behaviour-oriented approach is
a bottom-to-top approach which fulfilsÊ employeesÊ needs. It utilises forecasting
skills or those who are experts in counselling and development techniques, and
treats employees as individuals. It focuses on performance evaluation, promotion,
career and job management development. It attempts to balance interest, ability
and individual aspirations with the organisationÊs needs.

ANSWERS  269
TOPIC 4: EMPLOYEE RECRUITMENT
Exercise 4.1
1. True
2. False
3. True
4. True
5. False
Exercise 4.2
1. False
2. True
3. False
4. True
5. True
1. D
2. B
3. A
4. C

270  ANSWERS
1. A
2. D
3. D
4. D
Essay Questions
An organisation can engage in social media recruitment successfully by taking the

following steps:
 It can use social media as an extension of its recruitment strategies. Information

about recruitment on its website must be up to date and the website must be
capable of handling traffic visits.
 It must make sure that it has the resources to immediately engage the channels
created. This includes readiness to respond immediately and availability to
interact frequently.
 Social media recruitment relies heavily on content strategy. So the organisation

must spend a reasonable amount of time to work on the contents to ensure their
relevance to the intended recruitment.
 Employees who are in charge of social media recruitment must understand

applicantsÊ expectations, possess the right tone and communication style, types
of information that can be shared, and act within a given legal parameter.
 The organisation must choose a social media that suits the intended
recruitment. LinkedIn, for example, is one of the best recruitment platforms to
attract professional applicants.
 The organisationÊs social media pages should reflect its overall corporate
image. The organisation must be willing to spend some resources to hire a
designer or programmer.

ANSWERS  271
TOPIC 5: SELECTION
Exercise 5.1
1. False
2. True
3. True
4. True
5. False
Exercise 5.2
1. True
2. False
3. True
4. False
Exercise 5.3
Fill in the Blanks
1. A
2. B
3. C
4. D

272  ANSWERS
1. B
2. D
3. C
4. A
Essay Question
„Criterion‰ refers to the level at which selection tools are chosen and able to
forecast or correlate with the main elements of work behaviour. As examples, a
criterion for a sales job is sales figure and criteria for a production job are quality
and quantity of output.
TOPIC 6: EMPLOYEE TRAINING AND

DEVELOPMENT
Exercise 6.1
Organisations should provide training and development for their employees to:
 Increase Employee Productivity

Training and development can increase the productivity of employees by
enhancing their skills to perform current jobs.
 Increase Job Satisfaction

Training and development increase employeesÊ skills and knowledge, which
will help them to perform their jobs better. As a result, they will be satisfied
with their jobs.
 Update EmployeesÊ Knowledge to Always Be Ahead

Organisations need to provide training and development for their employees
when they use new equipment, introduce new procedures or rules and
regulations, promote an employee, respond to a changing business
environment, and employees are required to carry out new duties.
 Motivate Employees
Training and development allow hardworking employees to upskill and reskill
their existing competencies, thus motivating them to perform better at work.

ANSWERS  273
Exercise 6.2
1. True
2. False
3. False
4. True
Exercise 6.3
1. Low in cost.
2. No special tools or equipment are needed.
3. No space or special area are needed.
4. No full-time trainers are needed.
Exercise 6.4
True (T) or False (F) Statement
1. True
2. False
3. True
4. False
5. False
1. C
2. A
3. B
4. D
5. A

274  ANSWERS
Essay Questions
1. A trainer should use these techniques:
 divide the work into different parts;
 give an overall overview of the duties;
 show a part of the work to the trainees;
 allow the trainees to try what has been shown;
 rectify mistakes; and
 allow the trainees to self-train.
2. Best practices in conducting an online training are:
 determining an objective;
 sharing training materials used during the session;
 welcoming everyone;
 keeping the training slots short;
 encouraging everyone to participate; and
 recording the training session.
TOPIC 7: PERFORMANCE EVALUATION
Exercise 7.1
1. Performance evaluation is the process of identifying, observing, measuring,
and developing employeesÊ performance in an organisation or any
definitions such as those provided in Subtopic 6.1.
2. Six uses of performance evaluation from the administrative aspect:
 salary administration
 promotion
 decision to terminate or transfer employees

ANSWERS  275
 validating authority structure
 human resource planning
 documentation related to human resource decisions
2. Five reasons a performance evaluation process might fail to be implemented

successfully are:
 The supervisor or manager does not have sufficient information about the
employeesÊ real work performance.
 The standard of measuring performance is not clear.
 The supervisor or manager does not have the skills to evaluate employee
performance.
 The supervisor or manager is not prepared to evaluate employee

performance, as he or she does not want to be seen as a judge who is
giving out an unfair sentence.
 Employees do not receive constant performance feedback.
 The supervisor or manager is not sincere during the performance

evaluation process.
 The performance evaluation is not focused on employee development.
 The supervisor or manager uses language that is unclear to the employees

during the performance evaluation process.
 The employees feel that the organisation does not allocate sufficient
resources for performance rewards.
(Choose any five of the above)
Exercise 7.2
1. The main elements of an effective performance standard are:
 strategic relevance: The standard developed must be related to the

organisationÊs strategic objectives.

276  ANSWERS
 no criteria contamination: Such contamination happens when

uncontrollable external factors affect an employeeÊs performance.
 reliability: This refers to the consistency of a standard created, which is

how far an employee is able to sustain a specific performance level in a
particular period.
 no criteria deficiency: The development of a performance standard has to

consider all of an employeeÊs responsibilities. If the standard developed
only considers one aspect of a jobÊs responsibilities, criteria deficiency
occurs.
2. The key steps involved in the performance evaluation process are:
(a) Identifying Performance Evaluation Objectives

The performance evaluation process begins by developing performance
evaluation objectives. The development of objectives must be related to
the organisationÊs objectives so that there is work performance increase
by employees. For example, some organisationsÊ philosophy is to focus
on employee development aspects while other organisations focus on
administrative aspects such as salary standardisation.
(b) Developing Performance Standards

After the performance evaluation objectives are set, a standard
performance is developed. The purpose is to make comparison of real
work performance with the organisationÊs expected work performance
easier. Basically, performance standards must be developed based
on a particular workÊs requirements and these requirements result
from the job analysis. A good performance standard can translate
an organisationÊs strategic objectives to a particular work. Strategic
relevance, absence of criteria contamination, reliability. and absence
of criterion deficiency are the four important elements that must be
present when developing performance standards.
(c) Monitor Work Performance

After developing performance standards, the next step is to monitor
the employeesÊ work performance to ensure that it is in line with the
standards set. If the real performance shown by the employees deviates
far from the standards set, the standards must be re-analysed to ensure
that they are clear, attainable, measurable, and state the time period for
work to be carried out. An unclear standard must be altered so that
employees are able to carry out their duties effectively.

ANSWERS  277
(d) Evaluating Performance

Usually, at the end of the year, employee performance is evaluated to
ensure that the organisationÊs strategic objectives are achieved. The real
performance shown by employees will be compared to the standards
developed.
(e) Discussion on Performance

Employees and managers will review the formerÊs performance
together based on the standards set. A performance discussion will
determine how far an employee achieved the organisationÊs strategic
objectives, identify problems which hindered the achievement, and
find alternatives to solve the problems. This discussion will also include
developing objectives for the following year.
Exercise 7.3
The sources involved in evaluating employee performance are:
(a) Immediate supervisor: A traditional method which stresses that performance

evaluation must be done by an employeeÊs immediate supervisor. A
supervisor is the most suitable person to observe and evaluate employeesÊ
work performance, and is responsible for the management of the unit or
department.
(b) Self evaluation: If an employee understands the objectives that must be

achieved and is involved in the development of performance standards,
then he or she is qualified to evaluate himself or herself. This is because
the employee knows what has to be done and how to carry out the task
effectively.
(c) Subordinates: The most suitable people to evaluate managers are their
subordinates. This method is effective because the subordinates are the
best source to observe the effectiveness of their managers. Moreover, the
subordinates are always in contact with the managers. This type of
evaluation is more for the managersÊ self-development so that they can work
on their weaknesses.
(d) Peers: Peers can be an effective evaluation approach as peers often interact
with each other and are able to identify their colleaguesÊ strengths and
weaknesses. Peer evaluation can give accurate and valid input. However,
peer evaluation can create problems if used to give favours or seek revenge.

278  ANSWERS
(e) Customer evaluation: Customer satisfaction determines the success of an

organisation. Most organisations believe they should obtain input on
employee performance from customers. There are two types of customers,
internal and external. Internal customers are employees from a certain
department who depend on the output or other employeesÊ work results for
their input. External customers are people who use the products or services
produced by an organisation.
(f) 360-degree evaluation: An organisation may also use a 360-degree evaluation

method to assess its employees. This approach is very popular and an
alternative to the traditional method as the organisation gets complete
information about employee performance. Usually, an organisation uses this
method for employee development only.
Exercise 7.4
These are three main methods to evaluate employee performance:
(a) Trait Methods: These measure how far an employee is able to acquire certain
characteristics such as creativity, innovation, leadership, and dependency,
which are seen as important in carrying out oneÊs work. Some of the methods
that fall under this category are the graphic rating scale, essay method, and
forced choice scale.
(b) Behaviour Methods: These methods focus on behavioural aspects based on a

scale that illustrates certain behavioural descriptions. These descriptions
enable appraisers to identify employee performance based on certain
behaviours from weak to excellent. Some of the methods that fall under this
group are critical incident method, behavioural checklist and weighted
checklist, behaviourally anchored rating scale, and behaviour observation
scale.
(c) Results Methods: These methods enable supervisors to evaluate the results
achieved by employees. Therefore, these are more quantitative, objective,
and enable empowerment. This in turn will lessen bias. These methods stress
that employees are responsible for all the results achieved. There are two
techniques in this category, which are productivity measures and
management by objectives.

ANSWERS  279
Exercise 7.5
Appraisers often make these mistkaes in evaluating employees:
(a) Halo Effect: An appraiser conducts a total evaluation based on only one
aspect of performance. The appraiser sees the employee as being efficient in
all his or her work aspects when he or she is able to meet the quantity
required by the organisation.
(b) Central Tendency: An appraiser awards the same evaluation to all evaluated
employees. The appraiser gives an average evaluation to all employees to
maintain a good working relationship with everyone so that friction does not
occur.
(c) Recency Error: An appraiser focuses on work performance that is close to the
evaluation period as it is difficult to remember work performance at the
beginning of the year.
(d) Contrast Error: An appraiser compares an employeeÊs performance with that

of another colleague who has already been evaluated, and not based on set
standards.
(e) Leniency/Strictness Error: An appraiser commits leniency error by giving a

high value to an employee because the appraiser does not have the heart to
give a low rating. Strictness error happens when an appraiser awards a low
rating to an employee because the appraiser feels that none of the employees
deserve a high rating.
(f) Similar-to-Me Error: An appraiser gives a high rating to an employee for

having similar personal characteristics with the appraiser.
Exercise 7.6
1. C
2. D
3. B
4. D
5. B

280  ANSWERS
Essay Questions
1. The six roles of performance evaluation are as follows:
(a) Development: It determines which employees need training. This will

enhance the employee-supervisor relationship and encourage the
supervisor to contribute to the reinforcement process of employee
behaviour.
(b) Motivation: It encourages attempts, develops responsibilities, and

propels efforts towards improving performance.
(c) Human resource planning: It functions as valuable input to human

resource planning activities.
(d) Communication: It acts as a basis for discussion between the supervisor

and employees regarding work matters through daily interaction.
(e) Law abiding: It acts as a valid foundation for promotions, transfers,

rewards, and employee terminations.
(f) Human resource management research: It verifies methods or

techniques used in human resource management activities. For
example, during the selection activity, improving or selecting the
effective selection test.
2. Meaning of terms:
(a) Strategic relevance means the standard developed must be related to

an organisationÊs strategic objectives.
(b) Criteria contamination happens when there are uncontrollable external

factors which affect employee performance.
(c) Criteria deficiency happens if a standard considers only one aspect of a

jobÊs responsibilities: The development of a performance standard must
consider all aspects of an employeeÊs responsibilities.

ANSWERS  281
3. Preparations that need to be made by a manager before a performance

interview process are as follows:
The supervisor needs to inform employees about the interview date so that
the employees have an opportunity to re-examine their job description,
analyse any problems they faced, and compare their real performance with
the set standards.
The supervisor needs to collect information on the employees whose work

performance is being evaluated, study the job description of every employee
to ensure they are still correct, read the performance report to identify
matters that need to be focused on, compare their real performance with the
set performance standards, list matters that need to be discussed, and ensure
that the time allocated is sufficient and no disturbance occurs during the
interview process.
TOPIC 8: EMPLOYEE COMPENSATION
Exercise 8.1
An organisation can offer these two types of rewards to its employees:
(a) Monetary Rewards
 A direct monetary reward in the form of cash, salary, commission, or

bonus
 An indirect monetary reward in the form of benefits such as insurance,

annual leave, medical leave, flexible working hours, or others.
(b) Non-Monetary Rewards
 Non-monetary rewards from the work aspects are interesting job

scope, challenging work responsibilities, acknowledgement, and career
development.
 Non-monetary rewards from the work environment aspects are good

policies and practices, competent supervisors, congenial colleagues, and
a safe and healthy work environment.

282  ANSWERS
Exercise 8.2
Compensation fairness is when employees perceive that they have received fair
payment from their employers. There are three types of compensation fairness,
which are:
 Internal equity refers to a systematic method, done through job evaluation, to

determine the relative value of a job in comparison with other jobs to ensure
that different jobs are given different wage rates.
 External equity refers to an employeeÊs perceived compensation treatment

received from an employer compared to compensation treatment provided by
other organisations for the same job.
 Individual equity refers to fairness in determining wages for employees in the

same position.
Exercise 8.3
A management carries out incentive plans for these reasons:
(Choose any two of the following reasons)
 Incentives enable an employee to focus on his or her specific job performance

target. It motivates the employee and produces a satisfactory result.
 Incentives are variable costs that can be related to results achievement, which
encourage increase in output.
 Incentives can be directly related to operational achievement whereby if a

performance objective is met, incentives will be given. If employees fail to fulfil
a performance objective, no incentives will be given.
 Incentives encourage employees to work as a team and increase dependency

as payment for individuals depend on group achievement.
 Incentives encourage success sharing among those involved in achieving the

performance.

ANSWERS  283
Exercise 8.4
1. Maturity curve or career curve.
2. Through the standard hour plan, the rate of incentive is based on the
standard time set by the organisation to complete a particular task without
taking into account the actual time taken by the employee to complete the
task. If the employee is able to complete the task in less than the standard
time, the employee is still paid an incentive based on the standard time. This
plan is suitable for jobs or operations that need a lot of time to be completed.
Exercise 8.5
The five characteristics of an effective benefit programme are as follows:
 have a specific objective;
 allow input from employees;
 redesign employee benefits;
 flexible planning; and
 convey information about benefits to employees.
Exercise 8.6
A mandated benefits programme is a benefit set by the labour system. It is the most
minimum allotment on employee rights and has to be provided by employers.
Examples of mandated benefits are payment for time off and maternity leave
protection.
Non-mandated benefits are benefits offered by employers to employees

voluntarily and without force. Examples of non-mandated benefits are
transportation services, healthcare insurance, and children day care centre.

284  ANSWERS
Exercise 8.7
1. B
2. D
3. C
4. C
5. A
Essay Questions
1. The two key challenges faced by human resource managers in developing an

effective salary structure are:
(a) Influence of equity on wage rate: External factors take into account the
similarities between an established wage rate and other organisationsÊ
wage rate to attract and retain capable employees. Internal factors stress
on fair wages where an employee compares his or her wage with the
wage rate of a colleague in the organisation.
(b) Wage assurance: Various compensation plans have to be developed to

create wage payment assurance, including basic salary assurance,
service allowance or living expenses, and other financial benefits that
need to be increased from time to time, such as housing allowance. The
wage rate has to be regularly revised so that a basic salary is increased
when living costs increase.
2. Compensation is all forms of financial benefits and rewards as well as clear

and apparent services which are accepted by employees as part of work
relations.
3. The factors that need to be considered in developing a compensation

administration policy are as follows:
 focus on business objectives and strategies;
 attract and retain competent, motivated, and qualified employees;
 encompass organisational reward principles and philosophies;

ANSWERS  285
 prepare a wage allocation outline;
 strengthen the values and culture desired by the organisation; and
 be communicated to all employees.
4. Individual equity refers to fairness in determining wage payment for

employees in the same position. Individual equity takes into account issues
such as experience, seniority of service, and performance.
5. Choose any three of the following:
 insurance scheme
 healthcare
 employee aid programme
 children day care centre
 food service
 transportation service
 education amenities
 loan amenities
TOPIC 9: EMPLOYEE RELATIONS
Exercise 9.1
1. False
2. True
3. True
4. False
5. False

286  ANSWERS
Exercise 9.2
1. False
2. True
3. True
4. False
5. True
Exercise 9.3
1. True
2. False
3. False
4. False
5. True
Exercise 9.4
1. False
2. True
3. True
4. False
5. False

ANSWERS  287
1. C
2. C
3. B
4. B
Essay Questions
1. The hot stove method utilises the warning system and is immediate,
consistent, and not private. Workers are usually informed about the types of
punishment they will receive if they make mistakes before a problem arises.
If they are found guilty, punishment is immediately carried out so that they
can see the cause and effect of the mistakes made. The implementation of
punishment is consistent whereby workers who make the same mistake
receive the same punishment. This method is not personal, which means the
discipline action taken is not aimed at the workers but more at finding
solutions to unpleasant behavioural problems.
2. The important things to consider in planning disciplinary rules and laws

include:
 Distributing to all workers and not assuming that they know them;
 Investigate them again from time to time;
 Explain reasons for each rule;
 Provide them in written form;
 Ensure that they are logical;
 Implement them and given warnings;
 Get the workersÊ signatures to make sure they have read and understood
the rules set.
3. An in-house trade union has these weaknesses:
 It has limited membership and focuses on employees in one company only,

so it is not very strong;

288  ANSWERS
 Its leader can be easily exploited by the employer because selection is

made by union members whose numbers are limited;
 It has limited financial resources so it is difficult to carry out union

activities;
 Its leaders worry about being victimised in promotion, retrenchment,

transfer, and distribution of responsibilities, which are set by the
employer; and
 It cannot provide many benefits to its members due to its limited number
of members.
4. Some strikes are considered illegal because:
 they are on questions pertaining to the recognition of a trade union;
 they are on matters contained in the collective agreement, which have

been given cognisance by the Industrial Court;
 they are on management matters related to employee hiring, transfer,

promotion, termination, and job distribution; and
 the trade disputes have been referred to the Industrial Court for
arbitration.
TOPIC 10: EMPLOYEE SAFETY AND HEALTH
Exercise 10.1
1. False
2. True
3. False
4. True
5. True

ANSWERS  289
Exercise 10.2
1. True
2. False
3. True
4. False
5. True
Exercise 10.3
1. False
2. True
3. False
4. True
5. True
Multiple Choices Questions
1. B
2. A
3. D
4. C
5. B

290  ANSWERS
Essay Questions
1. I would take the following steps:
 make the work interesting;
 set up a safety committee comprising representatives of the workers and

the management;
 display safety statistics;
 use information boards in the organisation to promote workplace safety

culture;
 encourage workers and supervisors to practise workplace safety culture;

and
 conduct meetings and safety training from time to time.
2. Employers can use the following ways to reduce accidents at the workplace:
 create a safety and health policy;
 implement all rules and procedures that have been set;
 investigate immediately when accidents happen;
 provide protective tools such as helmets and gloves;
 regularly organise awareness campaigns to reduce accidents;
 make sure that workplace surroundings are always safe;
 organise a safe work system;
 establish a procedure of reporting and investigating accidents;
 create and provide safety training;
 choose proficient workers;
 have an incentive system to reward workers or departments that avoid

accidents at the workplace;

ANSWERS  291
 cooperate with government examiners;
 provide safety uniforms and tools;
 establish work areas and non-work areas such as dangerous areas;
 provide clear warning signboards such as „Smoking is Prohibited‰,

„Restricted Area‰, and „Be Careful‰;
 give ample holiday and rest to workers who need more rest compared to
others;
 obtain input from workers about their problems; and
 obtain feedback from workers each time an accident occurs.
(Choose any five of the above)

MODULE FEEDBACK
MAKLUM BALAS MODUL
If you have any comment or feedback, you are welcome to:
1. E-mail your comment or feedback to [email protected]
OR
2. Fill in the Print Module online evaluation form available on myINSPIRE.
Thank you.
Centre for Instructional Design and Technology

(Pusat Reka Bentuk Pengajaran dan Teknologi )
Tel No.: 03-78012140
Fax No.: 03-78875911 / 03-78875966


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BBPB2103

Human Resource Management

Copyright © Open University Malaysia (OUM)

Copyright © Open University Malaysia (OUM)

Developed by Centre for Instructional Design and Technology, OUM.

Copyright © Open University Malaysia (OUM)

Topic 1 Introduction to Human Resource Management 1

Topic 2 Legal Environment 23

Copyright © Open University Malaysia (OUM)

2.9 WorkmenÊs Compensation Act 1952 44

Topic 3 Human Resource Planning, Job Analysis and Design 48

Topic 4 Employee Recruitment 93

Topic 5 Selection 105

Copyright © Open University Malaysia (OUM)

5.3 Selection Methods 111

Topic 6 Employee Training and Development 128

Topic 7 Performance Evaluation 147

Copyright © Open University Malaysia (OUM)

Topic 8 Employee Compensation 174

Topic 9 Employee Relations 202

Copyright © Open University Malaysia (OUM)

Topic 10 Employee Safety and Health 231

Copyright © Open University Malaysia (OUM)

Copyright © Open University Malaysia (OUM)

COURSE GUIDE DESCRIPTION

Copyright © Open University Malaysia (OUM)

Figure 1: Student Learning Time

COURSE LEARNING OUTCOMES

1. Describe the functions of human resource management in an organisation.

3. Evaluate the effects of change and development in an organisation on

Copyright © Open University Malaysia (OUM)

Topic 1 is an introduction to human resource management. Discussion starts

Topic 2 discusses the legal environment that affects human resource

Topic 3 touches on human resource planning. It discusses how an organisation

Topic 4 talks about recruitment activities. It describes in broad terms two

Topic 5 discusses how an organisation selects qualified candidates to join its

Topic 6 focuses on the importance of conducting training and development

Copyright © Open University Malaysia (OUM)

Topic 8 discusses the types of compensation offered by an organisation to

Topic 9 deals with employee relations, rights, discipline, and participation

TEXT ARRANGEMENT GUIDE

Copyright © Open University Malaysia (OUM)

Self-Check: This component of the module is included in strategic locations

Activity: Similar to Self-Check, the Activity component is also placed at various

References: A list of relevant and useful textbooks, journals, articles, electronic

Copyright © Open University Malaysia (OUM)

Dessler, G. (2016). Human resource management (15th ed.). Pearson.

Ivancevich, J. M., Konospaske, R., & Matteson, M. (2013). Human resource

Maimunah Aminuddin (2013). Malaysian employment law and industrial

TAN SRI DR ABDULLAH SANUSI (TSDAS)

Copyright © Open University Malaysia (OUM)

Figure 2: Among the Online Databases Available at TSDAS Digital Library

Copyright © Open University Malaysia (OUM)

Copyright © Open University Malaysia (OUM)

Copyright © Open University Malaysia (OUM)

Human resource management is one of the most important management functions

1.1 DEFINITION OF HUMAN RESOURCE

Human resource management focuses on managing the workforce in order to

In the past, human resource management was also known as personnel