Chapter5-Human Resources Management

1
Human Resources
Management
5
Synopsis
This chapter introduces students to the basics of

human resources management, including human
resources planning, job analysis, recruitment and
selection, human resources development,
performance management, compensation and
benefits, safety and health, industrial relations and
employment laws.
Introduction to Entrepreneurship All Rights Reserved

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Objectives
The objectives of this chapter are:

❑To provide students with a basic understanding
of human resources management.
❑ To show students how human resources
management helps firms to achieve strategic
goals.

Learning Outcomes
At the end of this chapter, students should be able

to:
❑Describe the functions of important elements and
processes of human resources management to
achieve a firm’s strategic goal.
❑Discuss and appreciate the importance of human
resources management to business organizations.

List of Topics
❑ Human Resources Planning

❑ Job Analysis
❑ Recruitment and Selection
❑ Training and Development
❑ Performance Management
❑ Compensation and Benefits
❑ Occupational Safety and Health
❑ Employment Laws

Introduction
❑ An entrepreneur will want good, skilful and

competent employees with strong personal
characteristics such as being disciplined, hard-
working, responsible, trustworthy and reliable. This
chapter will briefly explain the various functions
needed to manage employees and how a company
can recruit, retain, train, motivate and reward the
best employee for a given position.

The Main Functions of Human
Resources Management

Human Resources Planning
❑ When an entrepreneur launches a new business, his

budget is limited most of the time.
❑ Therefore, he will only recruit and employ enough
employees as long as it is adequate for operations to
run effectively.
❑ The entrepreneur may face difficulties in recruiting good
candidates as they will have many job options to choose
from.
❑ Sometimes, an entrepreneur may persuade friends and
family members to help at the beginning of the business.

Human Resources Planning
(cont.)
❑ When sales grow and the business becomes stable,
then the entrepreneur can plan manpower
requirement, based on the actual needs of the
business.
❑ The quantity of sales becomes a guide to estimate
the amount of work, services or products that need
to be produced. The amount of tasks or jobs in terms
of man-hours can be calculated, followed by the
number of workers required.

Job Analysis
❑ Job analysis is the process of gathering

information about a particular job. The information
includes the job activities, duties, responsibilities,
scope, work environment, behaviours and
characteristics of a person that can effectively
perform the job.

Job Analysis (cont.)
❑ This information will be used to write job

descriptions, i.e. a list of what the job covers; and
job specifications, i.e. what kind of people to hire
for the job. This information is needed for an
entrepreneur to advertise the job and draw the right
candidates to apply and then choose the best
candidate for the vacancy.

Recruitment and Selection
❑ Companies recruit and select new staff for new start-

up, business expansion, or simply to replace
resigned or retired staff. The challenge is how to
attract the right candidates with the right skills and
behaviours that fit the job requirements. This
involves suitable qualifications, appropriate wage
amount, where and when to advertise, and how to
advertise.

Recruitment and Selection
(cont.)
❑ The next process is selection which involves the

process of choosing the best candidate for the
job. The information provided by the candidates
in their application forms must be scrutinized
and only suitable candidates are shortlisted for
interviews. The interviewer must be
experienced enough to interview and determine
the suitability of the candidate for the job as
outlined in the job specification.

Training and Development
❑ An entrepreneur will have to identify the type of

training needed for his employees to improve
their job performance or perhaps to prepare
them with a new skill set for new business
opportunities. New employees may need to
attend orientation or induction programmes to
prepare them for their job in the company.

Performance Management
❑ A Performance Management System (PMS) involves

a continuous process of communicating, coaching,
motivating, training, feedback, evaluating and
reviewing employees’ performance by supervisors,
in order to help firms achieve their goals.

Performance Management
(cont.)
❑ An effective performance management process
defines what performance to measure, measures
employees’ performance accurately, and provides
feedback to employees about their performance.
Currently, employees’ rights is an important issue,
and employers must make sure that an
employee’s performance evaluation record is
properly kept, as it may be needed if there is a
court case between employer and employee.

Compensation and Benefits
❑ Compensation and benefits are ways used by

firms to achieve strategic goals. Such methods
of attracting the best candidate to work for the
firm include motivating employees to achieve
productivity, improving employees satisfaction,
helping retain and maintain existing high
performers, and ensuring employees loyalty.

Occupational Safety and Health
❑ The importance of occupational, safety and

health issues (OSH) has been a major concern
of the government through the enactment of the
Occupational, Safety and Health Act 1994
(OSHA). The aim is to promote safety and
health awareness, and establish effective safety
organization and performance through self-
regulation schemes designed to suit the
particular industry or organization.

Occupational Safety and
Health (cont.)
❑ Entrepreneurs need to understand and comply

with the provision of OSHA. Furthermore,
implementing OSH helps to avoid accidents at
workplace, avoid costly medical related
expenses, minimize employees and their
families’ physiology and psychological distress,
and helps to avoid severe legal implications.

Employment Laws
❑ As business owners, entrepreneurs need to manage

the relationship between employees and the
organization. There are specific Employment Laws
stipulations outlined regarding permissible work
hours, rest days, holidays, annual leave, sick leave,
maternity leave and allowances, employment of
foreign workers, termination of employee’s services,
types of disciplinary action and recommended
approaches to disciplinary action.

Employment Law (cont.)
❑ The entrepreneur is advised to follow statutory

requirement to avoid being charged, found
guilty and subsequently required to pay
compensation to the employee or fined by the
Human Resources Department.

Summary
❑ As the business grows, an entrepreneur needs

to understand and apply the functions of
human resources management (HRM) inter
alia, human resources planning, conduct job
analysis, recruitment and selection, training and
development, performance management,
compensation and benefits, safety and health,
and employment laws. All these are important
elements for the prosperity and survival of the
business.

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1

This chapter introduces students to the basics of

Introduction to Entrepreneurship All Rights Reserved

The objectives of this chapter are:

Introduction to Entrepreneurship All Rights Reserved

At the end of this chapter, students should be able

Introduction to Entrepreneurship All Rights Reserved

❑ Human Resources Planning

Introduction to Entrepreneurship All Rights Reserved

❑ An entrepreneur will want good, skilful and

Introduction to Entrepreneurship All Rights Reserved

Introduction to Entrepreneurship All Rights Reserved

❑ When an entrepreneur launches a new business, his

Introduction to Entrepreneurship All Rights Reserved

Introduction to Entrepreneurship All Rights Reserved

❑ Job analysis is the process of gathering

Introduction to Entrepreneurship All Rights Reserved

❑ This information will be used to write job

Introduction to Entrepreneurship All Rights Reserved

❑ Companies recruit and select new staff for new start-

Introduction to Entrepreneurship All Rights Reserved

❑ The next process is selection which involves the

Introduction to Entrepreneurship All Rights Reserved

❑ An entrepreneur will have to identify the type of

Introduction to Entrepreneurship All Rights Reserved

❑ A Performance Management System (PMS) involves

Introduction to Entrepreneurship All Rights Reserved

Introduction to Entrepreneurship All Rights Reserved

❑ Compensation and benefits are ways used by

Introduction to Entrepreneurship All Rights Reserved

❑ The importance of occupational, safety and

Introduction to Entrepreneurship All Rights Reserved

❑ Entrepreneurs need to understand and comply

Introduction to Entrepreneurship All Rights Reserved

❑ As business owners, entrepreneurs need to manage

Introduction to Entrepreneurship All Rights Reserved

❑ The entrepreneur is advised to follow statutory

Introduction to Entrepreneurship All Rights Reserved

❑ As the business grows, an entrepreneur needs

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