Chapter 6

Managing human resource in

entrepreneurship
 Con.....
• H – Human --- (Manpower)

• R – Resources --- (Human, Financial, Technical,

Informational, etc)

• M – Management --- (Function of Planning,

Organization, Leading & controlling of
organization resources to accomplish goals
efficiently and effectively)
 Con…
• Human resource is the most important asset
in the organization and can be developed and
increased to unlimited extent.
• Employees feel highly motivated if the
organization provides for satisfaction of their
basic and higher level of needs
• HRM is healthy climate with values of
openness, trust, mutuality and collaboration is
essential for developing human resource
 OBJECTIVES OF HRM: -

• Societal Objectives: To be ethically and socially

responsible to the needs and challenges of the
society while minimizing the negative impact of
such demands upon the organization.
• Organizational Objectives: To recognize the role
of HRM in bringing about organizational
effectiveness. HRM is only means to achieve to
assist the organization with its primary objectives
• n
 Con…….
• Functional Objectives: To maintain department’s
contribution and level of services at a level appropriate
to the organization’s needs.

• Personal Objectives: To assist employees in achieving

their personal goals, at least in so far as these goals
enhance the individual’s contribution to the
organization.
• This is necessary to maintain employee performance
and satisfaction for the purpose of maintaining,
retaining and motivating the employees in the
organization.
 SCOPE OF HRM: -

• From Entry to the Exit of an employee in the

organization
 JOB ANALYSIS:

• JOB:
• “Job is a ‘group of tasks to be performed every
day.”
• Definition 1:
• “Job Analysis is a process of studying and
collecting information relating to operations and
responsibilities of a specific job.
• The immediate products of this analysis are ‘Job
Description’ and ‘Job Specifications’.”
 JOB DESCRIPTION

• “Job Description : implies objective listing of the job

title, tasks, and responsibilities involved in a job.”

• Job description is a word picture in writing of the

duties, responsibilities and organizational relationships
that constitutes a given job or position.
• It defines continuing work assignment and a scope of
responsibility that are sufficiently different from those
of the other jobs to warrant a specific title. Job
description is a broad statement of purpose, scope,
duties and responsibilities of a particular job
 Contents of Job Description
No Contents of job description
1 Job title
2 Location of the job
3 Job duties and responsibilities
4 Material tools etc
5 Working conditions
6 Reporting format
7 Objectives of the job
 Contents of Job specifications

No
Contents of job specification

1
Education background

2
Experience

3
Training

4
Judgment

5
Communication skills
 PROCESS OF JOB ANALYSIS

• Process 1: Strategic Choices

• Process 2: Collecting Information
• Process 3: Processing Information
• Process 4: Job Description
• Process 5: Job Specification
 Manpower Planning
• Manpower Planning which is also called as Human
Resource Planning consists of putting right number
of people, right kind of people at the right place,
right time, doing the right things for which they are
suited for the achievement of goals of the
organization
 To determine future employee needs
 To utilize HR more efficiency and
effectively
 To control employee cost
 To develop high talent employees.
 Key to managerial functions-
 Higher productivity
 HR PLANNING AT DIFFERENT LEVELS
• Human Resource Planning (HRP) may be done
at different levels and for different purposes
HRP at National Level
HRP at the Sector Level
HRP at the Industry Level
HRP at the Unit Level
HRP at the Departmental Level
 DETERMINANTS OF HRP
• There are several factors that affect HRP.
These factors or determinants can be
classified into
• external factors
• internal factors.
 External Factors
• Government Policies :
• Policies of the government like labor policy,
industrial relations policy towards reserving
certain jobs for different communities.
• Level of Economic Development : Level of
economic development determines the level
of HRD in the country and thereby the supply
of human resources in future in the country.
 Con…
• Level of Technology :
• Level of technology determines the kind of
human resources required.
• International Factors : International factors
like the demand for the resources and supply
of human resources in various countries
 Internal Factors
• Company Policies and Strategies:
• Company’s policies and strategies relating to
expansion diversification, alliances, etc.
determines the human resource demand in terms
of quality and quantity.
• Job Analysis:
• Fundamentally, human resource plan is based on
job analysis. Job description and job specification
determines the kind of employees required.
 Need of Manpower Planning
• Manpower Planning is a two-phased process
because manpower planning not only
analyses the current human resources but also
makes manpower forecasts and thereby draw
employment activities.
• Manpower Planning is advantageous to firm in
following manner:
 Con…
• Shortages and surpluses can be identified so that
quick action can be taken wherever required.
• All the recruitment and selection activities are
based on manpower planning.
• It helps in growth and diversification of business.
• It helps the organization to realize the importance
of manpower management which ultimately
helps in the stability of the organization.
 Linking organizational strategy to HR
planning
STRATEGIC DIRECTION HR LINKAGE

determining organization’s
mission business

setting goals and objectives

objectives and goals

strategy determining how to attain goals

and objectives

determining what jobs need to be

structure
done and by whom

matching skills, knowledge, and

people abilities to required jobs

bins
Options for Avoiding a Shortage

Temporary Turnover
Overtime
employees reductions

New external Technological

hires innovation
Options for Reducing a Surplus

Pay
Downsizing
reductions

Transfers Retraining
 recruitment
• Recruitment is the process of getting qualified
people and encouraging them to apply for a
position in an organization
• Recruitment is required to fill present or
future vacancies in an organization.
• Vacancies may occur due to employees
turnover, new establishment, expansion,
restructuring.
 Environmental factors affecting
recruitment:
• Any organization operates under the influence
of some environmental factors. Those factors
can negatively or positively affect the
activities of an organization, they may cause
threats or opportunity for the organization.
• There are two types of environmental
recruitment and they are:
• External
• Internal
 Process of recruitment:

• Recruitment planning
• Strategy development
• Searching
• Screening
• Evaluating the recruitment process
 Source and methods of recruitment:

• The main sources of recruitment are:

• Internal source of recruitment
• External source of recruitment
 Con..
• Internal recruitment sources:
• This include the current workers of the
organization and those with previous contact
with in the organization.
• Recruiting former employees who left the
organization due to retirement, layoff.
 Methods of internal recruitment:

• Job posting: the major means for recruiting

employees for other jobs within the organization
is job posting system.
• Job posting is a system in which the employer
announce job opening to all current employees
and responding by applying for specific jobs.
• A job posting is very similar to the advertisement
used in external recruitment.
• It spells out the duties and responsibilities
required of the job and show how applicants can
apply it.
 External sources of recruitment:

External sources of recruitment are sources outside

the organization. These include schools,
universities other similar organizations.

• Employment agencies: organizations can contact

employment agencies to recruit potential
employees.
• And there are two types of employment agencies
 SELECTION:
• General definition of selection: is the action
or fact carefully choosing from someone as
being the best or most suitable
• selection is the process of determining from
among applicants who best fit the
requirements of the job and should be offered
the job.
DIFFERENCE BETWEEN RECRUITMENT
AND SELECTION:
Recruitment
• Recruitment refers to the process of
identifying and encouraging prospective
employees to apply for jobs.
• Recruitment is said to be positive in its
approach as it seeks to attract as many
candidates as possible.
 Con..
• Selection
• Selection is concerned with picking up the
right candidates from a pool of applicants.
• Selection on the other hand is negative in its
application in as much as it seeks to eliminate
as many unqualified applicants as possible in
order to identify the right candidates.
•
 Employee selection criteria:

• This is the characteristics that a person must

have to do the job successfully.
• So any criteria should be job-related and
enables the person to perform the required
activities.
 Con…
• Physical makeup: this includes condition like
height, appearance, health condition, age that
is required to perform the job.
• Education: this is the type and the level of the
education E.G diploma degree or master
• Interest: this shows individuals leaning. And it
indicates what the applicants favor and
disfavor.
 Selection process:

1) Reception and initial screening:

2) Completing applications
3) Testing applicants
4) Selection interview
5) Checking references
6) Conditional job offer
7) Medical exam
8) Final employment decision/final job offer
9) Evaluation of the selection program
 Types of employee selection test:

• Knowledge test: it is designed to test the

applicant’s knowledge understanding of
theories and principles which are useful for
the position and it measures individuals
mastery of a particular subject.
• Intelligence test: are tests intended to
measure the mental ability to understand
general thinks, reasoning abilities and ability
to make judgments.
 Con..
• Personality test: this is a unique of individual
characteristics that affects interaction with the
environment for example emotional stability,
openness, ability to work under pressure.
 interview
• This is a face-to face talk between the employers
and the applicants
• Types of interview are
• Structured interview: is conducting using a set of
standardizing questions that are asked of all
applicants. Every applicant are asked same
questions so that comparisons among applicants
can more easily be made
• Unstructured interview: interview is not
prepared in advance and unstructured have this
flowing characteristics
 Interview process:

• there is no one simple procedure called “ an

interview” effective interview is a process that
takes time and involves steps of activities
• Plan the interview
• Conduct the interview
• Close the interview
• Review the interview
• n
 Types of interview questions

• Close- ended questions: this questions are mostly

answered YES or NO
– Did you have a certificate required for the job?
– What was your salary at your last job?
– What was the hour of your last job?
• These questions are appropriate, especially for initial
screening and to verify information on application
form/resume.
 Con..
• Open-ended questions: are questions that require full,
multiple word responses.
• Tell me about yourself ?
• Why did you want to work her?
• Hypothetical questions: hypothetical questions are a type of
open-ended questions, which are phrased in the form of
problems and presented to the applicant for solution.
• These questions allow the interviewer to evaluate
interviewees reasoning ability and creativity.
• What would you do if_______________?
• How would you solve_______________?
• How would you handle and employee who is frequently
complaining
 Job offer Acceptance and Rejection
• Acceptance
• Ultimately, a job offer can be accepted or rejected.
Acceptance is a condition in which the offer receivers
(the selection candidate) agree to accept the job offer
and decide to join the company. When the offer receiver
accepts a job offer, the organization should do two
important things
• First , it should check the receiver`s actual acceptance to
ensure that it has been accepted as required in the
offers. This means:
• The acceptance should not come in the form of a
counter offer ( with any other contingencies or
preconditions attached to it ).
 Job offer Acceptance and Rejection
• The acceptance should occur in the manner
required. I e., it should be made in a written form,
it should arrive on or before the date specified etc.
• Second, the organization should maintain contact
with the new hire. This many include:
• Acknowledging receipt of acceptance
• Having additional communication with the new
hire to build his commitment to the new job and
organization.
• e.g.: Co workers calling and offering
congratulations to the new hires.
 Con..
• Rejection
• This is a condition in which the selected candidate refuse
to accept the job offer and decide not establish an
employment relationship with the employer due to
different reasons like disagreement on terms or better
opportunity somewhere else.
• When such conditions take place, employers can decide
on either of the following two options:
• Accepting the rejection of the finalist (the top chosen
candidate) and shifting to other solutions.
• Extending a new offer to the person. If the terms of the
offer are negotiable, the organization can bargain with the
candidate and extend him/her a better offer.
 Employee Induction and Orientation
• Def: induction is the process of receiving and
welcoming an employee when he first joins a
company and giving him basic information he
needs to settle down quickly and happily start
the work.
• n
 Benefits of employee orientation:

• Establish clear standards that help reduce

disputes
• Inform new employees of the company’s policies
• A well-designed induction program reduces
nervousness, absenteeism and employee
turnover
• Induction also binds the newcomer and the
present employees in a team.
• n
 Phases of induction program:

• A carefully designed induction program

consist of the flowing phases

• General induction
• Specific induction
n
 Con..
• General induction:
• This is the first phase of induction and is conducted by
the HRM department. And the focus of the induction in
this phase is to expose the new entrant to the
organization by explaining him the mission, objectives,
history of the organization.

• Specific induction:
• This is the second phase of induction and it is given by
the new employs supervisor. And it is the way of giving
job details, introduce to his/her co-workers .
 Training and development
• “def: Training & Development is any attempt
to improve current or future employee
performance by increasing an employee’s
ability to perform through learning, usually by
changing the employee’s attitude or
increasing his or her skills and knowledge.”
 Benefits of training:

• How training benefits the organization:

• Leads to improve the profitability of the
organization
• Improves the job knowledge and skills at all levels
of the organization
• How training benefit for individuals:
• Help the individual in making better decisions
and effective problem solving
• Individuals they will be motivated
• n
Formula of Training and development

• Training & Development Need = Standard

Performance – Actual Performance

• Training and development=

job and organizational requirements –
employee specification.
• n
 Stages in training:
• Assessment of training needs:

• Organizational analysis: this includes analysis of

organizational objectives, strengths and weaknesses.
• Department analysis: departmental strength and
weakness includes special problems of the
department or common problem of a group of
employees like acquiring skills and knowledge.
• Job analysis: this includes study of job design due to a
change such as job enrichment and job enlargement,
job rotation.
• Individual analysis: individual strengths and
weaknesses in the area of job analysis, skills etc
 Con..
2: Designing the training system
• Learning principles: human learning are
studied in order to find out the reasons for the
fast accurate learning.
• All human beings can learn
• An individual must be motivated to learn
• Learning is active but not passive
 Con..
• 3: Implementation: after the training has
been designed we must conduct it
•
• 4: Evaluation of training: training should be
evaluated to correct the shortcomings and
improve further
 Methods of Training
• On the Job Trainings: These methods are generally
applied on the workplace while employees is
actually working

• Advantages of On-the-Job Training:

• It is directly in the context of job
• It is often informal
• It is most effective because it is learning by
experience
• It is not expensive
• Trainees are highly motivated
 On the Job Training Ways

• Job Rotation:
• Job Coaching: An experienced employee can give
a verbal presentation to explain the job.
• Internships and Assistantships: An intern or an
assistants are recruited to perform a specific
time-bound jobs or projects during their
education. It may consist a part of their
educational courses.
 Off the Job Training Methods

• Classroom Lectures: It is a verbal lecture presentation by

an instructor to a large audience. Advantage – It can be
used for large groups. Cost per trainee is low.
Disadvantages – Low popularity. It is not learning by
practice. It is One-way communication. No authentic
feedback mechanism. Likely to boredom.
• Audio-Visual: It can be done using Films, Televisions,
Video, and Presentations etc. Advantages – Wide range of
realistic examples, quality control possible,. Disadvantages
– One-way communication, No feedback mechanism. No
flexibility for different audience.
 Barriers to Effective Training:

• Lack of Management commitment

• Inadequate Training budget
• Education degrees lack skills
• Non-coordination from workers due to
downsizing trends
 END

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