CIMA E1 Official Learning System - Enterprise Operations Aug 2009

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5.3 Developing the human resource

One model devised by Devanna et al. (1984) emphasises the interrelatedness and the

coherence of HRM activities. The HRM cycle is seen as four key constituent components:

selection, appraisal, rewards and signiﬁ cantly development (Figure 5.2).

These four human resource activities aim to increase organisational performance. The

model emphasised the coherence of internal HRM policies and the importance of match-

ing internal HRM policies and practices to the organisation’s external business strategy.

It is important to note that the overall performance of the organisation depends on efﬁ -

cient and effective operation of each of the four components and the co-ordination of each

particularly in the context of developing the human resource:

●

The selection process is important to ensure that the organisation obtains people with

the right skills and the potential to develop further.

●

Appraisal is a pivotal process enabling managers to set targets for future performance in

line with an organisation’s strategic objectives. It also enables managers to assess the gap

between the competences already possessed by staff and the skills and knowledge that

the staff will require to develop.

●

Training and development is essential to ensure that staff can compete with the best in

the industry in terms of their ability to develop key competences. It is in this sense that

their skills are a key source of competitive advantage.

●

The reward system has to be such as to motivate people and to ensure that those key

employees do not leave but instead continue to develop and contribute.

An individual’s relationship with an organisation can be viewed as a series of staged proc-

esses that extend from the arrangements made by the organisation for the post to be ﬁ lled

through to that individual completing their engagement with the organisation and leaving

(see Table 5.4).

This section deals with certain of these processes and gives some background on the

associated techniques.

Selection

Performance

Appraisal

Training &

Development

Rewards

John Wiley & Sons, Inc. This material is used by permission of John Wiley & Sons, Inc.

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5.3.1 Recruitment

When a decision is made for the ﬁ rst time that a particular post should be created, some

form of job analysis should take place. Job analysis is also useful when an organisation

wishes to assess whether or not a post that is due to fall vacant should be ﬁ lled. The job

description deﬁ nes the overall purpose of the job and the main tasks to be carried out

within the role.

A robust job description is essential to successful recruitment and selection since it is

the foundation upon which other processes are based. The job description should be con-

sidered as a quasi-legal document, since once issued to an employee, it may be viewed as

contractual (see Table 5.5).

It is also useful to set out the terms and conditions of employment such as salary, nor-

mal working hours and holiday entitlement, etc. separately in a letter when making a for-

mal job offer. The person speciﬁ cation deﬁ nes the personal characteristics, qualiﬁ cations,

and the experience required by the jobholder in order to do the job well. Any other special

demands or requirements such as physical aspects and unusual working hours should be

included. The information relating to qualiﬁ cations and experience demanded by the job

can only be derived following a thorough job analysis that identiﬁ es the knowledge, skills

and other behaviours required. The list of personal characteristics needs to be as precise as

possible so that the assessment process can identify what a candidate knows and can do.

A danger in overstating the qualiﬁ cations and experience demanded by the job is that it

Table 5.4 The human resource cycle

Activity Description

Job analysis Analysing and deﬁ ning jobs

Job description Purpose and the main tasks of the job

Person speciﬁ cation Personal characteristics, experience qualiﬁ cations, etc. of post holder

Recruitment Attracting a pool of suitable applicants

Selection Making a choice

Induction Making the settling-in period easier

(Ongoing processes) Appraisal, training, development, career planning

Termination Promotion, resignation, retirement, redundancy

Source: Author

Table 5.5 Main points to be covered in the job description

●

The location of the job within the organisation structure (division, department and section).

●

Title of the job, and the job code if available.

●

Job title of the person to whom the jobholder is responsible.

●

Job title(s) of the person(s) responsible to the jobholder, and the number of staff directly supervised.

●

Brief description of the overall purpose of the role (listed chronologically or in order of importance,

preferably using action verbs).

●

Details of any technical procedures, tools, machinery or equipment used by the jobholder.

●

Any special requirements to liaise or deal with contacts of high signiﬁ cance inside and outside the

organisation.

●

Physical location of the job and the amount of travelling required. Special circumstances (if any)

attached to the job, such as shift, night work, on-call, degree of overtime commitment, weekend

working, physically demanding activities, etc.

●

Responsibility for budgets, etc.

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could lead to appointing a new employee who quickly becomes dissatisﬁ ed with the lack

of challenge and subsequently leaves.

When the job requirements have been agreed with the line manager, person require-

ments should be analysed using a suitable structure. The most straightforward is the Alec

Rodgers Seven-Point Plan which can provide a framework for the selection process (see

Table 5.6).

Recruitment is a set of activities designed to attract a qualiﬁ ed pool of applicants to an

organisation. Typically, there are three steps in the recruitment process:

1. advertisement of a job vacancy

2. preliminary contact with potential job candidates

3. initial screening to create a pool of suitable applicants.

Recruitment need not involve advertising (see Table 5.7), but if it does it must be effec-

tive. The appropriate media needs to be selected depending on the target audience and the

speed with which the position needs to be ﬁ lled. Professional journals, for instance, may

be more precise in targeting the audience but are expensive, have long intervals between

issues, a long lead time and a subsequent slow response rate.

5.3.2 Selection

Once a process of recruitment has taken place, selection follows with typical steps

including:

●

completion of a formal application form (and/or the curriculum vitae)

●

interviewing

●

testing

●

reference checks

●

medical examination

●

ﬁ nal analysis and decision to hire or not to hire

●

ofﬁ cial job ‘offer’ letter.

Any techniques used in selection should be:

●

Reliable: give consistent results.

●

Valid: accurately predict performance.

Table 5.6 Example Seven-Point Plan for a shift process operator

Essential

Physical make-up Good health record (from references)

Acceptable bearing and speech

Smart appearance

Attainment GCSE English language and Maths grade C or equivalent, e.g. GNVQ

General intelligence Average

Special aptitude Manual dexterity and reasonable facility with ﬁ gures, experience of extended

shift work

Interest Mechanical – cars, model airplanes, etc.

Disposition Calm, self-reliant

Circumstance Living within ten miles

Own transport (no public transport operators at shift change times)

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●

Fair: select employees in a non-discriminatory way, particularly in terms of race, age and

gender. This may be to fulﬁ l legal requirements and the ethical frameworks under which

the organisation operates.

●

Cost-effective: the costs of devising and operating the selection methods must be justiﬁ ed

in terms of the beneﬁ ts of selecting good applicants for the particular jobs in question.

Exercise 5.4

What are the likely outcomes of a faulty selection process?

Solution

●

rejecting applicants who would have been suitable

●

employing people who turn out to be unsuitable.

This can lead to a loss of morale, operating efﬁ ciency and involve additional costs and

missed opportunities.

Interviews. Once a shortlist has been drawn up, the most common way of selecting a can-

didate is by interview or series of interviews. Very few selection decisions are made without

an interview, even for internal promotions where the candidates are well known. Repeated

research shows that the interview used in isolation is unreliable as a selector, however when

it is used along with other methods greater reliability is achieved. It is important therefore

to consider all methods of selecting staff and to use those that seem appropriate in each

circumstance. Interviewers should determine before the interview the criteria against which

Table 5.7 Recruitment mechanisms and media

Most popular

Press Regional: for local markets, evening papers

Specialist: trade journals or quality press

Employment agencies Government operated. Employment agencies in

the UK include Government-funded initiatives such as Jobcentres and

Jobclubs, which aim to help the unemployed get back to work

Private sector agencies often deal with temporary support staff such as

secretaries, or specialist staff such as computer programmers

Recruitment consultants Private sector agencies, Executive Search consultants~

Web recruitment A growing area

Other

Careers conventions Exhibitions, fairs and conferences – to target highly selective groups

University Milk Rounds For graduate recruitment

Radio Often used locally, particularly for opening new stores or for temporary

jobs, as it has an immediate effect

Cinema Still used for local jobs. Often advertises agencies rather than vacancies

Posters A low-level method that does not target applicants in a helpful way (used

by small retailers, etc.)

TV Unusual unless local or large numbers needed as it is expensive

Locally maintained registers There is some cost associated with maintaining these records and drop out

rate of candidates tends to be high. Registers can be compiled from the

data of previously unsuccessful candidates and those who unsolicited

have forwarded their CVs to the organisation

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they are judging applicants and then after interview assess how each applicant ‘measured up’.

Some believe that the main value of an interview is to provide a two-way dialogue in explor-

ing the motivation and enthusiasm of a candidate, and the potential ‘ﬁ t’ with the nature and

culture of the organisation. There are several types of interview as reﬂ ected in Table 5.8.

Tests. The main types of test that can be used as part of a selection process as follows:

●

Cognitive tests which relate to thinking processes and include tests of intelligence, abil-

ity, aptitude, communication, numerical skills, etc. Usually intelligence tests are described

to candidates as ‘aptitude’ or ‘skills’ tests and comprise mathematical or number skills,

communication or verbal skills and a general logic or problem-solving testing. Originally

they were work-related, such as typing tests, but gradually more abstract forms were

developed for aptitudes seen to be important for some jobs. Manual dexterity, mechani-

cal, numerical ability and spatial testing are included in this category.

●

Personality tests which involve assessing non-cognitive and non-intellectual characteris-

tics of an individual, usually the emotional make-up, reﬂ ected in the style of behaviour.

Beaumont (1993) noted that ‘there is probably no subject more controversial in occupa-

tional psychology than the merits and demerits of personality assessment’. Results from

personality tests have to be interpreted carefully alongside the applicant’s other known

attributes. Many categories of personality tests exist, including questionnaires, which

have doubtful validity if candidates attempt to predict likely required answers. Such

techniques tend to have low reliability and less predictive validity. The most-well known

personality test is the Cattell 16 PF (Personality Factors) which provides 16 basic dimen-

sions, such as extrovert/introvert, tough-minded/tender-minded, along which individu-

als score from 0 to 10. These standard-ten or ‘sten’ scores can be aggregated to produce

higher-level factors such as leadership or toughness. This test has norms against which

candidates can be compared, and also has a ‘motivational distortion’ score, which can be

used to assess how far the candidate has tried to manipulate their responses. There are

several books interpreting the scores of such tests and computer software that can pro-

duce written narratives explaining the results.

Table 5.8 Types of job interview

The individual or

‘one to one’

The most familiar method involving face-to-face discussion. It provides the best

opportunity for the establishment of a rapport between the interviewer and

the candidate. If only one interviewer is used, there is more scope for a biased

or superﬁ cial decision to emerge. Highly unreliable when used as the only

selection method.

Tandem interviews Involves two interviewers per candidate. Rapport may be reduced but so is the

possibility of bias. Typical interviewers would be an HR ofﬁ cer and the relevant

line manager.

Panel interviews Consists of a number of people who interview the candidate together. The

interview is conducted on a very formal basis but it does enable a number

of different people to have a look at applicants and compare notes in ‘real

time’. The disadvantage is that a single member of the panel could dominate

proceedings. Conﬁ dent, articulate candidates may be more comfortable with

this approach.

Sequential interviews Involves the candidate being passed from one interviewer to another until several

one-to-one interviews have taken place. The advantage here is that several

people may see the candidate but the disadvantage is that interviewers may vary

in their opinions when results are collated.

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●

Psychometric testing is sometimes also undertaken in this context. The term ‘psychomet-

ric’ derives from ‘psyche’ meaning the mind and ‘metric’ meaning measuring so psycho-

metric applies to both personality and cognitive testing. The quality of tests used ranges

from good to of dubious quality. Others are expensive to administer and score, often

requiring the involvement of the commercial consultants. Organisations intending to use

such tests should ﬁ rst seek guidance from the British Psychological Society, the American

Psychological Society (Table 5.9) or other reputable agencies in other countries. In psy-

chological testing, ethical considerations should be applied to critical aspects of the sci-

ence. Since administration, scoring and interpretation of tests is a skilled operation only

qualiﬁ ed people are entitled to use them. Credible Psychological Societies require proper

training of test administrators and interpreters and there is a strong recommendation to

give the candidates feedback on their results.

In the following extracts from an article by Bryan Appleyard the growth and usefulness

of psychometric testing is reviewed:

Welcome to the weird world of psychometrics. If you want to work for a

big company there’s at least a 70% chance that before being given a job you will

be subjected to a personality test by one of the big four – MBTI (Myers-Briggs

Type Indicator), 16PF (16 personality factors), OPQ (occupational personality

questionnaire) or Hogan – and an ability exam measuring verbal reasoning and

numeracy. These are basically IQ tests by another name.

………………………………..

according to the Association of Graduate Recruiters, it’s because nobody trusts uni-

versity degrees any more. It has just issued a report saying degree standards are incon-

sistent and, as a result, companies are turning to psychometrics. But Ceri Roderick at

occupation psychologists Pearn Kandola adds two other reasons. ‘Companies want

to know things like the motivational characteristics of recruits and the technology is

now available to do these things.’ There’s also a fourth reason: the need to compete

for quality recruits. ‘There’s a war for talent,’ says Professor David Bartram of the

British Psychological Society (BPS), ‘companies are ﬁ ghting to get the best people.’

All of which means there is now a rapid proliferation of psychometrics consultan-

cies, most of them offering candidates the chance to do all the tests online. . . .

Table 5.9 Psychological Societies

British Psychological Society

‘The Society is a learned and professional body controlled by our Royal Charter. This means that our

primary duty is to preserve and nurture the discipline on behalf of the nation. Our main objective is to

advance and diffuse knowledge of psychology. This combines with our charitable status which says that as

an organisation we are not permitted to do anything outside of the objectives as speciﬁ ed in the Charter.’

(Source: http://www.bps.org.uk)

American Psychological Society

‘The American Psychological Society’s mission is to promote, protect, and advance the interests of

scientiﬁ cally-oriented psychology in research, (and) application’ (Source: www.psychologicalscience.org/)

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Assessment centre. An assessment centre does not necessarily mean a physical centre but

is a particular approach and philosophy. An assessment centre involves the assessment of a

group of individuals by a team of assessors using a comprehensive and interrelated series of

techniques. It is important to ensure that jobs have been analysed and the results classiﬁ ed

to provide a list of criteria or competencies around which the assessment centre should be

designed. These assessment instruments such as ‘in-tray’ exercises, negotiations or presen-

tations, can be designed by the organisation or bought off the shelf, but it is important

to ensure that there are a sufﬁ cient number of the right type of activities to measure all

relevant criteria. It may be helpful to combine interviews with other selection techniques

such as some of the tests described earlier, group exercises and simulations. A typical assess-

ment centre will involve applicants attending for one or two days and being subjected to

a range of selection techniques. Trained assessors observe candidates and at the end pool

their judgements of the applicants based on their performance on the range of selection

devices so that an overall assessment of each individual’s suitability will then be reached.

Although assessment centres can be very accurate methods of selection, they are expensive

to design and administer and can only be justiﬁ ed for certain types of jobs.

Where reliable past data is available on performance (e.g. in sales) assessments are really

not necessary, nor for jobs where signiﬁ cant factors are already known. Managerial jobs or

those where the ﬁ eld of applicants are unfamiliar with the new setting (such as university

graduates, or line managers applying for consultancy) often require the assessment centre

approach.

Group selection methods are relevant if the emphasis on selection is placed less on tech-

nical ability and more on social skills, inﬂ uencing, communication, intellectual ability,

Sceptics think the whole enterprise is misguided. In America a book – The Cult of

Personality by Annie Murphy Paul – has cast doubt on the intellectual credibility

of psychometrics………………….

In support of Paul’s book the author Malcolm Gladwell questions the very idea of

measuring personality: ‘We have a personality in the sense that we have a consistent

pattern of behaviour. But that pattern is complex and that personality is contingent:

it represents an interaction between our internal disposition and tendencies and the

situations that we ﬁ nd ourselves in.’. . .

But are Gladwell and Paul right to question the whole theory on which they are

based? The history of psychometrics marches hand in hand with the history of IQ

testing. Alfred Binet, the French psychologist, produced the ﬁ rst modern IQ test in

1905 and Walter Dill Scott subjected 15 engineering graduates to the ﬁ rst psycho-

metric test in 1915. Both ideas were inspired by the conviction that there could be

no reason why the human mind should be impervious to scientiﬁ c investigation. . . .

Psychometrics works, but only if the tests are properly applied, rigorously inter-

preted and accompanied by traditional interviews. This means that they do not

necessarily speed up the recruitment process. They might, however, help weed out

unsuitables in advance, a huge beneﬁ t at a time when all companies are swamped

with applicants for attractive jobs.

Source: Appleyard, B. (2007) Want a job? Let’s play mind games. Sunday Times, 22 July.

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attitudes and personality. Beaumont (1993) reported a further dimension to the selection

decision as follows:

. . .(it has become) less about matching an individual employee to the ﬁ xed requirements of an individual

job at a single point in time (and) as a consequence, immediate skills and employment background . . . and

more about willingness to learn, adaptability, and willingness/ability to work as part of a team. These changes

are concomitant with moves away from Tayloristic work organization which involved a hierarchy of nar-

rowly designed and highly specialised job tasks to each of which was attached the rate for the job and moves

towards a reduction in the number of individual job classiﬁ cations, team working . . . and the integration of

all responsibility for quality control.

Group selection is often included as part of an assessment centre (Table 5.10).

Research suggests generally positive ﬁ ndings about group selection methods and high

validity correlations have been achieved between assessments and subsequent job perform-

ance achieved.

Post selection issues. Once a candidate is selected a medical examination and a request

for references takes place. A physical check up by a medically qualiﬁ ed person or the com-

pletion of a health check questionnaire may be required. The purpose of a reference is to

obtain in conﬁ dence factual information about a prospective employee and opinions about

his/her character and suitability for a job. Employer references are viewed as essential but

are notoriously unreliable. References might be sought after job interviews but before a

job offer or before the selection process commences as part of the process of short listing a

suitable group of candidates.

5.3.3 Induction

Induction involves all arrangements meant to familiarise a new employee with the organi-

sation, including safety rules, general conditions of employment, the work of the section/

department, etc. (see Table 5.11)

Table 5.10 An example of an assessment centre

A leaderless group exercise. Candidates are given a group task to undertake in a given time, for example in

the form of a business game. Observers judge performance under pressure and look for leadership and

team working abilities

A report-writing exercise. Participants under time pressure, write a report on some aspect of business. Here

time management, written communication skills and understanding can be assessed

An in-tray exercise. This consists of issues that a manager might ﬁ nd on a day performing the job for real.

Ability to work under pressure, delegate, analyse and problem solve might be tested by this method

Other tests

Formal interview

Table 5.11 Indicative elements in the induction package

Terms of employment, such as information about hours of work, shift arrangements, timekeeping and

clocking-on and -off systems

Housekeeping and security issues, such as catering facilities, energy conservation and speed limits on site

Health and safety regulations, such as safety procedures, protective clothing and hazards of ofﬁ ce equipment

Remuneration and beneﬁ ts, holiday and sick pay, proﬁ t sharing, expenses claims, welfare

Organisational rules and policies, such as disciplinary and grievance procedures, trade union membership,

works rules, time off for statutory or trade union duties, equal opportunities

Employee development opportunities, sports and social amenities

Information about the company and the industry, such as a mission statement, history, product markets,

organisation structure and communications

Job performance issues, such as standards, appraisal and role within the department

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Many deﬁ nitions also mention the importance of helping employees ‘settle into their

new jobs’, welcoming them and arranging for them to get to know others. A formal induc-

tion programme need not be expensive, and the beneﬁ ts far outweigh the costs of recruit-

ing more staff if new staff fail to settle and leave. Induction can be viewed from a number

of perspectives summarised in Table 5.12.

5.3.4 Appraisals

Appraisal of performance is a vital part of the HR cycle. Most appraisal systems should

provide the individual with necessary feedback on their performance and focus on future

activities. Most schemes rely on an annual meeting between the employee (appraisee) and

his or her appraiser. The purpose of appraising may be seen as:

●

aiding technical, professional and management development

●

allowing a systematic follow-up of the results of staff development activities

●

a source of motivation

●

enabling the achievement of rewards (such as promotion)

●

(possibly) feeding into a wider reward system

●

increasing performance

●

helping achieve important organisational and individual objectives.

Exercise 5.5

What other potential beneﬁ ts of appraisal are there?

Solution

●

a mechanism to set objectives for the next period

●

identifying good prospects for promotion or transfer

●

developing psychological dependence on the manager

●

fostering an open atmosphere

●

developing relationships

●

enhancing corporate cultural norms.

Table 5.12 Induction perspectives

Administrative. The main issues appear to be what topics to include and when to deal with them so as

to prevent information overload. HR specialist is seen as particularly relevant in maintaining quality

standards during the induction process, as well as in delivering some parts of the programme (such as

information about welfare, wage and salary administration, grievance and disciplinary procedures, etc.)

Induction should be systematic enough to ensure that essentials are covered.

Welfare. During the ‘period of after-care’ when people start employment with an organisation, the manager

must try to settle the new person in quickly, as an act of benevolent paternalism. For those lacking in

conﬁ dence (e.g. school leavers, women returners, etc.) it is particularly appropriate.

Strategic. Employers make use of various techniques to ‘educate’ employees about the organisation’s ethos,

aiming to integrate them culturally.

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Many of the pitfalls associated with the selection interviews also apply in appraisal,

including:

●

a lack of preparation on either side

●

an appraiser talking more than the appraisee and asking leading questions to which the

answer is obvious and important aspects may be left unexplored

●

appraisers being just as nervous as the appraisees

●

little or no appraiser training.

Appraisers can improve the quality of interviews considerably if they keep in mind the

overall objective, which is to get an accurate ideas of performance and improvement needs.

The ﬁ rst task is to try to overcome the rather unnatural circumstances of the formal inter-

view and to encourage the applicant to relax and speak freely. To do this the interviewer

must keep the conversation ﬂ owing, while speaking no more than is necessary. By care-

ful questioning the interviewer should bring out how well (or badly) the employee has

matched the requirements of the job. The interviewer should always retain control of the

situation.

Exercise 5.6

What factors should be present in an effective appraisal system?

Solution

●

Careful planning which ensures the purpose and objectives of the system are widely

understood.

●

Skill in carrying out the appraisal interview.

●

Selecting the most appropriate method of appraisal.

●

Setting challenging targets which the appraisee can inﬂ uence.

●

Adopting a participative system that enables those being appraised to have a meaningful

input to the system.

Table 5.13 indicates some of the detailed considerations that an appraiser should take

into account.

Table 5.13 Detailed considerations that an appraiser

●

Be properly organised and allow enough time

●

Make sure there will be no interruptions (divert telephone calls, etc.)

●

Discuss issues of principle beforehand with senior manager and/or HR expert

●

Identify possible reasons for unusual performance, particularly if it is possibly ‘below par’? (Problem

recruitment, inadequate training or experience, qualiﬁ cations, etc.?) Check beforehand the policy to

address poor performance

●

Plan questions to be asked (they should be designed to probe performance and the training or

development needs arising)

●

Identify mechanisms to address individual training needs (e.g. refer to corporate training programme)

●

Identify potential rewards for high performance (promotion policy, levels of salary increase,

opportunity available for job moves)

●

Identify opportunities for sideways development moves or job enrichment

●

Anticipate the information needed to meet likely questions from the appraisee