HUMAN RESOURCE DEVELOPMENT

Module Guide

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MANCOSA
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 This module guide,
Human Resource Development(NQF Level 8)
will be used across the following programmes:

Master of Business Administration

Postgraduate Diploma in Business Management

 Human Resource Development

Table of Contents
Preface 2
Unit 1: A Strategic Approach to Human Resource Management 9
Unit 2: Human Resource Planning, Recruitment, Selection, Induction and
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Training
Unit 3: Performance Management 39
Unit 4: Compensation 47
Unit 5: Employee Relations and Legislation 55
Unit 6: HR Risk Management 64
Unit 7: Introduction to Human Resource Development 76
Unit 8: A Strategic Approach to Human Resource Development (HRD) 81
Unit 9: Talent Management Strategy 88
Unit 10: The Learning Organisation 94
Unit 11: Organisational Development 101
Unit 12: Human Resource Technology 112
Unit 13: Human Resource Measurement 119
Recruitment - A Specialist Recruiter's Perspective 129
Appendix B 129
Appendix A 135
References 138
Bibliography 142

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 Human Resource Development

Preface
A. Welcome
Dear Student

It is a great pleasure to welcome you to Human Resource Development (HRD801). To make sure
that you share our passion about this area of study, we encourage you to read this overview
thoroughly. Refer to it as often as you need to, since it will certainly make studying this module a lot
easier. The intention of this module is to develop both your confidence and proficiency in this
module.

The field of Human Resource Development is extremely dynamic and challenging. The learning
content, activities and self- study questions contained in this guide will therefore provide you with
opportunities to explore the latest developments in this field and help you to discover the field of
Human Resource Development as it is practiced today.

This is a distance-learning module. Since you do not have a tutor standing next to you while you
study, you need to apply self-discipline. You will have the opportunity to collaborate with each other
via social media tools. Your study skills will include self-direction and responsibility. However, you will
gain a lot from the experience! These study skills will contribute to your life skills, which will help you
to succeed in all areas of life.

Please note that some Activities, Think Points and Revision Questions may not have answers
available, where answers are not available this can be further discussed with your lecturer at
the webinars.

We hope you enjoy the module.

-------
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rights in or to multimedia used or provided in this module guide. Such multimedia is copyrighted by the
respective creators thereto and used by MANCOSA for educational purposes only. Should you wish to use
copyrighted material from this guide for purposes of your own that extend beyond fair dealing/use, you
must obtain permission from the copyright owner.

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 Human Resource Development

B. Module Overview
The Module is a 15 credit module at NQF level 8. The purpose of this module is to provide you with a
sound theoretical framework creating an understanding and overview of the key concepts which will
be used throughout this program. You will be introduced to the concept of projects and project
management. We will unpack the phases in a project life cycle and consider the respective
international standards and global trends.

Structure of Each Part

Each part is structured as follows:

Specific Learning Outcomes

Prescribed and Recommended Reading(s)
Brief Overview of Relevant Theory
Questions for Reflection

Specific Learning Outcomes

These are listed at the beginning of each part. These detail the specific outcomes that you will be
able to competently demonstrate on successful completion of the learning that each particular
section requires.

Brief Overview of Relevant Theory

Each part contains a very brief overview of theory relevant to the particular HRM or HRD topic. Once
you have read the overview, you need to explore the relevant topic further by reading the prescribed
textbooks and journal articles listed under Prescribed and Recommended Reading(s) for each part.

Additional electronic learning resources are available to supplement your learning. These are
detailed in the document “Electronic Learning Resources”. These resources seek to build on, and
expand, the learning that is facilitated in this Study Guide. They include video podcasts, individual
activities, as well as additional recommended reading and Think points.

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C. Learning Outcomes and Associated Assessment Criteria of the Module

[Link]
SETA’S Sector Education & Training Authorities
EEA Employment Equity Act
E-HRM Electronic Human Resource Management
E-LEARNING Electronic Learning
GAR Gross Absence Rate
HR Human Resource
HRD Human Resource Development
HRIS Human Resource Information System
HRM Human Resource Management
HRMS Human Resource Management System

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KSA Knowledge Skills Ability

LRA Labour Relations Act
LTO Labour Turnover
NQF National Qualifications Framework
OD Organisational Development
OHSA Occupational Health and Safety Act
PFI Private Finance Initiative
SABPP South African Board for People Practices
SAQA South Africa Qualifications Authority
SDA Skills Development Act
SHRD Strategic Human Resource Department
SHRM Strategic Human Resource Management
TNA Training-Needs Analysis
UIA Unemployment Insurance Act
WSP Work Skills Plan

E. How to Use this Module

This Module Guide was compiled to help you work through your units and textbook for this module,
by breaking your studies into manageable parts. The Module Guide gives you extra theory and
explanations where necessary, and so enables you to get the most from your module. The purpose
of the Module Guide is to allow you the opportunity to integrate the theoretical concepts from the
prescribed textbook and recommended readings. We suggest that you briefly skim read through the
entire guide to get an overview of its contents. At the beginning of each Unit, you will find a list of
Learning Outcomes and Associated Assessment Criteria. This outlines the main points that you
should understand when you have completed the Unit/s. Do not attempt to read and study everything
at once. Each study session should be 90 minutes without a break.

This module should be studied using the prescribed and recommended textbooks/readings and the
relevant sections of this Module Guide. You must read about the topic that you intend to study in the
appropriate section before you start reading the textbook in detail. Ensure that you make your own
notes as you work through both the textbook and this module.

In the event that you do not have the prescribed and recommended textbooks/readings, you must
make use of any other source that deals with the sections in this module. If you want to do further
reading, and want to obtain publications that were used as source documents when we wrote this

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guide, you should look at the reference list and the bibliography at the end of the Module Guide. In
addition, at the end of each Unit there may be link to the PowerPoint presentation and other useful
reading.

F. Study Material
The study material for this module includes tutorial letters, programme handbook, this Module Guide,
a list of prescribed and recommended textbooks/readings which may be supplemented by additional
readings.

G. Prescribed Textbook
There is at least one prescribed and recommended textbooks/readings allocated for the module. The
prescribed and recommended readings/textbooks presents a tremendous amount of material in a
simple, easy-to-learn format. You should read ahead during your course. Make a point of it to re-read
the learning content in your module textbook. This will increase your retention of important concepts
and skills. You may wish to read more widely than just the Module Guide and the prescribed and
recommended textbooks/readings, the Bibliography and Reference list provides you with additional
reading.

This textbook will provide you with a strategic understanding of Human Resource Management
(HRM) and introduce you to Human Resource Development (HRD).

The prescribed and recommended textbooks/readings for this module are:

Prescribed Reading(s)/Textbook(s)

Meyer, M. et. al. (2012) Managing Human Resource Development. South Africa: Lexis Nexis.
Noe, R.A. et al. (2016) Human Resource Management: Gaining a Competitive Advantage. Tenth
Edition. Dubuque: McGraw Hill.

Recommended Reading(s)/Textbook(s)

Sadler-Smith, E. (2021) Human Resource Development: From Theory into Practice. Sage.
Swanson, R.A. (2022) Foundations of Human Resource Development. Third Edition. Berret
Koehler, Penguin.

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H. Special Features
In the Module Guide, you will find the following icons together with a description. These are designed to
help you study. It is imperative that you work through them as they also provide guidelines for
examination purposes.

~~~~~~~~~~~~~~

Special Feature Icon Description

The Learning Outcomes indicate what aspects of the particular

LEARNING
Unit you have to master and demonstrate that you have
OUTCOMES
mastered them.

The Associated Assessment Criteria is the evaluation of student

ASSOCIATED
understanding with respect to agreed-upon outcomes. The
ASSESSMENT
Criteria set the standard for the successful demonstration of the
CRITERIA
understanding of a concept or skill.

A think point asks you to stop and think about an issue.

THINK POINT Sometimes you are asked to apply a concept to your own
experience or to think of an example.

You may come across activities that ask you to carry out specific
tasks. In most cases, there are no right or wrong answers to
ACTIVITY
these activities. The aim of the activities is to give you an
opportunity to apply what you have learned.

At this point, you should read the reference supplied. If you are
unable to acquire the suggested readings, then you are
READINGS
welcome to consult any current source that deals with the
subject. This constitutes research.

PRACTICAL
Real examples or cases will be discussed to enhance
APPLICATION
understanding of this Module Guide.
OR EXAMPLES

You may come across knowledge check questions at the end of

KNOWLEDGE
each Unit in the form of Multiple-choice questions (MCQ’s) that
CHECK
will test your knowledge. You should refer to the module for the
QUESTIONS
answers or your textbook(s).

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You may come across self-assessment questions that test your

REVISION understanding of what you have learned so far. These may be
QUESTIONS attempted with the aid of your textbooks, journal articles and
Module Guide.

Case studies are included in different sections in this module

CASE STUDY guide. This activity provides students with the opportunity to
apply theory to practice.

VIDEO You may come across links to videos as well as instructions on

ACTIVITY activities to attend to after watching the video.

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 Human Resource Development

Unit
1: A Strategic Approach to Human
Resource Management

U n i t 1 : A S t r a t e g i c A p p r o a c h t o H u m a n R e s o u r c e M a n a g e m e n t

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Unit Learning Outcomes

Prescribed and Recommended Reading(s)/Textbook(s)

Prescribed Reading(s)/Textbook(s)
Meyer, M. et. al. (2012) Managing Human Resource Development.
South Africa: Lexis Nexis.

Noe, R.A. et al. (2016) Human Resource Management: Gaining a

Competitive Advantage. Tenth Edition. Dubuque: McGraw Hill.

Recommended Reading(s)/Textbook(s)
Sadler-Smith, E. (2021) Human Resource Development: From Theory
into Practice. Sage.

Swanson, R.A. (2022) Foundations of Human Resource Development.

Third Edition. Berret Koehler, Penguin.

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1.1 Introduction
The role Human Resource Management (HRM) plays within organisations has changed dramatically.
Having excluded HRM from participating actively in business decisions for most of its existence,
organisations now require HRM to play an active role in the fight to be successful and remain
competitive. HR professionals must play a number of new roles to be successful, one being the
strategic-partner role which involves linking the HRM practices, systems, policies with the strategic
initiatives of the company. This process is known as Strategic Human Resource Management.
Despite the benefits that can be derived from this process, the strategic use of human resources
within companies frequently remains an after-thought (Grobler [Link]., 2014).

Given the fact that HRM goes beyond the administrative tasks of personnel management and
encompasses a broad vision of how management would like the people resources to contribute to
the success of the organisation, the adoption of a professionally accepted HRM standard for South
Africa, according to the SABPP (2013), can help all South African organisations move up the change
curve more rapidly. They believe that a set of clear, formal standards for HR will set the minimum
requirement for what is considered good HR management practice in any organisation. The project
is being managed by the South African Board for People Practices (SABPP), which is the HR
professional and quality assurance body of South Africa.
The purpose of the national HR standards development initiative, therefore, is to formulate a
consistent set of HR Standards for South Africa, including HR metrics to measure the bottom-line
impact of HR on business. While still recognising unique operating contexts, industry and company
differences, national standards will create a consistent framework for high quality HR work practised
by true professionals throughout the country. All participating HR Directors, their companies and
professional bodies will be acknowledged as the pioneers in setting HR standards for South Africa
(SABPP).

1.2 Overview of Strategic Human Resource Management

Strategic Human Resource Management can be thought of as “the pattern of planned human
resource deployments and activities intended to enable an organisation to achieve its goals.” (Noe
[Link]., 2015).

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Figure 1.1 provides an overview of the strategic management process, and how HRM should be
aligned with this process.

Figure 1.1: The Strategic Management Process

(adapted from Noe et al, 2015)
As an organisation grows, and maintaining effective and efficient management practices become
more complex the need for regarding HRM as a strategic imperative is realised. This new strategic
accountability implies that HRM must be able to provide evidence that it contributes to the mission
and goals of the organisation, and ultimately ‘the bottom line’.
Strategic Human Resource Management (SHRM) is the development of a consistent, aligned
collection of practices, programmes and policies to facilitate the achievement of the organisation’s
strategic objectives. SHRM includes all people management activities and it is crucial to ensure that
it is aligned to and supports the overall organisational strategy. This will result in ensuring that the
function of managing people is a priority and that all HR policies, activities and programmes are in
line with the organisational strategy (Nel and Werner; 2014).
It is critical that SHRM is aligned with the organisational strategic plan in order to improve
organisational competitiveness.

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Case Study 1

The Saatchi & Saatchi case

Saatchi & Saatchi was one of the most famous businesses in the global
advertising industry for over thirty years, but rapid expansion in the 1980s saw
the company face disaster. The 1980s boom experienced by the agency was
quickly followed by a bust that exposed the gaping debts at the agency, hitting
the company’s share price hard. This resulted in the organisation’s founders –
the Saatchi brothers – being sacked by the board, and, after several failed
chief executive appointments, Kevin Roberts was brought in to lead the
organisation in 1997.
The ‘strategic problem(s)’ Roberts faced was essentially one of firm viability.
Although advised to make wholesale redundancies in order to reduce
headcount costs, he refused to do so, instead he focused on restoring firm
viability through a strategic orientation of Saatchi & Saatchi as an ‘ideas
company’. This involved moving away from its status as an ‘advertising
agency’ to a company that transformed its clients’ business model, brands
and reputation through the use of an ideas brief and brand navigation rather
than relying upon a simple advertising campaign. The shift was demonstrated
in the new ways Saatchi pitched for business. Instead of traditional pitches
focusing on advertising campaigns, it broadened its focus to include the
client’s business strategy. The decision to reorient the company as an ideas
company was not an original one, since the possibilities of developing this
strategy were being generally mooted within the industry at the time when
Saatchi & Saatchi was facing problems. However, the organisation was able
to gain first-mover advantage through being the first to use it so extensively as
a form of strategic leverage. This was critical in order for it to retain its status
as a roster agency for global clients such as Proctor and Gamble, General
Mills and Toyota.
However, whilst it could be stated that viability was largely secured through
this strategic change, it could also be argued that it also rested upon the
ability of the existing staff to enact it. The Saatchi example, therefore, shows
that an important relationship existed between strategy and staff
competencies; whilst there is an important need to identify the ‘right’ strategy
that will leverage the organisation against its competitors, this will be

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dependent upon the existence, maintenance, or acquisition (at the right price
and right number) of staff capable of enacting it. In this case, Saatchi staff
were not being asked to do something they could not do.
Source: (Grobler [Link], 2014)

1.2.1 Formulating HR Management Strategy

This process involves deciding on an appropriate strategic direction by defining a company’s mission
and goals, its external opportunities, threats, and its internal weaknesses and strengths for the
management of HR within the context of the organisation’s environment. Strategic choices must be
made preferably within the context of environmental constraints. An organisation’s success is
dependent upon its ability to match or fit the variability of the environment in which it operates.

There must be a fit between the organisation and its environment for any particular organisation’s
strategy to work. This entails a focus that includes:

A scanning of the environment to create the necessary fit

Considering the organisation’s mission in terms of its HRM approach
Deciding on an appropriate HRM strategy
Establishment of a HRM business plan

This focus is essential because the HRM strategy and the HRM business plan must fit into a
particular organisation’s strategy. In other words, the HRM business plan’s purpose should be
basically to operationalise or bring about the concept of fit between general business strategy and
the HRM strategy (Nel and Werner, 2014).
It is of utmost importance that all people-related business issues be considered during strategy
formulation. These issues are identified in the HRM function. Mechanisms or structures for
integrating the HRM function into strategy formulation may help the strategic planning team make the
most effective strategic choice. Once that strategic choice is determined, HRM must take an active
role in implementing it(Noe et. al., 2015).

1.2.2 Strategy Implementation

After an organisation has chosen its strategy, it has to execute that strategy (Noe [Link]., 2015). In
other words, at this stage the organisation has to operationalise options and choices made in the
planning process (Nel and Werner, 2015).
The basic premise behind strategy implementation is that “an organisation has a variety of structural
forms and organisational processes to choose from when implementing a given strategy” and these

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choices make an economic difference (Noe [Link]., 2015).

The role of the HR function thus becomes one of ensuring that the organisation has the proper
amount of employees with the right KSA’s required by the strategic plan, and also the developing
control systems that ensure those employees are acting in ways that promote the achievement of the
goals specified and agreed upon in the strategic plan (Nel and Werner, 2015).

1.2.3 Strategy Evaluation and Control

Thus far we have focused on the planning and implementation of strategy. Evaluation and Control
could be regarded as the last component in the strategic management process. An effective and
successful organisation will constantly monitor the effectiveness of both the strategy and the
implementation processes. This monitoring makes it possible for the company to identify problem
areas and either revise existing structures and strategies, or devise new ones (Nel and Werner,
2014).

Think Point 1
Have You Completed the Prescribed and Recommended
Reading(s)Prescribed and Recommended Reading(s) for this Unit? Now
that you have been introduced to this unit, source and work through the
textbook parts and journal articles listed in the Prescribed and
Recommended Reading(s) list at the beginning of this unit. It is essential
that you read all the textbook parts and journal articles listed.

Practical Example 1

HALCROW
Halcrow Group Limited is a multidisciplinary consultancy group specialising in
the provision of planning, design, and management services for infrastructure
development throughout the world. Within this the Group’s main interests are
transportation, water, property and consulting. Although Halcrow has a
background in civil engineering and associated specialisms, in recent years
the group has extended its range of disciplines to cover architecture, project
management, environmental science, transport planning and other non-
engineering but related skills.
Unlike many organisations, Halcrow does not have a mission statement,

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arguing that their ‘purposeto sustain and improve the quality of people’s lives’
describes their approach better.
This purpose is underpinned by a series of values which outline those things
that are important to the Group: ‘Skills and innovation; Enjoying what we do;
Delivering within time and budget’, codes of business behaviour and business
principles.
Halcrow’s first projects outside the UK, were undertaken in the 1980s, such
work now accounting for nearly 40 per cent of an annual turnover in excess of
200 million with the Group currently undertaking projects in over 70 countries.
Recent projects in which Halcrow have been involved include the Channel
Tunnel Rail Link, road construction near the Stonehenge World Heritage Site,
the International Congress Centre in Rome, Kuala Lumpur International
Airport, new and refurbished stands for Chelsea Football Club, coordination
of wetland conservation and river basin management for the Danube and its
tributaries and managing pollution risk from the animal mass burial sites
arising from the UK’s 2001 foot and mouth disease outbreak.
Halcrow was founded in 1868 by Thomas Meik, the company becoming Sir
William Halcrow &Partners in 1941. In 1985 a private limited company
bearing the same name was formed, the most recent change being in 1998,
when the various Halcrow Group Limited. The Halcrow Trust owns 90 per
cent by its employees. Halcrow has grown extensively over the past decade
and now operates through a network of 29 UK and 32 international offices. As
part of this growth, the number of employees has increased from 1700 to
nearly 5000 worldwide. Approximately 80 percent of Halcrow’s employees are
classified by the Group as professional and technical (P&T) staff who have a
minimum of an undergraduate degree in engineering or a related subject.
The majority are engineers who are also members of a relevant professional
institution or are undergoing training to gain membership. The remaining 20
per cent of employees, including those in human resources, are classified by
Halcrow as non-P&T and provide corporate support services.
Halcrow Group’s strategy
As a result of restructuring to meet the future needs of the business
environment, Halcrow’s operations were brought together in 2001 as four
main business groups: Consulting, Property, Transport and Water. These
operate as a matrix structure across the Group’s eight geographical regions,
this structure facilitating appropriate employees or teams to be brought
together for specific projects throughout the world. Each of the four business
groups is led by a management team comprising five people including a
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Group board director or managing director. Within each business group, P&T
staff are assigned to technical skills groups the leader of whom is responsible
for their training and career development. Employees are also assigned to an
office in one of the regions. These vary in size from less than ten to more than
500 employees. The business groups and regional offices are supported by
Corporate Support Services, comprising all the corporate and business
support functions,
Including human resources, and located predominantly within the UK. At the
time of writing the human resource function had 31 employees divided
between three teams: Personnel (22), Pensions (3) and Training (6) with a
director at the executive level.
In 2004, Halcrow launched its change programme, ‘Act now’, which was
designed to help the Group ‘to continue to develop in a dynamic and
sustainable way’. The focus of ‘Act now’ was to align employees’ behaviours
and approaches to Halcrow’s purpose, values, codes of behaviour and
business principles thereby improving individual, team and overall business
performance. This was summarised in Act Now: Your pocket Guide to
Halcrow’s Change Programme as:
To take Halcrow’s existing personality, strengthen all those things that are
good about it, for example, our…
Technical competence

Dependability

Friendliness

Reputation for being a safe pair of hands

Commitment

Pride in one’s profession

…and give it some added extras

Passion

Dynamism

Fleetness of foot

Better listening skills

Excitement

Innovation

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Confidence (with a clear sense of self)

Being more celebratory

Consistent delivery to expectation

Greater commercial edge

Being performance driven

This change programme is intended to be continuous rather than having a

specific end date. It emphasises the need for flexibility and the sharing of
good practices and learning throughout the Group, the centrality of
employees to achieving this, and the need to monitor and evaluate.
SHRM at Halcrow
The ‘Act now’ change programme is central to everything that Halcrow
planned to do in relation to the HRM strategy. The overriding concern is to
change the organisation’s culture. It is often said that the group is full of
people who are professional engineers and who take pride in a job well done.
In essence, technical excellence takes precedence over commercial success.
By the very nature of their training, Halcrow people tend to be concerned with
‘detail’ rather than seeing the bigger picture. This has served the Group well.
But a recent client satisfaction survey commissioned by the Group did not
show Halcrow in a uniformly glowing light. It reported that Halcrow emerged
as technically excellent and a ‘safe pair of hands’ but that clients were looking
for much more than technical competence and a track record. They wanted
business partners whose behaviours were aligned to their own needs. In
addition, the Group was also seen as rather ‘grey’. The challenge for Halcrow
is to retain the reputation for technical excellence and reliability while
becoming increasingly commercially aware, flexible and, above all, more
responsive to customer needs.
Halcrow has designed several key HRM initiatives to support the change
programme. These are:
The development of core competences. This is seen as important
because Halcrow employees have traditionally emphasised the
importance of professional qualifications above all else. The
development of a core competence programme is designed to move the
emphasis from what people know to what they can do.

The introduction of 360-degree appraisal. It is envisaged that this will

make a significant contribution to the ‘Act now’ culture change initiative.

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The Group’s culture has always tended to reinforce the importance of

hierarchy in that employees have been very conscious of their position
in the organisation. In addition, there had been something of an ‘ignore
deflect culture’ in which people sought to evade responsibility for
mistakes rather than being open enough to learn from them. By opening
up the system of employee appraisal to people above and below the
individual being appraised and by seeking the views of significant other
stakeholders, particularly customers, Halcrow management believe that
a far greater degree of openness will be developed.

The instigation of a profit share bonus scheme. This is particularly

designed to create in employees a greater awareness of the Group’s
profit performance. In the view of senior Halcrow management, this has
the potential to make a major contribution to fostering in Halcrow
employees more commercially aware values. In view of the fact that
senior management have set clear targets for increases in Halcrow’s
profit performance, greater knowledge of the Group’s profitability is seen
as an effective way of focusing the minds of employees on profit
performance.

The development of ‘ideas labs’. This is an important part of the Halcrow

management of innovation programme which is designed to promote
innovative thinking and enable commercially valuable ideas to be
implemented. It is designed to:

Add value to the business;

Encourage cross-fertilisation between disciplines; and

Give staff ownership of the ideas put forward.

Overall, the key change issue that is driving SHRM, is the need for Halcrow to
be more responsive in the light of a more competitive industry. Therefore, the
principle aim of the new HR initiatives is to generate more competitive
employee behaviours which, in turn, is envisaged will generate better all-
round employee business performance.
There are other critical issues facing HR at Halcrow. An important one of
these is a consequence of customer feedback. Increasingly this shows that
customers are taking technical excellence for granted when making decisions
about which consultancy group to employ. In view of Halcrow’s reputation for
technical excellence among customers, this is bad news for the Group. As the

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HR director explained the world has moved on. Clients are now more
demanding and want more all the time. Among the most demanding clients
are the public sector. In the UK, Halcrow management feel that the UK
government’s Private Finance Initiative (PFI)has contributed to change in the
industry. (The PFI is a mechanism developed by the government to raise
money to pay for new buildings and services. Under PFI schemes a public
authority buys the services of private-sector companies to design, build,
finance, and operate a public facility, such as a hospital. The private-sector
companies borrow the money for the scheme and then the government pays
an annual fee to the companies under a long-term operating contract for the
services).
Three examples of the more demanding nature of clients are evident, each of
which demands an HR response.
The first is clients asking for an assurance that the staff commencing work on
a project will stay with the Group for the duration of the project. This is a key
issue in an industry where the reputation of the consultancy is such that, in
effect, the staff appointed to a project can be more important factor in the
client’s decision to engage a particular consultancy than the consultancy
group itself.
The implications for HR are twofold.
First, it must assure both external and internal clients that succession
planning is in place. In the past this was not an HR strength at Halcrow or
other similar consultancies, but is an issue that is now receiving more
attention.
The second implication is the problem of retention. There is a shortage of
high-quality consultants throughout the construction and engineering sectors
and competition for consultants is high. Like the sector in general, staff
turnover is high at Halcrow. This is an issue that senior management know
must be addressed. The problem is exacerbated by the declining number of
construction-related graduates in the UK, the number of students studying
relevant courses in the UK dropping by 10 per cent in the late 1990s.
The second example of the more demanding nature of clients is the
requirements that companies state their policy and practice on employee
diversity and equal opportunities. Again, this presents a problem for
companies in this sector, like Halcrow, which has been traditionally male
dominated and has, until recently, employed considerable numbers of
expatriates in its overseas operations. In the UK construction industry as a
whole, the proportion of women employed is less than 9 per cent.
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The third example of client demands is the requirement that companies offer
assurances over corporate governance. In the light of corporate scandals
such as Enron and Parmalat, this is understandable. The HR response to this
is to ensure that global training of key staff to ensure compliance with industry
standards take place. In addition, organisational structure issues, such as the
revision of reporting relationships to ensure greater transparency, are
receiving attention.
The level of staff turnover at Halcrow and decline in the number of graduates
entering the construction-related industry has shaped another HR priority for
the Group. This is to define more clearly a people statement that states more
precisely what is meant by ‘employer of choice’. In particular, Halcrow is
concerned about losing high-quality graduates to the financial sector, both at
the time of graduation and after they have worked with the Group for a short
period. High-quality graduates can earn more money in financial services. In
addition, younger graduates are more concerned with the work-life balance
issues and their own staff development than were their predecessors. A
measure of the significance of this issue to Halcrow is the large number of
graduates employed each year, this being 133 in 2003. There is also worry
over an ageing workforce in the construction industry in general.
It is felt by the HR director that employees and employee issues at Halcrow
need to be higher on the list of Group priorities. Staff turnover is now a key
performance indicator for the HR director. In her view ‘it is no good imposing
things upon people at Halcrow – the Group need to win hearts and minds.’
This is typical of companies employing a high proportion of professional staff
who tend to define, and act upon, their own standards of professional
behaviour.

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Revision Questions

Making reference to the case study provide a brief overview of Halcrow

Group’s strategy.
1. The HR function at Halcrow has been largely administrative rather than
strategic, a situation that is now changing because of the HR challenges that
Halcrow faces.
a. Discuss how managing human resources strategically will provide a
competitive advantage to Halcrow.
2. Evaluate the contribution of Halcrow’s ‘Act now’ change programme in
contributing to the emerging HR strategy.
[Link] the organisation for which you work;
[Link] the HR function fulfil the role of a strategic-partner?
[Link] of the HR practices implemented within your organisation are
consistent with the business strategy? Which HR practices are inconsistent
with the business strategy?
c. Make recommendations to the HR director for the improvement of your
organisation’s approach to SHRM

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Unit
2: Human Resource Planning, Recruitment,
Selection, Induction and Training

Unit 2: Human Resource Planning, Recruitment, Selection, Induction and Training

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Unit Learning Outcomes

Prescribed and Recommended Reading(s)/Textbook(s)

Prescribed Reading(s)/Textbook(s)
Meyer, M. et. al. (2012) Managing Human Resource Development.
South Africa: Lexis Nexis.

Noe, R.A. et al. (2016) Human Resource Management: Gaining a

Competitive Advantage. Tenth Edition. Dubuque: McGraw Hill.

Recommended Reading(s)/Textbook(s)
Sadler-Smith, E. (2021) Human Resource Development: From Theory
into Practice. Sage.

Swanson, R.A. (2022) Foundations of Human Resource Development.

Third Edition. Berret Koehler, Penguin.

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 Human Resource Development

2.1 Introduction
Human resource managers are at the forefront of the worldwide war for competitive advantage.
Organisations need to find the best set of workers for meeting their strategic objectives, attract those
workers to their companies, and then get them to stay long enough to obtain some return on their
investment.

Organisations have to strive to make sure that the decisions they make with respect to who gets
accepted or rejected for jobs promote the best interests of the company and are fair to all parties
involved.

The purpose of this part is to examine factors that influence the supply and demand for labour, focus
on what human resource managers can do in terms of planning and executing human resource
policies, and familiarise you with the selection, induction and training process that give firms
competitive advantage in a dynamic environment (Noe [Link], 2015).

2.2 Overview of HR or Workforce Planning

Human Resource Planning or Workforce Planning is an organisational process that involves
proactively planning ahead to ensure your company is staffed. Within the next decade organisations
can expect to experience the following:

An ageing workforce which will create an increasing need for talented employees with the skills
and competencies needed
A more diverse workforce
Increased competition for highly skilled employees
Technology playing an ever-increasing role in improving efficiency and productivity

The attainment of HR is fast becoming a vital ingredient in strategic organisational success. It is

imperative that companies develop processes, policies, procedures, and strategies to compete
aggressively
Figure 2.1 shows that there is a clear link between HR strategies and organisational strategies. This
integrative model presented below shows the flow of activities in executing workforce planning
effectively by means of integrating recruitment of labour with the objectives of the organisation (Nel
and Werner, 2014).

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 Human Resource Development

Figure 2.1: Workforce Planning Systems Category Areas

(Nel and Werner, 2014)
2.2.1 The Talent Demand and Supply Forecast
Talent forecasting is a process for predicting changes in the demand for and the supply of talent.

Forecasts are broken down into:

Estimated increases or decreases in company growth, output and revenue

Estimated changes in talent needs that result from organisational growth
Projections of future vacancies (Nel and Werner, 2014).

2.2.2 Talent Projection and Action Plans

It is important to plot a time series analysis projection using past information about the number of
people employed by the organisation over time on a graph, so that HR trends and requirements can
be forecast into the future. This technique is known as the trend projection. Talent action plans
outline which specific actions all managers have to take in terms of talent management. These plans
aim to attract, retain, redeploy and develop the talent a company needs in order to meet the
forecasted quantity and quality of employees. (Nel and Werner, 2014).

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2.2.3 The Integration Plan

For a company to meet its forecasted staffing needs, action plans must be fully implemented. They
must be integrated into every aspect of workforce management, including communication and the
identification of potential supporters and resisters concerning an integrative model for recruitment
(figure 2.1) (Nel and Werner, 2014).

2.3 Steps in the Workforce Planning Process

The following steps are involved in the workforce planning process:

Forecasting labour demand

Forecasting techniques
Forecasting labour supply
Implementation of the workforce plan (Nel and Werner, 2014)

2.4 The Human Resource Recruitment Process

As discussed above, it is difficult to anticipate exactly how many (if any) new employees will have to
be hired in a given year in a given job category. The role of human resource recruitment is to build a
supply of potential new hires that the organisation can draw on if the need arises.

Therefore, the primary purpose of human resource recruitment is identifying and attracting potential
employees.
It thus creates a buffer between planning and actual selection of new employees. (Noe et. al., 2015).
2.4.1 Recruitment Policies
Recruitment policies reflect the organisation’s general business strategy and describes how
organisations recruit employees of the highest calibre in accordance with employment legislation,
best practice and within available resources.
A company’s recruitment policy usually includes information on the following aspects:

Whether internal or external recruitment will take place

If relatives of existing employees may be hired
If part-time, or any type of flexitime workers will be considered.
If people over retirement age may be employed. (Nel and Werner, 2014)

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 Human Resource Development

Think Point 1
[Link] the relative merits of internal vs external recruitment.
2. What factors might lead an organisation to decide to switch from
internal to external recruitment or vice versa.

2.5 Selection
Having formulated the matching strategy and structures of the organisation the next logical step is
staffing. This includes hiring different people, transferring people from other branches or even
promotions. These people need to be selected to have the right person in the right job at the right
time (Nel and Werner, 2014).

Selection is therefore the process by which companies decide who will or will not be allowed into
organisations (Noe et. al., 2015).
The selection process is a series of steps through which applicants pass. These steps represent the
‘tools’, or methods of selection. The steps are mainly a number of eliminators, because as applicants
drop out of the process at each step, the applicant pool becomes smaller (Nel and Werner, 2014).

Figure 2.2: Recruitment Selection Process

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 Human Resource Development

The selection decision must focus on competency-related issues if the selection process is to
contribute to the organisation’s success. Nel and Werner (2014)

Case Study 1

Kinaxis Chooses Sales Reps with Personality

Kinaxis is a software company headquartered in Ottawa, Ontario, that sells to
clients around the world. Its specialty is software for supply chain
management – all the processes and relationships through which companies
obtain supplies as needed and get their products to customers on time and at
minimal cost. This is a sophisticated type of product, tailored to a company’s
specific needs. Therefore, Kinaxis depends on salespeople who understand
how businesses work, who listen carefully to identify needs, and who provide
excellent customer service to maintain long-term business relationships.
Recently Bob Dolan, vice president for sales at Kinaxis, needed to hire a
sales team to serve clients in North America. The company had just one
salesperson serving the continent, and Dolan wanted to add four more. He
received about 100 resumes and wanted to select from these. He started by
reviewing the resumes against job requirements and selected 20 candidates
for a first round of interviews. The interview process helped Dolan cut the list
of candidates in half, so he needed another way to narrow his options.
Dolan decided his next step would be personality testing. He hired a firm
called Opus Productivity Solutions to administer a test called PDP ProScan to
the remaining 10 candidates. In addition, Dolan himself took the test and had
his current sales rep do the same. The existing salesperson was doing an
excellent job, so the results of his test could help Dolan and Opus pinpoint the
characteristics of someone likely to succeed in sales at Kinaxis. Based on
analysis of all the results, Opus created a benchmark of traits associated with
success in the job.
Representatives, from Opus also discussed the test results with each
candidate, giving each one a chance to disagree with the scores. No one did.
Dolan observed that all the candidates scored high in assertiveness and
extroversion, not surprising for people in sales. In addition, two of them
scored above the benchmark in conformity and below the benchmark in
dominance. Those results suggested to Dolan that these candidates might be
so eager to please that they would be quick to give in to whatever customers

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 Human Resource Development

requested – a pattern that could become costly for the company. Dolan
eliminated those two candidates.
That meant Dolan still had eight candidates to fill four positions. He asked
each one to give him the names of major accounts he or she had signed up in
the previous two years. Four candidates were able to come up with three or
four large clients.
Those were the candidates Dolan hired. Since then, Dolan says his
experience with personality testing has only reinforced his belief that this
selection method helps Kinaxis identify the best candidates. For example, one
sales rep had scored low on “pace”, indicating that the individual might lack
the patience needed for the slow cycles required to close a sale of a complex
software system. Dolan hoped the issue could be overcome if he provided
enough coaching, but in fact, the sales rep sometimes behaved impatiently,
annoying prospects. After three years of trying to help him grow into the job,
Dolan laid him off.
The company’s commitment to careful selection is expressed on its website:
“The Kinaxis recruitment process enables us to explore the potential of a
partnership between our company and each employee] by determining if
there is solid alignment between your career aspirations, your values, and
your professional skills and the Kinaxis vision, culture, and passion.” (Noe
[Link]. 2015)

Activity 1

Making reference to the Kinaxis case study above

1. Highlight the selection methods used by Bob Dolan for hiring sales people.
2. Discuss the advantages for Kinaxis of using personality tests to help select
sales representatives. What were the disadvantages?
3. What improvements would you recommend to the process for decisions to
hire sales reps in the future.

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 Human Resource Development

2.6 Induction
Induction is the last step in the staffing process and provides an overview of the organisation’s
culture. It is an early opportunity for employers to set the right expectations with new employees.
From an employee perspective, it familiarises them with the systems and processes of the new
workplace and encourages [Link] induction means to introduce or to initiate, it is part of
the socialisation process that is aimed at fully absorbing an employee into the organisation and
turning them into a productive worker with minimum delay. Some organisations have been using the
term ‘engagement’ to refer to the broader view of the whole process of [Link] means
to become familiar with or adjusted to facts or circumstances. It is the process of informing new
employees about what is expected of them in the job and helping them cope with the stresses of
[Link] broad purpose of employee induction then is to introduce the new employees to the
organisation’s goals and objectives and is short-term focused.

Figure 2.3

2.6.1 Topics covered in the Employee Induction Programmes

The topics covered in the Induction Programmes include:
General Topics:

Company history
Company structure
Layout of physical facilities ANTI
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 Human Resource Development

Products or services
Company policies and procedures
Disciplinary regulations
Safety procedures
Pay scales and pay days
Holidays
Employee benefits

Job-Related Issues:

Introductions to supervisor and co-workers

Job location
Job tasks
Job objectives
Relationship to other jobs (Nel and Werner, 2014)

2.6.2 The Induction Process

Figure: 2.4: The Induction Process

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 Human Resource Development

(ROPES – Realistic Orientation Programmes for New Employee Stress)

(Nel and Werner, 2014)
2.6.3 On Boarding and Socialisation
On boarding or socialisation refers to the process of helping new hires adjust to social and
performance aspects of their new jobs (Noe [Link]., 2015).
To get newly recruited and hired employees up to speed quickly, many organisations have improved
and enhanced the traditional induction programme to include technical skills, training, industry
background, and soft skills training.
This is important to help employees adjust to their jobs by establishing relationships to increase
satisfaction, clarifying goals and expectations to improve performance, and providing feedback,
coaching, and follow-up activities to reduce turnover (Noe [Link]., 2015).
On boarding then is a socialisation process designed to shorten the productivity curve, to help new
employees reach capacity quicker, increase employee engagement and decrease turnover by
helping new employees to build stronger relationships and establish credibility earlier (Nel and
Werner, 2014).

Practical Examples

New hires at Sierra Nevada Corporation, a company in the defence and

aerospace industry, are contacted by the company’s talent acquisition and
training teams before orientation. The programme includes a review of the
company’s history, culture, vision, and values. New hires’ first day on the job
includes a meet-and-greet lunch date with their manager. Employees
continue onboarding for 90 days, which includes e-learning, mentoring, on-
the-job training, and a performance review.
(Noe [Link]., 2015

2.6.4 Follow-up and Evaluation of the Induction Programme

Regular checks should be initiated and conducted by the line manager after the new employee has
been on the job one day, and again after one week. An HR representative should check in with the
employee after one month.
The following methods can be employed to strengthen evaluation:

Unsigned questionnaires completed by all new employees

In-depth interviews of randomly selected new employees
Group discussion sessions with new employees who have settled comfortably into their jobs
Arrange meetings with longer serving employees on a structured and scheduled basis, such as
refresher courses when they return from leave each year

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 Human Resource Development

Give feedback on the organisation’s progress and get feedback from the employee (Nel and
Werner, 2014)

2.7 Training and Development

Training refers to a planned effort by a company to facilitate learning of job-related competencies,
knowledge, skills, and behaviours by employees. The goal of training is for employees to master the
knowledge, skills, and behaviours emphasized in training and apply them to their day-to-day
[Link] companies have relied on formal training through a course, programme, or
event to teach employees the knowledge, skills, and behaviours they need to successfully perform
their jobs.

Formal training refers to training and development programmes, courses, and events that are
developed and organised by the company. Typically, employees are required to attend or complete
these programmes, which can include face-to-face training programmes (such as instructor-led
courses) as well as online programmes (Noe [Link], 2015).

2.7.1 Training Needs Analysis

A key characteristic of training that contributes to competitiveness is that they are designed according
to the instructional design process. Training design process refers to a systematic approach for
developing training programmes (Noe [Link]., 2015)

The terms “analysis” and “assessment” are often used interchangeably in the context of determining
training needs. “Training-needs analysis” can be defined as a process of identifying an issue or
problem, collecting, analysing and interpreting data, and using the information obtained to select or
design an appropriate HRD intervention to address the issue or problem (Meyer [Link], 2012). The
implementation of the Skills Development Act of 1998 requires organisations (with some exceptions,
including small and micro enterprises) to submit a workplace skills plan to the relevant SETA for
approval and for recovery of part of the levy.
This workplace skills plan is a comprehensive document which requires the employer to give
detailed information regarding:

The current skills profile by number of employees in population groups and educational levels
The skills priorities and the number of beneficiaries in population, gender and occupational
groups
The process used to develop the workplace skills plan
The steps used to consult employees about the plan, for instance, whether a training committee
has been established
The plan’s relationship to the organisation’s employment equity plan
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 Human Resource Development

A proper analysis of the organisation’s training needs and skills requirements in the form of a skills
audit is therefore a vital step in the process of developing a workplace skills plan (Meyer [Link]., 2012)

The Needs-Analysis Process

A generic process approach to needs analysis, as developed by Meyer [Link]. (2012), can be used to
ensure that needs are identified and correctly analysed. It consists of a series of steps as depicted in
Figure 2.5.

Figure 2.5: Key Steps in Conducting Training-Needs Analysis

(Meyer [Link]. 2012)

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 Human Resource Development

Activity 2

1. Describe how you would apply these key steps in the identification of the
training priorities in the organisation at which you are employed

Skills Audit
A “skills audit” is a process where skills held by employees are identified and compared with skills
required now and in the future so that the skill shortfall or surplus can be determined. The skill
shortfall forms thebasis of a Training-Needs Analysis (TNA) so that the company can reach the
desired skill base amongst its employees. With the advent of skills development legislation and the
requirement for organisations to develop an annual workplace skills plan, many organisations have
responded by performing regular skills audits (Meyer [Link], 2012).

The Skills Audit Process (Meyer [Link], 2012)

The First Stage of the process is to ascertain what skill sets the organisation will require in order
for business strategies to be realised
The Second Stage requires the organisation to establish what skills are required per role, per
job, per task or per organisational process

When combined into a matrix, these two sets of skill for the “desired skills” set for the organisation

The Third Stage of the skills audit process is where the “desired skills” are compared to the
“current skills” which are ascertained through the assessment of employee skills

Once the organisation has a skills matrix of required skills and a profile of the skills of each
individual, the Fourth stage of the process is to compare the two results to identify where the skills
deficit exists.

Finally, in the Fifth Stage the organisation prioritises skills deficits and develops a training plan to
ensure that the gap between skills required and actual skills is closed over time. In order to
ensure that skills audit information is usable for translation into workplace skills plans, skills audits
usually report on skills requirements per role, per position of role in an organisational structure
and per employee profile (this includes race, gender, and disability status).

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 Human Resource Development

Activity 3

1. Develop a framework that could be used to conduct a skills audit in your

organisation.

Proper training-needs analysis provides the basis for the development and implementation of
workplace skills plans, the planning and organising of training programmes and the design of HRD
interventions which is dealt with in Part 2 of this study guide.

Readings
Have You Completed the ‘Prescribed and Recommended Reading(s) for
this Unit?
Now that you have been introduced to this unit on, source and work through
the textbook parts and journal articles listed in the Prescribed and
Recommended Reading(s) list at the beginning of this unit. It is essential that
you read all the textbook parts and journal articles listed.

37
 Human Resource Development

Revision Questions

After completing your study of this unit

Reflect on the following questions. (To adequately address these questions
you will need to have completed all the Prescribed and Recommended
Reading(s) listed at the beginning of this part.)
Question 1
1. Consider the organisation at which you are currently employed and
compile a recruitment policy for your organisation
Question 2
2.1 Do you agree that all new employees, whether permanent or part-time as
well as longer serving employees should attend an induction programme?
2.2 Discuss benefits the organisation and the employee would gain from an
induction programme
2.3 Discuss the importance of follow-up and evaluation of the induction
programme
2.4 Did your organisation follow the typical Steps in the selection process?
Question 3
3.1 Identify the most important reasons for conducting training-
needs analysis in your organisation.
3.2 Highlight the key steps in conducting training-needs analysis and
describe how you can apply these steps in the identification of education and
training priorities.
3.3 Develop and conduct a needs analysis in the organisation at which you
are currently employed
Question 4
4.1 Suggest ways for your organisation to improve their approach to
recruitment, selection and induction

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 Human Resource Development

Unit
3: Performance
Management
Unit 3: P e r f o r m a n c e M a n a g e m e n t

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 Human Resource Development

Unit Learning Outcomes

Prescribed and Recommended Reading(s)/Textbook(s)

Prescribed Reading(s)/Textbook(s)
Meyer, M. et. al. (2012) Managing Human Resource Development.
South Africa: Lexis Nexis.

Noe, R.A. et al. (2016) Human Resource Management: Gaining a

Competitive Advantage. Tenth Edition. Dubuque: McGraw Hill.

Recommended Reading(s)/Textbook(s)
Sadler-Smith, E. (2021) Human Resource Development: From Theory
into Practice. Sage.

Swanson, R.A. (2022) Foundations of Human Resource Development.

Third Edition. Berret Koehler, Penguin.

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 Human Resource Development

3.1 Introduction to Performance Management

According to Noe [Link]. (2015) Performance management consists of three major parts to its process,
which includes;

Defining Performance : Specifies which aspects of performance are relevant to the organisation
Measuring Performance : Measures those aspects of performance through performance
appraisal, which is only one method for managing employee performance
Performance Feedback : Provides feedback to employees through performance feedback
sessions so they can adjust their performance to the organisations goals

Performance appraisal may be viewed as only one part of the broader process of performance
management
Performance management then is the process through which managers ensure employees’
activities and outputs are congruent with the organisation’s goals and is central to gaining a
competitive advantage

3.2 Overview of Performance Management

Performance management may be defined as a process of creating a work environment or setting in
which people are enabled to perform to the best of their abilities for the achievement of shared goals.
(Nel and Werner, 2015).

3.2.1 Purposes of Performance Management

It is a process for strategy implementation

Provides input to other HR systems such as development and remuneration
It is a vehicle for culture change (Nel and Werner, 2014)
Serves as an Administrative purpose (Noe [Link]., 2015)

3.2.2 The Process of Performance Management

Step 1

Understanding and identifying important performance outcomes or results. Divisions, departments,

teams and employees must align their goals and behaviours and choose to engage in activities that
help achieve the organisation’s strategy and goals.

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 Human Resource Development

Step 2

Understanding the process (or how) to achieve the goals established in the first step. This includes
identifying measurable goals, behaviours and activities that will help the employee achieve the
performance results.

Step 3

Organisational support – involves providing employees with training, necessary resources and tools,
and frequent feedback communication between the employee and manager focusing on
accomplishments as well as issues and challenges influencing performance. For effective
performance management managers and employees have to value feedback and regularly
exchange it.

Step 4

Involves performance evaluation, that is, when the manager and employee discuss and compare the
targeted performance goal and supporting behaviours with the actual results. This typically involves
the annual or biannual formal performance review. One way to make the formal evaluation more
effective is for managers to engage in frequent performance conversations with employees rather
than wait for the formal annual review.

Step 5

Involves the employee and manager identifying what the employee (with the help from the manager)
can do to capitalise on performance strengths and address weaknesses.

Step 6

Providing consequences for achieving (or failing to achieve) performance outcomes. This includes
identifying training needs, adjusting the type or frequency of feedback the manager provides to the
employee, clarifying, adjusting, or modifying performance outcomes, and discussions of behaviours
or activities that need improvement or relate to new priorities based on changes or new areas of
emphasis in organisational or department goals (Noe et. al, 2015)

3.2.3 Approaches to Performance Management

There are different ways to evaluate performance. These include according to Noe [Link]., 2015):

The Comparative Approach

The Attribute Approach

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 Human Resource Development

The Behavioural Approach

The Results Approach
The Quality Approach

Activity 1

Refer to the text (Human Resource Management. Noe [Link] 2105) and
discuss:
1. The nature of each of these performance management approaches
2. The strengths and weaknesses of each of these approaches
3. Identify the approach that is implemented in your organisation
4. What are the strengths and weaknesses of the performance management
system in your organisation.

3.2.4 The 360-Degree Feedback System

According to Noe [Link], (2015), a recent trend in performance appraisals for management
development is the use of upward feedback and 360-degree feedback. Upward feedback refers to
appraisal that involves collecting subordinates’ evaluations of managers’ behaviours or skills. The
360-degree feedback process is a special case of upward feedback. In 360-degree feedback
systems, employees’ behaviours or skills are evaluated not only by subordinates but by peers,
customers, their bosses and themselves. The raters complete a questionnaire asking them to rate
the person on a number of different dimensions.

The results of a 360-degree feedback system show how the manager was rated on each item. The
results also show how self-evaluations differ from evaluations from the other raters. Typically,
managers review their results, seek clarification from the raters, and set specific development goals
based on the strengths and weaknesses identified.

Activity 2

1. Highlight the benefits and potential limitations of the 360-degree approach.

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 Human Resource Development

Case Study

Capitol One, a consumer credit company, has developed an effective 360-

degree feedback system. Capitol One has included a number of features in its
360-degree feedback system to minimise the chance that the ratings will be
used as ways to get back at an employee or turned into a popularity contest.
The 360-degree assessments are based on the company’s competency
model, so raters are asked for specific feedback on a competency area.
Rather than a lengthy form that places a large burden on raters to assess
many different competencies, Capitol One’s assessment asks the raters to
concentrate on three or four strengths, or development opportunities. It also
seeks comments rather than limiting raters to merely circling numbers
corresponding to how much of each competency the employee has
demonstrated. These comments often provide specific information about what
aspect of a competency needs to be improved. This comment system helps
tailor development activities to fit competency development. To increase the
chances that the assessment will result in change, the feedback from the 360-
degree assessment is linked to development plans, and the company offers
coaching and training to help employees strengthen their competencies.
Employees are encouraged to share feedback with their co-workers. This
creates a work environment based in honest and open feedback that helps
employees personally grow.
(Noe et. al., 2015)

3.3 Performance Feedback

If employees are not made aware of how their performance is not meeting expectations, their
performance will almost certainly not improve. Effective managers provide specific performance
feedback to employees in a way that elicits positive behavioural responses (Noe [Link].,2015).

The appraisal interview should be both evaluative and developmental. Goals that have been met do
not warrant long discussion except for the praise that must accompany these achievements ( Nel
and Werner, 2014). According to Noe [Link]. (2015), to provide effective performance feedback
managers should consider the following recommendations:
Feedback should be given frequently, not once a year.

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 Human Resource Development

Create the right context for the discussion

Ask the employee to rate his or her performance before the session
Encourage the employee to participate in the session
Recognise effective performance through praise
Focus on solving problems
Focus feedback on behaviour or results not on the person
Minimise criticism
Agree to specific goals and set a date to review progress

HR practitioners and senior managers are beginning to realise that the management of employee
performance must take place within the pursuit of strategic business goals. This is one of the major
reasons why many organisations are starting to favour a multi-rater, or 360-degree approach to
performance evaluation (Nel and Werner, 2015).

Readings

Have You Completed the Prescribed and Recommended Reading(s) for

this Unit?
Now that you have been introduced to this unit, source and work through the
textbook parts and journal articles listed in the Prescribed and Recommended
Reading(s) list at the beginning of this part. It is essential that you read all the
textbook parts and journal articles listed.

45
 Human Resource Development

Revision Questions

After completing your study of this unit, reflect on the following questions. (To
adequately address these questions you will needto have completed all the
Prescribed and Recommended Reading(s) listed at the beginning of this part.
1. Consider the performance management system implemented by the
organisation for which you work. To what extent does this performance
management system support your organisation’s achievement of a
competitive advantage.
2. In his journal article “Is Performance Management Applicable in Developing
Countries?” De Waal (2007) identifies factors impacting on performance
management in organisations operating in Africa.
2.1 To what extent are these factors evident in your organisation’s approach
to performance management?
2.2 What would you say are other emerging market related factors that
impact on performance management within your organisation?

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 Human Resource Development

Unit
4:
Compensation

Unit 4: C o m p e n s a t i o n

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 Human Resource Development

Unit Learning Outcomes

Prescribed and Recommended Reading(s)/Textbook(s)

Prescribed Reading(s)/Textbook(s)
Meyer, M. et. al. (2012) Managing Human Resource Development.
South Africa: Lexis Nexis.

Noe, R.A. et al. (2016) Human Resource Management: Gaining a

Competitive Advantage. Tenth Edition. Dubuque: McGraw Hill.

Recommended Reading(s)/Textbook(s)
Sadler-Smith, E. (2021) Human Resource Development: From Theory
into Practice. Sage.

Swanson, R.A. (2022) Foundations of Human Resource Development.

Third Edition. Berret Koehler, Penguin.

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 Human Resource Development

4.1 Introduction
In the modern organisation, with a variety of costly employee benefit programmes, wage incentive
programmes and structured pay scales, the compensation task is even more difficult and challenging
for an HR specialist. Employees’ compensation affects their productivity and tendency to stay with
the organisation.

Employees’ need for income and their desire to be fairly treated by the organisation make
developing the compensation programme very important for the HR department (Wärnich [Link],
2015).

4.2 Overview of Compensation

From the employers ‘point of view, pay is a powerful tool for furthering the organisations strategic
goals.

First, pay has a large impact on employee attitudes and behaviours. It influences the kind of
employees who are attracted to and remain with the organisation, and it can be a powerful tool for
aligning current employees’ interests with those of the broader organisation.
Second, employee compensation is typically a significant organisational cost and thus requires close
scrutiny.
Companies often look for ways to reduce labour costs without jeopardising their relationships with
their workforces.
From the employees’ point of view, policies having to do with wages, salaries and other earnings,
affect their overall income and thus their standard of living. Both the level of pay and its seeming
fairness compared with others’ pay are important (Noe [Link], 2015).
4.2.1 Objectives of a Compensation System
Every company must be aware that the design of its rewards system rests largely on the objectives of
its compensation management so there has to be a clear link between compensation and
performance.

It is clear that both employer and employee have to be satisfied in the employment relationship. The
basis of employee pay satisfaction can be grouped according to Nel and Werner (2014) into four
categories:

External Equity

How the pay relates to other companies in the industry

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Internal Equity

How fair the pay is compared to the size and profitability of the company

Individual Equity

Measures the fairness of the pay based on the performance of individuals working the same job

Procedural Equity

Measures the fairness of the decision-making process of pay distribution

4.2.2 The Design of a Compensation System

The modern view is that employees who work in a rewarding environment often tend to produce high
degrees of performance output. The reward environment is the starting point for adding value to the
organisation (Nel and Werner, 2014).

Value-Added Compensation

Is a compensation system in which components of the compensation package (benefits, base pay,
incentives and so on), both separately and in combination, create value for the organisation and its
employees?

Total Compensation

Includes monetary and non-monetary rewards as well as direct and indirect rewards. This means
that there are three components of total compensation; direct pay, performance-based pay and
indirect pay. The elements of total compensation are depicted in the Table below:

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Table 4.1 The Elements of Total Compensation (Nel and Werner 2014)

Variable Pay

Variable pay plans are compensation systems that pay cash bonuses to a defined group of
employees based on predetermined measures of group or organisational performance. Variable pay
is attractive because it does not compound from year to year and the unspent funds can be reused
each year, or can be returned to the budget cycle.

There are four basic variable pay approaches based on the type of formula used:

Profit sharing
Gain sharing
Goal sharing
Combination plans

4.3 Purpose and Importance of Total Compensation

To motivate employees
To attract potential job applicants
To retain good employees
To administer pay within legal constraints

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4.4 A Model for Designing and Implementing a New Compensation System

Figure 4.1: A Model for a New Compensation System

(Nel and Werner, 2014)

4.5 Emerging Pay Systems

Pay for competencies

Pay for Knowledge and skills
Performance-based pay
Incentive pay systems (Nel and Werner 2014)

4.6 Employee Benefits

Mandatory Benefits - Benefits that must be provided by law in South Africa:

Unemployment insurance
Compensation for injuries and diseases

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Voluntary Benefits
Employees can rely on a number of benefits which are non-mandatory or voluntary benefits on the
part of the employer. It should be noted that a number of the benefits discussed do have certain
legislated minimums such as the number of days’ vacation leave, the number of paid public holidays,
the number of days’ sick leave, and maternity leave benefits. In South Africa these minimums are
legislated in the Basic Conditions of Employment Act (No.75 of 1997):

Vacation leave
Paid public holidays
Time for personal matters
Sick leave
Maternity leave
Health and life insurance
Medical aid schemes
Pension funds
Employee services

(Nel and Werner 2014)

4.6.1 Benefit Planning and Flexible Benefit Plans

Today, although the tendency in bureaucratic –style organisations is still to dictate the terms of
benefit packages, employers are starting to realise that the new deal in employer-employee
relationship demands much more flexibility (Nel and Werner 2014).

According to (Nel and Werner 2014) the terms ‘flexible benefits plan’ and ‘Cafeteria benefits plan’ are
generally used synonymously. The idea of cafeteria benefits allows the employee to put together his
or her own benefits package, subject to two constraints:

The employers must limit the total cost for each total benefits package, and
Each benefit plan must include certain non-optional items, such as the mandatory benefits

The philosophy behind flexible benefit plans is that no one knows the employees’ needs better than
the employees themselves and their needs change through the years, so they can alter their
benefits.

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Activity 1

1. Despite the attractiveness of cafeteria benefits, what do you think are some
of the limitations of cafeteria benefits plans

Revision Questions

After completing your study of this part reflect on the following questions. (To
adequately address these questions you will need to have completed all the
Prescribed and Recommended Reading(s) lsted at the beginning of this part.)
1. Consider the compensation and benefits practices of the company for
which you are currently employed at. To what extent do the compensation and
benefits practices facilitate the attraction and retention of talent?
2. At the organisation in which you are employed, what component of the
total compensation system is perceived to be most valuable to employees?
Why do you think so?
3. To what extent are flexible benefit plans implemented within South African
companies or the country you currently reside in?
4. Discuss the benefits and potential limitations of flexible benefit plans.

Readings

Have You Completed the Prescribed and Recommended Reading(s) for

this unit?
Now that you have been introduced to this unit, source and work through the
textbook parts and journal articles listed in the Prescribed and Recommended
Reading(s) ist at the beginning of this part. It is essential that you read all the
textbook parts and journal articles listed.

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Unit
5: Employee Relations and
Legislation

Unit 5: Employee Relations and Legislation

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 Human Resource Development

Unit Learning Outcomes

Prescribed and Recommended Reading(s)/Textbook(s)

Prescribed Reading(s)/Textbook(s)
Meyer, M. et. al. (2012) Managing Human Resource Development.
South Africa: Lexis Nexis.

Noe, R.A. et al. (2016) Human Resource Management: Gaining a

Competitive Advantage. Tenth Edition. Dubuque: McGraw Hill.

Recommended Reading(s)/Textbook(s)
Sadler-Smith, E. (2021) Human Resource Development: From Theory
into Practice. Sage.

Swanson, R.A. (2022) Foundations of Human Resource Development.

Third Edition. Berret Koehler, Penguin.

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5.1 Introduction
Labour law governing employment relations derive its force and effect from a plethora of sources.
With that being said, it would be almost impossible to set upon the task of understanding the multi-
faceted content of this subject without first engaging in the hierarchy of law governing South Africa.

In terms of the Constitution ‘fair labour practice’ has been recognised as a fundamental right and as
such must be treated with the necessary attention and reverence. In line with the overall spirit of the
Constitution, Part 1 sets out the manner in which this right must be interpreted.
In looking at employee relations through the prism of various legislation, one must be sure to take in
account the underlying values of the Constitution when interpreting such legislation. Thus in looking
at any labour legislation, be it statute or precedent, it is mandatory to also consider,
International Law as well as foreign law; it is also a Constitutional imperative that South African
common law, which includes labour law, be developed to bring it in line with the ethos of our
Constitution, to the extent that it is inconsistent.
It thus becomes clear, that when engaging in employee relations whereby the rights and regulations
are governed predominantly by legislation, one needs to continuously question the validation of such
provisions.
However, to be in a position to evaluate the law, one is required to not only understand the hierarchy
of labour law in South Africa but also keep abreast with international labour standards and
developments in foreign countries. This part aims to provide a ‘catch all reference’ in terms of
relevant governing legislation, as well as the parameters in which such legislation operates, in
dealing with employee relations on a day to day basis

5.2 Overview of Employee Relations in South Africa

Without sound labour relations or work employment relations South African organisations can forget
about becoming more competitive. Whether you are self-employed, work for a company or are
employed by the government, you will be working with people, and good relationships between
people in the workplace are a key requirement for sound labour relations. It is important to note that
the employment relationship is essentially a relationship between the employer (employers and
employers’ organisations) and employee (labour and trade unions), as well as between
employer/employee and the state, thus making it a tripartite relationship (Wärnich [Link]., 2015).

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5.3 Sources of Employment Related Law in South Africa

Figure 5.1 Levels of Employment Law in South Africa

([Link], 2011)

5.3.1 The Common Law and the Employment Contract

The common law rules relating to labour law are not found in legislation but rather are derived from
custom and practice.
The employment contract may be defined as a contract between two persons, namely the employer
and the employee, for the letting and hiring of the employee’s services. In this type of contract, the
employer has an obligation and duty to supervise and control the employee’s work (Nel and Werner,
2014).

5.3.2 The Basic Conditions of Employment Act (BCEA) (No. 75 of 1997)

The BCEA is a vital component of South Africa’s protective labour law framework.
The primary objective of the Act is to:

Stipulate and regulate relevant conditions of employment and the variation of such conditions
Contribute to the creation of a secure, equitable, non-exploitative and harmonious work climate
Give effect to and regulate fair labour practices as advocated in the Constitution (Nel and Werner,
2014)

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5.3.3 The Employment Equity Act (No.55 of 1998) (EEA)

The EEA has two main elements:

The prohibition of discrimination by all employers

The duty placed on designated employers to implement affirmative action measures by means of
employment equity plans (Nel and Werner, 2014).

5.3.4 Labour Relations Act (No.66 of 1995) (LRA)

The Act seeks to advance economic development, social justice, labour peace and the participation
of employees, as worthy stakeholders, in the workplace. Its primary objectives are the following:

To give effect to the rights and obligations of employees and their unions as well as employers
and their organisations in accordance with the fundamental rights of the Constitution and
international labour conventions
To promote collective bargaining at sectoral level
To promote employee participation at the workplace, and
To promote dispute resolution and labour peace

The Act is relevant to and has a considerable impact on a number of HRM key functions such as:

Performance appraisal and management

Training and development
Discipline management
Retrenchments
Collective bargaining and employee participation
Strike handling and dispute resolution (Nel and Werner, 2014)

a. Collective Bargaining
Collective Bargaining is a process in which representatives of employees and representatives of the
employer (management) negotiate and otherwise interact in an attempt to reach agreements and to
uphold these agreements regarding matters that relate to or may impact on the employment
relationship.
In terms of the LRA, employers are not compelled to enter into collective bargaining with employees.
The Act does, however, strongly promote good faith collective bargaining – especially at a
centralised level. For this reason, it provides for bargaining and statutory councils and the conclusion
of collective agreements on various matters of mutual interest between employers and employees.
Collective bargaining takes place between employers (who may be represented by employers’
organisations) and employees (usually represented by trade unions). It may take place at various
levels and different approaches to bargaining or bargaining styles can be used (Wärnich [Link], 2015).

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5.3.5 The Skills Development Act (No. 97 of 1998) (SDA)

The South African economy faces several challenges and skills development is one of those
challenges. The Skills Development Act (No.97 of 1998), promulgated in 1999, makes provision for a
new approach to skills development that compliments the formal education, to ensure that the
country develops a strategic human development approach to improve its human capital (Nel and
Werner [Link], 2014). It links skill formation to the requirements of a growing economy and extends
education and training to people both within and outside formal employment. In tandem with the
Skills Development Levies Act (No. 9 of 1999), the Skills Development Act places a legal obligation
on all employers to improve the competency levels of their workforce.

The Skills Development Levies Act (No. 9 of 1999) imposes a skills development levy on most
employers, and imposes government departments to allocate a percentage of their budget to skills
development (Meyer [Link]., 2012).
As part of South Africa’s national skills development strategy, the Skills Development Act (No.97 of
1998) was enacted Nel and Werner (2014).
The Purposes of the Act are:

To develop the skills of the South African workforce

To increase the levels of investment in education and training in the labour market and to improve
the return on that investment
To encourage employers to:
Use the workplace as an active learning environment
Provide employees with the opportunities to acquire new skills
Provide opportunities for new entrants to the labour market to gain work experience and
Employ persons who find it difficult to be employed
To encourage workers to participate in learnership and other training programmes
To improve the employment prospects of persons who were previously disadvantaged by unfair
discrimination and to redress those advantages through training and education
To ensure the quality of education and training in and for the workplace
To assist:
Work-seekers in finding work
Retrenched workers in re-entering the labour market and
Employers in finding qualified employees and
To provide and regulate employment services

The Skills Development Strategy is based on the National Qualifications Framework Act (No. 67 of
2008), which makes provision for the National Qualifications Framework (NQF), established by the
South African Qualifications Authority (SAQA) (Meyer [Link], 2012).

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This body of skills development legislation has fundamentally changed the face of education and
training in South Africa. The implications of these Acts for Human Resource Development (HRD) is
important to provide guidelines for designing and implementing relevant organisational strategies
(Meyer [Link], 2012).

Sector Education and Training Authorities (SETAs)

There are various SETAs that have been established to cater for each national economy sector and
these institutional bodies are expected to perform the following functions:

Strategic functions
Implementation functions
Communication and reporting functions
Quality assurance functions (Meyer [Link], 2012)

Learnerships and Skills Programmes

A substantial amount of the SETAs time is spent in handling matters relating to learnerships. (Nel
and Werner , 2014). A learnership is a mechanism to link structured learning with work experience,
leading to a qualification registered on the NQF as a reliable indicator of work readiness. (Meyer
[Link], 2012).

The structured learning part of a learnership has to include the unit standard categories required to
make up a qualification:

Fundamental learning
Core learning
Specialisation

Skills programmes are another form of learning intervention to achieve the objectives of the Act,
and is described as unit standard-based programmes that are occupationally based and presented
by an accredited provider, and when completed, constitute a credit towards a qualification registered
on the NQF (Meyer [Link], 2012).

Workplace Skills Plan (WSP)

A WSP is a strategic plan, approved by the SETA, which outlines the training and development
requirements for an organisation for a minimum period of one year. The HR department needs to
follow certain steps when developing and implementing a WSP (Nel and Werner, 2014).

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Guidelines for developing a WSP:

Step 1: Proper workplace planning

Step 2: Analysing jobs as an input to the workplace planning process
Step 3: identifying and defining the organisation’s skills requirements
Step 4: conducting a skills audit to determine the organisation’s current skills profile
Step 5: defining the organisation’s skills training priorities
Step 6: Identifying the appropriate skills programmes to address the organisation’s identified
training needs
Step 7: Implementing the WSP
Step 8: Monitoring, evaluating and reporting on the WSP
Step 9: Establishing a quality assurance system to ensure effective and value-added skills
training and development (Nel and Werner, 2014)

5.3.6 Occupational Health and Safety Act (No.85 of 1993) (OHSA)

The aim of the OHSA is to establish institutions such as health and safety committees and the
appointment of safety representatives at the workplace to promote and monitor health and safety in
all areas where work is done.

The Act introduces rules and standards by which organisations will be judged and the sanctions that
they can expect when standards are breached (Nel and Werner, 2014)

5.3.7 Unemployment Insurance Act (No. 63 of 2001) (UIA)

The Act was promulgated to establish the Unemployment Insurance Fund (UIF) which is entrusted to
provide unemployment benefits, maternity and adoption benefits and dependent’s benefits related to
the unemployment of such employees. Employees contribute the equivalent of 1 per cent of their
remuneration which is matched by the employer in equal measures. The protective labour laws
outlined provide the legal framework that underpins labour legislation in South Africa and guidelines
for HRM and HRD practitioners.

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Readings

Have You Completed the Prescribed and Recommended Reading(s) for

this Unit?
Now that you have been introduced to this unit. source and work through the
textbook parts and journal articles listed in the Prescribed and Recommended
Reading(s) list at the beginning of this part. It is essential that you read all the
textbook parts and journal articles listed.

Revision Questions

After completing your study of this unitt reflect on the following questions. (To
adequately address these questions you will need to have completed all the
Prescribed and Recommended Reading(s) listed at the beginning of this
part.)
1. Provide a summary of the main provisions and purposes of the various
labour laws that underpin labour legislation in South Africa.
2. Outline and apply the practical steps that should be applied in your
workplace to ensure that HRD strategies are aligned with the skills
development legislation.
3. Provide an analysis of your organisation’s business objectives and skills
profile to identify strategic priorities for education and training.
4. Identify the steps in a project plan to develop a workplace skills plan (WSP)
that would comply with the requirements of the Skills Development Act and its
regulations and those set by your organisation’s SETA.

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Unit
6:
HR Risk Management

Unit 6: HR Risk Management

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Unit Learning Outcomes

Prescribed and Recommended Reading(s)/Textbook(s)

Prescribed Reading(s)/Textbook(s)
Meyer, M. et. al. (2012) Managing Human Resource Development.
South Africa: Lexis Nexis.

Noe, R.A. et al. (2016) Human Resource Management: Gaining a

Competitive Advantage. Tenth Edition. Dubuque: McGraw Hill.

Recommended Reading(s)/Textbook(s)
Sadler-Smith, E. (2021) Human Resource Development: From Theory
into Practice. Sage.

Swanson, R.A. (2022) Foundations of Human Resource Development.

Third Edition. Berret Koehler, Penguin.

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 Human Resource Development

6.1 Introduction
Business leaders are starting to make strategic HR risk management a core part of their talent
management agendas, from daily hiring activities to managing critical business events. Historically
HR Risk Management has largely been a defensive and tactical domain, mostly centred on
compliance-related activities, programmes and accountabilities (Goldberg and Dyer, 2012).

According to the National HR standard launched in 2013 HR Risk Management is a systematic

approach of identifying and addressing people risks (uncertainties and opportunities) that can either
have a positive or negative effect on the realisation of the objectives of an organisation (SABPP,
2015) and an HR risk is any people, culture or governance factor that causes uncertainty in the
business environment that could adversely affect the company’s operations (Meyer, Roodt and
Robbins, 2011).

6.2 Risk Management

Businesses invest money to yield returns on the risks they take. Risks are ‘uncertain future events
which, left unchecked, could adversely influence the achievement of a company’s objectives.’

Risk is a normal and unavoidable element in any business and entrepreneurs and investors pursue
business opportunities despite the risks. Not dealing with risks can lead to business failure and even
the collapse of the company.
In essence the challenge is to identify the specific risks and to plan for any deviation from the
expected.
A business needs a risk management framework to provide assurance about the effectiveness of its
operations and the validity of the findings of its risk management reporting. The framework should
have a clear focus on the cost implications and effects of these factors on the business.
The purpose of managing risk is to ensure the effectiveness and efficiency of operation

6.3 Overview of HR Risk Management

Human Resources have two roles in risk management.

First, people are a source of risk, e.g., shortage of employees, people doing sloppy work, an
employee refusing to take on additional responsibility, or a key employee leaving two months
after completion of a one-year training program

Second, people are important in handling risk, e.g., people using their ingenuity to solve
unexpected problems, employees going the extra mile for the good of the organisation, a key

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employee redesigning her own job to avoid unnecessary delays in getting work done, or an
employee persuading a talented friend to apply for a position in the business

Like risk, human resources are pervasive in the business. Human resource management is most
effective when integrated with decision making throughout the business. This leads to recognition
that each production, financial and marketing decision has a human component or influence. Which
choice is made, how the decision is carried out, the follow-up and monitoring depend on people.
Isolating management team and employee issues from production, financial, and marketing
management frustrates people and creates unnecessary risk in a business enterprise (Ervan, 2012).

6.3.1 King III Report on Governance

At a local level, the King III Code on Governance in South Africa has been in effect from 01 March
2010. Given the important role of HR Directors in supporting King III, and the sound governance of
South African organisations in particular, the Human Resource Research Initiative of SABPP
identified the management of HR risk as one of the most important opportunities that HR
practitioners have for adding value to the new governance dispensation in the country. Significantly
the King III Report specifically mentions HR as an important area for identifying and reducing risk.

6.3.2 Interface Between Human Resource Management and Risk Management

According to (Meyer, Roodt and Robbins, 2011) sometimes managers see training as a waste of
time. This perception is a main source of HR’s credibility crisis: what is the contribution of HR
directors to the success of a business? In order to meet this challenge, HR directors need to,
amongst other things, identify and manage its risks effectively.

To understand fully how human resource management and risk management are interrelated, one
must understand human resource management. It is the staffing, training, development, motivation,
and maintenance of employees to help accomplish organisational goals. Effective human resource
management also helps employees accomplish their career [Link] resource management is
a process that can be broken down into specific activities and understanding these activities helps
explain the relationship between human resources and risk. Failure to successfully carry out these
activities increases risk and penalizes the business by not taking advantage of what its people could
be contributing (Ervan, 2012).
Managing risk should therefore form part of the strategic plan of the organisation where businesses
take a more integrated and proactive approach to ensure that they become resilient and develop
capacity to handle risks and disasters (Meyer, Roodt and Robbins, 2011).

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6.4 The Role of HRM in Risk Management

South African organisations need a more integrated approach to managing HR risks. HR risks need
to be considered in every major business decision like opening a branch in a different province or
country. Research has clearly shown that so-called ‘soft’ issues, like cultural incompatibility, have led
to more major business failures during mergers, acquisitions and international joint
[Link] HR risk is a key element of HR governance. Proper HR Risk Management gives
HR executives an opportunity to fulfil their fiduciary duties of care and sound financial management.

HR Risk Management flows directly from external and internal stakeholder engagement. HR Risk
Management addresses key HR risk issues like reducing risk, HR due diligence, the role of HR
committees, implementing codes of ethics and fair labour practices.
Companies should identify HR risks in different sites or countries and develop proactive risk-reducing
plans to deal effectively with these risks. Consulting with different stakeholders is an important
element of sound HR governance. The purpose of the seamless interfaces between the different
stakeholders is to reduce the different risks and uncertainties that arise because of the interaction
between them.
Inevitably, the HR practitioner needs to work closely with the risk manager and risk committee to
ensure that the overall risk management plan of the company includes HR risks (Meyer, Roodt and
Robbins, 2011).
6.4.1 Table 6.1 Applying Risk Management to HR

HR ACTIVITY POTENTIAL RISK POTENTIAL CONSIDERATIONS

Compensation and Financial abuse Who has signing authority?
benefits How many signatures are required?

Are there checks and balances?

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Hiring Discriminatory Was a complete screening completed on

practices potential applicants?
Hiring unsuitable or
Were provincial human rights laws observed?
unsafe candidates
"Wrongful" hiring Is there a set probationary period?

Were promises made to the candidate that

cannot be honoured?

Did the employee sign off on the policies and

contract of employment before being hired?

Occupational Health Environmental, Do we provide safe working conditions and do

and Safety Personal injury or we conduct safety checks regularly?
death
Do we provide adequate training for staff?

Do we ensure the use of appropriate clothing

and safety equipment?

Do we have adequate policies, procedures, and

committee in place?

Employee supervision Abuse Do we provide sufficient orientation and

Reputation in the training?
community
Do we provide adequate supervision
Release of personal
(especially for activities that occur off-site or
information
after hours)?

Do we have a performance management

system in place?

Are personal information protection guidelines

followed?

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Employee conduct Abuse Do we have clearly written position descriptions

Reputation in the for all positions?
community
Do we follow up when the parameters of the job
description are not respected?

Do we provide thorough orientation and

training?

Do we provide an employee handbook?

Do we have comprehensive policies and

procedures?

Do we provide ongoing training about our

policies and procedures?

Do we retain written records of performance

issues?

Do we ensure that organisational valuables are

secure?

Do we have cash management procedures?

Do we have adequate harassment policies and

procedures?

Exiting employee Property Do we retrieve organisational information and

Reputation in the equipment that a dismissed employee used
community (especially from home)?
Compensation
Do we ensure that all access codes,
passwords, etc are de-activated?

Do we conduct an exit interview?

Do we record lieu time and vacation balances?

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6.5 Types of Human Resources Risks

Compliance with relevant legislation

The typical HR risk here is non-compliance
HR managers should have a clear understanding of what each piece of legislation requires
for compliance

Understanding trends in the business environment and being able to convert them into
business and HR strategies and policies
The typical HR risks here are the inability of senior managers, including HR managers, to
analyse the internal and external business environment and understand what the key
drivers of change are and the inability to convert them into business strategies
People and corporate culture drive the implementation of the business’ strategies
Typical HR risks here are:
Not having the right talent in the right places
Not attracting and retaining key talent
Performance that does not meet predetermined standards
Training and development interventions that do not improve performance
Absence of a constructive company climate.
Implementing business strategy
Typical HR risks here are that the business does not have a strategic or business plan that
converts into different strategic objectives or projects and that the business has not spelt out
the demands on, or implications for HR practitioners in terms of talent, policies, practices
and procedures
Carrying out operations – converting business or project plans into executable operations or
tasks
Typical HR risks here are not having clearly defined operations and tasks or the right staff to
execute them. (Meyer, Roodt and Robbins, 2011)

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Activity 1

Assume you are an HR Director at the organisation in which you are currently
employed at;
1. Firstly, identify some of the HR risks evident and discuss whether you would
take a proactive and aggressive approach to address the HR risks in your
organisation or would you adopt a ‘wait and see’ attitude
2. Secondly , depending on your approach to risk management, discuss
possible ways to respond to and address the risks with HR implications in
your organisation applying the managers skills discussed below.

6.6 Skills for Effective Integration of Risk Management and HRM

Leadership Responsibility

Every human resource manager has leadership responsibility. Even though delegation of authority
and responsibility and other tools for empowering employees decrease the need for leadership,
some leadership is necessary. No group of people comes close to its potential without effective
leadership.

Communication

Communication is an essential skill for effective human resource management. Sending clear
messages, listening and use if feedback are essentially important

Training

Training is helping people learn and effective training requires teaching skills, an understanding of
how adults prefer to learn, patience, communication, a systematic approach, and evaluation of
whether the training has been effective

Motivation

Motivation of employees challenges every manager. Employee motivation helps the organisation
accomplish its goals while also helping workers accomplish their career goals.

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Conflict

Conflict is inevitable among employees, between employees and the management team, and among
the management team. Managers must learn to deal with conflict rather than avoid it.

Evaluation

Employees have a fervent desire for evaluation i.e., information about their performance and
managers find it extremely difficult to share performance evaluations in an honest and helpful
manner. Both supervisors and employees need training in evaluation for it to be useful and pleasant
for both parties (Ervan, 2012).

6.7 Strategies for Managing Risks

Managers must consider the most appropriate risk management strategies for each identified risk.

The HR Council of Canada identified the following strategies for managing risks:

Avoidance

Stop providing the service or doing the activity because it is too risky

Acceptance

Some risky activities are central to the mission of an organisation and an organisation will choose to
accept the risks

Modification

Change the activity to reduce the likelihood of the risk occurring or reduce the severity of the
consequences. Policies and procedures are an important part of this risk management strategy
because they communicate expectations and define boundaries

Transfer or sharing

Purchase insurance or transfer the risk to another organisation through signing a contractual
agreement with other organisations to share the risk (for example, having a contractual agreement
with a bus company to transport clients rather than staff driving clients)

Additional options for dealing with risks as described by Meyer, Roodt and Robbins (2011) include
the following:
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Treat

Introduce preventative actions to reduce the probability or effect if the risk occurs and maximise the
potential for success.

Transfer

Share the exposure, totally or in part, with a partner or contractor, or with an insurer. Monitor any
partnership carefully, as it may not be possible to transfer all risks.

Tolerate

The ability of an effective action against some risks may be limited or the cost of taking the action
may be disproportionate to its potential benefits.

Eliminate

Decide not to undertake the activity that is likely to trigger the risk. Where the risk outweighs the
possible benefits, eliminate the risk by doing things differently and removing the risk

Revision Questions

After completing your study of this unit, reflect on the following questions. (To
adequately address these questions you will need to have completed all the
Prescribed and Recommended Reading(s) listed at the beginning of this
part.)
1. Discuss the significance of business leaders starting to make HR risk
management a core part of their strategic management process.
2. Evaluate the role of human resources and human resource management in
risk management.
3. Identify the key drivers of change in your organisation and discuss the HR
risk of the inability of HR managers to foresee their strategic implications.
4. Discuss how you would attempt to create a “risk culture” in your
organisation in order to be able to manage risk more effectively.

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Readings

Have You Completed the Prescribed and Recommended Reading(s) for

this unit?
Now that you have been introduced to this unit, source and work through the
textbook parts and journal articles listed in the Prescribed and Recommended
Reading(s) list at the beginning of this part. It is essential that you read all the
textbook parts and journal articles listed.

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 Human Resource Development

Unit
7: Introduction to Human Resource
Development

Unit 7: Introduction to Human Resource Development

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Unit Learning Outcomes

Prescribed and Recommended Reading(s)/Textbook(s)

Prescribed Reading(s)/Textbook(s)
Meyer, M. et. al. (2012) Managing Human Resource Development.
South Africa: Lexis Nexis.

Noe, R.A. et al. (2016) Human Resource Management: Gaining a

Competitive Advantage. Tenth Edition. Dubuque: McGraw Hill.

Recommended Reading(s)/Textbook(s)
Sadler-Smith, E. (2021) Human Resource Development: From Theory
into Practice. Sage.

Swanson, R.A. (2022) Foundations of Human Resource Development.

Third Edition. Berret Koehler, Penguin.

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7.1 Introduction
The field of Human Resource Development (HRD) in South Africa and abroad has evolved so rapidly
over the past ten years that traditional training is under threat. Traditionally training has been seen as
a tool to give employees knowledge and skills to perform their work more effectively. Today this view
is changing. An increasing number of company’s view HRD as an important business imperative to
enhance competitiveness and overall business performance. South African companies that use HRD
as a strategic business strategy are likely to outperform their competitors who fail to do so (Meyer
[Link], 2012).

The role of HRD has broadened beyond training programme design. Effective instructional design
remains important, but HRD practitioners are increasingly asked to create innovative systems and
mechanisms to ensure performance improvement in the workplace. The HRD practitioner is no
longer only a trainer, but becomes a consultant to the rest of the organisation in providing the support
that enables the achievement of business objectives (Meyer [Link], 2012).

Video Activity 1

This video illustrates the link between HRD strategy and organisational needs
as it supports the development of efficient and effective HRD program design
and implementation. Ideas for video content related to organisational strategy
and core competencies were drawn from Mathis and Jackson (2011); while
content about HRD strategy and HRD programs were drawn from Werner and
DeSimone (2012)
[Link]

7.2 Overview of Human Resource Development

More recently the term training and development has been replaced by human resource
development (HRD). Whereas training and development is normally driven by top-down, planned
interventions, HRD incorporates, in addition, a greater focus on individual and organisational
learning that can give rise to accidental as well as planned changes to the skill, knowledge and
attitude base of employees (Millmore, Lewis, Saunders, Thornhill and Morrow; 2007). From a South
African perspective HRD is increasingly influenced by the new skills development system based on
skills development within occupations which is to be driven by the quality councils and in particular
the Quality Council for Trades and Occupations (QCTO). In this new paradigm, the emphasis is on
what the learner must be able to apply in the workplace as a result of learning. HRD is also a key
element of the National Skills Development Strategy and other supporting government initiatives

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aimed at alleviating poverty and improving our competitiveness as a nation (Meyer [Link], 2012).

7.3 International Trends in HRD

A global revolution is taking place in the field of workplace learning driven by the requirements of the
information explosion, increased globalisation, the changing nature of work and business, as well as
changing learner needs and aspirations. The following international trends and developments in the
field of HRD have evolved and should be internalised by South African organisations if they want to
become competitive in the global world:

Globalisation
Strategic HRD and Talent Management
Electronic Learning
Management Development
Performance Consulting
Career and Performance Management
Proactive Needs Identification
Training design
Evaluation of Training
Employment Equity and Diversity Training
Learning Organisation (Meyer [Link],2012)

7.4 Local Trends in HRD

Local trends in HRD are driven by training legislation and national HRD needs. For the first time in
history we have a national HRD strategy driven by government. Although South African
organisations should implement the international HRD trends as referred to above, the
underdeveloped nature of our human resources requires additional interventions.

Most of these interventions, such as the Skills Development Act and Skills Development Levies Act,
necessitate a broader approach to HRD.

From an HRD perspective two important phases have emerged:

Training Legislation

Training legislation in South Africa regulates the training that takes place in organisations.

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The three main laws are:

National Qualifications Framework (NQF)

Skills Development Act (No.97 of 1998)
Skills Development Levies Act (No. 9 of 1999)

Companies and providers can no longer do what they want to do.

Revision Questions

After completing your study of this unit” reflect on the following questions. (To
adequately address these questions you will need to have completed all the
Prescribed and Recommended Reading(s) listed at the beginning of this unit.)
1. Provide an analysis of the readiness of South African organisations to
adapt to recent trends and developments in the field of HRD.
2. To what extent would you say, the organisation at which you are employed
in, is in a position to adapt to these recent trends of HRD.

Readings
Have You Completed the Prescribed and Recommended Reading(s) for
this Unit?

Now that you have been introduced to this part, source and work through the
textbook parts and journal articles listed in the Prescribed and Recommended
Reading(s) list at the beginning of this unit. It is essential that you read all the
textbook parts and journal articles listed.

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Unit
8: A Strategic Approach to Human
Resource Development (HRD)

Unit 8: A Strategic Approach to Human Resource Development (HRD)

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Unit Learning Outcomes

Prescribed and Recommended Reading(s)/Textbook(s)

Prescribed Reading(s)/Textbook(s)
Meyer, M. et. al. (2012) Managing Human Resource Development.
South Africa: Lexis Nexis.

Noe, R.A. et al. (2016) Human Resource Management: Gaining a

Competitive Advantage. Tenth Edition. Dubuque: McGraw Hill.

Recommended Reading(s)/Textbook(s)
Sadler-Smith, E. (2021) Human Resource Development: From Theory
into Practice. Sage.

Swanson, R.A. (2022) Foundations of Human Resource Development.

Third Edition. Berret Koehler, Penguin.

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8.1 Introduction
In order to ensure their survival, organisations need to create a strategic architecture, support
processes and learning mechanisms that facilitate continued learning and strategic renewal (Meyer
[Link]. 2012). Arguably SHRD represents the latest extension of the training and development lineage
where training and learning are strategically integrated, vertically to an organisation’s strategic goals
and horizontally to other HR activities. This moves training and development from a process that is
largely directed at solving specific gaps in HR competences as they are identified to a potentially
proactive activity directed at improving corporate effectiveness (Millmore [Link]. 2007).

In light of the above, HRD managers are challenged to internalise the seventh critical outcome of the
NQF which states that the learner must be able to demonstrate an understanding of the world as a
set of inter-related systems by recognising that problem-solving contexts do not exist in isolation.
This is essentially what SHRD is all about (Meyer [Link]. 2012).

8.2 Overview of Strategic Human Resource Development

HRD needs to be viewed not only from a reactive provision of training perspective but also to be
perceptually repositioned within the organisation which should result in HRD being considered a
strategic-partner entrusted with the joint responsibility of improving organisational performance as
well as organisational effectiveness. This would result in HRD extending and having a broader
influence as well as a renewed sense of purpose.

For HRD and its practitioners to be both successful as well as effective in transitioning to a strategic
partner, HRD needs to:

Interpret and understand the trends and commensurate practices in corporate strategy
formulation
Align and link HRD processes and practices to the external, competitive marketplace
Adopt a high value-added agenda, which creates and ensures a competitive customer focused
culture
Design and develop a range of deliverables which contribute to improving the organisation’s
capability not to just respond to discontinuous change but to innovate strategically
Focus on organisational performance issues
Strategically integrate HRD through ensuring that both strategies and interventions are designed
to fit internally with the organisation’s mission, vision, values, structures, procedures and
management systems as well as leadership policies and practices.
Develop the commensurate individual level competencies within the organisation’s staff which will
ensure that the staff are not only equipped to perform but to excel
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Define and create learning systems which encourage and sustain change, and which enhance
personal as well as organisational learning and growth
Provide for the development, deployment and leveraging of business unit level capabilities,
enabling the business unit to distinguish itself within the marketplace
Contribute significantly towards the galvanisation of organisational culture in order to provide
legendary high performance

Achieving all the aforementioned through a high degree of collaboration with all relevant
stakeholders will ensure that the HRD architecture is so well established as to literally enable the
organisation to execute and accomplish its strategy (Meyer [Link]. 2012).

Case Study

The Use of SHRD to support a hotel’s customer service strategy

René Angoujard, general manager of the Novotel London West Hotel,

challenges the commonly held view that training is a waste of time and money
because it leads to staff leaving once trained. He presents a stark alternative:
‘What if you don’t train them and they stay?’ For him, training was at the heart
of a culture change programme prompted by: client dissatisfaction; poor staff
morale; a staff turnover rate of 78 percent; and the need to profit from a major
refurbishment programme and market repositioning of the hotel from a tourist
to business customer base. The hotel had, in his opinion, lost sight of its
service ethic and a ‘comprehensive customer service strategy’ was used to
forge a service culture.
HRD interventions included formal training around a set of core service
behaviours and the use of selected staff drawn from all levels of the hotel’s
hierarchy to act as on-the-job exemplars and coaches. Initial returns on HRD
investment include: a 92 percent drop in customer complaints; a 10 percent
increase in sales; achievement of a repeat booking level of 70 percent;
winning a number of training and customer service awards; and reducing staff
turnover by over half to 34 percent (Millmore [Link]. 2007).

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8.3 A Strategically Oriented Cycle of HRD Activities

Muhlemeyer and Clarke (1997) (cited in Millmore et al., 2007:364) hold that their interpretation of the
training cycle (Figure 10.2) encapsulates a strategic orientation.

This can be found particularly in their emphasis on the whole cycle being driven by organisational
needs and securing knowledge transfer, and its exploitation, throughout the whole organisation.
Their emphasis on knowledge transfer prevents HRD outputs being simply locked up in the heads of
those directly involved in the training intervention and makes them available for others to utilise.

Figure 8.1: A Strategically-Oriented Cycle of HRD Activities

(Millmore [Link], 2007)
8.3.1 Strategy Formulation
McCracken and Wallace (2000) (cited in Millmore et al., 2007:355) develop Garavan’s nine
characteristics of strategic HRD to arrive at a revised definition and model of SHRD. They present
their construct of SHRD as being very strategically mature and compare and contrast this with HRD
and training where, in their view, strategic maturity progressively decreases. In this sense their ideas
on the development of SHRD can be presented as a continuum, working through training and HRD
to the fullest expression of strategic maturity represented by SHRD as depicted in Figure 8.2

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Figure 8.2: A Continuum of Strategic Maturity

(Millmore [Link], 2007)

8.4 Characteristics of Strategically Mature HRD

McCracken and Wallace (inMillmore [Link]., 2007) argue that:

1. True strategic integration arises only when SHRD shapes and influences an organisation’s
missions and goals as well as supporting their effective implementation.
2. Top management support is too passive to fully enact SHRD and that what is required is top
management leadership.
3. Consistent with this leadership role and as part of its environmental scanning responsibilities,
senior management should assume responsibility for analysing the HRD implications of external
and internal environment changes and take over this role from HRD specialists.
4. The formulation of HRD plans and policies, although strategically oriented, reflects an operational
emphasis. To achieve a more strategic focus requires the development of HRD strategies from
which the policies and plans would flow.
5. Line manager commitment and involvement, while necessary, is insufficient to achieve true
integration of HRD into their broader managerial responsibilities. To achieve this integration
requires closer collaboration with HRD specialists and the development of strategic partnerships
between them.
6. Similarly, the existence of complementary HRM activities is insufficient in that it downplays the
need for their close integration under the SHRM umbrella. This makes more explicit the necessity
to ally vertical integration with horizontal integration and anticipates the development of strategic
partnerships between HRD specialists and their other SHRM colleagues.
7. The expanded role for HRD specialists needs to be further extended to elevate their facilitation of
organisational change function to a leadership of change role
8. Similarly, the HRD function needs to extend its recognition of organisational culture, where
training activities are shaped, in part, by an awareness of the current cultural context, to a
position where it actively influences culture and, when necessary, plays a central role in culture
change.
9. That the emphasis on evaluation needs to be interpreted more rigorously to include a harder,
quantifiable edge, where HRD activities are evaluated in terms of their cost-effectiveness.

Activity 1

1. Develop a comprehensive definition of Strategic Human Resource

Development (SHRD)

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Revision Questions

After completing your study of this unit, reflect on the following questions. (To
adequately address these questions you will need to have completed all the
Prescribed and Recommended Reading(s) listed at the beginning of this
part.)
1. Consider the Human Resource Development function implemented by the
organisation for which you [Link] it be justifiable to position the HRD
function implemented by the organisation for which you work at the SHRD
end of the HRD strategic maturity continuum?
2. Suppose you have been appointed as a group HRD manager at the
organisation which you work for. Develop a strategic HRD plan for the
company.
3. Then develop a plan to measure the effectiveness of the strategic HRD
plan once it has been implemented.

Readings

Have You Completed the Prescribed and Recommended Reading(s) for

this Unit?
Now that you have been introduced to this unit, source and work through the
textbook parts and journal articles listed in the Prescribed and Recommended
Reading(s) list at the beginning of this [Link] is essential that you read all the
textbook parts and journal articles listed.

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Unit
9: Talent Management
Strategy
U n i t 9 : T a l e n t M a n a g e m e n t S t r a t e g y

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Unit Learning Outcomes

Prescribed and Recommended Reading(s)/Textbook(s)

Prescribed Reading(s)/Textbook(s)
Meyer, M. et. al. (2012) Managing Human Resource Development.
South Africa: Lexis Nexis.

Noe, R.A. et al. (2016) Human Resource Management: Gaining a

Competitive Advantage. Tenth Edition. Dubuque: McGraw Hill.

Recommended Reading(s)/Textbook(s)
Sadler-Smith, E. (2021) Human Resource Development: From Theory
into Practice. Sage.

Swanson, R.A. (2022) Foundations of Human Resource Development.

Third Edition. Berret Koehler, Penguin.

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 Human Resource Development

9.1 Introduction
The importance of managing HRD from a strategic point of view has evolved rapidly over the past
five years. It is now more difficult than ever to strategically plan HRD over the long term. The changes
in the business environment are so rapid and unpredictable that strategic HRD must be aligned on a
more regular basis. This means that strategic HRD plans must be flexible enough to accommodate
changes in the environment. In addition, major strategic decisions, such as whether to outsource the
organisation’s training activities wholly or partially, have to take costs savings and business
improvements into consideration. Moreover, the worldwide skills gaps have forced companies to
institute aggressive talent management strategies to attract, develop and optimise the available
talent in both the broader marketplace and specific industries (Meyer [Link].; 2012).

Video Activity 1

How to find undervalued talent:

[Link]
TMA Method: Discover three basic principles of great competency and
talent management:
[Link]

9.2 Overview of Talent Management

When a manager takes a talent management perspective, he or she:

1. Understands that the talent management tasks (such as recruiting, training, and paying
employees) are parts of a single interrelated talent management process. For example, having
employees with the right skills depends as much on recruiting, training and compensation as it
does on applicant testing.
2. Makes sure talent management decisions such as staffing, training, and pay are goal-directed.
Managers should always be asking, “What recruiting, testing, or other actions should I take to
produce the employee competencies we need to achieve our strategic goals?”
3. Consistently uses the same “profile” of competencies, traits, knowledge, and experience for
formulating recruitment plans for a job as for making selection, training, appraisal, and payment
decisions for it. For example, ask selection interview questions to determine if the candidate has
the knowledge and skills to do the job, and then train and appraise the employee based on
whether he or she shows mastery of that knowledge and skills.
4. Actively segments and proactively manages employees. Taking a talent management approach
requires that employers proactively manage their employees’ recruitment, selection, development
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and rewards. As one example, many employers pinpoint their “mission-critical” employees, and
manage their development and rewards separately from the firms’ other employees.
5. Integrates/coordinates all the talent management functions. Finally, an effective talent
management process integrates the underlying talent management activities such as recruiting,
developing and compensating employees. For example, performance appraisals should trigger
the required employee training.

Case Study 1
Talent Management at Qualcomm
At Qualcomm, a San Diego company, talent management is organised
around core values that emphasise recruiting smart, motivated employees
and creating a work environment that allow them to innovate, execute, partner
and lead. When Qualcomm wanted to introduce technology for its
performance management process human resources generalists worked
together with organisational development and information technology
specialists to ensure that what employees were being evaluated on
(performance management) and what employees were paid and rewarded for
(compensation and rewards) were aligned. HR trained managers to use the
performance management system and now focus on identifying employee
skills gaps to identify opportunities to improve performance (Noe et. al.,
2015).
The case study above recognises that all HR practices are inter-related,
aligned with business needs, and help the organisation manage talent to
meet business goals..

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9.3 Approach to Talent Management

Building information-rich HR practices such as succession planning and creating talent grids is
important in the challenging times South African organisations are facing at present. A focused
approach to talent management implies taking control by, amongst others, asking “what we can do
with what we have?”

Empowering employees through effective talent management means entrusting to them the
accountability and ownership of individual and team achievements, which is a step in the right
direction to also apply talent branding appropriately.

Because of the skills shortages that exist in South Africa it is crucial for organisations’ HR
practitioners to be aware of this within the context of Talent Management (TM) in order to attract and
retain talent in order to contribute to an organisation’s bottom line (Nel and Werner, 2014).

9.4 Talent Management: The Strategic Context for Career Development

Talent management can be broadly defined as the implementation of integrated strategies or
systems designed to increase workplace productivity by developing improved processes for
attracting, developing and utilising people with the required skills and aptitude to meet current and
future business needs. (Meyer [Link]. 2012)

Four diverse talent management activities emerge from the above definition.

Recruitment
Performance management
Leadership development
Organisational strategy

The following roles to be performed by HR

Focusing on scarce skills and fitting talented people to required roles or positions
Safeguarding key business capabilities
Accelerating leadership development
Providing full business exposure to rising stars in the organisation
Avoiding loss of key talent
Selecting successors with leadership abilities
Focusing on senior management's commitment to development and performance standards

The aim of career management within a talent management perspective is thus to plan and shape
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the progression of the employee within the organisation in accordance with, firstly, the organisational
needs and goals and secondly, the employee’s performance potential and personal preferences and
aspirations.

Revision Questions

After completing your study of this unit, reflect on the following questions. (To
adequately address these questions you will need to have completed all the
Prescribed and Recommended Reading(s) listed at the beginning of this
part.)
1. Discuss why it is important for managers to view recruiting, training,
appraising and paying employees as a talent management process.
2. Explain to the head of the HR department in your organisation how he/she
could use the talent management approach to improve the organisation’s
performance.
3. Describe the link and the role of Human Resource Development (HRD) in
career management
4. Provide a discussion on the aim of career management within a talent
management perspective.

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Unit
10: The Learning
Organisation
Unit 10: The Learning Organisation

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Unit Learning Outcomes

Prescribed and Recommended Reading(s)/Textbook(s)

Prescribed Reading(s)/Textbook(s)
Meyer, M. et. al. (2012) Managing Human Resource Development.
South Africa: Lexis Nexis.

Noe, R.A. et al. (2016) Human Resource Management: Gaining a

Competitive Advantage. Tenth Edition. Dubuque: McGraw Hill.

Recommended Reading(s)/Textbook(s)
Sadler-Smith, E. (2021) Human Resource Development: From Theory
into Practice. Sage.

Swanson, R.A. (2022) Foundations of Human Resource Development.

Third Edition. Berret Koehler, Penguin.

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10.1 Introduction
Learning occurs at individual, work group and organisational levels and a key focus of SHRD is the
creation of a learning environment and structural design, which promotes learning and development
for performance improvement and competitiveness. This positions learning as an organisational
capability such that those organisatios that are able to learn more quickly than their rivals secure
significant competitive advantage. It is this premise that has led to interest in the concept of the
‘learning organisation’ (Millmore [Link], 2007).

10.2 Overview of the Learning Organisation

The recent elevation in the status of learning can be attributed to a least two particular lines of
argument.

First is the notion that, to maintain a competitive advantage, organisations through collective
interactions of their employees need to learn faster than the rate of change and faster than their
competitors.
Second is the notion that learning itself is one of the main sources, if not the main source of
competitive advantage (Millmore [Link], 2007).
The learning organisation learns from the environment, but actively encourages learning within the
work environment. The learning environment encompasses the culture of the organisation. Learning
occurs in all activities of the members of the organisation. From this perspective it is evident that the
learning organisation represents major challenges for HRD in organisations (Meyer [Link], 2012).
It is important then to consider those organisational practices and support mechanisms that help
build towards a learning organisation.
These frequently collate around:

The creation of a learning culture where learning and experimentation are actively promoted, as
evidenced through such things as the resources allocated to learning and development activities
Structural mechanisms to support organisational learning, such as routines for collecting,
analysing, disseminating and applying information, and identifying and addressing learning and
development needs as well as the organisation structure itself
The importance of evaluation as a continuous process that not only underpins the principle of the
learning organisation and knowledge management but informs organisational investment in
HRD/SHRD; and
The psychological maturity of an organisation’s human resources such that, for example,
employees at all levels are receptive to the greater levels of accountability, autonomy and
responsibility that underpin the construct of the learning organisation (Millmore [Link], 2007)

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While a learning organisation cannot exist in its idealised form, and is better viewed as an
aspirational vision than can at best be pursued as a never-ending journey, some organisations will
exhibit some of the characteristics of learning organisations (Millmore [Link], 2007)

10.3 Characteristics of the Learning Organisation

A learning organisation is different from the traditional organisation in that the culture is dynamic and
requires that certain elements be entrenched in the culture.

These characteristics according to Meyer [Link] (2007) are as follows:

Flat organisational structure

Open communication
Teamwork
Empowerment
Inspired Leadership
Innovation and Change
Shared Vision of Quality
Systems Approach
Job Satisfaction and Commitment
People–Oriented and Talent Focus
External Focus
Technology–Driven
Learning Opportunities
Action and Results Focus
Customer-Orientated

Activity 1

Research the characteristics of learning organisations, and then determine

whether you would consider the organisation in which you are employed a
‘learning organisation’ or one that is aspiring towards a ‘learning organisation’

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10.4 Learning Organisation Implementation Plan

The learning organisation is an ideal organisation which means that no pure learning organisation
exists. If a company actively encourages the characteristics of the learning organisation, such a
company may be termed a learning organisation. Organisations must discover their own situations
and decide which strategies and plans can be used in becoming a learning organisation.

The generic model of the phases in creating a learning organisation depicted in Figure 10.1 can be
adapted by organisations

Figure 10.1 Generic Model of Learning Organisation Implementation

(Meyer [Link]; 2012)
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The concept of the learning organisation constitutes a new approach to learning and workplace
performance that requires a new way of managing organisations. Not only does it necessitate
changes to education, training and development interventions, but it also encompasses a totally new
way of managing people, processes and systems in the modern organisation. A change in
organisational culture is therefore needed in order to effect the change from a traditional
organisation to a learning organisation.
Learning is no longer restricted to an individual experience. Learning becomes a team and
organisational process which requires new and innovative ways of learning and managing
performance improvement. Learning becomes part of a continuous process of sharing information
with people and the environment. To be of value to organisations, organisational learning must be
encouraged, nurtured and managed for the improvement of performance.

Activity 2

The management team of the organisation at which you are employed have
realised the need to become a learning organisation in order to keep abreast
of technological developments.
Using the generic model of learning organisation implementation, develop a
plan to transform your organisation into a learning organisation.

Revision Questions

After completing your study of this unit, reflect on the following questions. (To
adequately address these questions you will need to have completed all the
Prescribed and Recommended Reading(s) listed at the beginning of this
part.)
Read the case study below taken from Meyer [Link]. (2012) and answer the
questions that follow:
Martex is an oil refinery with several plants throughout South Africa. The East
London plant had found a new way of processing waste material. This
processing is more efficient than what other refineries are using. Moreover,
the process meets all environmental regulations. The parent company
situated in Richards Bay saw the obvious benefits of getting the other
refineries in Cape Town, Saldanha, Port
Elizabeth, George and Durban to adopt this new process. If used in all
refineries, it could save approximately R65 million a year.

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The operations director, ZodwaDlamini, gathered all the plant managers and
chief engineers together to share information about how the new process
works. All members agreed that it was a breakthrough, but only the Saldanha
plant managed to follow the example set by the East London refinery. This
was due to regular contact between these two refineries on the
implementation of the new system.
After a year Zodwa realised that only two plants were productive as a result of
implementing the new system. After an investigation, she realised that most
people, had more disincentives than incentives for adopting new processes.
Each refinery had plenty of other things on its plate. This new procedure
required installing some new equipment, and it meant changing some things
that had been in place or a long time. Most supervisors and employees
resisted any change to new procedures and technology.
1. Which characteristics of the learning organisation are evident
at the East London plant?
2. Which characteristics of the learning organisation are absent at Martex?
3. How can resistance to the new procedures and technology be broken
down?
4. Develop a management plan to move Martex from a traditional
organisation to a learning organisation.

Readings

Have You Completed the Prescribed and Recommended Reading(s) for

this unit?

Now that you have been introduced to this unit, source and work through the
textbook parts and journal articles listed in the Prescribed and Recommended
Reading(s) list at the beginning of this part, it is essential that you read all the
textbook parts and journal articles listed.

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Unit
11: Organisational
Development
Unit 11: Organisational Development

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Unit Learning Outcomes

Prescribed and Recommended Reading(s)/Textbook(s)

Prescribed Reading(s)/Textbook(s)
Meyer, M. et. al. (2012) Managing Human Resource Development.
South Africa: Lexis Nexis.

Noe, R.A. et al. (2016) Human Resource Management: Gaining a

Competitive Advantage. Tenth Edition. Dubuque: McGraw Hill.

Recommended Reading(s)/Textbook(s)
Sadler-Smith, E. (2021) Human Resource Development: From Theory
into Practice. Sage.

Swanson, R.A. (2022) Foundations of Human Resource Development.

Third Edition. Berret Koehler, Penguin.

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11.1 Introduction
Organisational Development (OD) is an effort planned, organisation-wide, and managed from the
top, to increase organisation effectiveness and health through planned interventions in the
organisation’s ‘processes’, using behavioural science knowledge. Organisational development or
renewal is a series of techniques and methods that managers can use in their action research to
increase the adaptability of the organisation (Nel [Link],2014).

11.2 Overview of Organisation Development

Change becomes necessary when there is a noticeable gap between what an organisation is trying
to do, and what it is actually accomplishing. It occurs when positive steps are taken to reduce this
disparity. Change, and therefore renewal, is any alteration in the status quo. Without renewal efforts
an organisation is often threatened by short-term shifts in market demands (Nel [Link], 2014).

Organisational development is a change process through which employees formulate the change
that’s required and implement it, often with the assistance of trained consultants. OD has several
distinguishing characteristics:

1. It usually involves action research, which means collecting data about a group, department, or
organisation, and feeding the information back to the employees so they can analyse it and
develop hypotheses about what the problems might be.
2. It applies behavioural science knowledge to improve the organisation’s effectiveness.
3. It changes the organisation in particular direction – toward empowerment, improved problem
solving, responsiveness, quality of work, and effectiveness (Dessler, 2013).

Organisation development is an emerging discipline aimed at improving the effectiveness of the

organisation and its members by means of a systematic change programme. A truly effective
organisation is one in which both the organisation and the individual can grow and develop. An
organisation with such an environment is a “healthy” organisation. The goal of organisation
development is to make organisations healthier and more effective (Brown, 2014).

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11.3 The Characteristics of OD

Table 12.1 Major Characteristics (Brown, 2014)

Characteristics Focal Areas

1. Change OD is a planned strategy to bring about organisational
change

Change effort aims at specific objectives and planned by

managers to achieve goals

2. Collaborative approach Involves a collaborative approach to change

Includes involvement and participation of the organisation

members most affected by the changes

3. Performance orientation OD programmes include an emphasis on ways to improve

and enhance performance and quality

4. Humanistic Orientation OD relies on a set of humanistic values about people and

organisations

Emphasis on increased opportunity and use of human

potential

5. Systems approach OD represents a systems approach concerned with the

interrelationship of divisions, departments, groups and
individuals as interdependent subsystems of the total
organisation

6. Scientific method OD is based upon scientific approaches to increase

organisation effectiveness

Scientific approaches supplement practical experience

11.4 Managing Organisational Change Programmes

The planning and implementation of strategy involves change – both in the way the organisation
interacts with its external environment, and in how it manages its internal operation. OD deals with
creating and implementing planned change. Thus, strategic planning and OD should go hand in
hand (Blanchard and Thacker, 2014).

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11.5 OD, Strategy and Change

Organisational change is an inherent part of the process of developing and implementing strategy
(Blanchard and Thacker, 2014). Organisational turnarounds often start with a change in the firm’s
strategy, mission and vision – with strategic change (Dessler, 2014)

The field of OD can help organisations manage change effectively. OD techniques provide methods
for change to occur in an objective, goal-directed manner that addresses the needs of both the
organisation and the employees affected by the change (Blanchard and Thacker; 2014).
The strategic planning process, if done properly, is an OD approach to change. The first step,
establishing a compelling need for change, occurs in strategic planning during the environmental
scanning phase. The need for change is made apparent when the strategic planners identify the
threats and opportunities in the external environment and compare that information with what the
organisation is currently doing.

A need for change is established when a gap exists between what the organisation is doing and
what the external environment requires (or will require). Next, the company’s business objectives are
set.

The company’s current strengths and weaknesses are analysed to determine what internal changes
are necessary. This information provides the compelling need for internal change, and internal
strategic objectives are developed for these areas. The rest of the steps in the change model
concern the development of tactical activities to achieve the strategic objectives(Blanchard and
Thacker, 2014).

11.6 Change Management Models

11.6.1 Lewins Change Process
Psychologist Kurt Lewin formulated a model to summarise what he believed was the basic process
for implementing change with minimal resistance. To Lewin, all behaviour in organisations was a
product of two kinds of forces: those striving to maintain the status quo and those pushing for
change. Implementing change thus means reducing the forces for the status quo or building up the
forces for change.

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Lewin’s process consisted of three steps:

Unfreezing means reducing the forces that are striving to maintain the status quo, usually by
presenting a provocative problem or event to get people to recognise the need for change and to
search for new solutions
Moving means developing new behaviours, values and attitudes. The manager may accomplish
this through organisational structure changes, through conventional training and development
activities, and sometimes through the other organisational development techniques (such as
team building)
Refreezing means building in the reinforcement to make sure the organisation doesn’t slide back
into its former ways of doing things. (Dessler, 2014).

11.6.2 An 8-step process for leading organisational change

Establish a sense of urgency.

This often requires creativity.

Mobilise commitment through joint diagnosis of problems

Having established a sense of urgency the leader may then create one or more task forces to
diagnose the problems facing the company. Such teams can produce a shared understanding of
what they can and must improve and thereby mobilise commitment.

Create a guiding coalition

Most CEO’s create a guiding coalition of influential people. They work together as a team to act as
missionaries and implementers

Develop and communicate a shared vision

For example, in the case of Nokia’s CEO at the time, Stephen Elop’s vision was of a streamlined
Nokia moving fast to build advanced smartphones based on Microsoft’s operating system, using
multiple forums such as emails, formal and informal interaction.

Help employees make the change

Help employees address any impediments to change if any. For example, Elop quickly replaced
many of Nokia’s top and middle-level managers.

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Consolidate gains and produce more change

Aim for attainable short-term accomplishments. Use the credibility from these to change the
remaining systems, structures, and policies that don’t fit well with the company’s new vision.

Reinforce the new ways of doing things with changes to the company’s systems and procedures

For example, use new appraisal systems and incentives to reinforce the desired
behaviours. Reinforce the new culture by ensuring that the firm’s managers role-model the
company’s new values.

Finally, the leader must monitor and assess progress

This involves comparing where the company is today with where it should be based on
measurable milestones

At Nokia for instance, “How many new products has the company introduced?” What is our
smartphone and handset market shares?” (Dessler, 2014).

11.7 Leading Organisational Change

Managing change is important in today’s challenging environment. Professor Edward Lawler says
that as more employers face rapid competitive change, “focusing on strategy, organisation
development, and organisational change is a high payoff activity for the HR organisation. (Dessler,
2014).

The case of Nokia below illustrates an organisation faced with the decision about what to change.

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Case Study 1

Case Study - Example: NOKIA

Activity 1

Assume that the organisation at which you are currently employed is affected
by rapid technological, social, economic or some sort of organisational
change.
Using the 8-step process for leading change, discuss how you as an HRD
manager would lead the organisational change process at your organisation.

11.8 A Model for Organisational Development

OD programmes are based upon a systematic analysis of problems and a top management actively
committed to the change effort. The purpose of such a programme is to increase organisational
effectiveness by the application of OD values and techniques. Many Organisational Development
programmes use the action research model. Action research involves collecting information about
the organisation, feeding it back to the client system, and developing and implementing action
programmes to improve system performance. The manager also needs to be aware of the processes
that should be considered when one is attempting to create change (Brown, 2014).

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Figure 11.1 depicts a five-stage model of the total organisation development process.

Figure 11.1 Organisation Development’s Five Stages

(Brown, 2014)
Each stage of the process is dependent on the preceding one, and successful change is more
probable when each of these stages is considered in a logical sequence.

Activity 2

Refer to the text, Brown (2014) Experiential Approach to Organisation

Development. 8th edition. Pearson
Research the VW scandal dubbed the “diesel dupe” and the resignation of
Martin Winterkorn, the CEO, at the time of the scandal and discuss, using the
organisation development model in the text stated above, how VW would
apply an organisation-wide approach to the structural changes they faced

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11.9 Integrating HRD and OD Activities

The most effective way to ensure the seamless implementation of performance improvement plans is
to integrate HRD and OD. Trainers and OD professionals’ interests are intimately connected. Each
provide a valuable service to the other.

Trainers and OD professionals have differences in the nature of the change they are responsible for.
One reason for the division between them is that companies typically organise around their different
functional activities, and OD and HRD departments are often separated.

This separation increases the differences in perspective, role, value of service, clients, etc.

A solution would be to house them together in the form of a performance improvement department
within HR. This would be an example of a structural change to align the organisation’s internal
structure with its strategic direction (Blanchard and Thacker, 2014).

Revision Questions

After completing your study of this unit, reflect on the following questions. (To
adequately address these questions you will need to have completed all the
Prescribed and Recommended Reading(s) listed at the beginning of this
part.)
1. Discuss the link between OD, strategy and change and then discuss how
HRD may be integrated into OD activities.
2. Analyse the HRD environment at which you are currently employed at and
discuss whether there exists a distinct link between HRD and OD activities or
whether these departments operate separately.
3. Assume you are the HRD manager at the organisation at which you are
employed.
4. Consider the competitive strategy of your organisation and provide.

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Revision Questions

Have You Completed the Prescribed and Recommended Reading(s) for

this Unit?
Now that you have been introduced to this unit, source and work through the
textbook parts and journal articles listed in the Prescribed and Recommended
Reading(s) list at the beginning of this part. It is essential that you read all the
textbook parts and journal articles listed.

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Unit
12: Human Resource
Technology
U n i t 1 2 : H u m a n R e s o u r c e T e c h n o l o g y

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Unit Learning Outcomes

Prescribed and Recommended Reading(s)/Textbook(s

Prescribed Reading(s)/Textbook(s)
Meyer, M. et. al. (2012) Managing Human Resource Development.
South Africa: Lexis Nexis.

Noe, R.A. et al. (2016) Human Resource Management: Gaining a

Competitive Advantage. Tenth Edition. Dubuque: McGraw Hill.

Recommended Reading(s)/Textbook(s)
Sadler-Smith, E. (2021) Human Resource Development: From Theory
into Practice. Sage.

Swanson, R.A. (2022) Foundations of Human Resource Development.

Third Edition. Berret Koehler, Penguin.

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12.1 Introduction
HR is increasingly playing a strategic role as business partner in the organisation and as such, adds
value through making high impact decisions. HR stays the custodian of HRM functions, policies,
systems and processes, but it also acknowledges the role others play in the collaborative effort of
attaining strategic goals.

It provides HR executives, line managers, and employees with HR information and knowledge that
enable them to make sound decisions. The devolution of the HR function and dissemination of HR
knowledge throughout the organisation with complete online support for improved decision-making
is labelled E-HRM (Nelet. al, 2014).

12.2 Overview of HRIS, E-HRM and E-Learning

One of the most significant issues faced by modern organisations is the use of technology to
streamline activities, cut costs, improve connectivity and efficiency and increase business
effectiveness, thus moving from labour intensive to technology-intensive activities. Coupled to this
are the ever-changing environment and a workforce who have different expectations and needs; in
this era where they are more connected via social media than ever before ([Link]., 2015).

Greater use of technology has led to the use of Human Resource Management Systems (HRMS),
also called Human Resource Information Systems (HRIS), which are integrated systems providing
information used by HR managers in decision-making.

Sophisticated HRIS keep track of employee information, such as who’s doing what jobs and where,
what are they paid and what training they have already had.
The delivery of some HR services online through Web-based HR home pages has led to the
development of what may be termed E-HR (or E-HRM) (Warnich [Link], 2015).

12.3 Distinction between E-HRM and HRIS

Confusion can arise concerning the distinction between E-HRM and HRIS.

Warnich [Link], (2015) defines HRIS as an electronic system used to acquire, store, manipulate,
analyse, retrieve and distribute information regarding an organisation’s human resources.

Electronic human resource management, or E-HRM reflects a philosophy for the delivery of HR; it
uses information technology, particularly the Web, as the central component of delivering efficient
and effective HR services. Organisations embracing E-HRM do not simply use technology to support

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HR, rather they see technology as an enabler for things to be done differently in the HR function by
changing the manner in which information flows and how social interaction and communication take
place.

12.4 Electronic Learning (E-Learning)

Technological applications have become a necessity in society and the modern business
environment. All jobs and functions are affected by information technology. How does technology
affect training in the workplace and are HRD practitioners equipped to deal with the technology
revolution (Meyer [Link], 2012).
In response to the technology challenge, some companies have started to make use of technology-
based training or electronic learning (e-learning), the application of electronic technological systems
to support the learning process (Meyer [Link], 2012).
E-learning, commonly used interchangeably with computer-based training (CBT), online learning,
and web-based training refers to instruction and delivery of training by computer through the Internet
or Web. To enhance learning all of these training methods can include and integrate into instruction
text, interaction using simulations and games, video, collaboration using blogs, wikis, and social
networks, and hyperlinks to additional resources.
The training programme can be accessed using a password through the public Internet or the
company’s private intranet (Noe [Link], 2015).
There are many potential features that can be included in online learning to help trainees learn and
transfer training to their jobs.
For example, online programmes that use video may make it an interactive experience for trainees.
That is, trainees watch the video and have the opportunity to use the keyboard or touch the screen to
answer questions, provide responses to how they would act in certain situations, or identify the steps
they would take to solve a problem. Interactive video is especially valuable for helping trainees learn
technical or interpersonal skills. (Noe [Link], 2015)

Case Study 1

Sanofi-Aventis U.S. was behind its competition in product knowledge within

the diabetes sales force. The company needed a training solution that the
sales force could complete in the field or while traveling. As a result, the
company developed a self-paced e-learning solution – a virtual campus
called Diabetes University- where learners can be guided through the
campus by a “professor” and participate in different types of learning activities
including games, videos, and narrated text.

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12.4.1 Benefits of E- Learning

Course Administration
Financial Management
Management Reports
Resource Management
Cost Savings
Learner Needs
Effective Learning
Evaluation

12.4.2 Types of E-Learning Methods

Interactive Multimedia
Web-based Training
Video Conferencing
Internet
Intranet
EPSS
Social Learning

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12.4.3 E-Learning Implementation Process

Figure 12.1: E-Learning Implementation Process

(Meyer [Link], 2012)
The implementation of e-learning should be carefully planned and managed to ensure effective
training and transfer of skills. When making decisions regarding e-learning, the phases and sub-
steps indicated in Figure 12.1 should be used.
By implementing e-learning and accelerating learning in and outside the workplace by means of m-
learning, and s-learning, progressive South African organisations can gain a competitive edge if they
deliver to their customer’s quality products and services better than those of and more quickly than

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their competitors.

Revision Questions

After completing your study of this unit, reflect on the following

questions. (To adequately address these questions you will
need to have completed all the Prescribed and Recommended
Reading(s) listed at the beginning of this part.)
1. Prepare a presentation for the top management at your
organisation to convince them about the benefits of E-learning for
your organisation.
2. Include in your presentation the various types of e-learning methods and
highlight the method/s that would be most suitable to your organisation.
3. Suppose you were tasked to implement e-learning in the organisation at
which you are currently employed. Discuss the process you would follow and
the factors you would consider when planning and designing E-learning
implementation.
4. Consider the benefits of E-learning for your organisation

Readings

Have You Completed the Prescribed and Recommended Reading(s) for

this unit?
Now that you have been introduced to this unit, source and work through the
textbook parts and journal articles listed in the Prescribed and Recommended
Reading(s) list at the beginning of this part, it is essential that you read all the
textbook parts and journal articles listed.

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Unit
13: Human Resource
Measurement
U n i t 1 3 : H u m a n R e s o u r c e M e a s u r e m e n t

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Unit Learning Outcomes

Prescribed and Recommended Reading(s)/Textbook(s

Prescribed Reading(s)/Textbook(s)
Meyer, M. et. al. (2012) Managing Human Resource Development.
South Africa: Lexis Nexis.

Noe, R.A. et al. (2016) Human Resource Management: Gaining a

Competitive Advantage. Tenth Edition. Dubuque: McGraw Hill.

Recommended Reading(s)/Textbook(s)
Sadler-Smith, E. (2021) Human Resource Development: From Theory
into Practice. Sage.

Swanson, R.A. (2022) Foundations of Human Resource Development.

Third Edition. Berret Koehler, Penguin.

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13.1 Introduction
HR departments are continually under pressure to illustrate the financial value that they add to the
organisation which is expressed as ROI (return on investment). The HRIS enables the HR
department to determine the baseline and cost of many activities, behaviours and programmes in the
organisation, such as labour turnover, absenteeism or training interventions. This constitutes HR
metrics, which is information expressed in quantities, such as percentages, ratios or rand value, used
to highlight HR trends and measure the impact of HR processes and interventions.

An example of a HR metric is the percentage of newly appointed employees who leave the company
within six months due to performance (Nel and Werner, 2014).

13.2 Overview of HR Measurement

Being able to measure what you are doing is a big part of Human Resource Management today and
being able to measure what you are doing is an integral part of the HR strategy process.

First, management translates its strategic plan into workforce requirements, in terms of measurable
worker competencies and behaviours (such as outstanding service). Given these workforce
requirements, the Human Resource Manager then formulates supportive HR strategies, policies, and
practices (such as new training programmes), intended to produce these workforce competencies.

Finally, the HR manager picks measures by which to gauge whether his or her new policies and
practices are producing the required employee competencies and behaviours.

The measures (or “metrics”) you use may be broad organisational measures such as ROI and profit
margins or they may focus narrowly on specific Human Resource Management and activities (such
as “hours of training per employee”). The bottom line is that measuring “how we’re doing, and why” is
important for managing one’s human resources (Dessler, 2014).

13.3 HR Metrics
It is important that we measure the impact of HR initiatives and projects in terms of the cost and the
impact they have on the company. This should be done using different types of measurements
known as HR metrics and may include:

Diagnostic measures
Evaluative measures and
Human capital measures

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Each of these are used for different purposes.

Diagnostic measures can be used for simple calculations of employee turnover and the number
of applications received for each vacancy, among other [Link] measures can also be
used for compensation-related measurements such as the calculation of overtime costs or for
training and development for the calculation of the total cost per employee for training. In general,
diagnostics measures are used to generate regular reports that management can use to
measure a variety of HR initiatives
Evaluative measures mainly focus on the measurement of effectiveness. This is usually done by
means of quantitative data, for example when companies determine the reduction in recruitment
costs for jobs vacated by retirees to measure the effectiveness of the use of internal staffing and
succession planning, or qualitative data, for example the measurement of the impact of good
communication in an organisation on the level of employee engagement
Human Capital metrics includes looking at the metrics of the business that have an impact on
the whole business, for example the impact of management practices on the workforce. Human
capital metrics measure value more than cost whilst HR metrics focus more on costs

The important aspect is that the correct measures are used for the particular aspect that you want to
measure (Wärnich [Link], 2015).

13.4 Types of HR Metrics Used to Drive Organisational Strategy

13.4.1 HR Metrics in Staff Acquisition
During HR planning, previous levels of supply and demand are used to estimate future talent
requirements. In recruitment, different supply channels are compared. For example, how many
applicants applied via the graduate recruitment programme and how many via the Internet
recruitment programme? What percentage of those who applied was short-listed, what percentage of
those short-listed was selected and how many of those selected accepted the offer? The cost of
recruitment can be determined by taking overall recruitment costs and dividing it by the number of
people recruited.

The yield: Cost Ratio shows the most effective and efficient recruitment method. The average time
taken to fill positions can also be determined by dividing the number hired into the total days taken to
fill a job. During selection, psychometrics, which is just another form of HR metrics, gives a
quantitative indication of an applicant’s abilities and aptitude. Each selection criteria, such as
experience and presentation skill, can be given a weight in terms of importance and each applicant
can be rated on each criteria and a final score determined (Nel and Werner, 2014).

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13.4.2 HR Metrics in Employment Equity

The Employment Equity Act requires that employers prepare and implement an employment equity
plan that complies with the new regulations published by the Department of Labour in 1999. These
regulations stipulate the exact manner in which designated employers must analyse their workforce
and the relevant information that must appear in their equity reports. The online Employment Equity
Report is available on the Department of Labour website ([Link]). The report is divided into
sections that allow reporting on the organisation’s progress regarding its business’ goals when it
comes to recruitment, promotion, skills development and other elements of the organisation’s
Employment Equity Plan. (Nel and Werner, 2014)

13.4.3 HR Metrics in Absenteeism Management

Absenteeism is defined as the non-attendance of an employee when scheduled to work (Nel and
Werner, 2014).

Whatever the reason for absence there is no doubt that it impacts on the organisation’s ability to
meet its objectives and puts pressure on those who have to cover the extra workload. The costs of
unacceptably high levels of absence are normally expressed financially, and are based on
calculating the value of lost production and sick payments. These financial measures also include:

The costs of additional staffing levels and overtime working to cover anticipated absences
The cost of replacement labour
Costs associated with delayed production and disruptions to planning schedules
Costs associated with loss of quality or service levels
Costs resulting from low morale and dissatisfaction (Banfield and Kay, 2008).

Monitoring absence rates forms a key element of absence management and most organisations
track absenteeism on a weekly, or monthly basis to monitor the effectiveness of absence
management strategies. This often involves calculating absence using a formula and comparing the
resultant figure with an internal or external benchmark standard (Banfield and Kay, 2008).

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Two sets of HR metrics are generally used to measure absenteeism:

The total time lost or Gross Absence Rate (GAR) gives the percentage of work time lost owing to
absenteeism (Nel and Werner, 2014). It is calculated as follows:

Example:
A team of five people who each work five days a week, less bank holidays, can work a total of
(365 – 104 – 8) 253 days each, making a team total of 1265 potential working days. If 50 days
were to be lost through absence, the team’s absence rate would be:

The international benchmark for absenteeism is three percent. It is unlikely that an organisation can
drive absenteeism down to 0 percent as people do get sick. However, competitive organisations
strive to bring the absenteeism rate down to less than three percent. (Nel and Werner, 2014). One of
the limitations of the lost time rate calculation is that it cannot distinguish the pattern of absence in
terms of whether few employees are taking long periods of absence or whether many employees
have infrequent bouts of absence. (Banfield and Kay, 2008).

Consequently, the calculation of Absence frequency gives an indication of the number of absence
incidents per employee. An incident is one spell of absence, irrespective of the number of days
involved. A high absence frequency rate suggests that absence incidents are of a shorter duration,
and thus more disruptive to the organisation.
It is easier and less costly to make contingency plans when it is known that an employee will be
absent for a longer period than for short, unexpected absence incidents.

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The absence frequency rate is calculated as follows and expressed as a ratio:

13.4.4 HR Metrics in Labour Turnover and Retention

Labour turnover is considered as the permanent withdrawal from the work situation and can be
disruptive and costly to an organisation. Therefore, the retention of key talent in organisations has
become a major challenge for many organisations, especially with regards to valued employees with
scarce skills. (Nel and Werner, 2014). It is inevitable, that, from time to time, employees will choose to
leave and either pursue careers elsewhere, retire, take a career break or return to education
(Banfield and Kay, 2008)

It is important that employers find out what the reasons are why employees are leaving so that
effective strategies can be implemented to retain them. A certain amount of labour turnover can be
beneficial, as long as it provides the organisation with new, enthusiastic employees who bring
creative ideas with them (Banfield and Kay, 2008).
However, high turnover rates create particular pressures for the HR department, which is primarily
responsible for replacing those who leave, but also for line managers who face disruption to
production and service standards (Banfield and Kay, 2008).
Labour turnover, according to (Nel and Werner, 2014) is divided into controllable and uncontrollable
labour turnover, depending on management’s ability to prevent it or not.
Controllable Labour Turnover:

Voluntary resignations can be controlled if management provides better leadership, wages,

opportunities, working conditions, and so on.
Dismissals can be prevented through proper employment, training, policies, and procedures.

Only controllable labour turnover is included in the measurement of labour turnover

Uncontrollable Labour Turnover:

Includes death, permanent illness, pregnancy, retirement and retrenchment. These are recorded,
but not included, in the measurement of labour turnover, as no reasonable action from

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management can reduce or prevent them.

HR Metrics for Labour Turnover:

Labour turnover is usually measured over a 12month period to smooth out seasonal differences to
make comparison possible (Nel and Werner, 2014), but can be tracked weekly or monthly to provide
a more detailed and contemporary understanding of labour turnover (Banfield and Kay, 2008).

Labour Turnover (LTO) may be calculated as follows:

Example: (Banfield and Kay, 2008)

If 25 people left over the last 12 months and the current number of employees is 275, then
turnover would be calculated as:

The above analysis provides an indication of the course of action that should be taken in order to
reduce labour turnover.
If a high percentage of employees leave the organisation voluntarily soon after employment, the
employment, induction, and placement practices should be re-evaluated.
If many employees are dismissed, employment practices as well as training should be reconsidered.
Employees who leave after reasonable time periods often feel that they have started to stagnate and
leave for better opportunities or more challenges. If many employees leave after a long service with
the company, it will be an indication that changes have taken place that they found difficult to cope
with. Resistance to change should be managed by informing and involving employees in advance of
changes (Nel and Werner, 2014).
The measures or “metrics” you use may be broad organisational measures (such as return on
investment, and profit margins. Or they may focus narrowly on specific human resource
management and activities (such as “hours of training per employee”). In any case, the bottom line is
that measuring “how we’re doing, and why” is important for managing one’s human resources
(Dessler, 2014).

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Case Study 1

After completing your study of this unit, reflect on the following questions. (To
adequately address these questions you will need to have completed all the
Prescribed and Recommended Reading(s) listed at the beginning of this
part.)
Read the case study below taken from Nel and Werner (2014) and answer
the questions that follow:

Revision Questions

HR problems at Petal Engineering

Petal Engineering, an established engineering and construction company,
has recently won a tender to build a primary health care clinic, library and
nursery school in a local community. A few project teams were put together to
do the planning:
Environmental studies were required, building plans had to be drawn up,
extensive quantitative surveying was required, community leaders had to be
involved and construction had to be organised. After a few months, the
following problems surfaced:
The company struggled to attract and retain employees with scarce
skills
Recruitment and selection was slow and ineffective
Many engineers threatened to resign
Absenteeism levels in the company increased rapidly
The skill levels of construction workers proved to be inadequate
The company contracted an HR consultant to assist them with addressing
these problems. The HR consultant introduced the management of Petal
Engineers to the use of metrics as a diagnostic tool and assisted them in
collecting information about their HR processes. The analysis revealed that it
took approximately three months to fill an engineering position
in comparison to eight weeks’ average for project leaders. Of the engineers
recruited through employment agencies, only 40 per cent stayed in the
company. Exit interviews with engineers who resigned and a focus group
discussion with existing engineers revealed that they were mostly dissatisfied
with their remuneration. The HR consultant also assisted the company in

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determining the number of construction workers and the level of skill required
for specific projects and a gap analysis was done. A link between skill levels
and lost time injuries were also established. The cost of training employees in
the company versus sending employees to an external training provider was
determined.
The GAR for the company as well as for different groupings of employees was
calculated. It was found that absenteeism was exceptionally high (13 percent)
among construction employees belonging to Project team 3. This was also
the team experiencing the highest turnover among engineers.
Once all the figures were presented to senior management, they understood
their HR problems better and were better able to decide what interventions to
take, and how their decisions would affect the long-term direction of the
company,
1. Discuss how Petal Engineering can use HR Metrics to address the
attraction and retention of employees.
2. Discuss how HR metrics in absenteeism management may be used to
assist Petal Engineering to address their absenteeism levels in the company.
3. Analyse the labour turnover at Petal Engineering and discuss the use and
significance of HR metrics as applied to this situation.
4. Discuss the overall contribution that the HR department can make, by use
of HR metrics, to the overall attainment of organisational goals.

Readings

Have You Completed the Prescribed and Recommended Reading(s) for

this unit?
Now that you have been introduced to this unit, source and work through the
textbook parts and journal articles listed in the Prescribed and Recommended
Reading(s) list at the beginning of this part, it is essential that you read all the
textbook parts and journal articles listed.

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Recruitment - A Specialist Recruiter's Perspective

Recruitment - A Specialist Recruiter's Perspective

CASE STUDY 1:
PART 1 – HRM
Recrutment - A Specialist Recruiter's Perspective

Instructions to Learners
This case study is to be analysed and prepared in your Study Groups. Your Study Group is required
to present the analysis of this case study at Workshop 2. Your presentation should not be longer
than 15 minutes.
The questions that you are required to address in analysing the case study are:

1. Based on the given perspective of the recruiter’s viewpoint, compile a recruitment policy for this
organisation
2. Provide recommendations to the recruiter on some of the current and future trends in recruitment
3. Considering the common problems that are experienced, provide suggestions and
recommendations to how this recruiter can improve the way he addresses these problems
4. Discuss the nature of an induction and socialisation programme that would be beneficial should a
candidate from the case described above be appointed in an organisation

Appendix B

Appendix B
CASE STUDY 2: PART 2 - HRD

Instructions to Learners

This case study is to be analysed and prepared in your Study Groups. Your Study Group is required
to present the analysis of this case study at Workshop 3. Your presentation should not be longer than
15 minutes.

The questions that you are required to address in analysing the case study are:

Discuss whether INA has been successful in their attempt to create a learning culture towards
building a learning organisation

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Despite the important roles employees, line managers and senior managers have in contributing to
SHRD, analyse the extent to which these stakeholders represent obstacles to the development of
SHRD at INA and discuss how these obstacles may be addressed

In terms of INA’s HRD activities, justify the position of INA on the strategic maturity continuum and
provide recommendations to help INA move further towards HRD strategic maturity on the continuum

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CASE STUDY 2: PART 2 - HRD

INA BEARING COMPANY

INA Bearing Company is a medium-sized manufacturer of high-precision engine components for the
automotive industry. Based in Llanelli, South Wales, it is one of a number of manufacturing
companies across Europe owned by the multi-national Schaefler Group.

In 2001 the company was facing a crisis. Its market position had been declining rapidly since the late
1990s as a result of orders being switched to low-cost producers in eastern Europe. This period
resulted in successive reductions in the workforce from around 860 to 360 jobs. In 2001 prospects
looked bleak. INA’s German parent had plans to switch even more production capacity to units in
eastern Europe which, if implemented would have resulted in the loss of a contract accounting for
around half the plant’s output and further job losses of 120.

Faced with this bleak scenario, the personnel manager led a strategy workshop to reformulate the
best way forward. It was accepted that competing with its European counterparts on the basis of cost
was not a viable option. Instead INA decided to compete on the basis of quality with a vision to
become the group’s preferred location for high-tech production work. At the same time, it was
recognised that this transformation in production orientation could not be achieved without radical
realignment of the company’s skill base. This led INA to a commitment to compete on the basis of
workforce capability. Investment in machinery was to be switched to investment in human capital with
the clear intent of building an employee skills base, developing a continuous improvement culture
and building towards a learning in order to realise the company’s vision.

In effecting this transformation, INA had to confront a number of potential obstacles. The demands of
continuous production severely limited the time available for staff development. The failure of
previous turnaround initiatives had left the workforce cynical about management’s intentions. Over
time, the demands of production had resulted in the HR roles of managers, supervisors, and team
leaders becoming diluted. Team leaders spent too much time helping out with production, meaning
that the management hierarchy was becoming distorted as supervisors operated as team leaders
and managers as supervisors. The grape vine was rife and the works council operated more as a
forum for discussing housekeeping issues.

Previous attempts to build skills through NVQ (National Vocational Qualifications) programmes had

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foundered because of lack of time and commitment among supervisors to undertake the necessary
assessments of employee competences. The workforce was characterised by long-serving
employees who had received little task-based HRD. Lastly employee relations had deteriorated to
the point that some unresolved issues had prompted strike ballots.

In addressing these potential obstacles, INA took two early important steps towards facilitating the
desired learning culture where survival was seen to depend on learning faster than the rate of
change.

First, one-to-one meetings were held with every employee to explain the company’s vision, and
signal management’s commitment to that vision. The emphasis was on communicating the
company’s position honestly, whereby if the company failed to achieve its vision, its decision to base
its strategy around HRD investment would have at least resulted in employees having been
equipped with high-level, portable skills that would significantly enhance their employability. The
second was to forge a partnership agreement with the trade union Amicus. This resulted in the union
signing up to the change programme and securing funding for significant investment in the
company’s learning centre.

These two interventions have changed the employee relations climate and opened up a genuine
two-way dialogue. The individual meetings allowed employees to share their perceptions on
obstacles to the development of a learning culture. They particularly stressed the importance of a
unified team. This resulted in the harmonisation of terms and conditions, the introduction of an
inflation-linked pay system and the re-alignment of the works council. Shop stewards now report that
collaboration has replaced confrontation, evidenced by the way that the works council now plays a
key role in developing strategy. Also the council’s sub-committees have been charged with leading
important initiatives. These include a review of internal communications and the development of
systems to support company financed individual learning plans (similar to EDAPs)

The platform for skills development was the relaunch of the NVQ programme. This time around, the
roles of managers, supervisors, and team leaders, have been redefined to enable them to commit to
their HRD responsibilities. This surfaced a number of management skills gaps among these groups,
such as communication, and led to the introduction, of an NVQ level 3 in business improvement
techniques for supervisors and an NVQ level 3 in management for team leaders. To reinforce their
commitment to HRD, senior managers assist in customising training to meet INA’s context and
participate in its delivery to those with leadership [Link] NVQ level 2 programme in performing
manufacturing operations is being delivered in collaboration with a local college. This is being taken
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by all the company’s production operators, some of who are now progressing through levels 3 and 4
of the programme.

For some operators, gaining the NVQ award represents the first ever external qualification. However,
NVQ’s while addressing identified skills gaps, represent only one step in the direction of forging a
learning culture. The development of the learning centre represents a significant milestone in this
journey. Computerised learning facilities provide a network of HRD possibilities for all staff and so far,
for example, 100 employees have signed up for the government-initiated Learn direct courses. In-
house continuous improvement courses further reinforce the focus on learning which is increasingly
being supported by those already trained becoming involved as coaches, mentors, and NVQ
assessors in order to help cascade the outputs of the various training programmes throughout the
organisation. As roles are redefined, HRD support is offered to help facilitate changes. For example,
programmes to develop meeting skills have supported the now active engagement of employees in
the works council and its sub-committees. The trade union, Amicus, appoints and sponsors four
learning representatives and uses TUC courses to support their role development. The company’s
investment in individual learning plans is yet another step along INA’s journey towards internalising a
learning culture throughout the company.

Although some of the HRD outcomes of these plans involve employees attending non-work related
study in their own time, the message the company wishes to communicate is that learning is valuable
for its own sake.

This process of transformation has already yielded substantial benefits. The works council has
reported that the grapevine is now regarded as the least reliable information source by employees.
Labour turnover has fallen form an alreadymlow8.1 percent in 2001 to 2.5 percent and absence
rates have been reduced by 50 percent. Cost-reduction projects have produced savings in excess of
£324,000, alongside improvements in productivity and the company’s health and safety record. The
company’s efforts have also received external recognition, including a number of HR accolades. The
company was named ‘Welsh people development company of the year’ in 2003 and shortlisted for
CIPD’s annual People Management Award in both 2003 and 2004.

Despite this progress, and representations made by employees to the German parent, by the end of
2003 INA did not know whether all of this would turn around its fortunes within the Schaeffler Group.
However, the vision of becoming the Group’s production location of choice’ took a large step towards
becoming reality when in 2004 it was announced that Llanelli plant would not only retain production

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of the ‘at risk’ component but would also be commissioned to produce a new high-tech engine
component for a prestigious car manufacturer.

Source: (Millmore [Link]. 2007)

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Appendix A
CASE STUDY 1: PART 1 – HRM
RECRUITMENT – A SPECIALIST RECRUITER’S PERSPECTIVE

Recruitment agencies/firms could broadly be categorised into three categories – general recruiters,
specialist recruiters and search firm’s/head hunters.
I founded of the most specialised investment banking and investment management recruitment firms
in South Africa and what differentiates us from other agencies is the fact that we exclusively recruit
within the fields of investment banking and investment management, whereas the vast majority of
financial services recruiters cover the financial services sector as a whole. Our clients include some
of the top investment banks and investment managers in SA.
My definition of a specialist recruiter is someone who has the appropriate theoretical foundation /
qualifications coupled with the practical experience to enable him or her to accurately interpret job
descriptions and CVs of candidates operating with its chosen field/industry of specialisation. In my
case I have six years’ front-office financial markets experience (excluding recruitment experience)
coupled with a post-graduate commerce degree and professional qualification in investments
Our recruitment approach is a sharp shooter approach, as opposed to a shot-gun approach used by
many recruiters, so for most vacancies we rarely introduce more than three candidates and in many
cases we only introduce one candidate.
Normally the recruitment process kicks off with the receipt of a job description of a new vacancy from
a client, but it should be noted that we are also expected by our clients to introduce top talent on an
unsolicited basis, as and when we come across these top candidates in the market place.
On receipt of a job description form the HR department, I normally ask for additional information
pertaining to the remuneration range offered for this role; information pertaining to particular team’s
make-up; whether it is a newly created vacancy or resignation and whether the role is earmarked for
Employment Equity candidates only. From time to time I may also request a telephonic /in-person
discussion with the line manager, should the job description be unclear.
Once I have a proper grasp of the role, I draft a much shorter, more generic job description, which I
use to advertise the vacancy. The reasons for not just using the official job description are mainly to
disguise who the employer is, so that candidates do not contact the employer directly, and also to
better explain the job functions requirements.
I then follow a two-pronged approach: a more passive recruitment approach where I load the
vacancy on the job portals I use and then review applications; and a more active approach where I
literally search various databases, including social media platforms (such as LinkedIn) for suitable
candidates. As social media platforms and direct employer recruitment websites became more
prominent over the last decade, the recruitment landscape changed significantly with a strong move

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towards active recruitment, as opposed to the traditional passive approach.

For the vast majority of vacancies, we work on, there are only a small number of suitable candidates
available in SA mainly as a result of the pressures to employ Employment Equity candidates, but
because all the vacancies we work on are highly specialised.
Once a potentially suitable candidate has been identified, I make contact with the candidate and
either meet him or her in person (where possible), or conduct a telephonic interview. Before the
interview, the candidate is provided with the official job description, as well as a link to the employer’s
website and other pertinent information I may deem important. Given the seniority and specialist
nature of candidates, the interview is generally a frank, to-the-point discussion about the candidate’s
reasons for seeking alternative employment, how well the candidate’s profile fits the technical
requirements of the role, how well the candidate fits the ‘softer requirements’, such as corporate
culture and also how well this role fits within the candidate’s long-term career plans. I also check that
the candidate’s current remuneration package, as well as remuneration expectations is in-line with
the indicative range provided by the employer, but I would normally not divulge the clients range to
candidates, so as not to create expectations. If I pick up on something of concern, or an area in
which the candidate falls severely short from the requirements, I hone in on that area and the
conversation could at times become highly technical so as to ensure that I accurately understand the
candidate’s technical expertise and ultimately to enable me to make a decision whether to introduce
the candidate to the employer or not.
It is important to note that a candidate’s profile will only be discussed, or formally introduced to the
client, once the candidate has given his or her explicit consent to proceed with the process.
Introducing the candidate’s profile to the client normally entails (a) converting the candidate’s CV into
my standard format and while doing so, ensuring that it ‘speaks’ to the particular vacancy and that it
is an accurate reflection of the candidate’s profile. (b) I then draft a short motivation (normally about
two to three paragraphs) which will be in the body of the email accompanying the candidate’s CV -
the objective with the motivation is to explain to the employer why I believe the candidate to be a
suitable candidate for this role. I will also use the motivation to explain my thinking in those cases
where candidates are not an exact fit, but in my opinion they have the right potential to grow into this
role.
Once the candidate is introduced to the client, I provide the client with any additional
information/documentation they may require and also arrange all interview/meetings. I am also
responsible for following up on references and verifying the candidate’s credit record, criminal
record, and academic qualifications. I do this by means of a third party verification service such as
[Link] the candidate has been interviewed and the client decides to extend an offer to the
candidate, I am usually consulted first to ensure the remuneration offered falls within the candidate’s
expected remuneration range.
Once the formal offer letter or Letter of Employment is received, I present the offer to the candidate
and facilitate any questions / concerns the candidate may have and if all goes well return the signed
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contract to the client. In cases where candidates have to decide between two or more offers, I play a
significant role in promoting my client’s offer and convincing the candidate to accept my client’s offer.
Once the candidate accepts the offer, he or she is, for all practical purposes now, an employee of my
client and as such the client and candidate communicate directly from here on forward.
The most common problems experienced are:

A lack of knowledge/understanding by clients and HR practitioners:

In most cases direct contact with the line manager would be a much more effective means of
contact for both myself and the manager, as generally HR practitioners just do not have a strong
enough technical understanding of investment management to be in a position to accurately
assess a candidate’s level/degree of fit. I have experienced many instances where I introduce a
candidate to the HR person, who then through a lack of understanding deems the candidate
unsuitable. When I then get an opportunity to speak to the line manager and provide an overview
of the rejected candidate’s profile, he or she shows a keen interest and in the very least asks to
see the candidates CV.
Unethical behaviour by other recruiters:
Some recruiters will introduce the candidates to employers without the candidate’s consent, or
without providing the candidate with sufficient information about the employer and vacancy to
enable the candidate to make an informed decision. In such cases it becomes a significant
problem when I then follow all the necessary steps, obtain the candidate’s consent and introduce
the candidate, only to be informed that the client has already received the candidate’s application
through another agency.
Unethical behaviour by candidates:
Candidates will at times act unethically by overstating their technical expertise, over-stating their
current remuneration package and trying to apply for a vacancy for which they have been turned
down via another [Link] most cases these candidates are identified before submission to the
client and a note is made in our internal database warning us not to have contact with this
candidate in future. As a specialist recruiter I have accurately identified numerous candidates
over the years who have overstated their technical expertise and by doing so saved my client
valuable time. (Nel and Werner, 2014)

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