Monday, August 11, 2008

Industrial Relations Economic context and Human Resources Management

Sources of Finance
Government policy in UK has over recent years, strongly encouraged the growth of small companies
As a result, there are many possible sources of funding or finance
However, they can all grouped under three headings: Grants, Loans & Sale of equity
Financial Structure of a organization
Coming soon
A grant is a sum of money given to the company; while the company is obliged (thankful) to demonstrate that it has been used for purposes for which it was intended, it is not intended that grant should ever be paid back to the organization which gave it.

Surprisingly, grants are only available from government (local or national) and European Commission sources or, very occasionally, from charities.
Very often, grants are limited to a certain proportion of the money spent on a particular development and are conditional upon the reminder being raised from other sources.
A loan is a sum of money lent to the company; interest is payable on it, at a rate that may be fixed or variable, and the loan is usually for a fixed period.
The company is liable to pay back the loan, if the company goes into liquidation (bankruptcy); the lender is entitled to recover the loan from the sale of the assets of the company.

In most cases security is required for the loan; that is the loan is associated with assets owned by the company in much the same way that a mortgage is associated with a house
Equity capital
Equity (justice, fairness) capital (assets) is money paid to the company in exchange for a share in the ownership of the company.
Shareholders are at a much greater risk of getting a poor return on their capital or even losing it completely than are lenders but, in compensation for this, they stand to make a greater profit than lenders if all goes well.
Read example on page-64 in text book
Human Resource Issues
Recruitment and Selection
It is Concern policy to ensure all aspects of the recruitment and selection process (i.e. job analysis, advertising, documentation, interviews, interview evaluation, medical examinations, job offers) promote equality, fairness and transparency at all times.
Concern aims to recruit staff that satisfies as far as possible the requirements of the job, as outlined in the staff requisition (apply for) form.
The main criteria for employment are the candidate’s ability to fulfill the role, relevant work experience, education and/or qualifications, other related skills and motivation as applicable to working with concern.
It is Concern policy to fill vacancies from within the organization whenever possible, however, Concern reserves the right to recruit externally to the organization.
In exceptional circumstances, concern also reserves the right to ‘head-hunt’ potential candidates if they are unable to recruit a suitably qualified candidate following the advertisement of the position.
Staff training and development
Concern Worldwide is fully committed to ensuring that all members of staff have the relevant knowledge, skills and expertise to perform their work to consistently high standards; and to achieve their full potential compatible with Concern’s policy.
Training and development of staff members is fundamental to ensure the effective provision and quality of its work within the communities where we work.
The organization is committed to allocating a percentage of its salary budget per annum to invest in training and development.
Job evaluation
An effective way of determining the relative value of each position within an organization. By rank-ordering jobs using a point system, you can then accurately assign salaries in a defensible manner.
The usual end result of job evaluation is a hierarchy of jobs or groups of jobs in the organization. The hierarchy is usually based on job content, or value, or a combination of both. Job content refers to the skills required and the degree of responsibilities assumed. The value of a job refers to its relative contribution to the organization's goals or to their external market rates. Focusing on job content improving employee understanding of job content and what is valued in their work.

While not automatically determining the pay of a job, job evaluation provides a basis for establishing equitable pay differentials between jobs. In other words, it can help integrate pay with a job's relative contributions to the organization.
Job evaluation gives you a structured and consistent base from which to build your pay scale and/or a system of performance review and merit increases. If staff know where their jobs rank and where their salaries rank, you have a great base from which to allocate raises where you see fit. This is an excellent way to establish a workable, agreed-upon pay structure.

Appraisal What is performance appraisal?
Performance appraisal.
A process of systematically evaluating performance and providing feedback upon which performance adjustments can be made.
Performance appraisal should be based on job analysis, job description, and job specifications.
What is performance appraisal?
Performance appraisal methods.
Comparative methods.
Seek to identify a person’s relative standing among those people being rated.
Absolute methods.
Specify precise measurement standards.
What is performance appraisal?
Comparative methods of performance appraisal.
Paired comparison.
Forced distribution.
What is performance appraisal?
Consists of rank ordering individuals from best to worst on each performance dimension.
Relatively simple to use.
Can be burdensome when evaluating a large number of people.
What is performance appraisal?
Paired comparison.
Each person is directly compared with every other person being rated.
Final performance ranking reflects the frequency of endorsement across all pairs.
Can be very tedious when many people must be compared.
What is performance appraisal?
Forced distribution.
Uses a small number of performance categories, and rater assigns a specific proportion of employees to each category.
Can be problematic if most of the employees perform similarly.
What is performance appraisal?
Absolute methods of performance appraisal.
Graphic rating scales.
Critical incident diary.
Behaviorally anchored rating scales.
Management by objectives (MBO).
What is performance appraisal?
Graphic rating scales.
List of dimensions related to high performance, and the rater assigns an individual score on each dimension.
Easy and efficient to use.
What is performance appraisal?
Critical incident diary.
Record of incidents of each subordinate’s behavior that led to unusual success or failure in a give performance aspect.
Behaviorally anchored rating scales (BARS).
Developed through the careful collection of observable job behaviors that describe both superior and inferior performance.
A rating scale is developed that anchors specific critical behaviors, each of which reflects a different degree of performance effectiveness.

What is performance appraisal?
Management by objectives (MBO).
Subordinates work with their supervisor to establish specific task-related objectives.
MBO is the most individualized appraisal method .
MBO works well with counseling, provided the goals focus on important activities.

Remuneration policies
It is Concern policy to ensure that remuneration (salary) packages are internally equitable, (fair) within the context of the jurisdiction that the appointment is being made and externally competitive with like organizations.
Remuneration packages will be applied consistently throughout the organization and will be fair, adequate (sufficient).
Salaries are reviewed on an annual basis in light of cost of living increases.
Concern salaries scales will be observed/reviewed on an ongoing basis to ensure competitiveness with like organizations.

Any proposed salary changes in light of cost of living in each country of operation should have the approval of the Regional Director, in consultation with the Human Resources Director, prior to any changes being implemented.
When salary reviews take place, staff will be informed of
what the review is based on
who is responsible for conducting it
and who will make the final decision on whether any increase will be rewarded.
Procedures and review mechanisms for assessing/reviewing remuneration packages will be drawn up and made known to staff.
Dismissal and Grievances
Dismissal is a serious matter and a course of action that is not entered into lightly. The principles of natural justice must be followed in all cases of disciplinary action.
Disciplinary procedures should not commence without prior reference to the relevant Human Resource Directorate and relevant line manager. Advice will then be given on the procedures to be followed.

However, immediate dismissal may occur in certain circumstances i.e. in cases of gross misconduct/gross incompetence (unpleasant misbehavior/lack of skill) .
Gross misconduct/incompetence is any action, which is serious enough to be interpreted as a fundamental breach (violation) of the Contract of Employment.
Dismissal may be with or without notice depending on the circumstances.
The following examples of gross misconduct/incompetence
Theft, fraud.
Use of violence
Being at work under the influence of alcohol or drugs.
Misuse of Concern’s systems, including the viewing/ transmission of the following materials:
-Defamatory (insulting).
-Pornographic, Offensive (nasty), Harassing (Irritating)

Concern recognizes that there is no real substitute for a good day-to-day manager/employee relationship for resolving work-related problems.
Nevertheless, if this relationship fails to resolve a grievance informally, there is a formal process called the Grievance Procedure, where employees have a right to bring any grievances (complaint, criticism) to the attention of management and expect a response within working days.

Formal grievance procedures, which comply with local employment legislation and Concern best practice standards, are outlined in each country Human Resource Procedures Manual.
All staff should have access to and be aware with the grievance procedures, from commencement of employment.
Contracts of employment
National Staff are staff employed by Concern in each country of operation.
The terms and conditions of employment for national staff are based on local legislation and should also comply with Concern’s best practice standards.
While contracts of employment may vary from country to country in order to comply with the national legislation (lawmaking) under which they are governed

Full name and address of both the relevant Concern office and the employee
The place of work
Job title
The date of joining
Any terms or conditions relating to hours of work, paid leave & pension schemes and retirement plans etc

Employee is also required to comply (obey) with Concern policies and procedures as outlined in relevant documentation i.e. Human Resource Policy Document, Human Resource Procedures Manual and Health and Safety Statement.
Types of Contracts
Fulltime Contracts
Fixed Term/Temporary Contracts
Part-time Contracts
Discrimination means treating some people less
favorably than others on the grounds of
personal traits, like
Race, color, nationality
Sexual orientation

Discrimination and The Law
The law in Europe, the USA, and other countries
prohibits discrimination.

What does this mean for IT professionals?

Much of the legislation concerns the
workplace. People in managerial and
supervisory positions (i.e. most professionals,
sooner or later), must be fully aware of the
legal obligations (pressure).
Some of the legislation has implications (inference) for how information systems are built.

Anti-discriminatory laws related to Disability

1995: The Disability Discrimination Act
2001: Special Educational Needs and
Disability Act

What does the law say?
Illegal to treat disabled employees or
applicants less favorably because of their
disability without substantial (considerable) justification.
Employer required to make reasonable
adjustments to accommodate a disabled
employee or applicant.
Illegal for businesses and organizations
providing goods and services to treat
disabled people less favorably.

Discrimination on the grounds of sex, race, religion
1975: Sex Discrimination Act
1976: Race Relations Act

Direct discrimination occurs where a person is treated less favorably than another person (sex or gender) is, has been, or would be, treated on any of the said six grounds out.
Indirect discrimination occurs where a provision (whether in the nature of a requirement, practice or otherwise) which relates to the employment of a person is not explicitly discriminatory but nevertheless impacts negatively on a
particular group.

It unlawful to discriminate on the grounds of sex, race or religion.
Discrimination is not allowed in employment, education, advertising or when providing housing, goods, services and facilities.