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STRATEGIC HUMAN RESOURCE MANAGEMENT

Overview of the Components of Human Resource Management
Recruitment and Selection
To attract and hire new employees who have the abilities, skills, and experiences that will help an
organization achieve its goals.
EXAMPLE: Microsoft Corporation has the goal of remaining the premier computer software company in
the world. To achieve this goal, managers at Microsoft realize the importance of hiring only the best
software designers. Hundreds of highly qualified candidates are interviewed and rigorously tested. This
careful attention to selection has contributed to Microsoft’s competitive advantage. Microsoft has little
trouble recruiting top programmers because candidates know they will be at the forefront of the industry if
they work for Microsoft.
Training and Development
To ensure that organizational members develop the skills and abilities that will enable them to perform
their jobs effectively in the present and the future.
EXAMPLE: At Microsoft, newly hired program designers receive on-the-job training by joining small teams
that include experienced employees who serve as mentors or advisers. New recruits learn firsthand from
team members how to go about developing computer systems that are responsive to customers’
programming needs.
Performance Appraisal and Feedback
This serves two (2) different purposes in human resource management. First, performance appraisal can
give managers the information they need to make good human resources decisions—how to train,
motivate, and reward organizational members. Second, feedback from performance appraisal serves a
developmental purpose for members of an organization. When managers regularly evaluate their
subordinates’ performance, they can provide employees with valuable information about their strengths
and weaknesses and the areas in which they need to concentrate.
Pay and Benefits
By rewarding high performing organizational members with pay raises, bonuses, and the like, managers
increase the likelihood that an organization’s most valued human resources will be motivated to continue
their high levels of contribution to the organization. Moreover, if pay is linked to performance, high-
performing employees are more likely to stay with the organization, and managers are more likely to fill
positions that become open with highly talented individuals. Benefits such as health insurance are
important outcomes that employees receive by virtue of their membership in an organization.
The Legal Environment of Human Resource Management
Effectively managing human resources is a complex undertaking for managers. However, it is imperative
to look at how the legal environment affects human resource management. The Labor Code of the
Philippines stands as the law governing employment practices and labor relations in the country. It was
enacted on Labor Day of 1974 by President Ferdinand Marcos, in the exercise of his then extant legislative
powers. It prescribes the rules for hiring and termination of private employees; the conditions of work
including maximum work hours and overtime; employee benefits such as holiday pay, thirteenth month pay
and retirement pay; and the guidelines in the organization and membership in labor unions as well as in
collective bargaining.

The Labor Code contains several provisions that are beneficial to labor. It prohibits termination from
employment of Private employees except for just or authorized causes as prescribed in Articles 282 to 284
of the Code. The right to trade union is expressly recognized, as is the right of a union to insist on a closed
shop.

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Strikes are also authorized for as long as they comply with the strict requirements under the Code, and
workers who organize or participate in illegal strikes may be subject to dismissal. Moreover, Philippine
jurisprudence has long applied a rule that any doubts in the interpretation of law, especially the Labor Code,
will be resolved in favor of labor and against management.
Below are some of the basic labor laws that have to be taken into consideration:
Minimum Wage
Republic Act No. 6727 "Wage Rationalization Act," was enacted into law in 1989 to address such a
situation at the time as well as similar situations that may arise since then. It was intended to rationalize
the fixing of wages and the improvement of productivity throughout the country.
Hours of Work
According to Article 83 of the Labor Code, employees must not exceed eight (8) hours a day while health
personnel must have a maximum of 40 hours per week. If hours of work exceed 40 hours, the employee
is entitled to 30% additional pay. While the law suggests eight (8) hours to be the maximum number of
work hours, it prohibits working less than eight (8) hours. Part-time work is allowed, and the pay will
correspond to the actual hours worked. When it comes to the wage and benefits of part-time workers, they
should be in proportion to the number of hours worked. For instance, if the part-time worker earns P400.00
for an eight-hour work, P200.00 will be received for work done in four (4) hours.
Article 87 states that overtime applies to everyone. However, the following are exempted by the law:
government employees, managerial personnel, and house helpers, piece rate workers, non-agricultural
field personnel whose work hours cannot be determined, and family members who are dependent upon
the support of the employer. For work done between 10 PM and 6 AM, the rate is higher than normal.
Under the Labor Code, employees who work between the specified time shall be paid a night shift
differential of not less than 10% of the regular wage for each hour of worked performed.
Overtime work refers to work rendered beyond eight (8) hours and the employee who renders overtime
work shall earn an additional pay of 25%. If overtime work is done on a rest day or holiday, the rate will be
30%. In the event of under time on another day, overtime pay should still apply as the law prohibits
offsetting overtime with under time on another day.
Rest Day
Weekly rest day includes a rest period of not less than 24 consecutive hours after every six (6) normal
workdays. The employer determines the weekly rest day but shall respect the employee's preference if
such reference is based on religious grounds. If employees work on a rest day, the compensation will be
the regular wage plus 30% thereof. For employees working on a Sunday, the employee shall be entitled
to the additional 30% pay if Sunday happens to be the rest day.
Holidays
Employees receive Holiday pay on a special day or a regular holiday. For regular holidays, the employee
is paid even if s/he did not work. The employee will be entitled to double pay if s/he works on a regular
holiday. When it comes to a special day, the employees will not be paid if they do not report for work. If
employees work on a special day, they will be entitled to 130% of the regular pay.
Occupational Safety and Health Standards Act (R.A. 110058)
Safety and health should be the primary concerns in any workplace. The viability of an economy rests on
the productivity of its workers. Productivity entails an environment that nurtures workers and ensures their
safety. Poor conditions can result to illness, injury, and death.
In this republic act, employers are required to comply with occupational safety and health standards
including informing workers on all types of hazards in the workplace and having the right to refuse unsafe
work, as well as providing facilities and personal protective equipment for the workers, among others.

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The OSH provisions of the Labor Code define the different work-related injuries or casualties and assigning
corresponding benefits for workers and responsibilities for employers. This would minimize work-related
casualties and develop a safety- and health-oriented workplace for the benefit of both employers and
workers.
Attracting Human Resources
Human Resource Planning
Job analysis is a “purposeful, systematic process for collecting information on the important work-related
aspects of a job.” A job analysis typically collects four (4) kinds of information:

• Work activities, such as what workers do and how, when, and why they do it;
• Tools and equipment used to do the job;

• Context in which the job is performed, such as the actual working conditions or schedule; and
• Personnel requirements for performing the job, meaning the knowledge, skills, and abilities
needed to do a job well.
Job analysis information can be collected by having job incumbents and/or supervisors complete
questionnaires about their jobs, by direct observation, by interviews, or by filming employees as they
perform their jobs.
Job descriptions and job specifications are two (2) of the most important results of a job analysis. A job
description is a written description of the basic tasks, duties, and responsibilities required of an employee
holding a particular job. Job specifications, which are often included as a separate section of a job
description, are a summary of the qualifications needed to perform the job successfully.
Because a job analysis specifies what a job entails as well as the knowledge, skills, and abilities that are
needed to do the job well, companies must complete a job analysis before beginning to recruit job
applicants. Job analyses, job descriptions, and job specifications are the foundation on which all critical
human resource activities are built. They are used during recruiting and selection to match applicant
qualifications with the requirements of the job.
Reddit, a news consolidation website where readers vote on which stories and discussions are the most
important, wanted to hire a new programmer, but it did not want to sort through thousands of applications
from people who had no coding skills but thought it would be cool to work for the popular website. Therefore,
it used the job description as a test to make sure the company would only receive applications from highly
skilled programmers. Applications for the job were to be sent to [email protected], with “S” representing a real
email address that applicants had to figure out by solving a series of problems and equations. If you could
not figure it out, you could not send in your job application. This puzzle helped Reddit match applicant
qualifications to the requirements of the job.
Job descriptions are also used throughout the staffing process to ensure that selection devices and the
decisions based on these devices are job-related. For example, the questions asked in an interview should
be based on the most important work activities identified by a job analysis. Likewise, during performance
appraisals, employees should be evaluated in areas that a job analysis has identified as the most important
in a job.
Recruiting Human Resources
Once an organization has an idea of its human resource needs, the next phase is usually recruiting new
employees. Recruiting is the process of attracting qualified persons to apply for jobs that are open. Some
recruits are found internally; others come from outside the organization.
Internal recruiting means considering present employees as candidates for openings. Promotion from
within can help build morale and keep high-quality employees from leaving the firm. In unionized firms, the
procedures for notifying employees of internal job change opportunities are usually spelled out in the union

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contract. For higher-level positions, a skills inventory system may be used to identify internal candidates,
or managers may be asked to recommend individuals who should be considered. Most businesses today
routinely post job openings on their internal communication network, or intranet. One disadvantage of
internal recruiting is its ripple effect. When an employee moves to a different job, someone else must be
found to take his/her old job. In one organization, job movements were necessary as a result of filling initial
openings.
External recruiting involves attracting persons outside the organization to apply for jobs. External
recruiting methods include advertising, campus interviews, employment agencies or executive search
firms, union hiring halls, referrals by present employees, and hiring “walk-ins” or “gate-hires” (people who
show up without being solicited). Increasingly, firms are using the Internet to post job openings and to
solicit applicants. Private employment agencies can be a good source of clerical and technical employees,
and executive search firms specialize in locating top-management talent. In general, “help wanted” ads in
newspapers and online job posting sites are often used because they reach a wide audience and thus
allow a large number of people to find out about and apply for job openings (Griffin, 2016).
Selecting Human Resources
Once the recruiting process has attracted a pool of applicants, the next step is to select whom to hire. The
selection process intends to gather from applicants’ information that will predict their job success and then
hire the candidates likely to be most successful. Certainly, the organization can gather information only
about factors that are predictive of future performance. The process of determining the predictive value of
information is called validation (Griffin, 2016).
• Application Blanks – These are an efficient method of gathering information about the applicant’s
previous work history, educational background, and other job-related demographic data.
Application blanks are used informally to decide whether a candidate merits further evaluation, and
interviewers use application blanks to familiarize themselves with candidates before interviewing
them.
• Tests – Tests of ability, skill, aptitude, or knowledge that is relevant to the particular job are usually
the best predictors of job success, although tests of general intelligence or personality are
occasionally useful.
• Interviews – In a structured interview, questions are written in advance, and all interviewers follow
the same question list with each candidate they interview. This procedure introduces consistency
into the interview procedure and allows the organization to validate the content of the questions to
be asked.
• Assessment Centers – Assessment centers are a popular method used to select managers and
are particularly good for selecting current employees for promotion. The assessment center is a
content-valid simulation of major parts of the managerial job. A typical center lasts two (2) to three
(3) days, with groups of six (6) to 12 persons participating in a variety of managerial exercises.
Centers may also include interviews, public speaking, and standardized ability tests. Candidates
are assessed by several trained observers, usually managers several levels above the job for which
the candidates are being considered.

• Other Techniques – Organizations also use other selection techniques depending on the
circumstances. Polygraph tests, once popular, are declining in popularity. On the other hand, more
and more organizations are requiring that applicants in whom they are interested in taking physical
exams. Organizations are also increasingly using drug tests, especially in situations in which drug-
related performance problems could create serious safety hazards. For example, applicants for
jobs in a nuclear power plant would likely be tested for drug use. Some organizations today even
run credit checks on prospective employees.

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Developing Human Resources

Training and Development
In human resource management, training usually refers to teaching operational or technical employees
how to do the job for which they were hired. Development, on the other hand, refers to teaching managers
and professionals the skills needed for both present and future jobs. Most organizations provide regular
training and development programs for managers and employees. For example, IBM spends more than
$700 million annually on programs and has a vice president in charge of employee education. U.S.
businesses spend more than $125 billion annually on training and development programs away from the
workplace. Moreover, this figure does not include wages and benefits paid to employees while they are
participating in such programs (Griffin, 2016).
1. Assessing Training Needs
The first step in developing a training plan is to determine what needs exist. For example, if employees
do not know how to operate the machinery necessary to do their job, a training program on how to
operate the machinery is clearly needed. On the other hand, when a group of office workers is
performing poorly, training may not be the answer. The problem could be motivation, aging equipment,
poor supervision, inefficient work design, or a deficiency of skills and knowledge. Only the last could
be remedied by training. As training programs are being developed, the manager should set specific
and measurable goals specifying what participants are to learn. The manager should also plan to
evaluate the training program after employees complete it (Griffin, 2016).
2. Common Training Methods
Classroom Instruction: Through classroom instruction, employees acquire knowledge and skills in
a classroom setting. This instruction may take place within the organization or outside it, such as
through courses at local colleges and universities. Many organizations establish their own formal
instructional divisions—some are even called “colleges”—to provide needed classroom instruction.
For example, at Disney, classroom instruction and other forms of training and development are
provided to employees at Disney University (Jones & George, 2016).
On-The-Job Training: Learning occurs in the work setting as employees perform their job tasks. On-
the-job training can be provided by coworkers or supervisors or can occur simply as jobholders gain
experience and knowledge from doing the work. Unilever conducts an internship program for
interested business major students wherein they will be given a chance to propose solutions to actual
problems at the company.
Managers often use on-the-job training on a continuing basis to ensure that their subordinates are
updated with changes in goals, technology, products, or customer needs and desires. For example,
sales representatives at Mary Kay Cosmetics Inc. receive ongoing training so they not only know about
new cosmetic products and currently popular colors but also are reminded of Mary Kay’s guiding
principles. Mary Kay’s expansion into Russia has succeeded in part because of the ongoing training
that Mary Kay’s Russian salespeople receive (Jones & George, 2016).
3. Evaluation of Training
Training and development programs should always be evaluated. Typical evaluation approaches
include measuring one or more relevant criteria (such as attitudes or performance) before and after
the training, and determining whether the criteria changed. Evaluation measures collected at the end
of training are easy to get, but actual performance measures collected when the trainee is on the job
are more important. Trainees may say that they enjoyed the training and learned a lot, but the true
test is whether their job performance improves after their training.
Performance Appraisal
Once employees are trained and settled into their jobs, one of management’s next concerns is
performance appraisal. Performance appraisal is a formal assessment of how well employees are doing
their jobs. Employees’ performance should be evaluated regularly for many reasons. One reason is that

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performance appraisal may be necessary for validating selection devices or assessing the impact of
training programs. A second reason is administrative—to aid in making decisions about pay raises,
promotions, and training. Still, another reason is to provide feedback to employees to help them improve
their present performance and plan future careers. Because performance evaluations often help determine
wages and promotions, they must be fair and nondiscriminatory (Griffin, 2016).
Performance Feedback
The last step in most performance appraisal systems is giving feedback to subordinates about their
performance. This is usually done in a private meeting between the person being evaluated and his/her
boss. The discussion should generally be focused on the facts—the assessed level of performance, how
and why that assessment was made, and how it can be improved in the future. Feedback interviews are
not easy to conduct; many managers are uncomfortable with the task, especially if feedback is negative
and subordinates are disappointed by what they hear.
Performance appraisal and feedback contribute to the effective management of human resources in
several ways. Performance appraisal gives managers important information on which to base human
resource decisions. Decisions about pay raises, bonuses, promotions, and job move all hinge on the
accurate appraisal of performance. Performance appraisal can also help managers determine which
workers are candidates for training and development and in what areas. Performance feedback
encourages high levels of employee motivation and performance. It lets good performers know that their
efforts are valued and appreciated. It also lets poor performers know that their lackluster performance
needs improvement. Performance feedback can give both good and poor performers insight on their
strengths and weaknesses and ways in which they can improve their performance in the future (Jones &
George, 2016).
Maintaining Human Resources
Determining compensation
Compensation is the financial remuneration given by the organization to its employees in exchange for
their work. There are three (3) basic forms of compensation. Wages are the hourly compensation paid to
operating employees. Salary refers to compensation paid for total contributions, as opposed to pay based
on hours worked. For example, managers earn an annual salary, usually paid monthly. They receive a
salary based on the number of hours worked. Some firms have started paying all their employees a salary
instead of hourly wages. Finally, incentives represent special compensation opportunities that are usually
tied to performance. Sales commissions and bonuses are among the most common incentives.
Basic compensation is necessary to provide employees with the means to maintain a reasonable standard
of living. Beyond this, however, compensation also provides a tangible measure of the value of the
individual to the organization. If employees do not earn enough to meet their basic economic goals, they
will seek employment elsewhere. Likewise, if they believe that the organization undervalues their
contributions, they may leave or exhibit poor work habits, low morale, and little commitment to the
organization. Thus, designing an effective compensation system is clearly in the organization’s best
interests (Griffin, 2016).
Determining benefits
Benefits are things of value other than compensation that the organization provides to its workers. Benefits,
sometimes called indirect compensation, come in several forms. Pay for time not worked includes sick
leave, vacation leaves, and holiday leaves. Insurance benefits often include life and health insurance for
employees and their dependents. One example of a legally required insurance benefit is workers’
compensation wherein the company provides medical care and disability income for employees injured on
the job. Social Security is a government pension plan to which both employers and employees contribute.
Many employers also provide a private pension plan to which they and their employees contribute.
Employee service benefits include extras such as tuition reimbursement and recreational opportunities.
Some organizations have instituted cafeteria benefit plans, whereby basic coverage is provided for all
employees, but employees are then allowed to choose which additional benefits they want (up to a cost

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limit based on salary). An employee with five (5) children might choose enhanced medical and dental
coverage for dependents, a single employee might prefer more vacation time, and an older employee
might elect increased pension benefits. Flexible systems are expected to encourage people to stay in the
organization and even help the company attract new employees (Griffin, 2016).

REFERENCES
Bateman, T. & Snell, S. (2013). Management: Leading and collaborating in a competitive world. New
York: McGraw-Hill Education (Asia).
Current real minimum wage rates. (n.d.). Retrieved from http://www.nwpc.dole.gov.ph/stats/current-real-
minimum-wage-rates/
Occupational safety and health standards act. (n.d.). Retrieved from http://cpbrd.congress.gov.ph/78-
publications/791-occupational-safety-and-health-standards-act
Jones, G. R. & George, J. M. (2016). Essentials of contemporary management. New York: McGraw-Hill
Education.

Know the basics of Philippine Labor Law. (2016, July 27). Retrieved from https://attorney.org.ph/legal-
news/158-know-the-basics-of-philippine-labor-law

The Occupational Safety and Health Standards Act will protect the health of workers in the Philippines.
(n.d.). Retrieved from https://www.who.int/philippines/news/detail/23-08-2018-the-occupational-
safety-and-health-standards-act-will-protect-the-health-of-workers-in-the-philippines
Williams, C. (2017). Principles of management (9th ed.). Boston: Cengage Learning.

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