•

Department of Management
College of Business and Economics

Addis Ababa University

Human Resource Management

Short Note

Y.N.
Course Objectives
At the end of this course you will be able to:
 Gain an insight about the operative functions of HRM
 Understand the importance and significance of human
resource as an asset
 Acquire a broader perspective on managing human
resource effectively.
 Develop a realistic over view of major principles and
techniques of human resource management system
 understand the dynamic nature and applications of human
resource management in business and other organizations
 have a clear understanding of human resource handling
mechanism

2
 Chapter One

Overview of HRM
Chapter Objectives Contents

✓ Define and understand the notion of Human 1. Definition and background

Resource Management 2. Importance of human resource management
✓ Identify the importance of HRM 3. Evolution and development of human resource
✓ Point out the objectives of HRM
management
✓ Understand the HRM model and its elements
✓ Explain the human resource environment 4. Human resource management objectives
5. Human resource management models
6. Human Resource Management Environments
 Your Reflection

1. How do you perceive the term

human resource management?
2. Do you think that human resource
management is more important
than other resources? Why?
3. What do you think is the purpose
of human resource management?
 What is Human Resource Management?
Before giving answer to this question, it would be better to define
"management" itself, because HRM belongs to the broader field of
study and practice known as management.

 Management can be defined as the

process of reaching goals through efficient
utilization of human, financial, material
and informational resources.
 Among all these, human resource is the
most important and fundamental resource
for an organization. Why?

5
What is Human Resource Management?

Because:
✓ Unlike other resources, human resource require fairness, justice and
equity
✓ Human resources make decision over efficient utilizations of other
resources.
✓ Organizational activities require human efforts and capabilities
✓ Organizations depend on performance of people for achieving their
mission and goals.

6
What is Human Resource Management?
Definition: Human Resource
Management is the process of
achieving organizational goal by
attracting, developing, and
retaining and properly using
talented human resource.

What does this definition imply to

you? List at least three points.

7
 What is Human Resource Management?
⚫ HRM refers to the practices and policies one needs to carry out to deal with the
personnel aspects of the management job.
⚫ HRM creates value by engaging in activities that produce the employee
behaviors the company needs to achieve its strategic goals.

HRM) is the effective management of people at work

⚫ The goal is to make workers more satisfied and productive
⚫ When an organization is concerned about people, its total philosophy, culture,
and orientation reflect it
Every manager must be concerned with people (Whether or not there is a
human resources department)

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 Attract and retain talent

Train people for challenging roles

Develop skills and competencies

Importance Promote team spirit

of HRM
Develop loyalty and commitment

Increase productivity and profits

Improve job satisfaction

Enhance standard of living

Generate employment opportunities

 Your Reflection

1. What do you think are activities

of human resource management?
 HRM Activities
• Job analysis defines a job in terms of specific tasks and responsibilities and
identifies the abilities, skills and qualifications needed to perform it
successfully.
• Human resource planning or employment planning is the process by which
an organisation attempts to ensure that it has the right number of qualified
people in the right jobs at the right time.
• Employee recruitment is the process of seeking and attracting a pool of
applicants from which qualified candidates for job vacancies within an
organisation can be selected.
• Employee selection involves choosing from the available candidates the
individual predicted to be most likely to perform successfully in the job.

11
 HRM Activities
• Orientation and Placement is the formal process of familiarizing new
employees with the organization, their jobs, their work units and employees.
Placement, on the other hand, is the assignment of an employee to a new or
different job.
• Performance appraisal is concerned with determining how well employees
are doing their jobs, communicating that information to the employees and
establishing a plan for performance improvement.
• Training and development activities help employees learn how to perform
their jobs, improve their performance and prepare themselves for more senior
positions.

12
 HRM Activities
 Compensation refers to all types of rewards that employees receive in
return for their services.
 Safety and Health involves protecting employees from injuries caused by
work-related accidents. Health refers to the employees' freedom from illness
and general physical and mental well being.
 Career planning and development activities benefit both employees (by
identifying employee career goals, possible future job opportunities and
personal improvement requirements) and the organisation (by ensuring that
qualified employees are available when needed).

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The Link between HRM and Firm Performance

14
Objectives of the HRM Function
HRM contributions to organizational effectiveness:

01 Helping the organization

Employing workforce skills reach its goals
and abilities efficiently 02

Increasing job satisfaction,

03 self-actualization, and
Communicating HRM
policies to all employees quality of work life
04

Managing change to the mutual 05

advantage of individuals, Maintaining ethical
groups, the enterprise, and the policies and socially
public 06 responsible behavior
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Models of HRM

• The Michigan School Model:

• Congruency with organizational strategy (matching
model)
• The Harvard School Model
(Harvard framework)
• Integrated parts towards a strategic vision and with a
central philosophy

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The Michigan School Model

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The Michigan School Model
The human resource cycle

23
Elements of Human Resource Cycle

1.Selection: matching available human resources to jobs

2.Appraisal: performance management
3.Rewards: focus on organizational performance (most under-
utilized and mishandled tool)
• short-term and long-term
4.Development – developing high quality employees

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The Harvard Framework

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Characteristics of HRM in Harvard framework

1. Line managers accept more responsibility for ensuring

the alignment of competitive strategy and personnel
policy.
2. HR has the mission of setting policies that govern how
HR activities are developed and implemented in ways
that make them more mutually reinforcing

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 Group Discussion

• You are the HR staff for a Company based

in Kenya. The company employs a full
range of managerial, skilled and unskilled
staff. The company is considering opening
a new plant in Ethiopia, and you have been
asked to carry out an analysis to establish
what the major factors affecting HRM in
this country would be. List the issues that
you would consider.
The Environmental Factors Affecting HRM

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The Environmental Factors Affecting HRM
• The management must have a deep understanding and
appreciation of the internal and external environments.
• It is desirable that managers know what the environment is and
how it influences HRM functions in an organization.
• Managers must always be aware of the environmental forces
influencing their decisions; at the same time, they must be aware of
how their decisions may affect the environment.

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 Chapter Two
JOB ANALYSIS & HR
PLANNING
Chapter Objectives Contents

✓ Define job analysis and human resource planning 1. Meaning and definition of job analysis
✓ Identify methods of acquiring job analysis information 2. Steps in job analysis
✓ Understand the importance of job analysis information 3. Methods of collecting job analysis information
4. Importance of job analysis information
along with potential harms with job analysis
5. Potential problems with job analysis
✓ Explain the importance of human resource planning 6. Meaning and definition of Human resource
✓ List out the steps in human resource planning planning
✓ Explain factors affecting human resource planning. 7. Importance of human resource planning
8. Steps[procedures] in human resource planning
31
Job Analysis Terminologies
Task
The smallest units of analysis or identifiable work activities
composed of motions. E.g. receiving telephone call.

Duty
A larger work segments composed of several tasks performed
by an individual.
Position
The responsibilities and duties performed by one person.
There are as many positions in an organization as there are
employees.
Job
Group of positions that are similar in their duties and
positions performed by one or more person/s to achieve the
organization’s goal.
 Job Analysis Terminologies
Job may require a service of one or more person
Examples:
University president – requires Accounting clerks – requires the
the service of one person service of more than one person

Position require the service of only one person

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 Job Analysis Terminologies

Class Exercise:
In a work group consisting of a
financial head, a chief accountant,
two accounting clerks and two
cashers. How many positions and jobs
are there?

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 Concepts of Job Analysis

Job analysis is a
systematic process of When does job analysis is conducted?
determining tasks, duties
and responsibilities that
When the organization is established
make up the job and the
qualification (skill, When new jobs are created
knowledge, experience)
required to perform the when jobs are changed significantly as a
job. result of new technology
The Products (Outputs) of Job Analysis

1. Job description Uses of job description:

Job description is a written statement

It describes the job to the recruiters
that explains the title, duties,
responsibilities, authority,
It guides newly hired employees
accountabilities, working conditions, about what they are expected to
conditions of employment and other perform.
aspects of a specified job (what the It is used for appraising whether the
worker does ). actual activities of the employees
match with their stated duties
The Products (Outputs) of Job Analysis

2. Job Specification Uses of job Specification:

Job specification is a written It sets minimum qualifications

statement that describes the skill, needed in potential candidates
knowledge, work experiences
required to perform the job (who the It guides selectors to select
worker is) candidates with right qualifications

lets applicants know what skills, level

of experience, education, and abilities
are required for the role.
 The Products (Outputs) of Job Analysis

Uses of job performance standards:

3. Job Performance Standard
Motivation: standards becomes objectives or
targets for employee efforts. Once standards
Job Performance Standard: is a are met, workers may feel a sense of
statement that indicate quality accomplishment

and quantity of job performance. Performance Evaluation: Standards are

criteria against which job success is measured.

Improve the performance of employees: The

more employees understands what is expected
of them, the more likely it is that they will be
able to carry out responsibilities successfully.
The Products (Outputs) of Job Analysis

4. Job Evaluation Use of job evaluation:

Job Evaluation is the process of Provide information for developing a

determining the relative values of compensation package
each job in the organization and
ranking them in a hierarchy It serves as a bases for fixing a fair
and equitable salary and wage
structure

It helps to avoid wage and other

discrimination
Methods of Collecting Job Analysis Information

01 Observation Method
The job analyst actually watches employees directly on the
job to get first hand information

02 Interview Method
Interview of individual or group is conducted to collect
information for job analysis

Questionnaire Method
03
Employees are sent a structured questionnaire containing a
list of possible activities.

04
Diary Method
Employees record their daily activities in a diary.
Sources of Information for Job analysis

• Employees
• Supervisors
• Independent Expert (outside
consultant),
Job analysis
• Job Review Committee
• Non-human sources (old job
description, specifications,
Films of workers on the job,
reports etc…)
Information

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 Steps in Job Analysis
Step One Determine the use of the job analysis information.

Step Two Collect background information.

Step Three Select representative positions to be analyzed.

Step Four Collect job analysis information.

Step Five Review the information with the participants.

Step Six Develop a job description, and job specification.

 Job Design
Job design refers to organize work The purpose of job design and
content (task, duties, responsibility) redesign is to improve:
and qualification required (skills, • employees satisfaction and
knowledge, experience) in each job performance
in the way that meet the needs of • organizational performance
the organization and employees.
 Job Enrichment Job Rotation
Is a technique in which 03 01 Refers to the movements of
employees are given employees from one job to
Approaches
autonomy to set their other job
of Job
own work peace, design
Designing
their own work method,
participate in making
decisions and evaluate
their accomplishment. 02

Job Enlargement
Is a technique used to expand the
number of related tasks in a job
Job enlargement and job rotation are horizontal expansions, while job
enrichment is vertical expansion
 Human
Resource
Planning
45
 Your Reflection

1. How do you perceive human

resource planning?
2. What do you think is the
importance of human resource
planning?
3. As a manager what action will
you take if you face shortage of
human resources?
Human Resource Planning
Definition of HRP
▪ HRP is the process of reviewing HR requirement to ensure that the
required number and type of employees are available when they are
needed.
▪ HRP is a process used to determine what and how many position have
the firm to fill and how to fill them
▪ HRP is an activity that managers engage in to forecasting their current
and future needs of human resources.

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 Importance of Human Resource Planning
▪ Help the organization not to be understaffed or over staffed. How?
▪ Prepare the organization to cope up with changes. How?
▪ Important for decreasing and increasing growth of the organization.
How?
▪ Serves as a base for the performance of other HRM functions
▪ Help managers to predicate future net human resource requirements of
the organization

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 Characteristics of Human Resource Planning

▪ Done proactively - HRP is some thing done proactively(in advance)

than reactively(dealing with problem while facing the problem)
▪ Guide and coordinate all human resource management activities
▪ Responsive for changes in the internal and external environment
▪ Linked with high level of organizational plan instead of being
performed in isolation

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Steps in Human Resource Planning
Determining organizational goal and
01
strategic planning

Assessing current human resource situation

02

Human resource forecasting

03

Developing an action plan

04

Implement the action plan, Monitoring and

05
evaluation
 Determining organizational goal and
01
strategic planning

HR planning should be tied with overall

organizational long term plan

Assessing current human resource situation

02

Preparing human resource inventory that consists

of up-to-date information concerning each
employees knowledge, skills and experience, age,
marital status etc…
 Human resource forecasting
03

Human resource forecasting includes anticipating future human resource

demand (requirement) and supply (availability). It has Three components:
a. Forecasting human resource demand : require to determine the type
and number of personnel required in the future
b. Forecasting human resource supply: require anticipation of supply of
people who will be available in the future.
 Human resource forecasting
03

c. Comparing future demand and internal supply:

Three possible results (figure) may be obtained out of the
comparison process by subtracting the current man power (supply)
from the projected demand.

i. Surplus= HR demand < HR supply

ii. Shortage= HR demand > HR supply
iii. Balanced= HR demand = HR supply
 Human resource forecasting
03

Human Resource Demand Forecasting Techniques

1. Judgment and experience:
Top level executives and experts come together and estimate future HR
requirements
2. Zero based forecasting
Using current level of employees as a starting point to determine future HR
requirements
3. Bottom up approach
Unit managers(managers from different levels of mgt) are asked to estimate
their HR requirements and send a proposal to top level management
 Human resource forecasting
03

Human Resource Demand Forecasting Techniques

4. Work standard methods
Determining the relationship between the task and number of employees
required to perform the task.
Example:
✓planned work for the next……..planting 100,000 seedlings
✓Work standard…………………100 seedlings/ person/day
What are the numbers of people required/day to plant the seedling within
two months period (assuming that working days per months are 25)?

Solution… 20 workers per day are required

 Human resource forecasting
03

Human Resource Demand Forecasting Techniques

4. Work standard methods
This technique is used only when:
✓ The volume of work can be quantified
✓ Total productions and activities are clearly estimated
✓ Time required to produce a unit is known

NB. The work standard methods cannot be applied for estimating

professional personnel requirements like managerial skills. Why?
 Human resource forecasting
03

Human Resource Demand Forecasting Techniques

5. Key predictive factors
Identifying one major variable with which total human
resource is highly correlated
e.g. Addis Ababa University may use number of students as
key predictive factor to determine academic staff
requirement
 Human resource forecasting
03

Forecasting Human Resource Supply

Supply forecasting estimates future sources of human
resources that are likely to be available from inside and
outside the organization.

Factors that affect human resource supply forecasts are:

• Internal Sources Forecasts
• External Sources Forecasts
 Human resource forecasting
03

Forecasting Human Resource Supply

Internal Sources Forecasts:
• The Human Resource Inventory of existing human resources
provides information about human resources that are likely to be
available from internal sources.
External Sources Forecasts
• External sources consist of human resources who currently do
not work for the organization. The sources can be:
- Educational and training institutes
- Labor market
• The information flow from the labor market about job seekers
should be constantly monitored to analyze trends.
 Developing an action plan
04

Managers must develop an action plan to close the gap

between demand and supply.

A. If surplus is projected, plan must be made to:

▪ Encourage early retirement
▪ Layoff or dismiss employees. Is it possible?
▪ Reduce working hour/part time. Is it good?
▪ Restrict hiring
 Developing an action plan
04

B. If shortage is projected, plan must be done to:

▪ Allow overtime work/part time
▪ To extend retirement
▪ Introduce labor saving technology
▪ Job enrichment/enlargement
▪ Recruit and select employees
 Implement the action plan, Monitoring and
05
evaluation

Some of the major implementation actions are:

• Recruitment and selection
• Promotion, transfer, demotion and lay off
• Training and development
 Chapter Three
Recruitment and Selection
Chapter Objectives Contents

At the end of this chapter, you will be able to: 1. Employee Recruiting
✓ Describe recruitment and its features • Features of recruitment
✓ Explain factors affecting recruitment • Factors affecting recruitment
✓ Identify the sources and methods of recruitment • Sources and methods of recruitment
✓ Describe employee selection and its features 2. Employee Selection
✓ Explain the selection process • Selection criteria
• The selection process
• Factors affecting selection
3. Orientation [induction] and Placement
• Purpose of orientation
• Levels of orientation
• Placement
Recruitment

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Recruitment
Recruitment is the process of attracting individuals (pool of
candidates) on a timely basis, in sufficient numbers and with
appropriate qualifications.
The ground work for successful recruitment lies on:
• Human resource planning: identify job openings and future human resource
requirements
• Job analysis information: identify the content of the job and qualification
required
who conduct recruitment?
✓In large organization HRM department
✓In small organization recruitment and selection committee
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 Factors Affecting Recruitment
Internal factors
• Employees turnover. How?
• Promotional Opportunities. How?
• Salary levels, type and extent of benefits. How?
• Other HR policies and practices. How?
• Organizational growth. How?
• Image of the organization. How?
• Size of the organization. How?
• Nature of the job. How?
• Working Conditions. How?
• Cost and incentive of recruitment. How?
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Factors Affecting Recruitment
External factors
• Personnel policies and practices of other organizations regarding working
conditions, salary, benefits, promotional opportunities, employee relations,
etc.
• Career opportunities in other organizations
• Government regulations

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The Recruitment Process
The recruitment process consists of the following interrelated steps:
Recruitment planning
Step
One 1
Translating information on human resource planning in to
targets that specifies the number and type of potential
applicants to be contacted.

Step Searching
Two Involves locating source of the recruitment. Sources are:
✓Internal: with in the organization
✓External: out side the organization
The Recruitment Process

Attracting qualified candidates to apply for the jobs

Step ✓Job posting and employee 1referral are methods to attract
Three internal candidates

✓External candidates can be attracted by advertiing

Step Screening:
Four Individuals who are not able to meet the recruitment criteria for
a position should be rejected at an early stage
Source & Methods of Recruitment
1. Internal source of recruitment:
Are current employees in the organization and take the form of
promotion or transfer with in the organization.

➢ Internal sources involve recruiting within the organization

➢ Prospective qualified candidates are found within the
organization to fill up job vacancies above the entry level.

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 Methods for Internal Recruiting
Methods of Internal Recruiting
1. Job posting: this involves announcing job openings to all current employees.
Position, location, pay scale and qualifications are described.
• The means used for announcing the job vacancies can be: Bulletin boards, In-
house Newsletters, Circulars/memos, Electronic mail.

2. Employee referrals: Supervisors or current employees generally recommend

best-qualified candidates for the vacant jobs.

3. Skill inventory: it is an internal recruitment method to identify employees

with the attributes needed for a particular job.

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Advantages of Internal Recruiting
• Better Selection: The employee is already known, information on employee
performance is readily available and predictable.

• Moral Building: Employee loyalty will be higher and turnover will be low due
to they have greater chance for advancement &career dev’t.

• Adaptability: Those chosen internally already know the organization, hence,

less training and orientation will be required.

• Cost-effective: Internal recruitment is less costly as compared to external

recruitment because of low advertisement and training costs requirement.

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Disadvantages of Internal Recruiting
• Limited Choice (inadequacy of supply): Internal recruitment excludes
excellent candidates that may be available from external sources.

• In-Breeding: The employee tends to demonstrate on the job only what

he/she has learned in the organization and has few new ideas and experiences
(lack of new ideas and knowledge from other sources)

• Favoritism/ nepotism: Recruiting friends relatives of present employees

may often create unnecessary tensions among employees in an organization.

• Negative Impact on Employees Moral: Competition among employees for

promotions may be very intense to the extent of damaging the morale of
employees.

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 Your Reflection

• Do you think that internal

recruitment avoids the necessity
(need) of external recruitment? Why
or why not?
 External Sources of recruitment
➢External sources involves attracting qualified candidates from outside the
organization to apply for job vacancies

➢This source is widely used especially to:

✓fill entry-level jobs
✓acquire skill not owned by current employees (when the org. need new skills
&approach)

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External Sources of recruitment

Methods for External Recruitment

1.Advertising: a means to communicate the organization employment
requirement to the general public using mass medias (radio, TV, news
paper, Internet etc..)

2.Employment agency placement: Employment agencies carry out

recruitment function on behalf of their client organization.

• There are:
• Private employment agencies such as ethiojobs, The Talent Firm etc.

• Public employment agencies such as Civil Service Commission

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External Sources of recruitment
 Reasons for using an agency:
 When a firm doesn’t have an HR department and is not geared to doing
recruiting and screening.
 The firm has found it difficult in the past to generate a pool of qualified
applicants.
 The firm must fill a particular opening quickly.
 There is a perceived need to attract a greater number of minority or female
applicants.
 The firm wants to reach currently employed individuals, who might feel
more comfortable dealing with agencies than with competing companies.
 The firm wants to cut down on the time it’s devoting to recruiting.
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External Sources of recruitment
 Avoiding problems with employment agencies:
 Give the agency an accurate and complete job description.
 Make sure tests, application blanks, and interviews are part
of the agency’s selection process.
 Periodically review data on candidates accepted or rejected
by your firm, and by the agency.
 Check on the effectiveness and fairness of the agency’s
screening process

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External Sources of recruitment
3.Employee referrals: current employees refer job seekers from outside the
organization
4.Walk-ins/write-ins:
• Walk-ins are job candidates who physically arrive at the organization in search
for a job
• Write-ins are job seekers who send application letter to an organization
employment office
5. Educational Institution Placement: educational institutions are usually the
sources for young and bright-educated individuals who generally lack work
experience.
6. Executive Recruiters (“head hunters”): There are people who are
exclusively known for seeking out top management talent for their clients.
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Advantages of External Recruiting
• New employees bring new ideas, skill and experience to the
organization (organizational innovation)
• Provide sufficiently large no of candidates
• Fairness in recruitment (avoid nepotism)
• New recruits are less susceptible to conformity pressures
(disagreement)

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 Disadvantages of External Recruiting

• High cost: The cost of advertisement and training new entrants is

high as compared to internal recruitment
• Adaptability Problems: More time will be needed for new
employees to adapt to the work environment of the organization
• Wrong Selection: External recruitment can result in wrong
selection of employees.
• Poor Employee morale: Recruitment from outside can adversely
affect the morale of existing employees

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 Your Reflection

• Do you think recruitment is always

the best method to fill vacant
positions?

• What other alternatives or options do

organizations have to fill vacant
positions?
Alternative to Recruitment
Recruitment is not always the best method to fill vacant positions because:
• it is time consuming and expensive
• cannot solve the immediate employee demand of the organization

Most common alternative to recruitment includes:

• Job enlargement and enrichment
• Overtime
• Temporary employment,
• Subcontracting
• Employee leasing

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Selection

84
Selection

Selection is the process of choosing the most suitable candidate for a

particular position from among the candidates

Effective selection process requires:

➢Clearly spelled out job description and job specification
➢Sufficiently large pool of prospective applicants.
➢Series of steps through which applicants pass

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Selection
Poor selection leads to: Right selection improves:
• Increased employee turnover • Human capital of the
• Absenteeism organization
• Job related Accidents • employer-employee relations
• Job dissatisfaction • productivity and commitment
of employees
• High costs of training and
Productivity losses

86
The Selection Process

Steps in a selection process differ from organization to organization-

some use only interview, others use written tests plus interview, still
others follow all the necessary steps. However, a systematic selection
process consists of the following steps:

87
The Selection Process
1.Preliminary Evaluation of Application Forms and preliminary Interview

The recruitment process generates sufficiently large number of application forms filled by
prospective candidates. Such forms consist of information about:

✓Personal background information: Name, gender, age, marital status, nationality etc.
✓Qualifications: Educational, professional and other qualifications and specialized skills.
✓Work Experience: Experience in previous jobs; duties, responsibilities, etc.
✓Salary: Salary drawn in present employment and expected salary.
✓References: Names and addresses of persons who can be contacted for references.

88
The Selection Process

2. Selection Test
Standardized written and practical tests are administered to the
candidates passing the preliminary selection process.
The major types of tests can be:
➢Aptitude (paper and pencil )test : They measure aptitude for
the job. They test a candidate's learning capacity.

89
The Selection Process
➢Achievement Tests: measure theoretical and/or practical knowledge and skills, which
candidates claim to know.
➢Interest Tests: They are inventories of the likes and dislikes of candidates in relation
to work, hobbies, recreational activities etc. The assumption is that interests and job
satisfaction are correlated.
➢Personality Tests: They measure personality dimensions of the candidates.
➢Performance Tests: involves actually doing a sample of the job in a controlled
situation. E.g. typing tests
➢Performance Simulations: require applicants to perform tasks closely resemble
(representative of) the actual job but does not involve direct performance of the job or
part of the job

90
The Selection Process

• Tests can only be used to predict job success when they are valid
and reliable.
• Test validity implies that people who score high on the test do well
on the job and those who score low do not do well on the job.
• Test reliability implies that if people take the same test on different
days, they will get approximately the same score each time.

91
The Selection Process
3. Selection Interview
It is face-to-face observation and evaluation of the candidate's
suitability for the job. It assesses the candidates in the following
areas:
➢Ability to do the job
➢Motivation and eagerness to do the job
➢Ability to work under pressure (stress)
➢Ability to 'fit-in' with the organization
➢Personality and interpersonal skills
➢Adaptability to the job situation

92
The Selection Process

Types of interview:
1.Structured Interview: all candidates are asked the same type of
standard questions prepared in advance.
Structured interview can be:
oSituational questions: involve creating a hypothetical job situation
to determine what the applicant would do in that situation.
oJob knowledge questions: involve investigate the applicant's job-
related knowledge (basic educational)

93
The Selection Process
oWorker requirement questions: seek to determine the applicant's
willingness to confirm to the job requirements.

e.g. the applicant's willingness to work in the rural part of the

country

Reflection
what is the advantage and disadvantage of structured
interview?
94
The Selection Process

2. Unstructured Interview: In this type of interview, questions are not

planned in advance, the interviewer can prepare it while the
interview is in progress depending on the situation. Questions vary
from candidates to candidates

Activity
what is the advantage and disadvantage of unstructured interview?
.

95
The Selection Process
3. Mixed ( semi structured) Interview: in this method the
interviewers use combination of structured and unsaturated set of
questions.
The structured questions provide information that allows
comparisons between candidates; the unstructured questions
permit greater insights into the unique differences between
applicants
4. Stress Interview: stress interview is a deliberate attempts to
create tension and pressure in an applicant to see how well the
candidate responds to these tensions

96
The Selection Process
4.Background and reference checking. Why?
Information about background and character of the candidate is
checked from referees listed in the application form.

The major reasons are:

To check job accomplishments, titles, educational background, and
other facts on applicant’s resume is true

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The Selection Process

5. Medical examinations. Why?

Medical tests permit organizations to screen out
candidates with health problems or drug problems

6. Hiring Decision
Selecting those individuals best suited for
employment based on reliable and valid
information.

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 Orientation and Placement
Orientation is a means of familiarizing new employees with their
job, responsibilities, organizational policies, coworkers and other key
aspects of the organization as a whole.
Purposes of Orientation
• It improves the performance of the employee
• It increases organizational stability and reduces conflict.
• It saves time and effort

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 Orientation and Placement
Levels of Orientation

A.General Company Orientation

B.Departmental and Job Orientation

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Orientation and Placement

Placement refers to the assignment or reassignment of

an employee to a new job. it includes:
• Initial assignments of new employees from outside
• Reassignment of current employees due to promotion,
transfer or demotion.

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 Short Assignment II

Taking the case of the job you described in the previous

assignment and referring vacancy announcements from
newspapers such as: Online platforms such as:
• The Reporter • www.ethiojobs (https://t.me/ethiojobsofficial)
• Addis Zemen And/or • HaHuJobs (https://t.me/hahujobs)
• Ethiopian Herald • (Freelance Ethiopia)
• Addis Fortune https://t.me/freelance_ethio

Prepare a vacancy announcement for the job

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 Chapter Four

Training and Development

Chapter Objectives Contents

At the end of this chapter, you will be able to: 1. Objectives of training and
✓ Explain the concepts of training and development
development 2. Process of training and development
✓ Describe the process of training and 3. Training methods
development 4. Career Development
✓ Discuss the concept of career development
Human Resource Development

Human Resource Development (HRD) is

planned, continuous effort by management
to improve employee competency levels
and organizational performance through
training, education, and development
program
 Human Resource Development

Training is a program designed to improve skills and knowledge

that help employees to effectively perform their current job. The
purpose is helping employees to do their present job.

Development is a program designed to improve the overall

effectiveness of managers for their present as well as future positions.
The purpose is to mainly help managers handle future responsibilities.

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 Difference between Training and Development
Training Development
• Focus on present job (task oriented) future job (growth oriented)

• Targets operational workers managerial workers

• Period short term (periodic process) long term ongoing process

• Result develop skills and knowledge develop conceptual, interpersonal,
technical and decision making skills
• purpose Remedial effort develop employees potential

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Major Purposes of Training
Major purposes of training are:
• Establish sound relation ship between the worker and his/ her job
• Upgrade skills and prevent skills obsolescence
• Develop healthy and constructive attitude (Improves organizational
climate)
• Increase productivity and quality of work
• Improve labor-management relations
• Minimize operational error ( wastage, spoilage of materials and
unnecessary repetitions, reduce hazards and accident)
• Enhance employees moral and confidence
• Reduce employees turn over, absenteeism and job dissatisfaction

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Major Purposes of Development
Major purposes of development are to:
• Improve managerial decision making skills
• Stimulate managers use more creative problem solving approach
• Provide managers with latest information on theory and practice of
management
• Prevent managerial obsolescence
• Give managers the opportunity to discuss with other people

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The Basic Process of Training and Development
The training process consists of the following steps:
Step 1 Determine Training Needs (Need Assessment)
Step 2 Establishing training and development objectives
Step 3 Selecting Instructional Methods and Medias
Step 4 Select Trainees and Trainers
Step 5 Develop Budget
Step 6 Conduct Training
Step 7 Evaluate the Training and Development Programs

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 Step 1. Determine Training Needs (Need Assessment)

• Need assessment is refers to a systematic identification of training and

development needs.
• Training need is the gap between skills needed for a job and the present
skill level of employees. It should be properly determined as follows:

Training and development need= job performance standard - actual performance

• If the actual performance is below the job standards it indicates

performance deficiencies

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Step 1. Determine Training Needs (Need Assessment)
The need assessment occur at three stages ( levels):
1. Organizational level
Organizational level need analysis refers to shortcomings within the
organization as a whole.
Training or development needs at organizational level can be created by:
✓Projected growth and development
✓Changes in environment, objectives & structure
✓Changes in products and services
✓High absenteeism, turnover, reject rate and accidents

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Step 1. Determine Training Needs (Need Assessment)
2. Task level (job analysis)

The duties and responsibilities of the job, together with the knowledge,
skills and attitudes needed to perform them, are the focus of needs
analysis at the task level.
Training or development needs at task level can be created by:
✓Job redesign
✓Task relocation
✓Changes in work methods and procedures, and
✓Upgrading of job functions.

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Step 1. Determine Training Needs (Need Assessment)

3.Individual Level (person analysis)

This refers to assessing present deficiencies in specific skills,

knowledge and attitudes on the part of individual employee.
Training or development needs at individual level can be created by:
✓Job descriptions and job specifications, and Skill deficiencies on the job

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Step 2. Establishing training and development objectives

• Training objectives are desired outcomes that the training is intended to

achieve
• Objectives define the performance standards that the trainee should be able to
exhibit after training
e.g. after training the secretary is expected to type 80 words per minute
purpose of establishing objectives are to:
• Evaluate the training and development outcome
• Choose appropriate training methods

114
Step 3.Selecting Instructional Methods and Medias

✓Instructional methods and medias

represent the medium of instruction
needed to teach specific skills, knowledge
and influence attitudes.

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Step 3.Selecting Instructional Methods and Medias

1. Information presentation methods:

Used to teach facts, skills and concepts without requiring the trainee
to practice the materials thought.
These methods further classified in to:
• Lecture
• Conference
• Programmed instructions

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Step 3.Selecting Instructional Methods and Medias

2.Simulation Methods:
This method presents trainees with artificial representations of an actual
situation and require them to react as though the situation were real.
Some of these methods are:
• Case study
• Role playing
• In basket exercise

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Step 4. Select Trainees and Trainers

• Right kind of trainees and effective trainers should

be selected

121
Step5:Develop Budget

• Costing should be done for each training program

122
Step 6: Conduct Training

• The training programme should be delivered to the

trainees as per schedule

123
Step 7: Evaluate the Training and Development Programs

• It is a means to verify the success or failure of the program.

• Evaluation results provide feedback to improve current activities
and plan-future training programs.

124
Step 7: Evaluate the Training and Development Programs

Criteria for evaluation

• Reaction: how happy is the trainee?
• Learning criteria: did the participant learn what was intended?
• Job behavior: did the learning transferred to job?
• Organizational impact: has the training helped organizational
performance?
• Ultimate value: has the training affected the Ultimate wellbeing of
the organization?

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Types of Human Resource Training

Major types of Human Resource Training programs are:

a. On the Job Training: conducted in the place where the
employee is actually working.
In this program the employee is placed in to real work situations
and shown how the job is performed by experienced worker or
supervisor

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Types of Human Resource Training

on the job training consists of four steps:

1.Orientation (Preparation):the trainees are told about the job, purpose and
expected outcome of the training
2.Demonstration (presentation): the trainees are given instruction
by telling, showing and explaining about new knowledge and skills
3.Practice: The trainees actually perform the job to demonstrate
their understanding. Errors are corrected. Practice is continued
4. The employee perform the job with out supervision

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Types of Human Resource Training

b. Off the Job Training: takes place outside the work situation. The
trainees removed from the stresses and demands of workplace so as
to focus on learning experience.
The methods used for off-the-job training are: Lecture/ conference,
Simulation exercises and Programmed Instruction
c. Vestibule Training: Trainees learn their jobs on the equipment
they will be using on the job. The training is conducted away from
the actual work environment.
e.g. Language laboratories, computer centers etc..

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Types of Development Program
The most common type of management development programs are:
1.On-the-job Management Development
Management development takes place on the job. It is learning by doing in the
context of real work environment.
The most common methods are:
a. Job Rotation : it involves shifting managers from position to position. It is
generally horizontal or lateral job transfer.
✓Planned Rotation: Managers spend two or three months on a job and are then
moved on.
✓Situational Rotation: Shifting is done to meet work schedules or to make the job
challenging to the manager.
✓Line and staff Rotation: managers can be shifted between line and staff positions.

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Types of Development Program
b. Coaching It is actively guiding managers by their immediate supervisors.
The coach gives the guidance through direction, advice, criticism and
suggestions.
c. Development positions: organizations assigns less experienced
administrators to work temporarily as an assistant to more experienced
administrator.
2. Off the Job management Development: in this program managers move
from their work situation to other training institutions for concentrated
programs.

Some of the methods used are: Seminar, work shops, conference and other
training programs conducted by training institutions

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 Career Development

➢Career is a sequence of positions, jobs or occupations that one

person engages in during his or her working life.
➢Career goals: the future position that one want to reach
➢Career planning; is the process by which one select career goals ,
the path and the means of achieving the goals.
➢Career management is the process through which organizations
select , assess and develop employees skills to provide a pool of
qualified people to meet future needs.

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 Career Development

➢Career development: is the personnel activity which helps individuals plan

their future career with the organization in order to help the organization
achieve is goals.

N.B. Career development should not relay solely on individual effort, but
involve the assistance of managers and human resource department
Values of Career Development
✓Aligns strategy and internal staffing requirements
✓Develops promotable employees
✓Reduce turn over

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 Career Development
✓Tap employees potential
✓Further personal growth
✓Satisfies employee needs

Based on staffing need, organization can facilitate the career

planning process and help answer employees questions about career
progress within the organization

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 Chapter Five
Performance
Appraisal (PA)
Chapter Objectives Contents

At the end of this chapter, you will be able to: 1. Purpose of performance appraisal
✓ Describe the purpose of performance appraisal 2. Performance appraisal steps
✓ List out performance appraisal steps 3. Performance appraisals methods
✓ Discuss the various methos of performance 4. Problems associated with
appraisal performance appraisals
✓ Explain problems related to performance
appraisal
Meaning of Performance Appraisal (PA)

Performance appraisal is a formal

system of periodic, review and
evaluation of an individual’s job
performance as well as giving
feedback to an employee.

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Uses of Performance Appraisal

• Performance improvement: PA provide feedback necessary

for improving performance and motivating employees.
• Compensation adjustments: help to determine who get
what
• Placement decisions: Managers use information from PA
to make decisions on promotions, transfer and demotion
• Training and development needs: PA indicate a training
and development needs
• Guide career planning and development decisions

136
Uses of Performance Appraisal
• Indicate deficiencies in staffing process: show strengths and
weakness in performing staffing functions
• Informational inaccuracies: indicate errors in collecting information
on job analysis and planning
• Job-design errors: Poor performance may be a symptom of poor job
designs
• Feedback to human resources: indicates how well the human
resource function is performing

137
The Performance Appraisal Process

Establish Discuss
Take corrective Appraisal
Performance
actions With
standard Employees

Communicate Compare
Measure
Standards Performance
Actual
To With
Performance
Employees Standard

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The Performance Appraisal Process
Step 1:Establishing Performance Standards
➢performance expectations and standards of performance are established
based on the job descriptions.
Step 2: Communicating Standards to Employees
➢Communicating performance standards to employees will enhance their
motivation and commitment towards their jobs.
Step 3: Measuring the Actual Performance
➢The supervisor then observes and evaluate the work performance and
behavior of an employee
Step 4: Comparing the Actual Performance with Standard

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The Performance Appraisal Process

Step 5: Discussing Appraisal with Employees

➢After the evaluation, the rater must describe work-related progress
in a manner that is mutually understandable
Step 6: Initiating Corrective Action
➢Alternatives for corrective action includes:
➢Taking no action: if problems are insignificant
➢Correcting the deviation: if problems are significant
➢Revising the standards: if problems are due to inappropriate performance
standards

140
 Responsibility for PA
1. Immediate Supervisor
2. Peer Evaluation
3. Self Appraisal
4. Subordinate Evaluation
5. Group Appraisal
6. Combinations

141
Performance Appraisal Methods
1. Rating Scales: rates employees according to pre-defined factors
This method requires the evaluator to record his/her subjective assessment of
the employee's on a scale.
e.g.
Name of the employee____________
Position________________________

criteria excellent good acceptable fair poor

5 4 3 2 1
Attendance
Cooperation
total

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 Performance Appraisal Methods
2.Critical Incident technique: Keeps a log (record) of a person’s effective and
ineffective job behavior
•At the end of the valuation period, the evaluator used the log along with other
data to assess employee job performance

3. Essay method: requires the rater to write a brief narrative description of

employee's performance and characteristics.

4. Ranking: rater is asked to assess employees in a rank order of overall

performance relative to others doing the same job.

5.Work Standards: compares each employee's performance to a predetermined

standard or expected level of output

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 Performance Appraisal Methods

6. Checklist Appraisal
• A checklist appraisal is a record of performance, not an evaluation
by the supervisor.
• It contains a series of questions about the employee’s
performance.
• The supervisor checks boxes to answer the questions yes or no.
• The human resources department has a key for scoring the items resulting
in a rating of the employee’s performance.

144
 Performance Appraisal Methods
7. Management by Objectives (MBO)
• In organizations where MBO is used to set goals and objectives for
employees, the supervisor will use this approach for performance
appraisal also.
• The appraisal is based on whether or not the employee has met his or her
objectives.
• The advantage is that employees know what to expect.
• The supervisor focuses on results rather than more subjective criteria.

145
Bias in Appraising Performance

• Harshness Bias
• Leniency Bias
• central tendency
• Proximity bias
• Recency bias
• Personal preferences of the supervisor
• The halo effect

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 Chapter Six

Compensation
Chapter Objectives Contents

At the end of this chapter, you will be able to: 1. Importance of compensation
✓ Describe the purpose and meaning of 2. Factors affecting compensation
compensation 3. Types of compensation
✓ List out the Factors affecting compensation 4. Employee benefits and service
✓ Discuss the different types of compensation
✓ Explain various types of employee benefits and
services
What is Compensation?
Compensation is reward employees
receive in exchange for their
performance. It is concerned with
wages and salaries, pay raises, and
similar monetary and non monetary
exchange for employees’ performance
.
 Objectives of Compensation
✓To attract qualified employees required
✓To retain and motivate the existing workforce
✓Control cost ( to avoid over payment or underpayment)
✓Comply with legal regulations ( to consider legal challenges imposed
by the government)
✓Ensure equity :establish fair and equitable rewards to the employees
✓Reward desired behavior
✓Facilitate understanding: peope in the orga. can easily understand the
compensation management system.
✓ Further administrative efficiency

149
Consequence of Pay Dissatisfaction

• If employees are dissatisfied with the type of compensation they

receive, the following results would be exhibited;
✓Low job performance
✓Absenteeism and turnover
✓Looking for better paying jobs
✓Strike and increased grievance
✓Job dissatisfaction

150
Factors affecting compensation

a. Government
b. Cost of Living
c. Comparable wage rates
d. Market Conditions
e. Ability to Pay

151
Job Evaluation
• Compensation within an organization is determined by comparing
one job to other job.
• This comparison is made possible with job evaluation.
• Job evaluation is that part of a compensation system in which an
organization determines the relative value of one job in relation to
another.
• The major reason for job evaluation is to maintain internal pay equity .
Moreover, job evaluation is used to:

152
Types of Compensation
1. Financial compensation: any form of financial rewards that an employee
receives out of his /her services. It further be classified in to:
a. Direct compensation: which is paid b. Indirect compensation (benefits)
to employees in the form of wages, includes all financial rewards that are not
salaries, bonuses, and commission included in direct compensation.
in exchange for their performance.
• This type of compensation is not
• This type of compensations are directly directly related to performance. Major
related to performance of employees categories of benefits:
• Insurance Benefits
• Security Benefits
• Time-off Benefits
• Employee Services

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Types of Compensation
2. Non financial compensation: includes any form of rewards
employees receive from:
a. The job content: such as the need for recognition,
responsibility, personal growth and the like or
b. The job environment consists of comfortable working
conditions, competent supervision, pleasant work
companions and other related physical and social needs of
employees.

154
Methods of Payment

• Time-based payment
• Performance-based payment method (Incentive Plans)
• Combination of time-based and output-based methods

155
 Chapter Seven
Promotion, Demotion,
Transfer and
Separation
Chapter Objectives Contents

At the end of this chapter, you will be able to: 1. Promotion and types of promotion
• Discuss the concept of transfer, promotion, demotion and 2. Purpose of transfer
separation 3. Reasons for transfer
• Explain the different types of transfer, promotion and 4. Types of transfer
separation
5. Demotion
6. Types of separation
 Promotion
• Promotion occur when a current employee is moved from
one job to other that is higher in pay, responsibility, status
and organizational level (vertical movement). In other words:
• If the employee’s performance is high he/she will get promotion.
• It is un Upward movement of employees
• Employees get salary increment
• Includes more responsibility
• Promote to higher position
• More power

157
 Demotion
Demotion down ward movement of an employee to a position with
low responsibility, organizational level, status and perhaps lower
in pay. Demotion may occur due to: discipline, poor performance
and inappropriate behavior. In other words:
• It is downward movement
• Decrease in pay, responsibility and power
• Punishment for less performance or inappropriate behavior

158
 Transfer
• Transfer reassignments of employees from one job to
other with similar status, pay and responsibility
(horizontal movement). In other words:
• It is a horizontal movement
• Same salary
• Same position

159
Separation
There are two types of separation
1. Permanent separation
• Termination of contract of employment
• Retirement
• Disciplinary termination
2. Temporary separation
• Annual leave
• Maternity leave
• Sick leave e.t.c

160