e book HUMAN RESOURSE MANAGEMENT pdf

PURPOSE OF PERFORMANCE APPRAISAL

STRATEGIC ADMINISTRATIVE DEVELOPMENT
PURPOSES PURPOSES PURPOSES

• A performance • Organization use • Identify training and
management performance appraisal development
system should link information in many needed, strengths,
employee activities administrative decision; weaknesses,
with the potentials, needs for
organization’s goal. • Determining pay employees.
adjustment
• Refer to monitoring • Employers can
progress and • Making job placement inform employees
achievement of decision (promotions, about their
organization. transfers, demotions) progress, discuss
areas where
• It identify • Choosing employees additional training is
employees’ disciplinary actions needed, and outline
strengths and (termination of future
weaknesses. employee). developments.

• Link employees to • Builds a rational basis • Increment in skills
appropriate training for constructing and knowledge
and development rewards develop overall
activity, reward and personality, attitude
other incentives. and behavior of the
employees.

SOURCE OF PERFORMANCE APPRAISAL

IMMEDIATE
SUPERVISOR

CUSTOMER PEER/TEAM
MEMBERS

SOURCE OF
PERFORMANCE

APPRAISAL

SUBORDINATE SELF-
EVALUATION

IMMEDIATE SUBORDINATE
SUPERVISOR
• Most suitable people to
• Supervisor’s ratings are the evaluate manager.
heart of most appraisals.
• This method is effective
• The best position to observe and because the subordinates are
evaluate subordinate’s the best source to observe the
performance. effectiveness of the managers.

• Managers can determine the • The evaluation is more for the
appropriate form of feedback manager’s self-development so
with the employee evaluation. that they able to rectify their
weaknesses.
• Whether employees are required
to attend training and • Subordinates may give a good
development programs, getting a evaluation on their manager if
promotion or get a more they have a good working
attractive compensation package relationship and may evaluate
the manager poorly if they are
• Managers only focus on certain at odds with each other.
aspects and ignore other
aspects.

• Managers tend to manipulate the
performance results in a way to
justify the manager or the
employee salary increases.

CUSTOMER SELF-RATING

• Customer satisfaction • Employees qualified to
determines the success of an evaluate themselves if they
organization. understands the objectives
that must be achieved and
• Most organization feels that they involved in the development of
should obtain employees’ performance standards.
performance input from the
customers. • Employees knows what has to
be done and how to carry out
• Two types of customers: the task effectively.

• INTERNAL CUSTOMER: • Advantage / Disadvantage
Employees from a certain
department who depend on the i. Employees is more
output of the employees’ work keen/lenient/demanding to
result for their input. illustrate their strengths and
try to cover up their
• EXTERNAL CUSTOMER: weaknesses.
People who used the product /
services produced by the ii. More suitable for self-
organization. development.

PEERS / TEAM MEMBERS

• The appraisal are becoming more popular.
• Used when supervisor do not have the opportunity to observe each

employees, but other work group members do.

ADVANTAGES

i. Suitable to evaluate the performance of the workers who regularly
interact with each other as they know to each other and know their
strengths and weaknesses of each.

ii. Employees are more willing to accept the promotion decisions among
colleagues because the decision was made based on the
recommendations they put forward.

DISADVANTAGES
• Arise logrolling - employees conspired together to give high marks to

each other.
• Employee performance appraisal politicized by giving high marks to his

colleagues in the hope they will act the same way.
• Differences of gender, culture, race, age, religion, conflict between old

and new employees will create a bias.
• A feeling of envy among employees that they do not want to give a high

evaluation to colleagues to ensure that all employees are always at the
same level.
• Giving employees the right to make an assessment will result in partial
loss of control of the manager.
• This situation will lead to disrespect or belittle manager’s authority.

SOURCE OF PERFORMANCE APPRAISAL

360 DEGREE FORCE GRAPHIC
FEEDBACK DISTRIBUTION RATING
SCALE
METHOD

METHOD OF
PERFORMAN
CE APPRAISAL

BEHAVIOUR CRITICAL
ANCHORED INCIDENT
RATING SCALE METHOD

(BARS)

1. FORCED DISTRIBUTION METHOD

• Also known as Forced Choice Method / Forced Ranking Method.
• Performance appraisal method in which ratings of employees’ performance

are distributed along a bell-shaped curve.
• Employees have been divided into three categories : poor (unsatisfactory),

moderate (satisfactory) and excellent (outstanding).
• Employee's performance also can be ranked by 1-Unsatisfactory, 2-Below

Expectation, 3-Meets Expectation, 4-Above expectation, 5- Outstanding.

ADVANTAGES DISADVANTAGES

1. Managers can identify employee’s 1. A supervisor may resist placing
performance (high, moderate, any individual in the lowest (or
poor) the higher) group.

2. High performance can be 2. The rater must explain to an
developed and rewarded, while employee why he/she was placed
low performance can be in one group and other were
encouraged or leave. placed in higher group.

3. Ensures that compensation 3. Managers may make false
increased truly are differentiated distinctions between employees.
by performance rater than being
spread somewhat equally among 4. Rating employees such as quota.
all employees.

2. GRAPHIC RATING SCALE

• One of the oldest method and use widely in performance appraisal.
• Sometimes called a Likert Scale, is a performance appraisal method that lists

desired traits and behaviors for each role, then rates workers on each of

those on a numbered scale.
• The attributes might include punctuality, quality of work, job knowledge,

teamwork, accountability, responsibility, etc.
• This helps an organization determine employee performance levels, increase

efficiency and productivity, and make salary adjustments or promotions.
• Use frequently – simplicity.

DISADVANTAGES ADVANTAGES

1. Judgmental error: Rating behaviours may not be accurate 1. The method is
as the perception of behaviours might vary with judges easy to
understand and
2. Difficulty in rating: Rating against labels like excellent and is user friendly.
poor is difficult at times even tricky as the scale does not
exemplify the ideal behaviours required for a achieving a 2. Standardization
rating. of the
comparison
3. Perception issues: Perception error like halo effect, criteria’s
stereotyping can cause incorrect rating.
3. Behaviours are
4. They are good at identifying the best and poorest of quantified
employees. However, it doesn’t help while differentiating making appraisal
the average employees. system easier

5. Not effective in understanding the strengths of
employees. Different employees have different strong
characteristics and these might quantify to the same
score.

Example of
qualitative
Graphic rating

Scale

Example of
quantitative
Graphic rating

Scale

3. CRITICAL INCIDENT TECHNIQUE (CIT)

• Introduced by John Flanagan, in the Psychological Bulletin in 1954.
• It is a research method in which the research participant is asked to recall

and describe a time when a behavior, action, or occurrence impacted (either

positively or negatively) a specified outcome (for example, the

accomplishment of a given task).
• Needs the appraiser to keep records or writing on employees’ behaviors

during the entire rating period.
• When an action demonstrated by an employee affect the effectiveness of the

department, the supervisor has to record that particular behavior.
• No matter if the behavior that is seen as critical and influences the

department’s effectiveness, and can be done with other methods.

ADVANTAGES DISADVANTAGES

1. Helps to identify rare events which 1. Many incidents may go unreported
might be missed by other methods or might not be precise as the
as they focus only on common reporting of incidents relies on
events. memory of the respondent.

2. The technique is cost effective and 2. Biasness might creep in towards
provides rich information the incidents that happened
recently.
3. The respondent’s perspective is
taken into account 3. The incidents narrated may not be
representative of everyday
4. The respondents are not forced situation that takes place during
into any framework the job.

5. Many ways to implement the
technique like observation,
questionnaires and interviews

4. BEHAVIOUR ANCHORED RATING SCALE
(BARS)

• Performance appraisal method that combines elements of the traditional rating
scale (graphic rating scale) and critical incident method.

• BARS is designed to bring the benefits of both quantitative and qualitative data to
employee appraisal process as its mechanism combines the benefits of narratives,
critical incidents and quantified ratings.

• Various performance levels are shown along a scale with each described in terms
of an employee’s specific job behaviour.

• Each scale has a description of certain behavior (either +ve or –ve).
• It is an appraisal tool that anchors a numerical rating scale with specific behavioral

examples of good or poor performance.

ADVANTAGES DISADVANTAGES

1. Easy to use. The standards are significantly 1. Time-consuming. Organization
clear which makes the entire process much with many different roles would
less confusing. have to invest an enormous
amount of time and resources
2. Based on behavior. The ultimate goal of to get it done.
employee appraisals is to improve
performance. 2. Expensive. For smaller
organizations with multiple
3. It is impartial. BARS is heavily focused on roles, this may not be feasible
behaviour, the evaluation process seemingly to accomplish in the short run.
has more fairness to it.
3. Demands a management team.
4. Completely individualized. BARS creates the All of the statements and
ability to design a unique performance anchors need to be developed
management experience for every position and managers would have to be
within an organization. highly involved.



5. 360 DEGREE FEEDBACK

• A 360-degree feedback (also known as multi-rater feedback, multi

source feedback, or multi source assessment) is a process through

which feedback from an employee's subordinates, colleagues, and

supervisor(s), as well as a self-evaluation by the employee themselves

is gathered.
• It is an alternative to the traditional method as the organization gets

complete information on employees’ performance.
• Very popular approach.
• It can increase organization’s competitiveness and suitable for

employee’s development.
• It use a combination of various evaluation sources as stated above.
• Too expensive, takes long time to implement and involves many parties

in the evaluation process.

ERRORS IN PERFORMANCE
APPRAISAL

RECENCY
EFFECT

SIMILAR TO CENTRAL
ME ERROR TENDENCY

LENIENCY & ERRORS IN STEREOTYPE,
STRICTNESS PERFORMANCE PREJUDICE,
DISCRIMINATION
APPRAISAL

HALO &
HORN
EFFECT



CHAPTER 6

COMPENSATION MANAGEMENT

DEFINITION OF COMPENSATION

• Joseph J. Martocchio (2019): Both in intrinsic and extrinsic rewards
employees receive for performing their jobs.

• Mondy & Noe (2018): Compensation is a total of all rewards provided to
employees in return for their services.

• Ivancevish (2019): Compensation as all forms of financial and benefits as
well as clear and apparent service which are accepted by employees as a
part of work relations.

• Gary Dessler (2017): Compensation management is the process of
managing, analyzing, and determining the salary, incentives, and benefits
each employee receives.

• Compensation management aim to attract, retain, and engage employees
by offering broad and competitive compensation plans within the company
budget.



FINANCIAL COMPONENTS

DIRECT FINANCIAL / INDRECT FINANCIAL /
MONETARY NON-MONETARY
COMPENSATION
COMPENSATION
• Including all financial rewards
• Consisting of pay received in the that are not included in direct
form of wages, salaries, bonuses compensation.
& commissions.
• Can be understood to form part
• Provided at regular and consistent of the social contract between
intervals. the employer and employee
such as benefits, leaves,
• This broadly includes equitable retirement plans, education, and
salaries and wages, market employee services.
adjustments or increase in cost of
living, fair commissions or merit • Such benefits may include
increases / performance bonuses. insurance plans, supplementary
health, vision, dental, social
• Wages – time, weekly, daily security benefits, retirement
• Salary – monthly, twice a month plans, employee insurance
• Commission – based on targeted workers compensations, paid
absence like vacations, sick
sales leaves, holidays, educational
• Bonus – depending in budget / leaves.

profit.

NON-FINANCIAL COMPONENTS

• Drives from within employee’s self.
• Satisfaction that a person receives from the job itself or from the

psychological and/or physical environment in which the person work.

THE JOB JOB ENVIRONMENT

• Some employee feels that • It has become a trend nowadays in which
his work is very interesting the organization provides a work
and there are those that environment that can improve the quality
feel otherwise. of life of its employees.

• Working exciting can • i.e.: the provision of family-friendly
increase individual benefits program to help employees
motivation to do so, in fact balance the conflicting demands of
can be considered as a career and family.
compensation to the a. Flexible work schedule/working hours
employees. b. Children care centers in the
workplace
• Work is employees c. Telecommuting - a program that
intrinsically compensate. allows employees to work from home
(WFH).
• Includes diversity of skills, d. Job sharing, compression work week,
job significant, job compensation package.
identification, autonomy, e. Cyber ​facilities, certain status symbol
feedback, challenging (special parking).
work, and so fourth.

BENEFITS (INDIRECT FINANCIAL)

• All financial rewards that are not include in direct financial

compensation.
• Employees receive benefits because of their membership in the

organization.
• Benefits typically unrelated to employee's productivity.
• Therefore, although they may be valuable in recruiting and retaining

employees, they do not generally serve as a motivation for improved

performance.
• Benefits divided into TWO types:

i. Statutory benefits

ii. Non-Statutory benefits

1. STATUTORY 2. NON-STATUTORY
BENEFITS BENEFITS

• Employee Provident Fund • Time off payment
1991 • Health care
• Insurance
• Employee Social Security • Financial service
Act 1969 • Allowance

• Employment Act 1955

i. EMPLOYEE PROVIDEN FUND
(EPF/KWSP) (1991)

• Intended to ensure that all employees have adequate financial resources

to support himself as retired.
• Mandatory for all employees except maids and expatriates, in the range

of 9% - 11%.
• Employers have to contribute in the range of 11% - 13%.
• Self-employed individuals, partners and pensionable public sector

employees may elect to make contributions.

Account 1
• Saving is for the purpose of retirement.
• Cannot be fully withdrawn before reach the age of 55/56/58/60/passed

away/loses capacity/leaving Malaysia permanently

Account 2
• Help to make preparation for a comfortable retirement.
• Withdrawal are allowed for the purpose;

i. Attaining the age of 50.

ii. Owning a house / computers

iii. Setting the balance of housing loan.

iv. Medical expenses / education / Haji

ii. EMPLOYEE SOCIAL Source from www.perkeso.gov.my
SECURITY ACT (1969)

• Organization which responsible according
to this act is a SOCSO (PERKESO).

• To protect workers involved in work
accidents, prolonged illness and paralysis
without any reason.

• Responsible for ensuring that all
registered employers and contribute to it,
to pay benefits to employees when they
make a claim.

• Contributions made by employees (0.5%)
and employers (1.25%) in the salary of the
employee.

• The main benefits provided by SOCSO are:
i. Medical benefits - workers who are
injured on the job.
ii. Compensation benefits - workers who
are injured while working
iii. Funeral - funeral rites
iv. Family obligations - Workers who died
from injuries at work, invalidity
pension, allowances during treatment
and so fourth.
v. Supply of prosthetic and rehabilitation
facilities.

3. EMPLOYEMENT ACT (1955)

• Employment Act CONTRACT
1955 was enacted OF SERVICE
with the purpose of
protecting GAZATTED PAYMENT
employees from PAID OF WAGES
being exploited by
employers; LEAVES

• It is the legal EMPLOYMENT
foundation in ACT 1955
highlighting the
minimum conditions NORMAL MATERNITY
and terms related to WORKING COVERAGE
work that need to be
followed by HOURS
management.
RECRUITMENT
• It’s a bill related to OF WOMEN
work and has the
most influence in HR
management field in
Malaysia.

• Few important
elements concerning
work relations in
Employment Act
1955 are:

i. Contract of Service

• Contract of service is an agreement whereby employers agree to
employ a worker to work, and the worker agrees to serve as an
employee.

• Can be done verbally, writing, either explicitly or implicitly.
• However, in certain circumstance contract of service must be done in

writing.
i. Work that involves a duration of more than one year; or
ii. Apprenticeship contract that is not less than two years.
• Employment Act 1955 also allocates a few prohibitions towards the
contract of service such as:
i. Barring employees from participating in any trade union activities

and associates; and
ii. Setting conditions on how employees spend their fee.

ii. Payment of Wages iii. Recruitment of
Women
• Period payment can’t extend to more
than a month. • Female employees working in
the industrial and agricultural
• Employers need to pay no later than field is not allowed to work
the 7th day after the last day of from 10pm until 5am.
payment period.
• Employers can apply to
• Payments need not make if the Director General of Labour
employees are not present at work Department to enable the
due to imprisonment or attending female employees to work at
court. these time.

• Unless their attendance in court is
as witness to the employers.

iv. Normal Working Hours

v. Maternity Coverage

• Female employees have a right to maternity leaves at least 60/90 days
for every delivery, and NOT MORE THAN 360 days in service.

• Female employees that have more than FIVE [5] living children (along
in service) are not eligible to maternity allowance.

• However female employees that have more than five children are not
eligible to maternity allowance.

Number of Maternity Number Maternity Number Maternity
of Leave of Leave
Children Leave
Children 90 Children 90
1 60 1 60 90
2 60 2 60 1 90
3 60 3 60 90
4 60 4 90 2 360 days
5 60 360 days
TOTAL 300 days 5 3
Balance 60 days TOTAL
(scorched) 4

TOTAL

Example of calculating the maternity leave rate for female
employees in Malaysia according to the Employment Act
1955.

vi. Leave

• Every employee has the right to enjoy a minimum number of leaves
under the contract of service as enacted in the Employment Act 1955.

WEEKLY LEAVE• Employees• Employee • Employees • Employees
PUBLIC HOLIDAYShave thehave the right have the right have the right
right to enjoy to enjoy 10 to enjoy 60 to obtain a
SICK LEAVEone daydays public days medical minimum
ANNUAL LEAVEleave everyholiday whichleave if theynumber of
week. are set for are annual leaves
that particular hospitalized. according to
• When the year. their service
workplace is • This 60 days period.
far away and • The 10 public eligibility will
travelling holidays must be reduced to • Employee who
takes a long cover these 4 follow the are absent
time, days: number of without reason
employees standard or permission
are allowed • National medical leave and exceed
to group Day, that has 10% of working
their weekly already been days for 12
leaves on a • Birthday of utilized. months
condition the continuously
that the DYMMYDA, • Employees are NOT
employers are eligible 15 ELIGIBLE to
ask • Birthdays of days of sick get annual
permission Sultan and leaves in a leave.
from the YDP Negeri year.
Minister of or Federal
HR. Territory Day

• Labour Day.

Annual Leave

• If an employee are eligible 36 days of annual leaves: (36/12 = 3 days)

• If an employee’s annual leave is not spent in the current year, the

employees can carry out that leaves to the following year (36 days + 10

days = 46 days)

2022 2021

• There are other methods that can be used by employees to use unspent

annual leave:
10 days (2021): 5 days – carry forward to 2022, 5 days saved to get a

golden handshake (a big sum of money given to employees when they

leave the company or retired).

(2022) : 36 days (2022) + 5 days (2021) = 41 days
• The golden handshake will be paid according to annual leave that are

unspent and will be given on the retirement period.
• Amount of golden handshake is number of annual leaves x value of a

day's salary.
• i.e.: 160 days x RM100 = RM16,000 (receive by employee during

retirement period).

NON STATUTORY BENEFITS

• Any form of benefit provided by the employer to the employee at
the employer's own discretion.

• Purpose is to attract new employees, motivate them and to
increase employee’s satisfaction.

TIME OFF PAYMENT - Holidays
marriage, emergency leave, further
study, childcare, and paternity.

HEALTHCARE - treatment and care
bills, panel clinics.

INSURANS - life insurance and group
protection, other SOCSO.

FINANCIAL SERVICE - financial loans to
buy homes, cars, computers, land /
estate

ALLOWANCE - entertainment, public
services, housing, regional and
migration.

REWARDS

• Reward can be defined as something paid to a person for the return of

something.
• Reward also a thing given in recognition of service, effort, or achievement.
• Rewards can be categorized into 2 types:

i. Financial rewards

ii. Non-financial rewards

i. FINANCIAL ii. NON-FINANCIAL
REWARDS REWARDS

• Financial rewards are monetary • Any remuneration to a worker
other than extra pay.
incentives that an employee earns
• It includes an employee’s
as a result of good performance. satisfaction as a result of work
• These rewards are aligned with done or the physical /
psychological in which work takes
organizational goals. place.
• When an employee helps an
• The main purpose of the
organization in the achievement of compensation is to increase
employee motivation.
its goals, a reward often follows.
• All financial rewards are extrinsic • Common non-financial rewards:
• Common financial rewards: i. Performance award
ii. Letter of appreciation
i. Salary increment iii. Rewards for long service
iv. Sponsorship to seminar and
ii. Bonus conference

iii. Profit sharing

iv. Shares

v. Commissions

SALARY • An increment usually represents of a portion of what an
INCREMENT employee overall base pay

BONUS • Employers use increments to increase or decrease base
salaries or to award bonuses.

• Employees use them as a benchmark to either negotiate a pay
increase or a starting salary with a new employer.

• A sum of money added to a person's wages as a reward for
good performance.

• A bonus is a financial compensation that is above and beyond
the normal payment expectations of its recipient.

PROFIT • Is a retirement plan that gives employees a share in the
SHARING profits of a company.

SHARES • An employee receives a percentage of a company’s profits
based on its quarterly or annual earnings.
COMMISSIONS
• This is a great way for a business to give its employees a
sense of ownership in the company,

• Employee stock ownership, or employee share ownership, is
where a company's employees own shares in that company.

• Most corporations use stock ownership plans as a form of an
employee benefit.

• Employee share ownership may not confer any meaningful
control or influence by employees in governing and managing
the corporation.

• Is a sum of money paid to an employee upon completion of a
task, usually selling a certain amount of goods or services.

• Employers sometimes use sales commissions as incentives
to increase worker productivity and commission may be paid
in addition to a salary or instead of a salary.

Examples of financial rewards

CHAPTER 7

INDUSTRIAL RELATIONS

WHAT IS INDUSTRIAL THREE PARTIES
RELATIONS (IR)? INVOLVE IN IR IN

• Also known as relationship MALAYSIA

between employer and employees. GOVERNMENT

• It is the rapport or relationship EMPLOYERS EMPLOYEES

that exists is based on the
workers’ welfare management.

• Three aspect focused in industrial

relationship are:

i. Rapport between employers

and employees.

ii. Employment laws
iii. Discipline procedure

(termination and service
contract)

• This situation is being TRADE UNION SCENARIO IN
practiced in Malaysia MALAYSIA
even though there are
a few foreign TRADE UNION: Any organizations or a
organizations that combination of employee and employer
influence the industrial whose workplace in Peninsular Malaysia,
relationship such as Sabah or Sarawak, whether in a certain or
Industrial Labor similar employment or industry and whether
Organization (ILO). temporarily or permanently.

• Employees utilize the PURPOSE EMPLOYEES JOINING
trade union as the TRADE UNION
base to highlight on
their rights. ● Employees join the trade union because

• It is important to know they realized that if they fight for their rights
that industrial relation for better work conditions individually, they
will not exist without may fail.
the trade unions.
● But by joining a trade union and acting as a

group, employers may consider their
demands.

● Usually trade union will usually take steps

to protect its members.

Bohlender, Snell and Sherman (2017) stated among reasons why
employees are interested to join trade union include:

1. To protect 2. Peer 3. To 4. To
their rights. pressure increase socialize

status

7. Unsatisfied 6. To increase 5. To increase their
with the current employee negotiation power
welfare
conditions

FUNCTIONS OF TRADE UNIONS

• Some think that trade union is an outdated concept and do not see it as
necessary nowadays.

• They feel that employees who join trade union are NOT SHOWING
LOYALTY to the organization.

• Some employers feel that trade union disrupted the decision making and
processes of management in the organization.

• Thus contributing to the organization’s inability to reach the set objective.
• Whatever reasons given, employers need to accept the fact that

employees will continue to join a trade union as they are more aware of its
functions.

FUNCTIONS OF TRADE UNIONS

1. Becoming representative in industrial
disputes.

2. Encouraging industrial relations, improving
work conditions, social, economics status, or
increasingly productivity.

3. Outlining the relationship between
employees - employees, employers -
employers and employees – employers.

4. Managing issues related to dispute

5. Encouraging, organizing and funding
strikers/lockouts in any trade or industry
(allocating resources or other benefits to
members during strike/lockouts).

Source: Dr. Siti Zubaidah Othman, et.all. (2010).Human Resource Management: Pearson. Prentice
Hall. Open University Malaysia.

BECOMING MEMBER TYPES OF TRADE UNION
OF TRADE UNION

● All employees aged 16 and TYPES OF TRADE UNIONS
above have their right to join
trade union. PUBLIC SECTOR PRIVATE EMPLOYER’S
TRADE UNION SECTOR TRADE TRADE UNION
● Those aged between 16-21
years, have a limited UNION
opportunity in some trade
union activities. NATIONAL /
DISTRICT
● i.e.: competing in the election
for the post of union executive TRADE UNION
or participating in strike until
they reach the age of 18. IN-HOUSE
TRADE UNION
● Employees in the public sector
can only become a member of
the trade union that is formed
by employees within the same
occupation, department, or
ministry.

● Management level staff in
public sector have to obtain
permission from the
Government Chief Sectary.

● Police, army, prison officers are
not allowed to join any trade
union.

TYPES OF TRADE UNION

1. Trade Union for Public Sector
● Public sectors consists of public services, statutory bodies and local

authorities.
● Public servants are only allowed to establish a union if they are in the same

ministry, department or occupation.
● Issues relating – salary and wages, and terms of services
● Congress of Unions of Employees in the Public and Civil Services (CUEPACS)

2. Trade Union for Private Sector (National / District Trade Union)
• Employees are those from different companies but in the same industry or

employees in the same trade or occupations.
• i.e.: Malaysian Trade Union Congress (MTUC), National Union for Teaching

Professionals (NUTP).
• Some trade unions have members who are limited to one district only i.e.

Perak Textile and Garment Industry Trade Union which limits members intake
from Perak only.

Trade Union for Private Sector (In-House Union)
• A union established by employees working under one employer.
• Employees from different occupations can join this type of union as long as

their employers are the same.
• Even though the national trade union is against the establishment of this type

of unions, employers and government encourage them.
● If employers find out their employees are planning to join a national trade

union, they will take immediate actions to encourage employees to establish a
in-house trade union.
● In-house trade union have shown increase and is predicted to keep increasing
in the future.

3. Employers Associations
• Employers build a network by establishing an employer’s association from

similar organizations to fight for their rights and welfare.
• With the network, employers are more prepared and able to react towards the

demands of the trade union.
• This associations also plays role to balance the employee market condition

and the reward offer/salary.
● Also being involved in matters regarding decision making/discussions with

the government/agencies.
● Employers can share techniques and strategies to handle employee’s

demands.

a. Malaysian Commercial Banks Association (MCBA)
b. Malayan Agricultural Producers Association (MAPA)
c. Electrical Industry Employers’ Association (EIEA)
d. Engineering Machinery Employers’ Association (EMEA)

EMPLOYERS ACTIONS TOWARDS
ESTABLISHMENT OF TRADE UNION

Increasing Improve Change the Running a Establish Establish a
workers' workplace management campaign justice friendly/
wages and conditions against the and
policy and establishment equality harmonized
salary and procedures of a trade in all the relationship
atmosphere acts of
union. with the
organiza- employees.
tion.

INDUSTRIAL ACTIONS

• Even though corporation and understanding during negotiations are

encouraged between employers and trade union, there are still some
instances when disputes happens.

• However, there are also times when the parties involved would rather use

direct method by pressuring the other party to bow to its demands.

• In Malaysia, the law has allocated TWO [2] ways that can be used by

employees (pickets and strike) and employers can employ the only ONE [1]
way which is lock-out method.

1. PICKETS PURPOSE OF PICKETS

• Workers who belong to a trade 1. To publicize the workers’ dispute.
dispute with their employer 2. Hope that visible sign of the solidarity
have the right to picket at or
near their place of work, will persuade the employers to give
providing: into their demands.
i. They do not obstruct the 3. Is a great tactic if employers are
exist door or entrances; conscious of the organization’s public
ii. They do not intimidate / image.
threaten anyone; 4. If employers ignore the terms, pickets
iii. Their activities are carried can become a strike.
out peaceful.
iv. Usually conducted outside
office / working hours

2. STRIKE TYPES OF STRIKE

• Strike are only allowed for GENERAL •A strike involving a wide
employees from registered trade STRIKE variety of workers from
union if trade disputes are still different industries.
unsolved.
WILDCAT •A strike which does not
• Those involved in the dispute must STRIKE follow the prescribed
first have a secret ballot to procedures
determine the percentage of those
who agree and disagree to the strike. SYMPATHY •A strike by workers who
STRIKE do not have any dispute
• Strike only allowed if the voting with their employers but
result shows 2/3 (67%) of employees who wish to show their
agree to it. support for another
workers who are
• The voting result must be sent to the embroiled in a dispute.
DGTU who has the power to order
the trade union not to have strike if it SIT-IN • A strike where
is found that certain necessary STRIKE employees enter the
procedures are not followed. workplace but refuse to
work.
• Strike only valid to be held after 7
days which is after calm period.

• During the calm period, validity
confirmation can be done to enable
the parties involved to change their
minds as well as to give opportunity
for the government to intervene.

• A strike must be organized within 90
days period from the voting date.

• If not, voting must be done again.

3. LOCK-OUTS WAYS TO SOLVE
INDUSTRIAL
• A way of employers to force
employees to accept their ACTIONS/DISPUTE
demands.
DIRECT
• Employers will not allow NEGOTIATION
employees to work until the
dispute between them is CONCILIATION
solved.
MEDIATION
• i.e.: closing the work place,
stopping work or refusing to
give wage until they agree to
the work conditions imposed.

• Similar to a strike, the
requirements to a lock-out are
also subject to the law.

ARBITRATION

1. DIRECT 2. CONCILIATION
NEGOTIATION
• Director General of Trade Union
• Only the trade union and (DGTU) will suggest them to
employers will be involved in the hold a meeting of peace to
process of solving the arguments. solve the arguments.

• They will sit together in calm and • It is a process whereby
respectful manner. Industrial Department will help
to solve the arguments between
• The Director General of Trade both sides.
Union (DGTU) cannot force both
sides to make peace if the direct
negotiation is a failure.

3. MEDIATION 4. ARBITRATION

• Has similarity with arbitration but • Used after the previous
the mediator who is being methods have been failure.
appointed is not from government
or IR Department. • Also used the third party which
is Industrial Court according to
• The mediator is the outsider who the Industrial Relation Act 1967,
has being appointed and agreed the court empowered to solve
by both sides. the trade disputes.

EXERCISES QUESTIONS

QUESTION 1

a. Describe THREE (3) methods of external recruitment. [CLO1:C1]

[9 marks]

b. Training and development are important functions in human resource management,
aiming to better the individuals and groups in organizational settings. Explain THREE (3)
benefits of training and development to the organization. [CLO1:C2]

[6 marks]

c. Trade Union is an organized association of workers formed to further their rights and
interests. Discuss FIVE (5) reasons why workers join a trade union. [CLO1:C2]

[10 marks]

QUESTION 2

As Human Resource Manager, Jamal is responsible for managing all the activities related to
human resources in his organization. Before proceeding to recruitment, Jamal is always
ready to study and determine the particular job duties, skills, knowledge, experience and
other requirements necessary to perform a job. He will instruct his subordinates to conduct a
job analysis to document the requirements of a job and the work to be performed. Two types
of information documentation derived from job analysis are job description and job
specification. According to Jamal, these documents are important and closely related to
other functions of human resource management.

EXERCISES QUESTIONS

a. Based on the passage above, expose THREE (3) methods used to collect data to help
Jamal and his subordinates conduct a job analysis. [CLO2:C3]
[6 marks]

b. According to Jamal, job analysis is important because it is interrelated with other human
resource management functions. Adapt and explain THREE (3) uses and relevance of
job analysis information with other human resource management functions. [CLO2:C3]
[9 marks]

c. Human resource planning is the anticipation movement of workers either in or outside
the organization. It is also referred to all strategies undertaken to meet the needs of
human resources. Human resource planning helps improve organizational
competitiveness, enhances the productivity of an organization and reduces human
resources. Illustrate the FIVE (5) steps in the human resource planning process.
[CLO2:C3]
[10 marks]

QUESTION 3

Since working in managing human resources, Nora found that the most complex and
challenging activity is managing employees' compensation. Compensation management is
an important tool especially in times of facing an economic downturn. The ultimate goal is
to reward the right people for the most relevant reasons to the greatest extent. Sometimes,
Nora hears expressions of dissatisfaction among the employees.

EXERCISES QUESTIONS

They stated that they were not getting the benefits they deserved. Some employees
complained of being tired as they did not get enough rest because they had to work the
whole week. Some are worried about their safety while working in the factory. This has
moved Nora to review the company's compensation policy and draft the suggestion to
improve the company policy.

a. Based on the above statement, help Nora classify the components of direct financial
compensation and indirect financial compensation. [CLO2:C3]
[5 marks]

b. Construct FOUR (4) statutory benefits that Nora can suggest to overcome
dissatisfaction among employees. [CLO2:C4]
[10 marks]

c. Characterize TWO (2) types of common financial rewards and TWO (2) types of
common non-financial rewards that Nora can suggest to improve the company’s
compensation management. [CLO2:C4]
[10 marks]

QUESTION 4

a. Describe THREE (3) importance of recruitment and selection to the organization.
[CLO1:C1]
[9 marks]

EXERCISES QUESTIONS

b. Explain THREE (3) levels of Training Needs Analysis. [CLO1:C2]

[6 marks]

c. Interpret FIVE (5) methods of performance appraisal. [CLO1:C2]

[10 marks]

QUESTION 5

Human resource planning is the continuous process of systematic planning ahead to
achieve optimum use of an organization’s most valuable asset and quality employees.

Human resource planning ensures the best fit between employers and jobs while avoiding

manpower shortages and surpluses.

a. Provide TWO (2) importance of human resource planning. [CLO2:C3]

[6 marks]

b. Demonstrate THREE (3) purposes of job analysis. [CLO2:C3]

[9 marks]

c. Examine FIVE (5) stages in human resource planning process. [CLO2:C3]
[10 marks]

EXERCISES QUESTIONS

QUESTION 6
a. Write TWO (2) statutory benefits. [CLO2:C3]

[6 marks]

b. Good benefits can attract employees to stay in an organization. Analyse FOUR (4) non-
statutory benefits that usually provided by organization. [CLO2:C4]
[10 marks]

c. The relationship between management and employees in an industry is not always
harmonized. Sometimes conflicts happen. Figure out THREE (3) types of industrial
actions to solve the conflict. [CLO2:C4]
[9 marks]

REFERENCES

Main reference:

Martocchio, J. J. (2019). Human Resource Management,15th Edition. New York, USA:
Pearson Education.

Additional References:

Ang Huat Bin. (2019). Principles of Management, Polytechnic Series, 2nd Edition. Oxford
Fajar Sdn. Bhd. Selangor.

Bohlender, G. W., Morris, S. S. (2022). Managing Human Resource, 19th Edition.
Cangage Learning.

Dr. Siti Zubaidah Othman, et all,. (2010). Human Resource Management. Open University
Malaysia. Pearson, Prentice Hall. Malaysia.

Dessler, G. (2020). Human Resource Management, 16th Edition. New York, USA.
Pearson Education.

MaimunahAminuddin (2018). Human Resource Management, Principles and Practices,
4th Edition. Oxford University.

Mondy, R. W. and Martocchio, J. J. (2016). Human Resource Management Global Edition,
14th Edition. Pearson.

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