DPB6013 HUMAN RESOURCE MANAGEMENT

 Interview questions also give the employer to know what all expectations the respondent has
towards the company

 The respondent steers the course of the interview in case of a structured and unstructured
interview.

 Try to ask for clarification and other aspects before and allow the interviewee to steer the
direction of the interview.

 Group interviews can make the candidate feel less awkward since they might feel more
comfortable talking in groups rather than conversing with a single person.

Disadvantages of Interviews:

 Structured interviews are usually non-flexible, and thus new questions are not usually asked
since such interview patterns have a strict time to follow and have a certain time limit.

 Structured interviews create quantitative data and hence a lack of detail can be formed. This
means the interviewer won’t know why a candidate behaves this way.

 For unstructured or unplanned interviews, it is difficult to collect all the necessary data and
analysis of such data will take time since they are less specific and cover more areas and
aspects of the subject.

 Employing interviewers and trainers can be expensive. This can lead to more capital spent by
the company during the recruitment process. A great way to tackle this is by conducting
surveys or sending out questionnaires to the target audience and the people to be
interviewed.

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 Certain skills may be needed to be probed and verified. In this case, an interview is
indispensable. Interviewers have to cross-check the facts and try to make sure that the
candidate is truly interested and is fully adaptable and talented enough to join the post.

 Another main disadvantage of interviews is the handling of the personal information of the
candidates. They have to make sure the personal information of the candidates are kept safe
and have to be ensured that they won’t be misused that easily.

 Group interviewees have to be made sure that they won’t disclose the private information of
the candidate to others. Trust is the basic factor that needs to be seen by the company and the
organisation should make sure that the recruiters are following the rules of privacy set by the
organisation.

 Group interviews tend to use more open-minded questions that can deviate the interview from
its path and hence can lead to more loss in time. This also makes it difficult to repeat the
questions to the next candidate. Hence, the interview process tends to be more biased.

 Group interviews may tend to lack validity as the candidates may lie to the panel so as to
impress them. This can be because of the peer pressure and the desire to get the job position.
Always try to cross check if all the answers are true and try to point out if you feel unsure
about the candidate’s response. This helps the interview panel to select the right candidate.

iii. Job interview process iv. 01
Screening Interview

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A screening interview is a type of job interview that is conducted to determine
if the applicant has the qualifications needed to do the job for which the
company is hiring. A screening interview is typically the first interview in the
hiring process if the company does not start with open interviews where
multiple candidates are screened at an open hiring event.

v. 02

Phone Interview

Employers use phone interviews to identify and recruit candidates for
employment. Phone interviews are often used to narrow the pool of applicants
who will be invited for in-person interviews. For remote jobs, interviewing by
phone, Skype, or video may be how you get hired.

vi. 03

First Interview

The first in-person job interview is typically a one-on-one interview between
the applicant and a hiring manager. The interviewer will ask questions about
the applicant's experience and skills, work history, availability, and the
qualifications the company is seeking in the optimal candidate for the job.

vii. 04

Second Interview

A second interview can be a more in-depth one-on-one interview with the
person you originally interviewed with or it can be a day-long interview that
includes meetings with company staff. You may meet with management, staff
members, executives, and other company employees. Once you're scheduled
for a second interview, you're most likely in serious contention for the job.

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viii. 05

Third Interview

When you have made it through the first interview, then a second interview
you might think you're done with the interview process and you'll soon find out
whether you'll be receiving a job offer. That's not necessarily the case. You may
have to participate in a third interview and possible more interviews after that.
A third interview typically involves a final meeting with the hiring manager and
may provide the opportunity to meet more of your prospective colleagues.

ix. 06

Dining Interview

Dining with job applicants allows employers to review
your communication and interpersonal skills, as well as your table manners, in a
more relaxed (for them) environment. Depending on the interview process of
the company you're interviewing with and the type of job you are applying for
you may be invited to a lunch or dinner interview.

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xi. Final Interview

The final interview is the last step in the interview process and the interview
where you may find out whether or not you are going to get a job offer. Here's
information on preparing for an interview when you have already met with the
company multiple times, and advice on how to handle a final interview.

xii. 08

Review Interview Questions and Answers

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Regardless of where you are in the interview process, it's important to practice
interviewing and to be prepared for the typical interview questions you'll be
asked during each step in the process. It's also important to have questions
ready to ask the interviewer.

xiii. 09

Follow Up After Each Step in the Interview Process

Even though it may seem like a lot of work, especially when you have gone to
multiple interviews, it's important to follow up after each step in the interview
process. In fact, the most important thing you can do is to follow up and
reiterate your interest in the position and to thank the interviewer for taking
the time to meet with you.

Background Check

You may receive a job offer contingent on a background check and/or a credit
check. Or, a background check may be conducted prior to a company offering a
job. What the company learns during the background check could result in you
not getting a job offer or in the job offer being withdrawn.

Job Offer

When you have made it through the sometimes grueling interview process, the
final step will be a job offer. The job offer may have conditions attached, so
review the terms carefully. Before you accept, it's important to evaluate the
compensation package, consider whether you want to make a counteroffer,
and then accept (or decline) the job offer in writing.

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e. Reference Check

Sample Reference Check Questions

 When did (name) work for your company? Could you confirm starting and ending
employment dates? When did s/he leave the company?

 What was her/his position? Can you describe the job responsibilities?
 Could I briefly review (name's) resume? Does the job title and job description

match the position that (name) held?
 Why did (name) leave the company?
 What was her/his starting and ending salary? (In some locations, employers

are not allowed to ask about salary due to state and local legislation.)
 Did (name) miss a lot of work? Was s/he frequently late? Were there any issues

you are aware of that impacted her/his job performance?
 Did s/he get along well with management and co-workers?
 Can you describe this person's experience working as a member of a team?
 Did (name) prefer to work on a team or independently?
 How did s/he support co-workers?
 What were (name's) strengths and weaknesses as an employee?
 Was (name) promoted while with your company?
 Did (name) supervise other employees? How effectively? If I spoke to those

employees, how do you think they would describe (name's) management style?
 How did (name) handle conflict? How about pressure? Stress?
 Did you evaluate (name's) performance? Can you speak to her/his strong and

weak points? What was noted as needing improvement during this performance
review?
 What was (name's) biggest accomplishment while working for your company?
 Would you rehire (name) if the opportunity arose?
 If I describe the position to you, could you describe how good a fit you think
(name) would be for the job?
 Is there anything I haven't asked that you would like to share with me?

Some employers will check references in writing so they have a record of the reference.
This also provides the reference giver with authorization to release information on behalf
of the applicant. Here's an example of a reference check letter sent to a previous
employer. ( In Malaysia, check the university, are they graduated in that particular uni)

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f. Selection Decision
g. Medical Examination- Physical and mentally fit
h. Employed individual –

- Inform thru call
- Email
- Mail/ actual offer letter on first day at work

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CHAPTER 5 HUMAN RESOURCE DEVELOPMENT
STAFF ORIENTATION PROCESS/ INDUCTION

Employee orientation is the process of introducing employees to their new jobs and work
environments. Orientation provides an opportunity for new employees to become acclimated to
their new company, department, colleagues and work expectations.

5.1.1 DEFINITION of employee orientation
the process by which the new recruit is familiarized with the working environment.
5.1.2 PURPOSE

i) ACCOMMODATING EMPLOYEES
Introduce new staff to organization
Assist them to adapt to new environment, policies, rules and organizational goal

ii) Help new staff to overcome anxiety and inferiority complex
iii) Increase readiness and willingness to adapt to new organization
iv) Increase commitment – to make them excite and commit themselves to the

organization
v) BECOMING INSIDER
vi) OVERCOME REALITY SHOCK
vii) REDUCE EMPLOYEE TURNOVER
Common problems in new staff
i) Acceptance in team work
ii) Expectation – very high expectation lead to dissatisfaction
iii) New working environment – conducive and comfortable

5.1.3 FORMS OF EMPLOYEE ORIENTATION

Formal – Organization Level & Departmental level
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i) Formal Training/ orientation
Organizational level
- Consist of related info to policies and procedures, safety, facilities etc
- Normally handled by HRD

Departmental Level
- Supervisor in charge will handle the program
- Given orally by experienced workers
- HRD plan and run the overall program and appoint technical/ supervisor

ii) Informal
Orientation when simultaneously met

PROCESS OF ORGANIZING EFFICIENT INDUCTION PROGRAMMES

HRD responsible for the induction program.
Efficient Induction Programmes

i) Suitable - ensure that elements and facilities in induction program will give accurate
info on organization

ii) Easily understand – the program will colour their perception towards organization
iii) Interesting – variety method ( talks/ audio visual aids/ handouts/ demonstration )
iv) Smaller scale audience
v) Relatively cost effective
vi) Do checklist and follow up session

5.2.1 CONCEPT OF TRAINING AND DEVELOPMENT

Concept of Training and Development. ... A formal definition of training & development is it
is any attempt to improve current or future employee performance by increasing an employee's
ability to perform through learning, usually by changing the employee's attitude or increasing his
or her skills and knowledge.

Training: process of increasing the knowledge, skill, attitude, abilities, aptitude and potentials of
the employee to increase and sharpen the job performance. The training ensures better
performance of the job. .
Education : has broader aim in sight and its purpose is to develop the individual.
Development : overall improvement of the organisation such as its structure, objectives, policies
and procedure including managers and employees.

Training & Development
Imparting of specific skills , abilities and knowledge to an employee.

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Training and development need = standard performance – actual performance

5.2.2 IMPORTANCE AND NECESSITY OF TRAINING PROGRAMMES
i) Increase the productivity
Induction and training program will upgrade their knowledge and skills and keep them
informed to the latest organization info
ii) Increase employee satisfaction
Productive employee is a satisfied employee. Thus training will give most benefit to
both employee and employer
iii) Expose workers to latest technology
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Training provides with latest tech to workers especially to those who have been long
time being unemployed or workers fr other left behind company. With training, a good
investment in technology will be best used.
iv) Give opportunities to workers in gain new knowledge and skills
v) Motivates workers
Workers feel appreciated and motivated when being chosen to undergo training/ re-
induction
vi) Lower the risk of accident, damage and waste

5.2.3 Training Need Analysis (TNA)

Why do we need training?
Training is a means to ensure that employees have the knowledge and right skills to be able to do
their work effectively and competently. Training may be needed when there is a gap between the
desired performance, and the current performance, and the reason for that gap is lack of skill or
knowledge.

Why should you conduct a TNA?
1. Avoids training for ‘training sake’.

2. Supports cost effective training.

3. Targets areas of greatest need.

4. Gives information on the organization’s climate.

5. Gives commitment from managers and trainees.
6. Separates the ‘symptoms’ from the causes.

a. Organizational analysis: This type of assessment analyzes the effectiveness of the
organization as a whole and identifies any discrepancies. It is used to uncover the
competencies, knowledge and skills that are needed by the company to bridge any gaps.
Organizational assessments also take into account external factors such as the economy,
environmental policies, technological advances and changing workforce demographics.
These assessments determine where training is needed, how it will be conducted and
when. Organizational assessments answer two critical development planning questions:

• Where in the organization is training required?
• Will the training be effective if implemented (fill the gaps)?

b. Task analysis: The task assessment gathers information about a particular job function
or occupational group. This analysis identifies the key tasks, competencies and skills
required to perform the job at the most efficient level. Using job descriptions, skill
analyses and job inventory questionnaires these assessments are used to discover
specific training needs. This type of analysis is particularly useful if an organization is

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moving in a new direction or undergoing restructuring. Again, the assessment is used to
determine if there are any gaps between existing competencies and those needed for
improved performance. Task assessments answer the following planning question:

• What skills and/or behaviors must be acquired in this job function?

c. Individual task: The individual assessment focuses on a particular employee to
discover how well they are performing. This type of assessment determines the
individual’s existing skills and competencies, their learning style and capacity for new
work. The individual analysis identifies who within the organization requires training and
what kind of training is needed. 360 degree evaluations are useful as individual
assessments as they identify the employee’s strengths and areas for improvement in
regards to competencies, skills and behaviors. The individual assessment forms the basis
for the creation of a customized training and development plan for the employee. These
assessments answer the following key development questions:

• Does the employee have the necessary skills?
• What training is required for the employee to acquire the necessary skills?

5.3:1 Training approach and its common methods

a) Off the job training
Employee training at a site away from the actual work environment. It often utilizes lectures,
case studies, role playing, simulation, etc. .

Off-the-job training occurs when employees are taken away from their place of work to be
trained.

Common methods of off-the-job training include:

• Day release (employee takes time off work to attend a local college or training centre)
• Distance learning / evening classes
• Block release courses - which may involve several weeks at a local college
• Sandwich courses - where the employee spends a longer period of time at college (e.g.

six months) before returning to work
• Sponsored courses in higher education
• Self-study, computer-based training

The main advantages and disadvantages of this form of training can be summarised as follows:

Advantages Disadvantages

A wider range of skills or qualifications More expensive – e.g. transport and accommodation

can be obtained

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Can learn from outside specialists or Lost working time and potential output from employee

experts

New employees may still need some induction training

Employees can be more confident when

starting job Employees now have new skills/qualifications and may

leave for better jobs

1. lectures and conferences

• 1. Classroom Lectures: under the off the job methods of training, classroom method or
lecture method is well-known to train white collar or managerial level employees in the
organisation. under this method employees are called to the room like that of classroom
to give training by trainer in the form of lectures. This method is effectively used for the
purpose of teaching administrative aspects or on management subject to make aware of
procedures and to give instructions on particular topic.

•

• Advantage – It can be used for large groups. Cost per trainee is low.

•

• Disadvantages – Low interest of employees. It is not learning by practice. It is One-way
communication. No authentic feedback mechanism. Likely to lead to boredom for
employees.

2. instructor led

Instructor-led training is any kind of training that occurs in a training room, typically in an office,
classroom, or conference room. This form of training can have one or more instructors; and they
teach skills or material to another person or group through lectures, presentations,
demonstrations, and discussions.

Most often, it's used to instruct a group: this allows you to deliver many trainee-hours of training
for each hour of the instructor's time. Training can also be one-on-one, however, this can be
expensive.

Instructor-led training is particularly beneficial when the material is new or complex: here, having
an instructor on-hand to answer questions and demonstrate concepts can greatly enhance a
trainee's learning experience.

3. Simulation exercise

the simulation Method of training is most famous and core among all of the job training methods.
in the simulation training method, trainee will be trained on the especially designed equipment or
machine seems to be really used in the field or job. But, those equipment or machines are
specifically designed for training a trainees were making them ready to handle them in the real
field or job. This method of planning is mostly used where very expensive machinery or
equipment used for performing Job or to handle that job.

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Example:- The simulation method has been using widely for the purpose of training aeroplane
pilots on aeroplane simulator to make them ready to handle an fly aeroplane. Especially in Air
force fighter pilots are getting trained on the jet fighters simulator. because the cost of aeroplane
or jet fighter will be very expensive, hence employer may not allow directly to get trained on real
equipment to avoid damage to equipment or machine or in sometimes may cause loss of trainee
life. To avoid all such risks by the employer giving training on simulator is safe. (normally
simulators for the purpose of training would be provided by the manufacturer of original
equipment).

4. vestibule training
Mostly this method of training will be used to train technical staff, office staff and employees who
deal with tools and machines. Employees learn their jobs on the equipment they will be using,
but the training is conducted away from the actual work floor by bringing equipments or tools to
certain place where training is provided, but not work place. Vestibule training allows employees
to get a full feel for doing task without real world pressures. Additionally, it minimizes the problem
of transferring learning to the job.
vestibule training is provided to employees when new or advanced equipment or tools introduced
in to the organisation to do a particular job by using them. For this purpose such equipment is
brought to a separate place to give demonstration and train how to use and that handle it by
employees safely.

b) On the job training
On-the-job training allows employees to learn by actually performing a specific job or
task.
i) Coaching

Coaching

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Coaching is a process that is designed to assist motivated individuals in making changes to further
their professional development. Human Resource Management offers coaching services to
interested employees. Working with a coach can give you the edge you need to improve your work
skills, discover your strengths, and achieve your goals. Coaching is proven to work when these
two factors are present: you are willing to grow, and there is a gap between where you are now
and where you want to be.

Coaching Focus Areas

• Leadership
• Communication
• Change & Transition
• Work/Life Balance
• Time Management
• Meeting Facilitation
• Personal Organization
• Self Management
• Decision Making
• Mission and Values
• Strategic Planning
• Organizational Merges and Restructuring
• Team Development
• Relationship Building

ii) Mentoring

Mentoring is the Employee training system under which a senior or more experienced person (the
mentor) is assigned to act as an advisor, counselor, or guide to a junior or trainee. The mentor is
responsible for providing support to, and feedback on, the person in his or her charge.

Mentoring is the process of sharing your knowledge and experience with an employee.
Mentoring can be informal or formal:

o Informal mentoring takes place spontaneously between senior and more junior
employees.

o Formal mentoring occurs through a program with an established structure.
• A mentor can be an employee’s manager or not:

o Management typically involves at least some employee mentoring. In acting as a
mentor for an employee who reports to you, think of yourself as an advocate for
that employee—not for any particular behavior, but for the person—for their

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personal growth and career. Discipline can then become a matter of helping an
employee out of a difficult situation.
o In formal mentoring programs, the mentor is typically not the employee’s
manager, nor even in the employee’s chain of command

Mentoring is an ongoing relationship that is developed between a senior and junior employee
. Mentoring provides guidance and clear understanding of how the organization goes to achieve
its vision and mission to the junior employee.

iii) Job Rotation

Job Rotation is a management approach where employees are shifted between two or more
assignments or jobs at regular intervals of time in order to expose them to all verticals of an
organization. It is a pre-planned approach with an objective to test the employee skills and
competencies in order to place him or her at the right place. In addition to it, it reduces the
monotony of the job and gives them a wider experience and helps them gain more insights.

Job rotation is a well-planned practice to reduce the boredom of doing same type of job everyday
and explore the hidden potential of an employee. The process serves the purpose of both the
management and the employees. It helps management in discovering the talent of employees
and determining what he or she is best at. On the other hand, it gives an individual a chance to
explore his or her own interests and gain experience in different fields or operations.

Job Rotation Objectives

▪ Reducing Monotony of the Job: The first and foremost objective of job rotation is to
reduce the monotony and repetitiveness involved in a job. It allows employees to
experience different type of jobs and motivates them to perform well at each stage of job
replacement.

▪ Succession Planning: The concept of succession planning is ‘Who will replace whom’. Its
main function of job rotation is to develop a pool of employees who can be placed at a
senior level when someone gets retired or leaves the organization. The idea is to create an
immediate replacement of a high-worth employee from within the organization.

▪ Creating Right-Employee Job Fit: The success of an organization depends on the on-
job productivity of its employees. If they’re rightly placed, they will be able to give the
maximum output. In case, they are not assigned the job that they are good at, it creates a
real big problem for both employee as well as organization. Therefore, fitting a right person
in right vacancy is one of the main objectives of job rotation.

▪ Exposing Workers to All Verticals of the Company: Another main function of job rotation
process is to exposing workers to all verticals or operations of the organization in order to
make them aware how company operates and how tasks are performed. It gives them a
chance to understand the working of the organization and different issues that crop up
while working.

▪ Testing Employee Skills and Competencies: Testing and analyzing employee skills and
competencies and then assigning them the work that they excel at is one of the major
functions of job rotation process. It is done by moving them to different jobs and

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assignments and determining their proficiency and aptitude. Placing them what they are
best at increases their on-job productivity.
▪ Developing a Wider Range of Work Experience: Employees, usually don’t want to
change their area of operations. Once they start performing a specific task, they don’t want
to shift from their comfort zone. Through job rotation, managers prepare them in advance
to have a wider range of work experience and develop different skills and competencies. It
is necessary for an overall development of an individual. Along with this, they understand
the problems of various departments and try to adjust or adapt accordingly.

Job rotation is a well planned management approach that is beneficial both for employees and
management.

iv) Apprenticeship

Definition: Apprenticeship
Apprenticeship is a process of teaching a trade to young practitioners. It comprises mostly of on-
the-job training accompanied by some amount of the conventional reading and classroom study.
Ideal duration of the training is 3-6 years. The origin of apprenticeship can be traced back to the
middle ages when master craftsmen employed young people as what can be termed as assistants
who worked as labors and in exchange provide them with food, lodging and formal training of the
craft. At a later period of time, the governments stepped in to regulate and license vocational
training institutes and made the process formal and legal.

The Apprentices Act in India was enacted in 1961 and implemented in 1962. This act regulates
apprenticeship training by standardizing the syllabus, training period etc. of the program. The terms
are controlled by the Central Apprenticeship Council. In 1973, the act was amended to include
trainings of diploma and graduate engineers as “Technician” and “Graduate” Apprenticeship. In
1986 further amendment was made to make 10+2 vocational stream as “Technical(Vocational)”
Apprentice.

Importance of Apprenticeship for Trainees:
Apprenticeship programs are valued among employees not only as an educational or training
process but also as gateways to the professional world as it prepares them with the industry
knowledge and other essentials. Some benefits of the program for the trainees can be listed as:
• Specialized learning
• On-the-job experience
• First hand industry experience
• Greater exposure
• Earning during training
• Better relationship building with employer

Importance of Apprenticeship for Employers:

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In the current market employers are not only looking for a highly qualified workforce but a workforce
with quality and experience in relevant domains. Apprenticeships helps them to fill up this gap.
Some benefits of the program for the employers can be listed as below:
• Ability to understand the worker better before the formal hiring process
• Provide specializes training as per the organizations requirement
• Create a loyal workforce
• Better understanding and tackling skill gaps
• Newer ideas for problem solving
• Relevant domain knowledge

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CHAPTER 6 : PERFORMANCE EVALUATION/ APPRAISAL

6.1 .1 Definition

A performance appraisal, also referred to as a performance review, performance evaluation,
development discussion, or employee appraisal is a method by which the job performance of an
employee is documented and evaluated

The process by which a manager or consultant

(1) examines and evaluates an employee's work behavior by comparing it with preset standards,

(2) documents the results of the comparison, and

(3) uses the results to provide feedback to the employee to show where improvements are needed
and why.

Performance appraisals are employed to determine who needs what training, and who will be
promoted, demoted, retained, or fired.

Read more: http://www.businessdictionary.com/definition/performance-appraisal.html

6.1. 2 PURPOSES OF PERFORMANCE APPRAISAL

Strategic 1. Encourage quality performance
Encourage good performance by rewarding who do well

2. Improve current performance
Give feedback on employee’s performance so that he/ she will improve

3. Identify training needs
With good observation and evaluation, a good future training will be
designed effectively

4. Initiate fair disciplinary proceeding
Any mistake or misuse will be taken seriously and design disciplinary
procedures which will hinder it from happening again

5. Provide channel of communication between managers and
subordinates.

6. Reduces turnover
7. Increase interest and motivate employees to perform
8. Decides on rewards and appraisal system

Administrative Administrative Purposes: Administrative purpose includes:

 Document human resource decision with regard to performance and
its related issues.

- Determine promotion of employees.
 Determine transfer and change in job assignments.
 Identify poor performance areas of employees.

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 Decide on layoffs.
 Meet legal requirements.
 Evaluate the performance of training programs.
 Decide on salary and reward issues.
 Decide retention or termination.

Developmental Assist in training and continued personal development of
people. Developed employees are more motivated commuted
and competent to achieve their work roles and goals. They
can contribute effectively in improving the organization
effectiveness.

6.1.3 SOURCE OF PERFORMANCE APPRAISAL

a. Upper Management
1. Supervisors are likely to see many of the day to day tasks completed by employees and know
how the employees’ outcomes relate to overall organizational objectives
2. Supervisors may not be aware of how employees interact with one another

b . Immediate supervisors

1. Subordinates tend to closely monitor their supervisor’s behavior, making them a good candidate
for rating supervisor performance, but

2. They may not see the supervisor’s day to day tasks that do not directly involve the subordinate
and would not be able to speak to these behaviors

c. peers and team members

1. Peers are well-equipped to rate other team members’ performance since they would work closely
with them on a daily basis. They would also witness typical performance as opposed to
maximum performance that might occur if an employee knows a manager is watching.

2. There may be interpersonal problems that arise if a team member rates another negatively which
could in turn reduce group cohesiveness.

d. subordinates

subordinates are in an excellent position to view their superiors’ managerial effectiveness.

Advocates believe that this approach leads supervisors to become especially conscious of the work
group’s needs and to do a better job of managing. In the higher education environment, it is a common
practice for instructors to be evaluated by students. Critics are concerned that the manager (and
instructors) will be caught up in a popularity contest or that employees will be fearful of reprisal. If this
approach has a chance for success, one thing is clear: the evaluators must be guaranteed anonymity.
Ensuring this might be particularly difficult in a small department and especially if demographic data on
the appraisal form could identify raters.

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e. self-evaluation

1. Being able to rate one’s self (along with at least one other source) can help to reduce
defensiveness or other negative reactions to negative feedback from someone else because this
gives the individual more voice in the process about how he or she perceived the performance
level.

2. People are not humble when rating themselves and tend to attribute success to internal factors
and failures to external factors (a.k.a. the self-serving bias).

f. customer appraisal

Customer behavior determines a firm’s degree of success. Therefore, some organizations believe it is
important to obtain performance input from this critical source. Organizations use this approach
because it demonstrates a commitment to the customer, holds employees accountable, and fosters
change. Customer-related goals for executives generally are of a broad, strategic nature, whereas
targets for lower-level employees tend to be more specific. For example, an objective might be to
improve the rating for accurate delivery or reduce the number of dissatisfied customers by half. It is
important to have employees participate in setting their goals and to include only factors that are within
the employees’ control.

6.2 METHODS OF APPRAISAL AND THE PERFORMANCE APPRAISAL INTERVIEW

Performance appraisal measures the qualitative and quantitative aspects of job performance.
An appraisal evaluates not only the employee's performance but also his potential for
development. The primary objectives of an appraisal are – to assess past performance, to
identify training needs, to set and agree on future objectives and standards, and to facilitate
the achievement of these goals.

In many situations, the appraiser is the supervisor of the person who is to be rated. However,
companies may also use multiple raters to evaluate performances (360 degree appraisal). Peer
and self-evaluations are on the increase, as are customer or client evaluations. Some appraisal
systems use subordinate or reverse appraisals and team rating techniques.

Methods in Appraisal

i) COMPARATIVE PROCEDURES
Appraiser compare his subordinates. Manager/ appraiser rank the subordinates according
to normal curve. The top performer receives highest distribution of rewards, second
highest receives lesser reward and so on..

Disadvantages
i) If the best performer in Group A receives same value of reward with the

best performer in group B , group A might dissatisfy

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ii) Not provide information to help employees improve their performance when
evaluation done based on only certain criteria

iii) Not suitable to large number of employees

Advantages

i) Easy to administer
ii) Tie to rewards
iii)

Three techniques

a) Simple/ Straight Ranking **
List down employee performance from the highest to the lowest. In the straight
ranking method, employees are ranked from the best to the worst on the basis
of their performance. Management by Objectives involves an agreement
between a superior and his employee on the employee's performance objectives
for a specified period and a periodic review of the extent to which the employee
is able to accomplish those objectives.

Advantages :
-Easy and quick in small number of employee
-Avoid any bias or average same level of employee since all employee should be
listed accordingly
- evaluation determine the increment in salary
Disadvantages :
- If large number of workers, difficult to be implemented
- If there is no poor performance, moderate performer would be the lowest to

perform as it follow the list

b) Alternate Ranking **
According the following step
i) List all employees
ii) Choose the best and the worst
iii) Transfer it to the new list
iv) From the original list, redo the same step

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c) Forced Distribution **
Divide employees to best and worst group
Dis : employee perceive that there is the worst group among them eventhough
they are all performed.

d) Paired Comparison
Employees are compared in pair and grouped in 40% best, 20% good , 20%
averaged and 20% lowest
This method brings out the relative differences in the performance of
employees. Each employee is compared with all the other employees in the
same group in the paired comparison method

e) Point System
The best employer get the highest point.
Under the point allocation method, the rater has to allocate a fixed number of
points among all the employees in a group.

ii) TRAIT RATING SCALES

Measure personality traits, performance related behaviors or output/ result.
Typical job-related factors are quantity of work, quality of work, attendance and punctuality.
Other factors which used to differentiate between top performer or acceptable level might be
cooperation with others, initiative, adaptability and patience.

To do this, various techniques used

a) Graphic Rating Scales
Use scale like 1 - poor, 5 - excellent
Under the graphic rating scale method, an employee's performance is rated on a scale
ranging from high to low. In the checklist approach, the rater is given a set of positive or
negative descriptive statements that best describe employee performance and
characteristics. When weights are assigned to each of the items on the checklist,
depending on the importance of each item, it is known as a weighted checklist.

b) Non graphic rating scale
Simple description like tick (√ ) to each characteristics like personality, creativity etc

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c) Mixed- standard scales
Mixed with graphic and non graphic. See example in Sarimah Hanim text books pg 235
to 237

d) Forced Choice Approach
Marks given made appraiser forced to choose the best employee
The forced choice method is a kind of checklist, which requires the appraiser to rank the
statements from the one that best describes the employee to the one that describes
him least well. Weights (which are unknown to the appraiser) are attached to these
statements, which help in evaluation

e. Critical Incident Method**
As the name suggests these are based on events or incidents. Here logs are maintained for each
employee to record the events or decisive incidents of behavior of employees. At the conclusion
of the performance period these events are collated to find out the rating of the employees. The
main drawback of this method is that the negative incidents are more obvious than the positive
ones. Sometimes the employees will not like such close supervision by managers.

iii) ESSAY METHOD

In the essay method of appraisal, the appraiser writes an essay describing an employee's
past performance, strengths, weaknesses, potential and provides suggestions for future
development. Under the critical incident method, the appraiser evaluates performance
on the basis of a record of unusually favorable or unfavorable instances of the
employee's performance.

Other methods :

Among the modern methods, BARS or the Behaviorally Anchored Rating Scale ** has
scale values attached to a group of anchors under each dimension and the employee is
rated on the scale.

. The BARS Method: This is called Behaviorally Anchored Rating Scale which is
comparatively a new one. It’s a combination of two methods like graphical rating scale
and critical incident method. This method consists of a set of behavioral statements that
explains the performance of the resources towards a particular job as good or bad. These
statements are derived from critical incidents or events. Under this method the definite

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behavior is compared with the preferred behavior. The critical behavior thus obtained is
given a numeric value based on which performance is rated. The below example can
make us understand better.

Performance Points Behavior

Can be laid off 7 Employee can be expected to give important suggestions

Good 6 Employee can be expected to commence resourceful ideas

Beyond Average 5 Can expect him to do well

Average 4 Can cope with difficulty to reach goals

Below Average 3 Can be given training

Poor 2 Can be demoted

Extremely Poor 1 Can be laid off

Table Title: BARS (Behaviorally Anchored Rating Scale)

The team appraisal system involves the appraisal of each team member by every other
member of the team, to improve the overall effectiveness of the team. The appraisal
interview is characterized by performance-related feedback which is intended to
improve employee performance and promote development.

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360 DEGREE FEEDBACK EVALUATION METHOD

360 degree feedback is a method and a tool that provides each employee the
opportunity to receiveperformance feedback from his or her supervisor and four to
eight peers, reporting staff members, coworkers, and customers. Most 360 degree
feedback tools are also responded to by each individual in a self-assessment
This system demands active participation of both the appraiser and the appraisee. The
360 degree appraisal method reduces subjectivity in that the individual is appraised by
his peers, customers/clients and subordinates apart from the supervisor. The balanced
scorecard method, which is being adopted by more and more corporates, helps align
individual efforts to organizational goals and objectives.

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There are three general reasons as to why an organization would go in for a 360 degree
appraisal.

▪ To get a better view of the performance and prospective of future leaders.
▪ To have a broad insight of developmental needs of manpower.
▪ To collect more feedback so as to ensure justice to the job performed by the

employees.
In 360 degree appraisal system, the feedback is collected from managers, peers,
subordinates, customers, team members etc. A survey is conducted to get close
understanding of-on the job performance of the employees. A 360 degree appraisal has
four stages in it:

▪ Self Appraisal
▪ Superior’s Appraisal
▪ Sub-ordinates Appraisal
▪ Peer Appraisal
It is not an easy task to implement 360 degree appraisal. For this appraisal to be
effective one needs to bear in mind the following:

→ Right skills to be assessed are determined.

→ Appraiser should be selected properly.

→ He should be well aware of the system, if proper training on the appraisal system is
not given.

→ Elucidate the intention of this kind of appraisal system.

→ Ensure the process to be simple.

→ Follow up.

APPRAISAL INTERVIEW

The manager and subordinates must sit together to review the subordinate’s past
performance, set goals for the next time period and discuss how the manager can help
the subordinate overcome any problems he is facing in his work.

This is also called counseling and coaching- to improve their knowledge and abilities.
Thus the appraisal system must be integrated with training and development programe.
Although this is an uncomfortable however it has a purpose
Purpose :

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i) Give feedback to employee – aware of their strength and weaknesses and can
improve his potential

Opening i) remind employee of the purpose of the interview
ii) Welcome input from employee
iii) Welcome two way communications
iv) Appreciate employee
v) Minimize critics

Begin Discussion
i) Discuss employee’s self evaluation
ii) Reach agreement on achievement in time period under discussion
iii) Set objectives for next time period
iv) Discuss action plan to overcome weaknesses
v) Take action from time to time

Interview failed due to

i) Appraiser lack of info of actual performance of the employee
ii) Standard and procedures used to evaluate employee not clear
iii) Appraiser have poor skills to evaluate
iv) Employee do not receive feedback of their continues evaluation
v) Appraiser wont focus to help improving the performance of employee
vi) Poor language used
vii) Organization have low sources to reward

Performance Appraisal is a human resource activities used to measure performance, skills and
effectiveness of employees in accomplish duties.

Criticisms of performance appraisal and the problem is not the concept but the execution. Some
problems such as

i) Superior evaluate performance targets, they do not distinguish between what has been
achieved and how it was achieved

ii) Many bosses don’t really observe staff therefore with inadequate info,boss cannot help
subordinate to improve

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iii) Many bosses are not honest with staff. They afraid to give a truthful appraisal

Therefore the goals for performance appraisal should be mentioned clearly

Problems in Appraisal System

1. Problems with individual performance – lack of knowledge and skills and poor relationship with
others

2. Problems with departments/ unit – Less conducive environment, lack of motivation, poor
relationship with superior, poor training

3. Recruitment Problem – changes in orientation/ induction program, changes in selecting and
shifting workers

4. Organizational performance - poor management system, less profit, poor rewarding budget

6.3 Bias/ Errors in performance appraisal

i) Recency Effect
Consider only the latest performance, ignore ealier

ii) Halo Effect
Rate someone they like. Like the most similar with them like same university, same lifestyle
etc

iii) Central/ leniency/ strictness tendency
Appraiser rates all his subordinates as being average. He afraid that subordinates will
demotivated

iv) Prejudice and stereotyping
Negative opinion about particular group/ people

v) Fatigue
Fatigue will blur his judgment, rush may lead to insufficient thought to the matter

10 Rating Errors to Avoid During Performance Reviews

Rating errors are factors that mislead or blind us in the appraisal process. Armstrong warned that “appraisers
must be on guard against anything that distorts reality, either favorably or unfavorably.” These are the 10
rating errors seen most often. They’re where managers and other raters are most likely to go offtrack.

1. Central tendency. Clustering everyone in the middle performance categories to avoid extremes of
good or bad performance; it’s easy, but it’s wrong. This isn’t fair to employees who are really making
an effort, and it can be demoralizing.

2. Favoritism. Overlooking the flaws of favored or “nice” employees, especially those whom everyone
likes.

3. Grouping. Excusing below-standard performance because it is widespread; “Everyone does it.”

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4. Guilt by association. Rating someone on the basis of the company they keep, rather than on the work
they do.

5. The halo effect. Letting one positive work factor you like affect your overall assessment of
performance.

6. Holding a grudge. A dangerous luxury that may result in your ending up in court. Never try to make
employees pay for past behavior.

7. The horns effect. The opposite of the halo effect—letting one negative work factor or behavior you
dislike color your opinion of other factors.

8. Bias. Allowing your bias to influence the rating. Bias can come from attitudes and opinions about
race, national origin, sex, religion, age, veterans’ status, disability, hair color, weight, height,
intelligence, etc.

9. Recency. Rating only recent performance, good or bad. Data should be representative of the entire
review period. If you’re not keeping good notes, you may not remember the whole period. Armstrong
noted that “you want to make sure, again, that you’re keeping records so that you can adequately
describe performance over an entire performance period.”

10. The sunflower effect. Rating everyone high, regardless of performance, to make yourself look good
or to be able to give more compensation.

CRITERIA AND FORMAT FOR PERFORMANCE APPRAISAL
Performance Appraisal Process

Determine training goal

Do job analysis

Identify evaluation standard

Determine elements and criteria of performance appraisal

develop format for performance appraisal

Implement performace appraisal

Post portem of the output of performane appraisal

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Criteria and format for performance appraisal

1. Output – individual/ team
Measure quality and quantity of work done
Determine standard/ benchmark for quality and quantity

2. Skills
Competency level based on leadership style, work ethics, team spirit.

3. Attitude and personality
4. Confidence level
5. Ability to accomplish job within job specification and time
6. Cooperation and team work
7. Knowledge
8. Potential for improvement and excellence

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7.0 COMPENSATION MANAGEMENT

7.1.1 DEFINE CONCEPT OF COMPENSATION
Compensation is the total cash and non-cash payments that you give to an employee in
exchange for the work they do for your business. It is typically one of the biggest
expenses for businesses with employees. Compensation is more than an employee’s

regular paid wages. It also includes many other types of wages and benefits.

ADVANTAGES OF COMPENSATION ( REWARD AND BENEFIT)
Remuneration consist of reward, benefits and wages.
WAGES – Cash payments paid to employee on a regular basis in return for their labour
REWARD
The wage and benefit package offered to employees in return for their services.
It can be in terms of financial and non financial. It is a motivational tool to encourage
employees.
Purpose is to attract and retain productive employees and increase positive competition among
employees and rivals

BENEFIT

Can be both financial and non financial and it can be statutorily required or optional. Most
benefit are specified in the contract. Meaning once it is given it cannot be removed without
consent

Advantages Of Reward And Benefit

i) Attract staff to join organization
ii) Retain existing employees
iii) Increase morale of employees which lead to higher productivity
iv) Motivational tools to encourage high level of performance ( rewards)

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7.1.2 COMPONENTS OF COMPENSATION

Financial Compensation Non Financial

Direct Financial Non-monetary compensation differs from
direct and indirect pay as it is has no monetary
Direct financial compensation is most widely value. Non-financial incentives are the types of
known and recognized form of compensation. rewards that are not a part of an employee’s
Most sought after by workers, direct pay. Non-monetary incentives are typically
compensation is the money which is paid effective for employees who are comfortable
directly to employees in exchange for their with their salaries or have been in the position
labor. for a long time.
This includes everything from hourly wages, to Compensation if this nature can include:
set salaries, bonuses, tips and commissions. Achievement awards, team leadership
opportunities, personal days, prizes, paid
Indirect Financial training, gift cards, new office or workspace
upgrade or even paid parking or transit passes.
Indirect financial compensation includes all
monies paid out to an employee that are not
included in direct compensation. This form of
compensation is often understood as the
portion of an employee’s contract that covers
items such as temporary leaves of absence,
benefits and retirement plans.

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7.1.3 Malaysia legislation
a. Employment Act 1955

25. Wages to be paid in legal tender

(1) Except as otherwise expressly permitted by this Act, the entire amount of the wages earned by, or payable to, any employee in
respect of any work done by him shall be actually paid to him in legal tender, and every payment of, or on account of, any such
wages made in any other form shall be illegal, null and void.
(2) Every employee shall be entitled to recover in the courts or before the Director General acting under section 69 so much of his
wages, exclusive of sums lawfully deducted under Part IV, as shall not have been actually paid to him in legal tender or paid to him
by any of the ways under section 25A.
25A. Payment of wages through bank
(1) Nothing in section 25 (1) shall operate so as to render unlawful or invalid any payment of wages by the employer to the
employee with the employee's written consent in any of following ways --

• (a) payment into an account at a bank or a finance company licensed under the Banking and Financial Institutions Act

1989 in any part of Malaysia being an account in the name of the employee or an account in the name of the employee
jointly with one or more other persons;

• (b) payment by cheque made payable to or to the order of the employee.

(2) The consent of the employee under this section may be withdrawn by him at any time by notice in writing given to the
employer. Such notice shall take effect at but not before the end of the period of four weeks beginning with the day on which the
notice is given.
(3) The consent of the employee to the mode of payment of wages under subsection (1) shall not be unreasonably withheld or, if
granted, shall not be unreasonably withdrawn by the employee notwithstanding subsection (2).
(4) Any dispute as to whether an employee has unreasonably withheld or withdrawn his consent to the mode of payment of his
wages under subsection (1) shall be referred to the Director General whose decision on the matter shall be final.
26. Conditions restricting place at which, manner in which and person with whom wages paid to be spent, illegal
No employer shall impose any condition in any contract of service as to the place at which, or the manner in which, or the person
with whom, any wages paid to the employee are to be expended and any such condition in a contract of service shall be void and of
no effect.

b. The Sabah Labor Ordinance

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c. The Sarawak Labor Ordinance
d. Workmen’s Compensation act 1952
Workmen's compensation is a compensation for injury to a foreign employee or worker
arising out of and in the course of employment that is paid to the worker or dependants, as per
the Workmen's Compensation Act 1952.
7.1.4 Malaysia minimum wages concept

HR Related Regulatory Requirements - Minimum Wages

1. What is the definition of minimum wages?
Minimum wages is basic wages, excluding any allowances or other payments.

2. What is the difference between ‘wages' and ‘minimum wages'?
‘Wages' and ‘Minimum Wages' are described under section 2 of National Wages Consultative Council Act 2011.
The ‘wages' has similar meaning to ‘wages' in section 2 the Employment Act 1955 or Sabah Labour Ordinance
(Cap.67) and Sarawak Labour Ordinance (Cap.76) whereas the ‘minimum wages' refers to basic wages only,
excluding any allowances or other payments.

3. Who is eligible for minimum wages?
All local and foreign employees who have entered into a contract of service with an employer shall be entitled to
receive minimum wages.

4. Who is not covered by minimum wages?
• Domestic servants (e.g. maids, cooks, guards, gardeners and personal drivers).
• Apprentices who undergo training for a period not less than two years.

5. What is the minimum wage rate?

MINIMUM WAGES RATE

Daily
(As per the Guidelines on the Implementation of the Minimum Wages

Order 2012)

TERRITORY Monthly Hourly

Number of days worked in a week

65 4

Peninsular RM1000 RM4.81 RM38.46 RM46.15 RM57.69
Malaysia

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Sabah, RM920 RM4.42 RM35.38 RM42.46 RM53.08
Sarawak and
Labuan

6. When was the Minimum Wages Order enforced?
The Minimum Wages Order was first implemented on 1 January 2013 and the latest revision on 1 July 2016.

7. What are the penalties for offences under the Act?

Offence Penalty

First Offence Fine of not more than RM10,000 per employee. The court can order the employer to
pay each employee the difference between minimum wages rate and the employees's
basic wages.

General Penalty Fine of not more than RM10,000 for each offence where no penalty is provided.

Penalty for Continued A daily fine of not more than RM1,000 for continuous offence after conviction.
Offence

Penalty for Repeated A fine of not more than RM20,000 or imprisonment not exceeding 5 years.
Offence

8. Why is there a need for a prison sentence for offences under this Act?
Prison sentences are the penalty of last resort against employers who repeatedly commits an offence.

7.2 STATUTORY BENEFITS AND NON STATUTORY BENEFITS

STATUTORY BENEFITS NON STATUTORY BENEFITS

1. Employee Provident Fund- KWSP

Employees' Provident Fund (Malay:
Kumpulan Wang Simpanan Pekerja)
commonly known by the acronym EPF
(Malay: KWSP) is a federal statutory body
under the purview of the Ministry of
Finance. It manages the compulsory
savings plan and retirement planning for
private sector workers in Malaysia.
Membership of the EPF is mandatory
for Malaysian citizens employed in the

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private sector, and voluntary for non-
Malaysian citizens.

The employees monthly statutory contribution
rates will be reverted from current 8% to the
original 11% for employees below age 60 and
from 4% to 5.5% for those age 60 and above,
effective January 2018 wage/salary.

2. Employee Social Security
(SOCSO-PERKESO)

SOCSO (Social Security
Organization), also known as
PERKESO (Pertubuhan Keselamatan
Sosial), was established in 1971 under
the Ministry of Human
Resources (formerly known as Ministry
of Labour) to provide social security
protections to all employees/workers in
Malaysia.

Functions of SOCSO

The functions of SOCSO
(PERKESO) are as follows:

1. Registration
of employers and employees

2. Collection of contribution from
employers and employees

3. Payment of benefits to workers
and/or their dependents when
tragedy strikes

4. Provision of physical and vocational
rehabilitation benefits

5. promotion of awareness of
occupational safety and health

Maternity Protection 1. Time Off Payment
- Marriage
Law provides not less than 60 days - Paternity leave
- Personal emergencies
3. for every confinement ( 5 births, the - Pilgrimages
6th is on unpaid leave) - Studies
- Death of relative
Maternity allowance of RM6/ day is 2. Health care
Include payment or dental and optical bills. Some
only given when employee served large company employ their own nurse and

for a minimum 90 days.

2. Gazzetted Paid leave

- I) A weekly rest day

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Section 59 of the Employment Act doctors as to avoid employees wasting time while
stipulates that employees entitled waiting for medical attention
for one rest day per week
3. Financial Services
- Ii) Public holidays Loans to buy house, cars, computers etc
Section 60 entitles 10 paid gazette Usually offer lower interest.
public holidays
4. Subsidies and services
- Iii) Annual leave Canteen, laundry, nursery and transport
Employee have right to apply annual
leave 5. Retirement Benefits
Services less than 2 yrs – 8 days/ yr Although employees contribute to EPF, large
2 – 5 yrs – 12 days/ yr companies may establish special retirement
More than 5 yrs – 16 days/ yr funds.

- Iv) Sick leave 6. Insurance
Entitled to paid sick leave where no Employer buys a group insurance scheme to all
hospitalization is required employees
Less than 2 yr – 14 days/yr
2 – 5 – 18 days/yr
More than 5 yrs – 22 days/yr

7. Allowances
Travel/ transport allowances
Meal allowance
Housing allowance
Handphone allowance
Shift allowance
Stanby allowance
Entertainment allowance
Smile Allowances

CURRENT TREND OF COMPENSATION SCHEME

1. Awareness and desirability of benefits
Most workers are unaware of the cost of providing benefits for them.
Therefore let them know by writing in in-house journal, bulletin, or booklet.
Company also have to do some research on the benefits required/ wanted by
employees.
Eg : Elken Sdn Bhd mentioned in the ads about their benefit such as 5 days work,
insurance and DIGI offer chills areas such as large indoor sport centre, aerobic sessions,
staff cafeteria etc

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2. Align benefits to strategic objectives
Benefit package should be designed to help achieve organizational objectives. Eg If
turnover is a problem, benefit should emphasize on which would prolong/ retain the
employees like additional percentage to EPF contribution by employer or attractive
allowances.

3. Cafeteria benefit schemes
Flexi benefit that they can choose from. Eg Bank Negara offers canteen subsidies
whereby they can choose their own menu. Some employee likes the cafeteria concept
of benefit such as an employer may reject childcare centre benefit but can choose to
have gymnasium facilities.

4. Some issues related
Issues like benefit to spouse- in other countries spouse might be their long term
girlfriend instead of wife. Therefore some companies require proof of marriage. Other
issues like senior managers are offered better benefit or expatriates enjoy more benefits
than local employees whereby they will get accommodation, maid or even a car.

7.3 FINANCIAL AND NON FINANCIAL REWARDS

7.3.1 Define Rewards
Employee reward systems refer to programs set up by a company to reward
performance and motivate employees on individual and/or group levels. They are
normally considered separate from salary but may be monetary in nature or
otherwise have a cost to the company

7.3.2 FINANCIAL REWARDS
i) Salary increases
Increase in salary in any appropriate time.
ii) Bonus and profit sharing
Some are contractual bonus, ang pow,
iii) Commissions/ Shares

7.3.3 NON FINANCIAL
i) Performance Awards
Eg worker of the month, most promising executive. It can be merely a certificate,
souvenirs or even publicity in notice boards, in-house journal etc

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ii) Letters of Appreciation
Praise in public, whether in writing, orally, privately and publicly will potent
satisfaction among employees. Letter of appreciation signed by director, MD or
higher level manager
iii) Sponsorship to seminars, conference and overseas tour
iv) Rewards for long service
Given some token of appreciation like gold watch, trips to overseas, special
dinner event, award ceremony

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Rosmanizah PSIS/ Human Resource Management

8.0 INDUSTRIAL RELATION

8.1 Concept of Industrial Relation
8.1.1 Concept of IR
8.1.2 Relevant Acts to IR
8.1.3 Roles of Ministry

8.2 Establishment of Trade Union
8.2.1 Definition
8.2.2 Types of Trade Union – In house, public sector, employers trade union
8.2.3 Persons who are prohibited from becoming a member
8.2.4 Reasons to join Trade Union

8.3 Concept of Collective bargaining
8.3.1 Define
8.3.2 Collective bargaining process

8.4 Industrial action in organization
8.4.1 Define Industrial action
8.4.2 Methods of Industrial action

8.5 Industrial Dispute
8.5.1 Define industrial dispute
8.5.2 Procedure in solving industrial dispute
- Direct negotiation
- Conciliation
- Mediation
- Arbitration

8.1 Industrial Relation

The term ‘Industrial Relations’ comprises of two terms: ‘Industry’ and ‘Relations’.
“Industry” refers to “any productive activity in which an individual (or a group of
individuals) is (are) engaged”. By “relations” we mean “the relationships that exist
within the industry between the employer and his workmen.” The term industrial
relations explains the relationship between employees and management which
stem directly or indirectly from union-employer relationship.

8.1.1 Concept of IR

1. Sometimes known as labour relation
2. IR recommend that employer’s and employees’ union should work towards developing a

harmonious relationship in both parties respects the rights and role of each other
3. Most industrial system are tripartite, involves 3 parties

- Employees and trade union
- Employers and their association
- The government

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Rosmanizah PSIS/ Human Resource Management

8.1.2 Relevant Acts to IR

Industrial Act 1967

INDUSTRIAL RELATIONS ACT 1967 An Act to promote and maintain industrial harmony and to
provide for the regulation of the relations between employers and workmen and their trade
unions and the prevention and settlement of any differences or disputes arising from their
relationship and generally to deal with trade disputes and matters arising therefrom.

[7 August 1967]

Trade Union Act 1959

An Act relating to trade unions.

Employment Act 1955

Here are the highlights of the Employment Act. .

▪ The Malaysia Employment Act 1995 is applied to Peninsular Malaysia and Labuan only. For Sabah and Sarawak, they are governed by their

respective Labour Ordinance.

▪ Either party to a contract of service may at any time give a termination notice in writing, and the notice period shall not less than:
▪ 4 weeks for employment less than 2 years
▪ 6 weeks for employment between 2 to 5 years
▪ 8 weeks for employment more than 5 year

▪ The notice period above is minimum requirement, which can be longer in the actual employment contract, and is important for short notice

compensation serving, especially when Voluntary Separation, Retrenchment, Early Termination, etc. occur.

▪ Termination without notice nor compensation can happen in the event of any wilful breach by the other party of the employment contract.
▪ Employer may dismiss, downgrade or suspend up to 2 weeks after due inquiry to the employee, on the grounds of misconduct or inconsistent

in fulfilment of service.

▪ Employee may terminate without notice when threaten by danger, voilence or disease.
▪ Contract is deemed broken by employer if he fails to pay wages not later than the 7th day after the wage period.
▪ Contract is deemed broken by employee if he has been continuously absent from work for more than 2 consecutive working days without

prior leave from his employer, unless he has a reasonable excuse for such absence and has informed or attempted to inform his employer of
such excuse prior to or at the earliest opportunity during such absence.

▪ Wages is not payable during the period when employee is imprisoned or attending to a courtotherwise than as a witness on his employer’s

behalf.

▪ No deduction of wages can be made by employer other than:
▪ Deductions to the extent of any overpayment of wages made within 3 months of the mistake.
▪ Deductions for the indemnity due to the employer by the employee.
▪ Deductions for the recovery of advances of wages.
▪ Deductions authorized by written law, such as EPF, SOCSO, PCB, etc.
▪ Deductions upon employee’s written request, in respect of the payments to a registered trade union or co-operative thrift and loan

society of any sum of money due to the trade union or society by the employee on account of entrance fees, subscriptions, instalments
and interest on loans, or other dues.

▪ Deductions upon employee’s written request, in respect of payments for any ESOS shares.
▪ Deductions upon employee’s written request, in respect of payments to a third party on behalf of the employee.
▪ Deductions upon employee’s written request, in respect of payments for the purchase by the employee of any goods of the employer’s

business offered for sale by the employer.

▪ Deductions in respect of the rental for accommodation and the cost of services, food and meals provided by the employer to the

employee ‘at the employee’s request or under the terms of the employee’s contract of service.

▪ The total deduction shall not exceed 50% of the employee’s monthly wages, unless for:
▪ Indemnity payable by an employer to an employee
▪ Final payment of the wages of an employee for any amount due to the employer and remaining unpaid by the employee on the

termination of the employee’s contract of service

▪ Repayment of a housing loan (where an additional limit of 25% applied)
▪ All wages must be paid in legal tender or direct into bank account.
▪ Employer shall not require any female employee to work in any industrial or agriculturalundertaking between 10pm and 5am nor commence

work for the day without having had a period of 11 consecutive hours free from such work.

▪ No female employee shall be employed in any underground working.

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▪ Every female employee shall be entitled to maternity leave for a period of not less than 60 consecutive days in respect of each confinement.
▪ Maternity leave shall not commence earlier than a period of 30 days immediately preceding the confinement of a female employee or later than

the day immediately following her confinement.

▪ A female employee shall be entitled to receive maternity allowance if she:
▪ Has been employed more than 4 months before confinement.
▪ Is employed more than 90 days during the 9 months immediately before her confinement.

▪ If a female employee dies from any cause during the maternity leave period, her maternity allowance shall be paid to her nominee.

▪ The employer cannot terminate a female employee who remains absent from her work after the expiration of the maternity leave as a result of

illness related to pregnancy or confinement and certified by a registered medical practitioner, until her absence exceeds a period of 90 days after
the maternity leave.

▪ Every employee shall be allowed in each week a rest day of 1 whole day.
▪ Employee who required to work during his rest day should be double paid.
▪ An employee shall not be required under his contract of service to work:

▪ more than 5 consecutive hours without a period of leisure of not less than 30 minutes
▪ more than 8 hours in one day
▪ in excess of a spread over period of 10 hours in one day
▪ more than 48 hours in one week
▪ For any overtime work carried out in excess of the normal hours of work, the employee shall be paid at a rate not less than 1.5 times his hourly

rate of pay.

▪ Every employee shall be entitled to a paid holiday at his ordinary rate of pay on 10 gazetted public holidays in any one calendar year,

including:

▪ the National Day
▪ the Birthday of the Yang di-Pertuan Agong
▪ the Birthday of the Ruler or the Yang di-Pertua Negeri
▪ the Workers’ Day
▪ Employee who required to work on paid holiday shall be double paid.
▪ Employee who required to work overtime on paid holiday shall be triple paid.
▪ An employee shall be entitled to paid annual leave of:
▪ 8 days for every 12 months of continuous service with the same employer if he has been employed by that employer for a period of

less than 2 years

▪ 12 days for every 12 months of continuous service with the same employer if he has been employed by that employer for a period of 2

to 5 years

▪ 16 days for every 12 months of continuous service with the same employer if he has been employed by that employer for a period of 5

years or more

▪ An employee shall, after examination by registered medical practitioner at the expense of the employer, be entitled to paid sick leave:
▪ where no hospitalisation is necessary:
▪ 14 days in the aggregate in each calendar year if the employee has been employed for less than 2 years
▪ 18 days in the aggregate in each calendar year if the employee has been employed between 2 to 5 years
▪ 22 days in the aggregate in each calendar year if the employee has been employed for 5 years and above
▪ 60 days in the aggregate in each calendar year if hospitalisation is necessary, as may be certified by such registered medical

practitioner or medical officer

▪ An employee shall also be entitled to paid sick leave after examination by a dental surgeon as defined in the Dental Act 1971
▪ An employee who absents himself on sick leave shall be deemed to absent himself from work without permission if he is:

▪ not certified by a registered medical practitioner or a medical officer or a dental surgeon
▪ certified by such registered medical practitioner or medical officer or dental surgeon but without informing or attempting to inform his

employer of such sick leave within 48 hours of the commencement thereof

8.1.3 Roles of Ministry

• To update and implement labor policies and laws to create efficient, productive and
discipline workforce with positive values and good work ethics.

• To update and implement occupational safety and health policies and laws to ensure
a healthy and safe work environment.

• To efficiently manage and independently resolve industrial dispute between employer
and employee in order to create a conducive work environment.

• To monitor and facilitate development and movement of trade unions to be orderly for
the benefit of the nation.

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• To manage international relations in Labor Management field, technical co-operation
in labor related matters and human resources development.

• To encourage and coordinate tripartisme among employees, employers and
Government and to create harmonized relation toward Vision 2020.

• To plan and develop human resource through control and labor market analysis to
formulate policies relating to employment, development of skilled workforce and
productivity linked wage system.

• To create job opportunities and job placement.
• To update and implement National Vocational Training Policy and strategies that

will fulfil the training needs in the private sector.
• To revise, update and develop the syllabus of skills training (NOSS), Skills

Certification System (MOSQ) and skills standard for implementation.
• To update and effective implementation of social safety facility to ensure sufficient

safety net for workers.

Trade Union =
advice on dismissals/constructive dismissals under section 20 of the Industrial Relations Act 1967, includes
advising on proposals and negotiations for collective bargaining,
employment law aspects of retrenchment,
re-organisation and redundancy,
closure of business and
change of ownership of businesses,
take-overs and mergers,
assisting clients in the implementation of internal disciplinary proceedings involving the preparation of charges
of misconduct and poor performance,
the requisite notices,
and the conduct of domestic inquiries.
The department also advises on the drafting of terms and conditions of employment in respect of both
individual contracts as well as collective agreements.

8.2 Establishment of Trade Union

8.2.1 Definition

An organized group of workers who collectively want to improve the terms and conditions at their
workplace and to enhance their status in the society

8.2.2 Types of Trade Union – In house, public sector, employers trade union

In house – the member of house union are from the same company regardless of their
skills and occupation or job requirements
Eg : National Union of Cold Storage Employees, British American Tobacco (M) Bhd,
Keretapi Tanah Melayu Bhd Employees Union

Public Sector
CEUPACS, The Congress of Union of Employees in the Public and Civil Services
Malaysia (Malay: Kongres Kesatuan Pekerja-pekerja di dalam Perkhidmatan Awam

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Malaysia), abbreviated CUEPACS, is a national trade union centre in Malaysia. It has a
membership of 1,200,000.
Employers Trade Union
Employers also forms union.
Eg : MCBA – Malayan Commercial Banks Association (MCBA), Malayan Agricultural
Producers Association (MAPA),
Just like trade unions being represented by workers for promoting their economic and social
interests ,in the same manner employer's join employers organisation.An employers'
organization or employers' association is a collective organization of manufacturers,
retailers, or other employers of wage labor. Employers' organizations seek to coordinate the
behavior of their member companies during negotiations with trade unions or government
bodies.

8.2.3 Persons who are prohibited from becoming a member
Under the Trade Unions Act 1959, the followingclasses of persons can neither join nor
be accepted as members by any trade union.(i)

1. any person below the age of 16 years;(ii)
2. any student of an educational institution established by or under a Written law, unless he

isemployed as an employee and is over the age of 18 years;(iii)
3. any person employed or engaged in a trade or occupation or industry other than the one

inrespect of which the trade union is registered(iv)
4. any "public officer" which is any person in the permanent or temporary employment of

theFederal or a State Government.
However, the King may exempt from this prohibition either wholly or conditionally any
categoryor class of public officers, other than

the Armed Forces;
the Police Force;
the Education Service;

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8.2.4 Reasons to join Trade Union

8.3 Collective bargaining

1. Is the main functions of trade union
2. Industrial Relations usually refers to the relationship between employer and

employees.
3. Collective bargaining is the process where by employers and employees negotiate the

terms and conditions of employment.
4. Formal recognition to union is required by law before starts negotiate.

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5. Recognition allows a trade union to have certain rights. Industrial Relation Act ( Sec 13)
also requires trade union to get recognition before begin the process of collective
bargaining.

6. Collective Bargaining is one of the main functions of trade union. It is the best method
of regulating the terms and conditions of employment. It is a method to determine term
and conditions agreed by employer and employees.

7. In Malaysia collective bargaining is controlled by Industrial Relation Act 1967 which
defined it as negotiation and discussion to reach an agreement on collective bargaining
which give benefit to employer, trade union members and non members.

8. When employees grouped themselves together in association as in banks and plantation
industry, bargaining takes place between the union of employees and union of
employers. This enables standard benefits for all and avoid job hopping within industry
concerned. Some countries collective bargaining takes place at national level.

9. However trade union in public sector in Malaysia do not have right to negotiate/
conduct collective bargaining on terms and conditions however CEUPACS makes
request for improved wages and benefits.

10. Collective bargaining have 7 important steps:

Preparation
1. Starts a few months before available collective agreements ends.
2. Each parties will appoint their own team for instance team work for employers

might be managers for industrial relations, consultants, financial planners and trade
union committees will represent the employees.
3. Trade union have to identify members need, collect data on organizational financial
status, economic condition.
4. Both parties have
i) to collect data on various information such as organizational culture,

competition in business, current economic condition, wafes and benefit
structure etc
ii) Determine collective bargaining objectives
Eg : determine quatitatively on increment ( 5%/ any %)
iii) Determine strategy to encounter

1. DETERMINE ISSUES

Such issue s like wages, benefit, overtime payment. After the determination, trade
union have to write to employer ask for collective bargaining

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Impasse in Negotiation

2. PREPARING FOR NEGOTIATION
Collective Negotiation

Starts when they meet together and trade union list down the issues. Any
understanding on any issues like appraisal system, retrenchment, delegation etc can be
discussed on certain limit. If any grievance will lead to impasse in negotiation should
solve by third party.
The understanding will be kept by Industrial Courts ( Mahkamah Perusahaan) to be
legally right for 3 years.

3. NEGOTIATING THE ISSUES
Evaluation of collective bargaining status

Sec 2 in Industrial Act stipulate that any objection/ grievance/ which lead impasses
in negotiation.
There are ways to overcome
i) Third party involvement
ii) Trade union action ( picket/ strike/ lockout )
iii) Employer act

4. OVERCOME THE IMPASSE
A bargaining impasse occurs when the two sides negotiating an agreement are unable to
reach an agreement and become deadlocked. The word impasse may also refer to any
situation in which no progress can be made.

5. REACHING THE AGREEMENT
6. RATIFYING THE AGREEMENT

7. ADMINISTRATION OF THE AGREEMENT

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Grievance Procedure ( Tatacara Kilanan)

 Grievance: objection/ a rights dispute in which the parties disagree during the life
of the contract about the meaning, interpretation, or application of the contract
 Once the parties have negotiated the contract, they need to administer the
contract
 The parties might disagree on what the contract requires in
particular cases — a “grievance”

 Grievance procedure: the procedures spelled out in the contract for how
grievances are to be resolved
 The parties can negotiate and include clauses in the contract that specify
how grievances are to be resolved during the life of the contract

 Example of a grievance procedure:
 Step 1: employee reports the grievance to the union steward, who meets
with the employee’s supervisor to try to resolve the grievance
 Step 2: if no resolution in 3 working days at Step 1, next the grievance is
written down & a meeting occurs with the employee, the union steward,
the chief union steward, the employee’s supervisor, & the supervisor’s
manager. Grievance reports should be reported in 5 days after Iit occurs.
Supervisors should responds in 7 working days.
 Step 3: if no resolution at Step 2, next is a meeting of everyone from Step
2 plus the local union president, someone from the company’s HR
department, & someone from local top management. If in 3 working days,
grievance still occurs, workers should write to Managers/ top management
and cc to his/ her union
 Step 4: if no resolution in 6 working days at Step 3, next is a meeting of
everyone from Step 3 plus representatives from the national union & from
corporate top management
 Step 5: if no resolution at Step 4, last step is grievance arbitration which
would involve Ministry of Human Resource. Ministry wil, responds in 7
working days.

 Grievance arbitration: a neutral third party (grievance arbitrator) is brought in to
interpret the contract
 Arbitration hearing: the arbitrator listens to the arguments & evidence of
both sides to the grievance
 Arbitration award: the arbitrator decides the grievance in a written decision
 Arbitrator cannot change or amend the contract
 Arbitrator clarifies & applies the contract

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 Arbitrator typically considers past practices
 If the contract says so (and it usually does), the decision of the

arbitrator is final and binding
 No appeals: courts typically will not review arbitration awards

Not all grievance can be solved. If it is not being solved , try to solve with mediation or
arbitration. The best is to ensure there will be no grievance among workers by focusing
on their needs and facilities. Else the workers should be easily enabled to see/ meet
their supervisors/ managers/ top management.

8.4 Industrial / Direct Action

If parties fail to settle disputes/ grievances, there are methods to pressure the
other party into giving, there are

a) The Picket
Purpose of picket : to publicize workers dispute and promote no dealing with
the organization. Normally practiced during lunch time or before and after
working hours. Usually done before strikes. If strikes have takes place, picket
will be held all day long.
Picket is organized in peace and do not block any road access to company.

b) The strike
a. Strikes: workers put pressure on the company to change something by
withholding their labor & attempting to stop company operations
i. Types of strikes:
1. Economic strikes: workers withhold their labor to put
economic pressure on the company during contract
negotiations
a. Goal: increase the cost to the company of disagreeing
to the union’s contract demands
i. May result in the company making additional
concessions to prevent or to shorten the strike

2. Unfair labor practice strikes: workers withhold their labor to
protest the company’s ULPs

3. Wildcat strikes: workers go on strike in violation of their
contract NLRA does not protect wildcat strikers

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