i. Types of interview
There are various types of interview Structured and Unstru
Structured interview, each candidate is asked similar quest
your past experience and assets you can bring to company
are potentially scored on a standard grid. Unstructured inte
depend on free flowing conversation which tends to focus
Questions about skills and strengths can be asked and sho
Unstructured interviews may be so by design of the interv
you might find yourself in an unstructured interview after
while dropping off a resume in person at a location in whic
important than the particular questions being asked. In suc
points you want this employer to hear, and weave them in
mature and sociable.
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uctured Interviews
tions in a predetermined format. Emphasis tends to be on
y. Typically, the interviewer records your answers, which
erviews are much more casual and unrehearsed. They
s on your personal qualities as they relate to the work.
ould be answered as formally as in a structured interview.
viewer, or may be so due to the spontaneity of the event—
being introduced to a potential employer by a friend, or
ch you wish to work. Conversation and exchange is more
ch an interview it is important to hold on to the main
nto the conversation. Try to relax in the format – be polite,
nyname.com
ii. Methods of interview
1. Behavioural based interview: Behavioural based
interviews are based on the behaviour and the past
experiences of the interviewer. It is also based on the pa
performance of the candidate. For such purposes, STAR
based behavioural interviews are done
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ast
R
nyname.com
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CHAPTER4 TRAINING AND DEVELOPMENT
4.1 CONCEPT OF TRAINING AND DEVELOPMENT
Concept of Training and Development ..... 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.
PERFORMANCE,
ABILITY
THRU LEARNING
ATTITUDE + SKILLS + KNOWLEDGE
4.1.1 DEFINE TRAINING
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
4.1.2 Compare Training, development and education
4.1.3 BENEFIT OF TRAINING AND DEVELOPMENT PROGRAMMES
IMPORTANCE/ RATIONAL/ ADVANTAGES/ FUNCTIONS
i) Increase the productivity
Induction and training program will upgrade their knowledge and skills and keep them
informed to the latest organization info.
Eg : Company X will improve its productivity when most employees have enough
training. Higher skills, quick and fast productivity.
ii) Increase employee satisfaction
Productive employee is a satisfied employee. Thus training will give most benefit to
both employee and employer
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iii) Expose workers to latest technology
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
4.1.4 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
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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?
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.
4.2 EMPLOYEE ORIENTATION
4.2.1 DEFINITION of employee orientation
the process by which the new recruit is familiarized with the working environment.
4.2.2 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
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4.2.3 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
4.3 COMPARE TRAINING
4.3.1 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
The•maSinealf-dsvtaundtya,gceosmapnudtedri-sbaadsveadntraagineisngof this form of training can be summarised as follows:
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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
5.1 .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
5.1. 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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Developmental Decide on layoffs.
Meet legal requirements.
Evaluate the performance of training programs.
Decide on salary and reward issues.
Decide retention or termination.
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.
5.1.3 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.
5.2 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
5.3 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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6.0 COMPENSATION MANAGEMENT
6.1.1 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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6.1.2 COMPONENTS OF COMPENSATION
a. Financial Compensation b. 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.
compensation is the money which is paid i) The job
directly to employees in exchange for their ii) The Environment
labor. Non-monetary incentives are typically effective
This includes everything from hourly wages, to for employees who are comfortable with their
set salaries, bonuses, tips and commissions. salaries or have been in the position for a long
time.
Indirect Financial Compensation if this nature can include:
Achievement awards, team leadership
Indirect financial compensation includes all opportunities, personal days, prizes, paid
monies paid out to an employee that are not training, gift cards, new office or workspace
included in direct compensation. This form of upgrade or even paid parking or transit passes.
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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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.
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.
6.2 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
only given when employee served Include payment or dental and optical bills. Some
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.
6.3 FINANCIAL AND NON FINANCIAL REWARDS
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
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
NON FINANCIAL
iv) 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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v) 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
vi) Sponsorship to seminars, conference and overseas tour
vii) Rewards for long service
Given some token of appreciation like gold watch, trips to overseas, special
dinner event, award ceremony
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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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83
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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86
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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87
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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88
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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89
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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