Human Resource Management (HRM) is the process of managing employees so that a business has the right people, with the right skills, doing the right jobs.
Recruiting and Selecting Employees
Recruitment Process
Recruitment is the process of finding and attracting suitable people to apply for a job.
The main stages are:
Job description → Person specification → Job advertisement → Applications → Selection → Appointment
Job Description
A job description explains what the job involves.
It usually includes:
→ Job title
→ Main duties and responsibilities
→ Tasks the employee will perform
→ Who the employee reports to
→ Location of the job
→ Working hours
Example:
A job description for a sales assistant may require the employee to serve customers, operate the cash register, arrange products and maintain the shop floor.
Person Specification
A person specification describes the type of person the business wants for the job.
It may include:
→ Qualifications
→ Skills
→ Experience
→ Knowledge
→ Personal qualities
→ Communication ability
Example:
A hotel looking for a receptionist may require good communication skills, computer skills and previous customer-service experience.
Job description → What the employee will do
Person specification → What type of person is needed
Job Advertisement
A business advertises a vacancy to attract suitable applicants.
An advertisement may include:
→ Job title
→ Main duties
→ Qualifications and experience required
→ Salary or wage
→ Working hours
→ Location
→ How to apply
→ Closing date
Online Recruitment
Businesses can advertise vacancies through:
→ Company websites
→ Online job websites
→ Professional networking websites
→ Social media
Advantages:
→ Reaches a large number of potential applicants
→ Usually faster than printed advertising
→ Applications can be received electronically
→ Can attract applicants from different locations
Disadvantages:
→ May attract many unsuitable applicants
→ Business may receive too many applications
→ Applicants may exaggerate their qualifications or experience
→ Some suitable applicants may not see the advertisement
Employment Agencies
An employment agency helps businesses find suitable employees.
→ The business gives the agency details of the vacancy
→ The agency searches for suitable candidates
→ Candidates may be shortlisted by the agency
→ The business makes the final selection
Advantage:
→ Saves the business time and reduces the work involved in finding suitable candidates.
Disadvantage:
→ The business may have to pay the agency a fee.
Selection Methods
Selection is the process of choosing the most suitable applicant from those who applied.
Curriculum Vitae (CV) / Résumé
A CV gives information about an applicant, such as:
→ Education and qualifications
→ Previous employment
→ Skills
→ Experience
→ Achievements
Advantages:
→ Gives the employer useful information about the applicant
→ Allows qualifications and experience to be compared
Disadvantages:
→ Applicants may exaggerate their achievements
→ CVs may contain different amounts of information
→ A CV does not show how well the applicant will actually perform the job
Application Forms
The business asks applicants to complete a standard form.
Advantages:
→ All applicants provide similar information
→ Easier to compare candidates
→ Questions can be designed specifically for the job
Disadvantages:
→ Takes time for applicants to complete
→ Takes time for the business to process
→ A good applicant may not present their strengths effectively on the form
References
A reference is information about an applicant provided by someone who knows them, such as a previous employer.
References may provide information about:
→ Previous employment
→ Reliability
→ Skills
→ Experience
→ Behaviour
Advantage:
→ Helps the employer check whether information provided by the applicant is accurate.
Disadvantage:
→ References may provide limited information and are often positive.
Testing
Applicants may be given tests to assess:
→ Technical skills
→ Numerical ability
→ Literacy
→ Problem-solving ability
→ Knowledge
→ Aptitude
Example:
An accounting firm may give applicants a numerical test to assess their ability to work with financial information.
Advantage:
→ Provides evidence of the applicant’s ability rather than relying only on what they claim.
Disadvantage:
→ A test may not show how well the applicant will perform in the actual workplace.
Assessment Centres
An assessment centre uses several activities to assess applicants.
These may include:
→ Group discussions
→ Presentations
→ Role plays
→ Problem-solving activities
→ Interviews
→ Practical tasks
Advantage:
→ The employer can observe candidates in different situations.
Disadvantage:
→ Can be expensive and time-consuming.
Interviews
An interview allows the employer to ask questions directly to the applicant.
The employer can assess:
→ Communication skills
→ Knowledge
→ Experience
→ Confidence
→ Attitude
→ Suitability for the job
Advantages:
→ Allows two-way communication
→ Employer can ask follow-up questions
→ Candidate can explain their experience in more detail
Disadvantages:
→ Interview performance may not reflect actual job performance
→ Interviews can be affected by personal opinions or first impressions
→ They can be time-consuming
Internal and External Recruitment
Internal Recruitment
Internal recruitment means filling a vacancy using an existing employee.
Example:
→ A sales assistant is promoted to become a sales supervisor.
Advantages of Internal Recruitment
→ Cheaper because external advertising may not be required
→ Faster because the business already knows the employee
→ Employee already understands the business
→ Less training may be required
→ Promotion opportunities can motivate employees
→ Can improve employee loyalty
Disadvantages of Internal Recruitment
→ Smaller number of candidates
→ No new ideas may enter the business
→ Existing employee may not have all the skills required
→ Another vacancy is created when the employee moves to the new position
External Recruitment
External recruitment means recruiting someone from outside the business.
Example:
→ A company advertises for a marketing manager and employs someone who previously worked for another business.
Advantages of External Recruitment
→ Larger pool of candidates
→ New ideas and skills can enter the business
→ Business may find someone with specialist experience
→ No existing employee has to be moved into the position
Disadvantages of External Recruitment
→ More expensive
→ Takes longer
→ Advertising and selection can be costly
→ New employee may require more training
→ Business has less information about the applicant’s previous performance
Recommending Who to Employ
The most suitable candidate depends on the requirements of the particular job.
Consider:
→ Qualifications
→ Relevant experience
→ Skills
→ Personal qualities
→ Results of tests
→ Interview performance
→ References
→ Cost of employing the person
→ Whether the candidate meets the requirements of the job
Example:
A business needs a manager to lead a team of 20 employees.
→ Candidate A has excellent academic qualifications but no management experience.
→ Candidate B has fewer qualifications but has five years of experience managing a team.
Candidate B may be more suitable if practical management experience is the most important requirement of the job.
The recommendation should always be justified using the requirements of the job.
Employment Contracts
An employment contract is a formal agreement between an employer and an employee that sets out the conditions of employment.
Main Contents of an Employment Contract
Duties and Responsibilities
→ Explains what the employee is expected to do
→ Makes responsibilities clear
→ Helps the employer assess whether the employee is carrying out the job properly
Working Hours
→ States the expected hours of work
→ May include normal working hours, shifts and overtime arrangements
Holiday Entitlement
→ States how much paid holiday the employee is entitled to
→ Makes the employee’s holiday rights clear
Sick Pay
→ Explains what happens when an employee cannot work because of illness
→ States whether the employee receives sick pay and under what conditions
Other terms may include:
→ Salary or wage
→ Place of work
→ Notice period
→ Pension arrangements
→ Confidentiality requirements
Benefits of Employment Contracts
Benefits to Employers
→ Clearly explains what employees are expected to do
→ Reduces misunderstandings
→ Provides evidence of the agreed terms
→ Helps the business manage employees consistently
→ Provides a basis for resolving disagreements
Benefits to Employees
→ Clearly explains their duties
→ Makes working hours clear
→ Shows holiday entitlement
→ Explains sick pay arrangements
→ Provides greater certainty about employment conditions
→ Helps employees understand their rights
Legal Controls Over Employment Issues
Governments introduce employment laws to protect employees and establish rules for employers.
Unfair Dismissal
Unfair dismissal occurs when an employee is dismissed for an unlawful or unfair reason.
→ Employers must follow relevant procedures
→ Employees receive protection against certain forms of unfair dismissal
Effect on employers:
→ May increase administrative and legal costs
→ Employers must follow correct procedures
→ Compensation may have to be paid in some cases
Effect on employees:
→ Provides greater job protection
→ Reduces the risk of being dismissed unfairly
Discrimination
Discrimination occurs when a person is treated unfairly because of a protected characteristic under employment law.
Examples may include discrimination based on:
→ Sex or gender
→ Race
→ Religion
→ Disability
→ Age
Effect on employers:
→ Recruitment and promotion decisions must be based on appropriate criteria
→ Staff may need training about equality and discrimination
→ Breaking the law may result in legal costs or penalties
Effect on employees:
→ Provides greater equality of opportunity
→ Protects employees from unlawful treatment
Health and Safety
Businesses must provide a safe working environment and follow relevant health and safety requirements.
This may involve:
→ Safe equipment
→ Safe working conditions
→ Health and safety training
→ Risk assessments
→ Protective equipment
Example:
A factory may provide safety training and protective equipment to employees who operate machinery.
Effect on employers:
→ May increase costs
→ Equipment and training may be required
→ Time may be needed for safety checks
However:
→ Fewer accidents can reduce disruption
→ Employees may be more confident working in a safe environment
Effect on employees:
→ Reduces the risk of accidents and injuries
→ Provides a safer working environment
→ Employees must follow safety procedures
Legal Minimum Wage
A legal minimum wage is the minimum amount an employer is legally required to pay eligible employees, according to the laws of the country.
Effect on employers:
→ Wage costs may increase
→ Profit may fall if prices cannot be increased
→ Businesses may try to increase productivity
→ Some businesses may reduce the number of employees they hire if labour becomes more expensive
Effect on employees:
→ Low-paid employees may receive higher wages
→ Income may increase
→ Living standards may improve
However:
→ If higher labour costs lead to fewer job opportunities, some people may find it harder to obtain employment.
Training
Training is the process of improving employees’ knowledge, skills and abilities so they can perform their jobs more effectively.
Importance of Training to a Business
→ Improves employee skills
→ Can increase productivity
→ Can improve product or service quality
→ Can reduce mistakes and waste
→ Can improve customer service
→ Helps employees use new technology and equipment
→ Can improve employee motivation
→ Can improve health and safety
→ Can prepare employees for promotion
Example:
A restaurant trains employees in customer service and food safety.
→ Employees understand procedures better
→ Mistakes may decrease
→ Customer service may improve
→ Customer satisfaction may increase
Importance of Training to Employees
→ Improves knowledge and skills
→ Increases confidence
→ Helps employees perform their jobs better
→ Can create opportunities for promotion
→ May increase job satisfaction
→ Can improve future employment opportunities
Example:
An employee learns advanced spreadsheet skills.
→ Their ability to analyse financial information improves
→ They may become eligible for greater responsibility
→ Their future career opportunities may increase
Types of Training
Induction Training
Induction training is training given to new employees when they first join a business.
It may include:
→ Introduction to the business
→ Introduction to other employees
→ Health and safety procedures
→ Workplace rules
→ Job duties
→ Business policies
Example:
A new supermarket employee learns how to use the checkout, where stock is stored and what procedures to follow during an emergency.
Advantages
→ Helps new employees settle into the business
→ Employees understand their responsibilities
→ Can improve confidence
→ Introduces important health and safety procedures
→ Can reduce mistakes
Disadvantages
→ Takes time
→ Costs money
→ New employees may not be fully productive during training
→ Some information may not be relevant to every employee
On-the-job Training
On-the-job training takes place while the employee is working.
The employee may learn by:
→ Watching an experienced employee
→ Receiving instructions from a supervisor
→ Practising tasks
→ Being coached while doing the job
Example:
A new bank employee learns how to process customer transactions while working alongside an experienced employee.
Advantages
→ Usually cheaper than off-the-job training
→ Training is directly related to the actual job
→ Employees learn using the business’s own equipment
→ Employees can contribute to the business while learning
→ Practical skills can develop quickly
Disadvantages
→ Trainer has to spend time helping the new employee
→ Trainer may not have good teaching skills
→ Employee may learn incorrect methods
→ Mistakes during training may affect customers or production
Off-the-job Training
Off-the-job training takes place away from the employee’s normal workplace.
It may involve:
→ Courses
→ Workshops
→ Lectures
→ Role plays
→ Simulations
→ Specialist training institutions
Example:
A business sends its managers to an external leadership course.
Advantages
→ Employees can learn from specialist trainers
→ Employees may learn new ideas and techniques
→ Training can be more focused
→ Employees may gain recognised qualifications
→ Useful for developing specialist skills
Disadvantages
→ Usually more expensive
→ Employees are away from their normal jobs
→ Travel and accommodation may increase costs
→ Training may not exactly match the business’s procedures
→ Employees may leave the business after receiving expensive training
Choosing the Appropriate Type of Training
The most suitable training depends on what the employee needs to learn and the circumstances of the business.
| Situation | Suitable training | Why? |
|---|---|---|
| New employee joining the business | Induction | Introduces the employee to the business and its procedures |
| Employee learning to operate company machinery | On-the-job | Employee can learn using the actual equipment |
| Employee needs specialist professional skills | Off-the-job | Specialist trainers and facilities may be available |
| Business has a limited training budget | On-the-job | Usually less expensive |
| New employee needs to understand company rules and safety procedures | Induction | These are important when starting work |
| Manager needs advanced leadership skills | Off-the-job | Specialist courses may provide skills not available internally |