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INSTRUCTOR’S MANUAL

CHAPTER An Overview of
1 Human Resource
Management

Learning Outcomes
At the end of this chapter, students should be able to:
1 Explain the importance of human resource management;
2 Describe the growth of the human resource function from the mid-19th century until today;
3 Understand the impact of current social, business and economic changes on human resource
management;
4 Describe the structure of the human resource management function in organizations;
5 Clarify the requirements for a career in human resource management;
6 List the functions within the scope of human resource management;
7 Explain the role and structure of the Ministry of Human Resources, and
8 State briefly the purpose of each of the most important labour laws.

Key Teaching Points


1.0 Introduction
Human resource management is the development and implementation of systems in an organization
designed to attract, develop and retain a high-performing workforce.
Titles for human resource management specialists include:
(i) Welfare manager;
(ii) Personnel manager;
(iii) Human resource manager, and
(iv) Human capital manager.

2.0 Growth of the human resource function from the 19th century until today
2.1 The Industrial Revolution (1850s–1920s)
The human resource management function developed as a result of the industrial revolution
which began in the United Kingdom and quickly spread to Europe and the United States of
America.

2.2 The Human Relations Approach (1930s–1950s)


By the 1930s, employers recognized that workers play a major role in the success of any business
or enterprise.
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2.3 Recent Developments (1950s–2020)


The influence of multi-national organizations and a number of United Nations agencies,
including the International Labour Organization, mean that employers have to face many
challenges such as:
(i) Increased labour legislation;
(ii) Organizations are getting bigger;
(iii) The world is getting smaller;
(iv) Increasing workforce diversity, and
(v) Rapid change

3.0 Impact of current social, business and economic changes on human


resource management
Social, business and economic changes have an enormous impact on human resource management.
These include:

3.1 Technological changes such as:


(i) New machinery;
(ii) New products;
(iii) Computers at the workplace, and
(iv) The Internet.

3.2 Globalization and increased competition


Competition has led to a demand by employers for flexibility. They prefer:
(i) To hire workers on temporary contracts;
(ii) To dismiss workers without paying severance benefits when financial crises warrant
downsizing the workforce;
(iii) To outsource non-essential functions to other organizations;
(iv) To employ workers who are willing and able to carry out a variety of functions, and
(v) To introduce flexi-payment schemes for workers.

3.3 Rising levels of employee education and expectations


Employees today have:
(i) Higher levels of education than before;
(ii) Access to the Internet which allows them to gain information relating to their rights as
employees;
(iii) Expectations that they will find a job, as unemployment is low, and
(iv) Expectations of work-life balance.

Employers are faced with:


(i) Employees who are willing and able to fight for their rights;
(ii) High turnover rates, and
(iii) The need to recruit foreign workers to overcome the shortage of local workers.

3.4 Workforce diversity


In most organizations, employees come from a diverse range of backgrounds. Workers may
be identified as having differing needs and perceptions depending on their racial grouping,
religion, languages spoken, gender and so on.

3.5 Useful statistics


A number of key Malaysian statistics related to changes in Malaysia, which directly impacts
human resource management, can be found at www.mef.org.my and www.statistics.gov.my.
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4.0 Purpose structure and functions of a human resource management


department
4.1 Not all companies have staff dedicated to managing human resources. Whether or not a human
resource management department is established in an organization depends on:
(i) The size of the organization;
(ii) Whether the workforce belongs to a trade union;
(iii) Whether the company is foreign or locally owned, and
(iv) The philosophy of the top management.
Human resource management is a shared function. Some tasks relating to human resource
management are implemented by human resource specialists and some are undertaken by
managers, especially heads of departments. Sharing may lead to misunderstanding and conflict
between human resource specialists and heads of departments.

5.0 Human resource management as a shared function


The function of a human resource management department is shared between the department and all
managers and supervisors. Sharing leads to conflicts, so agreement on task and duties must be made.

6.0 Requirements for a career in human resource management


To become a human resource specialist, any of the following routes are possible.
(i) Joining an organization as a human resource clerk and, over time, being promoted to an
executive and later managerial position;
(ii) Complete a human resource management related diploma or degree at a university, and
(iii) Undertake a professional certificate or diploma in human resource management such as the
certificate offered by the Malaysian Institute of Human Resource Management (MIHRM).

6.1 Human resource positions may be general or specific. General positions require the job-holder
to multi-task and be able to carry out a variety of human resource related functions. Specialized
jobs may allow the job-holder to focus on one human resource function at a time.

6.2 The personal qualities and skills required of human resource specialists include:
(i) Communication skills;
(ii) Ability to bring about change;
(iii) Information technology (IT) savvy;
(iv) Numeracy and the ability to analyse data;
(v) Ability to understand the business context, and
(vi) High ethical standards.

6.3 Many human resource specialists join and are active in professional associations. In the world of
human resource, the following associations are well-known. Their website addresses are shown
in brackets.
(i) The Malaysian Institute of Human Resource Management
(www.mihrm.com);
(ii) The Society for Human Resource Management (USA)
(www.shrm.org);
(iii) The American Society for Training and Development (USA)
(www.astd.org);
(iv) The Chartered Institute of Personnel and Development (UK)
(www.cipd.co.uk), and
(v) The Australian Human Resource Institute
(www.ahri.com.au).
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6.4 Skills required of human resource specialists


Human resource specialists need many different skills and knowledge bases to be successful
including:
(i) Communication skills;
(ii) Persuasiveness skills;
(iii) A knowledge of how to bring about change;
(iv) Information technology skills;
(v) Ability to conduct research and analyse data;
(vi) A basic understanding of corporate finance, and
(vii) A thorough understanding of business.

Increasingly, human resource management functions are using technology, particularly


computers to improve productivity levels and to provide better service to customers. The use of
computerized software includes:
(i) Database systems for personnel records which allow for easy updating of information;
(ii) Payroll systems;
(iii) Intranet systems which allow the employer to communicate with employees as well as
permitting employees to contact other employees;
(iv) Attendance tracking systems;
(v) E-learning programmes, whereby employees are provided with training at their computer
via the Internet or through other methods, are increasing in popularity;
(vi) Knowledge management systems;
(vii) Tracking of performance output, and
(viii) Monitoring of computer usage.

Human resource management specialists must be familiar with the latest know­ledge relating
to human resource management, but they must also be comfortable talking the language of
business. Hence, they must make it their business to understand:
(i) Their employer’s mission and vision;
(ii) Their employer’s products and services;
(iii) The corporate culture where they work;
(iv) The technology used in the business;
(v) The impact the business has on society;
(vi) The profile of the employer’s customers;
(vii) How the business is affected by changes in the economic environment, and
(viii) The nation’s affirmative action programmes and how these affect the business decisions.

7.0 Functions of human resource department


A wide variety of functions are within the scope of human resource management including the
following:

Employment
(i) Human resource planning;
(ii) Recruitment;
(iii) Establishing career movement policies, including transfers and promotions;
(iv) Setting policies and administering disciplinary action systems;
(v) Terminating employees;
(vi) Liaison with Immigration and Labour Department;
(vii) Record keeping.
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Training and Development


(i) Holding induction programmes;
(ii) Providing skills training;
(iii) Organizing supervisory and management development programmes, and
(iv) Establishing and administering performance management and appraisal systems.

Payment/Reward Systems
(i) Developing a wage structure;
(ii) Establishing incentive schemes;
(iii) Preparing information for payroll preparation, and
(iv) Advising on benefits.

Health and Safety


(i) Organizing safety programmes;
(ii) Establishing wellness programmes;
(iii) Accident investigation;
(iv) Provision of health services, and
(v) Establishing programmes to prevent sexual harassment and violence.

Employee Services/Welfare
(i) Overseeing canteen facilities;
(ii) Provision of transport for employees;
(iii) Provision of recreation facilities, and
(iv) Counselling.

Productivity Improvement Schemes


(i) Establishing and maintaining quality improvement initiatives including the introduction and
implementation of ISO programmes, suggestion schemes, team problem solving activities,
Kaizen tools and other similar programmes.

Industrial Relations
(i) Grievance handling;
(ii) Relations with trade unions representatives;
(iii) Collective bargaining negotiations, and
(iv) Preparing contingency plans for strike actions.

8.0 Role and structure of the Ministry of Human Resources


The role of the Ministry of Human Resources is to:
(i) Set policies;
(ii) Prepare draft legislation and draft amendments;
(iii) Enforce the employment legislation passed by Parliament;
(iv) Establish codes of practice as guidelines on good practice for employers and employees;
(v) Implement initiatives to help upgrade the workforce and improve work-life balance, including:
¤ Jobs Malaysia, an online recruitment agency service
¤ Encouraging childcare centres
¤ Encouraging practices to prevent sexual harassment at the workplace
¤ Providing access to computers and the Internet via kiosks at its offices and public places
¤ Promoting a programme aimed at encouraging highly skilled Malaysians working overseas
to return to Malaysia
¤ Encouraging employers to hire employees with special needs
(Orang Kurang Upaya)
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8.1 The Ministry consists of a number of departments. Several statutory bodies and companies also
report directly to the Ministry. Table 1.1 lists these departments and bodies.
Table 1.1  Structure of the Ministry of Human Resources

Departments Statutory Bodies/Companies


Labour Employees Social Security Organization
Industrial Relations Human Resources Development Bhd
Manpower National Institute of Occupational Safety and Health
Trade Union Affairs Skill Development (Loan) Fund Corporation
Occupational Safety and Health
Skills Development

9.0 Labour laws and their enforcement


The most important labour laws are:
• The Employment Act 1955;
• The Sarawak Labour Ordinance, amended 2005;
• The Sabah Labour Ordinance, amended 2005;
• The National Wages Consultative Council Act 2011;
• The Employees Provident Fund (EPF) Act 1991;
• The Workman’s Compensation Act 1952;
• The Employees Social Security Act (SOCSO) 1969;
• The Occupational Safety and Health Act 1994;
• The Factories and Machinery Act 1967;
• The Children and Young Persons (Employment) Act 1966;
• The Employment (Restriction) Act 1968;
• The Trade Unions Act 1959;
• The Industrial Relations Act 1967;
• Pembangunan Sumber Manusia Bhd Act 2001;
• The Skills Development Fund Act 2004;
• The National Skills Development Act 2006, and
• The Minimum Retirement Age Act 2012.

Teaching Notes

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