The effectiveness of any organization in general, is a direct function of the quality of the individuals who make up that organization. The knowledge, skills, abilities, and commitment of the members of the organization together constitute the most critical factor in the development and implementation of work plans and the delivery of products and services. Without the full commitment of its employees, an organization cannot accomplish its objectives. Consequently, the attraction, organization, development and motivation of employees which is the personnel function of management are a central responsibility at all levels of management that is from the chief executive to the first line supervisor.
2.2 WHAT IS PERSONNEL MANAGEMENT?
There are many definitions of personnel management, but all basically say that it is: attracting and developing competent employees and creating the organizational conditions which result in their full utilization and encourages them to put forth their best efforts.1
In any organization, there has to be someone concerned with the welfare and performance of persons who are a part of the operation. When an individual or a team of individuals takes on this task of seeing to programs and setting policies that impact everyone associated with the company, they are engaged in the process of personnel management, sometimes referred to as human resources management,
According to Franklin A., personnel management is based on careful handling of relationships among individuals at work and is the art of forecasting, acquiring, developing and maintaining competent workforce so that the organization derives maximum benefit in terms of performance and efficiency.2
Personnel Management is that part of management which is concerned with, people at work and their relationship within the organization. It can also be defined as that aspect of an organization, which is concerned with obtaining the best possible staff for the origination, looking after them so well that they will like to remain in the organization and give off their best in their jobs. It has to do with how best to use the skills and intelligence of people towards the achievement of organizational objectives.3
From the definitions quoted by various management experts in the past or present, the inference that we derive is that personnel management aims at attaining maximum efficiency and to yield maximum benefits to the organization.
Two major points about personnel management are implied in this definition. First, effective personnel management must be future oriented. Support for organizational objectives now and for the foreseeable future must be provided through a steady supply of competent and capable employees. Second, effective personnel management is action oriented. The emphasis must be placed on solution of employment issues and problems to support organizational objectives and facilitate employee development and satisfaction
To sum up, Personnel management aims at achieving these major steps:
Basically Personnel management has certain goals and objectives to fulfill which includes;
- Creating a congenial and healthy environment for employees or workers to function effectively.
- To bring about organizational and human resource development through training, development programmes or even managerial succession planning.
- Selection and placement of right number of people and ensuring proper allocation of duties and responsibilities upon them.
- Creating better inter-personal relations, developing a sense of responsibility and responsiveness amongst workers and employees.
- Boosting the morale and sense of initiative amongst employees.
- Adopting best techniques or conceivable methods to bring best possible development of workers on work.
2.2.1 Functions of the Personnel Department
A well-organized personnel department of an organization performs the following functions. Typically personnel work is concerned with:
i. Manpower Planning: - This is the first function of the personnel department. It has to do with the process by which a firm ensures that the required staff in terms of qualification and number is available at the right time. It involves determining personnel needs in relations to the objectives of the organization. It therefore deals with the qualification or education, skills and the appropriate number of personnel a firm should engage. It is therefore the process of assessing, predicting, or forecasting an organization's manpower needs in a relation to its plans.
ii. Employment/Recruitment: - After the manpower needs of the organization have been determined, the next stage is the make an attempt to employ the right caliber of personnel into the organization. This involves identifying sources of labour supply, carrying out recruitment, selection and placement into the organization.
iii. Education/Training and Development: - The personnel department is responsible for the training, education and the development of employees. It is the training needs have been determined, it is the responsibility of the department to design an appropriate programme by determining the method to be used, the course content, the duration and the institution or person to conduct the training. Training enables employees to adjust to new trends, improve their performance on the job and prepare them for promotion.
iv. Wage and salary administration: - Wage and salary Administration is one of the important functions of the personnel department. It is responsible for designing equitable and attractive wage and salary schemes for employees in an organization. It also determines how overtime payments. Bonuses and other fringe benefits are to be paid. It is also responsible for surveying the labour market and making the necessary changes and adjustments to the wage and salary structures to reflect the wages and salaries policies of the government of the day.
v. Health, Safety and Welfare of Employment:- Another important function of the Personnel department is to ensure that there are measures to take care of the health, safety and welfare of its employees. It ensures these by providing first-aid facilities, good ventilation, lighting, drainage and proper working conditions. It also provides protective gadgets for employees to reduce the occurrence of accidents and injuries. Canteen, sports, transport, pension schemes, group insurance schemes and other recreational programmmes are provided for the welfare of its employees.
vi. Industrial Relations: - The personnel department plays an important role in maintaining a cordial and harmonium working relationship between workers and management. The term industrial relations are used to describe the relationship that exists between employers, employees (trade unions) and the government.
- Performance appraisal: - organizing the appraisal process to identify development needs of employees.
- Personnel administration: - record-keeping and monitoring of legislative requirements related to equal opportunities and possibly pensions and tax.
- Communication: - providing an internal information service, perhaps in the form of staff newspapers or magazines, handouts, booklets, videos.
2.3 EMPLOYMENT PROCESS
The employment process which is also referred to as the recruitment process involves a number of activities which are undertaken to engage the right caliber of personnel for an organization. It is therefore concerned with the employment and maintenance of qualified and efficient labour force. Employment therefore involves recruitment, selection and placement. The recruitment and selection process involves recruitment, interrelated activities which include the following.
It is the process of acquiring applicants who are available and qualified to fill positions in the organization.1 Recruitment refers to the first step in staffing, which is finding people.2 Sources of recruitment refer to the various avenues from which the personnel manager may recruit or employ labour. Recruits are obtained from a variety of sources. There source are divided into two main categories, namely internal and external sources. Pieter Grobler (page 167)
- Sources of Recruitment
Sources of potential candidates are many and varied, but a good starting point is to consider any internal candidates who might be suitable for the post. The exercise whereby the required manpower is obtained within the organization is the internal source. This may take the form of promoting a qualified worker to a higher position as they occur.
Advantages of Internal Source
- There is less risk of error in selection and placement
- It boosts the morale of employees and encourages them it work hard
- It is quicker, cheaper and less risky than an outside appointment
- The recruit fits in with the culture of the organization; he knows “how we do things here”
- The individual also knows the people, systems and the business and thus the induction period will be quicker
Disadvantages of Internal Source
- No new ideas, creativity or challenge to the culture and systems
- It tends to ignore qualified candidates who are not within the system
- A post will still need filling-the person's old post. That is he will create another vacancy
- The person may not be the best, qualified or most able candidate
Depending on management policy and the type of job involved. Management has a number of options available for obtaining people from outside the organization. These include:
- Educational Institutions: - Organization and companies sometimes recruit fresh graduates from schools, colleges, polytechnics and the universities.
- Private Employment Agencies: - Employers who cannot go through the process of recruitment engage consulting firms to do the recruitment for them.
- Labour Department: - this is a public agency found in almost all regional s\capitals where employees in search of employment and employers searching for employees go to register. An arrangement is then made to link the employer with the prospective employee.
- Advertisements: - This is the most common and popular source of external recruitment where companies announce their employment opportunities through the newspapers, magazines, journals, radio and television.
- Unsolicited Applicant: - People who are seeking for jobs sometimes apply to organizations without being aware of vacancies in those organizations. If there are vacancies, the applicant may be asked to go through the screening process. Where vacancies are not immediately available, his name will be placed on the waiting list.
- Employment Referrals:- Companies sometime announce job vacancies to their staff and ask them to recommend friends, relatives and neighbours who might be in need of employment and possess the required qualification and skill.
Advantages of External Source
- It leads to the employment of people with new knowledge and ideas
- It leads to the employment of qualified and suitable people to fill vacant posts
- It promotes good will
- Its scope of selection is widened
Disadvantages of External Sources
- It is costly and time consuming
- It may lead to low morale especially where there are qualified people within the organization
- The risk of making wrong selection is very high
2.3.2 JOB ANALYSIS
It is the determination of the essential characteristics of a job. It is therefore a process of determining the nature of the job and the skills, knowledge, experiences and abilities of the person who is supposed to perform the job. It therefore contains information such as task performed, machines and equipment to be used, materials, products or services involved, training skills, knowledge and personal traits required of the worker. Job analysis therefore describes both the worker and the job so that there are no questions about who is doing what within the firm. Franklin A. (page 156)
When undertaken carefully, job analysis could be used to;
- It provides the information necessary for recruitment, selection and placement of employees.
- It can be used to get an idea of the acceptable level of performance for each job (performance appraisal)
- It is used to device and implement training and development programmes
- It provides an opportunity to uncover and identify hazardous conditions
- Jobs may be analyzed in order to ensure that employees are fairly compensated
The components of job analysis include.
A. Job Description
It specifies the duties and requirements of the job. This is a broad statement describing the purpose, scope, duties and responsibilities of a particular job. It states the title and location of the hob, grade/salary level of the job, limits of authority, number of subordinates, physical working conditions, machines, tools and equipment used, product or service produced etc. it typically portrays job content. In short, it summarizes all the basic tasks that are required to be performed on a job. A job description is what the worker does. Franklin A. (page 167)
- Importance of Job Description
- Each employee gets to know what is expected of him. It helps to avoid overlapping.
- It helps determine the rate of pay which is fair for the job.
- It helps in appraising and training employees
- It makes it possible for new employees to be given orientation with regards to their duties and responsibilities.
- It provides information from which particular hob vacancies can be advertised
- It guides the personnel manager in the development of job specification
This is the process by which an organization chooses from a list/pool of applicants the person who best meets the job and organizational requirements. The main objective of the selection process is to sort out those judged qualified for the job.
(a) Selection Procedure
i. Application Forms
Applicants who reply to job advertisements are usually asked to fill in a job application form, or to send a letter giving details about themselves and their previous job experience (Curriculum Vitae or (C.V). An application form is used to find out relevant information about the applicant. It tells the organization whether or not an applicant is worthy of an interview or a test of some kind. Information usually required of candidates include; Personal data, educational background, work experience, date of birth, interests and hobbies. An applicant who is deemed suitable on this evidence becomes a candidate for interview.
ii. Application Screening (Short-listing)
The screening stage involves the sorting out or elimination of those applicants judged unqualified for the job. The personnel manager receives the filled application forms, and then screens them to determine those who are qualified to be invited for interview. This becomes necessary since all types of applications are received when jobs are advertised. This stage is also referred to as short-listing. It is done by marching all the applications against the employer's requirements.
iii. Selection Tests
Selection tests are used to supplement other techniques. The tests are usually handled by fully qualified industrial psychologists. It is a practical examination to determine whether an applicant is suitable for the job. The assumption behind the administration of the tests is that a candidate who scores well in the test will more likely succeed in the job.
- Types of test
The types of tests commonly used include:-
i. Intelligence Tests: - Their aim is to measure the applicant's general intellectual ability. That is they are designed to measure his thinking abilities. They may test the applicant's memory, ability to think quickly and logically, and skill at solving problems.
ii. Aptitude Tests: - These are designed to predict an individuals potential for performing a job or learning new skills. They are widely used to obtain information about such skills as mechanical ability, clerical and numerical ability. It measures a person's ability to do something given a good training.
iii. Psychological tests: - Psychological tests may measure a variety of characteristics such as an applicant's skill in dealing with other people, ambition and motivation or emotional stability. They usually consist of questionnaires asking respondents to state their interest in or preference for jobs, leisure activities etc.
Proficiency Tests: Proficiency tests are the most closely related test to an assessor's objectives, because they measure ability to do the work involved
iv. Medical Tests: - Medical tests are carried out to determine the physical fitness of the applicant and whether he has any hidden diseases. Candidates who might have contagious diseases will be rejected.
Interview is a conversation or verbal interaction between two or more people for a particular purpose. Interviewing is a crucial part of the selection process because it gives the organization an opportunity to assess the applicant directly, and it gives the applicant an opportunity to learn more about the organization and whether he or she wants the job
Objectives of Interview
- It gives the employer an opportunity to obtain information about each applicant and to assess his suitability for the job.
- It enables the employer to cross-check the applicant's original documents or educational certificates.
- It enables the employer to have a critical view of the physical appearance of the applicant
- It also gives him an opportunity to determine the applicant's level of intelligence.
- It provides the applicant an opportunity to know more about the organization, the job and the employees of the organization.
References (Background Investigations)
References provide further confidential information about the prospective employee. Prospective candidates are normally asked to submit references who can be contacted when the need arises. Such references include: schools, colleges, universities, former employers (if any) and relatives. The use of reference compels employees to be honest in supplying information about themselves to an organization. References are brief statements about a candidate made by a third party usually the candidate's superior. These statements are used to confirm information supplied by applicants on application forms.
This is the stage where the new employee is placed on the job. He is assigned to an officer and a superior if he is a clerical worker. It is the responsibility of the superior to give the new employee in-service training where necessary and to provide a schedule of duties.
This may be conducted by the personnel manager and it is the process of orientating the selected applicant into his or her new working environment. It takes the form of introducing new employees to existing staff, visits to the plants and other departments, informing him/her about his duties and responsibilities, as well as the policies and objective of the organization. Induction simply means the introduction of a new employee into his or her job or organization
The post recruitment functions of the personnel manager includes transfers, promotions, demotions and termination.
This occurs when employees have been assigned to another branch, department or to another job involving similar responsibilities, skills and remuneration. The transfer could be from one department to another or one station to another. It may be used to correct an error made during the recruitment process.
Reasons for transfers
- The close down of a branch or department may call for a transfer
- Self request by an employee because of his inability to relate well with co-workers of lack of interest in his job or for purposes of frequent medical check-ups due to sickness.
- Transfer may be used as a punishment device
- A person may also be transferred to take up a new appointment
- A fall in the level of production may also necessitate the re-allocation of employees.
Promotion may be defined as the transfer of an employee from one job to another which involves a greater responsibility and usually a higher reward (pay). In other words, it involves a change in status and usually means appointment to a higher grade with greater and more challenging responsibilities. It is an important aspect of management because it is through promotion that a worker obtains satisfaction and shows his desire to advance and develop.
Many large organizations have a policy of filling senior job positions from within the organization. Others also believe in recruitment from outside the organization. Every organization should however come out with a clear policy on promotion so that employees know in advance the criteria to be used in promotion. Normally promotion is based on the following:
- Seniority (length of service)
- Practical ability (skill)
- General attitude and loyalty
- Education and qualification
- Personality or character
Advantages of Promotion
- Promotion improves morale and motivation of employees in the organization.
- Promotion helps reduce labour-turn over in an organization
- It is seen as a reward for dedicated service, hard work, loyalty and obedience to rules and regulations of the organization.
- Fair promotions create a feeling of content among employees and retain their interest in the company.
- It helps employees to put in extra effort to help attain organizational objectives
- It improves the earning power and status of the employees
Problems of promotion
- more qualified employees may be ignored or overlooked
- an employee adjudged competent when promoted may perform below expectation
- qualified personnel when overlooked in time of promotion may feel dejected and unrecognized. This may affect his morale and for that matter his overall performance.
- A worker who has a special interest in his/her job e.g. cashier in a financial institution may refuse to accept promotion.
It is the reduction in rank of an employee or the transfer of an employee to jobs with lower ranks backed by a reduction in salary. It therefore refers to a decrease in status as well as remuneration.
Reasons For Demotion:
- Failure on the part of employees to live up to expectation (poor performance)
- Serious crime against the organization example; pilfering, fraud, leaking, organizational secrets to the advantage of competitors etc.
- It can also be based on indiscipline or disloyal to rules of the organization
- Serious or unfavourable business conditions may necessitate lay-offs and termination; some employees may accept demotion as an alternative.
Problems of Demotion
- it leads to reduction employee status and remuneration
- it also creates morale problems for affected employees.
- Some affected employees may resign, leading to labour turn over and its associated problems,
iv. LABOUR TURN OVER
Labour turn over refers to the rate at which employees are leaving the business organization at a particular time and their replacement. It therefore describes the movement of workers into and out of employment of an organization in a in a given period of time
It is calculated by:
L x 100
L = Those leaving during the year
A = Average number employed during the year or
Average number on the company's payroll within that period.
A high (index) labour turnover means more people leave the employment because of low morale. It could also mean a high proportion of the employment of women or scholars who have returned to college to pursue academic careers, death, pension etc.
Causes of Labour Turn Over
There are various causes of labour turn-over. Among them include the following:
- Discontentment (dissatisfaction) among employees as a result of poor working conditions,
- Lack of promotional avenues
- Poor leadership style
- Very long hours of work with little time for rest
- Unfairness and improper administration of disciplinary measures
- Poor wages and salaries
- Lack of opportunities for self advancement
- Boredom, wrong job assignment or lack of job satisfaction
- Lack of opportunity to express opinions to management and to participate in decision making.
Problems of Labour Turn Over
- It brings about extra-expenditure, that is hiring and training of new employees
- Production rate is decreased and this tend to affect the volume of ales and profit margins
- It leads to overtime payment for extra man-hours spent on the job
- The money spent on training developing employees who have left goes down the drain
- There could be low morale for the remaining employees due to loss of old work mates and friends
- It takes a lot of time for workers to properly settle or fit into the system
Solution To the causes of labour turnover
A study or research should be conducted to identify which factors have been the cause of dissatisfaction and that have been responsible for the labour turnover. The following suggested solutions could be applied by individual companies.
i. Companies should provide attractive wages and salaries to ensure that employees are above to meet their basic necessities.
ii. There should also be improvement in the working conditions of workers. Protective clothes, canteen, transport, housing and medical facilities should be provided to cater for the welfare of workers.
iii. There should also be opportunities for growth and development for employees, e.g study leave, provision of library facilities, promotion etc.
iv. Joint consultation must be instituted to enable representatives of workers and employers meet to identify common problems and find solutions to them.
2.4 Termination of Employment
Every employer has the option to terminate the employment of his employees but only on the grounds that certain conditions are meet e.g. giving of appropriate notice and payment of entitlements. Employees also have an option to resign from their present job and look for another provided they also satisfy certain conditions e.g. appropriate notice and proper handing over. There are ways by which a contract of employment may be terminated and they include: redundancy, dismissals, retirement and resignation.
This is a situation where employees are asked to leave their employment because of lack of work. that is, the organization does not need their service any longer. Therefore when there is reduction in production and the workers are greater than what the organization needs, some are asked to leave employment.
Dismissal is an act of sending an employee away form his employment because be is not qualified, undisciplined or is dishonest in his work. It is the permanent withdrawal of an employee from the services of a company.
It is the act of retiring or having stopped working after attaining a certain age. The age may either be contained in the company's policy or decision taken by the individual himself.
Resignation usually comes from employees. Resignation is the indication by the employee that he has ceased to be in the employment of the employer.
2.4.5 Lay Off
This is a temporary withdrawal of employees from work due to shortage of raw materials, low demand for the companies' products or services, or financial problems. These employees may be called back when the need arises. When conditions improve and some of the aid-off workers are invited to come back to work, it is known as recall.
2.5 EDUCATION, TRAINING AND DEVELOPMENT
This is usually intended to mean basic instructions in knowledge and skills designed to enable people make the most life in general. It is thus a process of training and instructing people in schools, colleges, Polytechnics, universities etc. which is designed to give knowledge and development of skills. At the end of the course, a certificate is given to those who pass their final examination. Education is therefore more personal and broadly based.
This suggests a broader view of knowledge and skills acquisition rather than training. It is less job-oriented and career-oriented. It sees employees as adaptable resources and thus concerned with preparing individuals with skills and experience to fill challenging higher level positions in the organization.
Training is job oriented rather than personal. Training involves a series of actions aimed at preparing an individual with skills to do a particular job. It may be defined as “the systematic development of the attitudes, knowledge and skill patterns required by an individual in order to perform adequately a given task or job”
Methods of Training
The main methods of training include:
i. Apprenticeship Training
This is a method of training where the apprentice under studies his master for a number of years, learning all the basic skills involved in the profession. This type of training is given to young people who have either completed school or who have not been to school. This type of training is common and popular in professions like tailoring, dressmaking, carpentry, driving and masonry. The apprentice pays a certain amount to his master and he is not paid during the period of his/her training but given allowance as and when necessary by his/her master.
ii. Supervisory Training
This type of training is give to employees who have been appointed supervisors or foremen. Supervisory training involves the teaching of supervisors or foremen the skill of getting work done through others. It is therefore meant to improve on their leadership skills and qualities. It takes place in an institute in the form of seminars or workshops with discussions on leadership, morale, development, directing, and health and safety measures.
iii. Executive Training
Personnel in middle management and top management positions are covered under this type of training. It is a training method designed for managing directors, general managers and finance managers (accountants). Seminars, workshops and conferences are organized by the universities and other professional bodies such as institute of Chartered Accountants (ICA), Management Development and Productivity Institute (MDPI) and Ghana Institute of Management and Public Administration (GIMPA). The training covers areas such as labour relations, financial management, business management and office management.
iv. On-The Job Training
Under this method of training, trainees are put directly on the job and taught how to do it under close supervision. To make such training easy, the job is usually broken into different parts and each part taught before the trainee is made to perform the whole. This type of training is suitable for routine work which takes relatively short time to learn.
v. Induction Training
This main aim of induction training is to introduce new employees of an undertaking to its practices, policies and purposes. It may also include visits to the plant and other departments of the organization.
Benefits of Training
Training has many benefits among which include:
- It helps workers to improve upon their existing skills and acquire new ones. It therefore improves their efficiency and increase output.
- Training improves employee morale because of the satisfaction employees derive from doing their jobs very well.
- A company with good training programme can attract desired and qualified personnel
- Training provides for succession. It helps to prepare employees for higher jobs or promotion.
- Training ensures greater accuracy of work. It ensures more efficient handling of machines and equipment by well trained staff and thus reducing cost of maintenance and accidents.
- It helps organizations to adapt to changes more effectively.
2.6 Performance Appraisal
Employee appraisal is an assessment of an employee's job performance over is period with a view to rewarding him or improving, his efficiency by correcting its short-comings.
The general purpose of any staff assessment system is to improve the efficiency of the organization by ensuring that the individuals within it are performing to the best of their ability and developing their potential for improvement. It is therefore used to review performance, to review potential and finally to review salaries. Employees' appraisal is therefore important in determining wages and salaries of employees and also which employee merits promotion.
2.6.1 Reasons for Performance Appraisal
- To review and if necessary amend the details of subordinate's work and job description.
- To assess subordinates potential and possibilities for some other work
- To assess and see whether the subordinate merits further promotion
- To identify subordinates deficiencies or to help recognize them and to discover to what extent training is needed to improve predominance.
- It helps ensure job satisfaction since the employee is aware that his boss is interested in his work.
- To discuss work problems and help find solutions to them.
- To identify an individual's current level of job performance.
- To identify employees strengths and weakness
- To identify training and development
2.6.2 Uses of performance appraisal results (Date)
i. Appraisal of employees provides information which enables management to decide whether to promote, demote, lay off or transfer an employee.
ii. Appraisal results are used to establish the goals and objectives of the training programme or to assess training needs
iii. Appraisal results are also used to determine the size and frequency of pay increases to the ratings assigned to the employee.
iv. They provide the means through which management can improve performance of an employee of his job.
v. Information from appraisal results to used to update the records of an employee. This facilitates the writing of confidential reports on employees during and after their stay with the organization.
vi. The appraisal results also help to compare and contrast the differences of employees.
2.6.3 Problems of Appraisal
- The various methods can suffer from subjectivity or bias. Quite often, personal prejudice favouritism and personal relationship plays a major role in the final results.
- The exercise is very expensive and time consuming especially where consultants are used in the evaluation exercise.
- Concepts and terminologies used in the exercise may mean different to appraisers
- Sometimes standards are not set with which performance could be compared and assessed by appraisers.
- Most often appraisers are not given the necessary training and lack of knowledge in the job may render their results unreliable.
2.6.4 Methods of Appraising Employees
i. Graphic rating scale
A common approach to assessing performance is to use a numerical or customers while also performing a self assessment. This is known as 360° appraisal.
ii. Overall Assessment
This is the simplest method. It requires the manager to write in narrative form judgments about the appraisee in his own words, possibly touching on the strength and weakness of the employee, leadership ability, technical effectiveness, achievements and failures. The main problem here is that, the result depends on the writer's own impressions and personal relationship and this can render the results unreliable.
iii. Grading (Graphic Rating Scales)
It is an evaluation technique where the appraiser is given a set of qualities and characteristics and asked to rate each of the employees on each of these qualities and characteristics. Such areas or characteristics examined included; quality of work, punctuality, cooperativeness, dependability, initiative, job knowledge, self discipline etc. The performance of the person is then given a rating such as outstanding, good, satisfactory, fair, unsatisfactory or poor or he is rated on a scale of 1.10 or A,B,C, D.
iv. Results-Oriented Schemes (management by objective (MBO); This method set out to review performance against specific targets and standards of performance agreed in advance by manager and subordinate together. At the end of the period, the appraisers' performance is measured against the targets or standard set against.
Other methods that are being used as performance appraisal process are:
- Behavioral Observation Scale
- Behaviorally Anchored Rating Scale
2.7 WAGES AND SALARIES ADMINISTRATION
Wages and salaries relate to payment for work done over one year released or paid to the
worker monthly. Wages are payment for a day's or week's work done released to him on that day or at the weekend.
The nature and type of work determines the method of payment of wages and salaries. The following are the main methods used:
2.7.1 Time Rates:
Under the time rate system, an employee is paid according to the number of hours spent on the job. This is the common method of payment in most Ghanaian companies. Employees are made to work for a standardized eight hours a day. A fixed salary is calculated and paid at the end of a stated period.
2.7.2 Piece Rate:
Unlike time rate, here an employee is paid according to the total quantity of items produced. Here, the output of the employee rather than the amount of time spent on the job is of paramount importance. The output of the employee must be easy to measure and the rate per unit or piece must be established.
An incentive is some form of financial encouragement given to an employee to enable him or induce him to increase his level of productivity. It is therefore a sum of money added to the employee's basic rate or salary in order of motivate him. It is used by management as motivation factor and takes the form of:
2.7.4 Bonus Schemes:
Bonus is an incentive payment and it is paid in addition to the normal wages and salaries of employees. Bonus may be paid for hard work, for attendance to work respect, results achieved or any other positive attributes displayed at the work place.
These are used to reward salesman. The commission rate is determined and the number of units sold multiplied by the rate. It is used to discourage idleness and laziness on the part of salesmen.
2.7.6 Gains sharing Plans:
This is where the money gained from increased output and above the standard is not directly proportional to the increment in output. The gains are shared between management and employees.
Factors Considered In Formulating Wages and Salaries Level
This personnel manager takes the following into consideration when determining the pay structure of a firm.
i. The cost of Living
This occurs when wages and salaries move in step with the consumer price index. When the cost of living is rising, workers clamour for increase in wage and salaries. The company must reasonably raise its salary level to enable employees cope with the rising prices of goods and services.
ii. Ability to pay
The ability of the organization to pay affects the general level of wages and salaries. It will be a mistake to accept a proposed salary without assessing the ability of the organization to pay. Companies, which make high profits, are able to pay higher wages and salaries than less profitable companies.
iii. Bargaining Power
Wages and salaries are sometimes determined by the bargaining power of the employer and the unions. A high demand by the union may lead to high salary levels.
iv. Differential Abilities of Employees:
Wages and salaries must commensurate performance or output. Hard working employees should therefore be rewarded higher.
In order to attract labour, especially in an industry where labour is scarce, a firm may pay comparatively higher than what is paid by other firms in order to attract labout from competitive firms.
2.8 JOB EVALUATION
Job Evaluation can be defined as the process of placing jobs in order of their relative worth or importance for the purpose of determining wage and salary differentials. It is the calculation of the responsibility in each job taken into consideration the danger involved, training, skill, physical and mental effort so that wages are calculated and paid according to the value of such work. The grades with less responsibility get the lowest wage whilst those with the greatest responsibility get the highest wage. Job evaluation thus performs tow necessary functions. It is the process of determining the relative value of each job to the company. It must also ensure that wages are internally and externally consistent.
The Process of Establishing a Job Evaluation System
- conduct a job analysis
- Prepare Job Description
- Determine the elements of the Job, which are necessary for its effective performance
- Use methods such as rating, point or factor comparison to place jobs in order of their relative worth
- Attach monetary value to the elements of the job.
The outcome of job evaluation is the creation of a structure showing which jobs are more important to the company, which jobs should be paid more than others, and the degree of difference and pay between jobs.
Methods of Job Evaluation:
- Raking Method
This method involves ranking jobs from low to high job requirements. It is suitable for companies with few jobs. The procedure involves obtaining descriptions of all the jobs under consideration and raking them from low to high job requirements or demands.
- Point Method
This method involves conducting a job analysis and preparing job description to determine the elements involved in each job. The elements which include, sill, effort, working conditions and responsibility are awarded with points.
- Factor Comparison Method
This method is used to evaluate white colour jobs. The elements of all the jobs, which include sill, mental effort, physical effort, responsibility and working conditions, are analyzed and recorded. Key or benchmark jobs are selected. The other jobs (elements) are compared with the benchmark jobs on factor-by -factor basis. The comparison will reveal which job stands superior to the other.
Advantages of Job Evaluation
- Job evaluation is used to establish the overall wage and salary structure in an organization.
- The process of conducting a job analysis can help receal difficult working conditions so that they can be removed.
- It forms the basis for providing equal pay for equal work in an organization.
2.9 HEALTH, SAFETY AND WELFARE OF WORKERS
The concern of every industrial organization should be the provision of safe and accident free working conditions for its employees. Thus the Factories, Offices and Shops Act of 1970 which was amended in 1982 (PNDC LAW 66) compels employers by law to be responsible for the making and of certain provisions for safety, health and welfare of employees in factories, offices and shops.
Under the factories, offices and shops act, employers are compelled by law to keep their premises clean, provide good system of ventilation, drainage, sanitation, first aid, washing facilities and drinkable water. The prevision of accident free working environment should therefore be the concern of every industrial complex.
The above health measures are therefore elaborated in the following:
2.9.1 HEALTH MEASURES
The act compels employers to keep their business premises clean, provide for good system of ventilation, sanitation, drainage, lavatories etc. so as to provide for the comfort of employees. The following measures are also adopted under the act to ensure the health of employees.
- Noise and vibration likely to affect the health of employees must be reduced as much as possible.
- First and facilities should also be provided. A first aid box containing first aid requisites must be provided. A trained personnel should be employed to take care of minor ailments, injuries etc.
- Washing facilities and good drinking water should be provided for the use of employees
- The provision of suitable sanitary convenience separate for each sex. The conveniences must be kept clean and if possible toilet rolls and other detergents must be provided.
- The area of operation should be kept under good hygienic conditions. Education on personal and industrial hygiene should be provided.
2.9.2 SAFETY MEASURES
Safety measures include the following
- Provision of protective clothing and appliances to reduce accidents and injuries at the workplace. Employees must be provided with suitable protective clothing, e.g boots, goggles, masks etc.
- Provision of effective fire alarms and proper maintenance of all equipment through cleaning and lubrication. The factory must have adequate means of fighting fire and dealing with other explosions.
- Display of posters on safety and showing of accident prevention films
- Educate employees on safety practices
- Electrical transmissions (generators), convectors, motors and flywheels connected to them must be properly fenced.
- Training facilities should be provided and no woman or person under age should be permitted to operate a delicate and dangerous machine which is likely to cause injury to that person or group of persons.
2.9.3 WELFARE MEASURES
Welfare facilities include incentive and fringe benefits which are added to the employees normal wages and salaries. Welfare facilities include the following.
- The establishment of canteen to provide food for the workers. The food is normally subsidized by the organization.
- Provision of Transport facilities e.g. bus services for the workers. The buses should be provided to send them to and from their place of work.
- Provision of sports facilities e.g football, basketball, volleyball etc.
- Provision of medical facilities e.g, an arrangement could be made with a medical doctor so that employees are treated and the bills sent to the company for payment
- Provision of cash benefits such as loans, annual bonus, pension, social security insurance schemes. Etc.
2.10 INDUSTRIAL RELATIONS
Just as human resource developers make sure employees have proper training, there are groups of employees organized as unions to address and resolve employment-related issues. Unions have been around since the time of the American Revolution (Mondy and Noe, 1996). Those who join unions usually do so for one or both of two reasons— to increase wages and/or to eliminate unfair conditions. Some of the outcomes of union involvement include better medical plans, extended vacation time, and increased wages.1
Today, unions remain a controversial topic. Not only do HR managers deal with union organizations, but they are also responsible for resolving lockout.2
Management should ensure that, there is a cordial relationship between them and the employees so that the stated objectives can e attained as well as the overall success of the organization.