Human Resource Management 11 Tou 3215

1. Human Resource Management 11Tou 3215 Deus KamunyuMuhwezi Department of Geography, Makerere University, Kampala - Uganda

2. Labour Markets In the recent years, the growth of corporate strategy and human resource management as bodies of ideas has encouraged scholars to focus on the ability of managers of organizations to exercise “strategic choice” over a range of decisions, including employment matters. The implication of this is that employers decisions are not just determined by external market forces and instead employers have a certain amount of freedom to interpret their external environment and choose from a range of possible responses in a search for competitive advantage.

3. Labour Markets • This view deviates from the traditional view by “neoclassical economics” that; competition means that market forces leave individual firms little scope for choice and as a result firms engage a search for lower costs and most efficient methods of production. • This also means that firms operating in the same industry or product market are forced to use:- • the same technologies , • the same types of labour, • give a standard/same pay to their employees • ultimately have the same employment policies

4. Labour Markets • This scholarly position and many others, point at a need to understand how labour market environments might aid or constrain the scope for strategic choice in human resource management (Claydon, 2004) and how this scenario later influences competiveness.

5. Labour markets: understanding key terms • Labour force – All non institutionalized individuals over the age of 18 (Uganda) who are working or looking for work • Employed – Any work for pay during the reporting week or month as an employee, independent professional, or self-employed person or part-time work up a certain number of hours including unpaid family work (number of hours depend on a nation). • Unemployed – not now employed but looking for work (at some point within a specified time), including: waiting for recall from layoff or due to report to work in a specified period of time e.g. 30 days. • Unemployed persons can be job losers (layoffs), leavers (voluntary quits), reentrants (out of the labour force for over specified period but now looking for work, and new entrants (persons looking for a job for the first time)

6. Labour markets: understanding key terms • Labour force participation rate – the number of persons in the labour force divided by the total number of non institutionalized individuals over the age of 18. • Unemployment rate – proportion of the labour force that is unemployed • Separations – Persons leaving employment due to quits, layoffs, retirement, discharges, death, or induction into compulsory national service e.g. Uganda’s Muchaka Muchaka in the 1990’s • Accessions – Persons added to payrolls as new hires or recalls from layoffs

7. Labour markets: understanding key terms • Each country may adopt definitions of terms as enshrined in the laws and regulations governing each country and the above terms and definitions have been adopted from the US Department of Labour

8. Labour Markets: what are they? Think about this - that any one time; • people will be trying to change their job • some will be trying to enter or acquire a new job • some employers will be looking for employees This means that in in principle that in the external labour market, all workers are assumed to be competing for all the jobs all the time and this is not actually the case in reality. ……this can be explained by trying to disaggregate different types of labour markets.

9. Labour Markets: what are they? • ….the term labour markets therefore refers to the myraid of changing influences and activities involving labour demand and supply, which themselves greatly depend on economic conditions (Dyer et, al., 2000) • e.g. numbers and types of employees needed by an organization in a given period of time reflect the relative labour demand • A part-time job as a cafeteria helper or a 30-year progression from a personnel assistant position to vice president of HR are both instances of labour supply

10. Levels of analysis in the labour market • We can further develop an understanding of labour markets by recognizing several levels of analysis, encompassing both; • the external market and • internal labour market • External labour market – refers to the labour market outside of the organization and can either be transnational, national and sectorallabour market (Dennis, 2007). • Internal labour market – based on the idea that sets of rules and conventions form within an organization which act as allocative mechanisms governing the movement of people and pricing of jobs.

11. Levels of analysis in the labour market • Transnational labour market • As a result of economic migration which means people willing to move to find work or better paying jobs. • This has been so in the recent years due to expansion of Multinational Companies (MNCs) in emerging markets world in the world. • MNCs are facing choices in how they staff their overseas units, including the use of expatriate managers and how the use of such managers is common place in the tourism hospitality and tourism industry • Expatriate managers is seen as denoting a rather more strategic use of HR by MNCs. The East Africa as regional economic block has seen a number of people

12. Levels of analysis in the labour market • The East Africa as regional economic block has seen a number of people seeking to move from Kenya particularly to Uganda as a result of lack of skilled managers and supervisors in the hospitality and tourism industry. • Most of these Kenyan hospitality and tourism managers and supervisors are viewed in a positive manner by Ugandan employers. • The current skills shortage in Uganda’s tourism and hospitality industry and the consideration of the fact that the industry is growing at a faster rate means that Uganda cannot do without the Kenyan immigrant managers and supervisors at the moment.

13. Levels of analysis in the labour market • National labour market Governments have a major influence on the national labour market and the manner in which policy is developed with regard to employment and economic issues may affect this labour market. • There are two example approaches that countries like UK (to some extent) & US (Capitalist) and then socialist countries like China and Russia use to regulate employment policies and practices namely; • Social model/approach – seeks much greater regulation to achieve a balance in interests between capital and labour whilst • Anglo-saxon model/approach – rely less on regulation and instead seeks to operate on a free market basis.

14. Levels of analysis in the labour market • Most capitalist countries like United Kingdom however would seek to integrate both approaches with part regulation and part flexibility • Examples of social approach could be for example the establishment of minimum wage act in most European nations and the employee relations act . These sets of regulations limit the operations of businesses and protect the interests of national labour. This approach moves to set standards in areas of pay, dismissal of staff and trade union recognition. • While the Anglo-saxon approach would leave it up the individual employers to design HR policies and regulations that they deem good for competitive operations of their businesses based on labour market forces and avoid policies that they view as rigidities in the labour market.

15. Levels of analysis in the labour market • Sectorallabour market This focuses on the sector e.g. the tourism and hospitality industry. It requires one to answer a question such as: • What kind of industry is the tourism and hospitality industry in Uganda? • It is an industry with a wide variety of organizations like hotels, guesthouses, bed and breakfast, farm houses, holiday parks, restaurants, pubs and cafes, airlines, cruise ships, travel agencies, tour companies etc • It is also wrong to think that the industry can be homogenous e.g. size of companies including small and multinationals. • Despite the emergency of MNCs, the industry is still dominated by small and usually owner managed units consisting of family labour and a small number of helpers. • This means that the industry is better conceptualized as a heterogeneous sector.

16. Levels of analysis in the labour market However, whilst there is greater heterogeneity in types and sizes of organizations, there certain recurring features in large parts of the sector such as; • Large number of individual units of varying size and many different types are located throughout the whole of country • Many units now operate beyond 12 hours a day, 7 days a week and 365 days a year • There are high fixed costs, a fixed rate of supply, but fluctuating, seasonal and often unpredicted demand. • It is both a production and a service industry • There is a wide variety of customers seeking to satisfy a variety of needs and expectations e.g. leisure, business, conference etc

17. Levels of analysis in the labour market • Services are supplied direct to the customer on the premises and the customer usually leaves with no tangible product • Managers are expected to demonstrate proficiency in technical and craft skills as well as in management areas • Many different skills are required but there are relatively large number of semi and unskilled staff. • The majority of staff are low paid • Staff are often expected to work long and unsociable hours • There is a large proportion of female, part-time, casual, student and migrant labour • Generally trade union membership is low • There is high labour mobility within the idustry and a high turnover of staff joining and leaving the industry

18. Levels of analysis in the labour market • The industry is labour intensive

19. Factors that influence labour-force participation of individuals Approximately more than 30 percent of people over the age 18 years are labor force participants in Uganda and this on the increase with increase in welfare of the population and trends in HIV/AIDS. The factors that influence the trend of labour force participation of individuals include; • Changes in the makeup of the population -

20. Recruitment and Selection Definitions: • Recruitment is the first part of the process of filling a vacancy which involves the examination of the vacancy, the consideration of sources of suitable candidates, making contact with those candidates and attracting applications from them. • Selection is the stage which involves assessing the candidates by various means and making a choice followed by an offer of employment.

21. Recruitment and Selection Vacancies can occur due to: • New or increased activity resulting into a job specification that requires a new employee • Replacement for people who have left the company or as the final event in a chain of transfers and promotions following a reorganization.

22. Recruitment and Selection These cases result into considerations such as: • The possibility of filling the vacancy within the company • Whether the vacancy can be filled by another kind of employee e.g. a school leaver or a part-time worker • The job and personnel specifications may need to be revised

23. Recruitment and Selection Sources of recruits can be; • Internal – filling the vacancy from inside the firm or • External – attracting applications from external source Advantages of internal sources • Better motivation of employees because their capabilities are considered and opportunities offered for promotion. • Better utilization of employees because the company can often make better use of their abilities in a different job.

24. Recruitment and Selection • It is more reliable than external recruitment because a present employee is known more thoroughly than an external candidate. • A present employee is more likely to stay with the company than an external candidate. • Internal recruitment is quicker and cheaper than external

25. Recruitment and Selection External sources • Many organizations fill vacancies externally. Even when an internal candidate is transferred or promoted, the final result is usually a vacancy elsewhere in the company which has to be filled from outside. Disadvantages of external sourcing; • It is time consuming • It is expensive since it involving attracting applications

26. Recruitment and Selection • It is uncertain in a way that a candidate with abilities that fits the job description may not be found. Note: The above disadvantages can however be reduced if forethought and planning is devised.

27. Recruitment and Selection External sources can be divided into two classes: (i) Those that are comparatively inexpensive but offer a limited choice – examples of these include • Unsolicited applications • Job centers • Direct links with skills and colleges

28. Recruitment and Selection (ii) Those that are comparatively expensive but give an employer access to a wider range of candidates. Examples are • Using advertising • Using private agencies

29. Recruitment and Selection • Good skilled employees are scarce to find even when there is high unemployment. • Employers in such circumstances may have no choice but to use expensive means of recruitment. • Unskilled workers are easy to get using inexpensive methods but the challenge is with selecting a suitable candidate from among a very large number of applicants.

30. Recruitment and Selection Colleges and agencies • Universities, colleges and schools – are also sources of employees but good candidates are usually available from these sources only at one time of the year. • There is also an important need for firms to choose a good time of the year to recruit and train school leavers and ready them for employment.

31. Recruitment and Selection • Government agencies – these include careers service of the Department of Employment of government and it can be either free of charge or may cost very little. • The choice offered by this method of recruitment service is limited and consequently many types of employees prefer to seek jobs by other methods and they do not register with the appropriate government agency.

32. Recruitment and Selection • Private agencies – these are organizations run as commercial enterprises for supplying employers with candidates for jobs. They are of two types; • Office staff employment agencies – these deal with clerical, typing, office machine operator, cleaners, bell boys etc vacancies.

33. Recruitment and Selection • The employer normally informs the agency of the vacancy • The agency submits any suitable candidates on their register • The agency is then paid a fee if the employer chooses to engage the candidate. • The fee is may be refunded if the employee chooses to leave before a specified period of time. • There is usually no fee charged on the candidate • The candidate may also choose to register with as many agencies as he/she wishes. • Unless the agency takes care to submit reasonable candidates for the vacancy, this method can also be very expensive because of the time taken to interview, to test and to process their applications.

34. Recruitment and Selection • Selection agencies for senior staff – these normally undertake complete recruitment process and first stages for managerial and professional vacancies. The agency carries out the following; • The agency analyses the job • Prepares job and personnel specifications • Advertises • Sends out application forms • Interviews selected candidates and sometimes selects them also

35. Recruitment and Selection • The employer selects a list of shortlisted candidates including the career and qualifications of each • The employer then makes the final choice • This method is usually expensive because the employer pays a substantial amount of fees whether or not a suitable candidate has been found • Disadvantages of agencies • It is always impossible for an outside body to understand in a short time the kind of a person that will fit in the present management of the company • It is very hard for the agency to carry out a follow up in order to validate their recommendation

36. Recruitment and Selection Headhunting It is also referred to as “executive search”. • It is a method of recruitment whose advocates argue that the best applicants of a vacancy are actually those that do not respond to the advertisements or even look for new jobs in other ways. They argue that most people who are satisfied in their current jobs do not think of moving else where.

37. Recruitment and Selection Process • On receipt of a commission, the headhunter begins to search for potential candidates • In competing businesses (possibly their company brochures, reports etc) • In the membership lists of professional bodies, trade year books, newspapers, magazine report that mention successful managers in the relevant industry. • Through confidential headhunting networks.

38. Recruitment and Selection • Selected individuals are then approached discreetly • Followed by the discussion regarding the job and remuneration • The headhunter then introduces the candidates to the client firm

39. Recruitment and Selection Advantages of headhunting • Headhunters should be knowledgeable of the salary levels