6.1 - Human Resource Planning
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Staff Appraisal and Development
Staff appraisal is a formal and structured process in which an employee’s performance is evaluated, typically at regular intervals such as annually or biannually. This process involves a manager assessing an employee’s contributions, achievements, and areas for improvement against pre-established objectives or performance criteria. Appraisals may include both quantitative metrics (such as sales targets met) and qualitative observations (such as teamwork or leadership potential).
The outcome of an appraisal is not just about judging past performance; it also serves as a foundation for setting future goals and identifying development opportunities. As such, appraisal systems are closely tied to staff development, which involves planning and delivering training or career advancement pathways to help employees grow. This could lead to promotions, changes in job roles, or new responsibilities, all of which aim to better align the employee’s skills and ambitions with the strategic goals of the organization.
Staff appraisal can be a significant motivational tool. When carried out effectively, it satisfies the need for recognition and achievement — key components of motivation theories such as Herzberg’s Two-Factor Theory. Constructive feedback and clearly defined development plans can increase job satisfaction, enhance employee engagement, and improve overall productivity. Conversely, a poorly managed appraisal process may lead to dissatisfaction, mistrust, and reduced morale.
Training
Training refers to the deliberate efforts by an organization to improve an employee’s skills, knowledge, and attitudes required for effective job performance. It plays a crucial role not only in preparing new employees to carry out their duties (through induction training) but also in updating and enhancing the capabilities of existing staff. This ongoing investment in human capital ensures that workers remain competent and competitive, particularly in industries facing rapid technological or procedural changes.
There are several forms of training. On-the-job training involves learning in the actual work environment, often under the supervision of a more experienced colleague or supervisor. It is practical and immediate, enabling the trainee to apply skills in real-time. Off-the-job training, by contrast, occurs away from the normal work setting, often in a classroom or virtual format, and can include workshops, courses, or simulations. Induction training is specific to new hires and focuses on orienting them with company culture, policies, expectations, and procedures.
Training is fundamentally linked to performance and employee retention. A well-trained workforce tends to make fewer errors, shows greater confidence, and is more likely to adapt to organizational changes. Additionally, employees who receive regular training often report higher levels of motivation and loyalty, as they perceive the company to be investing in their growth.
Dismissal
Dismissal refers to the termination of an employee’s contract by the employer, usually due to issues related to the employee’s conduct, capability, or some other substantial reason. It is a disciplinary measure and should follow a fair and transparent process to ensure legality and ethical responsibility. There are various grounds for dismissal, including repeated poor performance, serious misconduct (such as theft or harassment), or a breakdown in trust between employer and employee.
In most jurisdictions, dismissal must be both substantively and procedurally fair. Substantive fairness involves having a legitimate reason for the dismissal, while procedural fairness means following the correct disciplinary procedures. This typically includes issuing warnings, conducting hearings, allowing the employee to present their case, and giving them a chance to improve their behavior or performance if appropriate.
Failure to handle dismissal properly can result in claims of unfair dismissal, which may lead to legal proceedings, compensation payments, and damage to the employer’s reputation. Therefore, it is essential for organizations to have clear disciplinary policies and ensure that managers are trained to apply them consistently and lawfully.
Redundancy
Redundancy occurs when an employee’s job position is eliminated because it is no longer necessary for business operations. Unlike dismissal, redundancy is not based on the employee’s performance or conduct but rather due to external or structural factors affecting the organization. Common causes include business downsizing, technological automation, relocation of operations, or a significant drop in demand for the company’s products or services.
The redundancy process must be handled carefully and with respect to employment law. Employees are generally entitled to notice periods, consultation, and redundancy pay, depending on the length of service and national legislation. Employers are also expected to explore alternatives to redundancy, such as redeployment to other roles within the organization.
While redundancy is sometimes unavoidable, poor handling can lead to negative publicity, reduced morale among remaining staff, and potential legal challenges. Therefore, transparency, empathy, and open communication are vital throughout the redundancy process.
Contracts of Employment
A contract of employment is a legally binding agreement between an employer and an employee that sets out the terms and conditions of employment. This document typically includes details such as the job title, responsibilities, working hours, pay, benefits, holiday entitlement, notice periods, and termination procedures. In some jurisdictions, an employer is legally required to provide this contract in writing, while in others, verbal agreements may be legally binding but less secure.
The purpose of an employment contract is to clarify expectations and obligations for both parties, thus reducing the risk of disputes. It also provides legal protection, as both employee and employer can refer to the contract in case of disagreements or disciplinary action. Contracts may also include restrictive covenants, confidentiality clauses, and provisions related to intellectual property, especially for higher-level roles.
The absence of a formal contract or an unclear agreement can lead to ambiguity, lack of accountability, and potential litigation. Therefore, having a clear, well-drafted employment contract is essential for effective human resource management.
Case Study: Labour Law Flexibility in India
In a move to promote economic growth and business flexibility, India introduced reforms that allow companies employing fewer than 100 workers to close down without prior government approval. This legal change was intended to make it easier for small and medium-sized enterprises (SMEs) to adapt quickly to market conditions and reduce regulatory burdens that had previously slowed down restructuring or downsizing efforts.
From an employer’s perspective, this reform represents increased freedom and agility in decision-making. It enables businesses to control labor costs more effectively, especially during economic downturns or when transitioning to automation and digitalization. However, the implications for workers are significant. Without the safeguard of government oversight, employees in small firms may face sudden job loss with little recourse or compensation.
Critics argue that such flexibility undermines worker security and increases the risk of exploitation. Proponents, on the other hand, claim it will encourage entrepreneurship and improve the overall ease of doing business in India. This case highlights the ongoing tension between labor protection and economic liberalization.
Changing Work Patterns and Practices
The structure of work has evolved significantly due to globalization, technological advances, demographic shifts, and changing social expectations. Traditional models of full-time, permanent employment have given way to more flexible arrangements such as part-time work, temporary contracts, job sharing, and remote working (teleworking). Additionally, the rise of the gig economy and portfolio careers — where individuals engage in multiple roles or short-term projects — reflects a departure from the lifelong employment model.
This shift offers numerous advantages. For employers, flexible working allows better management of labor costs, access to a wider talent pool, and the ability to respond swiftly to changing market demands. For employees, these arrangements can provide better work-life balance, accommodate personal responsibilities, and allow greater autonomy over work schedules.
However, there are trade-offs. Flexible work can lead to job insecurity, lack of career progression, reduced access to benefits, and a sense of isolation, especially in remote work environments. Employers may also face difficulties in managing dispersed teams, maintaining consistent communication, and fostering organizational loyalty.
Handy’s Shamrock Organisation Model
Charles Handy introduced the Shamrock Organisation model to describe how modern businesses are structured to achieve greater flexibility and efficiency. The model envisions the organization as having three key segments, like the three leaves of a shamrock.
The first segment, or "leaf," comprises the core workforce: full-time, permanent staff who are highly skilled, deeply committed, and essential to the company’s strategy and long-term success. These employees typically handle planning, innovation, and decision-making functions.
The second segment includes contractual or outsourced workers, such as external consultants or service providers. These individuals or firms are hired to perform specialized tasks that do not require in-house management, such as IT services, catering, or logistics. This approach allows firms to reduce costs and focus internal resources on strategic operations.
The third segment consists of flexible or part-time workers who are hired on a temporary basis to meet short-term or seasonal demand. This may include casual laborers, freelancers, or agency staff. While they provide adaptability and cost efficiency, over-reliance on this group can lead to challenges in consistency, training, and workplace culture.
The Shamrock model reflects how businesses can remain agile in a rapidly changing world, though it also highlights the growing divide in job security and benefits among different categories of workers.