Expand Your Business An Integrated Support Programme For Growth Oriented Enterprises STRATEGIC HUMAN RESOURCES MANAGEMENT JORDANIAN EDITION Written by Meire Brito Adapted by Harndallah Mubarak 1i%!'i\l?V':x II>(:I?AI'!:V'! !ifC ,V!~II! I~. ~1.1 ~k:r! l:l! International Labour 'MC"*.iW, Organization *;11 (. I.~,IB- I J,I~CI.,~, About Expand Your Business (EYB) EYB stands for Expand Your Business. It is an integrated business training and support programme for small to medium scale enterprises that have growth potential and capacity to create more and better jobs. The vision of the EYE Programme is to assist growth oriented enterprises that have growth potential to develop effective strategies to exploit the growth potential of their enterprises. They are also assisted to strengthen their business functional areas in marketing, human resources and finance. The EYE Programme is targeted towards Growth Oriented Enterprises (GOEs) that have a growth potential, employ between 6 to 100 employees, have basic management systems and have been in operation for at least one year. The EYE Programme is designed to enhance the knowledge and skills of Owners, Executive Directors, General Managers and functional managers in marketing, human resources and finance. The programme is designed to assist the GOEs to anticipate, plan and successfully manage the growth of their enterprises. The EYB is an integrated programme, which involves classroom training, facilitation of business and financial linkages, individual counselling sessions and facilitation of Business Support Groups. The individual counselling sessions assist GOEs to complete their Business Growth Plans. The Business Support Groups provide an opportunity for GOEs to meet and discuss common problems, challenges and solutions, network and receive expert advice from invited resource specialists in identified areas. Acknowledgements This Module has been adapted from the ILO EYB Human Resource Management Manual (ISBN 92-2-1 14169-1) developed by the ILO-SIYBIEYB Regional Project Office, Expand Your Business in Harare, Zimbabwe, 2003. The ILO is thankful to the following organizations and individuals for their valued contribution in the development of this publication: Revision and approval: Roy Matenga, Enterprise Development Expert-Expand Your Business Manager -ILO Regional Project Office, Harare, Zimbabwe. Design and layout: Samih Jaber Editing: Ahmad Mustafa Abdalla and Edwina Anne lssa Review: Victor Kashkoush Provisional Version Copyright O lnternational Labour Organization 2004 Published by JABA -Jordan American Business Association under lisence from the ILO First published 2004 This publication may not be distributed or sold outside Jordan without prior permission of the lnternational Labour Office Publications of the lnternational Labour Office enjoy copyright under Protocol 2 of the Universal Copyright Convention. Nevertheless, short excerpts from them may be reproduced without authorization, on condition that the source is indicated. For rights of reproduction or translation, application should be made to the Publications Bureau (Rights and Permissions), lnternational Labour Office, CH-1211 Geneva 22, Switzerland. The lnternational Labour Office welcomes such applications. 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Stralegic Human Recourses Management Written by: Meire Brito Adapted by: Hamdallah Mubarak JABA Jordan American Business Association, Amman, Jordan, 2004 The Deposit Number at the National Library of Jordan: 20221812004 ISBN 9957-447-08-4 Also available in Arabic: Al-ldarah Al-lstrateegyeh Lelrnawared Al-Bashareye11 (ISBN 9957-447-01-7) The designations employed in ILO publications, which are in conformity with United Nations practice, and the presentation of the material therein, do not imply the expression of any opinion whatsoever on the part of the lnternational Labour Office concerning the legal status of any country, area or territory or of its authorities or concerning the delimitation of its frontiers. The responsibility for opinions expressed in signed articles, studies and other contributions rests solely with their authors, and publication does not constitute an endorsement by the lnternational Labour Office of the opinions expressed in them. Reference to names of firms and commercial products and processes does not imply their endorsement by the lnternational Labour Office, and any failure to mention a particular firm, commercial product or process is not a sign of disapproval. ILO publications can be obtained through major booksellers or ILO local offices in many countries or direct from ILO Regional Office for Arab States, ARENSCO Center, Justinien Street-Kantari, Beirut, Lebanon. Catalogues or lists of new publications are available free of charge from the above address, or by email: [email protected] Visit ILO' website: w.ilo.orqlpublns Printed in The Hashemite Kingdom of Jordan ... Contents of this module EXPAND YOUR BUSINESS (EYB) TRAlNlNG MODULES I PREFACE iii . 1 INTRODUCTION TO HUMAN RESOURCES MANAGEMENT I 2 What is l-hman Resources Management?. ............................................................... Human Resources Management in the Organizational Context. ............................. 3 5 HRM Challenges. .......................................................................................................... Why is Human Resources Management important for the growing business?. ..... 8 Chapter Summary ........................................................................................................ 13 . 2 SE'JTJNGU P A DYNAMIC ORGANIZATIONAL STRUCTURES 15 16 What is a dynamic organizational structure? ............................................................. How can dynamic organizational structures help your business to grow?. ............. 16 Common types of organizational structures for small and medium enterprises. .... 17 22 How to set UP dynamic organizational structures?. ................................................... Chapter Summary ........................................................................................................ 33 . 3 PLANNING AND ANALYSING YOUR HUMAN RESOURCES 35 The link between Human Resources planning and Organizational strategy .......... 36 4. RECRUITMENT AND SELECTION 57 what does recruitment and selection mean7. ............................................................ 58 How can effective recruitment and selection help to expand your business?.. ....... 58 The Recruitment and Selection Process. ................................................................... 58 The Employment Contract. .......................................................................................... 72 hlduction. ....................................................................................................................... 76 Chapter Summary ........................................................................................................ 79 ... Contents of this module What is staff training and development? ...................................................................... 82 How can developing your workforce and yourself help your business to grow? ...... 82 The training and development Process. ....................................................................... 83 . . In-house versus external tralnlng. ................................................................................. 99 Chapter Summary .......................................................................................................... 100 6. ENHANCING YOUR HUMAN RESOURCES PERFORMANCE 103 THROUGH MOTIVATION AND PARTICIPATION what is n-lotivation? ...................................................................................................... 104 How can motivated employees help a growing business?. ...................................... 104 t+XW to motivate Your employees. ............................................................................... 104 Implications of the motivation factors and theories on the entrepreneur or 118 manager. ....................................................................................................................... Chapter Summary ........................................................................................................ 125 . 7 COMMUNICATING WITH YOUR HUMAN RESOURCES 127 what is effective ~m-mTWlication? .............................................................................. 128 How can effective communication help the growth of your business?. ................... 130 t-iow to communicate effectively in the business. ...................................................... 131 Chapter Summary ........................................................................................................ 142 . 8 ESTABLISHING EFFECTIVE WORK RELATIONSHIPS WlTH 143 YOUR HUMAN RESOURCES what are effective work relationships?. ...................................................................... 144 How can effective work relationships help your business to grow?. ........................ 144 Adopting Basic Conditions of Employment and Respecting Employee Rights.. ..... 145 Chapter Summary ........................................................................................................ 159 9. Human Resources Records & Information ... Contents of this module . I 0 FROM STRATEGY TO ACTION: REALIGNING THE HRM 171 PLAN What is a Strategic Human Resources Management plan?. .................................... 172 How can a HRM plan help to manage the growing business better? ...................... 172 How to re-align your HRM plan to match the chosen strategy?. .............................. 173 ACTION PLAN. ............................................................................................................. 199 GLOSSARY OF MANAGEMENT TERMS USED IN THIS MODULE. ..................... 201 REFERENCES. ............................................................................................................. 203 Training Modules Strategic Management Strategic Marketing Strategic Financial Management In this module you will find: Relevant business knowledge and information Read the simple theory and information relevant to the topic of this nodule. 'The exan~ples 011 the case study that follow the theory and information show how that knowledge is applied to mallage a business well. Practical exercises Do the exercises in the nodule and then compare your answers with the suggested answers given at the end of the module to find out how ~nuchy ou have learnt. Action and Growth Plans Fill in and use the action and growth plans. l'his will help you to put your new knowledge into practice. Useful business terms Usefid busi~~estesr ms are pl-illled ill bold itrrlics when they appear for the first time in the moctule. Look up the I I I ~ ~ Io~f t~heIsIe ~te rms ill the text box next to them. Memorise their meanings. lhey are also listed in the annexes section of this module. The symbols You will see the following symbols in the lelt hand margin. 'The symbols indicate the nature of the text contained in the boxes next to them as explained below. @ Next to this symbol, you will find the objectives of the module and its Chapters. - I Next to this symbol, you will find exercises for you to do or questions for you to answer. I ...... ... next to this symbol tells you where to find more information in the other modules or elsewhere, for example: EYB Module: Strategic Financial Management tells you more about how to interpret financial ratios. I The box next to this symbol contains questions for you to answer about your own business. The box next to this symbol tells you something, which is extra important for you :I.,:t: to memorize. For example, the customer is the most important person for your business. I The box next to this symbol provides you with examples on the case study used in this module. It shows how theory and information is applied in the case study. STRATEGIC HUMAN RESOURCES MANAGEMENT PREFACE About the Strategic Human Resources ... Management module Nowadays, the concept of human resource management goes beyond the concept of personnel management, in a sense that HRM strives to manage the human resources requirements of an organisation to best suit the requirements of the organisational strategy. The reason behind this ncw approach is the general consensus that organisational success depends largely on the shared eff'orts of its employees. In other words, this newer HRM approach recognises human resources as the key to the successhl implementation of strategies and, additionally, as the core asset available to achieve sustainable competitive advantage. It is essential that organisations develop practices and techniques that will assist in getting the best out of its employees to effectively implement the strategy. Human resources management provides the best practices and tools that can be applied to the business in order to enhance the quality and commitment of the workforce. The application of these practices and tools are particularly important in a growth-oriented organisation, as a large part of the implementation of the growth strategy depend on the efforts of organizational members. Whom this module is for... This module is for YOU if you are managing a business and are willing and planning to expand it. It is for you if your business is currently employing between 6 and 100 e~nployecsa nd having good market opport~~nitiegso, od liir~nanr esources, and poduct or prodi~ctsw ith a good position in the product life cycle. This Module is for you if you are holding one of the following posts in the business: General ManagerIOwnerlPartner Human Resources Manager This module is for you if you have acquired the basic business management systems in marketing, record keeping, costing, buying, stock control and business planning basics. iii STRATEGIC HUMAN RESOURCES MANAGEMENT Before you read this module, You will benefit more fiom this Module if you first read the EYB Modules: Strategic Mamgenlent Strategic Marlteting Rfanagement ... What you will learn in this module Strategic Human Resources Management INTRODUCTION TO HUMAN RESOURCES MANAGEMENT Human Resources Management plays the important role of aligning human resources with organizational goals by putting in place practices, policies, and systems that honour its people as a source of competitive advantage. It is concerned with a broader set of topics including effective human resource planning, acquisition, ~nanagement,d evelopment, compensation, utilisation and retention. ... What you will learn in this chapter