Human Capital Function Study Guide

Human Capital Function (HCF) / Human Resources Study Guide

• The HCF is responsible for personnel sourcing and hiring, selection, placement, induction, skills development, benefits administration, and compliance with government regulations.
• The main task of HCF is to manage human resources to maximize their potential and help the business achieve its mission.

Key Activities of Human Capital Function

• There are 8 main activities, distinct from the selection process:
  • Manpower Planning
  • Recruiting
  • Selection
  • Placement of Staff
  • Induction of Staff
  • Training of Staff
  • Evaluation (Performance Appraisal)
  • Retention

Detailed Breakdown of Activities:

Manpower Planning

• Purpose: Determine how many employees are needed, what skills they need, and when they are needed.
• Techniques:
  • Workload Analysis: Determines the number of people required based on the amount of work.
  • Job Analysis: Gathers all relevant information about job tasks to make decisions.
  • Job Description: Summarizes duties, responsibilities, and level of authority of the job.
  • Job Specification: Lists the minimum acceptable human requirements (e.g., experience, education).

Recruiting

• Purpose: Attract job applicants with the necessary skills.
• Sources/Methods:
  • Internal: Promotions or transfers within the business.
  • External: Hiring from outside sources (e.g., advertisements, schools, agencies).
• Techniques:
  • Internal: Job postings, skills inventories, recommendations.
  • External: Advertisements, schools, employment agencies, referrals.

Selection

• Purpose: Screen applicants and choose the most suitable candidate.
• Steps:
  • Receipt of Application Forms and CVs: Collect and check documentation.
  • Initial Screening: Identify and notify unsuitable applicants.
  • CV Evaluation: Rank applicants based on a set scoring system.
  • References and Background Checks: Verify information and communicate with referees.
  • Interviewing: Assess suitability and fit for the organization.
  • Tests and Examinations: Ability/trade tests, psychometric tests, work sample tests, medical examinations.
  • Letter of Appointment: Offer the position to the chosen candidate.
  • Employment Contracts: Agree and sign a legally binding contract.

Placement of Staff

• Purpose: Match individuals' abilities with job requirements.
• Example: Assigning the best teacher to a problematic Grade 12 math class.

Induction of Staff

• Purpose: Help new employees learn business practices and integrate into the workgroup.
• Topics Covered: Company policies, expectations, introductions, and mentorship.

Training of Staff

• Purpose: Improve employee performance and efficiency.
• Steps:
  • Analyze Business Operations: Identify problems and future skill needs.
  • Job Analysis: Determine skills required.
  • Performance Analysis: Identify training needs.
  • Develop Training Objectives: Set SMARTER goals.
  • Develop Training Programme: Lessons, lectures, demonstrations.
  • Train Staff: On-the-job, off-the-job, apprenticeships, workshops, job rotation, mentorships.
  • Evaluate Training Results: Compare performance with objectives.

Evaluation (Performance Appraisal)

• Purpose: Assess employee performance and provide feedback.

Retention

• Purpose: Retain talented employees and reduce turnover.
• Remuneration (Salary/Wage):
  • Job Evaluation: Determines remuneration based on job importance.
  • Performance Evaluation: Adjusts remuneration based on individual performance.
• Types of Remuneration: Salary, performance-based pay, wages, profit-sharing schemes.
• Benefits: Pension, medical aid, housing allowance, company car, education allowances, etc.
• Tax: Fringe benefits are taxable as part of the salary package.
• Salary Structures:
  • Basic Cost Plus Benefits: Separate basic salary and benefits.
  • Cost to Company: Total package includes all benefits.