CHAPTER 6 It is important to know what the business plan’s purpose is:

INTRODUCTION TO BUSINESS IMPLEMENTATION for whom it is being written, and what would be the coverage
I. A VERY CLEAR PURPOSE of the business plan
THE PURPOSE MUST BE COMPELLING ENOUGH TO MOTIVATE
THE ENTREPRENEUR Purposes of a business plan:
Entice partners, investors, and bankers to fund a business
PERSONAL PURPOSE = PERSONAL MISSION venture.
OR Communicate what the enterprise is all about, what market it
ENTERPRISE MISSION STATEMENT wants to serve.
Show what financial returns it could muster.
I. A VERY CLEAR PURPOSE
A VERY COMPELLING VISION The business plan should contain important information:

a very exciting business concept business itself

offer something new, Organizer
something appealing, Management
something different that says, “Take notice, I’m arriving with technical people
a bang!” financial structure
present a winning business concept that manifests market potential
tremendous future possibilities. target market
projected sales
Expenses profits
THE JOLLIBEE BUSINESS CONCEPT probable risks

Filipino dishes The business plan should contain an executive summary:

“Langhap Sarap”
“You can savor its good taste from its great aroma” 1. The organizer and the key people behind the
Child friendly name and an endearing mascot business
2. The market being targeted
INITIAL VISION: Outgun McDonald’s 3. The products or services to be offered
NEXT VISION: Totally blanket the country 4. How the business will be operated and organized
NEXT VISION: global presence 5. The investment capital required
III. NOT BY ANY OTHER CASE 6. The technology
The entrepreneur must choose a very fitting name for the 7. The capital structure of the business;
enterprise. 8. The operating budget, financial projections, and ROI
The company name must: prospects
Identify the company very well, 9. The risks in the business
Communicates what the company is all about and what its
products are all about, and The CONCLUDING PORTION of the business plan should
Project its much desired image. highlight the key messages for the intended readers of the
plan.
IV. A COMPANY OF ANGELS
Partners who are well-meaning and like-minded. For the investors, they should be given “fearless forecasts” on
expected profits, dividends, and market values.
Angel Investors
-Provide capital to entrepreneurs For financial institutions and other financiers, the financial
statements must be synthesized in order to capture both the
Angel Industrial Partners upside and downside.
-People who can contribute their expertise, experience,
technology, contacts, and good character that will enable the For government readers, the business plan should provide
enterprise to succeed. compliance statements with all the laws and regulations
provisions.
V. A VERY GOOD BUSINESS PLAN
chart the course of the business properly VI. ORGANIZING AND STRUCTURING THE ENTERPRISE
Business Plan - must be able to estimate capital required
focus the efforts of the entrepreneur. Capital Required - would be determined by the investment of
assets of the enterprise
These assets are composed of the following: A bank certificate of deposit on the money distribution of the
• current assets or short-lived assets partners
• fixed assets or long-lived assets
• other assets The approval for its partnership name from the Department
of Trade and Industry
Capital structure of the enterprise - the way the financial
package is designed Register the files in:
Securities and Exchange Commission (SEC)
Sole proprietorship SSS
- simplest and easiest enterprise to organize BIR
- owner has sole control over the enterprise Other government instrumentalities
- no distinction between the owner and the enterprise
Corporation
Secure a mayor’s permit formed or incorporated by at least 5 to 15 persons. According
to the Philippine law, the majority of the incorporators must
The following are the clearances that must be obtained in be residents of the Philippines.
order to get the permit:
• Barangay clearance Four types of corporations:
• Fire safety clearance
• Certificate of electrical inspection Stock Corporation
• Certificate of occupancy
• Department of Trade and Industry (DTI) certificate Non-Stock Non-Profit Corporation
• Lease contract (if space is leased)
• Locational clearance Close Corporation

There may be additional requirements Corporation Sole

It is the responsibility of any enterprise to register the

business with the Bureau of Internal Revenue (BIR) for 1. Stock Corporation – issues capital stocks divided into
taxation and official receipts. shares The corporation is authorized to raise a capital, at least
25% of the authorized capital must be subscribed and paid.
For sole proprietorship, the tax identification number (TIN) of The rest 75% will comprise of unpaid capital.
the entrepreneur serves as the enterprise TIN.
2. Non-Stock Non-Profit Corporation – organized to carry out
Partnership a purpose or purposes other than generating profits for
- two or more persons bind themselves into a contract to investigators.
contribute money, property and expertise in a venture with
the intention of dividing profits 3. Close Corporation – has Articles of Incorporation that limit
- vested with its own legal personality and is separate from its the ownership of issued stocks to at most 20 persons.
individual members
Two types of partnerships based on the liability of the 4. Corporation Sole – a special form of corporation allowed by
partner: law.
A Merry Band of Men and Women
General Partnership – composed of partners who are liable
individually and collectively to all those who have claims
against them. The entrepreneur must meticulously screen and hire men and
women who foster the cause and share the commitment of
Limited Partnership – consists of partners who have limited the enterprise.
liabilities while others in the partnership have unlimited Good character and competence are two major criteria
liabilities. If the team is not fully equipped technically and managerially,
the organization should allow the people to learn fast about:
Customers
Note: In order to form a partnership, a binding contract must Operations
be signed by all of the partners. They should decide on a Competition
partnership name and craft their Articles of Partnership. Financing needs
These Articles of Partnership must contain: Teamwork

CHAPTER 7
file:///C:/Users/Marissa/Downloads/chapter-7%20(2).pdf The income statement shows the revenue and other income,
expenses, and net income for the business covering a period
of time, usually one year.
Chapter 7: Quantifying the Business Plan Four different profit measures are found in most income
Financial Analysis statements. They are the following:
refers to the process of interpreting the past, present, and Gross profit
future financial condition of a firm. =(sales – cost of good sold)
In making a financial analysis, the following are basic
requirements: Operating profit
Financial statements =(Gross profit – operating expenses)
Break-even analysis
Financial ratio analysis
Profit before tax
Financial statements are the main source of financial =(Operating profit + other income – interest
information for major investment decisions. expenses on borrowed funds)
Financial statements summarize what is going to happen to
the business if the plans are carried out well. Net profit
=(Profit before tax – tax liability)
Statement of Changes in Financial Position
Major Classes of Financial Statements that Provide Major Is designed to explain the financial changes that occur in a
Financial Data company from one accounting period to the next.
Balance Sheet
Gives a financial profile of a business at any given point, Break-even analysis
showing its assets, liabilities, and net worth. It is a means to determine at what point in a business activity
The balance sheet shows at a glance the financial health of a the total revenue equals expenses.
firm.
It shows what the corporation owns (assets), what it owes Break-even analysis is used to determine the following
(liabilities) and what its net worth is (equity). information which are useful to the BO:
Sales in pesos for a period, resulting on a zero net income
Components of a Balance Sheet Sales in pesos for a period, resulting in a reasonably
Assets calculated (and desired) net income
In general, assets mean anything of monetary value that the Sales in pesos, resulting in maximum net income for capacity
corporation owns and uses in its business. available.
Assets are classified into: Calculating the break-even point
Calculating the break-even point in units
Current Assets- these are assets that can be converted into BEPU = F/P – V
cash , sold or consumed within a reasonable period of time, Calculating the break-even point in pesos
typically a year. This include cash, investments in marketable BEPP = F/1 – V/P
securities, accounts receivable, inventories and supplies.

Fixed Assets- these are tangible assets used in the business

that are of a permanent or relatively fixed nature such as WHERE:
land, buildings, machinery and equipment. P = price per unit
Liabilities F = fixed cost
Are debts or claims against the corporate assets by creditors. V = variable cost per unit
Example
The two categories of liabilities are: Given:
Current liabilities- these are debts that fall due within a year Price per unit cost of product = Php 50,000.00
such as accounts payable, promissory notes payable and fixed cost = Php 3,500,000.00
accrued expenses/taxes. variable cost = Php 450,000.00
units sold = 120
Non-current liabilities- these are obligations of the company variable cost per unit = Php 3,750.00
that are due in more than one year from the reporting date. Financial Ratio Analysis
Stockholders’ Equity Financial ratios are used to spot trends (good or bad), get a
Is the residual interest in the assets of the company after better way of handling cash, and forecast the effect of
deducting all liabilities. operations on profitability.
Income Statement Financial ratios may be classified as follows:
Liquidity ratios
Activity ratios Defines the precise relationships between the different
Profitability ratios departments, divisions, and sections of the enterprise.
Leverage ratios Stipulates the terms of reference between the enterprise and
Liquidity ratios the organizational network of subcontractors, franchisees,
Reveals the firm’s ability to pay debts as they become due. affiliates, or strategic allies.
The Nine Critical Sup-Processes in the Transformation Process
Current ratio is used to measure the ability of the firm to Technology Application & Utilization
meet the current debt. Responsibilities of the managers and the technicians
Current ratio = current assets/current liabilities To understand how the technology works
To master how it is properly utilized
Quick ratio is also used to measure a firm’s ability to pays its
debt on time.
Quick ratio = current assets – inventory/ current liabilities
Technology Application & Utilization
Activity ratios Technology contracts with the suppliers are no longer needed
Also referred to turnover ratios, activity ratios provide a if the technology being applied and utilized is common and
glimpse of how effectively the company is using its assets. known to many.
Operating Work Flow
Accounts receivable turnover is a type of activity ratio that Follows the rationale of the technology being adopted and
relates accounts receivable to sales. used
Accounts receivable turnover = total yearly sales/outstanding Step by step process
accounts receivable at a year end Sourcing and storing the input
Delivery of output to the customers
Average collection period = accounts receivables/ daily sales Guiding Principles of OWF
The OWF must be very effective in terms of
Daily sales = annual sales/ 360 days a. Time – long waiting times, lag times, down times,
and wasted times should be avoided; a little distance
CHAPTER 8 between the steps of the sequential work processes.
Managing the Operations Function b. Movement – a minimal movement from the
Chapter 8 people and the materials whilst maintaining the quality of the
Operations Management product and service.
Delivering products and services to customers to meet or c. Utilization of resources – operations flow map,
surpass their expectations. factory or services shop layout, standardized work processes
for the operations manager
Designing, developing, and executing the Enterprise Delivery Guiding Principles of OWF
System. (EDS) The OWF must be balanced capacity – wise.
3 Customer Outcome Expectations A little difference between the capacity of each step in the
Enterprise Delivery System process to avoid operating bottlenecks
(EDS) If the company prioritize more profit than easier products,
Starts from the input (resources mobilized), proceeds to the the entrepreneur must accept a reduction in the overall
throughput (or the transformation process where input is capacity in the production process.
converted to output) and procedures the output (the Layouting
product). OWF is translated into an appropriately-designed and
The Six M’s of Operations executed layout of the factory or service shop.
4 Principles of Layouting
To ensure that the physical facilities are set up, employees The physical layout must allow the goods or the customers
are hired, and the operating systems are installed. being processed to go from one step to another with very
Machinery & Methods little distance and time spent in between
Choice of technology that is chosen by the EDS designer and A minimal or no crisscrossing of goods or customers within
developer. the physical space
May come in the form of hardware (machineries and The layout should capture physical and psychological
equipment) or software (operating systems). atmosphere desired.
Materials & Manpower Physical: lighting, ventilation, energy consumption,
Organizational waste management
Modality Psychological: “roominess” or human working space,
Specifies what parts of the EDS would be implemented by the proper ambiance and desired sense of safety, security, and
enterprise and what parts would be outsourced or human sensitivity.
subcontracted. Purpose of Layouting
To easily track the movement and flow of all materials, goods, Every step in the Transformation Process must also be
and people measured, monitored, and evaluated according to the QDP
To easily spot bottlenecks and work inefficiency standards.
For operations monitoring and quality control Every machine, worker, and conversion process has an impact
Production Programming on the customers’ QDP expectations.
& Scheduling Some of these machines, workers and processes are critical
Operations management is responsible for Production because they are major determinants of Quality, Delivery, or
Programming and Scheduling (PPS). Productivity Cost that affects the price.
4 Critical Factors Major rigor and emphasis should be exerted on these critical
Market Demand factors.
The hardest to figure out
The enterprise should not produce too many goods, The output should pass the final QDP tests.
otherwise there would be a lot of excess or obsolete The output should be very acceptable to the customers.
inventory. It cannot produce too little because there might be They should be delivered at the right times and under the
a stock out, hence substantial opportunity losses. best conditions.
They should be produced at high levels of productivity and at
4 Critical Factors relatively low costs, enabling the enterprise and its customer
Market Demand to settle at a mutually accepted price.
Consumer tastes change over time, competing products Operating Systems & Procedures
become more aggressive, substitute enter the marketplace The enterprise standards for running the entire operations of
and seasons of year create peaks and valleys of demand. the factory or service shop.
One solution is to have excess production capacity to meet “engineered methods”
unexpected sales increases. The operating system or methods have been subjected to
Another solution is to outsource or subcontract production to conceptual, analytical, critical, and creative thinking
other producers. processes.
4 Critical Factors They have been experimented at on and tested successfully in
Capital Investment and Financing Requirements the actual work setting.
Having sufficient production capacity to meet excess demand Operating Systems & Procedures
will require a fairly large production facility. Unfortunately, They have been judged optimally for the market being
the larger the facility, the larger the capital investment and served.
financing requirements needed. They have been proceduralized and standardized for
4 Critical Factors consistency and manualized for replicability.
Capacity Utilization The optimal OSP would differ from enterprise to enterprise
The operations manager must figure out how much depending on environmental conditions and market dynamics
production capacity a particular product line would of supply and demand.
potentially consume. Operations Management, Supervision & Control
This would depend on two things: Operations managers and supervisors orchestrate and control
1. The estimated demand for the product lined the entire EDS.
2. The number of machine and labor hours the
product line would consume in the factory of service shop. Pre-operations
Quality a. Designing and developing the EDS
Control b. Choosing the operations site and technology being
The quality, delivery, and price expectation of customers used.
must match with Quality, Delivery, Productivity c. Acquiring the technology and machinery and all
measurement, monitoring and evaluation system at every relevant service contracts.
stage of EDS. d. Constructing, layouting, installing, and testing the
operations facility and systems.
Before the input its accepted by the Transformation Process: e. Planning and programming the production of
It must conform strictly to certain QDP goods and services
The materials and supplies used must adhere to strict f. Standardizing and manualizing all operating and
technical standards that would produce the desired output administrative processes and procedures.
The input must be delivered to the factory or service shop at
optimal schedules
They should come at a reasonably low cost, arrive in sufficient Operations proper
quantities, and be prepared for easy convertibility to ensure a. Selecting, sourcing, and storing the appropriate
high productivity. raw materials & supplies
b. Recruiting and deploying the right manpower
c. Running and maintaining the factory or service
shop using all proper technical, supervisory, and control Fourth : Operations must make sure that the
methods. Maintenance department is able to do its preventive
d. Continuously improving operations and upgrading maintenance and its troubleshooting interventions in case
facilities problems erupt.
e. Quality assurance
f. Productivity, cost, and profit management. CHAPTER 9: MANAGING THE HUMAN RECOURCES
FUNCTION
Post - operations
a. Manages the logistics of warehousing, distributing
WHAT IS HUMAN RESOURCE?
and delivering the finished products to the customers.
b. Obtaining customer feedbacks. - Human resources is used to describe both the
c. Evaluating the output and outcomes of operations
people who work for a company or organization and
in order to improve the input and the transformation process.
the department responsible for managing resources
related to employees.
- The term human resources was first coined in the
Methods : ways of doing things 1960s when the value of labor relations began to
- Also include control mechanisms that allow the garner attention and when notions such as
enterprise to monitor and correct the operating system. motivation, organizational behavior, and selection
assessments began to take shape.
People run factories and service establishments – need GOOD - Human Resources evolved from the term:
people to calibrate and maintain the machines. “personnel”, as the functions of the field, move
So hiring the RIGHT people is the first step to good operations beyond paying employees and managing employee
management. Once hired, the operations manager will take benefits. The evolution of the HR function gave
care of all the people, especially the new ones.
credence to the fact that people are an
How the Manager Should Handle the People
organization’s most important resource.
Must motivate or inspire – advise, coach, and mentor the
- According to William R. Tracey, found on “The
people
Give a sense of belonging – allow the people to participate in Human Resources Glossary”, defines HR as: “The
the planning and decision processes people that staff and operate an organization” as
Aspire for higher levels of production and productivity – job contrasted with the financial and material resources
enlargement and job enhancement programs raise the of an organization. Therefore, Human Resources
morale or self-confidence of the people refer to all of the people you employ
Get through proper orientation and training programs – - Human resources is also the organizational function
aware and focus in the gaps in the competency and attributes that deals with the people and issues related to
of people people such as compensation and benefits,
Has people control – start with a fair but challenging recruiting and hiring employees, onboarding
scorecard – aware of performance evaluation and reward employees. Performance management, training,
system to attain good scores
organization development and culture, and advising
Support Services
senior staff about the impact on people of their
The Operation Function cannot perform well without
soliciting and getting the support of all the other units of the financial, planning, and performance decisions on
enterprise the people in the organization
Cross – functional coordination is important to the success of - HR responsibilities include payroll, benefits, hiring,
any operation including the Operation Function. firing, and keeping up to date with state and federal
tax laws.
Operation Function has steps towards its success and the
steps are the following:
WHAT IS HUMAN RESOURCE MANAGEMENT?
First : Operation must obtain a good sales forecast
from the marketing department. - Human resource management (HRM) is the process
Second : Operations must obtain the required of employing people, training them, compensating
resources from Finance in order to acquire machinery and them, developing policies relating to them, and
equipment, improve facilities, purchase materials, developing strategies to retain them.
compensate workers, and pay suppliers. - The Human Resource Management is all about
Third : Operations must coordinate with the Human increasing employee performance to their highest
Resource Department for the hiring and training of workers level that corresponds to their role in the
and supervisors. organization
 - human resource management is a contemporary,
umbrella term used to describe the management 2. Operational HR
and development of employees in an organization. The human resource function installs the
- HRM is an employee management with an emphasis administrative systems that would allow for the
on those employees as assets of the business. In this efficient management of the organization and the
context, employees are sometimes referred to creation of a conductive work environment that
as human capital. As with other business assets, the would nurture a culture of excellence and empower
goal is to make effective use of employees, reducing its people. Also, in this level - human resources staff
risk and maximizing return on investment members are top-level administrators. The tasks
- Human Resource Management (HRM) is the term they accomplish are generally highly visible to your
used to describe formal systems devised for the employees because they are focused on the daily
management of people within an organization. The work issues attributed to the ongoing needs of your
responsibilities of a human resource manager fall team. These include vital tasks such as recruitment,
into three major areas: staffing, employee interviewing and hiring, and risk management.
compensation and benefits, and defining/designing Operational HR management may use and maintain
work. computerized HR information systems and may also
- Essentially, the purpose of HRM is to maximize the oversee your payroll department.
productivity of an organization by optimizing the Example: Operational HR includes the
effectiveness of its employees. management of workers’ compensation issues,
- As Edward L. Gubman observed in the Journal of health benefits and compensation reviews. It may
Business Strategy, "the basic mission of human involve employee counseling and coaching, the
resources will always be to acquire, develop, and creation of employee rewards programs, and
retain talent; align the workforce with the business; developing social programs to engage employees.
and be an excellent contributor to the business. Attending operational meetings with line managers,
Those three challenges will never change." as well as devising and implementing training
programs, may be part of an operational HR
manager’s day. A chief function for operational HR
staff members is keeping abreast of employment
The Human Resource functions can be classified in to two
laws and making certain they are consistently
levels: The Strategic and Operational Human Resource:
followed.
1. Strategic HR Human resources can also be divided into systems
At this level, the human resource function component (formal processes and procedures to manage
manages the big changes in the direction of the
people) and people dimension (how to elevate people’s
enterprise. Strategic HR management requires
performance and productivity). The illustration below
that HR professionals consider the overall picture of
explains that Human Resources Function is divided in to four
your business’s growth, implementing ways to
quadrants and classified as Strategic, Systems, Operational,
make a direct contribution to your long-term goals.
Strategic HR is integral to the future planning of and People. The sequence of the quadrant follow a clockwise
your business as it relates to employees. In a manner while the sequence of the quadrant itself if
strategic capacity, HR staff members attempt to counterclockwise.
project future business needs and work to develop
current employees and programs to meet those
needs. Looking into the future, HR teams may
The four quadrants of the Human Resource Functions
consider many options to keep your business
competitive and growing, including outsourcing 1. Strategic-Systems (QUADRANT A)
certain jobs. o This quadrant represents the highlight of
Example: HR personnel working strategically aligning the Human Strategy, Structure, and
focus on increasing employee productivity and the Systems with Institutional Strategy
return of investment, with the intent of moving o The HR function of the organizational
your company forward. To achieve these ambitions, diagnosis and design lead to organizational
HR staffs may review and evaluate technical redesigning, redevelopment, and
expertise of your workforce. Strategic HR manager redeployment in which QUADRANT D
also make recommendations for the workers to begins.
participate in development programs.
 The highlights two critical HR processes that they may find happiness in their work
and remain loyal to the organization
o Reviewing or diagnosing organizational o Retaining good people who are
performance and designing the right dedicated and highly productive is
structure, systems, and staffing an HR objective
o Rewarding the achievements and o RESONATING
accomplishments of the organization
and its people. 4. Systematic-Operational (QUADRANT B)
o It maintains the enterprise’s ability to
2. People-Strategic (QUADRANT D) operate and compete in the marketplace by
o Follows the footsteps of strategic-system renewing and competently growing
function – any significant change in the organization
institutional and HR strategies must be o It is the programmatic management of the
accompanied by the difficult transformation HR function as it performs the two major
process of this function roles and these are hiring and placement of
o Introduces two additional HR process: people in the organization
Retooling and Recycling o As the enterprise grows, the personnel
o Retooling – endeavors to fill the should expand, recruitment of both old and
quantitative and qualitative gaps new talent, assign people to jobs wherein
and superfluities of the they could contribute, and career paths for
organization all in order to stimulate growth and work
 QUALITATIVE challenges.
DIMENSIONS include o It also monitors and records the progress of
redesign of the structures all employees as they do their jobs and
and right sizing of the careers
organization
o Recycling – addresses
redevelopment of the people in THE EIGTH R’S OF HUMAN RESOURCES
the redesigned structures, the
1. Recruiting
removal of personnel, outsourcing
of certain functions, and building WHAT IS RECUITMENT IN HUMAN RESOURCE?
of partnerships and networks
necessary by the strategic change - In human resource management, “recruitment” is
the process of finding and hiring the best and most
qualified candidate for a job opening, in a timely
and cost-effective manner.
- It can also be defined as the “process of searching
for prospective employees and stimulating and
3. Operational-People (QUADRANT C) encouraging them to apply for jobs in an
o Main function of this quadrant is to organization”.
deepens the HR function as it rallies the - Also, it is one whole process, with a full life cycle,
people to give their very best to the that begins with identification of the needs of the
organization while it forces the company with respect to the job and ends with
organizational purpose and commitment the introduction of the employee to the
down to each and every individual organization.
o It seeks to attain goal parallel to the
different units of the organization - Many HR advisors and consultant often advocate that
o It also aspires to achieve links between the organization should “hire for attitude and develop for
goals of the organization and the personal competence “, they are simply revising the mindset of
goals HR practitioners who screen applicants according of HR
o It focuses on two HR process: Resonating to their resumes or past employment records,
and Retaining in which it allows people to recruitment competency exams, and skills already
be happy and assures their well-being so possessed.
 - But for highly technical jobs, organizations often engagements;
develop competencies, skills and knowledge about the background check
workers through job immersion and training programs in community,
For some instances, it is difficult to “develop neighborhood, and
character, values, and attitudes” because it is offices
already the applicant’s intrinsic genetic qualities. Psychological Normalcy in Psychological Tests,
- Another common HR practice is to screen applicants Profile psychological EQ Tests,
tests; negative for interviews and
according to traditional measures such as the
neurotic, behavioral
Intelligence Quotient (IQ) test, abstract and logical
psychotic and observations;
reasoning and mathematical and verbal abilities. sociopathic background
- Before recruiting people, HR must be very precise disturbances investigation
about competences, character, and personality traits Personal Emotional Character “boot
required by the different organizational unit. Character Literacy and camp” training and
o In order to do this, HR must ask the hiring Maturity Values, testing; personal
units what has been exactly done by the Attitudes, stories on how
recruits. It can be accomplished if the Principles values and
organizations have a clear strategies that principles are being
were into specific action programs, activities, lived; verification
and task. from friends,
- There are six important criteria recommended as guide relatives,
colleagues, bosses,
in recruiting people, these are:
and subordinates
o Past performance
Potential for Personal In-depth
o Proficiency profile
Growth Ambition, Need to interviews; essay
o Personality profile Achieve, Excel, questions on life
o Psychological profile Lead, Review plans; stories in
o Personal character previous five areas of excellence
o Potential for growth criteria claimed

Recruitment Criteria Definition Validation and

Criteria Verification Strategies in recruiting people
Past Performance Track Record and Verify resume
Resume of Recruit submitted; check - Choose the best way to attract the right applicants.
with previous Casting a wide net is good for broad competencies like
employers,
sales and merchandising, accounting, brand
schools;
management, and technicians.
background
- For specialized positions, it would be better to set up
investigations; in-
depth reviews search committees that would be more pro-active in
Proficiency Profile Brain Preferences, Proficiency and finding talents because stakes are higher if mistakes
Intelligences, Skills Testing, IQ, are done in the organization
Skills, Talents IQ2, MBTI, HBDI - For sensitive positions that requires integrity and
tests; honesty, the organization should rely more on
demonstration of character referrals who would assure for the
skills, candidates recommended. This is where past and prior
competencies and relationship about the candidates become more
talents; in-depth important
interviews - After having sets of applicants for the available jobs,
Personality Profile Personal Conduct, On-the-job they should undergo testing and interviews.
Behavior, observation during
Relationship training Example of recruiting situation
Styles, Personal probationary
Disposition period; in-depth Jody Sweet, vice president of recruitment,
interviews; group diversity and inclusion and talent management, reveals
dynamic exercises; what it takes to work at the happiest place on earth, the
check with
Disney World. According to Jody Sweet, every candidate
previous
should share and embrace the vision of Disney, which is to
 create magical memories for guest. They look for people o For employees, this vertical movement may
who are storytellers, creators, and people who are be very slow because there are fewer
passionate about guest service. They hire thousands of cast positions at the top and they would rather go
members all over the world throughout the year. They post to other faster-growing organizations where
available roles on the Disney Careers website, university more vacancies may exist.
campuses, and they also head conferences in targeted - Organizations have learned to provide a second career
track, the technical track.
fields like digital technology, robotics, engineering, and
o For functions in the organization that
creative talent. Disney offers full-time positions for people
demands technical or professional expertise
with all kinds of experience. They recruit people with
like accounting, auditing, information
varying levels of education, creative talent, technical
technology, engineering, training, research,
expertise, and certifications. All those who wish to be part and product development, it may be more
of Disney must go through a background check prior to appropriate to ladderize the proficiency
starting. levels.
o FIRST LEVEL = apprentice with a relatively low
2. Routing
level of expertise and experience
WHAT IS ROUTING IN HUMAN RESOURCE? o SECOND LEVEL = junior technician
o THIRD LEVEL = senior technician
- Organizations who desire to optimize the value of
people over the long haul should have good routing o LAST LEVEL = master technician
strategy. When applicants are hired, their potentials  They have enough experiences
must be assessed to their abilities to contribute to the and expertise to mentor, coach,
organization in many functions and responsibilities for and train all the people under
years. him
 The skills of the master
- If the recruitment is adaptable and flexible it creates technician should be wider and
more opportunities for assuming roles in the deeper in terms of knowledge
organization. The greater and more versatile, it gets and proficiency
more relevant and applicable recruits’ intelligence are
by using the Theory of Multiple Intelligence. Also, the - As shown in the case example, the employees were
more noticeable leadership qualities of the recruits offered four career tracks where they can excel in.
are, the greater the human resource returns would be First, the performance track, here they could stay as
for the organization. SEDOs and have a higher pay due to their good
- The possible career paths of an employee should be performance. The second track is the management
regularly discussed and adjusted over time in order to track, here they could be promoted as branch
provide guidance and direction for both the recruit and managers or regional managers. The third track is the
the organization. It should be both aspirational and entrepreneurial track, where they could develop their
motivational for the employee but at the same time skill in their expertise which is being a micro enterprise
realistic and a time to grow. developer and can borrow money from the foundation
- The employee's full potentials should be maximized in if they want to build their own. Last is the technical
order to yield the highest human resource returns to skilling track, here they can develop their skill or
the organization. Depending on the competencies, expertise and find a higher paying job outside of the
proficiency, and preferences of the employees and the foundation. The last two were actually recycling
expectations of the organizations, several career tracks options.
could be laid out.
- The most common track is the vertical managerial
track. Employees enter the organization at the bottom
of the management pyramid.
3. Retaining
o They begin at the rank-and-file category up to
supervisory positions, then to assistant WHAT IS RETAINING IN HUMAN RESOURCE?
managership, managership, assistant vice-
president, the vice-president, senior vice - Retaining is being able to hold on to people, provided
president, executive vice president, and lastly that a company wants to keep them in the first place. It
the president.
 is quite expensive and inefficient to recruit and train o Determine the personal goals, needs, and
people only to lose them to competitors. wants of the employees in order to assess
- It is sometimes called “retention” whether they are the right people for the
- Retention is a vital part of the human resource job and whether they can function well
management function. within the cultural environment of the
o At a basic level, retaining workers is a matter enterprise.
of giving wages that would satisfy the - The organization must be sensitive to the feelings
minimum basic needs of the employee. and sentiments of the people
 Companies should not be o They should determine the conduciveness
complaining about their poor of the work climate for producing
retention record if they cannot communication and coordination among
meet this minimum. people for better productivity and
o Aside from the basic needs, people also performance.
aspire for their leisure time, respect and o They must provide a good job and good life
dignity in the work, and social and economic for the people even outside the job =
status. WORK-LIFE BALANCE = quite essential in
o Beyond a decent life, some companies do not stabilizing the psychological and emotional
see or it is unimportant their workers’ needs well-being of the people
and aspiration, can lead to losing their - Resonating is about:
workers and leads to poor retention. Workers o Motivating and energizing people. The
are for cost production of doing business that organization should explore the different
must kept in order to maximize profits. ways of buoying people’s spirits.
o Another view of workers, they are regarded o Great motivators is the people that
as “co-generator of wealth”, meaning, they employers work with.
are part in the wealth generation of the  It is important to mix-and-
business then they could be more productive match people correctly.
since their potentials harnesses over time. Also, the organization
o The job must be seen by the worker as a should ensure that the
personal journey to a total self-development. entire organization is
The nature of the job itself is an important cohesive, coordinated,
motivator for the worker to stay on. and complementary
 The worker must see his/her job o Empowering people. People are able to
as an important contributor to author their own plans and programs, have
the whole effort of the company access to resources, and be in control of the
 Job fulfillment does not need to implementation.
come only from the job o Authorship, access, and control
procedures and processes but would increase their self-worth in
also from worker’s sense of the organization and they can
belonging to his/her community become full partners in the
with mutual purposed and company objectives.
reinforcing co-workers. - If people act like partners rather than employees =
full resonance
4. Resonating
- To resonate = “to tune with” or reverberate with 5. Reviewing
- The organization’s goals are embraced and internalized WHAT THE REVIEWING IN HUMAN RESOURCE?
by the people and the personal goals of the people are - Reviewing people is to measure and evaluate their
realized and fulfilled while serving the organization. performance with the organizational goals in mind.
- Responsibility of the organization: - “Size them up” – An idiomatic expression used for
o Fully articulate its goals, meaning its vision, reviewing and evaluating people
mission and objectives, and translate these
into measurable and attainable
performance indicators based on clear key
result areas.
TWO CRITERIA OF VITAL IMPORTANCE IN REVIEWING
 1. PERSON’S APTITUDE OF KNOWLEDGE, SKILLS, AND - Rewarding is concerned about compensating,
COMPETENCIES motivating/encouraging, and recognizing employees
o In order to measure person’s aptitude there for their work, loyalty, and accomplishments.
are testing instruments on intelligence - It includes monetary and non-monetary benefits
quotient, abstract reasoning, numerical such as:
abilities, verbal skills, and managerial MONETARY BENEFITS:
• basic pay
expertise. On the other hand, some tests
• Living allowances
assess the analytical, critical, creative, and
• Incremental pay for extra work
systemic thinking process of a person • Bonuses
2. ATTITUDES AND VALUES • Commissions
o These includes personality traits and • Profit shares
personal preferences that can be measured
through written and oral tests also through NON-MONETARY BENEFITS:
job performance observations. • rank and position
o Past job behavior can give clues on how a • Office space occupied
person would conduct himself on a new job • Number of reporting personnel and
unless the old job was a mismatch to the support staff
person’s inherent intelligence and interests. • Company freebies
• Leave credits
o if there is NO INFORMATION on past
• Awards
actuations, probationary employment
• Level of trust and confidence given
periods, on-the job-training, and
apprenticeship contracts are valid for basis Employee pay is put together by organizations in many ways:
of measuring values and attitudes 1. Compensation can be tied to the level of
o PARTICIPATION – amount of hard work, responsibility and span of control that the
cooperation, and involvement a person employee has
exhibits in the workplace. It also measures o The organization usually regulate this by
the contribution of the employee to the creating positions such as manager, vice-
programs and activities of the organization. president, and president.
 At the lowest level, participation o The higher the level, the higher the pay
measures the person’s compliance
with the minimum expectations of 2. Compensation can be competency-based
o Organizations define the competencies and
a job
skills that they require in order to
 Includes:
accomplish their programs and tasks.
o Hours of working
o The pay is based on the level of job
o How employees’
complexity and difficulty
complete given
o The higher the complexity and difficulty, the
assignments
higher the pay
within time limit
o It is not necessary to classify the
 At the next level, the person’s competencies and skills into broad band.
contribution to the group can also  The organization may decide to
be assessed create technical tracks with each
- Performance is beyond the efforts exerted by the department to reflect the
employee. complexity and difficulty of the
o It measures the actual output, end results track.
and outcomes delivered by the people
because they are committed and highly 3. Organization can pay people according to their
participative output.
o Performance measures are quantified o Like for example, a skilled craftsman can be
paid according to the number of pieces they
attainments of the vision, mission, and
have produced, the hours they have put in,
objectives of the business.
and the value of work they have done
o Also, some organizations are willing to pay
6. Rewarding lawyers according to hours, according to
their level of expertise, connections,
WHAT IS REWARDING IN HUMAN RESOURCE?
experience, and affiliations
 o The more valuable the work to the - The organization should periodically assess its
organization and the higher its impact, the retooling requirement. The greater the gap between
higher is the compensation the actual and the desired performance or quality
standards, the greater is the need for retooling.
4. Organizations can pay people according to their
length and service, loyalty, trust, and confidence Retooling can come in various forms:
o The more loyal and trustworthy the people 1. Through formal training sessions conducted either in
are, the higher their pay house or by professional training organizations.
2. Through on-the-job training where the employee is given
EXAMPLES: an assignment and is closely supervised and trained as he or
1. Giving Free Vacations: she learns the job.
3. Through a formal or informal actual advertising, coaching,
This is one thing that we noticed to be a trend throughout the and mentoring program (these ways fold not include
top 100 companies list. For example, Ultimate Software, the commanding and controlling people)
developer of people-management software such as Quicken
Loans treats workers to a free vacation every two years. THREE EFFECTIVE WAY TO EVOKE THE BEST OUT OF PEOPLE:
1. ADVERTISING
2. Big Money Incentives: ⁃it is the way of the teacher who is able to import knowledge,
develop skills, and enhance competencies.
Hilcorp Energy Company promised staff in 2010 that if the
The Advisor may:
company doubles its production rate and reserves by 2015,
every employee will get a check for $100,000. An earlier met • Provides technical and managerial expertise
goal rewarded 400 employees with $50,000 toward a new • Suggests possible approaches and alternative
car. methodologies to arrive at the desired results
• Critiques the process adopted and evaluates the
output and outcomes
7. Retooling • Maintains a healthy, open, and transparent
atmosphere
WHAT IS RETOOLING IN HUMAN RESOURCE? • Learns with the advisees and improves upon their
- Retooling people is about reorienting them to the own style of advising
new directions of the enterprise and not just about • Leaves ample room for the advisees to explore,
improving their capabilities. experience, and experiment and to make their own
- Is a continuous process of organizational evaluation
development wherein it is done in order to meet the
• Accompanies advisees through their journey of
performance expectations of the organization.
development
FOR NEW RECRUITS REQUREMENTS:
• good induction trainings and orientation seminars about
2. COACHING
what the organization is all about like the goals, culture and
⁃it is the way of the leader who is able to rally the people and
the business itself.
inspire them to excel.
• Employee handbooks
• Website information
The Coach may:
• Face to face instruction guides (to properly introduce the
enterprise to the employees) • sets high goals and designs game plans
• Post-induction trainings (needed for generic skills that • Drills the team to perfection until the individual
includes the use of information system, familiarization with members attain their peak
the company’s markets and products, communication and • Must earn the respect of the team in their struggle
behavioral protocols, etc.) for victory
> in this struggle, the team learns the 3 Cs of champions:
 Courage- is needed to meet challenges and face all
- A specific competency-raising seminar are required odds.
for each department in the organization. On the  Charisma- is essential to influence, encourage, and
other hand, work procedures, new technical skills, transform people.
and production processes are required for the  Commitment- is vital to harness energy and focus
operating business. Lastly, the needed requirements power.
for marketing and sales units are trainings for selling
methods, market research processes, and product - The coach knows too well that winning the game is
features. important so as it stretches the his/her team to
limits of performance of excellence.
3. MENTORING
⁃it is the way of the spirit guide.
The Mentor may:
• nurtures the mentee through the painstaking path of
self-discovery
• Does not teach
• Does not lead
• Provokes, probes, and postulates
• Blows a fervent breeze that inflames the heart and
mind of the mentee until it scorches the soul
• Listens with great empathy
• Creates a safe and trusted space for enlightenment

8. Recycling

WHAT IS RECYCLING IN HUMAN RESOURCE?

- Affords the people the chance to change jobs or
even careers because they sometimes get bored or
not able to do their assigned jobs that are more
suited on their personality, competency, and
temperament.

- Recycling is more possible in an organization that

provides educational and training opportunities
outside those given for existing job requirements.
Some industries provides trainings such as
accounting and finance so that the employees would
fully understand the language of the business.
o Trainings would allow the employees to
have a communication among the different
functional areas because they are in
commonality, a common lingua numerica.
 Lingua Numerica – pagiging
dalubhasa sa matematika
- The tools and techniques of operations management
and service delivery are shared by the organization
to enable various units of the organization to
improve their work processes. All of these training
programs would broaden the competencies of
employees and provide them the opportunity to
pursue new-found interests and recycle themselves.