The Establishment Phase of the Employment Cycle

The Establishment Phase

The Establishment Phase involves determining what human resources are required to ensure the organisation is able to accomplish what it has set out to achieve.

The activities involves in the Establishment Phase include:

  • Human Resource Planning
  • Recruitment
  • Selection
  • Employment Arrangement and Remuneration

Human Resource Planning

Human Resource Planning is the development of strategies to meet the organisation’s future human resources needs. It involves forecasting the number of employees available and the number of qualified employees demanded in the future. If the supply of employees is forecast to be greater than demand, the Human Resource practitioner will have to plan for a reduction of the workplace.

Human Resources Planning requires an organisation to constantly monitor and plan:

  • The number of employees required
  • Their qualifications, including skills, previous experience and knowledge
  • When and where these employees will be needed

Job Analysis

Job analysis is the next step in determining an organisation’s human resources needs. The organisation must determine the exact nature of the job before it can recruit someone to do it.

A job analysis is the systematic study of an employee’s job in order to determine the:

  • Duties performed
  • Time allocated to each of the said duties
  • Responsibilities involved
  • Degree of supervision (including reporting relationship in the management structure)
  • Equipment required

A job analysis involves two parts:

A Job Description, which is a written statement describing the employee’s duties, and tasks and responsibilities associated with the job.

As well as a Job Specification, which is a list of the key qualifications needed to perform the particular job in terms of education, skills and experience.

Job Design

Another aspect of Human Resource Planning is a Job Design. Whereas a job analysis concentrates on the work required for a job to be completed, job design details the number, kind and variety of tasks that individual employees perform their jobs.

The factors of a job design are:

  • A variety of tasks to be performed (avoid over specialisation).
  • Giver employees some decision-making responsibility


Recruitment is the process of attracting qualified job applicants from which to select the most appropriate person for a specific job.

Sources for Recruitment

Many sources of employees for an organisation include:

  • Advertisements in the media
  • Schools, TAFEs and universities
  • Internal searches
  • Private employment and recruitment agencies
  • Public employment agencies
  • Temporary Services


Selection: involves choosing the candidate who best matches the organisation’s requirements.

A poor selection process leads to increased costs and lower productivity by increasing:

  • Training costs, if poorly qualified staff are selected
  • Job dissatisfaction and labour turnover, if the organisation or the job does not meet the expectation of candidates selected.
  • Absenteeism rate if staff feel inadequate on the job of feel under excessive work pressure.
  • Accident or defect rates, and fines or claims, if untrained staff are selected.

Selection Process

  • Application forms: Candidates outline information about themselves. The form may be simple, requiring details such as name, address and contact number, or it may require more detail about personal history, skills and experience.
  • Tests: Written or practical and are design to assess intelligence, aptitude or ability. Not used by all industries and not always reliable when used alone.
  • Interviews: Most commonly used process. Must be well organized and structured, common questions must be used in each interview to ensure consistency for selection. Questions are asked to evaluate the candidate’s personality, motivation and attitudes.
  • Background Checks: Employers verify the information on application forms by contacting referees and agencies about the applicant’s history, skills and experience.
  • Medical Examinations: Some jobs required specific physical attributes. Such as the Victoria Police requiring medical assessment as part of their background checks.

Employment Arrangements and Remuneration

Employment Arrangements

The suitable applicant is offered an appropriate employment package. The aspects included within employee arrangements include the type of employment, the award salary or negotiated salary, leave and holidays.

Employment arrangements are influenced by enterprise bargaining. This is process of directly negotiating wages and employment conditions between employers and employees at the enterprise level.

Contractors are not employees and do not have the same rights. They are typically self-employed and are increasingly common in many industries. By using independent contractors, employers bypass many requirements such as having to pay sick leave entitlements.


Remuneration is payments in return for work performed. The very minimum must meet the National Employment Standards.

Remuneration can be in the form of Wages, Salaries, Packages or Salaries. Employees are also entitled to a minimum 9% super whether on wages or on salary.

Other benefits include:

  • Bonus incentives and salary increases (often linked to productivity gains).
  • Giving employees a small stake in the company.
  • Flexi-time
  • Telecommuting

See Also