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The best way to set targets would be to look at the data from the previous year and then update them and apply them to the current situation. Always set targets at the upper-end of the difficulty range, but do not set them so high that they will demotivate your staff. Always attach a number and a deadline to these targets. Be specific and try to find examples of when you have done this in the past. Acknowledge the importance of incentives in some instances.
In HR you will need to deal with conflict in many forms. Depending on the sector, a main source of friction will come from trade unions. Companies are often reflected well to external bodies if they have a loyal workforce, and as HR manager you must note that you can act as an intermediary between employees and management. Establish a list of ways that the firm is good for your employees that you can keep you your sleeve, and work with employees to deal with conflict early on to reduce the need for union involvement. Over time you will develop a strong defence to common criticisms.
This is a testing question. If you are a graduate with little experience then the employer will not expect you to know employment legislation inside out. If you have prepared for the interview to some extent then you should be able to respond well, if not entirely comprehensively. Prior to the interview look carefully at legislation related to employment, acknowledging the importance of avoiding both negative and positive discrimination in the workplace, both for the sake of fair employment and to avoid possible legal repercussions.