10. HRM

Question 1

Define HRM

Answer 1

The strategic approach to the effective management of an organisation’s workers so that they help the business gain a competitive advantage

Question 2

What are the roles of HRM?

Answer 2

Strategically manage people as business resources:

• Planning the workforce
• Recruiting and selecting staff
• Appraising, training and developing staff at every stage of their careers
• Drawing up contracts of employment
• Discipline and dismissal of employees if necessary
• Redundancy if necessary
• Improving staff morale and welfare

Question 3

Define workforce planning

Answer 3

Analysing and forecasting the number of workers and the skills of those workers that will be required by the organisation to achieve its objectives

Question 4

Define workforce audit

Answer 4

A check on the skills and qualifications of all existing workers/managers

Question 5

How to decide the number of workers required?

Answer 5

• Forecast the demand for the firm’s products: consumer demand is increasing => more staff needed
• The productivity levels of staff: productivity high => recruit fewer staff
• Changes in the law regarding workers’ rights: government might pass laws that establish maximum working week => greater demand for workers or minimum wage level => fewer demand for workers
• The labour turnover: the higher rate at which staff leave the business, the greater the need to recruit replacement staff

Question 6

Define labour turnover

Answer 6

• The number of workers who leave and join an organisation over a period of time, as a proportion of the total number of workers employed in that same time
• Formula: (no.of workers who leave or join / total no. of workers) x100

Question 7

Costs of high labour turnover

Answer 7

• Costs of recruiting, selecting and training new staff
• Poor output levels and customer service due to staff vacancies before new recruits
• No staff loyalty, poor morale
• Difficult to establish team spirit

Question 8

Benefits of high labour turnover

Answer 8

• Low skilled and less productive staff might be leaving => replaced with better ones
• New ideas and practices are being brought into an organisation by new workers

Question 9

Factors affecting the skills of staff required

Answer 9

• The pace of technological change in industry

- The need for flexible or multi-skilled staff as business try to avoid excessive specialisation

Question 10

Define recruitment

Answer 10

The process of identifying the need for a new employee, defining the job to be filled and the type of person needed to fill it, attracting suitable candidates and then select the best one

Question 11

Benefits of internal recruitment

Answer 11

• Applicants already know the organisation and its internal methods => no need for induction training
• Costs of advertising will be saved
• Give internal staff a career structure and a chance to progress => motivated
• Encourages other staff to work hard to get promoted

Question 12

Disadvantages of internal recruitment

Answer 12

• Envy and jealousy within the organisation
• Size of prospective applicants is significantly reduced. Many other people would be more suitable for that specific position
• Organizations that heavily rely on inside recruitment might eventually find that they have to advertise outside the organization to fill the vacancies

Question 13

Benefits of external recruitment

Answer 13

• External applicants will bring in new ideas and practices to the business
• Wide choice of potential applicants
• Avoids resentment sometimes felt by existing staff if one of them gets promoted
• In touch with the external business world

Question 14

Disadvantages of external recruitment

Answer 14

• Costs of advertising and induction training
• Damages employee morale because current employees feel like they do not have a chance of promotion
• More time consuming
• Bringing in different coporate culture can affect the running of the business - time to introduce new methods and culture

Question 15

Define job description

Answer 15

A detailed list of the key points about the job to be filled - stating all its key tasks and responsibilities

Question 16

What does the job description include?

Answer 16

• Job title
• Details of the tasks to be performed
• Responsibilities involved
• Place in the hierarchical structure
• Working conditions
• How the job will be assessed and performance measured

Question 17

Define person specification

Answer 17

A detailed list of the qualities, skills and qualifications that a successful applicant will need to have. e.g. experience, qualification

Question 18

What does the selection process involve?

Answer 18

Job description and person specification -> job advertisement -> drawing up a shortlist of applicants -> conducting interviews

Question 19

What are the 3 types of training?

Answer 19

• Induction training
• On-the-job training
• Off-the-job training

Question 20

Define training

Answer 20

Work-related education to increase workforce skills and efficiency

Question 21

Define on-the-job training

Answer 21

Instruction at the place of work on how a job should be carried out

Question 22

Define off-the-job training

Answer 22

All training undertaken away from the business e.g. institutions

Question 23

Define induction training

Answer 23

Introductory training programme to familiarise new recruits with the systems used in the business and the layout of the business site

Question 24

Costs of training staff

Answer 24

• Expensive

- Well-qualified staff leaving for better paid job

Question 25

Costs of not training staff

Answer 25

• Untrained staff will be less productive and inflexible => give a less unsatisfactory customer service
• Without being pushed to achieve higher standards or other skills => become bored and demotivated
• No self-actualisation (Maslow)

Question 26

Define employment contract

Answer 26

A legal document that sets out the terms and conditions governing a worker’s job

Question 27

Main features of a contract of employment

Answer 27

• Name of the parties
• Start date
• Job title and description
• Hours of work
• Salary
• Probationary period
• Deductions
• Holidays
• Expense: The employer can agree with the employee, which work-related expenses will be covered and when the employee will be reimbursed
• Sickness and disability
• Retirement and pension
• Discipline and dismissal of employees

Question 28

Define dismissal

Answer 28

Being dismissed or sacked from a job due to incompetence or breach of discipline

Question 29

Define unfair dismissal

Answer 29

Ending a worker’s employment contract for a reason that the law regards as being unfair

Question 30

Examples of dismissal

Answer 30

• Inability to do a job when sufficient training has been given
• Negative attitude at work
• Continuous disregard of require health and safety procedures
• Violate employment’s contract

Question 31

Examples of unfair dismissal

Answer 31

• Pregnancy
• Discriminatory reasons e.g. race, colour, religion
• Being a member of the trade union
• A non-relevant criminal record

Question 32

Define redundancy

Answer 32

When a job is no longer required so the employee doing this job becomes redundant though no fault of his or her own. Receives redundancy payment

Question 33

What is employee welfare and how to achieve it?

Answer 33

Most HR departments will offer counselling and other services to staff who are in need of support (financial problems, family) or have troubles with work. When workers feel that the employer is concerned about their long term welfare then it is likely to lead to a much stronger sense of loyalty and desire to do well for the business => increases staff morale as well

Question 34

Define flexi-time contract

Answer 34

Employment contract that allows staff to be called in at times most convenient to employers and employees

Question 35

Define outsourcing

Answer 35

Not employing staff directly, but using an outside agency or organisation to carry out some business functions

Question 36

Define hard HRM

Answer 36

An approach to managing staff that focuses on cutting costs. e.g. temporary and part time employment contracts, offering maximum flexibility with minimum training

Question 37

Define soft HRM

Answer 37

An approach to managing staff that focuses on developing staff so that they reach self actualisation and are motivated to work hard and stay with the business