11. Finance function and HR Flashcards
What is the role of HR
- Recruitment
- Selection of employees
- Tracks performance
- Appraisal
- Training and development
- Rewards
What are the stages of HR Planning
Strategic Analysis
Internal analysis
Gap analysis
Plan to close labour gap
Review
What is the first stage of HR Planning
Strategic analysis
- Consider the organisation’s overall strategic plan
- on environment, manpower, SWOT, objectives
What is the second stage of HR Planning
Internal analysis
- Staff audit to identify employee number and skills
- eg/ staff turnover, potential, absenteeism
What is stage 3 of HR plan
- Gap analysis
- Identify staffing shortfall or surplus
What is stage 4 of HR Plan
- Plan to close labour gap
Shortage: - Internal transfers, promotions, training
- external recruitment
- reduce turnover
- overtime
Surplus:
-allow employees to reduce
- restrict recruitment
- reduce hours
- redundancies
What is stage 5 of HR planning
Review
- Measure the effectiveness of HR in achieving strategies
What are high-performance work arrangements
- Practices to achieve high employee performance among all employees
What are the stages of the recruitment process
Stage 1: perform job analysis
Stage 2: job design
Stage 3: develop job description
Stage 4: Advertising Job vacancies
Stage 5: Initial screening
Define job analysis
Process of collecting, analysing and setting out information about the job
- Purpose of job, responsibilities, who they will report to, career path ,working conditions
Define Job Design
Development and outlining of competencies within a competency framework
- Competency framework should be re-evaluated against needs of organisation periodically
Define competency and competency framework
Competencies are skills and behaviours that enable workers to meet requirements
Competency frameworks are formal methods of grouping and defining competencies expected from employees
What are competency areas
Intellectual (Strategic perspective, analytical judgement, planning and organising)
Interpersonal ( managing staff, sensitivity, persuasiveness, communication, decisiveness)
Adaptability (flexibility, coping with change)
Results (initiative. motivation, business sense)
Define the stage of developing a job description
- Set out the purpose of the job, where the job fits into structure, context, responsibilities
- Job title, location, accountabilities, skills and knowledge required, working patterns
What are the alternatives to job description
- Role definition
- Person specification: focus on the skills and qualities of a person
Explain stage 4 advertising of recruitment phase
- Can advertise internally and/or externally
- Cost depends on the advertising medium
- Firms may employ agencies to select agencies to find employees
What is the last stage of the recruitment process
Initial screening - reviewing CVs and selecting candidates for interview
Which features do the selection process require
Reliable
Valid
Fair
Cost-effective
What are the types of interviews
- Individual
- Problem solving
- Tandem: two interviewers per candidate
- Panel
- Succession
- Group
What are the limitations of interviews
- Horn and Halo effect: initial judgements of a person can contribute to later perceptions
- Contagious bias: behaviour of the applicant might be changed through clues
- Stereotypes of candidates
- Incorrect assessment of qualitative factors
What type of testing may applicants go through
- Psychological and personality
- Cognitive
- Proficiency
- Psychometric
- Medical
Define the process of HR development and training
Development: growth or realisation of person’s ability and potential
Training: planned and systematic modification of behaviour through learning skills to carry out work
What are the stages in the planning approach to training
- identify training gap
- define the learning required
- Define training objectives
- plan training programs
- implement training
- evaluate training
What are personal development plans
clear developmental action plans for individuals that incorporate a wide set of opportunities
- to improve performance in current job
- develop skills for future career moves
What are the stages of developing a personal developmental plan
- Analyse current position (personal SWORT)
- Set goals to cover performance (SMART objectives_
- Plan personal development
What are methods of training and development
- Formal training
- On-the-job training (demonstration, instruction, coaching)
What are the advantages and disadvantages of on-the-job training
Advantages:
- Training provided that is relevant to performing in role
- Training gis just in time and specific
Disadvantages:
- Training is difficult
- No formal structure
How does Kirkpatric evaluate training
Four levels:
- Reaction
- Learning
- Behaviour
- Results
What are the benefits of training and developing to organisation
- Minimise learning costs of obtaining skills
- Lower costs and increased productivity
- Fewer mistakes
- Less need for supervision
- Flexibility
- Recruitment and succession planning
- Change management: giving skills to cope with change
- Corporate culture improvement
- Motivation of staff
What are the benefits of training and development to workers
- Enhances portfolio
- Psychological benefits of value
- Social benefit -networking
- The job - do better
Define career management and succession planning
Career management: progress of individuals within organisation from job to job is planning with organisational need and individual capacity
Succession planning: ensures suitable replacements are available to take over positions as they become available
What are advantages and disadvantages of career management and succession planning
Advantages:
- cheaper than advertising new jobs
- develops structure
- motivates employees
- logical and rational
Disadvantages
- large talent pool makes it hard to decide promotions and loss of fresh blood at higher levels
- vacancies may occur before suitable replacements
- better candidates may be available externally
- staff may leave
Define performance management
Process of getting the best out of employees and ensuring they perform roles effectively
- creating work environment conductive to allow employees to reach potential
- analyse employee performance level
What are the four stages of performance management
1: Target setting (SMART)
2. Monitor performance
3. Review performance (appriasal)
4. Action plan
What are appraisals
systematic review and assessment of an employee’s performance, potential and training needs
- establish key deliverables
- compare performance against standard
- identify training needs
- monitor organisation’s initial selection against performance
What are the techniques of appraisal systems
Overall assessment
Guided assessment
Grading
Behavioural incident methods
Objectives and results-oriented schemes
common appraisal standards
What is meant by overall assessment
Managers write in narrative form their judegements
What is meant by guided assessment
Assessors are required to comment of specific characteristics
What is meant by grading as an appraisal technique
Comparative fram of reference to general guidelines where managers are asked to grade employees of given characteristic
What is meant by behavioural incident methods
Concentrate of employee behaviour which is measured against typical behaviour and common indicents of successful or unsuccessful job behaviours
WHat is meant by objectives and results oriented schemes
Reviews performance against specific targets agreed in advance
- objectives should be agreed and should be SMART
What is meant by common appraisal methods
Define competency framework specific to the organisation
What are the forms of appraisals
- Self-appraisal
- Upwards appraisal: employees rated by subordinates
-Customer appraisal: feedback from customers are included - 180-degree appraisal: manager obtains feedback from colleagues
- 360-degree appraisal: taking downwards, upwards and customer appraisals together
What are barriers to appraisal as identified by Lockett
-Appraisal as confrontation
- Appraisal as a judgement
- Appraisal as chat
- Appraisal as bearaoucracy
- Appraisal as unfinished business
- Appraosal as an annual event
Define motivation
employees desire to perform role - linked to outcome and reward
What is Taylor’s maximising prosperity theory
Four principles to achieve maximum prosperity for employees and employers
- science should be used to determine fair pay
- scientific methods used in recruitment
- mental revolution to fulfill potential
- constant and intimate co-operation between management and staff
What term did Elton mayo pioneer
Human relations
Concept that people are motivated by social or belonging needs satisfied by the social relationships formed at work
What is Maslow’a theory
Hierarchy of needs
- ranked structure of behavioural stimuli within individual which explains motivation
- Seven innate needs
Explain the concept of hierarchy of needs
Two higher order needs:
- need for freedom of inquiry and expression
- need of knowledge and understanding
Five other needs
- physiological needs
- safety needs
- Love/social needs
- esteem needs
-self actualisation
Each level is dominant until satisfied
Who came up with the two factor theory
Herzberg
What is Herzberg’s two factor theory
Two groups of work related factors
- Motivation factors; satisfaction - creates job satisfactorion and self fullillment
- Dissatisfaction: hygeine factors - prevent or minimise dissatisfaction but does not satisfy - maintencne factor because they do not give good satisfaction but prevents bad
What are common hygeine factors and common motivation factors
Hygeine factors: company policy, admin, salary, quality of supervision, interpersonal relationships, working conidtions, job security, status
Motivation factors: advancement, recognition, responsibility, challenge, achievement, growth, autonomy
What is Mcgregor’s theory X and Theory Y
Theory X: most people disliek work and responsibility and will try to avoid it - will need to be coerced, controlled and threatened
Theory Y: satisfy needs through workand contribution- need enrichment
WHo came up with expectancy theory
Victor Vroom
what is the expectation theory formula
Force or strength of motivation = Valence for specific outcome x Expectation behaviour will result in outcome
What is the goal setting theory
- Suggests that goals can motivate
- Challenging goals that are accepted lead to better performance
What is Mullin’s theory
Classification of motivation
- Motivation is the driving force within individuals to attempt to achieve a goal
What are the classifications of motivation according to mullins
- Economic desire: pay and benefits
- Intrinsic satisfaction: enjoyment of job and personal satisfaction
- Social reealtionships: team working
What is the theory of psychological contracts
- Understanding that exists between organisation and employees on expectations and requirements both waysq
What are the types of psychological contracts
- Coercive contract: individual is considered to be forced and exploited
- Calculative contract: individual accepts job and ressponsibilitie sfor rewards
- Co-operative contract: indidividual identifies themself with organisation and goals and seek to contribute and provides them with self fullfillment
What are other factors of employee motivation
- Job redesign: suited to individual
- job rotation: variety
- job enlargement: more responsibility
- job enrichment: depth of responsibiliity and growth
What is meant by workforce flexibility
- Way of attractign and keeping workforce through flexibility
- Remote working, fexitime, shift system, compressed week, job sharing, part time
What are the two basic concerns for pay
- Equity: fair rate fo job
- Relativity : justified differntials between pay of different individuals
What are the aims for pay
- Aid recruitment
- Retain
- Reward performance
What pay structrues exist
- Graded pay
- Broad banded structures
- Individual pay
- Job family structure - jobs in specific functions are grouped by responsibility
- Pay maturity curves: pay is progressive
- Spot rates: rate of pay for specific job linked to market price
- Rate for age: alloccates rate of pay based on age
- Pay spines: government organisations pay relative to range of roles
- Manual worker pay structrue: differences in status between manual jobs and others
- Knowelede contingent pay: bonuses with qualifications
- Integrated pay structure: one grading system for all employees apart from senior management
What is meant by total reward structure
- Non cash benefits
- Gym, cycle to work, training, childcare support
What are incentive shcemes
- Improves performance by linking to reward
- Three main types:
- Performance related pay
- Bonus schemes
- Profit sharing
What is performance related pay
- Payment is fixed amount per unit produced or operation completed
- SMART criteria should be applied
- Clear objectives for rewards
What is bonus schemes
- Complementary to basic salary
- can be group incentive
- can be value added
What os profit sharing schemes
- Employees have opportunity to get shhares in company
- employees contribute to profitability and contribution should be recognised
What are the difficulties of incentive schemes
- Increased earning may not motivate some poepl
- workers are unlikely to be in complete control of results
- may lower targets to make bonuses achievable
- manipulation of rules
- poorly designed scheme can increase labour costs
What information does finance funciton provide at lowest level
- assembling informaiton
- payroll funciton
- collection of PAYE information
- Identificaiton of KPIS
what assistance does finance function provide at 2 level
- Analysing information
- analyse employee surveys
- analyse competitor salaries an dbenefits
- analyse kPIs
What assistsance from fiancnce funcitn at 3rd level
-advising to influence
- communicaiton of key findings
- communicaiton of benchmarking analysis
- communicaiton of advice based on KPIs
What asisstance would finance function provide HR on highest level
-Applying for impact
- creation of business cases to support expansion or cut backs
- information or reports for redundancies
- applications of insights
What KPIs are used for HR funciton by finance
- Revenue per employee
- Employee satisfaction index
- Employee engagement level
- Employee churn rate
- Performance review completion factor
- Salary competitvienes ratio
- Time to hire
