2.3. Further HRM Flashcards
Define hard HRM
an approach to managing staff that focuses on cutting costs, treating employees like any other resources. E.g. call centres
Define soft HRM
an approach to managing staffs that focuses on developing staff so that they rare motivated to work hard and stay with the business.
Advantages of hard HRM
- Staff are well monitored and also easily replaceable
- Costs are minimised/ more cost effective => potential increased profitability
- More standardisation of processes, reduces the risk of errors being made
Disadvantages of hard HRM
- Could increase recruitment and induction training costs in the long term as temporary workers have to be frequently recruited
- Demotivated workers with little job security => decreased productivity => reduce efficiency and profitability
- Bad publicity regarding the treatment of workers
Advantages of soft HRM
- Higher motivation
- Greater commitment from staff
- Less absenteeism
- Greater productivity => competitive advantage
Disadvantages of soft HRM
- Increased costs for development of skills, wage increases, the support staff to work
- Delaying decision-making for the synthesis of the opinions of employees, management
Define temporary employment contract
employment contract that lasts for a fixed time period. E.g. six months
Advantages of temporary contract
- Reduce the overhead costs of employing staff when there may he less demand for them
- Flexibility is important for seasonal business activities
- Flexible for workers as they can have multiple of jobs => gain experience and skills
- Efficiency of staff can be assessed
Disadvantages of temporary contract
- No employees loyalty => reduced productivity and efficiency => adds costs to the business
- Little motivation to work since employees are not committed to the company
- Security of employment
Define part time employment contract
employment contract that is for less than the normal full working week/ for part time workers
Define flexi time contract
employment contract that allows staff to be called in at times most convenient for employers and employees
Advantages of flexi time and part time contract (to the firm)
- Staff can be required to work at particular busy periods of the day but not during slack times => reduce overhead costs => competitive advantage
- By using teleworking from home => saves costs
- More staff are available to be called upon should there be sickness or other causes of absenteeism
- The efficiency of a staff can be assessed before they are offered a full time contract
Disadvantages of flexi time and part time contract (to the firm)
- Additional administrative work and “red-tape” involved in setting up and running flexible working
- The potential loss of customers if key employees reduce their working hours
- Lower employee productivity
- Inability to substitute for certain skills if certain employees are absent (a common concern of smaller businesses_
- Managers finding it difficult to manage or administer the flexibility
Advantages of flexi time and part time contract (to the workers)
- Contract can be ideal for certain types of workers for example students parents with young children who do not wish to work a full week
- They may he able to combine two jobs with different firms giving greater variety to their working lives
Disadvantages of flexi time and part time contract (to the workers)
- They will be earning less than full time workers
- They may he paid at a lower rate than full time workers
- The security of employment and other working conditions are often inferior to those of full time workers
Define labour productivity
the output per worker in a given time period. It is calculated by - total output in time period/ total staff employed
Define absenteeism
- measures the rate of workforce absence as a proportion of employee total. It is calculated by: Absenteeism (%) = (no. of staff absent/total no. of staff) x 100
Define labour turnover
- measures the rate at which employees are leaving an organisation.
- It is measured by: (number of staff leaving in one year/average number of staff employed) x 100
Causes for poor employee performance
- Lack of training given to the employees
- Lack of resources available to allow optimisation of their work
- Obstacles such as collaboration problems, communication and permission
- Miscommunication leads to misinterpretation of the guidelines
- No incentives to motivate the employees
- No punishment for their poor work
Consequences of poor employee performance
- Absenteeism
- Decreased efficiency and productivity
- Increased overhead costs => reduced competitive advantage
- Lower morale => reduced employee loyalty
- Management stress
- Poor output level
- Poor quality of the output
Strategies to improve performance
- Regular appraisals of performance against agreed pre set targets
- If workers fail to reach targets => establish disciplinary nature or provide training
- Training
- Quality circles - small groups of workers encouraged to take responsibility for identifying and suggesting solutions to work related problems
- Financial incentives linked to profits of the business or offer a stake in the ownership of the company
- Teamworking - encourage multi-skilling training and opportunity to take responsibility => feels valued
Costs of high labour turnover
- Costs of recruiting, selecting and training new staff
- Poor output levels and customer service due to staff vacancies before new recruits are appointed
- Difficult to establish loyalty and regular contact with consumers
- Difficult to establish team spirit
Benefits of high labour turnover
- Low skilled and less productive staff can be replaced by more carefully selected workers
- New ideas and practices are brought into the organisation
Define management by objectives (MBO)
a method of coordinating and motivating all staff in an organisation by dividing its overall aim into specific targets for each department, manager and employee
Possible benefits of MBO
- Each manager and subordinate will know exactly what they have to do. This will help them prioritise their time and enable them to see the importance of what they do to the whole organisation
- By using the corporate objectives as the key focus to all departmental and individual objectives => everyone work to the same overall target => avoid conflict and ensure a consistent and well-coordinated approach
- Managers are able to monitor everyone’s performances => measure success or failure
Possible problems of MBO
- Process of diving corporate objectives can be time consuming. Best performed only after full consultation
- Objectives can become outdated quickly due to changing nature/dynamics of business
- Setting targets does not guarantee success. Issues such as adequate resources and staff training must also be addressed to achieve the targets
Why do we need labour legislation?
- Prevent exploitation of workers by powerful employers
- Prevent loss of industrial output and national income from excessive use of trade union collective action
How can the state affect industrial relations and trade unions?
- Through industrial relations law
- Through agencies set up to improve industrial relations such as arbitration councils
- Through its own policies as a major employer
Examples of labour legislation implemented (UK)
- removed the right to engage in strike action unless agreed by secret ballot
- allowed workers belonging to an union to force employer to recognise collective bargaining purposes
- greater protection against discrimination
Examples of labour legislation (Malaysia)
- protects right of workers to join or not join an union
- protects workers from being victimised by employers for joining an union
- union can request recognition after it has obtained more than 50% of staff as memeber
Causes of conflict between employers and employees
- Rationalisation and organisational change
- Common management view: business needs to cut overheads and be flexible and adaptable to deal with competition
- Common employee view:
- Business change - e.g. relocation/new tech
- Common management view: change is necessary to remain competitive and profitable
- Common employee view: change can lead to job losses, result in retraining new skills => might not be able to cope, demands greater flexibility
What are the 3 broad approaches to labour-management relations?
- Autocratic management style with a ‘take it or leave it’ attitude to workers
- Collective bargaining between powerful trade unions and major employers and their associations
- Cooperation between labour and management, recognising that successful competitive businesses will benefit all parties
Autocratic management style with a take it or leave it attitude
- no labour security and low levels of motivation
- staff will not have the opportunity to be trained due to frequent job changes
- no common objectives established between labour and management
- non-existent job enrichment and no staff involvement => no contribution
Collective bargaining between trade unions and employers
- national agreements were not always suitable/affordable for small businesses
- strikes and other industrial action caused disruption and lost output and sales
- powerful unions resisted any changes that might adversely affect their members and this led to a lack of investment in and development of key industries
Cooperation between labour and management
actively involve workers in important decision making and operational issues
Define trade union
an organisation of working people with the objective of improving the pay and working conditions of their members and providing them with support and legal services
Reasons for worker joining trade union
- power through solidarity, puts workers in stronger position
- individual industrial action. e.g. one worker going on strike is not effective
- provide legal support to employees who claim unfair dismissal or poor conditions of work
- unions pressurises the employers to ensure all legal requirements are met
How can negotiations be categorised?
- national level - with employers’ associations
- collective bargaining - at a business level is when a firm negotiates with union officials
- plant based bargaining where each factory or administration centre agrees a deal between union officials and local management
Define trade union recognition
when an employer formally agrees to conduct negotiations on pay and working conditions with a trade union rather than bargain individually with each worker
Benefits for employers
- Employers would be able to negotiate with one officer rather than individual workers
- the union system could provide an additional, useful channel of communication with the workers - 2 way communication
- unions can impose discipline on members who plan to take hasty industrial action that could disrupt business
- growth of responsible, partnnership unionism => increased productivity
Define single union agreement
an employer recognises just one union for purposes of collective bargaining
Define no strike agreement
unions agree to sign a no-strike agreement with employers in exchange for greater involvement in decisions that affect the work force
Reasons for no strike agreement
- improves the image of the union as being a responsible representative body and this could encourage employees to become members
- often agreed in exchange for greater union involvement in decision making process
Define industrial action
measures taken by the workforce or trade union to put pressure on management to settle an industrial dispute in favour of employees
Forms of industrial action
- Negotiations
- Go slow - workers keep working at a minimum pace as demanded by their contract of employment. Bonus payments might be lost but at busy times this action can be very disruptive
- Work to rule - employees refuse to do any work outside the precise terms of employment contract
- Overtime bans - refuse to work more than contracted number of hours
- Strike
Ways of settling disputes
- Negotiations
- Public relations - using media to try to gain public support for the employer’s position in the dispute
- Threats of redundancies
- Changes of contract
- Closure
- Lock outs
Define conciliation
the use of a third party in industrial disputes to encourage both employer and union to discuss an acceptable compromise solution
Define arbitration
resolving an industrial dispute by using an independent third party to judge and recommend an appropriate solution
Factors affecting the success of trade union (7)
Internal factors:
- Union density − this is the proportion of the workforce that are members of the union in dispute with the employer. If union density is high, then the union’s negotiating position is strengthened
- The importance of the job performed by union members − if the union represents key workers, then the union has a stronger bargaining position
- The cost of strike action to the employer − strikes are very expensive for any industry.
- The financial position of the firm − this will have to be considered in any negotiations.
External factors:
- The level of unemployment and economic activity − if jobs are scarce, the employer has a much stronger negotiating position.
- Labour and trade union laws
- Public opinion and media coverage − if workers are supported by the public, there will be more pressure on the employer to settle the dispute.
