3.6 - Decision Making To Improve HR Performance Flashcards
What is HRM?
The design, implementation and maintenance of strategies to manage people for optimum business perfromace
Includes activities like staff performance, recruitment and trainging - contributes to individual and company growth
What are the 6 main objectives of HRM?
1 Number, skills and location of employees
- ensures right number at right time with right skills and attitudes
2 Alignment of values
- making sure feel central to decision making-sense of purpose
- recruitment and training focus on aligning staff with businesses core values-helps motivation and retention levels
3 Diversity
- shareholders benefit from diverse range of skills, background and experience in business
4 Employee engagement and involvement
- if not either they wont give 100%
5 Training
- more person does, more motivated
6 Talent development
- given opportunity for career progression but focusing on individuals could demotivate others, effecting teamwork, morale and culture
What are 3 internal and 3 external influences on HR objectives and decisions?
INTERNAL
- past experiences, character and ambitions of new chief executives
- financial pressures (shareholders)
- changing marketing objectives (change training for higher service standard
EXTERNAL
- economic factors (if a boom-thriving and growing-may be shortage of employees if all businesses booming and want staff)
- legal factors (legislation-pay or hours able to work)
- improvements in technology (could job be taken over/need training)
Summarise the hard and soft strategies used by HR
focus and 3 key features from each
HARD
- employee treat as a resource which needs monitored for efficiency-easily replaced
- identify workforce needs-recruit and manage accordingly
1 minimal communication-from top down
2 little empowerment or delegation (autocratic)
3 appraisal system focused on making judgements-objectively
SOFT
- employees treat as valued asset, source of competitive advantage and as individual with needs planned accordingly
- concentrated on needs (roles, rewards motivation)
1 strong, regular two way communication (democratic)
2 empowered and encourage to seek responsibility and delegation
3 appraisal system focused on identifying and addressing development needs
Which is the better strategy hard or soft in HR?
One advantage and disadvantage of each
Hard
+ more cost effective workforce-quicker decision making and focused on senior managers
- likely to suffer higher absenteeism, staff turnover and less successful recruitment
Soft
+ rewards employee performance and motivates more effectively
- be “too soft” and when all employee benefits added up, cost of workforce may leave business at competitive disadvantage
Managers require objective, unbiased ways to measure performance to look at motivation, productivity and if goals are met, what 5 measures could be used?
Employee costs as percentage of turnover
Employee retention rate
Labour productivity
Labour cost per unit
Labour turnover
How is labour productivity calculated?
Labour productivity = output per time period/number of employees
What is Britain’s productivity like? What 4 reasons have been put forward to explain this?
UK has experienced slump in productivity since financial crisis showing no signs of ending
- low rate of capital investment (most cant afford latest technologies)
- banking crisis (affects lending to those wanting to expand)
- persistent and skill shortages in key industries
- relatively low levels of market competition
How can labour productivity be improved (5 ways) and why should it?
HOW (increased productivity=efficiency improvement)
- better technology (grants given to help afford this)
- training
- specialisation of staff
- motivation
- leadership
WHY
- higher growth in productivity is how nations become richer, living standards rise, governments have resources to improve public services or cut taxes
- if more productive can become more competitive (charge lower prices) and achieve higher profits as due to quicker production and better quality
- lower labour cost
Employee costs as a percentage shows the impact of productivity, how is this calculated? What does a higher figure and higher percentage show?
Employee costs as a percentage of turnover = (employee costs/sales turnover) x 100
High figure can show impact of inefficiency (eg/ less productive staff, lower sales)
Higher percentage could be indication of more staff/better service in service sector organisation
Have to compare to similar businesses only
Labour cost per unit closely links to profitability (what is actually kept, how is it calculated? What does a higher or lower labour costs per unit show?
Labour cost per unit = labour costs/units of output
If labour cost per unit is higher, lower profit margins made
Lower labour costs per unit allow firm to be more competitive
Labour turnover measures the rate of change of a firms workforce, how is it calculated? What are 3 internal and 1 external cause of high labour turnover?
Labour turnover(%) = (no. staff leaving during year/average no. employed during year) x 100
A business does not want 0 turnover - want new skills and ideas
INTERNAL
- poor recruitment processes (wrong staff)
- ineffective leadership/motivation
- wage lower than other firms
EXTERNAL
- more local vacancies (choose jobs closer to home-les travel/better transport)
What are the pros and cons of high labour turnover?
3 of each
+ new workers-new ideas and enthusiasm
+ new skills-rather than existing training only
+ new perspective and ways to solve problems
- high cost of recruitment and training
- takes time for staff to settle-less effective
- loss of productivity while they learn
Employee retention added to turnover totals 100%, it is the % that stay, how is it calculated?
Employee retention rate (%) for particular time period = ((no. employees at end-number of leavers)/no. at end of period) x 100
To what extent is it important to consider the views of stakeholders when making decisions?
Need to consider stakeholder interest, power and influence - some catered to more than others which varies overtime
Stakeholder desires could conflict-hard to make all happy
Eg/ in recession important to reduce prices resulting in wage rises being delayed or shareholders returns lowered
Managers have to make regular judgements about extent to which needs of particular groups should be satisfied - have to do whats best for business even if it reduces profit margins
To what extent is centralised approach (head office keep control of how organisation is run) to decision making right for all organisations?
2 pros 2 cons
+ maintains uniformity of product/service
+ head office can provide support functions more effectively
- local differences in eg/ taste - important issue for large companies in different markets
- branch mangers no say over inventory ordering may ignore valuable local knowledge - high labour turnover
What is job design?
Tasks and responsibilities grouped into specific job
Boring repetitive jobs often lead to poor quality and low productivity (demotivated)
In relation to job design, what did Herzberg introduce?
Concept of job enrichment - redesigned to do range of activities and responsibilities and cut tall structures
Builds motivating potential
Hackman and Oldham expanded on this - provided framework to enrich jobs-job characteristics model
Hackman and Oldham expanded on the work of Herzberg, creating a job characteristics model, what is it based on? What are the 3 things involved in it?
Based on belief task is key to motivation
1 CORE JOB CHARACTERISTICS - suggested there was 5 characteristics to help predict job satisfaction
- measured against scale from very low to very high coverage
2 PSYCHOLOGICAL STATES- focus on people than jobs,
- there are 3 things which impact state
- greater level of these gives a positive and relaxed worker
3 OUTCOMES
- 1&2 both impact workplace outcomes-can and should be measured
- consist of employee motivation, performance, job satisfaction and practical measurements eg/turnover
What is the value of changing job and organisation design?
JOB
+ lead to reduced stress levels associated with lack of control (manage themselves) so lower absenteeism and labour turnover figures
ORGANISATION
- some businesses have changed many times in the search for the perfect structure, does it exist
From Hackman and Oldham’s model for job enrichment, Outline the 5 aspects of job design that according to their model, can influence how motivating a job will be
ive 2 examples of characteristics to help predict job satisfaction (CORE), 2 examples of what affects workers psychological state
CORE
1 skill variety
(able to do no. diff tasks using no. skills/talents/abilities aka does it stretch them to develop skills, motivating not repetitive)
2 task identity
(clearly defined-enjoy feelings of achievement as opp. to complete from start to finish with identifiable outcome)
3 task significance
(importance of job&impact of employees work)
PSYCHOLOGICAL
4 meaningfulness of work&feedback
(can relate to work not just repeated movements&offered feedback regarding performance&outcome)
5 responsibility for outcomes aka autonomy
(given opp, freedom, learn on job&have control of own work)
What is involved in organisation structures? Why is organisational design needed?
Breaks an organisation into functions-shows the roles, responsibilities and relationships of each member in a business (links departments with people)
Reinforces communication flow, lines of authority and layers of hierarchy
Organisations grow, become more complex, require more formal structure and more management layers (managers aren’t overloaded with subordinates)
- more management levels means slower, less reliable communication and more difficult to see work done by those closest to customer
What is span of control? What are the 2 types?
Number of people directly under supervision of one manager
NARROW - smaller number reporting to one manager
WIDE - large number of staff reporting to one manager
What are the 3 advantages and 3 disadvantages of narrow span of control?
For WIDE span of control=opposite
(WIDE - large number of staff reporting to one manager)
+ allows close management supervision (vital if staff are inexperienced or task is critical)
+ excellent communications (small immediate team)
+ many layers of hierarchy-chances to move up career ladder
- workers feel over supervised-feel not trusted so leave
- communications suffer, more layers so vertical communications harder
- restricted scope for initiative and experiment
What is the extent to which decision making power and authority is delegated known as?
Centralisation - decision making power remains in hands of top management
Decentralisation - decision making power delegated to workers lower down hierarchy (attitudes to staff influence this-is there trust? Empowers and motivates staff)
Toyota changed their organisational structure from centralised to decentralised? Why? What does the new structure now allow?
Changed as response to safety issues and corresponding product recalls-before Japan headquarters made all decisions, individual units didn’t communicate, slow response
+ greater degree of flexibility empowers Toyota to speedily response to issues
+ more capable of responding to regional market conditions
+ facilitates business resilience and contributed growth
- increased decision making of regional heads has reduced headquarters control
Delayering is removing a management layer.
Who is it good for?
Who is it bad for?
GOOD for some employees and shareholders (better finance)
BAD for trade unions and some employees (may effect community)
What is matrix design/management? What are the advantages and disadvantages of this?
Staff work in project teams in addition to responsibilities-can be answerable to more than one boss
+ help break traditional department barriers improving communication across entire organisation
+ individuals use particular skills within a variety of contexts (motivating)
+ share resources (cost effective) and ideas
- members have divided loyalties as report to two line managers-under a heavy pressure of work
- takes time for matrix team member to get used to the structure
- may neglect functional responsibilities
What is HR planning about and what are the 4 key steps of the workforce plan? How are these impened within the business?
Thinking ahead so staff have right balance of the right skills each year into future
1 Audit aka inspect
(what do you have atm-how many staff, their skills, aspirations etc)
2 Analyse
(corporate plan to turn plans into people-eg/growth)
3 Account
(for changes between now&then eg/leavers, retirements etc)
4 Calculate
(gaps needing filled)
Plans then put into practice through recruitment, training&planned redundancies
What is job description and personal specification?
- Duties and responsibilities of job (pay, location, hours etc)
- Essential and desirable skills, qualifications, attributes required in person to fill role
What are 3 types of training?
3 types:
- induction training
(insight to business culture, aims objectives, health and safety, security and meet key members-familiarises employee with business so ready to start)
- on the job training
(workers trained whilst doing job, shadow experienced workers-some degree of productivity)
- off the job training
(leave job to train, fully focused, specialist trainers, lost production)
What is redeployment?
Why is this beneficial (4)?
Find employees another role in the business to avoid redundancy (changes in demand or tech make tasks or responsibilities redundant)
+ staff from redundant roles may be able to switch to other role elsewhere
+ saves redundancy payments
+ helps morale
+ avoids external recruitment
What is piece rate pay?
Would could this lead to?
Paid amount per item sold
Then work faster to earn more (better productivity and output)
- more wastage=more costs as mistakes made
- quality suffers (reputation suffers)
Could lead to being a lower quality business charging lower prices
What is employee engagement?
Contribution employee makes toward their work including intellectual effort&positive emotions
What was found about motivation in the UK?
15% highly motivated
25% coasting
8% completely demotivated
28% would be more productive with better boss
If underperformance tackled, value of UK output would rise by more than £350 billion a year=motivation matters
What are the 4 motivational theorists and what do they advocate?
Taylor (scientifc management)
Mayo (human relations management-Hawthorne effect)
Maslow (hierarchy of needs)
Herzberg (2 factor theory-hygiene or maintenance factors)
What is Taylors scientific management theory and its 4 main principles?
How is it applied to a business (3)?
MOTIVATION
Workers mainly motivated by pay
- employers should reward for every increased productivity rather than scolding for every minor mistake “dont have intative&obey orders&quick”
4 main principles:
1 use scientific methods to determine&standardise 1 best way of doing job eg/identify person doing best process&apply to all
2 clear division of tasks&responsibilities
3 high pay for high performing employees (eg/piece rate)
4 hierarchy of authority&strict surveillance of employees (bc dont enjoy job)
How to apply
1 measurement of what can be done better&how
2 motioring to ensure targets=met
3 control through analysis
What is Herzberg’s two factor theory?
How does the business implement this?
- There’s certain factors business could introduce that would directly motivate employees to work harder (motivators-eg/advancement, nature of work, responsibility, recognition)
- Also factors that would de-motivate employee if not present but wouldn’t in themselves actually motivate employees to work harder (hygiene factors-eg/company policies, quality of leaderships, work conditions)
Managers have to create ideal enviro eg/eliminate demotivators&increase motivators (focus on motivation&job enrichment, talk to employees, be an example setting standards of work, give a voice
What is Mayos Human Relation Theory?
How does the business implement this, what did he conclude best motivated workers (3)?
Workers not just concerned with money, could be better motivated by having social needs met whilst at work (paternalistic management style)
Did Hawthorne effect experiment-found job satisfaction &productivity increased through new light levels&employee participation, not ST incentives
Mayo concluded that workers best motivated by:
1 Better communication between managers&workers (taking interest, hearing opinions)
2 Greater manager involvement in employees working lives (what do they enjoy?)
3 Working in groups or teams
What is Maslow’s hierarchy of needs? How does the business implement this? Give 2 advantages and 2 disadvantages
Focused on psychological needs of employees
5 levels of needs employees need fulfilled at work, only once lower need is fully met will worker be fully motivated by having next need in hierarchy satisfied (basic bottom, more personal as up)
1 psychological
(basic needs - acceptable pay and conditions)
2 safety
(safe working environment/job security, health and safety protection)
3 social
(sense of belonging-working in team, mentor and coaching)
4 esteem
(self respect/status-trust, recognition of achievements)
5 self actualisation
(intellectual needs&fulfilling potential-challenging work, promotion opportunities)
Business should offer different incentives to help fulfil each need in turn and progress up hierarchy
Herzbergs work had such an impact n business as he also gave a method to improve motivation
What is it and what 3 things does it involve?
Job enrichment- giving people opportunity to use ability
For job to be enriched it would have to contain:
1 complete unit of work
(not just small repetitive fragment of job but challenging tasks)
2 direct feedback
(work should enable worker to immediately judge quality of what he/ she has done-gives satisfaction of knowing how ell done-must be held responsible for own quality)
3 direct communication
(avoid delays of communication via supervisor so feel committed, in control and gain direct feedback-communication and motivation interrelated)
Why is effective communication important?
How can it be managed and improved?
Links various activities
Without, employees wouldn’t know what to do, why, how, when to do it by and managers would have little idea of how business performing and what people actually doing
- ensures all working to common goal an enables feedback (help staff feel have real input on business decisions)
- vital for decisions (need high quality info-need to know what shop floor staff know about customer and competitors)
M&I
- take regular initiatives to meet with staff and talk
- staff happy to keep contributing thoughts if know complaints aand suggestions addressed
What are the influences on employer employee relations?
- underlying demand conditions
(eg/ revenue growing, whole staff optimistic about job security and promotion prospects) - level of skill required by producers of product or service
(risk of “them and us” divide if management see staff as low skilled, causing rift in communication and trust, may build solidarity in opposition) - conditions in broader labour market
(if economy booming, demand for labour high enough to make staff push hard for perhaps overly ambitious improvements to pay and conditions of service-fault lines then appear between employer-employee)
What are methods of employee involvement?
Success depends on full participation of many staff possible
SMALL FIRMS-informal griup consisting of 1 person from each department, monthly meetin gs used to raise issues and discuss future plans
LARGER FIRMS-formal methods so structure to allow element of workplace democracy or staff represented by trade union
Why would a company recognise a trade union?
Helpful for managers to have small representative group to consult and negotiate with-collective bargaining removes need to bargain with every individual
Promote consultation over conflict (union officials consulted by business at early stage about causes, procedures and objectives-give workforce confidence management acts thoughtfully)
Provide channel of upward communication not filtered by middle managers
Outline a case where theres been a lot of trade union involvemnt
Include teir plan, action, deal, results&duration
BRITISH AIRWAYS
PLAN
-unite&secure deal t end long running dispute over BA’s plans to fire&rehire workforce in cargo division
ACTION
-undertook 9 day strike over Christmas/new year causing overwhelming disruption to company’s cargo services, then proposed further 9 days but called of last minute after progress made during negotiations
DEAL
-key points inc. end of fire rehire, no compulsory redundancies, improved pay protection whose pay sits above new agreed rates, increased pay for significant prop. of staff
RESULTS
-anticipated deal will be accepted, airline believes bc of agreed changes they’ll modernise crew industrial relations&help ensure same kind of dispute doesn’t occurs again
DURATION
-began in 2009, resulted in travel chaos for many passengers costing BA around £150m
To what extent is increased labour productivity accepted by workers?
Aka depends on factors
How higher profits achieved are shared (do employees earn more/invested in R&D)
How is higher productivity achieved (more work/better equipment-but might create fear of job being taken over)
Does greater productivity impact quality
How much is the targeted increase in productivity
Taylors motivational theory is a scientific management theory which suggests employees are best motivated by financial reward
Explain 1 benefit and 3 costs
Is it used today?
MOTIVATION
+ increase in output&profit, lower costs so more competitive&raise pay
- workers easily replaced due to high pay (no security)
- quit (no time to slow or stop-unhappy&overly supervised and overworked)
Depends on what actually motivates YOUR employees regardless of industry
TODAY trade unions involved&employment laws (recorded reason need to sack)
Analyse 3 effects/outcomes on the business/indiviual of a firm using Hackman&Oldhams model
Autonomy=people given independence, control&freedom over task completing so feel empowered&trusted by business thus valued&motivated=better productivity
Feedback enables performance to be monitored ebales work to be improved thus reduced waste&better customer satosafcatiin&enables employee to develop
Task identity=see complete unit of work, feel make difference=empowered
What are 3 advantages and 3 disadvantages of delayering?
+ REDUCED COSTS (wages) - higher up higher wages and bonuses (more costly)
+ BETTER EFFICIENCY through reduced length of chain of command
+ NATURAL WASTAGE seek voluntary redundancies not forced out of job (nicer way) if not criteria has to be fair to justify
- STAFF UNHAPPY with more responsibility especially if on same pay
- REDUNANCIES DEMOTIVATE remaining staff=union involvement (strike)
- DAMAGES CUTOMER RELATIONSHIPS as sales disrupted, trust gone
4 steps in HR planning consist of audity/inspect, analyse, account and calculate and tend to be implemented in th ebusiness through recruitment training and planned redundancies
What dose this place emphasis on/focus on in relation to HR?
Emphasis on recruitment, quantity&quality of staff
Eg= if expanding, new skills needed OR are job roles the same?
- internal/external advertisement needed but expensive&time consuming so has to be right first time
3 types of training are induction, on the job and off the job, what are 3 costs and 3 benefits to training?
+ increases skills
(improve productivity and quality)
+ increases flexibility
(quick response to changes in demand or tech)
+ more motivated workforce
(more chance for development and promotion)
- expensive
- production disrupted, lost output
- newly trained workers may be poached by other firms
What is motivation?
What are the 4 impacts of a motivated workforce?
Desire to achieve results
+ better productivity
(lead to lower unit costs, enabling firm to sell at lower price)
+ lower levels of absenteeism
(content workers-also gives good reputation)
+ lower levels of staff turnover
(less leaving=lower training and recruitment costs)
+ likely to improve product quality/customer service associated with product
Taylors motivational theory is a scientific management theory which suggests employees are best motivated by financial reward
Which industry types is it most/least suitable for?
MOST
factories where labours divided with specialised roles so piece rates possible (speed up if paid for every job performed)
LEAST
service&high quality=cant measure as time with each customers diff as may have diff qs etc so wouldn’t work
Herzbergs 2 factor theory explains motivation through motiavtors and demotivators
Give 2 advantages and 2 disadvantages
+ focuses on employees rather than external factors
+ brings change by measuring employee satisfaction not in terms of money but other equally important factors
- job satisfaction and job productivity not directly related so business may face disappointment
- different people have different perceptions of job satisfaction
Mayos Human Relation Theory suggests workers arent just concerned with money and could be better motivated by having social needs met whilst at work (paternalistic management style)
Give 2 advantages and 2 disadvantages
+ makes more democratic workforce
+ workers given more freedom at work
- individual responsibilities cause pressure and stress
- workers given more freedom=less control
Malows hierarchy of needs focuses on psychological needs of employees where 5 levels of needs employees need fulfilled at work
Give 2 advantages and 2 disadvanatges
+ hugely influential
+ can be applied to most jobs and is simple to understand as all go through at least one stage of needs in pyramid during lifetime
- not everyone has same needs and may move through pyramid in different orders due to different degree of need
- not everyone has same set of needs (some need no more than money from job) and may never be fully satisfied (human desire for achievements limitless)
What are the values of having good employee employer relations?
VALUABLE bc they have to get along in long term for business success
- as changing external market conditions can force change eg/ redundancy trust hugely valuable (staff accept short term difficulty if believe headed in right direction-need to base on “all in it together”
