3.6 Decision making to improve HR performance

Question 1

Human Resources

Answer 1

This refers to the organisation’s employees in general, or the department responsible for their management

Question 2

Human Resource Objectives

Answer 2

Health and safety
Employees’ rights (trade unions)
Hierarchy/promotion
Recruitment and selection
Legislation
Appraisals
Contracts
Training
Pay
Consultations
Motivation

Question 3

Importance of setting human resource objectives:

Answer 3

It gives employees something to work towards

Improves efficiency

Focus on decision making

Improves coordination between departments

Question 4

Internal influences on HR objectives:

Answer 4

Corporate objectives
(e.g. an objective of cost minimisation results in the need for redundancies, delayering, or another restructuring)

Operational strategies
(e.g. introduction of new IT or other systems and processes may require new staff training, fewer staff)

Marketing strategies
(e.g. new product development and entry into a new market may require changes to organisational structure and recruitment of a new sales team)

Financial strategies
(e.g. a decision to reduce costs by outsourcing training would result in changes to training programmes)

Question 5

External Influences on HR Objectives:

Answer 5

Available labour force – for example, the impact of Brexit.

Government legislation – changes in minimum wages or workplace practices.

Changes in technology – new machinery or equipment that can replace some jobs or enhance others.

Question 6

Soft HRM

Answer 6

Workers are the key to the business’s success.

Build the business around the skills of the workers.

Encourage the development of the workforce to create a competitive advantage.

Question 7

Hard HRM

Answer 7

Workers are a resource.

Adjust the workforce to meet the business needs, rather than adjust the business to work with the strengths of the workforce.

Recruit and train workers to fit the business.
Cost first focus.

Question 8

Differences between soft and hard HRM

Answer 8

Hard Soft
Autocratic leadership Democratic leadership
Hard pay bargaining Performance-related pay
High labour turnover More delegation,
Short-term workforce planning Long-term planning
Tall organisational structure Flat structure

Question 9

Labour Productivity

Answer 9

output per period/number of employees per period

Question 10

Unit Labour Costs

Answer 10

total labour costs / total units of output

Question 11

Employee Costs as a % of Revenue

Answer 11

employee costs/sales turnover x 100

Question 12

Absenteeism

Answer 12

staff absent/total number of staff

Question 13

Labour Turnover

Answer 13

number of employees leaving during period / average number employed during period

Question 14

Labour Retention

Answer 14

number of employees for one year or more / overall workforce number x 100

Question 15

Categories involved in human resource objectives and planning:

Answer 15

Employee engagement and involvement

Talent development

Investment (level) in employees training

Staff retention rates

Training

Diversity

Alignment of values

Number, skills, and location of employees

Question 16

Job Design

Answer 16

The process of deciding on the content of the job in terms of its duties and responsibilities.

Question 17

Hackman and Oldham

Answer 17

A model based on the belief that the task itself is the key to employee motivation

Question 18

Influences on organisational design:

Answer 18

Machinery
Money/finance
Existing skills
Nature, range, and volume of tasks for employees required to complete
Physical capabilities
The way work is organised/carried out
Quality standards
Time frame required for products to be completed

Question 19

Authority

Answer 19

The rights of permission assigned to a particular role in an organisation in order to achieve organisational objectives

Question 20

Influences on organisational design:

Answer 20

Machinery
Money/finance
Existing skills
Nature, range, and volume of tasks for employees required to complete
Physical capabilities
The way work is organised/carried out
Quality standards
The time frame required for products to be completed

Question 21

Delegation

Answer 21

The process of passing authority down the hierarchy from a manager to a subordinate

Question 22

Centralisation

Answer 22

An organisational structure where authority rests with senior management at the centre of the business.

Question 23

Decentralisation

Answer 23

An organisational structure where authority is delegated further down the hierarchy, away from the centre.

Question 24

Advantages of decentralisation

Answer 24

Delegation enables more managers to gain greater levels of responsibility, therefore, linking into Maslow’s self-esteem needs and Herzberg’s satisfiers.

Decentralisation enables senior managers to concentrate on their part of the business.

Question 25

Advantages of centralisation

Answer 25

The centralisation of power enables quicker decision-making. It also maintains consistency of practice in a business.

Question 26

Human Resource Flow

Answer 26

The flow of people in and out of the business

Question 27

What is included in the human resource flow:

Answer 27

Inflow
Recruitment and selection
Induction

Internal flow
Evaluation of performance/appraisal
Career development
Promotion and demotion, transfers, and redeployment
Training and development

Outflow
Employees leaving voluntarily, dismissal, redundancy, retirement

Question 28

Motivation theories - Taylor

Answer 28

“Motivated by money”

Key features of Taylor’s motivational theory:

Workers do not naturally enjoy work and so need close supervision and control

Therefore managers should break down production into a series of small tasks

Workers should then be given appropriate training and tools so they can work as efficiently as possible on one set task

Workers are then paid according to the number of items they produce in a set period of time- piece-rate pay

As a result, workers are encouraged to work hard and maximise their productivity

It links closely with an autocratic management style as the managers take all the decisions and give the orders to people below them

Question 29

Motivation theories - Mayo

Answer 29

Workers are not just concerned with money but could be better motivated by having their social needs met whilst at work

Key features of Mayo’s motivational theory:

Better communication between managers and workers

Greater manager involvement in employees’ working lives

Working in groups or teams

It closely fits in with a paternalistic style of management

Workers motivated by having social needs met

Managers should have greater involvement in employee’s working life

Question 30

Motivation theories - Herzberg

Answer 30

Hygiene factors and motivators are part of the two-factor theory

Key features of Herzberg’s motivational theory:

Motivators are more concerned with the actual job itself (e.g. how interesting the work is and how much opportunity it gives for extra responsibility, recognition, and promotion)

Hygiene factors are factors that ‘surround the job’ rather than the job itself – for example, a worker will only turn up to work if a business has provided a reasonable level of pay and safe working conditions but these factors will not make him work harder at his job once he is there.

Question 31

Maslow’s Hierarchy of Needs

Answer 31

There is a hierarchy of needs of each employee

Workers are motivated by having each level of needs met in order as they move up the hierarchy

Levels of needs are: Physical, Security, Social, Self-esteem, Self-fulfilment

Workers must have a lower level of needs fully met by the firm before being motivated by the next level

Question 32

Financial methods of motivation

Answer 32

Time-rate pay

Piece-rate pay

Commission

Other performance-related pay (including bonuses)

Pensions

Question 33

Non-Financial methods of motivation

Answer 33

Fringe benefits

Flexible working

Job enrichment

Job rotation

Rewards

Question 34

Benefits of a good employee-employer relationship:

Answer 34

Communication is better and clearer

Change is easier to adapt to as the employees understand the need for it

More motivated workforce – a happier place to work

Employees feel more comfortable and relaxed

Innovative and more effective problem solving

Employees feel more involved and part of the team

Happier employees mean lower labour turnover

Decision making is more efficient

Organisations become more competitive

Question 35

Trade union

Answer 35

These are organisations of workers that seek collective bargaining with employers

Question 36

Why do businesses join trade unions?

Answer 36

Protect and improve the real incomes of their members

Provide or improve job security

Protect workers against unfair dismissal and other issues relating to employment legislation

Lobby for better working conditions

Offer a range of other work-related services including support for people claiming compensation for injuries sustained in a job