3.6 Decision making to improve HR performance Flashcards
Human Resources
This refers to the organisation’s employees in general, or the department responsible for their management
Human Resource Objectives
Health and safety
Employees’ rights (trade unions)
Hierarchy/promotion
Recruitment and selection
Legislation
Appraisals
Contracts
Training
Pay
Consultations
Motivation
Importance of setting human resource objectives:
It gives employees something to work towards
Improves efficiency
Focus on decision making
Improves coordination between departments
Internal influences on HR objectives:
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)
External Influences on HR Objectives:
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.
Soft HRM
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.
Hard HRM
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.
Differences between soft and hard HRM
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
Labour Productivity
output per period/number of employees per period
Unit Labour Costs
total labour costs / total units of output
Employee Costs as a % of Revenue
employee costs/sales turnover x 100
Absenteeism
staff absent/total number of staff
Labour Turnover
number of employees leaving during period / average number employed during period
Labour Retention
number of employees for one year or more / overall workforce number x 100
Categories involved in human resource objectives and planning:
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
Job Design
The process of deciding on the content of the job in terms of its duties and responsibilities.
Hackman and Oldham
A model based on the belief that the task itself is the key to employee motivation
Influences on organisational design:
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
Authority
The rights of permission assigned to a particular role in an organisation in order to achieve organisational objectives
Influences on organisational design:
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
Delegation
The process of passing authority down the hierarchy from a manager to a subordinate
Centralisation
An organisational structure where authority rests with senior management at the centre of the business.
Decentralisation
An organisational structure where authority is delegated further down the hierarchy, away from the centre.
Advantages of decentralisation
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.
Advantages of centralisation
The centralisation of power enables quicker decision-making. It also maintains consistency of practice in a business.
Human Resource Flow
The flow of people in and out of the business
What is included in the human resource flow:
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
Motivation theories - Taylor
“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
Motivation theories - Mayo
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
Motivation theories - Herzberg
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.
Maslow’s Hierarchy of Needs
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
Financial methods of motivation
Time-rate pay
Piece-rate pay
Commission
Other performance-related pay (including bonuses)
Pensions
Non-Financial methods of motivation
Fringe benefits
Flexible working
Job enrichment
Job rotation
Rewards
Benefits of a good employee-employer relationship:
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
Trade union
These are organisations of workers that seek collective bargaining with employers
Why do businesses join trade unions?
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
