3.6 Decision making to improve human resource performance

Question 1

HR Objectives - TRAINING

Answer 1

Improving work-related skills and knowledge if employees results in improved employee performance

Question 2

HR Objectives - DIVERSITY

Answer 2

Based upon gender, race & ethnicity, disability, religion, sexuality, class and age - PROTECTED CHARACTERISTICS

Diversity in senior management position and external recruitment

Question 3

Influences on HR objectives - INTERNAL (hard HRM)

Answer 3

Employees are seen as a resource to the business

Seen as short-term –> can be hired or fired as necessary

Employees are paid as little as possible,
Have limited control
Minimal communication
Little empowerment or delegation

Suits autocratic and mainly motivated by pay

Question 4

Influence on HR objectives - INTERNAL (soft HRM)

Answer 4

Employees are seen as the most important resource of the business and seen as a source of competitive advantage too

Seen as long-term to achieve long term corporate objectives

Strong and regular two way communication
Competitive pay w performance related rewards
Empowerment & delegation –> employees have more control

Suits democratic style of leadership

Question 5

Calculating HR data - LABOUR TURNOVER

Answer 5

Labour turnover is the % of a businesses employees who leave the business

Labour turnover = number of staff leaving / number of staff employed by the business x 100

Labour turnover could be due to –> low wages, poor morale

Question 6

Calculating HR data - LABOUR RETENTION

Answer 6

Labour retention is the extent to which a business holds onto its employees –> (employees who remain/stay in the business)

Labour retention = number of employees who stayed / number of employees at the start of the business x 100

Question 7

Calculating HR data - LABOUR PRODUCTIVITY

Answer 7

Measures output per employee per time period

Labour productivity = total output / number of employees

Question 8

Calculating HR data - EMPLOYEE COSTS AS A % OF TURNOVER

Answer 8

Measure of employee performance for the business

Employee costs / sales turnover x 100

Question 9

Calculating HR data - LABOUR COST PER UNIT (unit costs)

Answer 9

Measures the labour cost per unit of output produced

Unit costs = labour costs / unit of output

Unit costs are determines by –> 1) cost of employing workers and 2) productivity (speed at which products are produced)

Question 10

Job design

Answer 10

Job design - grouping together tasks and responsibilities to complete jobs

1) Job enlargement - adding extra similar tasks –> prevents repetition & stimulates interest

2)Job rotation - employees switch regularly between different jobs

3) Job enrichment - employees jobs are redesigned to provide them with more challenging and complex tasks

4) Empowerment - employees gain greater control over their working lives

Question 11

Job Design - HACKMAN AND OLDHAM’S JOB CHARACTERISTICS MODEL

Answer 11

Five job characteristics which predict job satisfaction & motivation

1) Skills Variety - range of skills required of the employee

2) Task Identity - a clearly defined task which has successfully been completed

3) Task Significance - does the task have an actual impact (if its meaningless, its demotivating for the employee)

4) Autonomy - Freedom of employees over working lives to complete tasks

5) Job Feedback - employees receive feedback on their work

Question 12

Influences on Organisational design - AUTHORITY

Answer 12

The power to give orders, make decisions and to control

Authority comes with responsibility for actions & decisions taken

Question 13

Influences on organisational design - SPAN OF CONTROL

Answer 13

Number of subordinates directly responsible to a manager

Wide span of control = flat organisational structure

Narrow span of control = tall organisational structure

Question 14

Influences on organisational design - WIDE SPAN OF CONTROL

Answer 14

Wide span of control = flat organisational structure

Advantages:
- Less layers = better communication
- More autonomy & responsibility for employees
- Independence = motivation = increased labour productivity

Disadvantages:
- lack of progression opportunities for employees
- stuck in same repetitive job –> leads to demotivation
- higher workload for managers

Question 15

Influences on organisational design - NARROW SPAN OF CONTROL

Answer 15

Narrow span of control = tall organisational structure

Advantages:
- more opportunities for progression within the company
- close supervision = more open communication between employees and managers –> improves satisfaction

Disadvantages:
- increased costs on training because of additional managers
- companies need more managers to supervise fewer employees which links to recruitment costs

Question 16

Influences on organisational structure - HIERARCHY

Answer 16

Hierarchy - refers to number of layers of authority within an organisation

Chain of command - line of communication & authority

Tall organisations = narrow span of control, more levels of hierarchy –> longer chain of command

Flat organisations = wide span of control, fewer levels of hierarchy –> shorter chain of command

Question 17

Influences on Organisational design - DELEGATION

Answer 17

Passing authority down the organisational structure

Advantages:
- reduces workload of senior managers
- improves skills of junior employees
- employees have closer relationship w customers –> so could meet customer needs better

Disadvantages:
- costs of training employees to have necessary skills
- not appropriate in certain situations e.g. rapid decisions need to be made by experienced senior managers

Question 18

Influences on organisational design - CENTRALISATION

Answer 18

When majority if decisions are made by senior managers

Advantages:
- rapid decision making due to fewer people being consulted
- ensures the business pursues objectives set by managers
- allows senior managers to retain control

Disadvantages:
- lack of authority down the hierarchy –> reduces motivation
- junior employees are less engaged because they aren’t involved

Question 19

Influences on organisational design - DECENTRALISATION

Answer 19

When authority for decision making is given to junior employees

Advantages:
- employees needs are fulfilled e.g. achievement + recognition
- reduces workload on senior managers –> can focus on key tasks

Disadvantages:
- costs of training on junior employees to have required skills
- inappropriate in certain situations e.g. rapid decisions need to be made by experienced senior managers

Question 20

Value of changing job and organisational design

Answer 20

Improves performance of workforce –> increase in labour productivity leading to reduced unit costs

Delayering (removing layers) can also reduce unit costs

Question 21

HR flow - RECRUITMENT

Answer 21

Recruitment and selection - process of filling an organisations job vacancies by appointing new staff

Question 22

HR flow - INTERNAL RECRUITMENT

Answer 22

Firms recruiting staff through promotion or redeployment within the business

ADVANTAGES:
- Cheaper and quicker to recruit
- People already familiar with & how the business operates
- Opportunities for progression –> motivating

DISADVANTAGES:
- Limits the number of potential applicants
- No new ideas can be introduced from outside
- May cause resentment amongst candidates not appointed
- Creates another vacancy which needs to be filled

Question 23

HR flow - EXTERNAL RECRUITMENT

Answer 23

Firms recruiting staff from outside of the business e.g. job centres

ADVANTAGES:
- Outside people bring in new ideas
- Larger pool of workers from which to find the best candidate
- People have a wider range of experience

DISADVANTAGES:
- Longer process
- More expensive process due to advertising and interviews

Question 24

HR flow - TRAINING

Answer 24

Process whereby an individual acquires job related skills & knowledge

ADVANTAGES:
- improves employee performance –> competitiveness increases
- improves employee motivation & productivity
- reputation for training attracts high quality employees

DISADVANTAGES:
- Costly –> uses up valuable resources
- training –> employees are unavailable for a period of time

Question 25

HR flow - ON THE JOB TRAINING

Answer 25

Doesn’t require employee to leave the workplace

They learn through observation and shadowing

Receives guidance from senior managers

Question 26

HR flow - OFF THE JOB TRAINING

Answer 26

Training outside the workplace e.g. at college or university

Question 27

HR flow - REDEPLOYMENT

Answer 27

Occurs when an employee is offered alternative employment within the same business

Question 28

HR flow - REDUNDANCY

Answer 28

Takes place when an employee is dismissed because a job no longer exists or when:

Question 29

Benefits of motivated & engaged employees

Answer 29

Better productivity –> lower unit costs of production –> products can be sold at a lower price

Lower levels of absenteeism and labour turnover as the employees are content with their working lives

Motivated employees –> improved quality / customer service

Question 30

Motivation - TAYLOR (scientific management)

Answer 30

Money is the main force that motivates employees to work at a company.

1) Work study - identified most efficient methods of production

2) Normal times - spot the most efficient workers and approaches they have adopted

3) Training - train the remaining workers to be like the best

4) Piece-rate pay - pay workers based on their productivity

Question 31

Motivation - MASLOW

Answer 31

5) SELF ACTUALISATION - fulfilling potential

4) ESTEEM NEEDS - recognition & achievement

3) SOCIAL NEEDS - relationships w fellow employees

2) SECURITY NEEDS - safe working conditions, job security

1) PHYSIOLOGICAL NEEDS - food, drink and shelter

Question 32

Motivation - HERZBERG

Answer 32

MOTIVATORS - factors that directly motivate people to work harder –> which would include:
1) Responsibility at work
2) Meaningful and fulfilling work
3) Achievement & recognition

HYDIENE - factors that can potentially demotivate employees if not present but don’t actually motivate employees to work harder –> which would include:
1) Pay & other financial rewards
2) Working conditions
3) Appropriate supervision & policies

Question 33

Financial methods of motivation - PIECE RATE PAY

Answer 33

When employees are paid accordingly to how much of a product they produce

Advantages:
- increased production and efficiency
- less wasted money

Disadvantages:
- poorer quality
- pressure on employees to work harder –> negative effect on employee morale

Question 34

Financial methods of motivation - COMMISION

Answer 34

Commission is a payment made to employees based on the value of sales achieved

Advantages:
- enables high performing sales for people to earn more

Disadvantages:
- employees may cut corners to make sales e.g. may not explain the product in enough detail to the customers

Question 35

Financial methods of motivation - SALARY SCHEMES

Answer 35

When employees are paid for the amount of time they spend at work.

Advantages:
- easy for a business to calculate

Disadvantages:
- does little to encourage greater productivity –> no incentive

Question 36

Financial methods of motivation - PERFORMANCE RELATED PAY

Answer 36

Exists where some part of an employees pay is linked to the achievement of targets at work

Advantages:
- increases employee motivation
- gives them an incentive to work harder

Disadvantages:
- disputes about how performance is measured & seen as unfair as employees may not get on with managers

Question 37

Non-financial methods of motivation - JOB DESIGN

Answer 37

Job rotation –> improve skills, increased interest & motivation

Job enlargement - less repetition and monotony

Job enrichment - greater responsibility due to increased amount of tasks —> abilities being used to the fullest

Empowerment - giving people greater control over their working lives —> higher productivity

Question 38

Non-financial methods of motivation - TEAMWORK

Answer 38

Allows employees to meet social needs e.g. relationship with other fellow workers

Fulfils esteem needs of Maslow’s hierarchy

Question 39

Employee Representation - TRADE UNIONS

Answer 39

Trade Union - an organisation of workers established to protect and improve working conditions of its members

Advantages for an employer with a good relationship with a TU:

• Employee morale & motivation may be improved if they know that their interests are being protected by a union

Question 40

Employee Representation - WORK COUNCILS

Answer 40

Work council - a meeting where workers and management discuss issues such as working conditions, pay and training

Question 41

Improving employer-employee communications

Answer 41

Regular and effective communication helps ensure employees remain closely focused on corporate objectives

Technology can be used to improve communications such as:
1) Email
2) Social Media
3) Video conferencing

Question 42

Value of good employer-employee relations - BENEFITS TO EMPLOYERS

Answer 42

1) Strong employer brand –> reduced disputes will attract more able and productive employees

2) Promoting employee engagement

3) Strengthening competitiveness

Question 43

Value of good employer-employee relations - BENEFITS TO EMPLOYEES

Answer 43

1) Financial benefits - good relations mean employees avoid loss of pay during industrial disputes

2) Job security

3) Greater participation in decision making