3.6 Decision making to improve human resource performance Flashcards
HR Objectives - TRAINING
Improving work-related skills and knowledge if employees results in improved employee performance
HR Objectives - DIVERSITY
Based upon gender, race & ethnicity, disability, religion, sexuality, class and age - PROTECTED CHARACTERISTICS
Diversity in senior management position and external recruitment
Influences on HR objectives - INTERNAL (hard HRM)
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
Influence on HR objectives - INTERNAL (soft HRM)
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
Calculating HR data - LABOUR TURNOVER
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
Calculating HR data - LABOUR RETENTION
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
Calculating HR data - LABOUR PRODUCTIVITY
Measures output per employee per time period
Labour productivity = total output / number of employees
Calculating HR data - EMPLOYEE COSTS AS A % OF TURNOVER
Measure of employee performance for the business
Employee costs / sales turnover x 100
Calculating HR data - LABOUR COST PER UNIT (unit costs)
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)
Job design
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
Job Design - HACKMAN AND OLDHAM’S JOB CHARACTERISTICS MODEL
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
Influences on Organisational design - AUTHORITY
The power to give orders, make decisions and to control
Authority comes with responsibility for actions & decisions taken
Influences on organisational design - SPAN OF CONTROL
Number of subordinates directly responsible to a manager
Wide span of control = flat organisational structure
Narrow span of control = tall organisational structure
Influences on organisational design - WIDE SPAN OF CONTROL
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
Influences on organisational design - NARROW SPAN OF CONTROL
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
Influences on organisational structure - HIERARCHY
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
Influences on Organisational design - DELEGATION
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
Influences on organisational design - CENTRALISATION
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
Influences on organisational design - DECENTRALISATION
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
Value of changing job and organisational design
Improves performance of workforce –> increase in labour productivity leading to reduced unit costs
Delayering (removing layers) can also reduce unit costs
HR flow - RECRUITMENT
Recruitment and selection - process of filling an organisations job vacancies by appointing new staff
HR flow - INTERNAL RECRUITMENT
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
HR flow - EXTERNAL RECRUITMENT
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
HR flow - TRAINING
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
HR flow - ON THE JOB TRAINING
Doesn’t require employee to leave the workplace
They learn through observation and shadowing
Receives guidance from senior managers
HR flow - OFF THE JOB TRAINING
Training outside the workplace e.g. at college or university
HR flow - REDEPLOYMENT
Occurs when an employee is offered alternative employment within the same business
HR flow - REDUNDANCY
Takes place when an employee is dismissed because a job no longer exists or when:
Benefits of motivated & engaged employees
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
Motivation - TAYLOR (scientific management)
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
Motivation - MASLOW
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
Motivation - HERZBERG
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
Financial methods of motivation - PIECE RATE PAY
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
Financial methods of motivation - COMMISION
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
Financial methods of motivation - SALARY SCHEMES
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
Financial methods of motivation - PERFORMANCE RELATED PAY
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
Non-financial methods of motivation - JOB DESIGN
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
Non-financial methods of motivation - TEAMWORK
Allows employees to meet social needs e.g. relationship with other fellow workers
Fulfils esteem needs of Maslow’s hierarchy
Employee Representation - TRADE UNIONS
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
Employee Representation - WORK COUNCILS
Work council - a meeting where workers and management discuss issues such as working conditions, pay and training
Improving employer-employee communications
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
Value of good employer-employee relations - BENEFITS TO EMPLOYERS
1) Strong employer brand –> reduced disputes will attract more able and productive employees
2) Promoting employee engagement
3) Strengthening competitiveness
Value of good employer-employee relations - BENEFITS TO EMPLOYEES
1) Financial benefits - good relations mean employees avoid loss of pay during industrial disputes
2) Job security
3) Greater participation in decision making
