3.6 Decision Making To Improve Human Resource Performance Flashcards
What is human resource management?
Human resource management is about managing people
What is the purpose of Human resource management?
The purpose of human resource management is to ensure that business achieve the maximum benefit from its employees at the minimum cost. The human resources department needs to make sure that the business has the right number of employees with the right skills, qualifications and qualities.
What are human resource objectives?
Human resource objectives are the targets that the function of a business responsible for all employer related issues want to achieve in the given time period
Examples of human resource objectives
– Employee engagement and involvement – talent development – training – diversity – alignment of values – number, skills and location of employees
What is the talent development cycle?
– Analysis of needs/talent planning – recruitment/selection – orientation (introducing new staff to the business) – skill development – performance evaluation – succession planning ... and the cycle continues
What is alignment of values?
Alignment of values is bringing the core values or beliefs of all employees together to focus on achieving a common aim, this can lead to a strong corporate culture where all employees fit into ‘the way we do things around here’ mindset
Internal influences on HR objectives / values
– Time – budget – correct resources – objectives of the business – objectives of other departments
External influences on HR objectives
– Workforce skills and availability – technological change – market conditions – political factors – current ethical and environmental issues – Social factors
What is hard HRM?
Staff are treated as a resource that must be managed in order for the business to control costs and output
What is soft HRM?
Staff are treated as an asset to the business that can contribute and help the business achieve its objectives
Typical characteristics of soft HRM
– Managers motivate employees through empowerment and development and think that working is natural for employees
– Opportunities for development including training, talent development, internal promotion
– consultation
– greater autonomy and responsibility due to a flat organisational structure
Typical characteristics of hard HRM
– Managers believe that employees are mainly motivated by money and think they will do as little work as possible
– Training is only done to meet production needs
– there are many control mechanisms in place, for example, judgemental appraisals, centralised decision-making and tall organisational structure
– Fixed term contracts
– minimum wage
– external recruitment
Formula for labour productivity
Labour productivity =
Output per period
————————————
Number of employees
Formula for labour cost per unit
Labour cost per unit =
Total labour cost
—————————————
Number of units produced
Formula for employee costs as a % of turnover
Employee costs as a % of turnover =
Employee costs
————————— X 100
Sales turnover
Formula for labour turnover
Labour turnover =
Number of staff leaving
————————————- X 100
Total number of staff
What are some external causes of high labour turnover?
External causes of high labour turnover include changes in regional unemployment levels, and the growth of other local firms using staff with similar skills.
What are some internal causes of high labour turnover?
Internal causes of high labour turnover include poor motivation of staff, low wages, and a lack of opportunities for promotion. Staff will join other firms to increase their pay and job responsibilities.
Benefits of high staff turnover
– Constant stream of new ideas through new staff
– firms can recruit staff who have already been trained by competitors which saves money
– if sales fall, firm can reduce workforce through natural wastage rather than a costly redundancy
– enthusiasm of new staff influences other workers
Disadvantages of high staff turnover
– Lack of loyal and experienced staff who know the business
– firm loses staff it has trained, often to direct competitors
– training costs money and productivity drops when new staff get trained
– recruitment costs are high
Formula for absenteeism
Number of staff absent
for a time period
—————————————— X 100
Total number of staff days
worked per time periodWhat is the link between labour retention and labour turnover?
The higher the labour turnover the lower the labour retention rate
What does an organisational chart set out?
An organisational structure chart is the simplest way to show how a business is organised. It sets out who has authority and responsibility to make decisions within a business by organising job roles into a hierarchy, spans of control, line management and chain of command.
What is a tall organisational structure?
Tall organisational structures have long chains of command due to a lot of levels of hierarchy. Tall structures can affect communication because messages take a long time to get from the top to the bottom or vice versa. Decisions can take a long time and there is a lot of paperwork to deal with.
What is an organisational structure?
An organisational structure is the way in which the workforce within a firm is organised including job roles and communication flows
Describe what a flat organisational design is.
Flat organisations only have a few levels in the hierarchy. People are given more responsibility and freedom. Flat structures can lead to managers getting overwhelmed by too many people reporting to them.
Define span of control and in a flat structure decide whether a manager has a narrow or wide span of control
The span of control is a number of subordinates that a manger or supervisor is directly responsible for. Managers in flat structures have wide spans of control this means they have a lot of workers answering to them.
Define chain of command
Chain of command is the order of authority and delegation within a business
Define delegation
Delegation is where the responsibility for carrying out a task or role or decision making is passed onto someone else in a business
Give three advantages of delegation
+ Reduces management stress
+ Subordinates are empowered
+ Good method of on-the-job training
Give three disadvantages of delegation
– Depends on experience of subordinates
– harder in a smaller firm
– may increase workload of subordinates
Define delayering
Delayering is there a removable of one or more layers of hierarchy from the management structure of an organisation
Give three advantages of delayering
+ Better delegation, empowerment and motivation
+ Improved communication (smaller chain of command)
+ Encourages innovation
Give three disadvantages of delayering
– Not all organisations suit a flat organisational structure
– can cause job losses
– causes disruptions
Define authority
Authority is the power of a person to use and allocate the resources efficiently, to take decisions and to give orders.
What is a centralised structure?
Centralised structures keep authority for decisions at the top and all decisions are made by senior managers
Give 3 advantages of centralisation
+ Business leaders have lots of experience of making business decisions
+ Managers get an overview of the whole business, so decisions are consistent throughout the business
+ Senior managers aren’t biased towards one department so they can make the best decisions for the whole business
Give three disadvantages of centralisation
– Not many people are expert enough to make decisions about all aspects of the business
– excluding employees from decision-making can be demotivating
– the organisation reacts slowly to change, allowing its competitors to get ahead. This is because the senior managers who make the decisions don’t spend time on the shopfloor, so they are slow to notice consumer trends
What is a decentralised structure?
Decentralised structure is share out the authority to make decisions to more junior employees.
Give three advantages of decentralisation
+ Involvement in decision-making motivates employees
+ Employees can use expert knowledge of the sector
+ Day-to-day decisions can be made quickly without having to ask senior managers
Give three disadvantages of decentralisation
– Junior employees may not have enough experience to make decisions
– inconsistencies may develop between the divisions in a business
– junior employees may not be able to see the overall situation and needs of an organisation
Define recruitment
Recruitment is the process of actively seeking out, finding in hiring candidates for specific position a job
Define selection
Selection is the process of choosing the most suitable candidate for the vacant position in the organisation
Define internal recruitment
Internal recruitment takes place when a business looks to fill the vacancy from within the existing workforce
Define external recruitment
External recruitment occurs when a business invites applicants for vacant posts from any suitably qualified candidates
Give three advantages of internal recruitment
+ Candidates already know the business and the business now is the candidates
+ Short and cheap process
+ Motivate workers to go for a promotion
