3.6 Decision making to improve human resource performance Flashcards
What are ‘Human Resources’ in a business?
The term used to describe an organisation’s employees and the departmental function within an organisation that is focused on activities related to employees.
What is human resource management?
The management of people at work to assist the organisation in achieving its objectives.
Name some functions of the human resource department.
-Recruitment and selection;
Training and development;
Appraisal;
Consultation;
Collective bargaining;
Wage in salary systems;
Fringe benefits;
Disciplinary and grievance procedures;
Health and safety issues; and
Employment legislation.
What are 7 examples of human resource objective areas?
- employee engagement and involvement
- talent development
- training
- diversity
- alignment of values
- number, skills and location of employees.
Why would a business look to improve employee engagement and involvement?
To improve businesses productivity, reduce labour turnover and absenteeism
How could a business look to improve employee enagement and involvement?
-Increase employee feedback
-Show the employees work benefits the organisation
-Improve fringe benefits
-Increase employee responsibility
What is, and why would a business look to improve talent development?
Talent development refers to an organisation providing an envirmonent in which a worker can improve themselves and their skill set.
A business would look to do this in order to motivate employees, allow them to access their full potential, and improve productivity of the business.
What is a downside to improving talent development?
Costly, time spent away from work, talent getting poached
What is the difference between training and talent development?
Training is focusing on the job the indivdual already has.
Why would a human resources department look to improve training?
-To allow employees to progress in the company and access more complicated roles
-To improve labour productivity
What is a downside to improving training?
Costly, time spent away from work, talent getting poached
Why would a business look to improve their diversity?
To ensure their employees are aware of, and to meet, the basic legal requirements regarding equality and diversity on the benefits of having a diverse workforce.
Why is it important for employees values and organisational values to be aligned?
Employees will be motivated and engaged, leading to increased job satisfaction, higher productivity, and improved employee retention. It also ensures that everyone is working towards the same goals.
What are some benefits of setting human resource objectives?
- Focus for decision making and effort
Yardstick agaist which succes and failure can be measure
-Improves coordination giving departments a common purpose
-Improves efficiency by examing reasons for succes or failure
-Motivates staff with challenging but achievable objectives
-If SMART, good
What are some problems with setting HR objectives?
-Hard to predict external changes
-Conlfict between HR objectives and coorporate objetives
-If objectives are imposed rather than agreed then employees may feel de motivated and not heard
-May be reluctant to set realistic objectives in times of difficulty
What are some internal influences on HR objectives/departments?
-Overall business aims
-Available finance and resources
-Corporate culture
-Organisational structure
-Trade unions
-Relationship between employees and employers
What are some external influences on HR objectives/department?
-PESTLE
-Actions of competitors
What is the difference between a hard and soft human resource management approach?
Hard = employees are to be utilised as efficiently as possible by directing them. This approach sees HRM as essentially a control mechanism. The style of management in organisations using hard HRM is likely to be authoritarian or autocratic because the approach requires that authority is kept in the hands of a few, and it is likely to involve a centralised, rather than a decentralised, organisational structure.
Soft = This focuses on motivational issues, organisational culture, and leadership approaches in business. This is a strategy that encourages the personal development of all staff and is associated with a democratic management style. Managers will wish to pass authority throughout the organisation and are likely to favour delegation and decentralisation.
What would make a business adopt a soft or hard HRM style?
depends on the history, culture, approach, and attitudes of management and their management style.
Employees today react more favourably to a soft HRM approach. Employees are well educated and skilled and offer greater involvement in the workplace.
What are the benefits of having an EFFECTIVE HRM style?
The benefits of effective HRM strategies are lower labour turnover, high retention rates, less absenteeism, greater productivity, and lower unit labour costs
Why are labour turnover rates beneficial to a business?
Measures the effectiveness of its workforce and HR department aswell as working enviorment
How is labour turnover calculated?
(N^of employees leaving over a given period / avg n^of employees hired) x 100
How are retention rates calculated?
(Number of employees with one or more years’ service/overall workforce numbers) x 100
What are some problems with high labour turnover and low retention rates?
Increased costs:
-admin costs
-training costs
Jobs may need to be redisgned to make them as simple as possible and avoid long training periods
Reduced productivity due to disruptions
Low morale
What are some problems that can LEAD TO high labour turnover and low retention rates?
-Ineffecitive leadership
-Poor communication
-Low wages/salaries compared to comp
-Poor selection process
-Boring jobs that lack career development
-Poor working conditions
-Economy is in period of growth then possibly more attractive positions exist
How can a business improve labour turnover and retention rates?
-Be aware of how rates compare to industry standard and compare possible causes and differeces between firms
-Exit interviews to identify problems
-Imrpove recruitment and selection
-Improve training
-Improve working conditions
How is labour productivity calculated?
Output per period / number of employees per period
How are labour costs per unit calculated?
Total labour costs / total units of output
How is employee costs as a % of turnover calculated?
(Employee costs / sales turnover) X 100
What does employee costs include?
Wages, payroll taxes and benefits
How could a business increase labour productivity?
-Improve recruitment and selection process
-More training
-Appropriate non financial benefits
-Improved tech and capital equiptment
How could a business reduce labour costs per unit?
-Holding down wages
-Replace workers with machines and tech
-Outsource production to other firms and downsize workforce
What are some problems with reducing labour costs and increasing labour productivity?
-De motivating employees
-Increasing labour turnover rates
What is absenteeism?
The proportion of emplyees not at work on a given day
What are some strategies to reduce absenteeism?
-More flexible working practises; home working, part-time etc
-Ensure jobs are intersting and challenging
-Improve working conditions
-Attendance bonuses
What is organisational design?
-The process of shaping an organisational structure so that it meets the organisations purpose
What is the span of control?
The number of subordinates a manager is required to supervise directly.
Many subordinates = span of control is said to be wide.
relatively few subordinates = then the span of control is said to be narrow
What would create the need for a wider or narrower span of control?
Wider = If workers have a degree of similarity in the task they do, easier to manage
Narrower = If there few workers doing similar tasks, therefore levels are needed
What is the Hierarchy?
The verticle division of authority and acountability in an organisation
What are some features of a tall hierarchy with a narrow span of control? Good and bad
Good:
-More promotion opportunities
-Less delegation = less stress
-Tight control over security, quality and safety
Bad:
-Less delegation could lead to low morale
-Important details / info may be lost in reporting up through the hierarchy
-More layers meaning more staff and higher company overheads
-Takes longer for decisions to be made and implemented
What are some features of a flat hierarchy with a wide span of control? Good and bad
Good:
-More delegation meaning more responsibility for staff, more motivating and more opportunity for them to show their skills
-Improves vertical communication process
-Reduced overheads
-Improved efficiency throiugh lower costs and improved communication
-Decisions can be made and implemented quicker
Bad:
-Managers have less time for each subordinate
-More delegation could result in workers being overstretched
-Less promotion opportunities
-Less control over securtiy and quality
What is delegation?
When a manager gives a subordinate the authority to oversee/complete certain tasks
What is authority?
Right/power assigned to a particular role
What is accountability?
Extent to which a named individual is responsible for the success or failure of a particular task
What are some advantages of delegation?
-Frees up management time
-Motivational
-Improves subordinates knowledge
What are some disadvantages of delegation?
-Less common in smaller firms
-Customer expectations may not be met
-Poor in crisis situations
What is centralisation / decentralisation?
The degree to which all authority is delegated within an organisation
What are centralised organisational structures?
Where there is a greater degree of central control via a head office.
Decision making is kept at the top opf the hierarchy rather than delegating
Example: Burger King
What are some advanatges of centralisation?
-Consistent policies on marketing and production result in greater control
-Quick decision making
-Customers know what to expect as each branch is identical
-Enables tight financial control, efficient use of resources and lower overheads
-Cooporate view can be experssed and understood
-Useful in times of crisis
What are some disadvantages of centralised organisational structures?
-Manager of a local branch may have more knolwedge than cooporate
-Lack of decision making ability can have adverse affect on managers motivation
-Infelaxibility
What is a de-centralised organisational structure?
-Where the power and authority to make decisions is delegated from the head office to management in local branches, backed by financial resources.
Decisions are made in relation to local circumstance
What are some advantages to de-centralised organisational structure?
-Empowers local managers, encouraging innovation
-Local knowledge may be beneficial for sales/promotion
-Reduces volume of day to day communication between head office, improving efficiency
-Head office have more time to consider long term strats
-Flexibility, more responsive to changes in customer demand
-Improved motivation, reduced labour turnover
What are some disadvantages to de-centralised organisational structure?
-Customers may not like differences between branches
-Local managers may disconect from the big picture
-Worse in times of crisis
What are the 5 different types of organisational structures?
Functional organisational structure - This is a traditional structure with departments organised according to the different functions in the business for example marketing, operations, finance, and HR.
Geographical structures - These are organised according to the location of operations. They have the advantage of enabling more local decisionmaking that can ensure products are tailored to meet the needs of the local markets. These structures are adopted more by multinational and global organisations.
Product line - Organisational structures that are organised according to different products made by the business.
Customer and market-based – These are organisational structures
organised according to the customers or markets they serve. This is often used where business relies heavily on one or more large customers.
Matrix organisational structures - These are organised so that hierarchical and functional approaches are combined. This is a more flexible organisational structure in which tasks are managed in a way that cuts across traditional departmental boundaries and are often used in organisations that are project based
What are some advantages of a functional organisational structure?
-Promotes specialisation and expertise, increasing job satisfaction
- Increased productivity and efficiency
What are some disadvantages of a functional organisational structure?
- Risk of ‘silo’ mentality ; where functional areas just work on there own and dont collaborate
- Risk of being less flexible so not good i rapidly changing industries
What indsutry is a functional organisational structure best for?
Stable industry with clear processes and less need for inovation
What are some advantages of a product based organisational structure?
-Clear product focus, encourages innovation
-Faster decision making
-Customer centric ; better for metting their needs
What are some disadvantages to a product based model of organisational structure?
-Duplication of efforts (marketing)
-Could be less efficient and increase average costs
-Risk of ‘silo effect’
What industry is a product based model of organisational structure best for?
Wide product ranges with diverse products that are independent of eachother
What are some advantages of a regional model of organisational streucture?
-Allows for a localised approach
-Bertter to meet local customer needs
-Faster local decision making
What are some disadvantages to a regional model of organisational struicture?
-Duplication of efforts
-less efficient and higher avergae unit costs
What is industry is a regional model of organisational structure best for?
Where there is a clear regional variation in customer needs
What are some advnatages of a matrix model of organisational structure?
- You get the best of the functional pros and the best of the product focuysed pros
What are some disadvantages of a matrix model of organisational structure?
-Complicated and confusing to who has most power
-Demotivating if confused
What are some influeces on organisational structure?
-Business objectives
-SIze of organisation
-Nature of organisation
-Culture
-Experience of workforce
-HR process
-External enviroment
-Stakeholders
What is job design?
The process of deciding on the content of a job, in terms of its duties and responsibilities
What are the 4 theories relating to employee motivation?
Hackman and Oldham Job Characteristics Model
Fredrick Taylor theory of motivation
Abraham Maslow theory of motivatin
Fredrick Herzberg theory of motivation
What theory/s relates to how managers should design the work/tasks of their employees?
The Hackman and Oldham Job Characteristics Model
Abraham Maslows Hierarchy of Needs
What is the theme of the Hackman and Oldham Job Characteristics Model? What is it?
That the tasks employees are expected to peform is the MAIN FACTOR underpinning their motivation. Job design = motivation.
They proposed there are 5 key job characteristics:
-Skills variety
-Task identity
-Task significance
-Autonomy
-Job feedback
Explain skills variety of the Hackman and Oldham Job Characteristics Model
Allowing employees to exercise a wide variety of skills. Instead of small tasks, to stay motivated employees need variety and more challenging work to stay motivated
Explain Task Identity of the Hackman and Oldham Job Characteristics Model
tasks must have a clearly defined start point and clearly defined end point
-Clear instructions for employees, clear goals
-This raises motivation and productivity
Explain task significance of the Hackman and Oldham Job Characteristics Model
Employees must see the importance of their tasks to stay motivated
-show they are contributing to the success of the business
-Raises motivation and productivity
Explain the autonomy feature of the Hackman and Oldham Job Characteristics Model
Employees ust have freedom to make decisions regarding work, some form of control and responsibility
Explain the job feedback feature of the Hackman and Oldham Job Characteristics Model
Workers are more motivated when recieving constructive feedback on work produced: praise or advice
What is Fredrick Taylors theory of motivation?
Taylors motivation theorys are underpinned by a ‘theory X management style’ =
‘Workers are inherantly lazy, reluctant to be productive and have to be cohersed into doing work, not interested in autonomy, managers need to sheperd’
He implemented ‘division of labour’ and ‘time and motion studies’. He increased workers motivation through monetary rewards
He was around in the 1900s, where if employers needed employees they would simply tell workers to bring anyone, they recieved little formal training and work was disorganised
What is ‘division of labour’ relating to Fredrick Taylors theory of motivation?
Breaking down the production process into smaller, more specialised jobs. Matching right employees to the right task
He belived repetition = increased productivity
What were Frederick taylors ‘time and motion studies’?
He would time workers doing task, looking for fastest worker and then take this workers style and use it as the ‘one best way’, others would learn
How did Fredrick Taylor increase motivation?
Through monetary rewards.
the ‘piece rate system’
Imposing ambitous targets, if achieved worker would recieve bonuses. Every piece of work beyond target would recieve additional fee
What are some problems with Taylorism?
-Organisations needed less workers which acted as a de-motivator as employees lost colleagues
-Targets kept increasing, felt efforts were not valued
-Industrial unrest led to rise in TUs
-Not effective long term
What is Abraham Maslows theory of motivation?
He developed a ‘hierarchy of needs’, the idea being that as workers progressed throuigh their working life, their needs and motivating factors changed.
As each need from the hierarchy is met, the next need becomes the motivator, they progressed through the pyramid:
1st) Physiological needs ; clothing, shelter food, bills, etc.
2nd) Safety needs ; Health and safety, job security, pension, longevity
3rd) Social needs ; Social opportunity, team-working, good relations
4th) Esteem needs ; Feeling like you’re achieving, work being recognized, contributing to business
5th) Self actualisation ; Fulfilled potential, being best you can be, making a difference
What is Frederick Herzbergs theory of motivation?
He split all factors of the job into two groups:
Hygiene factors: Aspects of job that do not motivate, however if one was missing then this would DEMOTIVATE
Motivators: Aspects that stimulate greater productivity
What are the hygeine factors relating to Frederick Herzbergs theory of motivation?
Pay
Working enviroment
Realtionships with colleagues
What are the motivators relating to Frederick Herzbergs theory of motivation?
Opportunties for promotion
Job design; herzberg believed in
-Job enlargment; Greater variety of tasks
-Job enrichment; More challenging/complex tasks
-Empowerment; Responsibility, decision-making autonomy
What are some problems with Frederick Herzbergs theory of motivation?
Never really tested on large number of employees
What are some actual strats a business could use to improve employee motivation?
-Clearly defined vision that employees understand and identify with
-Well defined job description where employees understand there roles and have a sense of purpose
-Good working conditions to promote efficiency
-Training and development opportunities
-Good communication between employees and managers
-incentive programs that reward strong performance
What are some drawbaacks of using money as a motivator?
Motivation could fluctuate with the performance of the company and this can cause uncertainty in financial planning if employees come to depend upon rewards the financial incentives.
If it is based on individual performance, it can cause conflict between employees, especially where an individual employee’s contribution cannot be measured objectively, and employees are doing the same job.
What are some benefits of using money as a motivator?
-Reduce resistance to change
-Short term goals
-Recognise and reward effort
What are some non-financial methods of motivation?
Job enlargment ; Increasing scope of job
Job rotation ; Switching jobs to provide variety
Job enrichment ; Giving employees more responsibility and challenges
What are some influences on the method of the motivation used?
-Organisational design
-Levels of hierarchy and span of control
-Lines of accountability
-Delegation
-Nature of job
-Clarity and nature with business objectives
-Quality of communication
-Organisational culture
-Research findings
What influences the extent to which employees are involved in decision making?
-Organisation size; Small business will often involve employees more
-External enviroment; Gov legislation on TUs, economy in boom or recesion
-Style of leadership
-Quality of communication
-Organisational culture
