3.6 Human resource management Flashcards
What’s the value of setting human resource objectives?
Setting HR objectives allow managers to manage people effectively, to align with business’s mission and corporate objectives, to reach targets.
Examples of human resource objectives?
- employee engagement
- talent development
- training
- diversity
- alignment of employee and employer values
- number, skills and location of employees
Soft human resource management (HRM) approach?
Soft HR management: employees seen as most important resource, managed on long term basis, managers motivate employees through empowerment and development, appraisals are developmental and training is done to meet development needs.
Features include: strong regular two way communication, competitive pay with perform related rewards, non financial incentives to motivate, focus on job design and satisfaction, flatter organisational structure and suits democratic leadership style.
Advantages
- increases staff morale as they are valued, retain staff easier
- benefits from skills and experience of staff
- good performance as loyal to organisation (high motivation and productivity)
- gives good business reputation
- lower absenteeism
Disadvantages
- higher labour costs may leave business at competitive disadvantage (as investment into employees talent)
- employees may not be interested in development or empowerment
- extra training is time consuming (employees who have completed all this may leave for better job)
Hard human resource management (HRM) approach?
Hard HR management: employees seen as a resource like any other, hired on short term basis, managers believe employees are mainly motivated by money and thought do as little work as possible, appraisals are judgemental and training is done only to meet production
Features of Hard HRM include: minimal communication from top to bottom, little empowerment or delegation, tall organisation structures, suits autocratic leadership style
Advantages
- managers can keep control of workforce so people are less likely to make mistakes (as they are seen as easy to replace)
-most cost effective workforce if used efficiently
-quicker decision making by senior managers
Disadvantages
- doesn’t use employees to full potential, missing out on increasing profits
- demotivates workforce
- high staff turnover and high absenteeism
- boring, repetitive jobs that makes employees feel undervalued
How to calculate labour turnover and productivity?
Labour productivity= Output per period/Number of employees
Labour turnover(%)= Number of staff leaving/Average number of staff employed x100
How to calculate labour costs per unit and employee costs as percentage of turnover?
Labour costs per unit= Labour costs/Units of output, this shows how much money business pay its employees to make one unit of output
Employee costs as a % of turnover= Employee costs/Sales turnover x100, this shows percentage of money made is spent on employees.
How does HR data aid decision-making and planning?
HR data figures are calculated using a performance management system, used to check if business’s HR always being used to maximum efficiency. These data figures also factor when making decisions (labour productivity, turnover, absenteeism) and compare them to competitors to see who is utilising their HR workforce better and if they need to improve in certain areas. HR also uses this data to make plans for human resource flow in the future.
What are the organisational structures?
Functional structure
- business can be organised into several departments, which group jobs together by function, main four departments are finance marketing, operations and HR. These all run separately and work accordingly to their own areas of expertise, can lead to department having its own culture and focusing on its own priorities- needs to be good communication between departments for functional structures to work effectively.
Product-based structures
- In business that produces lots of different products, each group of products can be run almost as a separate business, each product division has own director, marketing team, finance team, etc. This allows different divisions to have different objectives, but may be unnecessary duplication of roles, perhaps making it less efficient.
Regional structures
- are based on location, business may have branches all over the country, grouped into regional divisions that run themselves. Global company could have headquarters on each continent, which oversee national divisions. If there are different market requirements in different locations, control can be decentralised s each division can run independently to adapt to local needs.
Matrix structures
- organise staff by two different criteria, business organised by project and function. Each project team has workers from different functions. Matrix structures ensures staff are pursuing clearly defined objectives, encourages departments to build relationships with one another, however this structure may lead to conflict (between project and department managers). Co-ordinating matrix structure uses lots of management time and resources.
Decisions that relate to organisational design?
- authority, as the series of levels go up in organisational chart each level has more responsibility and authority over decisions.
- tall organisations, organisations with lots of levels in hierarchy called ‘tall’, have long chains of command (the path of communication and authority up and down hierarchy), these structures can affect communication as msgs take long time to get from top to bottom, decisions take longer time to make.
- flat organisations, only have a few levels in their hierarchy, people given more responsibility and freedom. Managers can become overwhelmed by too many people reporting to them (wide span of control).
- span of control, is the number of people who report directly to a manager. Flat structures have a wide spans of a control whereas tall structures have narrow spans of control (aren’t responsible for many people, allows to monitor employees below them more closely). If span of control too wide, managers find it hard to manage effectively. If span of control is too narrow, workers can be demotivated - feel micromanaged. Hard to keep close eye on workers if span of control bigger than 6 people.
- hierarchy, multiple layers of management, each level having more authority and control.
- delegation, giving responsibility for D-M to people below you. Manager needs to trust person they are delegating responsibility to, delegated tasks should be challenging tasks (to help them develop), makes employees feel valued and encourage loyalty.
- delayering, means removing parts of the hierarchy, creating flatting structure with wider spans of control. Helps to get lower labour costs, gives junior employees enhanced roles with more responsibility and can improve communication. Staff may need to be retrained into new roles, managers can end up overwhelmed.
What is centralisation and decentralisation? Value of these?
Centralised organisations, are where all decisions are made by senior managers at the top of the business. ADV: business leaders have lots of experience making decisions, managers get overview of whole firm so decisions consistent throughout firm, senior managers aren’t biased to one department make best decisions for business as a whole, senior managers can make decisions quickly as don’t have to consult anyone else. DISADV: not many people are expert enough to make decisions about all aspects of the business, excluding employees from D-M can be demotivating, organisation will react slowly to change, allowing competitors to get ahead as senior managers who make decisions don’t spend time on shop floor so slower to notice consumer trends.
Decentralised organisations, shares out authority to more junior employees, national/multinational firms decentralise D-M and delegate power to regional managers. Managers have to make sure work of all companies employees is contributing to overall goal of the firm, difficult to achieve when power is delegated. ADV: involvement in D-M motivates employees, employees can use expert knowledge of their sector, day-to-day decisions can be made quickly without having to ask senior managers. DISADV: junior employees may not have enough experience to make decisions, inconsistencies may develop between divisions of the business, junior employees may not be able to see overall situation and needs of organisation.
What’s the value of changing organisational design?
- improved communication and faster decision making (flatter structures, better responsive customer service, better flow of info).
- greater flexibility and adaptability (different OD help to respond faster to market changes e.g. matrix)
- cost saving (delayering)
- better employee engagement and motivation ( responsibility through wider spans of control, autonomy (decentralisation))
- supports growth for firm
- enables strategic change
- improved customer focus ( changing OD to tailor to wants and needs)
- may be hard to change OD if there is resistance to change by employees and high costs to retrain
What is HR flow and how does managing it help meet HR objectives?
The human resource flow is the HR lifecycle of employees from the point of recruitment to leaving the organisation. Effective management of the human resource flow will enable business to meet HR objectives.
Human resource plan, strategic document outlining management of organisations workforce including recruitment, training, redeployment and redundancy (to ensure right people with the right skills are in the right place at the right time at the right costs).
1. Recruitment, is the process of finding, attracting and employing staff (job descriptions, interviews, person spec, contract), likely happens in growth stage of product life cycle.
2. Training, upskilling employees with knowledge and skills to perform job efficiently (on/off job training, introduction training and awareness of regulations), likely to happen in introduction/growth phase of product lifecycle (product knowledge and sales training).
3. Redeployment, transfer of employees from one role of department to another (retain employee talent, better workforce efficiency), makes sense when changes need to be made (restructuring), likely to happen in decline and maturity phases of product lifecycle (this will help to optimise workforce).
4. Redundancy, process of terminating employment contract (reduce workforce size/capacity) most likely to happen in decline phase of product life cycle.
Taylors theory of motivation?
Maslow’s theory of motivation?
Herzberg’s theory of motivation?
Financial methods of motivation include?
- piece rate, workers paid per unit produced, no fixed salary (motivate to produce high quantity of products, quality and morale can suffer)
- salary schemes, workers paid according to given time period (hourly rate, weekly wage or annual wage), expected to work longer if work isn’t finished, cannot earn extra for hard work or quality
- commission, workers paid bonus on top of their salary, bonus could be based on sales or units produced (these rewards can increase performance or motivation by staff, however firm doesn’t know its labour costs each month)
- performance related pay, paid based on their or business’s performance, determined by meeting targets often done through annual appraisals (reward best workers may motivate to meet individual targets and business objectives, lead to demoralisation of staff if only few get increased pay when whole business is doing well
Non-financial methods of motivation include?
- job enrichment, gives employees more challenging work and training in order to do it (given more responsibility for organising their work and solving their own problems)
- job rotation, employees move between different roles in organisation (motivate employees as reduces boredom and develops opportunity to develop additional skills, firm then also has flexible employees that can fill in vacancies)
- empowerment, gives people control over their work and greater role in D-M , quality circles lets groups of workers from diff department suggest improvements to quality and productivity
- teamworking, putting workers into smaller teams and let them organise their own work, can lead to job enrichment and empowerment as worker gets greater role in variety of tasks
- flexible working, adapt work hours to suit employees (flexi-time, employees work full time but can decide when to work around fixed core hours OR job- sharing two people share one job, working alternate weeks OR remote working employees work from home). Flexible working improves motivation so employee productivity should improve, helps employees with children or disabilities or employees located in remote places. However, job sharing can lead to confusion over responsibilities and unequal workloads, remote workers may be easily distracted and impractical to businesses that serve public during normal working hours.
What influences businesses choice of financial and non financial methods of motivating? And how do they assess the effectiveness of financial and non financial methods of motivating?
Influences may be:
- type of work or job role
- personality/skills of workforce
- organisational culture
- management style
- financial position of business
- demographic of workforce
Assess motivation through:
- labour productivity
- employee retention/ turnover rate
- output per employee
- absenteeism rates
Methods of employee involvement in decision making?
- delegation
- employee representation (work councils, trade union)
- teamwork
- quality circles
- involvement in strategic planning
What are trade unions in terms of employee representation method?
an organisation that acts on behalf a group of employees in workforce when negotiating for their interests e.g. rates of pay or working conditions. By belonging to a union, employee strengthens their bargaining power in a way they couldn’t as an individual, TU allows employers and workers to communicate with each other, TU also give advice and assistance to individual employees that are having problems with their employer.
What are work councils in terms of employee representation method?
Work councils are committees made up of employer and employee representatives, they meet regularly to discuss general issues (training, etc), the sharing of ideas and info in a relatively relaxed atmosphere improves relations. Quality circles are like work councils but only discuss quality issues, meet regularly to discuss ways of improvements, includes employees that are all level of the business.
How to manage employer and employee communications/relations?
- two way communication, use both top-down (managers to staff) and bottom-top (staff to managers) communication
- employee voice mechanisms (work council, trade unions)
- effective line management (train managers to communicate openly, listen actively, solve conflict early and give regular feedback and praise)
- recognition and rewards
- employee engagement activities (team-building days)
- handling disputes effectively (address conflicts early and fairly)
- consultation during change
How to improve employer and employee communications/relations?
- introduce employee representation
- recognise and reward contributions
- act on feedback
- build culture of trust
- support employee well being
- use to tech to enhance communications (company apps, group chats)
- train managers in communication and people skills
- encourage two way communication
What is the value of good employer and employee relations?
- firm gets great reputation, thus attract best candidates during recruitment
- employees feel involved/ valued (job security, increase employee engagement and morale)
- if relations are good increased productivity and efficiency as employees may share innovative ideas, firm can be more competitive
- firm will make more money as employees are valued and want to work efficiently for the business
- more diverse opinions when making decisions
- job satisfaction for employees as they feel valued
- good communication means objectives of employees aligned with objectives of business
- employees able to communicate personal objectives to employer, help talent develop
- fewer conflicts
- lower absenteeism and turnover rate
