3.6 Human Resource Management Flashcards
What is Human Resource Management?
The design, implementation and maintenance of strategies to manage people for optimum business performance
What is the overall aim of HRM?
To maximise the contribution of employees, on an individual and group level, to organisations overall objectives
HR objectives will be derived from the targets of the business as a whole
What are 6 examples of HR objectives?
Employee engagement
Talent development
Training
Diversity
Alignment of the employer and employee values
The number, skills and location of employees
What two types of approaches are there to HRM?
Soft
Hard
What is the Hard HRM approach?
Identify workforce needs of the business and recruit and manage accordingly
Short term changes in employee numbers
Minimal communication (top down)
Pay - minimum wage
Little delegation
Taller organisational structures
Autocratic leadership
What is a Soft HRM approach?
Concentrate on the needs of employees - their roles, rewards, motivation etc
strategic focus on longer term workforce planning
strong and regular two way communication
competitive pay structure and suitable performance related rewards
addresses employee needs
flatter organisational structures
suits democratic leadership styles
What is the need to measure performance?
Managers require an objective, unbiased way to measure performance.
They need to look at:
Is the workforce fully motivated?
Is the workforce as productive as it could be?
Are the HR policies helping the business to meet its goals?
How do you analysis HR performance ?
Firms try to measure staff performance objectives in an unbiased way
so calculations are used!!
What is Labour Productivity and how is it measured?
A measure of how well a firm’s workers are doing
Labour productivity = output per time period / number of employees
compares number of workers with the output of the business
How to improve labour productivity?
- Better tech
- Specialisation of staff
- Motivation
- Training
- Leadership
Why does it need to improve?
- competitiveness
- profit
What can calculating employee costs as a percentage of revenue show?
Shows the impact of productivity by calculating staff costs as a % of sales revenue
Employee costs as a % of turnover = employee costs / sales turnover
Calculation for labour cost per unit
Labour cost per unit = labour costs / units of output
( LC decreases if staff are more productive, UoO increase if staff are more productive)
if labour cost per unit it higher, lower profit margins will be made
Causes of high labour turnover?
Internal:
Poor recruitment process
Ineffective motivation / leadership
Wage levels are lower than other firms
External:
More local vacancies
Better transport
Consequences of high labour turnover?
Negative:
Cost of recruitment
Cost of training
Time taken for new staff to settle
Loss of productivity while new staff learn
Positive:
New workers = new ideas + enthusiasm
Workers bring new skills
New way to solve customers problems
Calculation for labour turnover (%) ?
[Number of staff leaving during year/ Avg number of staff employed by business during year ]
x100
What is employee retention?
The most proportion of staff who stay in a year
What is the need for organisational design?
When an organisation grows they become more complex and require a more formal structure
Function of organisation in a business is seen as converting inputs into outputs in order to make a profit
Improves efficiency
key considerations : breaking an organisation into functions, every employee reports to line manager, no manager overloaded,
Decent layers of management
What does an organisation structure show?
Roles, responsibilities and relationships of each member of the business
How is an organisation structure illustrated?
By an organisation charts
chart shows links between people and departments
(Shows communication flow (channels), lines of authority and layers of hierarchy (level of power and responsibility)
What are the 4 types of organisational structure?
Functional
Product based
Regional
Matrix
What is a functional structure? how is it organised and what are the +/-
Organise staff by department
+ Employees with same skills and expertise work tgt, which can make implementing strategy easier
- Can lead to rivalry between depts, depts may have their own culture and focus on their own priorities. If comms r not good between depts it’ll be hard to comm strategy
What is a product based structure? how is it organised and what are the +/-
Organise staff by product
+ ideal if strategies are focused on individual products
- unnecessary duplication of roles = inefficient
What is a Matrix structure? how is it organised and what are the +/-
Organise staff by a combination of factors ; could be project or function
+ staff have clearly defined objectives and it encouraged depts to build up relationships
- possible conflict e.g project and dept managers might have diff ideas about how to implement strategy
What is a regional structure? how is it organised and what are the main +/-
Organise staff by geographic location
+ tend to suit a market development strategy. If different markets demand different things a business can be decentralised and adapt to local needs
- unecesary duplication of roles ; can be inefficient
What are the levels in hierarchy and what do they mean?
Levels in hierarchy =number of supervisors/managers/workers shown from the top to the bottom of the chart
more levels = slower and less reliable comms become
More levels = difficult for people at top to see work at bottom (closest to customer)
What is the span of control and what does it mean?
Number of people directly under supervision of one manager
Narrow = smaller number of staff reporting to one manager
Wide = large number of staff reporting to one manager
Key notes:
for comms/cntrl/help/support
depends on nature of tasks/skills and attitude of workers and managers
What are the advantages of a narrow span of control?
Allow close management supervision (vital if staff are inexperienced or labour turnover is high or if task is critical)
Comms may be excellent within small immediate team
Many layers of hierarchy = more chance of promotion
What are the disadvantages of a narrow span of control?
Workers may feel over supervised & therefore not trusted ; may cause staff to leave
Comms may suffer as more layers = harder vertical comms
Narrow span = restricted scope for initiative and experiment, boss is always looking over your shoulder = alienates enterprising staff
What is chain of command and how does it affect organisation?
Reporting system from top to bottom of hierarchy; route through which info and orders are carried
More levels in hierarchy = longer chain of command = bigger gap between workers at bottom and managers at top
Longer chain = more chance of info becoming distorted
What is delegation?
Passing authority down the hierarchy
Giving responsibility to junior managers or staff (motivating and empowering them)
Key notes :
attitudes of managers towards staff will influence delegation (mistrust)
delegation of power requires training, knowledge and confidence
What is centralisation and decentralisation?
The extent to which decision making power and authority is delegated
Centralised - decision making power remains in the hands of the top management
Decentralised decision making power is delegated to workers lower down the hierarchy, away from the centre
What can centralisation do?
It can provide rapid decision making as few people are likely to be consulted
Should ensure the business pursues objectives set by senior managers
Centralised buying decisions may lead to purchasing economies of scale
What can decentralisation do?
Decentralisation provides motivation for junior employees, through more opportunities for achievement and recognition
Reduces workload of senior managers, allowing them to focus on long term issues while at the same time developing skills of junior managers, ready for promotion
Customers may benefit from local decision making, meeting their needs more fully
What are the internal influences on delegation/centralisation/decentralisation?
Leadership and management styles
Corporate objectives
Skills of the workforce
What are the external influences on delegation/centralisation/decentralisation?
Technological environment
Competitive environment
Economic environment
What is Matrix design/management?
Where staff work in project teams in addition to their responsibilities of their own dept. Staff can therefore be answerable to more than one boss
+/- of matrix management?
+ Overcome cross functional issues at the outset (R&D work with production to see if the capability to make the product is there, HR may identify training needs)
Saves time and money as all considerations being made collaboratively rather than being padded from one dept to another over a longer period of time
- Reporting to more than one boss means prioritising own work with project work
