3.6 - Human Resources (HR) Flashcards
What is Human Resource Management? (HRM)
The design, implementation and maintenance of strategies to manage people for optimum business performance.
What is the importance of HRM?
most business now provide services rather tan produce goods.
why does competitiveness require a business to be efficient and productive
Because it is difficult unless the workforce is well motivated, has the right skills and is effectively organised.
What does the move towards fewer layers of management hierarchy (flatter organisational structure) mean?
Places greater emphasis on delegation and communication
The scope of HR is wide…
- workforce planning
- recruitment
- training
- creating a culture
- employee discount
- diversity
- talent management
HR objectives are…?
- employee engagement and involvement
- talent development
- training
- diversity
- alignment of values
- numbers, skills and location of employees.
‘Employee engagement & involvement’ as a HR objective means…
- maximising reported levels of engagement
- extent of satisfactorily completed appraisals
‘Talent development’ as a HR objective means…
- investment (level) in employees training
- staff retention rates
- % of job vacancies filled by internal candidates
‘Training’ as a HR objective
- spend in total and per employee on training
- measures of training effectiveness
‘Diversity’ as a HR objective
- In senior management positions (gender, experiences, ethnicity)
- in extent recruitment (gender, ethnicity)
‘Alignment of values’ as HR objective
- recruitment & induction training: extent focused on cost values
- employee awareness of core values
‘Number, skills & location of employees as a HR objective…
- labour turnover
- staff retention
- recruitment targets
- training budgets
External Influences on HR objectives…
- market changes
- economic changes
- technological changes
- social changes
- political & legal changes
Market Change as an influence on HR objectives
E.g a loss of a market share to a competitor may require a change in management or job losses to improve competitiveness
Economic Change as an influence on HR objectives
E.g the recession of 2009/10 placed great pressure on HR departments to reduce staff costs and improve productivity
Technological Change as an influence on HR objectives
E.g the rapid growth of social networking may require changes to the way the business communicates with employees and customers
Social Change as an influence on HR objectives
E.g the growing number of single-person households is increasing demand from employees for flexible working options
Political and Legal Change as an influence on HR objectives
E,G EU legislation on areas such as maximum working time and other employment rights impact directly on workforce planning and remuneration,
Internal Influences on HR objectives…
- corporate objectives
- operational strategies
- marketing strategies
- financial strategies
Corporate objectives as an internal influence on HR objectives
e.g an objective of cost reduction is likely to require HR to implement redundancies, job reallocations etc.
Operational objectives as an internal influence on HR objectives
E.g introudction of new IT or other systems and processes may require new staff training, fewer staff
Marketing objectives as an internal influence on HR objectives
E.g new product development and entry into a new market may require changes to organisational structure and recruitment of a new sales team
Financial objectives as an internal influence on HR objectives
E.g a decision to reduce costs by outsourcing training would result in changes to training programmes
Hard HR
treats employees simply as resources of the business
Strong link with the corporate business planning - what resources do we need? how do we get them? and how much will they cost?
Soft HR
Treats employees as most important resources in the business and a source of competitive advantage.
Employees are treated as individuals and their needs are planned accordingly.
The focus of Hard HRM
identify workforce needs of business and recruit, manage accordingly (hiring, moving, firing)
Key features of Hard HRM
- short term changes in employee’s number / recruitment / redundancy
- minimal communication, from top down
- pay-enough to recruit, retain enough staff (e.g minimal wage)
- little empowerment or delegation
- appraisal system focused on making judgements (good + bad) about staff
- taller organisational structures
- suits autocratic leadership styles
Soft HRM focus
Concentrate on the needs of employees - their sales, rewards, motivation etc.
Soft HRM key features
- strategic focus on long term workforce planning
- strong, regular two way communication
- competitive pay structure, with suitable performance - relatable rewards (e.g profit share, share options)
- employees are empowered, encouraged to seek delegation and take responsibility
- appraisal systems focused on identifying and addressing training and other employees development needs
- flatter organisational structures
Reasons a business may lose staff
- recruitment / maternity / death / long-term illness
- unsuitability
- change in strategy (e.g closure of locations)
- labour turnover needs to be managed if the business is to succeed
- employee retention, the ability of a business to convince its employees to remain with business
Labour turnover
the % of the workforce (employees) that leave a business within a given period (usually a year)
How to calculate labour turnover
number of employees leaving during period / average number of employed during that period X 100
Factors that affect labour turnover
- types of business (some has seasonal staff or employee temporary staff - hotels)
- pay and other rewards
- working conditions
- opportunities for promotion
- competitor actions
- standard of recruitment
- quality of communication in business
- employee loyalty
- economic conditions (down = lower staff retention, buoyant economy - staff more likely to leave)
- labour mobility ( how transferrable are staff skills, what other jobs are available )
How can a business improve labour turnover
- job enrichment
- effective recruitment and training (recruit the right staff, do all you can to keep the best staff)
- provide competitive pay and other incentives (competitive pay levels and non-financial benefits)
- reward staff loyalty (service awards, extra holiday etc.)
Increase of labour productivity means…
Higher output per employee
Decrease of costs per unit means …
Lower labour costs per unit
Influences on labour productivity
- extent and quality of fixed assets (e.g equipment, IT systems)
- skills, ability, and motivation of the workforce
- methods of production organisation
- extent to which the workforce is trained and supported (e.g working environment)
- external factors (e.g reliability of suppliers)
Problems when trying to improve labour productivity
- potential “trade-off” with quality - higher output must still be of the right quality
- potential for employee resistance - depending on the methods used (e.g introduction of new technology)
- employees may demand higher pay for their improved productivity (negates impact on labour costs per unit)
Ways to improve labour productivity
- measure performance and set targets
- streamline production processes
- invest in capital equipment (automation + computerisation)
- invest in employee training
- improve working conditions
How to calculate labour productivity
Output per period (units) / number of employees at work
