7. The Finance Function's Relationship with Human Resources Flashcards
What is human resource management?
A strategic approach to acquiring, developing managing and motivating an organisation’s people
What are the 4 core objectives HRM?
- To meet the organisation’s social and legal responsibilities relating to staff and employment
- To develop an effective pool of employees which will respond effectively to change
- To obtain and develop the human resources required by the organisation, and to motivate them
- To maintain effective working relationships and manage disputes
What are the 4 ways that finance interface with HR?
- Costs of meeting social/legal responsibilities
- Affording and managing payroll
- Budgeting for appropriate reward packages
- Supplying data to support appraisal
What 6 things will effective HR do?
- Contribute to strategic success
- Lead to increased productivity
- Enhance organisational learning
- Increase synergies
- Reduce staff turnover
- Encourage innovation
What does the organisations HR plan aim to do?
Close the gap between the demand for labour and the supply of labour
What options can HR take to close the labour supply and demand gap?
- Training of current staff
- Promotions
- Overtime agreements
- Recruitment of new staff
- Potential redundancies
Which unquantifiable benefits can HRM bring?
Motivation and commitment
What is the psychological contract?
The individuals’ expectations, beliefs, ambitions and obligations, as perceived by the employer and the worker
What may employers do if the employee breaks the psychological contract?
Take disciplinary action
What may employees do if the employer breaks the psychological contract?
Leave the organisation
What is recruitment?
The process of attracting suitable candidates into joining an organisation through targeted advertising
What are 2 alternatives to recruitment?
Promotion within the organisation or job redesign
What are 2 alternatives to a classic job role?
Technological automation or sub contraction (jobless structure)
What is job analysis?
The process of collecting, analysing and setting out information about the content of jobs in order to provide the basis for a job description and data for recruitment
What are the 2 elements of job analysis?
Job description and person specification
What are the 7 attributes listed in a job specification?
Background Attainments Disposition (Goals/Motivation) Physical Make-Up Interests General Intelligence Special Aptitudes
What are the advantages and disadvantages of staff recruiting friends?
+ Known
+ Cheap
- May have to discipline
- May ruin friendship
What are the advantages and disadvantages of using company notice boards to recruit?
\+ Known \+ Cheap \+ Motivational - May upset staff - No new talent
What are the advantages and disadvantages of using recruitment websites?
+ Cheap
+ Large audience
- Too many time wasters
- Need to sift large no. of applications
What are the advantages and disadvantages of using trade magazines to recruit?
+ Targeted audience
+ Correct skills pool
- Cost
- Applications from a far
What are the advantages and disadvantages of using job centres to recruit?
\+ Cheap \+ Available \+ Highly motivated - Time wasters - Large no. applicants
What are the advantages and disadvantages of using recruitment agencies?
+ Pre interview candidates
+ Pre-select
- Expensive
- Send all applicants’ CVs
What is screening?
A way of removing the least suitable initial applications, then identifying the most suitable applicant for the job
What are the 3 main types of interviews?
- One to one
- Two to one/tandem
- Panel
How can you improve reliability in interviews?
- Using standards questions
- Same interviewer
- Same rating system
- Factual rather than subjective assessments
What are the 2 types of test that can be used to test whether an applicant has the required skills?
- Proficiency tests
2. Psychometric tests
What are assessment centres used for?
Participant selection
What are the advantages and disadvantages of obtaining references?
\+ Independent opinion \+ Honest feedback - Bias for or against the candidate - Blandness - Reference limited to factual information only
What is induction?
The process of familiarisation into a new company, their people and working practises
What is staff training?
The planning and systematic modification of behaviour through learning events, programmes and instruction which enable individuals to achieve the level of knowledge, skills and competence to carry out their work effectively
What is development?
The growth or realisation of a persons ability and potential through the provision of learning and education experiences
What are Kirkpatrick’s 4 levels of evaluation of training and development?
- Reaction from recipient
- Learning expansion
- Behaviour impact
- Results
What are the 4 stages of monitoring performance?
- Identify assessment criteria
- Agree performance levels
- Monitor
- Periodic performance reviews
What is appraisal?
A systematic review and assessment of an employee’s performance, potential and training needs
What are the 3 purposes of appraisals?
- Reward review
- Performance review
- Potential review
What are the 3 types of appraisal?
- Management led
- Self-appraisal
- Multi-source: 360 or 180 degree
What is essential to follow apprisal?
Feedback
What are Lockett’s six barriers to successful appraisal?
- Confrontation
- Judgement
- Informal chat - lacking purpose
- Bureaucracy
- Annual event
- Unfinished business
What is motivation?
The urge to take action to achieve something or to avoid something
What are the 5 levels of Maslow’s Hierarchy of needs?
Physiological -> Safety -> Social -> Esteem -> Self-actualisation
What are the 4 categories of feedback?
- Intrinsic
- Extrinsic
- Concurrent
- Delayed
What is the purpose of a reward system?
To provide a transparent, fair and consistent system for motivating and rewarding employees
What are 4 main categories of reward?
- Performance based pay (e.g. commission, bonus - objectives must be SMART)
- Profit based approaches
- Equity-based approaches (e.g. shares)
- Non financial (e.g. flexible working, additional holiday, bigger offices, better job titles)
What are the As that finance does in relation to HR?
Analyse, advise and apply (budgeting, performance review and cost benefit analysis)
What are some of the main HR KPIs?
- Staff turnover
- Average salary per staff member
