Chapter 16 HRM Strategy

Question 1

Define hard HRM

Answer 1

An approach to managing staff that focuses on cutting costs, treating employees like any other resources. E.g. call centres.

Example sentence: Call centers often implement hard HRM strategies to reduce costs.

Question 2

Define soft HRM

Answer 2

An approach to managing staff that focuses on developing staff so that they are motivated to work hard and stay with the business.

Additional information: Soft HRM aims to create a positive work environment to enhance employee motivation.

Question 3

Advantages of hard HRM

Answer 3

Staff are well monitored and also easily replaceable. Costs are minimized/more cost-effective => potential increased profitability. More standardization of processes, reduces the risk of errors being made.

Example sentence: The use of hard HRM practices can lead to cost savings and increased efficiency.

Question 4

Disadvantages of hard HRM

Answer 4

Could increase recruitment and induction training costs in the long term as temporary workers have to be frequently recruited. Demotivated workers with little job security => decreased productivity => reduce efficiency and profitability. Bad publicity regarding the treatment of workers.

Additional information: Hard HRM may lead to negative perceptions of the organization.

Question 5

Advantages of soft HRM

Answer 5

Higher motivation. Greater commitment from staff. Less absenteeism. Greater productivity => competitive advantage.

Additional information: Soft HRM can result in a more engaged and productive workforce.

Question 6

Disadvantages of soft HRM

Answer 6

Increased costs for the development of skills, wage increases, the support staff to work. Delaying decision-making for the synthesis of the opinions of employees, management.

Example sentence: Soft HRM may require additional investments in employee development.

Question 7

Define temporary employment contract

Answer 7

Employment contract that lasts for a fixed time period. E.g. six months.

Additional information: Temporary contracts are often used for seasonal work or specific projects.

Question 8

Advantages of temporary contract

Answer 8

Reduce the overhead costs of employing staff when there may be less demand for them. Flexibility is important for seasonal business activities. Flexible for workers as they can have multiple jobs => gain experience and skills. Efficiency of staff can be assessed.

Example sentence: Temporary contracts allow businesses to adapt to fluctuating demand.

Question 9

Disadvantages of temporary contract

Answer 9

No employees loyalty => reduced productivity and efficiency => adds costs to the business. Little motivation to work since employees are not committed to the company. Security of employment.

Example sentence: Temporary contracts may lead to decreased employee loyalty.

Question 10

Define part-time employment contract

Answer 10

Employment contract that is for less than the normal full working week/ for part-time workers.

Additional information: Part-time contracts involve working fewer hours than full-time employees.

Question 11

Define flexi-time contract

Answer 11

Employment contract that allows staff to be called in at times most convenient for employers and employees.

Additional information: Flexi-time contracts offer employees flexibility in their working hours.

Question 12

Advantages of flexi-time and part-time contract (to the firm)

Answer 12

Staff can be required to work at particular busy periods of the day but not during slack times => reduce overhead costs => competitive advantage. By using teleworking from home => saves costs. More staff are available to be called upon should there be sickness or other causes of absenteeism. The efficiency of a staff can be assessed before they are offered a full-time contract.

Example sentence: Flexi-time contracts allow businesses to optimize staffing levels based on demand.

Question 13

Disadvantages of flexi-time and part-time contract (to the firm)

Answer 13

Additional administrative work and “red-tape” involved in setting up and running flexible working. The potential loss of customers if key employees reduce their working hours. Lower employee productivity. Inability to substitute for certain skills if certain employees are absent (a common concern of smaller businesses). Managers finding it difficult to manage or administer the flexibility.

Example sentence: Flexi-time arrangements may pose challenges for managers in coordinating schedules.

Question 14

Advantages of flexi-time and part-time contract (to the workers)

Answer 14

Contract can be ideal for certain types of workers for example students parents with young children who do not wish to work a full week. They may be able to combine two jobs with different firms giving greater variety to their working lives.

Additional information: Flexi-time and part-time contracts offer employees flexibility to balance work and personal life.

Question 15

Disadvantages of flexi-time and part-time contract (to the workers)

Answer 15

They will be earning less than full-time workers. They may be paid at a lower rate than full-time workers. The security of employment and other working conditions are often inferior to those of full-time workers.

Additional information: Part-time workers may face challenges in terms of lower pay and job security.

Question 16

Define labour productivity

Answer 16

The output per worker in a given time period. It is calculated by - total output in time period/ total staff employed.

Additional information: Labour productivity is a key metric for assessing workforce efficiency.

Question 17

Define absenteeism

Answer 17

Measures the rate of workforce absence as a proportion of employee total. It is calculated by: Absenteeism (%) = (no. of staff absent/total no. of staff) x 100.

Additional information: Absenteeism can impact business operations and productivity.

Question 18

Define labour turnover

Answer 18

Measures the rate at which employees are leaving an organisation. It is measured by: (number of staff leaving in one year/average number of staff employed) x 100.

Additional information: Labour turnover can indicate employee satisfaction and retention issues.

Question 19

Causes for poor employee performance

Answer 19

Lack of training given to the employees. Lack of resources available to allow optimization of their work. Obstacles such as collaboration problems, communication and permission. Miscommunication leads to misinterpretation of the guidelines. No incentives to motivate the employees. No punishment for their poor work.

Example sentence: Poor employee performance can be attributed to various factors such as lack of training and communication issues.

Question 20

Consequences of poor employee performance

Answer 20

Absenteeism. Decreased efficiency and productivity. Increased overhead costs => reduced competitive advantage. Lower morale => reduced employee loyalty. Management stress. Poor output level. Poor quality of the output.

Additional information: Poor employee performance can have significant negative impacts on the organization.

Question 21

Strategies to improve performance

Answer 21

Regular appraisals of performance against agreed pre-set targets. If workers fail to reach targets => establish disciplinary nature or provide training. Training. Quality circles - small groups of workers encouraged to take responsibility for identifying and suggesting solutions to work-related problems. Financial incentives linked to profits of the business or offer a stake in the ownership of the company. Teamworking - encourage multi-skilling training and opportunity to take responsibility => feels valued.

Question 22

Costs of high labour turnover

Answer 22

Costs of recruiting, selecting and training new staff. Poor output levels and customer service due to staff vacancies before new recruits are appointed. Difficult to establish loyalty and regular contact with consumers. Difficult to establish team spirit.

Question 23

Benefits of high labour turnover

Answer 23

Low skilled and less productive staff can be replaced by more carefully selected workers. New ideas and practices are brought into the organization.

Question 24

Define management by objectives (MBO)

Answer 24

A method of coordinating and motivating all staff in an organisation by dividing its overall aim into specific targets for each department, manager, and employee.

Question 25

Possible benefits of MBO

Answer 25

Each manager and subordinate will know exactly what they have to do. This will help them prioritize their time and enable them to see the importance of what they do to the whole organisation. By using the corporate objectives as the key focus to all departmental and individual objectives => everyone works to the same overall target => avoid conflict and ensure a consistent and well-coordinated approach. Managers are able to monitor everyone’s performances => measure success or failure.

Question 26

Possible problems of MBO

Answer 26

Process of dividing corporate objectives can be time-consuming. Best performed only after full consultation. Objectives can become outdated quickly due to the changing nature/dynamics of business. Setting targets does not guarantee success. Issues such as adequate resources and staff training must also be addressed to achieve the targets.

Question 27

Why do we need labour legislation?

Answer 27

Prevent exploitation of workers by powerful employers. Prevent loss of industrial output and national income from excessive use of trade union collective action.

Question 28

How can the state affect industrial relations and trade unions?

Answer 28

Through industrial relations law. Through agencies set up to improve industrial relations such as arbitration councils. Through its own policies as a major employer.

Question 29

Causes of conflict between employers and employees

Answer 29

Rationalisation and organisational change. Common management view: business needs to cut overheads and be flexible and adaptable to deal with competition. Common employee view: Business change - e.g. relocation/new tech. Common management view: change is necessary to remain competitive and profitable. Common employee view: change can lead to job losses, result in retraining new skills => might not be able to cope, demands greater flexibility.

Question 30

What are the 3 broad approaches to labour-management relations?

Answer 30

Autocratic management style with a ‘take it or leave it’ attitude to workers. Collective bargaining between powerful trade unions and major employers and their associations. Cooperation between labour and management, recognizing that successful competitive businesses will benefit all parties.

Question 31

Autocratic management style with a take it or leave it attitude

Answer 31

No labour security and low levels of motivation. Staff will not have the opportunity to be trained due to frequent job changes. No common objectives established between labour and management. Non-existent job enrichment and no staff involvement => no contribution.

Question 32

Collective bargaining between trade unions and employers

Answer 32

National agreements were not always suitable/affordable for small businesses. Strikes and other industrial action caused disruption and lost output and sales. Powerful unions resisted any changes that might adversely affect their members and this led to a lack of investment in and development of key industries.

Question 33

Cooperation between labour and management

Answer 33

Actively involve workers in important decision-making and operational issues.

Question 34

Define trade union

Answer 34

An organisation of working people with the objective of improving the pay and working conditions of their members and providing them with support and legal services.

Question 35

Reasons for worker joining trade union

Answer 35

Power through solidarity, puts workers in a stronger position. Individual industrial action. E.g. one worker going on strike is not effective. Provide legal support to employees who claim unfair dismissal or poor conditions of work. Unions pressurize the employers to ensure all legal requirements are met.

Question 36

How can negotiations be categorised?

Answer 36

National level - with employers’ associations. Collective bargaining - at a business level is when a firm negotiates with union officials. Plant-based bargaining where each factory or administration center agrees a deal between union officials and local management.

Question 37

Define trade union recognition

Answer 37

When an employer formally agrees to conduct negotiations on pay and working conditions with a trade union rather than bargain individually with each worker.

Question 38

Trade union Benefits for employers

Answer 38

Employers would be able to negotiate with one officer rather than individual workers. The union system could provide an additional, useful channel of communication with the workers. 2-way communication. Unions can impose discipline on members who plan to take hasty industrial action that could disrupt business. Growth of responsible, partnership unionism => increased productivity.

Question 39

Define single union agreement

Answer 39

An employer recognises just one union for purposes of collective bargaining.

Question 40

Define no strike agreement

Answer 40

Unions agree

Question 41

Benefits of shift work

Answer 41

• It increases the output of the business
• It ensures expensive capital equipment is fully used, eg equipment is working 24hrs a day
• It is more flexible for business. If demand fails, one shift can be eliminated
• Workers may be able to switch shift, so there is some flexibility

Question 42

Limitations of shift work

Answer 42

• Machine maintenance and repair schedules have to be built into the shift system
• About 20% of night and rotating shift workers are thought to have sleep disorder know as “shift work disorder”. This can reduce productivity and cause long-term, stress-related health issues