HRM Strategy

Question 1

need for HRM strategy

Answer 1

• need to have the right types and numbers of employees
• must use appropriate payment methods for different types of workers
• must offer suitable job contracts to different types of workers
• to avoid motivation issues
• to apply IT to HR operations to increase efficiency

Question 2

when question refers to HRM strategy, it means…

Answer 2

hard or soft approach, which is further divided into:

• workforce planning - e.g. flexible contracts for seasonal demand
• recruitment - employment contracts
• training - to use new tech e.g.
• managing performance - appraisal, discipline, motivation, MBO

Question 3

hard VS soft HRM

Answer 3

hard = see as cost, use sparingly and little concern for WLB or development

soft = see as asset that needs to be nurtured to motivate to work towards objectives of business

Question 4

hard HRM may save costs in the SR, but in the LR…

Answer 4

1. recruitment and training costs will rise - frequently
2. poor motivation will reduce productivity and increase unit costs and reduce profitability (may be central objective especially for PLCs)
3. LT damage to reputation and sales - negative publicity, pressure group attention, industrial action
4. hard to achieve LT objectives - Maslow, Mayo and Herzberg suggest employees need to be nurtured to motivate and make committed to meeting objectives

Question 5

use of hard VS soft HRM depends on

Answer 5

1. if workers are easily replaceable
2. weigh up costs of hard (e.g. recruitment, low productivity, rep damage) with benefits
3. depends on objectives of business - if has CSR will not
4. depends on what customers want - if they value ethical behaviour or just low prices

Question 6

why are core workers and peripheral workers treated differently?

Answer 6

core workers have the skills and potential to help the business meet objectives so it is crucial to develop and motivate them to want to stay loyal to the business and work towards objectives

peripheral workers tend to be low-skilled and easy to replace

Question 7

which employment strategies come under a Hard and Soft HRM approach?

Answer 7

hard - part time, gig, zero-hour, temporary

soft - full time, permanent

Question 8

why does a hard approach use less secure contracts?

Answer 8

hard HRM focuses on cost reduction - main benefit is that they only require employees to be paid when they work, minimising labour costs
soft HRM on the other hand is focused on developing, motivating and retaining core employees to meet objectives, so full time and permanent more appropriate as they allow more training and job security

Question 9

pros of permanent/full time contracts

Answer 9

1. meets security needs (Maslow) - motivating so higher retention, lower recruitment and training costs and retain the competitive advantage of skills instead of losing them to rivals
2. Can be trained to increase their skills and qualifications as they are more LT employees - better expertise may mean better quality performance thus can meet objectives (BE SPECIFIC E.G. CUSTOMER SATISFACTION, QUALITY, LOWER COSTS)
3. Regular employees can develop strong relationships with customers - better customer service thus satisfaction and repeat custom and loyalty

NOTE: if changing from zero-hour to full time: Guides will have more certainty in terms of their hours and also possibly which tours they will be taking which will allow for more effective planning (AN) leading to reliability of service and higher customer satisfaction. (DAN)

Question 10

cons of permanent/full time contracts

Answer 10

1. labour becomes a fixed cost - if demand falls, OPM will fall (revenues will have fallen while costs stay fixed)
2. limited operational flexibility makes it hard and costly to respond to demand during demand surges

Question 11

ideal type of contract depends on

Answer 11

1. type of business - seasonal or not
2. type of employees - high skilled and hard to replace?
3. resources of business - small business may not be able to support full time employment costs
4. needs of employee - if skilled enough to want to retain, understand if they would prefer flexibility

Question 12

4 main problems with flexible employment contracts

Answer 12

• understaffing - unmet demand so reputation
• communication - lower productivity/more mistakes and higher costs
• teamwork - less innovation
• employees cannot form effective relationships (social needs) so lower motivation

communication issues can be overcome with effective IT systems e.g. group messaging or intranets

Question 13

MBO

Answer 13

dividing the business’ overall aim into specific targets for each department and individual, then comparing actual performance against these targets

Question 14

pros of MBO

Answer 14

• improves motivation - each employee understands how their role is important for company’s objective, - increased commitment, lower absenteeism which reduces costs
• OR: employee involvement in setting objectives leads to increased
  ownership thus motivation and commitment hence better performance
• measure and control performance - helps to give specific feedback so employees know what they have to improve thus objective more likely to be achieved
• improves coordination- working towards same overall aim
• improves focus - understand exactly what they have to do so higher productivity thus more likely to meet objective

Question 15

cons of MBO

Answer 15

• time consuming to discuss objectives and performance appraisal –> lower ST productivity
• employees may share confidential strategic plans
• agreed objectives may be too easy to achieve - not effective for long term aims
• objectives can become outdated quickly as external environment changes

Question 16

guarantee, motivation, smart, manager, success, time - mgmt ss

MBO Eval

Answer 16

1. doesn’t guarantee success - other factors important like skill of mgmt and adequate resources
2. if inclusive culture has not been used before, employees may be distrustful and refuse to cooperate/work towards set goals - clear communication needed to establish trust before proceeding but may be long term
3. ST costs of lost productivity outweighed by benefits of involving employees - ownership is a sustainable motivating force
4. MBO needs structured approach to goal setting, it may not be suitable for organizations that require high levels of flexibility and adaptability.
5. objectives must be SMART and not too easy in order to provide clarity about the task and make significant progress
6. must ensure employees understand the objectives they are committing to and support with training
7. depends on effectiveness of review and control process - performance appraisal necessary to improve and keep employees engaged; avoid rising costs
8. hard to measure some factors contributing to success e.g. culture of workplace but may be equally important
9. should not be excessive focus on ST targets as company may lose focus on the overal LT objective

Question 17

hard HRM

Answer 17

focused on cutting costs, by treating employees as any other resource that must be obtained and used as cheaply as possible. Linked to Taylor’s scientific mgmt theory (achieving maximum efficiency with strict control) and Theory X mgmt

Question 18

soft HRM

Answer 18

sees employees as an asset that must be developed and nurtured to help them self-actualise, which will in turn motivate them to work towards business’ objectives and stay loyal

linked to motivators in Herzberg’s 2-factor theory and Theory Y mgmt style

Question 19

should business use hard or soft approach?

Answer 19

will not use completely hard/soft, will be a mixture of both and the degree depends on:

1. objectives of business - e.g. CSR
2. whether prices (and hence costs) are more important to consumers than acting ethically
3. the type of workers - core workers that are hard to replace
4. culture and management style/attitudes
5. type of work/industry - e.g. low skilled, naturally high worker turnover like fast food - does it make to invest so much in developing employees?

Question 20

pros of part time/zero hour/gig contracts

Answer 20

1. more operational flexibility to respond to demand surges - lower risk of unmet demand thus better customer satisfaction
2. cheaper as becomes variable cost - lower labour unit costs could lead to lower prices thus higher competitiveness and sales+share
3. help to assess suitability of worker before offering full-time contract - reduces risk of hiring a poor fit thus lower cost of recruitment/training again

situational - if using PT AND FT
could access wider range of skills than just FT - expertise can increase quality of output, thus leading to higher added value and competitiveness so premium price

Question 21

cons of part time/zero hour/gig contracts

Answer 21

• less job security (Maslow) so lower commitment and motivation - higher turnover thus higher recruit/train costs

OR poor quality customer service thus lower satisfaction OR lower productivity hence higher unit costs

• communication and coordination difficult - increase risk of mistakes thus increasing waste costs OR lower productivity
• teamwork is harder - cannot be as innovative thus reduced competitiveness and sales
• ethical issues e.g. w/ ZH - pressure groups create poor publicity that damages brand image hence lower sales in LT
• may be illegal - cost of legal battles thus lower profit for the year

Question 22

full or part time eval

Answer 22

1. depends on type of business - if seasonal demand then flexibility better for costs AND customer service (do not want customers to be neglected/unmet)
2. depends on skill level of job - if high skill then offer them job security to retain their skills as it may be costly and difficult to find replacement + may lose competitive advantage. If low skill then cost+flex better

• obviously you have to think of these points then see their relevance to the case to either strengthen/weaken your judgement

e.g. given that they are a seasonal business, part time better for minimising costs

Question 23

main advantage of flexible employment contracts to workers (and flexibility in general)

Answer 23

• allows a better work-life balance as they can fit their work schedule around their personal circumstances, e.g. having young children or for other needs (Maslow, Self actualisation

Question 24

main advantages to employers of offering flexible employment contracts

Answer 24

• more competitive employer - attract and retain skills
• attract wider range of skills (limiting personal circumstances)
• more motivated employees - WLB and self-act (Maslow) - lower turnover, lower R/T costs
• longer working days - better customer service; higher productivity

Question 25

pros of annualised hours contracts

remember, employers choose when to call employees in. typically set some fixed schedule then the remaining hours are up to the employee

Answer 25

1. employees have more flexibility for WLB/personal needs
2. employer has more flexibility as can call in workers when needed - demand surges

** do not link 2. to costs as this is still a full time job, just with flexible schedules

Question 26

cons of annualised hours contracts

Answer 26

1. Employees may be overworked during busy periods - burnout and lower productivity/quality
2. if employer underestimates the number of hours that staff are needed for the year, overtime has to be paid - increases costs, reduces profit

don’t talk about risk of understaffing as employer has some control over this with the regular shifts set

Question 27

pros of job sharing

Answer 27

1. attract skill that could not work full time - greater expertise could increase productivity thus lower unit costs
2. more innovation from two people sharing ideas - may work together to increase quality of work thus increasing competitiveness and customer satisfaction
   not work alone
3. better work-life balance - less stressed or tired means better motivated thus higher retention

Question 28

cons of job sharing

Answer 28

1. may not be compatible/trust each other - conflict may reduce productivity and unit costs
2. may not share work equally - demotivation thus turnover and loss of skills

Question 29

pros of compressed hours

Answer 29

1. 3 day weekend may allow for better WLB - less stressed+tired thus higher productivity

Question 30

cons of compressed work hours

Answer 30

1. some days popularly taken off so risk of understaffing - unmet order/poor customer service so lower satisfaction
2. employees may prefer short bursts to long stretches - may lose focus and motivation so lower productivity and higher unit costs

Question 31

remember that shift work…

Answer 31

is still full time work, just with timings other than typical 9-5

Question 32

pros of shift work

Answer 32

1. longer work days - output, customer service
2. better capacity utilisation - lower unit FC and BEP
3. greater flexibility to respond to demand surges - fewer unmet orders thus better customer service + satisfaction
4. flexibility may motivate workers - committed to higher quality work thus competitive advantage

Question 33

cons of shift work

Answer 33

1. consecutive shifts - less time for machine maintenance so lower producitivity if breaks down
2. health issues - greater stress, poor health, and lower productivity

Question 34

measures of employee performance

Answer 34

• labour productivity
• absenteeism
• industry/business specific - e.g. material wastage, customer complaints

Question 35

formula for absenteeism

Answer 35

(total number of days of employee absence/total number of working days) * 100

Question 36

strategies for improving employee performance

Answer 36

Hard:
* warnings
* threats of disciplinary action like termination

Soft:
* MBO
* performance appraisal with feedback
* training
* financial and non-financial incentives
* non-financial motivators like job enrichment/enlargement, teamworking

you keep forgetting MBO!! DON’T! IS THE MOST IMPORTANT!

Question 37

strategies to improve employee performance eval

Answer 37

1. best strategy depends on root of problem - e.g. investing in new tech will not help to increase productivity if the problem is poor motivation!
2. soft strategies are more costly than hard, but tend to produce greater levels of motivation in the LR that lead to higher quality, productivity and lower absenteeism and turnover, which will save costs - based on idea of theorists like ________

Question 38

impacts of absenteeism

Answer 38

1. costly to hire temporary workers/pay overtime
2. poor customer service due to understaffing/irregularity (e.g. in salons) - low satisfaction therefore will not return so you have lost sales
3. pressure on remaining workers - demotivating so lower productivity
4. temp workers may lead to lower quality - again lower satisfaction and sales
5. lost productivity - higher unit costs

Question 39

solutions to absenteeism

Answer 39

depends on cause

• if health/family issues, offer support
• if laziness, disciplinary action
• if motivation, provide incentives/job enrichment
• reward good attendance - reinforcement
• automation - more reliable and productive (BUT ethical issues, cost, demotivation)