HRM Strategy Flashcards
need for HRM strategy
- 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
when question refers to HRM strategy, it means…
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
hard VS soft HRM
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
hard HRM may save costs in the SR, but in the LR…
- recruitment and training costs will rise - frequently
- poor motivation will reduce productivity and increase unit costs and reduce profitability (may be central objective especially for PLCs)
- LT damage to reputation and sales - negative publicity, pressure group attention, industrial action
- hard to achieve LT objectives - Maslow, Mayo and Herzberg suggest employees need to be nurtured to motivate and make committed to meeting objectives
use of hard VS soft HRM depends on
- if workers are easily replaceable
- weigh up costs of hard (e.g. recruitment, low productivity, rep damage) with benefits
- depends on objectives of business - if has CSR will not
- depends on what customers want - if they value ethical behaviour or just low prices
why are core workers and peripheral workers treated differently?
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
which employment strategies come under a Hard and Soft HRM approach?
hard - part time, gig, zero-hour, temporary
soft - full time, permanent
why does a hard approach use less secure contracts?
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
pros of permanent/full time contracts
- 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
- 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)
- 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)
cons of permanent/full time contracts
- labour becomes a fixed cost - if demand falls, OPM will fall (revenues will have fallen while costs stay fixed)
- limited operational flexibility makes it hard and costly to respond to demand during demand surges
ideal type of contract depends on
- type of business - seasonal or not
- type of employees - high skilled and hard to replace?
- resources of business - small business may not be able to support full time employment costs
- needs of employee - if skilled enough to want to retain, understand if they would prefer flexibility
4 main problems with flexible employment contracts
- 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
MBO
dividing the business’ overall aim into specific targets for each department and individual, then comparing actual performance against these targets
pros of MBO
- 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
cons of MBO
- 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
guarantee, motivation, smart, manager, success, time - mgmt ss
MBO Eval
- doesn’t guarantee success - other factors important like skill of mgmt and adequate resources
- 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
- ST costs of lost productivity outweighed by benefits of involving employees - ownership is a sustainable motivating force
- MBO needs structured approach to goal setting, it may not be suitable for organizations that require high levels of flexibility and adaptability.
- objectives must be SMART and not too easy in order to provide clarity about the task and make significant progress
- must ensure employees understand the objectives they are committing to and support with training
- depends on effectiveness of review and control process - performance appraisal necessary to improve and keep employees engaged; avoid rising costs
- hard to measure some factors contributing to success e.g. culture of workplace but may be equally important
- should not be excessive focus on ST targets as company may lose focus on the overal LT objective
hard HRM
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
soft HRM
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
should business use hard or soft approach?
will not use completely hard/soft, will be a mixture of both and the degree depends on:
- objectives of business - e.g. CSR
- whether prices (and hence costs) are more important to consumers than acting ethically
- the type of workers - core workers that are hard to replace
- culture and management style/attitudes
- 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?
pros of part time/zero hour/gig contracts
- more operational flexibility to respond to demand surges - lower risk of unmet demand thus better customer satisfaction
- cheaper as becomes variable cost - lower labour unit costs could lead to lower prices thus higher competitiveness and sales+share
- 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
cons of part time/zero hour/gig contracts
- 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
full or part time eval
- depends on type of business - if seasonal demand then flexibility better for costs AND customer service (do not want customers to be neglected/unmet)
- 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
main advantage of flexible employment contracts to workers (and flexibility in general)
- 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
main advantages to employers of offering flexible employment contracts
- 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
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
- employees have more flexibility for WLB/personal needs
- 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
cons of annualised hours contracts
- Employees may be overworked during busy periods - burnout and lower productivity/quality
- 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
pros of job sharing
- attract skill that could not work full time - greater expertise could increase productivity thus lower unit costs
-
more innovation from two people sharing ideas - may work together to increase quality of work thus increasing competitiveness and customer satisfaction
not work alone - better work-life balance - less stressed or tired means better motivated thus higher retention
cons of job sharing
- may not be compatible/trust each other - conflict may reduce productivity and unit costs
- may not share work equally - demotivation thus turnover and loss of skills
pros of compressed hours
- 3 day weekend may allow for better WLB - less stressed+tired thus higher productivity
cons of compressed work hours
- some days popularly taken off so risk of understaffing - unmet order/poor customer service so lower satisfaction
- employees may prefer short bursts to long stretches - may lose focus and motivation so lower productivity and higher unit costs
remember that shift work…
is still full time work, just with timings other than typical 9-5
pros of shift work
- longer work days - output, customer service
- better capacity utilisation - lower unit FC and BEP
- greater flexibility to respond to demand surges - fewer unmet orders thus better customer service + satisfaction
- flexibility may motivate workers - committed to higher quality work thus competitive advantage
cons of shift work
- consecutive shifts - less time for machine maintenance so lower producitivity if breaks down
- health issues - greater stress, poor health, and lower productivity
measures of employee performance
- labour productivity
- absenteeism
- industry/business specific - e.g. material wastage, customer complaints
formula for absenteeism
(total number of days of employee absence/total number of working days) * 100
strategies for improving employee performance
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!
strategies to improve employee performance eval
- 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!
- 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 ________
impacts of absenteeism
- costly to hire temporary workers/pay overtime
- poor customer service due to understaffing/irregularity (e.g. in salons) - low satisfaction therefore will not return so you have lost sales
- pressure on remaining workers - demotivating so lower productivity
- temp workers may lead to lower quality - again lower satisfaction and sales
- lost productivity - higher unit costs
solutions to absenteeism
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)
