Human Resource Management (3.6) Flashcards
Human Resources are the…
The people of a business or organisation, regarded as a significant asset in terms of skills and abilities.
HR Management needs to make sure…
That the business has the right number of employees with the right skills, qualifications and qualities.
Human Resource tasks examples (4) :
- Employee safety.
- Recruitment and Training.
- Motivating employees.
- Managing employee relations.
Aim :
A specific goal a business has in mind. (Long term).
Objective :
Short-term step to help a business achieve its aim.
(Helps motivate people).
HR Management :
Department of a business or organisation that deals with the hiring, administration and training of staff.
7 HR Objectives :
- Labour Productivity.
- Employees engagement and involvement.
- Talent development.
- Training.
- Diversity.
- Alignment of values.
- Number, skills and location of employees.
(HR objectives) Labour Productivity :
- So they meet goals and objectives.
- Maximises efficiency.
- Lowers unit costs.
- Improves customer experience.
(HR objectives) Employee engagement and involvement :
- To ensure employees are motivated.
- More likely to stay with business (retention).
- Lower unit costs.
(HR objectives) Talent development :
- Improve skills.
- Lower unit costs since they’ll work harder.
- Staff retention rates.
- Makes employees feel valued.
(HR objectives) Training :
- So staff can work efficiently, increase customer satisfaction.
- Lower unit costs.
- Know what’s required of you.
(HR objectives) Diversity :
- So everyone feels comfortable.
- Gives new ideas and perspectives which will help the business grow.
(HR objectives) Alignment of values :
- Less conflict.
- So people understand the business and what it aims to do, all work towards it.
- e.g. ethics.
(HR objectives) Number, skills and location of employees :
- So everything runs smoothly, you’ll never be understaffed which could cause queues and upset customers.
- Don’t want too many staff.
(Internal influence on HR objectives) Corporate Culture :
- Alignment of values.
- Non-toxic environment.
- Employee relations reduced.
(Internal influences on HR objectives) Employee Relations :
- Diversity, everyone feels welcome and safe.
(Internal influences on HR objectives) Overall Performance of Business :
- If this is down, there will be less money to be spent on talent development.
(Internal influences on HR objectives) Financial Constraints :
- If they’re not much money, it might affect how many staff they can employee and what their wages are.
(Internal influences on HR objectives) Organisational Structure :
- Employee engagement and involvement will vary depending on whether it’s hierarchal/flat.
(External influences on HR objectives) Legislation/Political Factors :
- Will have to ensure they have a diverse workforce and don’t discriminate.
- Will have to ensure they’re treating staff and paying them fairly.
(External influences on HR objectives) Actions of Competitors :
- Increase training, will want highly trained staff as it’s a competitive advantage.
- Might have to lower product price to compete and therefore wages.
- Talent development.
(External influences on HR objectives) Structure of Population :
- If there’s lots of unemployment, won’t have to offer as many benefits to persuade people to work for them.
(External influences on HR objectives) Economic factors :
- If the economy’s struggling, they’ll have to lower prices and limit spending on things like talent development.
- Will affect how often/much they recruit.
(External influences on HR objectives) Social Factors :
- End of trends may mean decreasing the price of products.
- Some jobs may be less popular/wanted.
(External influences on HR objectives) Technological Factors :
- New machinery could reduce the need for staff but they would have to train them to use it.
Treating employees as an asset :
Treating them well so they work hard, see them as a competitive advantage.
~ Train them frequently.
Employee Engagement :
How motivated and involved employees are.
~ Physical act of doing something.
Employee Motivation :
Drive to complete something.
Hard HR Strategy :
Treat employees simply as just another resource of the business.
~ Autocratic leadership.
~ Financial methods of motivation.
~ Short term approach (don’t care about retention).
~ Taller structure (narrower span of control).
Soft HR Strategy :
Treats employees as the most important asset in the business and a source of competitive advantage.
~ Democratic leadership.
~ Encourages promotion/talent development (non-financial motiv.)
~ Long term approach.
Hard HR approach is…
~ Cheaper.
~ Quick decision making.
~ Higher absenteeism (labour turnover).
~ Difficulties with retention.
~ Potential to damage business reputation.
Labour Turnover :
The proportion of employees leaving a business over a period of time (usually a year).
Labour Turnover Formula :
Number of employees leaving
over a given period
—————————————— x 100
Avg number employed over a
given period.
Retention Rates :
Proportion of employees with a specified length of service (normally one or more years) as a proportion of the total workforce.
Retention Rates Formula :
Number of employees with one
or more years’ service
—————————————— x 100
Overall workforce number
(High Labour Turnover and Low Retention) High induction costs :
~ Business will have to spend more money on training employees to replace those who have left.
(High Labour Turnover and Low Retention) Reduced Productivity:
~ Because more people will of left the business.
~ May struggle to replace jobs.
~ New staff will be less productive while they’re learning.
Internal + External causes of High Labour Turnover & Low Retention Rates :
Internal : May be a toxic work environment.
External : May be better, promotional opportunities elsewhere.
How can firms improve their Labour Turnover? (3)
~ Monitoring + Benchmarking (track trends, identity areas where it’s high).
~ Exit Interviews (identify problems).
~ Reducing turnover of long-term workers (e.g. career progression, examine remuneration).
Impacts an increase in Labour Turnover will have on UK businesses ;
~ Larger choice of potential employees, can be pickier.
Labour Productivity :
A measure of the output per worker in a given time period.
Labour Productivity Formula :
Output per period
————————————————
Number of employees per period
Labour Costs per unit :
Are a measure of the average labour costs involved in producing one unit of output in a given time period.
Labour Costs per unit Formula :
Total labour costs
____________________
Total units of output
Reducing wages will reduce…
Labour costs per unit because staff will be less motivated + businesses are paying less money.
Improving working practices will…
Increase labour productivity.
Employee Costs as a percentage of revenue :
Measures the percentage of sales revenue needed to cover labour costs.
Employee costs as a % of revenue Formula :
Employee costs
———————— x 100
Sales Revenue
Absenteeism :
Is the proportion of employees not at work on a given day.
Absenteeism Formula :
Number of staff absent
——————————— x 100
Number of staff in total
Low employee costs as a % of turnover industries :
Car industry (lots of machinery so limited staff and sell cars for lots of money).
An industry with High employee costs as a % of revenue :
Hospitality (restaurants) because they have to pay lots of employees the same regardless of how much revenue they’re making.
Benefits of low Retention (4) :
~ New ideas, enthusiastic (more diverse workforce).
~ Could loose lazy workers.
~ Spend less money in talent development/bonuses etc.
~ Pay lower wages (less promotional opportunities).
Drawbacks of low Retention (5) :
~ Bad reputation.
~ High costs when recruiting + training.
~ Won’t be skilled when first arriving, may decrease customer satisfaction.
~ Poor talent development.
~ May loose staff to competitors.
Employee Engagement :
Emotional commitment an employee has to an organisation and its aims.
Empowerment is a series of…
A series of actions designed to give employees greater control over their working lives.
Job Design is the process of deciding the…
The process of deciding the content of the job in terms of its duties and responsibilities.
(Influences on Job design) Maintaining Quality :
~ Don’t over-load the job roles.
- Employee people with correct skills.
- Meet required quality.
(Influences on Job Design) Operational Efficiency :
~ Employee a correct amount, include training, make sure they have the skills and resources required.
(Influences on Job Design) Labour Retention :
~ Offer good wages and lots of promotional opportunities, variety in job roles.
(Influences on Job Design) Skills of Workforce :
~ Employees can only undertake jobs effectively if they have the skills required.
Hackman & Oldham’s Job Characteristic Model :
Based on the belief that the task itself is key to employee motivation.
~ Suggests 5 job characteristics that can be studied to help predict job satisfaction.