Section 3.6 - HR Performance Flashcards
Purpose of HRM (Human Resource Management)
definition:-
to ensure that a business achieves the maximum benefit from its employees at minimum cost
^^^
needs to make sure the business has the right number of employees, with the right skills, qualifications and qualities
HR Objectives
- influenced by the objectives of the business as a whole
- work closely with other departments; other departments help HR to anticipate workforce needs and react to them
- decides how to treat staff; how to use their skills, keep them working for the company, train and award, and how to terminate employment
They help HR to manage staff successfully
> matching with workforce to the business needs
> helping employees reach their full potential
> supporting employee/employer relations
Internal factors influencing HR objectives
- culture
- other departments
- amount of funding available
External factors influencing HR objectives
- general state of the economy will impact activities such as recruitment and training
- UK employment laws
- ethical and environmental issues
- improvements of technology ; may have to employ people who can use certain types of software
Hard HRM
- employees seen as a resource
- hired on a short term basis
- managers believe that employees are mainly motivated by money/appraisals are judgemental
- training only done to meet production needs
Soft HRM
- employees are the most important resource
- employees are managed on a long term basis
- managers motivate employees through empowerment and development
- appraisals = developmental
- training done to meet developmental needs
Labour productivity
labour productivity is checked before making decisions on training recruitment and payment
Calculation:
labour productivity = output per period/ number of employees
> can have a positive impact on labour productivity by employing a diverse workforce and making sure that employees are engaged and motivated
labour productivity increasing = reward e.g. bonuses and increased salaries
labour productivity decreasing = retrain staff, offer bigger incentives, redundancies or replacement
compare labour productivity data with competitors to see if they need to improve.
Labour cost per unit
Labour cost per unit = labour costs / units of output
Employee costs as a percentage of turnover
employee costs / sales turnover x 100
Labour turnover
definition:- measures the proportion of staff who leave each year
Calculation:
labour turnover (%) = number of staff leaving / average number of staff employed x 100
External causes - include unemployment levels
Internal causes - include poor motivation, low wages, lack of opportunity, etc.
Benefits of high staff turnover:
> constant stream of new ideas
> recruit already trained staff
> reduce firm through natural wastage if sales fall
> enthusiasm of new staff can be influential
Disadvantages of high staff turnover:
> lack of loyal and experienced staff
> firm loses staff it has trained
> training costs money and productivity drops
> recruitment costs are high
Labour retention
Labour retention (%) = number of staff employed at the end of a period / number of staff employed to start x 100
Organisational design
- sets out who has authority and responsibility for making decisions
- Shows who individual employees are accountable to send who employees are responsible for
- Chart also shows how the organisation is divided up
Organisational design - Tall Design
- lots of levels
- long chains of command
- the chain of command is the path of communication and authority
- can affect communication
- managers have narrow spans of control; workers can become demotivated
Organisation design - Flat Organisations
- given more responsibility and freedom
- leads to managers getting overwhelmed
^^^ can be improved through delayering
Delegation
definition:-
giving responsibility for decision-making to people below you
> manager needs to trust the person they are delegating responsibility to
persons delegated needs to trust their manager
amount of delegation is highly influenced by the nature and culture of the business
Centralised structures
Definition:-
all decisions are made by senior managers at the top of the business
Advantages:
> business leaders have lots of experience of making business decisions
> managers get an overview of the whole business, decisions are consistent
> senior managers aren’t biased towards the one department; make the best decisions as a business as a whole
> senior managers can make big decisions quickly
Disadvantages:
> not many people are expert enough to make decisions about all aspects of the business
> can be demotivating to other employees
> organisation reacts slowly to change
Decentralised structures - share out authority of making decisions
E.g. national and multinational companies decentralise decision making and delegate power to regional managers
Advantages:
> motivates employees
> can use expert-knowledge of their sector
> day-to-day decisions can be made quickly
Disadvantages:
> junior employees may not have enough experience to make decisions
> inconsistencies may develop between divisions
> junior employees may not be able to see the overall situation and needs of an organisation
Profuse human resource flow
^^^ makes sure that the business always has the right number of staff with the right skills - done by predicting the demand and supply of staff
1. HR predict how many and what kind of workers will be needed
2. Need to assess the potential supply of new workers
Recruitment
- Identify a vacancy
- Write a person specification and job description
- Advertise the job
- Process applications
- Shortlist most suitable candidates
- Interview most suitable
- Appoint most suitable
Internal recruitment
Advantages:
> candidates already know the business
> short and cereal
> motivates worker to go for the promotion
Disadvantages:
> leaves a vacancy in another department
> can cause resentment; bad work culture
External recruitment
Advantages:
> bring in fresh new ideas
> bring in experiences from other organisations
> larger number of applicants
Disadvantages:
> long and expensive
> longer induction process
> recruitment process may not be representative of what they’re like
HR - training and development
HR plan employees training and development:
- organises induction and training programs of new staff
- can be done off the job or on the job
On the job training
Advantages:
> easy to organise
> lower cost
> training is job specific
Disadvantages:
> trainer and trainee are not productive during training
> bad practices are passed on
> no new ideas brought to the business
Off the job training
Advantages:
> trainers are specialist
> new ideas brought to the business
> no job distractions during training
Disadvantages:
> expensive
> no benefit to the business
> training might not b e specific to their day
HR Flow Management
HR flow needs to be manages during tough times:
- some departments might have too much labour if there has been a recent drop in demand or new technology
- HR will see its the surplus staff can be redeployed to other areas; moral and motivation remains high
- may have to make them redundant
^^^ managing HR flow this ay can make sure that the business has the right number of employee and being put where the business needs them most
HR flow - internal factors
- corporate, marketing and production plans
- changes in production styles may lead tor training, recruitment and redeployment
HR flow - external factors
- employment legislation protects employees rights and restricts companies ability to dismiss employees or transfer workers
- new tech might change number of staff and skills needed
- labour market trends like migration and ageing population impact supply of workers
Motivation
- value of motivation shouldn’t be I underestimated; likely yo be more productive, aligned with company objectives, and prepared to go above and beyond
- motivated employees are more loyal; decrease labour turnover and absences
- customer satisfaction increases when workforce feel engaged
- more attractive prospect for future employees
Motivation: Taylor and scientific management - concentrate on efficiency
- early 20th century, Taylor thought that workers were motivated by money
- goal was to figure out the most efficient way to do the job and also making sure that each task was being done by the right worker; scientific management
- favoured division of labour
Believes in paying workers according to the quantitative they produces; most productive worker got a better rate - increased productivity meant that fewer workers are needed
- could lead to reduction in quality
^^^
Wouldn’t work in modern businesses - would be seen as exploitation
Motivation: Maslow’s Hierarchy of Needs
People need the basics:
5. Basic physical needs - food, water, shelter, clothes
4. Safety - safe work environment and job security
3. Social needs - friendship, teamwork
2. Self-esteem - achievement
1. Self-actualisation
^^^
Appealing but isn’t always obvious which level each individual is at
Motivation: Herzberg’s Hygiene and Motivating Factors
Hygiene factor - necessities:
Things like good company policy, supervision, working conditions, pay, and relations with fellow employees
Motivating factor:
Things like interesting work, personal achievement, recognition, and scope for more responsibility and personal development
Job design
Outlines the way a job is planned and organised
- influenced by internal and external factors
- day-to-day tasks are the main influence on job design
- external factors e.g. new technology, changes to law and legislation, customer demand and the availability of certain skills can affect job design
Job design: Hackman and Oldham
Job design is focused on the person not the job; the person would then be motivated
Broken down unto 5 key element of job design which lead to worker motivation, more worker involvement, higher performance, lower staff turnover and lower absenteeism.
- Skill variety - a wide variety of skills needed in a job can motivate
- Task identity - worker will fell involved if there is a clear task and they deal with it from the start to finish
- Task significance - more likely to be motivated if they feel their job is significant
- Autonomy - workers who make their own decisions will feel like their contribution is valued
- Feedback - tells them how they’ve done and encourages them to do better
Improving motivation
Payment methods can be used to reward and motivate -
- piece rate - workers are paid per unit produced; no fixed salary
- salary schemes - paid according to a given time period; could be an hourly rate, weekly rate and annual wage
- commission - paid a bonuses on top of their salary - could be based on sales or unit produced
- performance-related pay - paid based on performance or on the performance of the business
