Section 3.6 - HR Performance

Question 1

Purpose of HRM (Human Resource Management)

Answer 1

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

Question 2

HR Objectives

Answer 2

• 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

Question 3

Internal factors influencing HR objectives

Answer 3

• culture
• other departments
• amount of funding available

Question 4

External factors influencing HR objectives

Answer 4

• 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

Question 5

Hard HRM

Answer 5

• 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

Question 6

Soft HRM

Answer 6

• 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

Question 7

Labour productivity

Answer 7

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.

Question 8

Labour cost per unit

Answer 8

Labour cost per unit = labour costs / units of output

Question 9

Employee costs as a percentage of turnover

Answer 9

employee costs / sales turnover x 100

Question 10

Labour turnover

Answer 10

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

Question 11

Labour retention

Answer 11

Labour retention (%) = number of staff employed at the end of a period / number of staff employed to start x 100

Question 12

Organisational design

Answer 12

• 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

Question 13

Organisational design - Tall Design

Answer 13

• 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

Question 14

Organisation design - Flat Organisations

Answer 14

• given more responsibility and freedom
• leads to managers getting overwhelmed
  ^^^ can be improved through delayering

Question 15

Delegation

Answer 15

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

Question 16

Centralised structures

Answer 16

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

Question 17

Decentralised structures - share out authority of making decisions

Answer 17

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

Question 18

Profuse human resource flow

Answer 18

^^^ 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

Question 19

Recruitment

Answer 19

1. Identify a vacancy
2. Write a person specification and job description
3. Advertise the job
4. Process applications
5. Shortlist most suitable candidates
6. Interview most suitable
7. Appoint most suitable

Question 20

Internal recruitment

Answer 20

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

Question 21

External recruitment

Answer 21

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

Question 22

HR - training and development

Answer 22

HR plan employees training and development:
- organises induction and training programs of new staff
- can be done off the job or on the job

Question 23

On the job training

Answer 23

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

Question 24

Off the job training

Answer 24

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

Question 25

HR Flow Management

Answer 25

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

Question 26

HR flow - internal factors

Answer 26

• corporate, marketing and production plans
• changes in production styles may lead tor training, recruitment and redeployment

Question 27

HR flow - external factors

Answer 27

• 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

Question 28

Motivation

Answer 28

• 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

Question 29

Motivation: Taylor and scientific management - concentrate on efficiency

Answer 29

• 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

Question 30

Motivation: Maslow’s Hierarchy of Needs

Answer 30

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

Question 31

Motivation: Herzberg’s Hygiene and Motivating Factors

Answer 31

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

Question 32

Job design

Answer 32

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

Question 33

Job design: Hackman and Oldham

Answer 33

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

Question 34

Improving motivation

Answer 34

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