The Finance Function's Relationship with Human Resources

Question 1

Benefits of good human resource management

Answer 1

HRM - a strategic approach to acquiring, developing, managing and motivating an organisation’s people
Contributes to strategic success of organisation
Increased productivity (more skilled employees)
Enhances group and organisational learning
Synergies from increased teamwork, co-ordination, etc
Reduces staff turnover
Encourages innovation

Question 2

Explain the steps within the recruitment process

Answer 2

1 - attracting suitable clients
2 - screening
Receipt and analysis of application
Further selection procedures eg tests, assessment centres
Decision/reference checks/other

Question 3

What is training vs development

Answer 3

Training - planned systematic modification of behaviour through learning events, programmes and instruction which enable individuals to achieve the level of knowledge, skills and competence to carry out their work effectively
Development - the growth of a person’s ability and potential through the provision of learning and educational experiences

Question 4

What are the 4 steps in managing performance?

Answer 4

1 - identify assessment criteria
2 - agree performance levels
3 - monitor performance
4 - periodic performance reviews

Question 5

Identify and give examples of the 5 categories in Maslow’s hierarchy of needs

Answer 5

Physiological needs - basic eg food, shelter
Safety needs - eg job security, comfortable working conditions
Social needs - sense of belonging, chance to meetup and socialise with like-minded people
Esteem needs - opportunity to gain social status and feel self worth
Self-actualisation - fulfilling one’s potential

Question 6

Examples of different types of rewards

Answer 6

Financial:
Performance related pay (PRP) - eg commission
Profit based approaches - eg year end bonus
Equity based approaches - shares within the company
Non-financial:
Flexible working
Car parking space
Additional holiday
Bigger office
Improved job title
Recognition from higher ups

Question 7

How may finance interact with human resources?

Answer 7

Recruitment - analyse/advise on job design and need for recruitment/alternatives
Training and development - analyse/advise/apply in relation to evaluation for training and therefore putting acumen into future training and development decisions
Performance management - analyse/advise/apply in connection with appraisals and feedback
Motivating and rewarding staff - analyse/advise/apply in relation to how employees should be motivated as well as in connection with budgeting as discussed above

Question 8

KPIs for human resources

Answer 8

Staff turnover %
Average salary per staff member