U3 AOS2: Human resource management Flashcards
Human resource management (HRM)
The effective management of the formal relationship between the employer and employees
What is the role of HRM in a business?
Responsible for getting the best out of its employees
Motivation
The individual, internal process that directs, energises and sustains a person’s behaviour
What is a need?
A personal requirement
What are the 3 theories of motivation
- Maslow’s hierarchy of needs
- Locke and Latham’s goal setting theory
- Lawrence and Nohria’s four drive theory
Maslow’s hierarchy of needs
Maslow’s sequence of human needs in the order of their importance
Concept of Maslow’s
Most basic needs are at the bottom, needs at a lower level must be fulfilled before moving onto the next, and once a need is met, it no longer motivates.
Physiological needs
Air, food, water, health
- Satisfactory pay for survival
Safety needs
Safety, shelter, stability
- Safe working conditions
- Job security
Social needs
Love, belonging, inclusion
- Teamwork
- Involvement in decision-making
- Supportive management
Esteem needs
Self-esteem, power, control, recognition
- Responsibility
- Promotion
- Recognition
Self-actualisation needs
Development, creativity, growth
- Creative, interesting jobs
- Opportunities for advancement
How can Maslow’s be implemented?
Managers must identify where employees are on the hierarchy and meet their specific needs at that level.
Strengths of Maslow’s
- Management understand individual needs
- Raises awareness of variance between employees > cater to each employee
- Easy to understand, use and relate to
Weaknesses of Maslow’s
- Theory not supported by evidence
- Stages don’t apply to all
- Can struggle to identify individual’s stage
Locke and Latham’s goal setting theory
Concludes that employees are motivated by clear goals and feedback regarding achievement
- Specific/challenging goal = better performance
What are the 5 goal setting principles?
- Clarity
- Challenge
- Commitment
- Feedback
- Task complexity
Clarity
Simple, clear, specific. Ensure everyone understands expections.
Challenge
Highly valued task, motivates the employee.
Should extend the employee and be achieveable
Commitment
Greater input from employee = more likely to commit to goal
Feedback
Recognise employees progress/achievements, make adjustments to goals, ensure clear expectations.
Can be informal or formal
Task complexity
Tasks shouldn’t be overwhelming. Additional training my be required to assist employee.
Strengths of goal setting theory
- Motivate employees, leading to improved performance
- Highly research backed
- Higher performance standards + rate of productivity
- Collaboration = improved relationships
Weaknesses of goal setting theory
- Poor goals = poor performance + demotivation
- Goals may clash/not support bus objectives
- Tunnel vision on goal = neglect other aspects of job
- If goal is not met, can be detrimental to employee confidence
Lawrence and Nohria’s four drive theory
Motivational theory that suggests that employees strive to achieve four fundamental needs
What are the 4 drives?
- Acquire
- Bond
- Learn
- Defend
Drive to acquire
Driven to acquire material things
- Money
- Possessions
Driven to acquire abstract things
- Praise
- Pride
- Status
Drive to bond
Driven to relate to others
- Collaboration
- Recognised as individuals
- Personal friendships at work
Drive to learn
Driven to be challenged
- New and interesting experiences
- Bore of repetitive tasks > eager to increase skills and knowledge
Drive to defend
Latent drive (lying under the surface but ready to rise up) > two approaches
- Employees become unmotivated if they feel unsafe or threatened > driven to defend themselves rather than work
- Employees become motivated if it helps defend their job, eg. “gain certain amount of customers or else you’ll be fired”
Strengths of four drive theory
- Drives work independent > flexibility on strategies implemented
- Adaptable to different environments
Weaknesses of four drive theory
- Other drives may exist which can motivate
- Some applications involve comp between employees = lack of cooperation/info sharing
Similarities between Maslow’s and goal setting theory
- Achievement of goal in LL similar to meeting esteem and self-actualisation needs in M
- Recognition and feedback apparent in both > M via esteem needs, LL via setting goals and the provision of feedback
- Job satisfaction as key motivator
- Foci of one thing at a time
Differences between Maslow’s and goal setting theory
- M = ongoing, long-term, whereas LL = short-term, achievement of goal ends process
- LL = concentrates on a variety of different goals, whereas M = lead to processes that encourage all employees to progress through the hierarchy
- M = internal needs of employees, whereas L = business goals/needs
Similarities between goal setting theory and four drive theory
- Reward of achieving goal in LL = drive to acquire
- Managers must understand needs of employees > setting goals, implementing appropriate strategies to satisfy drives
- Focused on employees
- Cooperation between manager and employee > feedback of goals, understanding how drives affect each employee
Differences between goal setting theory and four drive theory
- LL = achieve business goals (external), LN = satisfy drives within person (internal)
- LL = one goal at a time, LN = satisfy all 4 drives simultaneously
Similarities between Maslow’s and four drive theory
- Achievement of employee satisfaction
- Drive to acquire = physiological needs
- Drive to bond = social needs
- Drive to learn = self actualisation
Differences between Maslow’s and four drive theory
- M = 5 levels, hierarchal structure, LN = 4 drives that are all considered equal significance
- M = sequential steps, LN = satisfy 4 drives simultaneously
What are the 5 motivational strategies?
- Performance related pay
- Career advancement
- Investment in training
- Support strategies
- Sanction strategies
Performance related pay
The monetary compensation provided to employees relative to how their performance is assessed according to set standards
How can performance related pay be provided?
- Pay increase
- Bonuses (one off payments)
- Commissions (amount paid for accomplishing a sale)
- Share plan
- Profit sharing
- Gainsharing (reward employees for making suggestions to improve productivity/reduce costs, savings are distributed to employees)
Impact of performance related pay on short-term motivation
Pay increases, bonuses, and commissions = immediate and tangible reward for effort/commitment to business.
If these rewards become an ongoing strat, they can provide longer term motivation
Impact of performance related pay on long-term motivation
Share plans, profit sharing, and gainsharing = takes a number of years to be achieved
Shares > generally trend upwards over long period
Profit isn’t guaranteed year-to-year > requires employee to take longer-term pov of business
Advantages of performance related pay
- Improve employee performance as they chase higher income
- Best performers are rewarded > linked to improved performance
- Attracts high quality employees
Disadvantages of performance related pay
- Develops competitive culture > undermines teamwork
- Can be exp
- Challenging to create equitable system
Career Advancement
The assignment of more responsibilities/authority to employees or the promotion of employees to positions that bring rewards, such as increased salary, fringe benefits and increased responsibilities.
Impact of career advancement on short-term motivation
Changing roles usually brings a pay rise + greater job security > satisfies low order need on Maslow’s
Impact of career advancement on long-term motivation
- Opportunity to be involved in decision making process (social per Maslow)
- Gain responsibility = self-esteem (self actualisation per Maslow)
- All 4 drives can be achieved through career adv > encourages employee to stay within organisation
Advantages of career advancement
- Attract and retain quality employees
- Motivates others as they see promoted colleagues
- Business has knowledge on employee capabilities
Disadvantages of career advancement
- Hard to provide opportunities to all
- Resentment of overlooked employees
- Loss of employees if opportunities are limited
Investment in training
The direction of finances, or resources such as time, into the teaching of skills to employees
A skilled workforce can improve productivity, and help achieve core business objectives
Impact of investment in training on short-term motivation
Gives employee opportunity to learn > provides access to multiple jobs/areas
Impact of investment in training on long-term motivation
- Sense of accomplishment (per Maslow’s esteem and self-actualisation)
- New skills and achievement (drive to acquire, bond (belong with higher level skills) and learn)
Advantages of investment in training
- Indicates that business values employee’s contribution, support, and future advancements
- Improves skills of employees > productivity
Disadvantages of investment in training
- Costs of training
- Waste of time/money (if employee leaves after gaining training)
Support strategies
The assistance or services (such as counselling and mentoring) provided by the business to help employees cope with difficulties that may impede their work performance.
Impact of support strategies on short-term motivation
- Support and encouragement motivates employee to do better
- Applies when employee has done a good job, or achieved goal/target (validation)
Impact of support strategies on long-term motivation
Encourages sense of loyalty and willingness to remain in a supportive work environment
Advantages of support strategies
- Support can be provided with little to no cost
- Counselling and mentoring help develop meaningful professional relationships
- +vely impacts employees attitudes, improving their confidence and motivation
Disadvantages of support strategies
- Hard to provide appropriate support for all employees
- Employee dependency on their mentor/counsellor
Sanction strategies
A form of penalty or discipline imposed on an employee for poor performance
Sanctions can include…
- Verbal warning
- Reassignment of duties
- Demotion
- Reduction in salary
- Termination of employment
Impact of sanction strategies on motivation
- Fear of sanctions can be motivating factor
- Generally influences lower order needs
- Can influence defence drive
- Likely to only impact short-term motivation, doesn’t encourage long-term commitment
Advantages of sanction strategies
- Defer -ve behaviours, reinforces +ve ones
- Creates sense of accountability
- Stop inappropriate behaviour
Disadvantages of sanction strategies
- Reduces sense of belong > culture of fear and mistrust
- Cause resentment > may result in conflict
- Create -ve environment over the long term
Training
The process of teaching staff how to do their job more efficiently and effectively by boosting their knowledge
Benefits of training for employees
- Opportunity for promotion + improvement
- +ve job satisfaction due to +ve job performance
- Chance to learn new things
- Gain adaptability > cope with changes
Benefits of training for businesses
- Higher productivity due to better job performance
- More efficient use of human resources
- Goals and objectives more effectively met
- A more capable workforce
Impact of training on motivation
Short-term
- Improved job satisfaction, challenges
Long-term
- Promotion and self improvement
- Adaptability
On-the-job training
Occurs when employees learn a specific set of skills to perform particular tasks within the workplace
Training may be provided by an experienced team member, leader, manager, etc.
External providers may be brought into the workplace to provide training, such as when new equipment or software is installed
Advantages of on-the-job training
- Cost-effective (no travel expenses or other costs incurred)
- Often working whilst training, more productive
- Use the actual equipment required to do the job
- Familiar environment
- Immediate feedback from more experienced colleagues
Disadvantages of on-the-job training
- Quality of trainer may vary
- Bad habits may be passed on
- Learning environment may be noisy
- May disrupt production
Off-the-job training
Occurs when employees learn skills in a location away from the workplace. It usually involves sending individuals or groups of employees to a particular specialised training institution (uni, TAFE)
Advantages of off-the-job training
- Delivered by experts and specialists > broader experiences
- More structured and organised > clear assessment procedures
- Can provide formally recognised qualifications
- Availability of wider range of skills/qualifications
Disadvantages of off-the-job training
- May be too theoretical
- More expenses > training fees, travel costs, etc.
- Loss of working time whilst employee is absent
- May not directly relate to exact skills required
- Employees with formally recognised qualification may be tempted to leave
Performance management
A focus on improving both business and individual performance through relating business performance objectives to individual employee performance objectives
What are the 4 performance management strategies?
- Management by objectives
- Appraisal
- Employee self-evaluation
- Employee observation
Uses for performance management
- Allows feedback to be given to employees
- Acts as a measurement to determine promotion and pay rises
- Identifies employees training needs
Management by objectives
- Management and employees agree on a set of goals for each employee
- Goals contribute to the objectives of the business as a whole
Management by objectives process/cycle
- Business objectives are clearly defined
- Individual employee goals are negotiated
- Regular monitoring of progress
- Performance feedback
- Performance appraisal on achievement of goals
Advantages of management by objectives
- Both manager and employee know expectations, reducing confusion of roles
- Can highlight areas where training must be done
- Improve communication, thus raising awareness of business objectives
Disadvantages of management by objectives
- Time consuming > meetings and reports required, can also add to expenses
- Not always useful for all types of employees
- Failure to meet objectives = demoralising = lack of motivation
- Staff may expect pay rise/promotion for meeting objectives
Appraisal
The formal assessment of how efficiently and effectively an employee is performing their role in the business
- Typically occurs at frequent intervals
What is the purpose of appraisal?
- provide feedback regarding work performance
- act as a measurement for promotion and pay rises
- help business monitor employee performance
- identify employees’ training and development needs
- identify new objectives for employees
- put a plan to improve future performance
- review employee objectives in line with business’s objectives.
What are the methods of appraisal
Essay = manager keeps a journal on each employee
Critical incident = only noting down exceptionally good or bad aspects of the employees work
Comparison = employees ranked according to a predetermined performance criteria.
Advantages of performance appraisals
- Communication, allows positive relationships to develop
- Feedback > help employees improve performance
- Information can assist managers when making decisions about pay, promotions, and dismissals
Disadvantages of performance appraisals
- Can be time consuming
- Can be stressful for both managers and employees
- Staff who meet standards may expect a pay rise/promotion
Employee self-evaluation
A process whereby employees carry out self-assessment, based on a set of agreed criteria
Questions that employees ask themselves when self-evaluating
- What are my strengths?
- What are my weaknesses, and what can I do to overcome them, or reduce their impact on my work performance?
- What could I have done better during the period under review?
- What initiatives can I take to become a better employee in the future?
Considerations of self-evaluation
Employees should be prepared to…
- examine their current role in the business
- consider how that role may change
- identify how greater responsibility and leadership could be taken on in the future
Advantages of employee self-evaluation
- Helps employee understand their role in the business
- Assess their own contribution, strengths and weaknesses
- Provides business insight on how employees perceive themselves
Disadvantages of employee self-evaluation
- Can overstate their performance
- Some employees are incapable to conduct a self-assessment
- Provision of training will increase expenses
- Management may need to take responsibility to correct poor performance
Employee observation
A strategy where a variety of opinions on the performance of employees is sought with the aim of arriving a more comprehensive picture of the past and current performance
Who can employees receives feedback from
Themselves, superiors, subordinates, colleagues, customers, suppliers
Advantages of employee observation
- Broad range of observations from variety of sources
- Useful in identifying strengths and weaknesses
- Employee receiving feedback from other staff may be more likely to respond (if they value opinion of peers)
Disadvantages of employee observation
- Staff may feel stressed if aware of observation
- Participants may be biased
- Assessment may not be fully understood by everyone
- Positive feedback may lead to an expectation of a pay rise/promotion
Termination
The ending of the employment of an employee
Types of termination
Voluntary
- Retirement
- Resignation
- Redundancy
Involuntary
- Dismissal
- Redundancy
Resignation
The voluntary ending of employment by the employee ‘quitting’ their job
Why do people resign?
- The offer of promotion elsewhere
- Start own business
- Boredom with present job
- A change of lifestyle
Retirement
Occurs when an employee decides to give up full-time or part-time work and no longer be part of the labour force
Redundancy
Occurs when a person’s job no longer exists, usually due to technological changes, a business restructure or a merger or acquisition
Voluntary vs involuntary redundancy
Voluntary = employees nominate themselves as they are willing to leave the organisation
Involuntary = employees are forced to leave the organisation against their will
Rights of redundant employees
- Providing the redundant employee with relevant information
- Time off leading into the final day
- Redundancy pay (severance pay); dependant upon the term of employment
- Annual leave or long service leave owed
Dismissal
Occurs when the behaviour of an employee is unacceptable and a business terminates their employment
Types of dismissal
- Summary dismissal
- Dismissal on notice
Dismissal on notice
When an employee is not performing the job satisfactorily. Poor performance may be identified during an appraisal or performance process
Summary dismissal
When an employee commits a serious breach of their employment contract. No notice is required.
Unfair dismissal
When an employee is dismissed because the employer has discriminated against them in some way
An employee who believes they have been unfairly dismissed may lodge an unfair dismissal claim with an industrial tribunal, such as the Fair Work Commission.
Discriminatory reasons to fire individuals
- absence from work due to illness or injury
- either belonging or not belonging to a trade union
- race, colour, sex, sexual preference, age, disability, marital status, family responsibilities, pregnancy, religion, political opinions held, or nationality.
How is the termination process managed?
Managers should be trained in order to handle dismissals in a manner that…
- takes account of the legal and financial implications
- minimises the trauma for both parties
- does not have adverse effects on the morale of the remaining staff
Entitlement considerations
The rights to benefits that employees have when leaving the workplace, either on a voluntary or involuntary basis
Examples of entitlement considerations
Examples…
- AL or LSL owed
- Salary owed
- Termination statement
- Redundancy payment
Transition considerations
Issues relating to the process of changing from one job to another or from one set of circumstances to another
Retirement transition considerations
Gradual reduction in days worked over a period of time to allow the employee to make a smooth transition to retirement.
Redundancy transition considerations
employer may provide assistance…
- help with writing job applications for other positions
- references for potential employers
- time off to attend job interviews.
Transition - outplacement services
An external organisation will typically provide the outplacement services, paid for by the business.
The services will usually consist of helping employees to transition to a new job or career, and may include…
- job interview training
- career coaching
- assistance with improving resumes
- career counselling.
Workplace relations
The interactions between employers and employees, or their representatives, to achieve a set of working conditions that will meet the needs of employees, as well as allowing the business to achieve its objectives
What is the intended goal of workplace relations?
- Achieve +ve relo’s
- Satisfactory pay and working conditions
- Productivity and competitiveness
- Minimise disputes
Participants in the workplace
- HRM
- Employees
- Employer associations
- Unions
- Fair Work Commission (FWC)
Employees (workplace relations)
- Individual employment contracts
- Negotiating employment arrangements
- If negotiations break down, employees may take industrial action, ie strike
Role of HRM in the workplace
- Negotiation of employment arrangements with employees and their representatives
- Implementing the agreement
- Training of staff and other managers
- Dealing with disputes
Trade unions (workplace relations)
Organisations formed by employees in an industry, trade or occupation to represent them in efforts to improve wages and the working conditions of their members
- Investigate breaches of workplace laws, discrimination laws or workplace safety laws
Objectives of employees/trade unions
- better wages
- better working conditions
- job security
Employer associations (workplace relations)
Organisations that represent and assist employer groups
responsibility of…
- keeping their members informed of legislative changes
- assisting their members to negotiate workplace agreements that are consistent with legislation.
Objectives of employers/employer associations (workplace relations)
- increase profit
- minimise costs
- be competitive
- expand business
- maximise customer service
What is the FWC responsible for under the Fair Work Act 2009?
Has power to carry out a range of functions, make and vary Awards, and approve agreements between employers and employees.
What is the FWC’s role in workplace disputes?
It helps parties resolve disputes through conciliation, mediation, and arbitration when no agreement can be reached.
What types of applications does the FWC deal with in relation to employment?
It deals with applications regarding unfair dismissal and administers the regulation of industrial action.
Objectives of governments (workplace relations)
- international competitiveness
- workplace reform
- compliance with legislation
Award
Legally binding document determined by the FWC that sets out minimum wages and conditions for whole industries or occupations
- Conditions in the Award must be at least as good as the National Employment Standards
- Awards are reviewed every 4 years
Advantages of awards
- Less costly for business
- Less time consumed to determine T&C’s
- Employees have limited input
- Provides stability and safety for employees
Disadvantages of awards
- No flexibility > can’t be accustomed to suit workplace needs
- Business may need to implement multiple awards
- Awards can be complex
- May not attract the best or most talented candidates
What are the 11 national employment standards?
- Maximum weekly hours
- Flexible work arrangements
- Changing from casual to permanent
- Parental leave + related entitlements
- Annual leave
- Personal, carers and compassionate leave
- Community service leave
- Long-service leave
- Public holidays
- Notice of termination and redundancy pay
- Information statements (FWC)
Individual employment contract
Covers those employees who are not under any Award or collective/enterprise agreements
Collective bargaining (enterprise) agreement
Determining the terms and conditions of employment through direct negotiation between unions and employers
- Provides the opportunity for employees to gain employment conditions that improve on the minimum standards of Awards.
Enterprise agreements
- Cover a workplace
- Improve upon minimum standards of Awards
Enterprise bargaining (agreements)
There is an expectation that both parties enter negotiations in good faith
Once agreement is reached it is submitted to the FWC. Agreement is signed by both parties and has an expiry date (fixed term).
Advantages of enterprise bargaining
- Highly flexible
- Wages and conditions tailored to needs of employees and business
- Attract and retain high quality employees
Disadvantages of enterprise bargaining
- Time consuming to negotiate
- Negotiations can break down > leads to chance of industrial action
- Expensive for the business
Similarities between awards and agreements
- Both have fixed agreements
- Both contain pay and working conditions in accordance to the NES
- Both must be approved by the FWC
Differences between awards and agreements
- Awards cover industries, whereas enterprise agreements only cover a workplace
- Agreements are negotiated directly with employees, whereas Awards are determined by the FWC
Disputes
A result of disagreements or dissatisfaction between individuals and/or groups
What are the main causes of disputes?
- Remuneration (salary, entitlements, superannuation)
- Employment conditions (leave, benefits, etc)
- OH&S
- Job security
Types of industrial action
Strike > withdrawal of labour for a period of time
Lock-out > employers close the workplace for a period of time
Protected industrial action
Action taken by either party to a dispute that has been approved by the FWC
Unprotected industrial action
Action that takes place before the expiry date of the previous agreement, without proper warning
Dispute resolution process
- Listening to staff
- Negotiating
- Mediation
- Conciliation
- Arbitration
Negotiation
A method of resolving disputes whereby discussions between the parties result in a compromise and a formal or informal agreement about a dispute
When is negotiation effective?
Effective when manager uses consultative/participative management style, and has strong interpersonal and communication skills
When successful, all parties are feeling optimistic about the decision and committed to the outcome
Mediation
- Confidential discussion of issues in non-threatening environment
- Presence of neutral third party who helps work towards agreement but can’t offer suggestions/solutions
- Third party can be independent of agreed upon by parties
Advantages of mediation
- Disputing parties come to their own resolution > more likely to accept outcome
- Maintain +ve relo’s
- More cost effective
Disadvantages of mediation
- No guaranteed resolution
- Outcomes not legally binding > vulnerable to change of mind
When is the FWC involved in dispute resolution
FWC resolves workplace disputes via conciliation, mediation and, in some cases, arbitration.
Conciliation
A process that occurs when a third party participates in the resolution of a dispute and attempts to resolve the differences through discussion
Arbitration
A means of dispute resolution involving an independent third party (such as a commissioner of the FWC) hearing both arguments in a dispute and determining the outcome
Arbitration at the FWC
Involves a tribunal member to consider arguments of each side, making a decision that resolves the dispute.
FWC may arbitrate when authorised under an…
- enterprise agreement
- unfair dismissal of employee
Advantages of arbitration
- Compulsory to attend
- Dispute will be resolved more quickly
- Private (though not always confidential)
Disadvantages of arbitration
- Parties have reduced control of outcome
- Time consuming and costly (depends on dispute)
- Less effective at preserving relationships between parties
Similarities between mediation and arbitration
- Both included in awards and EA as methods of resolving disputes
- Both usually involve the FWC
- Both mean that the employer and employee were unable to resolve the dispute internally
Differences between mediation and arbitration
Mediation
- Voluntary
- Informal
- Outcomes not legally enforceable
- Quick and cheap
Arbitration
- Involuntary
- Formal
- Outcomes are legally enforceable
- Longer and expensive (lawyers)
