Unit 6 - Human Resources Flashcards
What is human resource management?
The management of people at work
What is job analysis
Analysing the responsibilities, activities, duties, skills/ equipment of the job
What does managing employee relations involve?
- disciplinary procedures and relations
- dispute settlement
- managing employee grievances
- trade union negotiations and consultation
What does the alignment of values involve?
- promote the company’s values
- reward employee engagement with company’s values
- create a sense of employee pride within the organisation
What does developing talent involve in the business?
- delegating responsibility to employees
- investing into skills and knowledge training
- allowing employees to pursue their own goals
- providing opportunities for promotion and advancement
How do we improve employee engagement?
- consult employees
- making them feel valued and equal
- give them a voice in the business
- appraisal and target setting
- give them a sense of ownership and stake in the business
How do we increase productivity and reduce costs in the business via HR?
- ensure employees are highly trained
- devise the best systems and arrangements of work
- reduce absenteeism (staff time off work)
- reduce labour turnover (number of people leaving the business)
How does HR deal with training?
- give inductions to new employees
- external and internal training
- management and team training
- look into employees apprenticeships and qualifications
What does HR ensure in terms of diversity?
- create a feeling of equality
- makes employees feel valued
- proportionate mix of genders, race, sexuality etc
- promote respect and tolerance
What are the internal influences of a business? (6)
- overall business aims (HR ensures objectives meet corporate objectives)
- available finance resources (HR must compete with other departments for finance)
- corporate culture ( strong ethical culture must be reflected in employees)
- organisational structure ( flat/tall/delayering etc)
- trade unions and relations between employer and employee
- overall business performance ( business expanding/ developing can influence objectives)
What are the external factors of the business?
- political factors (change in gov = change in attitude toward trade union= can affect employer and employee relations)
- economic factors (change in economy = change in demand= change in labour market = affects wage costs)
- social factors (increased emphasis of work-life balance= more flexible hours = impacts hours of work)
- technological factors (staff must be trained to use IT)
- legalisation ( HR objectives are influenced by employee related legalisation = influences recruitment, training, promotion, environment = affects number/skill/location of employees)
Hard HR
- treats employees as a resource
- employees are monitored and controlled
- maximise output
- use of data to track and monitor
- fear drives productivity
Soft HR
- values employees and relationships
- empowers employees to make decisions
- maximise motivation
- employees drive their own performance and achievement
- happiness drives productivity
What is labour turnover rate?
Measure the proportion of employees leaving the business in one year
LABOUR TURNOVER RATE= NO. EMPLOYEES LEAVING/ NO. EMPLOYED X100
What is retention rate?
EMPLOYEES WITH MORE THAN ONE YEAR SERVICE/ AVERAGE NO. EMPLOYED IN A YEAR X100
What causes a business to have a high labour turnover rate?
-poor pay
- low opportunities for promotion and reward
- better opportunities elsewhere
- family reasons
- retirement
- redundancy
- relocating
- toxic culture
- fired
- change in career
Cause of high labour turnover and low retention?
- no confidence in management
- low wage
- lack of investment in training
- stress / ill health
Implications of high labour turnover and low retention
- high recruitment costs
- more investment in training
- lost skills
- poor morale
- low productivity due to low motivation
- bad reputation
Labour productivity
OUTPUT / NO. OF EMPLOYEES
Labour cost per unit
TOTAL LABOUR COSTS / TOTAL UNITS OF OUTPUT
What happens when we get people worker harder in terms of labour costs?
Inverse relationship - increase in productivity reduces labour costs therefore we can sell for cheaper, becoming more price competitive to keep/get higher profit margins
Ways to increase productivity using soft HR
- recruiting skilled employees
- investing in training and technology
- increase financial rewards and fringe benefits
- improve working conditions
- restructure to allow more promotion opportunities
Examples of fringe benefits
- free meals
- company car
- pension
- gym
- discounts
- flexible work
Ways increase productivity using hard HR
- performance related pay
- set staff targets
- stricter disciplinary procedures
- create a competitive work culture
Way to lower labour cost per unit
- reduce number of staff (redundancy)
- lower staff wages
- utilise more capital intensive production methods
- outsourcing
What is employee cost as a % of turnover
The % of sales turnover needed to cover labour costs
EMPLOYEE COSTS/% OF TURNOVER X100
What is absenteeism?
The number to days employees take off work
NUMBER OF WOKRING DAYS LOST/ TOTAL WORKING DAYS IN A HEAR X100
Organisational structure
A formal way of ordering the way that authority, responsibility and information will flow in a business
What is the functional approach for organisational structure?
Separates a business into departments
- director of each department will overlook subordinates in that department and then report to managing director
+ and - of functional approach
+ departments will employ specialists
+ it’s clear who is responsible
+ everyone knows their role
-departments may have their own agendas
-more people are involved
-decisions take longer
What is span of control?
The number of employees for whom a manager is responsible
Narrow span of control
- allows for closer supervision
- more layers in hierarchy may be required
- helps for more effective communication
Wide span of control
- gives subordinates more independence
- more appropriate if labour costs are significantly high
What does the choice of type of span of control depend of?
- personality/ skill/ experience of the manager
- size and complexity of business
- whether the business is centralised or decentralised
- the extent of use of clear objectives throughout a business
Level of hierarchy
The numbers of layers of management or supervision in the organisation structure
Chain of command
Describes the lines of authority within business
Tall organisational structure
- traditional, mechanistic structure
- many layers in hierarchy
- narrow span of control
Flat organisational structure
- “organic”
- small hierarchy
- wide spans of control
- delegation encouraged
+ and - of tall structure
+ tighter control
+ opportunities for promotion
-takes longer for communication
-more layers= more staff= higher costs
+ and - of flat structure
+ more delegation
+ staff given greater responsibility
+ vertical communication
+ fear layers= less staff= lower costs
- less direct control
- fewer opportunity of promotion
What is the product approach of organisational structure
Separates a business according to the types of products it manufactures
+ and - of product approach
+ allows business to focus on its products
+ creates competitiveness
+ each product can be a separate profit centre
-wasteful duplication in some areas
-lack of focus on external competitors
-lack of central control
What is the geographical approach of organisational structure
Separates a business according to their geographical area it operates in
E.g. New York, London, Sydney etc
+ and - of geographical approach
+ allows products to be adapted to meet the needs of different geographical markets
+ encourages competitiveness within business
-can cause conflict between head and area offices
-creates wasteful duplication in some areas
What is the matrix structure of organisational structure
Used when business works on projects which involves creating teams of staff who have different expertise
+ and - of matrix structure
+ staff can be allocated role based on expertise
+ very flexible, allowing business to react quickly to changes
-teams can be difficult to manage
-can cause conflict between departments
What is organisational structure important?
- promotes flexibility
- retain order and authority
- maximise efficiency
- encourages creativity
- all of the above must be balanced
When and where was Taylorism proposed
1909- Bethlehem steel company
Rules of Taylorism
1) Division of labour - workers should have specialised tasks. The thinking is done by management and the doing is done by workers
2) Design the most efficient way - this will improve productivity and reduce costs to become more competitive
Critiques of Taylorism
- can lead to boredom and demotivation
- ignores benefits of team working
- pushing workers to maximum efficiency can lead to demotivation, errors, reduced quality and high staff turnover
- Taylor was ignorant to the fact that things other than money can motivate people
Who proposed the Two Factory Theory
Herzberg
What are Hygiene Factors of the Two Factor theory
These don’t motivate workers but their sense will lead to dissatisfaction
E.g
- quality of supervision
- pay
- company policies
- physical working conditions
- relations with others
- job security
What are Motivators of the Two Factor theory
These factors will lead to motivation amongst workers
E.g.
- promotion opportunities
- opportunities for personal growth
- recognition
- responsibility
- achievement
When we get to used to motivators…
… they become hygiene factors
Who proposed Theory X and Theory Y
McGregor
What is Theory X
(HOMER SIMPSON)
- work avoiding
- need to control
- avoids responsibility
- workers seek security
What is Theory Y?
(LISA SIMPSON)
- work is natural
- capable of self direction
- seek responsibility
- can make good decisions
When and who proposed the Hierarchy of Needs?
1943 - Maslow
List the hierarchy of needs (top to bottom)
- self transcendence (sense of meaning)
- self actualisation (achieving one’s full potential)
- esteem (feeling of accomplishment)
- love/ belonging (intimate relationships and friends)
- safety (security)
- physiological (food, water, rest)
What did Maslow say motivates people?
To achieve certain needs and when one is fulfilled they seek to fulfill another
Problem with Maslows theory
People don’t progress up the hierarchy neatly, they deal with these problems all at once
Business Examples of Maslows Hierarchy of Needs
- self transcendence ( volunteering, sabbatical, training others)
- self actualisation (target setting, delegation, development)
- esteem (bonuses, promotion, recognition, job title)
- love/ belonging (team building activities, work socials, staff room)
- safety ( personal protection equipment, legalisation, safety policies)
- physiological (food, water, gym, “rest rooms”)
What is delegation
Pass responsibilities down to someone subordinate
What is delayering
Remove a layer of management from the hierarchy
Advantages of delayering
- saves costs (labour costs)
- flatter and dynamic structure
- faster decision making
- improved communication
What is centralised?
Keep major responsibility at the centre of the organisation
What is dencentralised ?
Giving decision making power to an organisation
Advantages of centralised
- efficiency in time and resources
- clear chain of command
- gives employees an understanding
Advantages of decentralisation
- provides trusted environment
- reduces points of weakness
- optimises resource distribution
What is HR flow
The flow of employees through an organisation
What involves the inflow of employees in terms of HR?
- induction
- selection
- recruitment
What involves the internal flow of employees in terms of HR?
- training
- appraisal
- promotion
- transfer
- development
What involves the outflow of employees in terms of HR?
- retirement
- dismissal
- voluntary leaving
- redundancy
Influences on the HR flow
- operational requirements (strategy of the business)
- individual needs
- external environment
Workforce planning
Getting the right people with the right skills at the right place at the right time
Workplace capability and planning cycle
1) workforce profiling/ analysis
2) forecast needs
3) analyse gaps
4) develop strategies
5) implement strategies
6)monitor and evaluate
How would a business solve the problem of competition offering higher wages and promotion opportunities?
- increase wages
- improve culture and work satisfaction
- create role of responsibility
Why do businesses need good employer- employee relations?
- lowers labour turnover
- employees feel trusted and valued which increases motivation
- save costs from increased productivity from an increase in motivation
- achieve business objectives
- reduce absenteeism (saves costs)
- increase in employee innovations which could solve problems and lead to better business decisions which can increase profitability
How can firms manage good employee relations?
- less authoritarian approach
- more democratic
- praise to motivate
- pay fair wage
- provide good facilities
- training
- equality
- embrace union involvement
- fair work life balance
What is employee representation?
Arises when employees are part of a formal structure for involving them in the decision making process of a business
What should business consult employees about?
- proposed redundancies programmes
- when employees are transferred from one employer to another
- changes to be made to pension arrangement
- changes to working time arrangements
Advantages of consulting employees?
- makes employees views known
- helps strengthen understanding to workplace issues
- creates an atmosphere of mutual trust which improves relations
Piece rate
Payment based on number of items each worker produces
+ and - of piece rate
+increases productivity
-expense of quality
-output may be based off workers needs (around Xmas and holidays) rather than customer demand
Commission
A sum of money paid to an employee upon completion of a task. May be paid as a % of sales or on a flat rate based on sales volume
+ and - of commission
+incentive increases productivity
+high performance can earn people large amounts in accordance of effort and ability
-no reliable income
-resentment may arise
-encourages dishonesty
Salary schemes
A basic payment system where employees are paid on an annual salary
+ and - of salary schemes
+simple and cheap to administer
+security may produce motivation
-payment for input rather than output
Performance related pay
System that rewards individual employees based on an assessment of their individual performance and usually measured against pre agreed objectives
+ and - of performance related pay
+higher motivation
+more efficient use of company resources
+clearer goals
-creates competitive atmosphere
-focuses on the short term goals of individual rather than teamwork
-goals may be unachievable
What is job rotation?
The job is expanded horizontally by giving the worker more task, but at the same level of responsibility
+ and - of job rotation
+increases motivation
+encourages wider range of skills so workers become more flexible
-retraining costs
-employees may view it as more of the same work which can demotivate
What is job enrichment?
Giving employees more responsibility and offering them challenges that allow them to utilise their skills fully
+ and - of job enrichment
+challenges employees
+encourages contributions
-some employees may not want to be challenged
-could be viewed as a way to delegate jobs
-training costs
What is empowering employees?
Giving employees the means by which they can exercise power over their working lives
Advantages of empowering employees
- trust
- recognition of achievement
- creates an atmosphere by which employees want to be involved in
