Decision making to improve Human resource performance 3.6 Flashcards
What is Human Resource Management (HRM)
The strategic approach to the effective management of people in a business or organisation so that they help the business gain a competitive advantage at a minimum cost
It is Important because it ensures the business hires employees with the right skills, experience, and attitude, boosting efficiency and productivity. It helps build company culture, promoting teamwork and job satisfaction. Additionally, good HRM practices lead to less staff turnover thereby reducing hiring costs. Businesses keep staff motivated by offering rewards.
What is HR objective
Specific goals set by the human resource department that supports the overall aims of the business. It involves activities such as recruitment, training, employee motivation, performance management, achieving workforce diversity
Examples of HR Objectives
Employee engagement
Talent development
Diversity and inclusion
Maintaining employee relations
Maximising employee skills
ALL WHILE BEING COST EFFICIENT
Internal Influences on HR Objectives
Corporate objectives - E.G If a business chooses to grow HR will recruit more staff or improve training
Organisational structure - The size of the business and the structure, whether it’s tall or flat, affects how HR sets objectives related to communications and delegation regarding employee roles
Leadership style - Democratic leadership may influence HR to focus on employee involvement while an autocratic style may lead to stricter performance controls
Financial resources - Amount of money impacts the HR decisions. Limited budgets may lead to HR to focus on more cost-efficient training or reducing staff turnover rather than expanding the workforce
External Influences on HR Objectives
Market changes - Changes in demand, competition, or consumer preferences may lead to HR to adjust recruitment or training objectives
Technological change - Advances in technology may require new skills, so HR might focus on retaining existing staff or hiring staff experienced using tech
Political and legal changes - E.g. EU legislation on areas such as maximum working time and other employment rights impacts directly on workforce planning and remuneration
Social and ethical expectations - increased focus on work-life balance, diversity and fair treatment
Hard HRM vs Soft HRM
Hard HRM is a management approach that treats employees as a resource and a cost to the business to be used efficiently and focusing on short-term workforce planning, much like machinery or raw materials it involves short term contracts, centralised decision-making and high levels of control and supervision
Soft HRM is an approach that treats employees as valuable assets and focuses on their development, motivation and long-term contribution to the business. It involves employee involvement in decision-making, training and development, strong internal communications and long-term workforce planning
How is HR Performance measured
Labour turnover
Employee/staff retention
Labour productivity
Absenteeism
Labour Turnover Definition
Labour turnover is the percentage of employees who leave a business over a given period of time, usually a year
CAUSES FOR LABOUR TURNOVER:
1) Low pay and benefits - employees feel underpaid or receive lack of incentives
2) Job insecurity - Fear of redundancy
3) Personal reasons - Relocation, family commitments, maternity leave, health issues
4) Poor management - Lack of support can lead to dissatisfaction and resignation
PRO: Brings in new ideas and skills, removes underperforming staff, opportunity to reduce costs , motivates remaining staff with opportunities for promotion
CON: Increased recruitment training, loss of experience and skills, lower productivity, negative impact on morale, impacts on consistency and quality of service
WAYS TO IMPROVE LABOUR TURNOVER: Regularly gather feedback, Enhance work-life balance, Reward Employees, Promote Job security
LABOUR TURNOVER FORMULA:
No. of employees leaving/ Average No. of employees X 100
Employee Retention
Refers to a business’s ability to keep its employees and reduce staff turnover over a period of time
CAUSES FOR EMPLOYEE RTENTION:
1) Job satisfaction
2) Opportunities for career progression
3) Positive work environment
4) Recognition and reward, job security
Labour Productivity
Measure of output per worker over a given period of time
FACTORS INFLUENCING LABOUR PRODUCTIVITY:
Training and skills, motivation levels, technology and equipment, working conditions, management style, work process and organization, employee engagement
FORMULA FOR LABOUR PRODUCTIVITY:
Total Output / Number of Employees
WAYS TO IMPROVE LABOUR PRODUCTIVITY:
1) Improve employee motivation - Use financial and nonfinancial incentives E.G. bonuses, recognition, flexible working to boost efforts and commitments
2) Improve working conditions
3) Streamline processes - eliminating waste and improving workflow can reduce delays and increase output
4) Invest in better technology - modern tools and automation can speed up production and reduce human error
Absenteeism
Rate at which employees are absent from work without valid reasons over given period of time
Absenteeism Formula - No. of days lost to absence / Total possible working days X 100
Recruitment
Recruitment is the process of identifying attracting, and selecting suitable candidates to fill job vacancies within a business
It is Important because it ensures the right people are hired, fills skill gaps, supports business growth, improves competitiveness, reduces employee turnover, maintains business operations
PRO: -
1) Cost savings - lower wages and benefits costs compared to full-time staff
2) Improved work-life balance - can boost employee morale
3) motivation and retention
4) Greater flexibility - helps the business respond to demand changes. Wider talent pool
CON:
Reduced availability
Lower commitment,
Training costs
Internal Recruitment PRO and CON
PRO:
Faster and cheaper process
Candidate already known
Shorter induction/training
Boosts staff morale
CON:
Limited pool of applicants
Creates another vacancy
Cause tension and jealousy
Lack of innovation
External Recruitment PRO and CON
PRO:
Wider talent pool
New skills and perspectives
Helps drive change
CON:
Higher costs
Longer process
Unfamiliar with company culture
May demotivate internal staff
Training PRO and CON
PRO:
Increases productivity
Boosts motivation
Supports career progression
Improves adaptability
CON:
High costs
Risk of staff leaving
Other staff may feel demotivated
Induction Programme
Process of introducing a new employee to the business, their role, colleagues, and working environment
On-The-Job Training
Method where employees learn by doing their job while being supervised or coached in the workplace
PRO: Relevant and practical, minimises disruption, allows for management to analyse efficiency of training
CON: Lack of formal structure, distractions in the workplace, risk of inconsistent standards
Off-The-Job Training
Method where employees receive training away from their usual work environment
PRO: Opportunity to gain fresh ideas
CON: More expensive, time taken away from work, no immediate application if newly learnt skills
Redeployment
Process of transferring an employee from one role or department to another within the same organisation, often due to changes in business needs
PRO: Avoids redundancies, maximising existing talent, cost efficient, retains internal knowledge
CON: Increased training costs, potential for discontent, disruption to business’s operations
Redundancy
Occurs when an employee’s role is no longer needed by the business, often due to the factors like technological advancements, company restructuring, or a decline in business activity, leading to the termination of their employment
PRO: Cost savings for the business due to reduced labour costs, opportunity for reconstructing assigning resources to areas with higher demands or growth potential, avoids legal action
CON: Negative impact on morale, loss of skills and experience, reputational damage
Organisational Structure
The way in which a business is arranged to carry out its activities, including how roles, responsibilities, and authority are disturbed within the company
It includes elements such as hierarchy, span of control, chain of command, delegation and centralisation vs decentralisation
FACTORS INFLUENCING ORGANISATIONAL STRUCTURE: Size of the business, type of business, management and leadership style, the competitive environment
Span of Control (Wide Span vs Narrow Span)
Refers to the number of employees directly managed by one supervisor or manager
A wide span of control means a manager oversees many employees, while a narrow span of control means they supervise fewer. It affects communication, workload, and how closely employees are motivated
SPAN OF CONTROL DEPENDS ON:
Complexity of tasks - the more complex they are the more supervision is required
How skilled and independent the employees are
Use of technology
Managers experience and skills
Chains of Command
Level of hierarchy referring to a specific layer within an organisational structure, where individuals have a certain level of responsibility and authority. Higher levels have more authority and control whereas lower levels follow instructions from above
Hierarchy (Tall vs Flat Structure)
Arrangement of individuals within an organisation according to their level of authority and responsibility
Tall structure - Many levels of hierarchy, narrow span of control, long chain of command, more opportunity for promotion, communication can be slower, closer supervision and tighter control
Flat structure - Few levels of hierarchy, wide span of control, short chain of control, faster communication, employees have more responsibilities and autonomy, can lead to overworked managers