Human resource management

Question 1

What is human resource management (HRM)?

Answer 1

The design, implementation, and maintenance of strategies to manage people for optimum business performance.
OR
The management of people at work in order to assist the organisation in achieving its objectives.

Question 2

Why is HRM so important?

Answer 2

More and more businesses are providing their customers with services which customers can be very critical about in regards to quality and customer service level.
Competitiveness requires the business to be efficient and productive- if staff are not so motivated or have the right skills, this can be very difficult.

Question 3

What are the human resource objectives?

Answer 3

Labour productivity
Number, skills, and location of employees
Employee engagement and investment
Training
Talent development
Diversity
Alignment of values

Question 4

What is labour productivity?

Answer 4

Relates to the quantity of products employees should produce, on average, over a specific time frame.
This assists businesses in controlling costs.
If employees are efficient and produce a large number of goods then the costs of producing the goods will be controlled, enhancing the business’s competitiveness.

Question 5

What is the number, skills, and location of employees?

Answer 5

Dependent on the size and the industry of the business the company would need to have the right number of employees at the right skill level to be efficient.
These factors are essential to meeting the objectives the business sets.

Question 6

What is employee engagement and involvement and the 2 types?

Answer 6

Affective engagement- feeling positive about doing a good job.
Social engagement- actively taking opportunities to discuss work-related improvements with others at work.
Employee involvement.
Considering employees’ ideas and opinions.
Employee representatives.

Question 7

What is training?

Answer 7

Improving the work-related skills and knowledge of employees to be effective and improve employee performance.

Question 8

What is talent development?

Answer 8

This focuses on fulfilling employees’ potential and guidance of top employees who have the potential to contribute to an organisation’s performance and success.

Question 9

What is diversity?

Answer 9

Treating people and individuals and valuing the benefits that diverse individuals or groups will bring to the business.

Question 10

What is alignment of values?

Answer 10

An employee’s core values will determine the way they behave and influence the decisions they make in the workplace.
A business’s core values remain unchanged over a period of time and provide a reference point for decisions made by managers as they respond to competitors’ actions and changes in the external environment.

Question 11

What is a hard approach?

Answer 11

Treats employees simply as just another resource of the business. e.g. Amazon
Strong link with corporate business planning- i.e. what do we need to get this done, how do we get them and how much do they cost?

Question 12

What is the focus of a hard approach?

Answer 12

Identify workforce needs of the business and recruit and manage accordingly (hiring, moving and firing).

Question 13

What are the key features of a hard approach?

Answer 13

Short term changes in employee numbers (recruitment, redundancy).
Minimal communication from the top down.
Pay-enough to recruit and retain enough staff (e.g. minimum wage).
Little empowerment/delegation.
More cost-effective workforce where decision-making is quicker and focused on senior managers.
Higher absenteeism and staff turnover and less successful recruitment.

Question 14

What is a soft approach?

Answer 14

Treats employees as the most important resource of the business and a source of competitive advantage.
Employees are treated as individuals and their needs are planned accordingly.

Question 15

What is the focus of a soft approach?

Answer 15

Strategic focus on longer term workforce planning.
Strong and regular two way communication.
Competitive pay structure, with suitable performance related rewards e.g. profit share.
Employees are empowered and encouraged to seek delegation and take responsibility.
Appraisal systems focused on identify and addressing training.
Flatter organisational structure.
Democratic leadership style.
Cost of the workforce may leave a business at a competitive disadvantage.

Question 16

What are the internal influences on HR?

Answer 16

Corporate culture
Attitudes and beliefs
Hard/soft HR approach
Financial constraints

Question 17

What are the external influencers on HR?

Answer 17

Political
Economic
Social
Technological
Legal
Environmental/ethics
Competition

Question 18

What are the methods of measuring the effectiveness of the workforce?

Answer 18

Labour cost per unit
Labour productivity
Labour cost as a % of turnover
Absenteeism
Labour turnover

Question 19

What is labour productivity?

Answer 19

The contribution made by employees to the output of a business.

Question 20

What are the 3 types of labour productivity?

Answer 20

Output per employee
Labour cost per unit
UK productivity

Question 21

What is the formula for output per employee?

Answer 21

Total value of output per period / Total number of employees per period

Question 22

What is the formula for labour cost per unit?

Answer 22

Total labour costs / Total output
An increase in labour productivity will reduce labour cost per unit of output and will improve competitiveness.

Question 23

What is the formula for UK productivity?

Answer 23

Total UK output / Total UK hours worked

Question 24

How can labour productivity be improved?

Answer 24

Better recruitment and selection polices.
Training
Appropriate remuneration packages
Improved working practices
Improved technology and capital equipment

Question 25

Does an increase in productivity always lead to an increase in output?

Answer 25

No because productivity may have increased but the output may be the same as the firm is employing fewer workers.

Question 26

What is labour turnover and how can it be calculated?

Answer 26

The number of employees who leave and join an organisation over a specific time period. Voluntary- when employees leave for their own reasons. Involuntary- includes dismissal and redundancy. Number of leavers per year / Average number of employees per year.

Question 27

What are the causes of high labour turnover?

Answer 27

Ineffective leadership and management techniques. Poor communications. Wages and salaries that are lower than those being paid by firm offering comparable jobs in the area. Poor selection procedures. Boring and unchallenging jobs that lack opportunities. Poor working conditions. Low morale.

Question 28

How can labour turnover be improved?

Answer 28

Monitoring and benchmarking (understand and evaluate the current position of a business or organisation in relation to best practice and to identify areas and means of performance improvement. Exit interviews Recruitment and selection Induction and training

Question 29

What is absenteeism and how is it calculated?

Answer 29

The number of working days lost as a result of an employee's deliberate or habitual absence from work is seen as a good indicator of salinification at work. Average number of staff absent one day / Total number of staff

Question 30

What are the causes of absenteeism?

Answer 30

Some unavoidable. Poor levels of motivation or commitment. Ineffective management.

Question 31

What are the problems of absenteeism?

Answer 31

The costs of covering employees who are absent. Missing deadlines. Reduced quality if using less experienced staff.

Question 32

What are strategies to reduce absenteeism?

Answer 32

Introduce more flexible working practices. Ensuring that jobs are interesting and challenging. Improving working conditions. Improving relations between employers and employees. Introducing attendance bonuses.

Question 33

What are the different types of organisational structures?

Answer 33

Functional Product based Regional Matrix structure

Question 34

What is a functional organisational structure?

Answer 34

Businesses are organised to their roles and skills into smaller groups or departments. This may include: Sales Marketing Production IT Finance Operations

Question 35

What is a product-based organisational structure?

Answer 35

Framework in which a business is organised in separate divisions, each focusing on a different product or service and functioning as an individual unit within the company. Includes assigning employees into self-contained divisions according to the: the particular line of products/services they produce the customers they deal with the geographical area they serve

Question 36

What is a regional organisational structure and what does it enable businesses to do?

Answer 36

Organise activity according to geographical area or location. This is common in large multinational companies, but it may also suit medium-sized businesses e.g. group of taxi firms. This form of structure enables businesses to: have reporting and functional systems across multiple locations operate separate sites according to local demand but still be directed by business policy

Question 37

What is a matrix organisational structure?

Answer 37

Combines the traditional departments seen in functioning structures with project teams. Individuals work across teams and projects as well as within their own department of function.

Question 38

What is span of control?

Answer 38

The number of employees for whom a manager is responsible for.

Question 39

What are the 2 different span of controls?

Answer 39

A wide span of control- more appropriate if labour costs are significant as it reduces the number of managers. A narrow span of control- allows for closer supervision of employees.

Question 40

What does the span of control depend on?

Answer 40

Personality and skill/level of experience Size and complexity of the business Whether the business is centralised/decentralised

Question 41

What is a tall structure?

Answer 41

Many layers in the hierarchy and narrow spans of control Allows opportunities for promotion Many layers= more staff= higher cost Allows tighter control (less delegation)

Question 42

What is a flat structure?

Answer 42

Flat hierarchy and wide span of control Delegation encouraged Less direct control and more delegation Fewer opportunities for promotion, but staff given greater reasonability Verbal communication is improved Fewer layers= less staff= lower cost

Question 43

What is delayering?

Answer 43

Removing layers of management from the hierarchy of the organisation.

Question 44

What are the benefits of delayering?

Answer 44

Lower labour costs Faster decision-making Shorter communication paths Stimulating employee innovation Widens span of control Greater emphasis on teamwork and empowerment

Question 45

What is delegation?

Answer 45

The assignment to others of the authority for particular functions, tasks, and decisions.

Question 46

What are the advantages of delegation?

Answer 46

Reduces management stress and workload Allows senior management to focus on key tasks Subordinates are empowered and motivated Good method of on the job training

Question 47

What are the disadvantages of delegation?

Answer 47

Cannot/should not delegate responsibility Depends on the quality/experience of subordinates Harder in smaller firms May increase workload and stress of subordinates

Question 48

What is employee empowerment?

Answer 48

Giving employees the power to do their jobs. Employees need to feel that their actions count Closely linked to motivation Showing trust in employees Encourages employee feedback

Question 49

What does authority involve?

Answer 49

Decision making A key question is whether authority should rest with senior management at the centre of a business (centralised) or whether it should be delegated further down the hierarchy away from the centre (decentralised)

Question 50

What is centralisation?

Answer 50

Keep decision-making firmly at the top of the hierarchy (amongst the most senior management)

Question 51

What are the advantages of centralisation?

Answer 51

Easier to implement common practices and policies for the whole business. Prevents other parts of the business from becoming too independent.

Question 52

What are the disadvantages of centralisation?

Answer 52

More bureaucratic- often extra layers in the hierarchy. Lack of authority down the hierarchy may reduce manager motivation.

Question 53

What is the main reason for restructuring a business?

Answer 53

To execute a new strategy. A strategy sets out a plan that determines how a business will use its major resources to meet its strategic objectives: Transition from a start-up to a scale-up company Take on a partner, or introduce change in management Move into new product lines Expand your business overseas

Question 54

What are the internal factors that a business needs to prompt business change?

Answer 54

Raise capital, improve cash flow or profitability of business. Improve working practices and processes. Eliminate excess job positions and duplicate management roles. Reorganise internal functions, such as sales and marketing, for efficiencies.

Question 55

What are the external factors that prompt a change in a business's structure?

Answer 55

Address new markets React to changes in product or service demand Keep up with new technologies or products from competitiveness

Question 56

What are the benefits of change for a business?

Answer 56

Sustain competitive advantage Align its business strategy with changing customer needs and wants Take advantage of developing technologies Gain from improved productivity and a better work environment Develop a more appropriate and effective organisational structure= better communication and decision-making. Build a reputation for embracing change rather than fearing it.

Question 57

What is human resource flow?

Answer 57

The movement of employees through an organisation, starting with recruitment. This includes: inflow e.g. recruitment and selection Internal flow e.g. training and redeployment Outflow e.g. resignations and redundancies

Question 58

What does a human resource flow include?

Answer 58

HR plan Recruitment Training Redundancy Redeployment

Question 59

What is a HR plan?

Answer 59

Starts with an assessment of the forecast HR needs of a business over the next few years if it is to achieve its overall or corporate objectives. These are then compared to the existing HR available to the business, taking into account untapped skills and talents.

Question 60

What is recruitment?

Answer 60

Start- draw up job description (tasks, duties, employment conditions) and person specification (qualifications and qualities). Candidates' applications should be compared against the persons specification and those applicants having the "best fit" should be invited to selection procedure.

Question 61

What is the difference between internal and external recruitment?

Answer 61

Internal recruitment is done through promotion or redeployment from within the existing workforce= pool of applicants is limited. External recruitment is widely used by HR managers- attracting candidates through corporate websites, recruitment agencies. Its very expensive.

Question 62

What are the costs of training?

Answer 62

Uses up valuable resources that could be used elsewhere. (opportunity cost) Employees are unavailable to the organisation for a long period of time. Once trained, they may leave for better jobs. Lessen degree of control

Question 63

What are the benefits of training?

Answer 63

Improve employee performance and hence the competitive position of the business. Improve employee motivation and productivity. Assists organisations in achieving strategic objectives. Reputation for training will assist organisations in attracting and retaining high quality employees.

Question 64

What is redundancy?

Answer 64

One reason for dismissal. It is a legal reason for an employer to dismiss an employee but it can only occur if a job no longer exists.

Question 65

What are the reasons for redundancy?

Answer 65

A business closes down Jobs of some employees are replaced by new technology Business moves some of its operations overseas

Question 66

What is redeployment?

Answer 66

Offers a worker what should be suitable alternative employment.

Question 67

What are the factors that determine whether a job is deemed as "suitable alternative employment"?

Answer 67

Proximity of the work to the employee's current job. Terms of the job being offered. Employee's skills, abilities and circumstances in the relation to the job and the pay, status, hours and location of the job.

Question 68

What does a HR plan include?

Answer 68

Training Redeployment Internal promotion External recruitment Relocation Restructuring

Question 69

What is motivation?

Answer 69

The will to work. Comes from enjoyment of work itself and/or form desire to achieve certain goals e.g. earn more money.

Question 70

How do you encourage employees to be engaged and motivated?

Answer 70

Motivation is the factors influencing the way people behave. Financial incentives Non-financial incentives Desire to achieve a goal Motivated employees will be engaged employees. Engaged employees are those who are fully committed to their role and strive to help the business achieve its objectives.

Question 71

What are the benefits of motivated and engaged employees?

Answer 71

Higher labour productivity Lower labour turnover Higher retention rates Lower unit costs Lower absenteeism Improved customer service Better workplace relations

Question 72

What are 3 classic theories of motivation?

Answer 72

Taylor (scientific management) Maslow (hierarchy of needs) Herzberg (two-faced theory motivators hygiene or maintenance factors)

Question 73

What is Taylor's theory of motivation?

Answer 73

Managers should maintain close control and supervision over their employees. Approach to management: measurement of what can be done better and how. Monitoring to ensure targets are met. Control through analysis. Autocratic style of management- managers make all decisions.

Question 74

How does Taylor's theory of motivation work?

Answer 74

Work study- identify most efficient methods of production. Identify- spot the most efficient workers. Train- train the remaining workers to work like the best. Reward- pay workers based on productivity.

Question 75

What is Maslow's hierarchy of needs?

Answer 75

5 levels of human needs which employees need to have fulfilled at work. Once a lower level of need has been fully met, would a worker be motivated by the opportunity of having the next need up in the hierarchy satisfied. A business should therefore offer different incentives to workers in order to help them fulfil each need in turn and progress up the hierarchy.

Question 76

How does Maslow's hierarchy of needs work when applying it to a business?

Answer 76

Physiological= acceptable pay and working conditions. Safety= job security, clear job role and description, health and safety protection, insurance. Social= working in a team, social facilities, mentoring and coaching. Esteem= status (job title), authority, trust, recognition of achievement. Self-actualisation= promotion opportunities, challenging work, job enrichment.

Question 77

What are the criticisms of Maslow's hierarchy of needs?

Answer 77

Not everyone has the same needs. Our perception of what is important at work will vary. Not realistic that most employees will reach the top of the hierarchy. Self-actualisation is not easy to get to.

Question 78

What is Herzberg's theory of motivation?

Answer 78

More convinced about the importance of non financial rewards. Believed in two-faced theory

Question 79

What is the two-faced theory?

Answer 79

Motivators= responsibility at work meaningful, fulfilling work achievement and recognition. Hygiene= pay and other financial rewards working conditions appropriate supervision and policies.

Question 80

Why bother with relations?

Answer 80

Implementing change Motivation Achieving objectives Improving competitiveness

Question 81

Why should we have a formal system of employee representation?

Answer 81

Make employees views known to management. Help strengthen both managements and employees understanding of the workplace issues and other matters affecting the business. Help create an atmosphere of mutual trust between employees and management and therefore improve workplace relations.

Question 82

What are the advantages of employee representation?

Answer 82

Increased empowerment and motivation of the workforce. Employees become more committed to the objectives and strategy of the business. Better decision-making because employee experience and insights taken into account. Lower risk of industrial disputes (strikes).

Question 83

What are the disadvantages of employee representation?

Answer 83

Time consuming- potentially slows decision making. Conflicts between employer and employee interests may be a block to essential change. Managers may feel their authority is being undermined.

Question 84

What are trade unions?

Answer 84

Organisations of workers established to protect and improve economic position and working conditions of its members.

Question 85

What do trade unions do with their collective bargaining power?

Answer 85

Improve and protect the real incomes of their members. Provide or improve job security. Protect workers against unfair dismissal and other issues relating to employment legislation. Lobby for better working conditions. Offer a range of other work-related services including support for people claiming compensation for injuries sustained in a job.

Question 86

What are the 2 main functions of trade unions?

Answer 86

Represent and protect interest of employees. Negotiate on behalf of employees with employer.

Question 87

What are the advantages of unionisation from the employers' point of view?

Answer 87

Negotiating with trade unions saves time and cost rather than dealing with all employees individually.

Question 88

What is a work council?

Answer 88

Forum within a business where workers and management meet to discuss issues such as working conditions, pay and training. It is common for works council to exist in company's that do not have trade union representation.

Question 89

What is the typical agenda of a work council?

Answer 89

Business objectives and performance. Workforce planning issues (e.g. recruitment, staffing levels). Employee welfare issues (working conditions, health and safety). Training and development programmes.

Question 90

Why is communication important for effective relations?

Answer 90

Improving competitiveness Motivation Increase efficiency Implementing change Improve the corporate culture

Question 91

What are the main financial incentives?

Answer 91

Wages= normally paid per hour worked and receive money at the end of the week. Salaries= normally an annual salary which is paid at end of each month. Bonus system= usually paid when certain targets have been achieved. Commission= some workers, often salesmen, are partly paid according to number of products they sell. Profit sharing= a system whereby employees receive a proportion of company's profits. Performance related pay= paid to those employees who meet certain targets. Share options= common incentive for senior managers who are given shares in company rather than a straightforward bonus or membership of a profit sharing scheme. Fringe benefits= items an employee receives in addition to their normal wage or salary e.g. company car, private health insurance, free meals.

Question 92

What are non-financial incentives?

Answer 92

Empowerment= delegating power to employees so they can make their own decisions. Praise= recognising for good work. Promotion= promoting employees to a position of higher responsibility. Job enrichment= giving employees more challenging and interesting tasks. Job enlargement= giving employees more tasks of a similar level of complexity. Feedback= employees have a chance to give feedback and advice to managers. Working environment= providing a safe, clean, comfortable environment to work in. Team working= offers employees an opportunity to meet their social needs and often accompanied for team.