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Unit 6 -- Human resources - Coggle Diagram
Unit 6 -- Human resources
Human Resources objectives
HR
-- these are the people within a business who are needed to be well managed so as to maintian business competitivity.
Human resources objectives
-- this is a specific goal or target relating to the management and performance of human resources within a business.
Common HR objectives
Ensure human resources are used effectivly.
Maintian good employee-employer relationships.
Engage employees with the business.
Operate effective talent development.
Operate talent development.
Infleunces on HR objectives
Internal
Corprate objectives.
Attitudes and beliefs of senoir management.
Hard v soft HR approach.
Type of product (e.g high skilled v low skilled production).
External
Laws and politics
Technological changes.
Economic enviroment.
Social enviroment (e.g increase in demand for more diverse management).
Competition.
Human resources management
HRM
-- this is the effective management of people within a business to meet strategic objectives.
Aspects of HRM (i.e what must HR do)
Training.
Workplace planning.
Recruitment and selection.
Talent development.
Employee engagement and involvement.
Managing diversity.
Developing corporate culture.
Soft and Hard HR
Hard HR
Hard HR
-- this treats employees simply as a resource for the business (just like a piece of machinary).
Features of hard HR
Short term changes to employee numbers.
Minimul communication and what communication there is, it is top down.
Pay -- Taylorism
Little empowerment or delegation.
Apprasial system is about making judgements on staff.
Tall organistional structure.
Suits autocratic business style.
Too hard a HR policy may increase absenteeism and labour turnover.
When done well hard HR can help improve the businesses unit costs and speed up decision making.
Based used in industries with little need for staff development, it would be less likely to succeeded in an industry where inderpedence is key (e.g use in a factory, but not in a tech start up).
Soft HR
Soft HR
-- this is method treats employees as the most important resource a business has and treats employees as a source of competitive advantage.
Features of soft HR
Long term workforce planning.
Strong and regular to way planing.
Competitve pay structure.
Employees are empowered and delegation is encrouged.
Appraisal system is based on indentifying where employees can be improved and providing them with the training they need.
Flatter organistional structure.
Suits democratic leadership.
If the business is too soft it may become very high cost as rewards and benefits become more expensive.
Soft HR can lead to a motivated workforce that wants the business to succeeded as they feel part of the organistion.
This form of HR is best suited for industries where free thinking and indepence can be key to sucecess and it would be less effective in industries where uniformity is key.
Analysing human resource performance
Key measures of HR performance
Labour turnover
Labour turnover = (number of employees who leave the business in a period / number of people employed by the business in a period)X100
Labour turnover
-- the percentage of people that leave a business over a period of time.
Labour retention
-- this is the ability of a business to convince its employees to stay at the business.
Problems with high staff turnover
High costs as the business must recruit new staff.
Increased presure on staff that remain.
Can disrupt production.
Harder to maintian quality levels.
Factors that affect staff turnover
Type of people the business employs.
Deos it employ seasonal staff.
Deos it employ lots of students
Pay and other rewards
Working conditions.
Opportunities for propomtion.
Actions of competition (e.g them increasing pay).
Quality of communication within the business.
Economic conditions.
If the economy is contracting then employees will be less liekly to take the risk of moving jobs.
Labour verstaility (how transferable are employee skills).
Employee loyalty.
Labour productivity
Labour productivity = output per period/number of employees
Labour costs and total costs are closely linked and to remain competitve a business must keep labour productivity high.
On average across all industries 20% to 35% of total costs are labour costs.
Within industries such as restraunts it can be as high as 50%.
Nationally and globally their is currently a decline in labour productivity.
Higher output per employee = higher labour productivity = lower labour costs per unit
Factors infleuncing labour productivity
Extent and quality of fixed assets (more machinary = lower labour costs and higher labour productivity).
Skills and motivation of the workforce.
Training of the workforce.
External factors such as the relaibility of suppliers (no supplies means no manufacturing).
Ways to improve labour productivity
Measure performance and set target.
Streamline production process.
Invest in capital equipment.
Invest in employee training.
Improve working conditions.
Problems faced when trying to improve labour productivity
Can create a potential trade off with quality.
Potential for employee resitence (espically if redunancies are involved).
Employees may demand better pay for higher productivity.
Absenteeism
Can be calculated two ways
Absenteeism = (number of staff absent over a period/number employed during period)X100
Absenteeism = (number of days taken off for unauthorised absence/total days worked by workforce over the period)X100
Absenteeism
-- this is the intentional or habitual absence from work of employees.
Methods of tackling absenteeism
Understand the cause of absenteeism (is the business not giving enough holidays, giving to genrous sick pay, is motivation low?).
Set targets and monitor trends.
Have a clear sickness and abscence policy.
Reward good attendence.
Consider wider issues of employee motivation.
Revenue per employee
Revenue per employee = revenue/number of employees
This is useful in labour intensive industries where labour productivity is crucial and keeping revenue per employee as high as possible.
Human resource planning
Human resource planning
-- this is the process of assessing the current and future capacty of a business's workforce and sets out the actions necessary to meet the business's future human resource needs.
Improving organistional design and human resource flow
Job design
Job design
-- this is way in which jobs are aranged in the workplace in order to reduce boredom and employee disatifaction.
Job design in split into three
Job enrichment
-- this is an increase in the amount of responsibility an employee has so as to increase motivation.
Job enlargement
-- this is an increase in the number of responsibilities an employee has so as to increase motivation.
Job rotation
-- this is the process of varrying the tasks an employee has to do so as to reduce boredom and increase the range of skills an employee has.
Changing job design can increase workplace performance, improve motivation and make the workforce more productive.
Organisational structure
Heirarchical structures
Tall heirarchy
Lots of layers.
Narrow span of control.
Key features
Enables tighter control and less delegation.
More opportunities for promotion within the business (due to the high number of layers).
Communication takes longer to go through layers.
More layers = more staff = more costs
Flat heirarchy
Fewer layers then a tall heirarchy.
Wide span of control.
Key features
Less direct control from management and more delegation.
Fewer opporunities for promotion (as there are fewer layers), but employees have more responsibility at each level.
Verticle communication is quick.
Fewer layers = less staff = lower costs
Delayering
Delayering
-- this is the process of removing layers from within a hierarchy.
Benefits
Lower labour costs (because there are fewer managers).
Faster decision making.
Shorter communication paths.
Employees are closer to managers and this should encrouge them to want to participate in the business more.
Drawbacks
Can be expensive in the short term as managers are made redunant.
Increased workload for managers.
Reduncancies may impact moral.
People may feel they will loose their job.
Business can loose experienced employees.
Delegation
Delegation
-- this is the passing of authority, but not accountability down heirarchy.
Delegation will:
Free up managers time.
Provide job enrichment to employees.
Can mean decisions are made closer to the staff enacting them and closer to the customers.
Pros and cons
Pros
Reduces stress on management.
Allows senoir management to focus on key tasks.
Subordinates are empowered and motivated.
Cons
Accountability is not delegated down.
Harder in small firms with fewer staff.
May increase workload and stress for subordinates.
Hackman and Oldman
This model is based on the idea that what task and how it is undertaken is crucial to the motivation of an employee.
They believed in 5 job characteristics, that fed into 3 critical physiological states and these will infleunce personal work outcomes.
Model
Job characteristics
Skill variety
(i.e how many skills are used).
Task identity
(i.e how much is the individual in charge of the task).
Expereinced meaningfulness of work
Task significance
(i.e the importance of the task to others).
Autonomy (i.e freedom to complete the task independently.)
Experienced responsibility of work outcomes
These lead to the personal work outcomes:
High internal work motivation.
High quality performance.
High statisfaction.
Low absenteism and low labout turnover.
Feedback (i.e do superoirs talk on how to improve).
Knowledge of actual results
Organistional design
Organistional design
-- this is the framework of a business that provides it with the structure it needs to succed.
Organistional structure
Organistional structure
-- this is how a workforce in a business is organised this includes people's job roles and communication flows.
Why change organistional structure:
Businesses growing can mean there is a need for a more formal structure.
Can help reduce costs and complexicity (by removing unecessary jobs).
Can help boost employee motivation (for example people may prefer working in a wide span of control enviroment).
Can improve customer service and/or quality (this can be by making it clear what the layers of heirarchy are and this means that employees will find it easier to get help from the right sources).
Challanges to organistional structure
Can be resisted.
The disruption may damage labour turnover.
Can be expensive (e.g redunancies).
Can impact quality and customer service durring the period of change.
Decisions relating to organistional design include:
Authority
Authority
-- this is the power of employee to instruct subordinates, make decisions and control the use of resources.
Authority can be a good motivator.
Span of control
Span of control
-- this is the number of supivors a manager has.
Wide span of control
Lots of subordinates.
More independence for subordinates.
Good when labour costs are high.
Narow span of control
Fewer subordinates and more layers in the hierarchy.
Allows for closer supervision of subordinates.
Helps ensure good comunication to subordinates, but somunication between lays can be confused.
Hierarchy
Delegation
Centralistion/decentralisation
Authority can be either centralised or decentralised.
Centralisation
Pros
Easier to implent a common policy.
Prevents parts of the business becoming too independent (making communication and strategic planning harder).
Cons
More beuarcratic.
Centralisation removes autonomy from managers and may demoralise them.
Decentralistion
Pros
Decisions are made closer to the customer.
Enables businesses to better respond to local changes.
Cons
Decision making may not always be strategic (as it is made by local managers).
Harder to ensure uniformity across the business.
Infleunces on levels of centralisation
Attitudes/beliefs of management.
Skills of the workforce (high skill = decentralised).
Confidence in the economy (recesion may lead to business rentrenchment and managers ensuring a common policy).
Empowement
-- this is giving employees the power to do their job, it is important for motivating employees (espically in high skilled jobs).
Human resources flow
HR flow
-- this is the movement of employees into, through and out of the business.
Inflow (recruitment/selection)
Recruitment
-- this is the process of identifying and filling a vacency.
Recruitment and selection process
1
-- identify vacency.
2
-- create job description.
3
-- Create person specification.
4
-- Advertise vacancy.
5
-- recieve applications.
6
-- short list applicants and review references.
7
-- Assess candidates.
8
-- Offer position.
Internal flow (training and redployment)
Training
Training
-- this is the process of equiping employees with the skills and knowledge to effectivly carry out there job.
Types of training
On the job
On the job training
-- this is where employees learn in the workplace from experienced workers.
Pros
Free for the business
Staff training can be focused on the needs of a business.
Cons
Someone else will have to reduce their workload to help the new employee.
People may be taught bad habits (depends on who is chosen to do the training).
Off the job
Off the job training
-- this is anyform of training/education that occurs outside the workplace.
Pros
Enables workers to learn new skills (Contuinal Professional Development (CPD)).
Cons
Going to need to find people to cover the employee on training.
Not free.
Redeployment
Redployment
-- This is the process of offering people whos jobs are at risk the opportunity to move to another job within the business that they would be well suited for.
Advantages
Helps the business keep talented employees within the business.
Reduces negertive publicity related it changes.
Lowers costs (less redunancies).
Motivates employees as people will feel that the business cares for them.
Reduces conflicts with trade unions.
Outflow (resignations and redunancies)
Redunancy
Redunancy
-- this is a formal dismissal when an employee's job no longer exists.
This can be very costly.
Employee motivation
Motivational therorists on pay
Taylor viewed pay as the only motivator and argued for a system of pay called peice rate.
Piece rate
-- this is where an employee is payed more for the more products they produce.
Maslow and Herzberg both felt that although pay was important, non-financial motivation such as empowerment and job enrichment are better motivators.
Examples of motivators
Financial
Pay
Bonuses
Profit sharing
Non-financial
Delegation
Promotion
Work enviroment
Motivation
-- these are factors that infleunce the way inwhich people behave, it is best for a business to have a motivated workforce.
Benefits of motivation
Higher labour productivity
Lower turnover
Improved customer service
Lower levels of absenteeism
Better workplace relations
Theories of motivation
Taylor
(scientific management)
Taylor believed that people worked to earn money and that was their only concern.
He argued for scientific management which meant that:
All tasks should be study to find improvements.
Most effiencent ways of working must be utilised.
Each employee will be trained to do one task.
Workers should be supervised closely.
A key part of Taylorism was the idea that employees should be paid by peice rate.
Masslow
(hierarchy of needs)
This was a pyramid which Maslow believed would show the steps in which a business needs to take to ensure the highest levels of motivation.
The pryamid
Physiological needs
These are the most basic needs that everyone needs and means that businesses must ensure that its employees are able to eat, have shelter and clothe themselves.
Safety and security needs
Businesses should next ensure that employees are safe and secure and this means they are healthy, they have protected jobs and are able to increase their wealth (through pay).
Love and belonging needs
Next employees should be able to live happy lives with friendship and family, this could be brought about by a business ensuring that it gives employees choices over when they work.
Self esteem needs
Employees should be confident in themselves, be able to respect others and have achievements.
Self actualistion
This is a level reached by a few employees when they are fully motivated and leads to creativity and spontinaity.
Herzeburg
(two factor theory)
Herzeberg argued that motivators could fall in to one of two catagories: hygene or motivator factors; hygene factors where the bare minimum and just stoped people feeling demotivated while motivator factors make employees feel motivated.
Hygene
Job security
Pay
Having relationships (friendship) with coworkers
Motivator
Growth
Recorgnition
Varied and vulable work (employees want to feel needed)
Employee - employer relationships
Employee representation
Employee representation
-- this is where employees are part of the formal decision making structure within a business.
Some times businesses must, by law, enage employees with the decision making proccess, these include:
When businesses propose redunancies
When employees are moved from one part of the business to another.
When planning changes to the pension plan.
When the business changes working time arragnements.
Pros and Cons
Pros
Increases the power and therefore motivation of employees.
Employees may become more committed to the objectives and strategries of the business.
Can improve decision making as employee expereince is taken into account.
Lower risk of industrail dispute.
Cons
Time consuming.
Conflicts between employee and employer beliefs may block effective decision making.
Managers may feel their authority is undermined.
Trade unions
Main roles
Protect and improve the real incomes of employees.
Provide and improve job security.
Protect workers against infringements on their rights.
Lobby for better working conditions.
Offer a range of work related services such as injury support and eduction.
Functions
Represent
Negoaitate
Advantages of good trade union relations for the business
Saves time and money when compared with negoating with employees seperatly.
Unions help communication between businesses and employees.
Can improve employee motivation when employees know they are protected by a union.
Trade union membership has been declining in the past couple of decades for many reasons:
Decline in manufacturing jobs (tradiational union jobs).
Increased employement in the teritary and quaternary sectors (less unionised).
Increase in the number of firms that do not recorginise unions (backed by anti union legislation).
Increase in flexiable workers.
Improved employee involvement in the workplace.
Methods of industrial actions:
Work to rule
-- employees follow strict conditions of their working contract for example they don't work overtime or enage in voluntary actions. They still get paid a basic rate.
Over time ban
-- Employees refuse to work overtime (not effective during quite periods).
Go slow
-- employees work at the slowest or least productive rate possible.
Strike
-- employees refuse to work. Strongly regulated by law and is the option of last resort.
How employees prevent industrial disputes
Regular consulations with trade unions.
A staff forum to pass infomation to employees and collect employee thoughts.
An employee body to discuss major issues as they arise.
Team/group feedback sessions.
Who suffers from industrial action
Damage to the business
Reduced output and possibly reduced sales.
Can damage customer satisfaction.
Can damage relationships with staff and harm motivation.
Damage to the staff
Lost pay
Lost jobs if the industrial action leads to cost cutting.
Industrial action can loose public support.
If it become illegal they can be faced with legal action.
Works councils
Works council
-- this is a group of employees representing the workforce in negoations with employers.
The Advisory, Concilation and Arbitration service (ACAS)
Three key roles
Council/consulation
This is used when an employee is making a complaint to a business, it is used to avoid the problem going to a tribune and seeks to gain an agreement between the different parties.
Arbitrate/arbitration
This is an alterative to a court of law, with the problem going before an employement tribunal. This asks an outsider to make a specific judgement.
Most common between employers and trade union.
Mediate/mediation
Involves an independent and impartial third party that seeks to reach a solution that both parties can agree on, agreements are not legally binding, but are usally carried out.
Managing communication with employees
Effective communication with employees is important.
Why is important:
It can help create open and honest communication.
Can improve decision making by enagaging employees on decision making.
Enables genuine communication.
Creates two way communication.
Helps outline the reasons for change (over come resistence to change according to Kotter and Schelsigner).
Helps manage employee relations.