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Topic Two: Human Resource Management - Coggle Diagram
Topic Two: Human Resource Management
2.1 Introduction to Human Resource Management
Role of Human Resource Management
HRM is the strategic approach to the effective management of an organization’s workers is that they help the business gain a competitive advantage.
they are important because it essentially "adds value to output" by increasing labour productivity, quality of goods, and customer service
Long term
planning looks at the human resource
needs of the business in the foreseeable future.
Short term
Exitsing and upcoming demands such as employing staffs
They can be achieved by
Historical data and trends
Sales and income levels
Labor turnover rates (higher more worker)
The flexibility and workload of an employee
Demographic changes
Some problems they face include
recruitment
resources
reservations
returns
reputation
Internal and External factors that influence human resource planning
human resource planning (or workforce planning) - the management process of anticipating and meeting an organization’s current and future staffing needs.
Demographic change
such as change in Such as changes in net birth rate, migration rate, retirement age, females entering the workforce
Changes in labor mobility
is the extent to which people can move to different locations (known as geographical mobility) and their flexibility in changing to different jobs (known as occupational mobility).
Immigration
Immigrating from different countries for more work opportunities such as ex-pats. can cause culture clash and language barriers
flexitime
a system that requires employees to work for a core period (say from 9am to 1pm) but the rest of the time is flexible.
teleworking i
s when they employees communicate and work through the means of technology such as calls
homeworking
is a form of flexitime where employees work at home
Gig economy
labor markets where workers are typically on short-term, flexible and temporary contracts. hard to train, lacks loyalty but is cheap to hire and readily available
Resistance to cahange
Strategies to tackle resistance to change
Education and communication
Participation and involvement
Facilitation and support
Negotiation and agreement (financial and non-financial)
Manipulation and co-option (bringing a representative of those resisting change into
the change process.)
Explicit and implicit coercion (intimidation techniques)
Reasons for resistance
Preference for the current situation:
many do not like change because they think the extra change is unnecessary
Fear of change:
does not want to change to an unfamiliar condition
Poor Communication:
the change was not communicated properly, doesnt understand
Poor Timing:
the company might be undergoing seasonal changes or personal issues
Prior experience
: had a bad experience with a similar change event
2.2 Organisational Structure
Organisational structure
refers to the formal interrelationships and hierarchical arrangements of human resources within a business.
Key terms
Delegation
is the empowerment of a person lower down in the organizational structure by passing on control and decision-making authority to complete a certain task or role.
(+) Managers save time, employees feel empowered
(-) poor delegation can be confusing and demotivating
Span of control
refers to the number of people who are directly accountable to a manager.
Bureaucracy
is the execution of tasks that are governed by official administrative and formal rules of an organization.
Chain of command
refers to the formal line of authority through which communications and orders are passed down in an organization.
Centralisation
occurs when the majority of decision-making is done by a very small number of people (usually the senior leadership team) who hold decision-making authority and responsibility.
(+) quick decision making, easier to control, sense of direction, efficient in critical situations
(-) can be demotivating for works, pressure for decision makers, completing task needs confirmation which is time consuming
Decentralisation
occurs when decision making authority and responsibility are shared with others in the organization.
(+) more motivation, improved accountability, teamwork, input from the workers
(-) Hard to control and can loose control, inefficient, prone to mistakes
Matrix structure
refers to a flexible type of organizational structure of representatives from different departments, temporarily working together on a particular project or job.
levels of hierarchy
in a business refers to the organizational structure based on a ranking system
(+) creates sense of belonging, clear lines of authority
(-) departmentalisation, inflexible
Line manager refers to the person directly above an employee on the next hierarchical level, managing day-to-day task
Accountability
shows who is held responsible (or answerable) for each particular job or task,
Responsibility
shows who is in charge of and in what role and in what capacity
Types of organisational charts
Flat/horizontal
Advantages
Delegation becomes an important part of the company which engages employees
Communication should be improved overall since less layers
Cheaper to operate since theres less managers hired
Eliminates ‘us and them’ culture so employees dont feel alienated
Disadvantages
Larger teams are usually more difficult to manage
Less opportunities for promotion
Less specialisation which can be less efficient
Communication can be slower because a wider span of control means managers have to deal with more issues
By purpose
Organization by function
refers to structuring a workforce according to business functions, i.e. specialized roles or tasks such as marketing or finance and accounts.
Organization by-product
refers to structuring a workforce according to the goods or services produced or sold. Each department focuses on a different product within the organization’s overall product portfolio.
Organization by region
refers to structuring a workforce according to different geographical areas, based on where the firm’s operations are.
Tall/ vertical
Advantages
Smaller teams are easier to manage as the span of control is smaller
There are more opportunities of promotion as there are different layers of hierarchy
More specialisation and division of labour helping to improve efficiency and productivity
Quicker and more effective communication within smaller teams
Disadvantages
Creates ‘us an them’ culture which alienates the employees
Communication can be slower because there is a longer chain of command
More costly since they need to hire more managers
Changes in organisational structures
Project Based Organisation
A type of organisational structure that is temporal per project. Different teams from different departments join to complete the task
(+) more flexible, productive (focused on solution), efficient (has a project manager), motivative (different types of projects)
(-) Discontinuity, Isolation between teams, inefficiencies of capital, conflicting interests and priorities in project teams due to culture
Charles Handy Shamrock Organisation
A type of organisation that divides the workforce into 3 leafs depending on how essential they are
CORE:
full time employees that are professionals such as managers which handle the daily business
OUTSOURCE
(Contractual):
subcontracted to specialist businesses, such as consultants or marketing agencies
TEMPORARY: (Peripheral):
workers employed only when needed, usually paid by piece ratesuch as supermarkets. NO SECURITY, FLEXIBLE HIRING
(+) cost effective for temp, risk mitigating to economic situation, access to specialised skills
(-) quality concerns since lack of training, isolation between fixed and temp workers, weakened culture
2.3 Leadership and Management
Scientific and intuitive thinking/management
Scientific thinking management
are based on objectivity facts and empirical evidence. They are rational methodical and systematic. Takes account of objective data.
The decisions are rational and logical which means its easier to communicate and justify to staff
Intuitive management
is based on personal beliefs perceptions and instincts or gut feelings. It considers issues that are not quantifiable such as well-being. They are emotional and unsystematic
Quicks and inexpensive
Takes account of emotions
Depends in extent of work experience, scale of decision, urgency of decision
Management and leadership
Management
is the process of dealing with or controlling to ensure achieving the organization’s objectives through controlling available human and non-human resources in an effective way.
Managers are incharge of planning, commanding, controlling, coordinating, and organising (
Henry Fayol
)
Differences between managers and leaders
Time and effort: run a 9-5 job
Deal with questions of day-to-day operations.
Instructions and orders from managers are listened to because of the formal position
Managers follow the rules
Managers do well in familiar situations
Time and effort: 24/7
Accountable for a broader range of roles and responsibilities.
Leaders know that the best thing to do is
Inspire and motivate their followers through action and vision. Focus on people
radical choices and creative risks
Leaders thrive in change and creates visions.
Leadership
is the process of influencing invigorating and inspiring others to achieve organizational goals. They have followers and tend to follow broader goals without a set time frame.
Leadership and Management Styles
Autocratic
An autocratic leader is someone who makes all the decisions and prefers not to delegate any responsibility. They tell the subordinates what to do, there is a clear chain of command.
Suitable for... quick making or when critical decisions have to be made.
Inexperienced employees
Drawbacks include...Top-down communication so the opinions of workers are often ignored
Employees become overly reliant on the autocratic leader.
Paternalistic
Paternalistic leaders treats their employees as if they are family by guiding them through the consultation process and acting in best interest of the employees. Protects. There are two types of paternalistic styles:
Suitable for Building trust with employees and gain acceptance and respect from workforce
Do not want perceived interests dictated by someone else
This would be inappropriate in informal organisations that share power such as person culture
Democratic
Democratic leaders are those who involve employees in decision-making process. Consult staff for final decision-making. It indicates decentralized decision-making
Suitable for.. job satisfaction, when leaders arent around, innovative companies
Drawbacks include... slow decision making, unclear leadership reliance
Laissez-faire
Laissez-faire leaders are those who have minimal direct input in the work of employees. They allow subordiencates to make own decisions and complete tasks their own ways. They set objectives yet it is for the employees to strategize and achieve it
Suitable for.. creative industries to motivate employees
Drawnbacks include... lack of unity, inefficient decision making, relies on goodwill and teamwork, encourages slack
2.4 Motivation and Demotivation
Labour turnover
Labour turnover
is the percentage of a company’s worker that leaves the firm after a given period of time, usually one year
Labor Turnover = Number of staff leaving/ Total number of staff x 100
What are some reasons of people leave organizations that raises concerns for the managers?
→ Toxic work culture
→ Dissatisfaction with job
→ Poor physical working conditions and environment
→ Human resource policies such as strict autocratic ones.
Types of appraisal
Formative appraisal
is the planned and ongoing appraisal used to inform employee of their learning and performance
monitors learning and performance, helps to identify strength and weakness, recognise areas where staff are struggling
Summative appraisal
is written descriptions of an employee's performance at the end of the work period, giving recommendations for improvement
evaluate performance, professional judgement of an employee's performance
360-degree feedback
is collecting evidence from a range of stakeholders to appraise the employee's performance
relies heavily on opinions so its not suitable for all, should consider some culture norms, usually used for managers
Self-appraisal
is when employees appraise themselves, they are expected to be honest and their evaluation is compared to those of line managers
can be hard for some to rate themselves
Appraisal
is a formative assessment of employee's performance over a particular period
(+)
improve productivity and document progress
(-)
demotivate and stress out, biased and subjective
Types of Motivation Theories
Taylor principles of scientific
management
suggests that specialisation and division of labour help to increase the level of productivity. Assumes that money is the main motivator, linking to piece-rate reward system
Division of labour:
break down different aspects of a job or task and assign different people to each particular part of the work.
Allows SPECIALISATION
Undifferentiated piecework:
workers are paid a standard level of output and receive. A higher rate of pay if they exceed that benchmark
Advantages
good for money driven
works for low pay
in line with some culture
goal is clear
increase efficiency
Disadvantages
does not ensure quality of work
money is not always the main motivator
when standards are vague its hard to manage
no chances of teamwork
Expectancy Theory
is V. Vroom’s theory that assumes that people behave in a certain way in exchange for rewards based on their conscious expectations. He argued that people only put in the effort to do a job if they expect that their role will help to achieve the required result.
Equity:
employees compare their efforts based on social and instrumentality which is performance reward
Expectancy
people act in a certain way because they expect certain outcomes for their behavior
Disadvantages
input and output cannot be quatified
subjective levels of fairness
Advantages
suggests new approach (changing rewards)
McClelland's Acquired Needs Theory
coined by D. McClelland, suggests that three types of needs must be satisfied to boost motivation: the need for achievement, power and affiliation
Need for achievement
Need for power
Need for affiliation
Advantages
different jobs are assigned to different needs
Disadvantages
employees have 3 needs that are constantly changing
Deci and Ryan’s self-determination
describes three core requirements that facilitate growth and motivation in people: autonomy, competence and relatedness.
competence (feel confident)
relatedness (need to interact)
Autonomy (want independence)
Disadvantages
hard to quantify amount of need
many are driven by rewards and unable to internalise motivators
Advantages
universal emphasis on intrinsic motivation (helps employer better engage)
individual employees better understand how the can be more successful
Herzburg’s Two Factor
looked at factors that must be met to prevent dissatisfaction and the factors that motivate employees.
Hygiene Factors
factors that do not increase the job satisfaction such as the level of pay, regulation, enviornment
Motivators
are factors that motivate through psychological growth such as considering job enlargement, job empowerment, and job enrichment.
Job empowerment
is giving authority to workers, usually suitable for the more skilled workforce.
might not work for everyone since not everyone wants more work to do
Job enlargement
is giving a more variety of work for the employees to complete, good for unskilled workforce
Job rotation
is a form of job enlargement whereby workers are given different tasks, but of the same level of complexity, to help reduce the problems associated with repetitive tasks.
may mean that the employee can make mistake
Needs may increase, taking these things for granted
Job enrichment
is giving more challenging tasks to the workforce. This is good for creative workforces
J.S Adams Equity theory
is J.S. Adams’ theory of motivation, which suggests that people make comparisons of perceived fairness in the workplace based on the ratio of their input (effort) to output (rewards).
Advantages
suggests new approach, changing rewards
Disadvantages
input and output cannot be quantified
subjective for "fairness" and comparison
Maslow’s Hierarchy of Needs
refers to A. Maslow’s theory of motivation, is that people are motivated by different levels of needs: physiological, safety, social, esteem, and self-actualization. Lower order needs must be met before people progress up the hierarchy.
Physiological needs
Security needs
Social needs
esteem needs (recognisation)
self actualisation (being best)
Disadvantages
Impossible to motivate all workers using same order (diff needs)
Levels of hierarchy are impossible to measure
nothing beyond self actualisation
Advantages
straight forward
easy to use
can motivate intrinsically
Types of financial rewards
Financial rewards
Salary
is a type of financial payment that rewards workers a fixed annual amount of money, usually paid per month.
Advantages
provides a sense of security
Disadvantages
rely on business to work expected hour and quality
Wage
are a type of financial reward payment system based on time or output. Wages are paid as time rate (hours) or piece rate (output).
Advantages
good for service industry (hour), agricultural industry (by piece). The employees are more efficient
Disadvantages
No incentive to produce quality of work
Commission
is a type of financial reward that pays workers a certain percentage of the sale of each good or service that they are responsible for.
Advantages
meets the hygiene needs and esteem needs, rewarded for work so they try to sell more
Disadvantages
does not take into account the time and effort put in
Performance related pay
is is a payment system that rewards people who meet set targets over a period of time. The targets can be on an individual, team or organizational basis.
Advantages
more sales because more earning for employees
Disadvantages
can cause division in the business
Profit related pay
is a type of financial reward system which remunerates workers a certain percentage or amount of the annual profits that the firm earns.
Advantages
bonus based on company earning means higher quality in the work
Disadvantages
can be demotivating if profit decrease especially when out of their control
Employee share ownership scheme
are a type of payment system that rewards staff by giving them shares in the company or by selling the shares at a discounted price.
Advantages
success of the business helps to increase share value
Disadvantages
reward may be very small so there is little worth
Fringe benfits - perks
are the financial rewards paid in addition to a worker’s wages or salaries, such as subsidized meals, housing allowance and pension fund contributions.
Advantages
highly valuable and not offered by all businesses, employees tend to stay in business
Disadvantages
costly for the firm
Non financial rewards
Job Empowerment
allowing the employees to have control and power
Advantages
Allows employees to feel more trusted and valued as well as have higher morale and work harder
Disadvantages
requires training and still needs to be overseen by managers
Job rotation
allowing the employees to change between departments, but tasks are the same level of difficulty
Advantages
avoids repetitive tasks, they feel more responsible and satisfied with work
Disadvantages
training is needed and it can be inefficient for the company
Job Enrichment
is providing the employees with more complex and challenging tasks by redesigning the work
Advantages
employees feel more responsible and more satisfied
Disadvantages
extra work can be demotivating and not applicable for all industries
Job enlargement
number of tasks handled in one's job is increased
Advantages
employees enjoy carrying one single job, less repetition
Disadvantages
more work is less enjoyable for some
Teamwork
working in groups
Disadvantages
not for everyone since there are potentially personal problems
Advantages
fulfil social needs, connected ideas
Purpose
employees wanting to work for something larger and making a difference outside of profit motivation
Disadvantages
intrinsically motivating
Advantages
hard to achieve profit where there is social aim
Types of training
Induction training
is a type of training aimed at introducing new employees to the organization
Advantages
cheap since they use in house experts
relavant for the business issue
fewer disruptions to the work say since they are in workplace
Disadvantages
internal trainers may not be the best and outdated
can pick up bad habits
labour productivity is lower because they make time for training
on the job training
training refers to training carried out whilst at the workplace. For example, the training can be delivered by a manager, supervisor or other specialist.
Advantages
experts are used
morale is boosted and they feel confident
Disadvantages
loss of output (potentially working)
not all skills are applicable in the business
can be costly to hire and plan the trip
Off the job training
refers to training conducted off-site, such as at a tertiary college or hotel conference centre.
Advantages
clear expectations, good working habit from the start
helps understand corporate culture
morale is boosted and more competent
Contribute faster
Disadvantages
planning is time consuming
overwhelming amount of information
Positive outcomes due to training
staff confidence increased
improved competence = less reworking that wastes time
higher morales because they feel self assured
easier to cope with changes
Negative outcomes due to training
higher financial costs
no guarantee that they will stay
time consuming
Recruitment
Internal recruitment
involves hiring people who already work for the business to fill a vacant post.
(+)
cost effective, less risky since familiar, more motivational
(-)
time consuming, internal politics (jealousy), fewer applicants
External recruitment
is the process of hiring people from outside the business.
(+)
larger pool of talent and applicants, wide range of experiences, new ideas and skills
(-)
greater degree of uncertainty, time consuming, expensive to train again
Methods of recuitment
Person specifications
are mental and physical requirements such as qualifications and description of the ideal candidate
Job description
defines the main duties and responsibilities of a job
interviews
are the most common method of selecting the right candidate for a position
Others: boomberang employees, interns, collge job fair, CV, promotions and transfers, internet advertising
2.5 Organisational Culture
Types of organisational culture
Power culture
exists when there is one dominant individual or group that holds centralised decision making power
usually has one charismatic leader that has decision making power. The results are more important than the process. The decision making is fast
(+)
swift decision making, quick and responsive
(-)
difficult for highly opinionated workers, formal job titles may not be highly regarded
Role culture
exists in highly structured organisations with formal rules, policies, and procedure
individual jobs and areas are usually clear, clear accountability and power is developed through formal positions
(+)
employees understand tasks quickly, tasks are completed by structure
(-)
less adaptive and agile, not suitable for creativity and risk taking
Task culture
exists in organisations where the focus is on getting tasks done and getting results
there is no single source of decision making and goals are the main driver. They are project based organisations in a matrix structure
(+)
common goals, good teamwork, power transfers to someoe that handles the job better
(-)
lacks proper control, can create a competitive environment
Person culture
exists in organisations where a large number of people thinks there are more important than the rest of the organisation itself
do not have an emotional attachment to the company, creative and highly skilled employees
(+)
highly driven and creative employees, increases job satisfaction
(-)
no workforce loyalty, risk, self motivated, limited structure and formal guidance
Cultural clashes
Cultural clash
exists when there is conflict or incompatibility between two or more cultures within an organisation such as when two firms merge.
Cultural gap
refers to the difference between existing culture of an organisation and its desired culture, management strives to reduce the gap*
Reasons for cultural clashes
mergers and takeovers
growth
new leaders
poor performance
High labour turnover
Consequences of cultural clash
divided workforce
resistance to change
rising cost due to high labour turnover
Bad business performance
Workforce conflict
Why is there organisational culture in a business?
Organisational culture
are a set of key values and beliefs shared by members in an organisation usually occuring naturally. It controls the way people beh
2.6 Communciations
Formal Methods of Communication
refers to the official and established channels of communication.
Method of communication
Visual communication
refers to the use of visual stimuli to communicate information or ideas. Such as Gnatts chart, videos, bar graphs, pie charts, histograms
Advantages
Can be understood easily
Communicate ideas quicker than words
Often cheaper to produce that pages full of text
Cater for visual learners
May have longer lasting impact.
Disadvantages
can be distracting
complex, difficult and time consuming to analyze.
Written communication
refers to communication methods that use the written word. These provide a permanent record of documented messages for future reference
Advantages
provide a permanent record for future reference.
Clear understanding
Disadvantages
issue of storage
Hard to ask follow up
Relatively slower
Verbal communication
refers to communication via the use of spoken words. It involves talking and listening to one another, such as meetings,
Advantages
Not costly
Detailed questions can be asked
little delay in the speed questions are responded to
Facial expressions add meaning to the conversation
Disadvantages
No permanent record of the conversation for future reference
Meetings and interviews can be very time-consuming.
Confidential information may be difficult to communicate, especially if many people are involved.
Can be incomplete conversations if interrupted
Non-verbal communication
is all forms of communication can come under the category of non-verbal communication. Such as email
Advantages
Increasingly important in a global business world.
Faster and cheaper forms of communication
Disadvantages
Need to purchase and maintain expensive computer hardware and software.
business comes to a hault if there is internet issues
Informal Methods of Communication
refers to unofficial, natural, and unstructured channels of communication, naturally established by people from within an organization.
Barriers to Communication
High costs -
not all firms may be able to afford good communication networks and to train all employees to become effective communicators
Fear of technology -
some people have a fear of using new communication technologies as they find them confusing and difficult to understand
Technological breakdowns -
computer viruses, power outages and technological failures prevent communication
Jargon -
technical language used by professionals can cause problems with non-specialists
Internal politics -
occurs when conflict in the organization, rumors and harmful gossip
Geographical location and distance -
remote areas may have limited access to communication
Poor presentation skills -
not engaging, quiet
Poor or negative body language -
listeners are distracted by the body movement rather than the content itself
Language proficiency -
lack of fluency in the official business language prevents effective communications
Inaccurately transmitted gossip -
common in tall organizations where communication is transmitted through many layers in the hierarchy
Cultural ignorance -
a lack of cultural awareness can cause offense to others
Physiological barriers
- physical and biological factors such as hearing or sight impediments can hinder the effectiveness of communication
Communication
is the transfer of information from one party to another. In a business, communication can be formal or informal
Internal communication
refers to communications within the business organization.
External communication
is conducted between members of one organization and members of another.
2.7 Industrial/employee relations
Sources of conflict
Disputes over pay-
workers seek to increase wages while businesses want to maximize profit.
Disputes over working conditions-
this includes hours working, holidays, benefits, safety, etc
Internal or external change-
this could include new technology, leadership styles or increased competition
Poor management-
this includes poor communication, inadequate leadership styles, or failure to recognize unions
Poor performance-
when the business is not doing well, managers may push workers harder while workers fear redundancies
Different interests/values-
Employees see their job differently and may not work like management wants
Approaches to conflict
Action of employees
Collective bargaining
is the negotiation process whereby trade union representative and employer representatives discuss issues with the intention of recaching a mutually acceptable agreement
Work to rule
occurs when the employees do the absolute minimum required as stated in their employment contracts. This is done by adhering precisely to all rules and regulations of the organisation in order to reduce productivity
Strike action
is a form of industrial action that involved employees refusing to turn up for work. This is usually the result of major industrial unrest such as large-scale pay disputes
Action of employers
Threat of redundancies
threatening employees with losing their job so that they settle for less faborable working conditions
Changes of contract
changing the working conditions, pay, or responsibilities set out in the contract
Lockouts and closures
closing the business temporarily (lockout) and permanently (closure)
Conflict resolution
conflict resolution
refers to the course of action taken to resolve conflict and differences in the workplace. It is considered to be successful if each party's interest are addressed, resulting in a satisfactory outcomes for all sides.
Conciliation
is a process whereby the parties involved in a dispute agree to use the services of an independent mediator.
the mediator meets separately with the sides known as
caucusing
in an attempt to resolve the dispute and compromise. The writings are
legally binding
Arbitration
is when an external entity is used as part of the conflict resolution process. However, it involves an independent arbitrator deciding on an appropriate outcome
the arbitrator acts like a judge by listening and examining arguments to put forward a final decision which is legally binding
Employee participation and industrial democracy
means that workers are given responsibilities and authority to complete tasks and are involved in the decision making process
industrial democracy
refers to the involvement of workers in the decision making process (voting rights)
No strike agreement
is a method of conflict resolution involving members of a labour union in agreement to not strike as a form of industrial action
some trade unions have disrupted businesses so much that they try to improve their image by setting this agreement
Ultimately depends on level of experience and skills of the negotiators, degree of unity, state of economy, level of demand for a product, public and media opinions, and government intervention
Single union agreements
occurs when an organization agrees to participate in the negotiation process with a sole labour union that represents the workers
it causes fewer disruptions to the employer as there is no need to spend as much management time and resources dealing with a multitude of problems from various unions