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Business Unit 2: Human Resource Management - Coggle Diagram
Business Unit 2: Human Resource Management
Chapter 10: Human Resource Management
10.1 HRM Purpose & Role
human resource management (HRM)
10.2 Workforce Planning
Factors that Determine Number and Skills of Employees
Objective of business
Change in labor laws
Productivity level
Labor turnover rate
Forecast demand for product
workforce audit
Labor Turnover
Formula: Labor Turnover = No. of employees leaving in one year / Average number of people employed x 100
Pros/Cons of High Labor Turnover
Cons
Opportunity cost during transitional period
Stakeholders need to re-establish relationship with new employees
Cost of recruiting, selecting, and training new staff
Pros
New workers bring new ideas
Fortunate if business was planning to reduce number of workers anyway
Can replace "bad" employees more easily
labor turnover
workforce planning
10.3 Recruiting and Selecting Employees
Stages of Recruitment & Selection
Job Advertisement
Shortlisting
Person Specification
Applicant Selection
Job Description
Employment Contracts
recruitment
selection
recruitment agency
job description
person specification
application form
curriculum vitae (CV)
resume
reference
Training
assessment center
internal recruitment
external recruitment
Pros/Cons of Internal Recruitment
Cons
Can cause conflicts among employees
Doesn't bring in new ideas
Candidates outside of the firm may be better
Pros
Faster and cheaper than external recruitment
Motivates employees as they have chance of promotion
Candidate already familiar with the business
Pros/Cons of External Recruitment
Cons
More expensive
Needs additional training
Takes longer
Pros
Wider choice of applicants
Less risk of upset workers that lost promotions
Brings new ideas
10.4 Redundancy and Dismissal of Employees
dismissal
unfair dismissal
redundancy
10.5 Employee Morale and Welfare
work-life balance
equality policy
employee welfare
diversity policy
employee morale
Pros of Diversity Policy
More qualified workforce as employees are chosen by merit not discrimination
different ideas from employees of different backgrounds
Customers may care about diversity
10.6 Training and Developing Employees
training
Types of Training
on-the-job training
off-the-job training
induction training
multi-skilling
employee appraisal
10.7 Management and Workforce Relations
collective bargaining
trade union recognition
industrial action
Chapter 11: Motivation
11.1 What is Motivation and Why Does It Matter?
motivation
Pros of Well-Motivated Workers
Lower labor turnover
Employee more likely to take responsibility and suggest improvements
Higher labor productivity
11.2 Human Needs
11.3 Motivation Theories
Taylor (Piece Rate)
piece rate
Key Aspects of Taylor's Theory
Management Control Over Work Methods: Workers should be forced to use the most efficient work method while performing tasks; increasing output.
Scientific Management: Different ways of performing a task should be tested to identify the most efficient way.
Economic Man Theory: People are only motivated by money to work, therefore businesses should provide monetary incentives so that workers work harder.
Mayo's Theory (Worker Participation)
Workers should be allowed to give input; increasing their motivation
Working in teams will increase productivity
Changes in work conditions have little effect on productivity
Maslow's Theory (Hierarchy of Needs)
Individual's needs start on the lowest level. Once one level is satisfied, the individual will work to achieve the next level
Once a need has been satisfied, it will no longer motivate the individual
Workers will be more productive if work is organized to satisfy their needs
Reversion to a lower level is possible
Needs determine our actions, everyone is motivated to satisfy them
self-actualization
Limitations of Maslow's Approach
Difficult to identify which level a worker is on
Money will help achieve most needs
Not everyone has the same needs
Self-actualization is not permanent
Herzberg's Theory (Job Enrichment)
Motivators
motivators (motivating factors)
Examples
Recognition
Work itself
Achievement
Advancement
Responsibility
Hygiene Factors
hygiene factors
Examples
Salary or wage
Supervision
Relationship with others
Company policy
Working conditions
Job Enrichment
job enrichment
Can provide motivation to workers by:
Feedback on performance - regular two-way communication between workers and managers; including giving recognition
A range of tasks - makes the worker less bored
Complete units of work - work is done in teams to make identifiable units of work
McClelland (3 Types of Motivation)
Authority/Power Motivation: will seek to be influential and make an impact; strong leadership skills
Affiliation Motivation: will seek to have friendly relationships and interact with other people
Achievement Motivation: will seek job advancement and sense of accomplishment; common characteristic of entrepreneurs
Vroom's Theory (Expectancy Theory)
Workers can be motivated if they believe that:
Favorable performance will lead to a desirable reward
The reward will satisfy an important need
There is a positive link between effort and performance
The desire to satisfy the need is strong enough to make the work effort worthwhile
Vroom's Expectancy Theory is based on:
Expectancy: If people believe that putting more effort will lead to higher performance
Instrumentality: If employees believe that they will get what they desire
Valence: If an employee wants money (extrinsic reward) or satisfaction (intrinsic reward)
If one of these conditions is missing, workers will not be motivated.
11.4 Motivation Methods in Practice
Financial Motivators
Bonus Payment
Pros/Cons of Bonus
Cons
Reduces motivation if bonus is not achieved
Damages team spirit if only some get bonus
Pros
Incentivize employees to do well
Offers additional security
Often used when:
The business wants to make one-off payments
Business wants to reward employees for good performance
bonus payment
Performance-related Pay
Pros/Cons of Performance-Related Pay
Cons
Requires frequent target setting and appraisal interviews
Managers may show favoritism to certain workers
Pros
Can be used in relation to meeting the business' objectives
Encourages workers to work hard to meet target
Often used when:
Managers want to encourage target setting and achievement
Employees performance cannot be measured in terms of output or sales
performance-related pay
Commission
Pros/Cons of Commission
Cons
Discourages teamwork
Employees pressure people into buying. damaging customer relationships
Pros
Offer security of pay if as an addition to basic salary
Creates incentive to increase sales
commission
Profit Sharing
Pros/Cons of Profit Sharing
Cons
May only be small proportion of total profits, so not that motivating
Reduces retained profits
Pros
Might lead to suggestions for cost cutting and ways to increase sales
Increases commitment of workforce to make business profitable
Often used when:
Managers want to increase employee focus on business profits to encourage cost-cutting and revenue-increasing ideas
profit sharing
Salary
Pros/Cons of Salary
Cons
Not directly linked to output
May lead to low achievement / motivation
Pros
Since fixed for a year, labor costs are easier to forecast
Offers security of pay level
Often used when:
Status and security of income are important motivators
Overtime pay is not expected
salary
Share-Ownership Schemes
Pros/Cons of Share-Ownership Schemes
Cons
May be a very small number of shares, so not motivating
Workers feel resentment to managers, who often receive more shares
Pros
Workers more likely to participate in decision-making
Reduces conflict of objectives between owners and workers
Often used when:
Senior managers want to increase commitment to the business' success
Business wants to encourage loyalty and participation form all employees
share-ownership scheme
Piece Rate
Pros/Cons of Piece Rate
Cons
Quality might fall
Individual worker output may be hard to calculate
Pros
Easy to calculate labor costs per unit
Motivates workers to increase output
Often used when:
Output of each worker is easy to identify and measure
Need to keep unit costs as low as possible
Fringe Benefits
fringe benefits
Pros/Cons of Fringe Benefits
Cons
Some employees may not use the fringe benefits, making it a waste of money
Expensive
Pros
Motivating
Lower turnover rate
Time-based Wage Rate
Pros/Cons of Time-Based Wage Rate
Cons
Pay level not directly linked to output
Labor cost per unit depends on output, which varies
Pros
Different rates can be offered to different workers
Offers security over pay levels (e.g. during periods of low demand)
Often used when:
Output of the job is hard to measure
Quality is more important than quantity
time-based wage rate
Non-Financial Motivators
Job Redesign
job redesign
Pros/Cons of Job Redesign
Cons
Some workers may not like the redesign and become demotivated
Pros
Working in teams make workers more motivated
Serves as a test for potential managers
Will make work more interesting for worker
Development
development
Pros/Cons of Development
Cons
Lower productivity while in training
Employees may use skills learned to search for a better job elsewhere
Expensive
Pros
Increasing status of employees gives them access to higher paid jobs
Lower turnover rate
Increasing skills of employees will lead to higher productivity
Job Enlargement
job enlargement
Pros/Cons of Job Enlargement
Cons
Additional tasks may leave the employee frustrated and demotivated
Managers must accept reduced control and supervision over employees
Employees may see this as a way to get them to do more work
Pros
More feedback and communication between workers and managers
Challenging tasks offered, allowing workers to learn new skills
Complete units of work are produced
Employee Promotion
employee promotion
Job Rotation
job rotation
Pros/Cons of Job Rotation
Cons
Does not increase empowerment or responsibility for the work being performed
Does not necessarily give a worker a complete unit of work to produce
Limited in scope
Pros
Makes workforce more flexible
Workers can cover if someone is absent
Relieve boredom
Employee Status
employee status
Employee Participation
Types
Empowerment
Quality Circles
Teamworking
teamworking
employee participation
Chapter 12: Management
12.1 Management and Managers
manager
management
Key Aspects of Fayol's Theory
Commanding, Directing, and Motivating Employees: Managers must guide and oversee employees so that business objectives can be reached
Coordinating Activities: Managers need to make sure that all branches, departments, and employees work in sync of each other increasing efficiency
Organizing Resources: Managers make sure there are the people and resources necessary for the business to meet its objectives
Controlling and Measuring Performance against Targets: Managers set targets and do everything needed to achieve or surpass these targets
Planning: Managers set objectives for the business to achieve
Key Aspects of Minzberg's Theory
Informational Roles
Disseminator
Spokesperson
Monitor
Decisional Roles
Disturbance Handler
Resource Allocator
Entrepreneur
Negotiator
Interpersonal Roles
Leader
Liaison
FIgurehead
Main Managerial Positions
CEO: Highest ranking executive; makes major corporate decisions
Manager: Has authority over other employees lower in the hierarchy
Director: Responsible for determining and implementing the company's policy
Supervisors: Appointed by management to watch over the work of others
Management Styles
Democratic
Pros/Cons of Democratic Management
Cons
Sometimes quick decision-making
Some issues too sensitive to involve workers
More time consuming
Pros
Benefits experienced and flexible workers
Useful in situations where new ways of thinking or new solutions are needed
Workers contribute ideas, increasing motivation
democratic management
Paternalistic
paternalistic management
Pros/Cons of Paternalistic Management
Cons: May demotivate higher-skilled workers
Pro: Most appropriate for lower-skilled employees
Autocratic
autocratic management
Pros/Cons of Autocratic Management
Cons
Can be demotivating for workers, especially in higher-skilled jobs
Pros
Most appropriate in situations that need quick decision-making
Can be effective in certain cultural, political, and business contexts
Laissez-Faire
laissez--faire management
Pros/Cons of Laissez-Faire Management
Cons
Employee may lack direction and structure
Lack of feedback may result in errors and less improvement
Pros
Can be motivating for higher-skilled workers
12.2 McGregor's Theory X and Theory Y
Key Aspect of McGregor's Theory
