Human Resources

HRM

Managing employees to achieve business objectives

Strategic HRM

Long-term workforce planning

Operational HRM

Day-to-day employee management

Human capital

Value of employees’ skills and experience

Workforce planning

Forecasting future staffing needs

Labour demand

Workers required by a business

Labour supply

Available workers for jobs

Flexible workforce

Employees adaptable to change

Numerical flexibility

Changing employee numbers

Functional flexibility

Employees doing multiple roles

Temporal flexibility

Employees working different hours

Geographical flexibility

Employees working in different locations

Hard HRM

Focus on efficiency and cost reduction

Soft HRM

Focus on motivation and wellbeing

Advantage of hard HRM

Lower labour costs

Disadvantage of hard HRM

Low morale

Advantage of soft HRM

Higher motivation

Disadvantage of soft HRM

Higher costs

Employee engagement

Employee commitment to the business

Talent management

Attracting and retaining skilled staff

Succession planning

Preparing future leaders

Labour turnover

Percentage of employees leaving

\text{Labour Turnover}

\frac{\text{Employees Leaving}}{\text{Average Employees}}\times100

High labour turnover causes

Higher recruitment costs

Absenteeism

Frequent employee absence

Causes of absenteeism

Stress, illness and low morale

Labour productivity

Output per employee

\text{Labour Productivity}

\frac{\text{Output}}{\text{Employees}}

Ways to improve productivity

Training and motivation

Employee costs

Total cost of employees

Employee costs % turnover

Employee costs as share of revenue

\text{Employee Costs %}

\frac{\text{Employee Costs}}{\text{Turnover}}\times100

Labour cost per unit

Labour cost of one unit produced

\text{Labour Cost Per Unit}

\frac{\text{Labour Costs}}{\text{Output}}

Organisational structure

How a business is organised

Hierarchy

Levels of authority

Chain of command

Line of authority

Span of control

Employees supervised by one manager

Wide span of control

Many employees per manager

Narrow span of control

Few employees per manager

Tall structure

Many management layers

Flat structure

Few management layers

Advantage of flat structures

Faster communication

Disadvantage of tall structures

Slow decisions

Centralisation

Decisions made by senior managers

Decentralisation

Decision making delegated downwards

Advantage of decentralisation

Quicker local decisions

Delegation

Passing authority to employees

Advantage of delegation

Motivates staff

Communication

Transfer of information

Formal communication

Official communication channels

Informal communication

Unofficial communication

Downward communication

Manager to employee communication

Upward communication

Employee to manager communication

Horizontal communication

Communication between equals

Barrier to communication

Language differences

Recruitment

Attracting applicants for jobs

Internal recruitment

Hiring existing employees

Advantage of internal recruitment

Cheaper and quicker

Disadvantage of internal recruitment

Fewer new ideas

External recruitment

Hiring outside the business

Advantage of external recruitment

Wider talent pool

Disadvantage of external recruitment

Higher costs

Job analysis

Identifying job requirements

Job description

Details of job duties

Person specification

Skills and qualities needed

Selection

Choosing the best applicant

Application form

Written applicant information

CV

Summary of qualifications and experience

Interview

Meeting with applicants

Assessment centre

Selection using tasks and exercises

Psychometric test

Personality or aptitude test

Induction training

Training for new employees

On-the-job training

Training while working

Advantage of on-the-job training

Cheap and practical

Disadvantage of on-the-job training

Can disrupt work

Off-the-job training

Training away from workplace

Advantage of off-the-job training

Expert training

Disadvantage of off-the-job training

Expensive

Apprenticeship

Training combined with work

Retraining

Teaching new skills

Performance management

Monitoring employee performance

Appraisal

Performance review meeting

360-degree feedback

Feedback from many colleagues

Motivation

Willingness to work hard

Taylor’s theory

Money motivates workers

Scientific management

Efficiency through specialisation

Piece rate

Pay per unit produced

Advantage of piece rate

Higher productivity

Disadvantage of piece rate

Lower quality

Maslow’s hierarchy

Five levels of needs

Physiological needs

Food and shelter

Safety needs

Protection and security

Social needs

Friendship and belonging

Esteem needs

Respect and recognition

Self-actualisation

Achieving full potential

Herzberg’s theory

Motivators and hygiene factors

Motivators

Factors causing satisfaction

Examples of motivators

Recognition and achievement

Hygiene factors

Factors preventing dissatisfaction