Unit 2 - HRM - Human Resource Management

CHAPTER 7 - Introduction to human resource management

Human Resource Management (HRM)

The strategic approach to the effective management of an organisation’s workers so that they help the business achieve its objectives and gain a competitive advantage.

What is the role of HRM? what does it involve?

• Human resource planning

• Recruiting

• Retaining high-quality employees

• Motivating employees

• Training

• Reward and performance management

• Employee relations

• Employee welfare - facilities & working environment

• Human resource compliance

  • Make sure the business meets legal controls & regulations

  • e.g. legal minimum wage, health & safety laws…

Human resource planning

Also known as workforce planning - analysing and forecasting the numbers and the skills of those workers that will be required by the organisation to achieve its objectives.

• getting the right number of people with the right skills

  • right jobs at the right time at the right cost

Stages of HRM planning

1. Forecasting number of employees

2. Forecasting skills required

What factors does forecasting the number of employees required depend on?

INTERNAL factors

1. Demand of product

   • Based on market conditions

   • Competitor’s actions

   • Trends

2. Productivity levels of employees

3. Business objectives

   • Future expansion - number of employees needs to increase

   • Increase customer service level - more workers needed

4. Changed in the law - regarding worker’ rights

   • laws, shorter maximum working hours, minimum wage

5. Labour turnover

What factors does forecasting the skills required depend on?

1. Rate of technological change

   • machinery

   • production methods

2. Need for flexible, multi-skilled workers

Labour turnover

Measures the rate at which employees are leaving an organisation.

Workforce plan

Numbers of workers and skills of those workers required over a future time period

Workforce audit

A check on the skills and qualifications of all existing employees

EXTERNAL factors that influence HRM planning

1. Demographic change

2. Changes in labour mobility (p.105)

Examples of demographic changes + pros + cons

1. Population growth

   • Pros

     • easier to recruit - more choice

   • Cons

     • Increased birth rates - take years before impact on working population

2. Net migration

   • Pros

     • Easier to recuit from other countries - lower rates of pay

     • Highly qualified employed from other countries

   • Cons

     • Qualified + experienced employees move

     • Immigrants may need training + language & cultural issues

3. Ageing population

   • Pros

     • Older employees - More loyal + reliable

     • Experience + skills

   • Cons

     • Less flexible + adaptable

     • Difficulties with technology

EXTERNAL factors that influence HRM planning

1. Flexi-time

2. Gig economy

Flexi-time

A flexible way of working that allows employees to fit their working hours around their individual needs to allow for other commitments outside of work

Gig economy

A labour market characterised by the widespread use of short-term contracts or freelance workers rather than jobs with permanent contracts

Why does business change happen?

• Technological innovation

  • Products - new computers…

  • Processes - AI, robots…

• Takeover

  • New leadership style

  • New management culture

• Remain competitive

• Survive

• Grow

• Changes in the market

• Changes in senior management

• Relocation

Why does resistance to change happen?

1. Fear of the unknown

   • uncertainty - not knowing what will happen to their jobs and business

   • Increased anxiety

2. Fear of failure

   • new skills required by workers and scared to not be able to succeed

3. Misinformation

   • Think that change isn’t needed

4. Low tolerance - lack of trust

   • Because of past experiences

5. Inertia

HRM ways of reducing impact of change

1. Understand what change means

2. Recognise major causes of change

3. Understand the stages of change process

4. Lead change, do not just manage it

5. Use project champions

6. Use project groups of teams

7. Planning and promoting change

CHAPTER 8 - Organisational structure

Organisational structure

The internal, formal framework of a business that shows the way in which management is organised and linked together and how authority is passed through the organisation

Delegation

Passing authority down the organisational hierachy

*manager retains ultimate responsibility

Delegation pros + cons

Pros

• gives managers more time to focus on more important tasks

• Motivates employees - shows trust

• Helps them achieve self-actualisation

Cons

• Unlikely to succeed if training of employee is inadequate

• Unsuccessful if insufficient authority is given to subordinate

• Managers only delegate boring jobs

  • Not motivating

Span of control

The number of subordinates reporting directly to a manager

Level of hierarchy

A stage of the organisational structure which the personnel on it have equal status and authority

Tall (vertical) organisational structure + cons

One with many levels of hierarchy and wide spans of control

• Slow + distorted communication

• Narrow span of control

Flat (horizontal) organisational structure

One with few levels of hierarchy and wide spans of control

Chain of command

The route through which authority is passed down an organisation - from the chief executive and the board of directors.

Bureaucracy

An organisational structure with standarised procedures and rules

Centralisation

Keeping all of the important decision-making powers withing head office or the centre of the organisation

Decentralisation

Decision-making powers are passed down the organisation to empower subordinates and regional/product managers

Advantages of centralisation

• Rapid decision making

• Prevents any conflicts

• Avoids confusion

• Greater economies of scale

• Senior managers are experienced

Advantages of decentralisation

• Decisions adapted to different conditions can be made - with local knowledge

• Delegation is easier

  • Increases motivation of employees

• Decision making is quicker and more flexible

Delayering

Removal of one or more of the levels of hierarchy from an organisational structure

Advantages of delayering

• Reduces business costs

• Shortens chain of command

  • Improves communication

• Increases opportunities of delegation

• Increases workforce motivation

Disadvantages delayering

• May make people redundant

• Increased workloads

  • overwork, stress

• Reduce sens of security

Matrix structure

An organisational structure that creates project teams from across traditional functional departments

Gathers together a team of specialists with the objective of completing a task or a project successfully.

Matrix structure advantages

• Increases communication between all members

• Crossover of ideas

  • More successful solutions

• Respond to changing markets

Matrix structure disadvantages

• Managers might find it difficult to pass down their authority

• Reduced bureaucratic control

  • Managers may be redundant

Hierachical structure

A structure in which power and responsibility are clearly specified and allocated to individuals according to their standing or position in the hierarchy.

What does the business hierarchy show?

• Who has overall responsibility in decision making

• Number of levels of hierarchy

• Workers cann identify their position in the business

• Chain of command

• Span of control

• Formal channels of communication

Key features of FLAT / HORIZONTAL structures

• Few levels of hierarchy

• Short chain of command

• Wide spans of control

• Delegation

Key features of TALL / VERTICAL structures

• Many levels of hierarchy

• Long chain of command

• Narrow spans of control

• Delegation likely to be limited

CHAPTER 9 - Leadership and Management

Leadership

The act of motivating a group of people towards achieving a common objective

Manager

Responsible for setting objectives, organising resources and motivating employees so that the organisation’s aims are met.

Management

Directing and controlling a group of people or an organisation to reach a goal by using the resources available to the organisation

Scientific management

Management of a business which follows the principles of efficiency derived from scientific experiments to improve productivity, especially those based on time-and-motion studies.

Intuitive management

Decision-making based on the hunched and subcounscious expertise of managers

Stages of scientific decision-making process

1. Business objectives - setting and wanting to achieve

2. Define the problem - what is the issue that needs a solution?

3. Problem analysis - what data needed by managers to assess importance?

4. Generate possible solutions

5. Analyse options - decision trees, force field analysis, investment appraisal

6. Select the best solution

7. Monitor progress an plan the next course of action - measure how effective solution was

Advantages - scientific management

• Setting objectives

  • Gives a clear sense of direction

• More than one manager involved

  • reduces bias

• Rational thinking

  • Business success more likely

When is scientific management likely to be used?

• With decisions with long-term consequences and involve substancial resources

• Consequence of failure are significant

• Business controlled by professional managers and not the owner

Advantages - Intuitive management

• Decisons taken fast

  • Fast reaction time

• Personal experience of managers

when is intuitive management most likely to be used?

• Business owner controls major decisions

  • has great experience of business environment

• Business is family owned

• Data is out of date, unreliable, not available

• Business environment chaning rapidly

Functions of managers

1. Setting objectives & planning

2. Organising resources to meet the objectives

3. Directing & motivating employees

4. Coordinating activities

5. Controlling & measuring performance against targets

What makes a good manager?

• Desire to succeed

• Self-confidence

• Creative - Think beyond the obvious

• Multitalented

List the types of leaders

1. Autocratic

2. Paternalistic

3. Democratic

4. Laissez-faire

5. Situational

AUTOCRATIC leadership

A style of leadership that keeps all decision making at the centre of the organisation.

• Leader takes all decisions

• Little/limited info given to employees

• One-way communication

PATERNALISTIC leadership

A type of fatherly/motherly style that promotes the active participation of workers taking decisions.

• ‘Parent-like’ figure

• Key decision made with interest of employees

• Some feedback & consultation given to employees

DEMOCRATIC leadership

A leadership style that promotes the active participation of workers in taking decisions.

• Particpation encouraged

• Two-way communication

• Workers given information

LAISSEZ-FAIRE leadership

A leadership style that leaves much of the business decision-making to the workforce - reverse of autocratic

• All authority delegated

SITUATIONAL leadership

Effective leadership varies with the task in hand and situational leaders adapt their leadership style to each situation.

CHAPTER 10 - Motivation and demotivation

CHAPTER 11 - Organisational (corportate) culture

Organisational (corportate) culture

The shared values, attitudes and beliefs of the people working in an organisation that influence how they interact with each other and with external stakeholder groups.

• Gives a sens of identity

• Influences the way decisions are taken

How can we understand the culture of an organisation?

• Mission & vision statement

• Record of senior managers

• Organisation’s ethical code of conduct

• Strategies on social & environmental issues

• Example set by senior managers

  • How they treat subordinates

  • How they take decisions

Types of organisational structure

1. Power culture

2. Role culture

3. Task culture

4. Person culture

5. Entrepreneurial culture

1. POWER culutre

Concentrating power among few people

• Autocratic leadership

• Hierarchical structures

2. ROLE culture

Each member of staff has a clearly defined job title and role

• Bureaucratic organisations

• Little creativity - rules

• Tall hierarchical structures

3. TASK culture

Based on cooperation and teamwork

• Encouraged to be creative

• Strong team-spirit

• High motivation

4. PERSON culture

When individuals are given the freedom to express themselves and make decisions

• The MOST creative

• Each individual focuses on their own tasks and projects

5. ENTREPRENEURIAL culture

Encourages management and workers to take risks, to come up with new ideas and test out new business ventures

• Succes is rewarded

• Failure not criticised

• High motivation

• Flexible organisational structures

List the God’s of management

1. Zeus

   • Leadership by trust

   • Managers make fast, intuitive decsions

2. Apollo

   • Manages through bureaucracy

   • Role culture

   • Demand consistency

   • NO individuality and personality

3. Athena

   • Problem-solving

   • Task culture

4. Dionysus

   • Individualism

   • No clearly identified ‘leader’

   • Encourages creativity

   • Can lead to internal conflicts, unproductive competition

Reasons for cultural clashes

• Business changes rapidly

  • Conflict between new managers and employees

• Business merges or acquires another business

  • Different cultures

• New leader

• Leaders adopt new leadership style

Consequences of cultural clashes

• Demotivation

• Disaffection

• Serious & unresolvable disagreements

Ways to minimise clashes

• Concentrate on positive aspects

• Obtain the full commitment of people at the top

• Establish new objectives & mission statement

  • That reflect new values

  • Communicate them to staff

• Train employees

• Change employee reward system

CHAPTER 12 - Communication

Effective communication

The exchange of information between people or groups, with feedback

Feedback

Information given by the receiver in response to a message

Importance of (internal) effective communication

• Employee motivation

• Labour productivity

• Number of quality ideas generated

• Speed of decision-making

• Speed of response to market changes

• Reducing errors

• Effective coordination of departments

Formal communication

Information that flows through well-defined official channels

Methods of formal communication

1. Spoken communication

2. Written communication

3. IT - Electronic communication

4. Visual communication

Factors influencing choice of communication method

• Importance

• Advantages

• Cost

• Speed

• Quantity

• Size of geographical spread

• Health issues - e.g. pandemic

Informal communication

The sending of unofficial messages between informal groups within an organisation

Methods of informal communicaiton

• Single channel

• Gossip communication

• Probability communication

• Cluster network

Communication barrier

Something that gets in the way of a message being received

Barriers to communication

• Failure of one of the stages of the communication process

• Poor attitudes of sender or reciever

• Physical reasons

• Failure to consider different cultures

Ways to reduce communication barriers

• Ensure message is clear & precise

• Few intermediaries

• Method of communication is appropriate

• Establish trust between senders and receivers

• Physical conditions are appropriate

CHAPTER 13 - Industrial / employee relations

Trade union (labour union)

An organisation of working people with the objective of improving the pay and working conditions of its members and providing them with support and legal services.

Industrial action

Measures taken by the workforce or trade union to put pressure on management to settle an industrial dispute in favour of employees

Sources of conflict in the workplace

• Poor communication

• Difference in personalities

• Different values

• Business change

• Internal rivalry

• Pay levels

• Working conditions

Approaches to workplace conflict (EMPLOYEES)

1. Union membership (trade union)

2. Collective bargaining

3. Work to rule

4. Strike action

Collective bargaining

The negotiations between employees’ representatives (trade unions) and employers on issues of common interest such as pay and conditions of work.

Approaches to workplace conflict (WORKERS)

1. Collective bargaining

2. Threat of redundancies

3. Changes of employment contract

4. Closure

5. Lockouts

Approaches to conflict resolution

1. Conciliation & arbitration

2. Employee participation and industrial democracy

3. Single-union agreement

4. No-strike agreements

Conciliation

The use of a third party in industrial disputes to encourage both employer and union to discuss an acceptable compromise solution

Arbitration

Resolving an industrial dispute by using an independent third party to judge and recommend an appropriate solution

Single-union agreement

An employer recognises just one union for purposes of collective bargaining

No strike-agreement

Unions sign an agreement with employers not to strike in exchange for greater involvement in decisions that affect the workplace.