6. Decision Making to Improve Human Resource Performance

Human Resource Management Objective

A specific goal or target relating to the human resource management of a business; must be S: specific, M: Measurable, A: Attainable, R: Relevant, and T: Time-bound.

Employee engagement and involvement

Maximise reported levels of engagement and the extent of satisfactorily completed appraisals.

Talent development

Investment level in employee training, staff retention rates, and the percentage of job vacancies filled by internal candidates.

Training

Spend in total and per employee on training and measures of training effectiveness.

Diversity

Diversity in senior management positions (gender, experience, ethnicity etc) and in external recruitment (gender, ethnicity etc).

Alignment of values

Recruitment and induction training; extent focused on core values and employee awareness of core values.

Number, skills and location of employees

Labour turnover, staff retention, recruitment target, and training budgets.

Corporate objectives

An objective of cost reduction is likely to require HR to implement redundancies and job reallocations.

Operational strategies

An introduction of new IT or other systems and processes may require new staff training or fewer staff.

Marketing strategies

New product development and entry into a new market may require changes to organisational structure and recruitment of new sales staff.

Financial strategies

A decision to reduce costs by outsourcing training would result in changes to training programmes.

Market changes

A loss of market share to a competitor may require a change in management or job losses to improve competitiveness.

Economic changes

Changes in the level of unemployment and the labour market will affect the supply of available people and their pay rates.

Technological changes

The rapid growth of social networking may require changes to the way a business communicates with employees and customers.

Social changes

The growing number of single-person households is increasing demand from employees for flexible working options.

Political and legal changes

Legislation on areas such as maximum working time and other employment rights impacts directly on the workforce planning and remuneration.

HRM

The design, implementation and maintenance of strategies to manage people for optimum business performance.

Hard approaches to HRM

Treats employees simply as just another resource of the business.

Soft approaches to HRM

Treats employees as the most important resource of the business and a source of competitive advantage.

Focus of a HARD approach to HRM

Identify workforce needs of the business and recruit and manage accordingly (hiring, moving and firing).

Focus of a SOFT approach to HRM

Concentrate on the needs of employees- their roles, rewards, motivation etc.

Labour turnover

Percentage of staff who leave during a period.

Employee retention

The ability of a business to convince its employees to remain with the business.

Labour productivity

Output per employee

Absenteeism

Percentage of staff who are absent from work.

Flexible Working

Working arrangements where employees have options in terms of working time, working location, and the pattern of working.

Span of Control

The number of employees for whom a manager is responsible/in control of at any one time.

Delegation

The assignment to others of the authority for particular functions, tasks, and decisions.

Centralised Decision-Making

Businesses with a centralised structure keep decision-making firmly at the top of the hierarchy (amongst the most senior management).

Decentralised decision-making

Decision-making is spread out to include more junior managers in the hierarchy, as well as individual business units or trading locations.

Attraction

This involves attracting the right candidates through job postings, social media, and recruitment events.

Selection

This involves assessing the candidates' skills, qualifications, and cultural fit through interviews, assessments, and reference checks.

Integration

This involves welcoming new employees, introducing them to the organisation, and providing them with the necessary resources to succeed.

Development

This involves supporting employees' growth and development through training and career planning.

Separation

This involves the exit of employees from the organisation through resignation, retirement, or termination.

Psychological

Basic needs- e.g. food, shelter

Safety

Safe working environment; job security

Social

Feeling wanted, sense of belonging, part of a team

Esteem

Self-respect, level of status

Self-actualisation

Intellectual needs, fulfilling potential, achieving targets

Motivators

Factors that directly motivate people to work harder

Hygiene

Factors that can de-motivate if not present but not actually motivate employees to work harder

Wages

Normally paid per hour worked paid weekly/monthly

Salaries

An annual salary paid at the end of each month

Bonuses

Paid when certain targets have been achieved- performance-related

Commission

Paid according to volume or value of sales achieved

Profit share

Where part of the business profits is shared amongst some/all employees

Share options

Where some/all of the employees have the option to buy shares in a business

Fringe benefits

In addition to basic pay- e.g. company car, private health insurance, free meals, staff discounts

Delegation

Is when authority is passed down to employees and staff are given the responsibility to carry out tasks

Empowerment

Provides employees with more responsibility to work on their own behalf without necessarily the need to “hand down” specific tasks and projects.

Consultation

Occurs when managers and leaders obtain the views of employees when making decisions

Job Rotation

Involves the movement of employees through a range of jobs in order to increase interest and motivation.

Job Enrichment

Attempts to give employees greater responsibility by increasing the range and complexity of tasks that they are called upon to complete, and giving them the required authority

Job Enlargement

Involves the addition of extra, similar, tasks to a job.

Team Working

Can meet worker’s social needs (Maslow) and can also lead to a more multi-skilled workforce and shared responsibility, which can improve worker motivation.

Flexible working

Ultimately involves workers having a degree of choice relating to how and when they work, allowing workers to balance their own personal needs with the needs of the business.

Employee Representation

Where employees are part of a formal structure that involves them in business decision-making

Work Councils

EU legislation makes these mandatory for firms that operate in two or more EU countries and have more than 1,000 employees

Role of Trade Unions

Protect and improve the incomes of their members