Business Management Unit 3 AOS 2 (Human Resource Management)

Human resource management

the effective management of the formal relationships between the employers and the employees

Productivity

A measure of performance that indicates how many inputs it takes to produce an output

Motivation

The individual, internal process that directs, energises and sustains a persons behaviour

Motivational Theories

- Maslow's Hierarchy of needs

- Goal Setting Theory (Locke and Latham)

- Four Drive Theory (Lawrence and Nohria)

What does high motivation result in

Increased productivity and better meeting business objectives

What does Maslow's hierarchy of needs state

Human needs are arranged in a 5-level hierarchy, where people begin at the lowest level of needs. Once each level of needs is fulfilled, these factors will no longer motivate staff, rather newer needs will emerge.

Tiers of Maslow's hierarchy and how they relate to a business (Need to get them in order)

-Physiological (Satisfactory remuneration)

- Safety (Safe working conditions, Job Security)

- Social (Teamwork, friends, support)

- Esteem (Responsibilities, Recognition, Promotions)

- Self-actualisation (Creativity, opportunities to learn

Strengths of Maslow's hierarchy of needs

- Allows HR to develop an understanding of individuals needs

- Fairly easy to understand and implement by HR

Weaknesses of Maslow's hierarchy of needs

- It is just a theory with no evidence supporting it

- May be difficult to identify what tier employees are at, with strategies may not being effective as the need has already been satisfied

What does Locke and Latham's Goal setting theory states

People are more motivated and perform better when they are aspiring toward and are able to achieve a goal. A goal needs to adhere to the five principles.

5 principles of Locke and Latham's Goal setting

- Clarity (Simple, clear and specific goals that are measurable)

- Challenge (Not too challenging, not too easy)

- Commitment (More input employees have the more motivated they are)

- Task Complexity (Straightforward and allow employee skills to develop)

- Feedback (Offering recognition for progress and outlines expectations)

Strengths of Locke and Latham's Goal Setting Theory

- Will motivate employees, improve performance and better meet business objective

- There are many studies that support this theory

- Easy to implement into all goals

Weaknesses of Locke and Latham's Goal Setting Theory

- Employees may focus only on there goal and ignore all other responsibilities

- Failing to meet a goal is demotivating for an employee

- Time consuming to apply to every business goal

The Four Drives Theory

There are four main drives that shape the way all humans think and behave. The drive to acquire, bond and learn are active drives, while the drive to defend is only active in face of threat.

What are the Four Drives

- Drive to Acquire (The desire for non-material things)

- Drive to Bond (Evoking a sense of belonging in the business)

- Drive to Learn (The need to understand the world around us, be challenged and faced with interesting and varied experiences)

- Drive to Defend (Motivation comes from removing fears and insecurities from the workplace)

Strengths of the Four Drive Theory

- The drives work independently, allowing management and employees to be flexible in behaviours or strategies implemented

- Four drives are easily adaptable to complicated environments

- Achieving the drives will improve productivity and meeting business objectives

Weaknesses of the Four Drive Theory

- Other drives exist and the theory does not outline all aspects that motivate people

- Some workplace applications involve competition between employees, which can have detrimental effects on productivity

Motivational Strategies

Methods of motivation that go beyond money but instead meet the individual needs and ambitions of the employees

5 Types of Motivational Strategies

- Performance Related Pay

- Career Advancement

- Investment in Training

- Support Strategies

- Sanction Strategies

Performance related pay

The monetary compensation provided to employees relative to how their performance is assessed according to set standards

Performance related pay examples

- Pay rises

- Bonuses

- Gainsharing (Giving money to employees for suggesting improvements to productivity)

Performance related pay Impact on motivation (Short and Long Term)

Short Term

- Initial impact but wears off reasonably quickly

Long Term

- Only a long term impact if the payments are ongoing

Performance related pay Advantages

- Will only apply when employees actual performance is improved

- There is an immediate boost to motivation

Performance related pay Disadvantages

- Motivation lessens as time goes on

- Other employees may expect similar rewards and thus lower morale

What Motivational theories does Performance related pay relate to

Maslow: Esteem and Physiological needs

The Four Drives: Drive to acquire

Career Advancement

The assignment of more responsibilities/authority to employees or the promotion of employees to higher positions

Career Advancement impact on motivation (Short and Long Term)

Short Term

- Immediate boost to self esteem

Long Term

- Improves loyalty, Self-actualisation

What Motivational Theories do Career Advancement Relate to

Maslow's: Security needs, Esteem needs, Self-Actualisation

Four Drives: Drive to acquire, Drive to comprehend

Career Advancement Advantages

- Retains valuable employees

- Promoted employees feel like they can contribute more, improving productivity

Career Advancement Disadvantages

- Promotion positions must have a purpose

- Promotion can cause resentment among other employees

Investment in Training

The direction of finance or resources such as time, into the teaching of skills to employees

Investment in Trainings impact on motivation (Short and Long Term)

Short Term

- Increases commitment and loyalty

- Creates a feeling that the business cares about development

Long Term

- Improved skills can heighten esteem

- Trained staff can meet more business objectives

What Motivational Theories do Investment in Training relate to

Maslow: Esteem need, Self Actualisation need

Goal Setting: Challaning, Clear

Four Drives: Drive to acquire, Drive to comprehend

Investment in Training Advantages

- Improved loyalty from greater job security

- Improve the productivity of employees due to them being more skilled

Investment in Training Disadvantages

- Training may be wasted unless there are sufficient jobs

- Employee may eventually leave wasting the cost of their training

Support Strategies

The assistance or services provided by the business to help employees cope with difficulties that may impede work performance

Types of Support Strategies

- Mentoring

- Counciling

Support Strategies impact on motivation (Short and Long Term)

Short Term

- Help Resolves employee issues

- Can resolve problems employees face

Long Term

- Improve employee loyalty and build positive relationships

What Motivational Theories relate to support strategies

Maslow's: Social needs, Security needs

Four Drives: The Drive to bond

Support Strategies Advantages

- Provided with little to no cost

- Support can develop positive relationships between employees and management

Support Strategies Disadvantages

- May be difficult to support all employees

- Employees may be dependent on support services

Sanction Strategies

A form of penalty or discipline imposed on an employer for poor performance of harmful behaviour

Sanctions impact on motivation (Short and Long Term)

Short Term

- Reflection and assessment of performance

- Adjust behaviour and attitudes

Long Term

- Unless there is a constant threat there is no long term impact

What Motivational Theories relate to Sanctions

Maslow's: Security needs

Four Drives: Drive to Defend

Sanctions Advantages

- Can motivate employees to improve performance

- May quickly stop inappropriate or harmful behaviour

Sanction Disadvantages

- Can reduce a sense of belonging and can lower motivation

- Only motivates in the short term

Training

The process of teaching staff how to do their job more efficiently and effectively by boosting their knowledge and skills

Benefits of training for employees

- Opportunity for promotion and self-improvement

- Improved job satisfaction through better job performance

Benefits of training for business

- Higher productivity through better job performance and more efficient use of human resources

- Goals and objectives more effectively met

Why do businesses need ongoing training

Technological changes

On-the-job Training

Training that occurs in the working environment and uses the equipment, machinery and documents that are present in the workplace. It is provided by someone who works at the trainees job.

Types of On-the-job Training

- Mentoring/Coaching

- Job Rotations

- Apprenticeships

Advantages of On-the-job Training

- Cost effective as there are no travel expenses

- Employees work while trained so are more productive

- Employees are in a familiar environment an are comfortable

Disadvantages of On-the-job Training

- Quality of the trainer may vary

- Bad habits of older staff are passed on

- Trainer may have to leave own duties to carry out training

Off-the-job Training

Training that occurs in a location away from the workplace, involving sending employees to a specialised training institution and provided by someone not in the business.

Types of Off-the-job training

- Conferences/Workplace

- Online training

- Simulations/RP's

Advantages of Off-the-job training

- Wider range of skills and qualifications

- More structured and organised

- Outside experts and specialist providing border experiences

Disadvantages of Off-the-job training

-May be too focused on theory with little prac

- More expensive due to fees and travel costs

- Lost working time while employees are away

Similarities between On-the-job and Off-the-job

- Both improve employees skills

- Both can motivate employees

- Both use someone more specialised

Performance Management

A focus on improving both business and individual performance through relating business performance objective to individual employee performance objectives

Types of Performance Management Strategies

- Management by Objectives

- Appraisals

- Employee Self-evaluation

- Employee Observations

What does Performance Management Help to Inform

The motivational strategies, to determine what needs to occur to boost and employees motivation

Management by Objectives

A process by which management and employees agree on a set of goals for each employee, with these goals all contributing to the objective of the business as a whole

Advantages of Management by Objectives

- The more involved employees are with making goals, the more productive they will be

- Can improve communication and result in employees being more aware of business objectives

- There is clarity around performance and improvement

Disadvantages of Management by Objectives

- Time consuming and costly

- Failing to meet objectives can demotivate some employees

- Expectations of pay rises of rewards if objectives are met

Appraisal

the formal assessment of how efficiently and effectively an employee is performing their role in a business

Purpose of appraisal

- Identify training and development needs

- Identify new possible employee objectives

- Determine if employees should receive promotions or pay rises

Methods of appraisal

- Essay method (Manager keeps a journal of notes of all performance for each employee)

- Critical incident method (Manager keeps a journal of only good or bad aspects of performance)

- Comparison method (Employees ranked according to set criteria)

Advantages of Appraisal

- Facilitates communication and allows positive relationships between employees and managers

- Feedback can help employees improve

- Info from appraisal asist manager when making decisions about pay increase, dismissals or promotions

Disadvantages of Appraisal

- Can become time consuming

- Causes stress for both parties

- Staff who meet performance standards may expect pay rises or promotions

Employee self-evaluation

A process whereby employees carry out self-assessment based on a set of agreed criteria

Advantages of Employee self-evaluation

- Allows employees to be involved with performance management

- Allows business to gain an insight in how their employees perceive their own skills

- Can highlight the need for training

Disadvantages Employee self-evaluation

- Some employees may not wish to self-evaluate

- Employees may overstate their own performance of be dishonest

Employee Observation

-A strategy where a variety of opinions on the performance of employees is sought with the aim of arriving at a more comprehensive picture of past and current performance.

- Called the 360-degree method

Advantages of Employee Observation

- Allows a manager to gain a broad range of perspectives providing a comprehensive idea of overall performance

- Employees may imitate strengths of co-workers they observe

Disadvantages of Employee Observation

- Staff may feel stressed being observed

- Employees can be sabotage due to personal issues

- Staff that receive positive feedback may expect a pay rise or promotion

Types of Termination and weather it is voluntary or involuntary

- Retirement (Voluntary)

- Resignation (Voluntary

- Redundancy (Voluntary or Involuntary)

- Dismissal (Involuntary)

Retirement

Occurs when an employee decides to give up full-time or part-time work and no longer be a part of the labour force

Entitlement considerations for Retirement

• Provide payment for any work that has been complied

• Pay about any leave, including annual or long service leave.

• May also pay out any superannuation

Trasntion considerations for retiremnt

• The business may gradually reduce the employees working hours, to help support the sift to retirement.

• The business can provide retirement planning or financial advice too.

Resignation

The voluntary ending of employment by the employee quitting their job due to; career advancement, dissatisfaction with their current job or wanting a lifestyle change

Entitlement considerations for Resignation

• Provide payment for any work that has been complied

• Pay about any leave, including annual or long service leave.

• May also pay out any superannuation

Transition considerations for retirmant

The business may offer the employee a farewell, to show their appreciation for the work that the employee has contributed to the business.

Redundancy

Occurs when a person's job no longer exist due to tech changes, a business restructure or a merger/acquisition

Entitlement Considerations for redundancy

• Redundancy pay

• A notice period (payment in lieu)

• Annual or long service leave payouts

• Any superannuation payouts

• Provide payment for any work that has been complied

Transition considerations for redundancy

The business may offer additional counselling to redundant employees, and outplacement services to help them find other employment.

Dismissal

Occurs when the behaviour of an employee is unacceptable and a business terminate their employment

Entitlement Considerations for Dismissal

Employees that are dismissed immediately are entitled to:

• Provide payment for any work that has been complied

• Pay about any leave, including annual or long service leave.

• May also pay out any superannuation

For a dismissal that is not immediate:

• A notice period (payment in lieu)

Transition considerations for Dismisal

The business may provide carer transition services, to help the employee find new employment, such as help with writing a resume.

Workplace relations

The interactions between employers and emplpoyees, or their reresentative, to acheive as set of working conditions that will meet the needs of employees, as well as allowing the business to achieve its own goals

Participants in the Workplace

- Human Resource Managers

- Employer Association

- Fair Work Commision

- Employees

- Union

Employees role in the workplace

- Adhere to the terms of the employment contract

- Perform their job to the best of their ability

- Negotiate in good faith

HR Managers role in the workplace

- Negotiation of employment agreements with employees

- Implementation of the agreement

- Training of staff

- Dealing with disputes

Union

Organisation formed by employees in an industry to represent them in efforts to improve wages and working conditions

Role of Unions in the workplace

- Negotiate employment agreement on employees behalf

- Represent workers in setting Awards and minimum wages

- Supports employees when resolving disputes

Employer Association

Organisations that represent and assist employer groups.

Role of employer associations in the workplace

- Represent employers in setting Awards and minimum wages

- Represent employers in collective bargaining negotiations

- Advise employers of their rights and obligations

Fairwork Commision

Australia's national workplace tribunal that has a number of responsibilities under the Fair Work Act 2009

Role of the Fair Work commision in the workplace

- Make awards

- Approve agreements

- Helps parties resolve disputes

- Deal with unfair dismissal logs

- Reviews (every four years) and set the minimum wage

Awards

Legally binding document determined by the Fair Work Commision that sets out minimum wages and conditions for a whole industry