TP 4 Chunk 1 Role of HRM

Strategic Role of HRM

Define human resource management

Management of the relationship between an employer and employee.

Build

• Meet long term business objectives through workforce planning, training and development, and employee retention. • Interdependent with other key business functions. • HR involves senior management to achieve competitive advantage, increase efficiency and a motivated workforce.

Interdependence with other key business functions

Define interdependence

Mutual dependence that the key business functions have on one another.

Build

Rely on each other to conduct activities.

How does HR need operations?

HR needs operations to determine what jobs and training are needed.

How does operations need HR?

Operations needs HR to recruit, train and reward staff to complete tasks.

How does HR need marketing?

HR needs marketing to create brand image and reputation of the business, to recruit quality employees.

How does marketing need HR?

Marketing needs HR to recruit, train and reward staff to complete tasks.

How does HR need finance?

HR needs finance to set budgets and provide funds to recruit, train and reward employees.

How does finance need HR?

Finance depends on HR to recruit, train and reward suitable staff to complete tasks.

Outsourcing – HR Functions

Define outsourcing

Involves the use of third-party specialist business to do a business function.

Build

• Takes advantage of specialist skills and reduces labour costs. • Don’t outsource main functions.

HR functions commonly outsourced

Recruitment, payroll, training.

Advantages of outsourcing HR functions

• Better quality and superior service (specialise with tools and equipment). • Lower cost of services. • Allows firms to focus on core functions.

Disadvantages of outsourcing HR functions

• Loss of control. • Difficult monitoring performance. • Damage to morale. • Difficult to coordinate activities.

Using Contractors – Outsourcing

Domestic

Define domestic contractors

Individuals/businesses that do outsourced work for a business. From the same country as the business (outsource to local business).

Advantages of domestic contractors

• No language barriers. • Operate under same legal system. • Familiar with local customs and practices.

Disadvantages of domestic contractors

• May limit options available (limited selection). • Not the lowest price. • Not the best quality.

Global

Define global contractors

External individuals or businesses that do outsourced work that are located outside the country.

Advantages of global contractors

• More choice available. • Better quality. • Lower price (labour/wages).

Disadvantages of global contractors

• Language/communication barriers. • Security issues, e.g. loss of intellectual property. • Timezone barriers. • Exchange rate issues. • Different culture.

Remember

Contractors = fixed period of time. Outsourcing = ongoing.