AOS2 (part a) - business

Human resources

The activities and tasks involved in getting the very best out of the employees that are working for you, including motivation, termination, training, wages and conditions of work, and performance management.

HR Management Strategies

Motivation, training, performance management, and termination management.

Definition of motivation

An employee's willingness to expend energy and effort in doing a task or job.

Definition of training

Providing the skills and knowledge to an employee in order to do a particular job.

Definition of termination management

Decisions made by an employer or employee to end the employment contract and relationship.

Definition of Performance management

A system used to improve organisational and individual performance through linking the objectives of each. This can include analysing and assessing the way in which an employee performs their job.

Human resource management

Human resource management is the effective management of the formal relationship between the employer and employees. It is concerned with all the activities associated with acquiring, developing, maintaining and terminating employees. Well-designed human resource management policies and practices can improve the performance of organisations.

Hierarchy of needs (Abraham Maslow) definition

Based on the concept of five human needs. The levels of needs are ranked in order of their importance, with the lowest being the easiest to achieve and the top being the hardest. They must be achieved in sequential order. It suggests that organisations should aim to create workplaces that satisfy all the needs of an employee. Otherwise, employees will not be fully motivated and may become despondent. Once a particular need is satisfied, the next level of need becomes a motivator for employees.

Maslow's Hierarchy of Needs (lowest to highest)

Physiological needs: food, clothing, shelter. Safety and security needs: physical and emotional security. Social needs: sense of belonging, love and affection. Esteem needs: respect, sense of accomplishment. Self-actualisation needs: fulfilment.

Practices to satisfy hierarchy of needs

Self-actualisation needs: creative and interesting jobs, opportunities for advancement, volunteering opportunities to help the community and make the world a better place. Esteem needs: greater responsibility, promotion, recognition. Social needs: teamwork, involvement in decision-making. Safety needs: safe working conditions (OHS), job security. Physiological needs: satisfactory pay for survival, good working conditions.

Advantages and disadvantages of hierarchy of needs

Advantages: belief that both intrinsic and extrinsic factors motivate staff and act as motivators. Motivation is clearly defined from one level to the next. Disadvantages: human behaviour may be in response to several needs, not just one at a time. Employees may be at different levels in the hierarchy, making it difficult to identify and implement appropriate strategies to motivate them.

Definition of goal setting theory (Locke and Latham)

Based on the idea that employees are motivated by clear goals and appropriate feedback about their achievement. They believed that working towards a goal provided motivation to reach it, and this would improve performance.

Goal setting theory (Locke and Latham): Complexity

The goal should not be too simple, nor should it have too many parts such that the employee loses sight of the original goal.

Goal setting theory (Locke and Latham): Commitment

The employee should have input in setting their goal. This is the only way to make sure that employees develop some sense of ownership over the goals, which will help to ensure that they are motivated and willing to persevere to achieve the outcome.

Goal setting theory (Locke and Latham): Clarity

The goal must be clear, simple and measurable.

Goal setting theory (Locke and Latham): Feedback

Managers must give employees ongoing feedback as they work towards achieving the goals. Employees will lose motivation very quickly if managers fail to give them updates that identify progress. It is useful for managers to give specific positive and negative feedback so that employees know where they are doing well and the areas in which they should focus on improving.

Advantages and disadvantages of goal setting theory

Advantages: manager has a clear way of measuring performance against goals. May improve manager and employee relationship due to feedback. Disadvantages: time consuming as manager needs to discuss and negotiate goals with employees. Goals need to be set on an individual or team basis in order to be specific. Difficult to align with overall business goals and objectives.

Four drive theory (Lawrence and Nohria) ABCD definition

The four drive theory states that there are four key drives to human behaviour which can be used to ensure employee satisfaction: acquire, bond, comprehend and defend.

Acquire

This drive focuses on obtaining things both material and non-material. This can be applied in the workplace by ensuring competitive remuneration, rewarding employees for high levels of performance, making expectations clear for employees to follow, praising employees for good work, providing financial incentives, and making the requirements for career advancement clear and accessible.

Bond

This drive manifests itself through a desire to belong and interact positively with others. This can be applied in the workplace by creating opportunities for teamwork and collaboration, hosting social events to improve workplace cohesion and develop relationships between employees, and having managers interact with employees positively and show concern for them.

Comprehend

Comprehend refers to the constant need to keep doing new things and expanding one's knowledge. This helps employees to maintain interest in their work. It can be applied by ensuring that work is as interesting as possible, giving employees the opportunity to make the work their own and share input, rotating duties so that there is as little repetition as possible, and providing opportunities to develop skills and explore new paths.

Defend

To satisfy this drive, the work environment should be kept safe. Businesses should aim to minimise the times an employee feels the need to defend themselves. This can be applied by ensuring that employees are trained in the safe operation of workplace equipment, managers treating employees fairly, remuneration processes being non-discriminatory and rewarding everyone equitably, and creating an environment of open communication where employees feel that management trusts them and they can tell them their problems.

Advantages and disadvantages of the four drive theory

Advantages: inexpensive strategies to implement. Manager does not have to achieve drives in order. Disadvantages: difficult to measure employee performance. Manager may find it difficult to create work environment that satisfies all four drives.

Motivation strategies

Performance related pay, career advancement, investment in training, support, and sanctions.

Performance related pay definition

An employee will receive a financial reward when they have met or exceeded a predetermined performance standard. Some are effective short-term, such as bonuses or commissions. Some are effective long-term, such as pay increases. However, there is a point where monetary rewards become less effective at motivating employees, generally making it more effective in the short-term.

Performance related pay advantages and disadvantages

Advantages: can provide immediate motivation. Goal focused to achieve reward. Makes employees feel more recognised and increases morale in the long term. Rewards best performers. Disadvantages: can generate a competition-based culture. Can cause resentment and jealousy if peers are paid differently. Short-term motivator. Can be expensive.

Career advancement definition

Where an employee is given an opportunity to have greater authority and responsibility within the business. Effective in the long term, as it often takes years for employees to progress to higher positions.

Career advancement advantages and disadvantages

Advantages: helps business retain talented employees. Employees are rewarded for past performance, increasing morale. Employees strive to improve performance because they are clear on what is required to achieve promotions, increasing productivity. Disadvantages: may cause resentment or demotivate those overlooked for promotion. May create rivalries. Employees may be promoted beyond their capacity level.

Investment in training definition

Employees are more likely to feel valued and trusted if they see their employer investing in their development. It contributes to a more skilled workforce, increasing productivity. It is a longer-term motivation strategy.

Investment in training advantages and disadvantages

Advantages: improves quality of business labour force. Satisfies higher needs in Maslow's hierarchy. Shows employees the business values them. Gives a sense of job security. Builds a learning culture. Disadvantages: training is often expensive. May require employees to take time off from work. Does not guarantee that employees will remain in the business.

Training definition

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

Positives of training

Employees approach their work more confidently and enthusiastically when they feel competent in their role. Employees are more likely to make mistakes if they are not properly trained. Training boosts employee productivity, allowing the business to increase markup and therefore profits, aiding the achievement of business objectives and increasing market share.

Support definition

Individual assistance designed to help employees cope with problems that may negatively impact their lives and work performance. It allows employees to feel supported, stimulated and recognised for work performance. It is a long-term motivator.

Support advantages and disadvantages

Advantages: improves the mental well-being of employees. Builds loyalty. Develops a positive attitude towards management and stronger relationships with the business, improving motivation and retention rates. Long-term motivator. Builds a strong culture. Disadvantages: can be time-consuming. Relies on managers knowing how to exercise good communication skills. Needs a positive corporate culture to work effectively.

Sanctions definition

Penalties imposed on employees for poor performance or disobeying policies. Examples are benefits, demotion and written warnings. Short-term motivator.

Sanctions advantages and disadvantages

Advantages: employees may respond immediately to sanctions out of fear. May bring other employees in line with policy through fear of sanction. Carrying out sanctions in line with company policy gives employees clear expectations and promotes behaviours and performance. Disadvantages: normally a short-term motivator. Can cause resentment from employees and damage relationships with managers. Can cause disputes and union involvement.

On the job training definition

Training that occurs within the organisation for a specific task or procedure that is part of an employee's duties. Examples are coaching, mentoring, job rotation, job shadowing, workshops and modules.

Advantages and disadvantages of on the job training

Advantages: employees are more likely to embrace the training as they are on site with people and facilities they are familiar with. Inexpensive to conduct as training is held on site. Does not have a large impact on productivity as training usually occurs as part of day-to-day operations. Creates opportunities for senior employees to assume leadership roles, which can increase motivation. Disadvantages: there may not be knowledge within the business to provide adequate training. Could disrupt operations. Trainers will be required to forgo completing their normal duties. Job shadowing may lead to employees picking up bad habits.

Off the job training definition

Training that is away from the business environment, for example TAFE, university, lectures and online tutorials.

Off the job training advantages and disadvantages

Advantages: instructors from external organisations can provide new and valuable insight. Will often result in a formally recognised qualification. External organisations allow access to a wider range of skills and knowledge. Could provide networking opportunities for employees. Disadvantages: more expensive than on the job training. Will result in lost working time. Achieving a new skill or qualification may cause some workers to leave in favour of a better job. Sometimes not job specific.

Performance management definition

Assessment of an employee's present work performance. Can be used to achieve both business and employee objectives.

Performance management strategies

Performance appraisals, management by objectives, self evaluation, and employee observation.

Performance appraisals definition

Assessment of an employee's performance. It gives the opportunity for managers to provide feedback, set new goals, and determine promotional needs or training needs. Measures employee performance against set standards.

Management by objectives definition

When a manager and employee collaboratively set clear objectives for the employee that are in line with business objectives. The progress is reviewed periodically and feedback is given on their performance.

Self evaluation definition

Involves the employee assessing their own performance against a determined set of criteria. Relies on the integrity of the employee and, while it may be more motivating, it is vulnerable to manipulation and dishonesty.

Employee observation definition

A manager seeing how employees operate in all of their working environments. Employee observation is useful for evaluating leadership and interpersonal skills. Having an employee observed and recorded performing their role can be done without their knowledge or with their knowledge.