CIE As Level Business | 2.1 Human Resource Management - HRM

Human Resource Management (HRM)

The strategic approach to the effective management of employees so that they help the business gain a competitive advantage.

What are the roles of *human resource management*?

1. *Recruitment and selection*

—> Helps the business run efficiently with the right staff.

2. *Training programmes*

—> Helps improve the skills and contribution of workers.

3. *Motivational techniques*

—> Keeps workers happy and productive.

4. *Performance management*

—> Help employees improve and feel valued through feedback.

5. *Health and safety*

—> Helps reduce accidents and absenteeism.

6. *Employee relations*

—> HRM works with trade unions + staff to solve conflicts and maintain a positive work atmosphere.

7. *Legal compliance*

—> Makes sure the business follows the law on *employment contracts*, dismissal and discrimination.

Workforce planning

Forecasting the number of workers and the skills that will be required by the organization to achieve its objectives.

What are the benefits of workforce planning?

1. *Fill skill gaps*

—> Ensures people w/ required skills are hired or trained on time.

2. *Handle retirements or resignations*

—> By predicting when people might leave, HRM can recruit or promote others without causing disruption.

3. *Meet changes in demand*

—> If growth (i.e. launch in new country) = plans for more staff. If demand drops = reduce workforce.

4. *Control labour costs*

—> Reduces overstaffing (expensive) or understaffing (unproductive + produces bad quality)

5. *Support strategic goals*

—> Hiring more experienced employees / provide extra training to improve customer service quality.

6. *Adapt to technological changes*

—> New machines / systems may require

Workforce audit

A check on the skills and qualifications of all existing employees.

Labour turnover rate

Measures the rate at which employees are leaving the organisation.

Labour turnover *formula*

Labour Turnover = (Number of Staff Leaving / Average Number of Staff) x 100

*Advantages* of labour turnover

- New *skills*, *ideas* from external recruits —> more *innovation*.

- Can hire staff with better *qualifications* or *attitudes*.

- Opens up *internal promotion* opportunities for existing staff —> *higher motivation*.

- *Lower pay* as there are fewer long-term staff that may expect more.

- Can help reshape *company culture* or *restructure teams* more easily.

*Disadvantages* of labour turnover

- Increased *recruitment* and *selection* costs.

- Increased *induction* and *training costs* for new staff.

- *Lower productivity* while new employees settle in.

- Disruption to *strong relationships* —> worse teamwork.

- Loss of *experienced employees* and *valuable knowledge*.

- Worse *customer service* as staff can't build relationships.

Recruitment agency

A business that offers the service of recruiting applicants for vacant posts.

Selection

The series of steps by which candidates are interviewed, tested and screened to choose the most suitable person for a vacant post.

Recruitment

The process of identifying the need for a new employee, defining the job to be filled and the type of person needed to fill it, attracting suitable candidates for the job and selecting the best one.

Internal recruitment

The process of hiring employees from within the organisation.

What are the advantages of *internal recruitment*?

- Internal candidates are already *familiar with business culture and processes* —> can adapt more quickly and require little training.

- Business has a good *understanding of the candidate* (strengths, weaknesses, skills, and aptitudes).

- *Opportunities to progress* can be *motivating* for existing employees.

- *Cheaper* and *quicker to promote or redeploy existing staff rather than recruit externally.

What are the disadvantages of *internal recruitment*?

- Can lead to *conflict* or *resentment*.

- A *further vacancy is created* when an employee is promoted / redeployed.

- A *limited number of suitable applicants* may be available internally.

- Missed opportunity to inject *new ideas*, *experience* or *skills*.

External recruitment

The process of hiring employees from outside the organisation.

What are the advantages of *external recruitment*? (name 2)

1. *Brings new ideas and skills*

—> External candidates may have experienced from other businesses.

—> ✅: Improved *innovation, efficiency* and *competitiveness*.

2. *Wider pool of applicants*

—> The business can choose from many candidates.

—> ✅: Increased chances of recruiting the *best-qualified person*.

What are the disadvantages of *external recruitment*?

1. *Higher recruitment costs*

—> Advertising, recruitment agencies, and interviews are expensive.

—> ❌: Increases *short-term costs*.

2. *Time-consuming*

—> The process takes longer than internal recruitment.

—> ❌: May delay business operations.

3. *Risk of poor cultural fit*

—> New employees may not adapt to the firm's culture.

—> ❌: Can reduce *motivation* and *productivity*.

4. *Demotivates existing staff*

—> Employees may feel promotion opportunities are limited.

—> ❌: May increase *labour turnover*.

5. *Uncertain performance*

—> The business does not fully know how well the new employee will perform.

—> ❌: Increases *risk*.

Job description

A detailed list of the key points about the job to be filled - stating all its key tasks and responsibilities.

Person specification

A detailed list of the qualities, skills and qualifications that a successful applicant will need to have.

Application form

A set of questions answered by a job applicant to give a potential employer information about the applicant, such as educational background and work experience.

Curriculum vitae (CV)

A detailed document highlighting all of a person's professional and academic achievements, work experience and awards.

Resume

A brief written account of one's education, working experience, or qualifications for a job

Assessment centre

A place where a range of tests is used to judge job applicants on their potential ability to perform a particular role.

Employment contract

A legally binding document that sets out the terms and conditions governing a workers' job.

Redundancy

When a job is no longer required, the employee doing this job becomes unnecessary through no fault of their own.

Voluntary redundancy

Allowing employees to choose to become redundant in order to reduce employee numbers.

Involuntary redundancy

The employee has no choice in being made redundant.

Dismissal

Being dismissed or fired from a job due to incompetence or breach of discipline.

Unfair dismissal

Ending a workers' employment contract for a reason that the law regards as being unfair.

Industrial tribunal

This is the type of law court or legal meeting, that makes judgement on disagreements between companies and their employees, for example, workers' complaints of unfair dismissal or discrimination at work.

Employee morale

The overall attitude and satisfaction of employees within the workplace.

Employee welfare

Employee's health, safety and level of morale when at work.

Work-life balance

A situation in which employees are able to allocate the right amount of time and effort to work and to their personal life outside of work.

Diversity policy

Practices and processes aimed at creating a mixed workforce and placing a positive value on diversity in the workplace.

Equality policy

Practices and processes aimed at achieving a fair organization, where everyone is treated the same way and has the opportunity to fulfill their potential.

Employee appraisal

The process of assessing the effectiveness of an employee judged against pre-set objectives.

Training

Work-related education to increase workforce skills and efficiency

Advantages of training for the business

1. *Increased productivity*

—> Employees gain better skills and knowledge.

—> ✅: *This improves output per worker and efficiency.*

2. *Improved quality of work*

—> Fewer mistakes are made.

—> ✅: *This reduces waste and rework, improving customer satisfaction.*

3. *Lower labour turnover*

—> Training preparers staff for new technology expansion.

—> ✅: *This reduces recruitment and induction costs.*

Disadvantages of training for the business

1. *High costs*

—> Training involves course fees, trainers, equipment, and materials.

—> ❌: *Increases short-term costs and may reduce profits.*

2. *Loss of productivity during training*

—> Employees are taken away from their normal work.

—> ❌: *Reduces output in the short term.*

3. *Risk of trained employees leaving*

—> Employees may leave for better paying jobs once up-skilled.

—> ❌: *Lost in investment from training.*

3 types of training

- Induction

- On-the-job

- Off-the-job

Induction training

Introductory training programme to familiarise new recruits with the systems used in the business and the layout of the business site.

Advantages of induction training

- Helps new employees to understand their *job roles* and *responsibilities.*

- Introduces employees to the *company culture, policies, and procedures*.

- Improves employee *confidence* and *motivation*.

- Reduces the *time taken* for new employees to become *productive*.

Disadvantages of induction training

- Can be *time-consuming* and *expensive* to organise.

- May not cover *all aspects* of the job role.

On-the-job training

Instruction at the place of work on how a job should be carried out.

Advantages of on-the-job training

- *Training is tailored* to the employee's specific job roles and responsibilities.

- Training is often *more practical and relevant* to the employees job duties.

- *Can be cost-effective* as it takes place during working hours.

Disadvantages of on-the-job training

- Employees may make mistakes while learning, which can *impact productivity and quality*.

- Can be disruptive to the workplace, as it *requires the trainer to devote time* to training the employee.

- May not be effective in all cases, leading to *employee dissatisfaction* and higher *staff turnover* rates.

Off-the-job training

training undertaken away from the place of work

Advantages of off-the-job training

- Employees learn new skills and knowledge outside of the workplace, which can *bring fresh ideas and perspectives* to the workplace.

- *Training can be tailored* to the employee's specific needs and interests.

- Training can be *used as a reward* or incentive for high-performing employees.

- It can be *cost-effective* if training is provided online or through webinars.

Disadvantages of off-the-job training

- It can be expensive to organise, especially if *travel and accommodation* are required.

- Employees may *miss work* while attending training, which can impact *productivity*.

- The training *may not be directly applicable* to the employee's job role or the needs of the firm.

Intrapreneurship

When an individual is tasked with *creating / improving* innovative *products / processes* within an *already-established business*.

(i.e. Sony PlayStation, 3M)

What are the approaches that businesses may take to encourage intrapreneurship?

1. *Training in creativity and problem-solving*

—> Helps employees think in new ways, question current methods, and solve challenges independently.

2. *Encouraging idea sharing*

—> Creates space for employees to pitch ideas and be heard with rewards for good suggestions.

3. *Job rotation and project work*

—> Increases employee knowledge across departments — giving them a broader view + more confidence to suggest improvements.

4. *Leadership and personal development programmes*

—> Builds confidence and skills needed for independent thinking and decision-making.

5. *Creating a culture of trust and experimentation*

—> Encourages employees to try new things without failure, which helps ideas grow.

Multi-skilling

The training of an employee in several skills to allow for greater flexibility within the business.

Flexibility

The ability of an employee to adapt to different roles, work patterns, or changing business needs.

Benefits of multi-skilling & flexibility

1. *Reduces reliance on specific individuals*

—> Someone else can easily fill in an absent employee's role.

—> ✅: Avoids *delays* + reduces *pressure* on individuals.

2. *Helps the business respond quickly to changes in demand or workload*

—> Flexible and multi-skilled employees can be moved to busier departments or roles when needed.

—> ✅: The business can handle busy periods or sudden changes *without hiring more staff*.

3. *Increase employee satisfaction*

—> Different tasks makes work *engaging* + helps employees *feel more skilled*.

—> ✅: *Reduced boredom + increased motivation*.

What are the approaches businesses may take to encourage multi-skilling and flexibility?

1. *Job rotation*

—> Employees are moved between different roles to gain a range of skills and experience.

2. *Cross training*

—> Employees are trained in tasks outside their usual role, so they can step in when needed.

3. *Team-based working*

—> Employees work in flexible teams that can shift roles depending on the task or project.

4. *Flexible working arrangements*

—> Employees are supported to work flexible hours or locations or shift between teams.

5. *Personal development planning*

—> Employees set goals with managers to build skills beyond their current role.

Workplace relations

The interactions between managers and workers in a business.

What are the benefits of positive workplace relations?

1. *Low staff turnover*

—> Pos relationship = employees *less likely to leave* or *face dismissal*.

2. *Few days lost to industrial action*

—> Happy employees = *reduced disruptions* from industrial action.

3. *Employee cooperation*

—> Employees may *go the extra mile* for the business if they feel valued.

4. *High productivity*

—> Workers are *less likely to be absent* and more *focused on maximising output*.

5. *Good reputation as an employer*

—> Avoid negative publicity —> attract + retain *better staff*.

6. *Ease of implementing change*

—> Significant change is more likely to be *welcomed* than feared —> employees look to *play their part* in implementing change.

What are the strategies to improve *employee welfare*?

1. *EQUALITY & DIVERSITY*

—> Fair recruitment + pay + promotion helps build a *skilled + productive* workforce.

—> Diverse teams can also attract a *wider range of customers*.

2. *PROVISION OF FACILITIES*

—> Providing *rest areas*, *workshop spaces*, *refreshments*, and access to *guidance* supports employee wellbeing.

3. *WELLBEING POLICIES*

—> *Leave* policies + limiting *out-of-hours communication* help improve *work-life balance*.

4. *PERKS*

—> Extras (i.e. social events, staff discounts, or gym memberships) can boost morale and motivation.

What are the ways to improve *work-life balance*?

1. *TELEWORKING*

2. *FLEXIBLE WORKING*

3. *JOB SHARING*

4. *SABBATICALS*

What is *teleworking* + its general advantages & disadvantages?

*Work from home* for some/all of the working week.

—> Significant *cost savings* can be made as large premises are no longer required.

—> But businesses may need to provide equipment (i.e. computers) to ensure workers can work effectively from home.

What is *flexible working* + its general advantages & disadvantages?

Includes:

1. *Flexitime*: workers arrange their weekly working hours according to their own needs.

2. *Annualised hours*: workers determine hours over a whole year.

3. *Compressed hours*: workers complete the hours in a standard working week in fewer days.

—> Employees can fit their working hours commitments around family responsibilities or interests.

What is *job sharing* + its general advantages & disadvantages?

Where two people share the work and pay of a single full-time job.

—> Workers can work alongside *care responsibilities*.

—> Businesses can benefit from the *input of two individuals* whilst incurring the cost of one employee.

—> Careful *coordination* and *communication* between job-sharers are required to avoid duplication or omission of tasks.

What are *sabbaticals* + its general advantages & disadvantages?

The right to take an *extended period of leave*, often after a determined period of service.

—> *Keeps the employee's job open* until their arranged return to work.

—> *Generally unpaid* though sabbaticals are sometimes used to attract the best talent to hard-to-fill positions.

Trade union

An organisation of *workers* who come together to *achieve common goals* and protect their *collective interests*.

—> Union members pay a *membership fee* and *elect representatives* in the workplace.

Collective bargaining

Process by which a union representing a group of workers negotiates with management for a contract.

Trade union recognition

When an employer *formally agrees to conduct negotiations* on pay and working conditions with a trade union rather than bargaining individually with each worker.

Industrial action

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

What are the 5 types of industrial action

1. Strike

2. Work-to-rule

3. Go-slow

4. Overtime ban

5. Picketing

Strike

Employees refuse to work completely for a period of time.

Work-to-rule

Employees work strictly according to their contract and refuse to do any extra duties.

Go-slow

Employees deliberately reduce their work pace.

Overtime ban

Employees reduce to work overtime hours.

Picketing

Union members gather outside the workplace to discourage others from working during a strike.

*Advantages* of trade unions for *workers*

1. *Higher wages*

—> Trade unions negotiate collectively with employers.

—> ✅: Increased *bargaining power*, leading to higher pay.

2. *Improved working conditions*

—> Unions push for safer environments and reasonable hours.

—> ✅: Improves *employee welfare* and *job satisfaction*.

3. *Job security*

—> Unions protect members against unfair dismissal.

—> ✅: Increases *employment stability*.

*Drawbacks* of trade unions for *workers*

1. *Union membership fees*

—> Workers must pay regular contributions.

—> ❌: *Reduces disposable income*.

2. *Risk of strikes*

—> Industrial action may result in unpaid time off.

—> ❌: *Reduces short-term income*.

3. *Collective decisions may not suit everyone*

—> Agreements apply to all members.

—> ❌: Some may have to take actions that *do not benefit themselves*.

*Advantages* of trade unions for *businesses*

1. *Improved communication*

—> Management negotiates with one body instead of many individuals.

—> ✅: *Simplifies negotiations*.

2. *Higher employee motivation*

—> Fair wages and conditions can increase morale.

—> ✅: *Improves productivity*.

3. *Lower labour turnover*

—> Workers who feel protected are less likely to leave.

—> ✅: *Reduces recruitment and training costs*.

*Disadvantages* of trade unions for *businesses*

1. *Higher labour costs*

—> Unions negotiate for higher wages and benefits.

—> ❌: Increases *operating costs*.

2. *Risk of industrial action*

—> Strikes can halt production.

—> ❌: Leads to *lost output* and *revenue*.

3. *Potential conflict*

—> Disagreements between unions and management can damage relationships.

—> ❌: This may *reduce efficiency*.