chapter 20

what is the HR department responsible for?

use of labour within organisation

what are HR objectives?

goals/targets that a business’s HR department seeks to achieve

what are the benefits of HR objectives? (there’s 6)

• managers & owners can judge business performance

• provides target for managers & employees - improves performance - especially if rewards offered

• motivates employees

• by comparing actual performance of workforce against objectives (variance analysis), managers can assess achievements & give guidance

• managers can identify aspects of business that are causing problems at early stage - can solve problem before sales decline

• employees providing better service have more value & may charge higher prices - use quality of their service as USP

what are the 7 types of HR objectives?

• training

• employee engagement & involvement

• the size and location of & workforce

• labour productivity

• talent development

• diversity

• alignment of values

what is labour productivity?

output per employee

it relates to the quality of products employees should produce, on average, over a specific period

what is the benefit of setting labour productivity objectives?

they help a business control costs (if high labour productivity)

what is the benefit of high labour productivity?

reduced unit costs for business

how does high labour productivity affect production costs?

if employees produce more units (over specific period of time), the average cost per unit decreases

how can labour productivity enhance a business’s competitiveness?

by controlling costs, the business can offer competitive prices

e.g. through price skimming (high price then low), price penetration (low price then high) or dynamic pricing

what business changes can lead to workforce adjustments?

growth, moving overseas & replacing employees with technology

why is having the right number of employees in a workforce vital for a business?

to meet customer needs and provide the best quality products - can be USP

why is it difficult for some businesses to maintain the right workforce size?

because of seasonal demand fluctuations

how has technology affected HR objectives relating to workforce location?

it has enabled more businesses to allow teleworking

what is teleworking?

an arrangement that allows employees to work during any part of regular, paid hours at an approved alternative worksite

what makes teleworking feasible for businesses?

electronic communication, which allows employees to communicate effectively w stakeholders

what is employee engagement?

it describes the connection between a business’s employees & its mission, goals & objectives

what are the 3 types of employee engagement?

intellectual engagement, affective engagement & social engagement

what is intellectual engagement?

thinking hard about your job & how to it better

what is affective engagement?

feeling positively about doing a good job

what is social engagement?

taking opportunities to discuss work-related improvements w others at work

what is the relationship between employee engagement & business performance?

there’s a positive relationship betw employee engagement & business performance

what is employee involvement (employee voice)?

when employees can influence decisions & actions that affect their working lives

what is the main goal of employee involvement?

to let employees contribute to decision making & business performance

how can employee involvement be achieved?

• 2-way communication

• systems that allow employees to express their views

how has technology helped employee involvement?

it’s made communication easier - e.g. through email

what are other ways of involving employees in decision making?

appointing employee directors, using employee forums & involving employee representatives

what happens in an employee forum?

managers brief employees on imp matters & invite feedback

what is training?

process where employee gains job-related skills & knowledge - way of improving employee performance

what are the benefits of training?

• improves employee performance/increases labour productivity —> higher quality products

• helps attract talented & motivated employees

• in service sector, employee performance (high quality service) can be USP

what does talent development focus on?

fulfilling potential of employees to change business’s performance

what does talent development (developing the talents of employees) lead to?

high employee retention —> allows business to continue to succeed

what are the benefits of talent development?

• helps succed in v competitive global markets

• helps cope w shortage of certain skilled employees

• helps w growing needs of highly specialist employees

• improves employee performance

• provides able employees for promotion from within business

what is diversity?

recognising differences betw individual employees & differences that may exist betw diff groups of employees

if a business has an objective of increasing diversity, what does it aim to do?

treat people as individuals and value the benefits diverse individuals & groups offer

what characteristics can employee diversity be based on?

age, gender, disability, class, religion, ethnicity and race

how does increased diversity improve business performance?

business can employ the most talented people by drawing from wide range of individuals

what are the benefits of setting diversity objectives?

• drawing on all people offers best opportunity to employ most talented —> improves business performance

• promoting people (regardless of personal characteristics) secures highest level of talent for business

• diff ways of thinking & working

• diverse workforce - business can understand needs of market (which may consist of diverse customers) —> customer needs met more closely

• good employer brand —> business w reputation for diversity is attractive to potential employees

what is employer branding?

how business promotes itself to attract & retain employees —> helps attract highly skilled

why is alignment of values imp?

an employee’s core values influence their behaviour & decisions

why are the business’s core values imp during decision making?

they provide refence point for managers responding to changing ext environment

what are the benfits of alignment of values?

• helps business establish & maintain competitive advantage

• helps business fulfil its vision

• stakeholders see values reflected in decisions —> business reinforces their identity w stakeholders —> customer loyalty

• business attract suitable staff (w similar values), as potential employees likely to research employers (as part of application process

how can a business align the values of employees w those of the business?

through training & communication - expensive

what are the internal influences on HR objectives & decisions?

• corporate/overall objectives

• attitudes & beliefs of senior managers

• HR approach (hard or soft)

• type of product

how do overall/corporate objectives influence HR objectives?

HR objectives must help business to achieve their overall/corporate objectives

how does the attitudes of senior managers influence HR objectives?

if they think workforce valuable, they’ll want long-term ralationship & develop skills to fullest

or if workforce has little significance, they’ll only hire when necessary & pay min wage

what does it mean if a business has a ‘hard’ HR approach?

• they treat employees same as any other resource avaliable to business

• autocratic leadership

give 3 examples for how a ‘hard’ HR approach may be used?

• paying employees min wage

• employees have little control over working lives

• 1-way communication. (downward - from managers to subordinates)

what does it mean if a business has a ‘soft’ HR approach?

• treat employees as most valuable asset to organisation

• they should be developed to maximise their value to organisation

• democratic leadership

give some examples of how a ‘soft’ HR approach may be used

• managers consult w employees

• 2-way communication

• managers give employees control over their working lives - through delayering & empowerment

• training & talent development

• employees promoted, showing business’s long-term desire to develop workforce

how does the tyoe of product influence HR objectives?

• if skilled labour force required —> training & talent deveopment most imp

• if capital intensive —> little need for skilled labour —> minimises costs —> few employees required

• if disninct logo —> alignment of values most imp - consequences of their ‘values’ more apparent

what are the external influences on HR objectives & decisions?

• political environment

• economic environment

• social environment

• technological environment

• competitive environment

how does the political environment influence HR objectives?

govt passes laws to protect employees in workplace —> encourages business to develop talent of employees/set HR objectives to develop potential of workforce —> new laws makes it harder to fire/hire

discrimination act, equality act 2010

how does the economic environment influence HR objectives?

when economy good - sales & wages rise —> HR managers revise no of employees their business requires n future

how does the social environment influence HR objectives?

• ethically minded customers are increasing

• many businesses are responding to demand for ethical & environmentally friendly products - can be USP

how does the technological environment influence HR objectives?

• technology developments have replaced labour

• capital intensive businesses replace labour w technology —> strengthens competitiveness —> reduces costs/offers customers better service

• technology allows more people to work form home - teleworking

• training & talent development imp - to ensure employees have necessary skills to meet customer needs in increasingly technological market

how does the competitive environment influence HR objectives?

• if demand is price elastic, HR objectives will focus of reducing labour costs

• if demand is price inelastic, HR objectives may focus of training - improve customer service skills - USP - improve competitiveness