AOS2 - Human Resource Management

performance related pay

A financial reward granted to employees for reaching or exceeding a set business goal.

What are the advantages of Performance Related Pay?

• Very personalised and goal-focused

• Improve productivity levels - improve level of engagement and commitment

• The manager is only required to implement when signs of performance improvement become evident

What are disadvantages of Performance Related Pay?

• If the value doesn't increase employees will become dissatisfied

• May cause unhealthy levels of competition between employees

• Not all employees will be motivated through receiving a financial reward

Effects of Performance Related Pay in the Short Term

Positive Effect:
Pay increases, bonuses and commissions provide immediate and tangible reward for effort and/or commitment

Negative Effect:
Employees may be demotivated if they are competing against colleagues

Effects of Performance Related Pay in the Long Term

Positive Effect:
If pay increases, bonuses and commissions are an ongoing strategy, employees will be regularly rewarded. Share plans, profit sharing and gainsharing take a number of years for the reward to be achieved

Negative Effect:
Continuous competition with colleagues can lead to demotivation. If the rewards do not continuously increase, employees may become demotivated

What is Career Advancement?

Is the upwards progression of an employees job position which involves the employee taking on greater responsibilities or increased opportunities for leadership.

What are the Advantages of Career Advancements?

• Promoted employees feel valued and as though they contribute significantly to the business -productivity, engagement and commitment

• Provides a means for retaining valuable employees

• Satisfies the employees who desire the need to achieve more or take on extra responsibilities

What are the Disadvantages of Career Advancement?

• Positions cannot just be created they have to have some sort of purpose in the business

• Employees may have to compete for a limited number of positions

• Promotion of an employee can cause resentment between employees

Effects of Career Advancement in the Short Term

Positive Effects:

Drives employees to do their job well each day and may be rapidly motivated if they are taking on more responsibility

Negative Effects:
Employees may be resentful and demotivated if they believe they were not considered for a promotion

Effects of Career Advancement in the Long Term

Positive Effects:

motivated by ongoing opportunities to be promoted or take on additional responsibilities

Negative Effects:
A limited number of responsibilities an employee can add to their role - therefore fewer career advancement opportunities for that employee.

What is Investment in Training?

Is the allocation of resources to improve employee skills and knowledge.

What are the Advantages of Investment in Training?

• Shows employees the business values their contributions

• Benefits the business through improving employees skills and knowledge

• Employees feel more confident and perform more productively assisting in the achievement of business objectives

What are the Disadvantages of Investment in Training?

• Unless employees need training it could be a waste of money and time

• A business may be unable to afford the costs of training

• A business may pay the costs of training only to have the employee leaving for a position in a competing business

Effects of Investment in Training in the Short Term

Positive Effect:
Employees may be motivated through the immediate opportunity to upskill

Negative Effect:
Taking time off work to participate in training programs may cause employees to lose momentum and consequently lack motivation

Effects of Investment in Training in the Long Term

Positive Effect:
Employees may be constantly motivated as they feel valued when given opportunities to develop their skills by a working environment that promotes and encourages learning

Negative Effect:
Employees may become demotivated by the consistent workflow interruptions caused by training programs

What is Support Strategies?

Involves providing employees with any assistance or services that improve their satisfaction at work.

What are the Advantages of Support Strategies?

• Encouragement can be provided with little to no costs

• Support and encouragement can positively influence employee attitudes

• Services such as mentoring help employees develop meaningful and professional relationships

What are the Disadvantages of Support Strategies?

• Time consuming for mangers to meet with and support the employee and also to then see development

• Employees may become too dependent on support

• Requires a business to have a positive corporate culture

Effects of Support Strategies in the Short Term

Positive Effects:
Support and encouragement when the employee has done a good job/made a mistake due to inexperience employees may be motivated to work harder for a business where their wellbeing is considered and valued

Effects of Support Strategies in the Long Term

Positive Effects:
They begin feeling valued by management and are able to resolve issues efficiently

What is sanction strategies

Involves the penalising of employees for poor performance or breaching business policies.

What are the Advantages of Sanction Strategies?

• Motivate employees to improve their performance through fear

• Efficiently stops inappropriate behaviour from employees

What are the Disadvantages of Sanction Strategies?

• Excessive emphasis on sanctions can reduce employee sense of belonging

• Can lead to potential conflict between management and staff

• Does not motivate employees to make a long term commitment to the business

Effects of Sanction Strategies in the Short Term

Positive Effect:
Employees may be motivated to quickly follow instructions in order to avoid punishment

Negative Effect:
Employees may become resentful of their managers if they utilise threats and punishments leading to resignation and decreased productivity

Effects of Sanction Strategies in the Long Term

Negative Effect:
Over time, employees can become desensitised to the threat of sanctions which can contribute to a negative workplace environment, decreasing employee satisfaction and motivation

Define 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 the Employees:
- Opportunity for self improvement
- Improved job satisfaction through better job performance
- Gives employees a challenge

For the Business:
- Higher productivity levels
- Goals more effectively met
- Reduced costs due to less labour turnover and absenteeism

Define On-The-Job Training

Involves employees improving their knowledge and skills within the workplace.

Examples of On-The-Job Training

• Coached (taught)

• Mentoring (supported)

• Job Shadowing

• Hiring an external trainer

• Having employees rotate between different jobs

Advantages of On-The-Job Training

• Most cost effective

• Most employees are working while training to - productivity

• Employees are in a familiar environment

Disadvantages of On-The-Job Training

• The quality of the trainer may vary

• Bad habits of older staff may be passed to younger staff

• The employee (trainer) may leave their own role vacant in teaching the other employees

Define Off-The-Job Training

Involves employees improving their knowledge and skills in a location external to the business.

Advantages of Off-The-Job Training

• Wider range of skills and qualifications

• Outside experts can provide their broader experiences

• Typically more structured and organised

Disadvantages of Off-The-Job Training

• Cost (expensive)

• Decreased productivity due to employees absence

• Increased qqualification may tempt employees to leave the business and find a better job

Define HR Management

The effective management of the formal relationship between the employer and employees.
Ensures that the business has appropriate employees with appropriate skills to carry out various duties.
Ensures the business is able to get the best out of its employees.

What is the role of a HR Manager?

A human resource manager coordinates all the activities involved in acquiring, developing, maintaining and terminating employees from a business's human resources.

Define business objectives

Business objectives are the desired outcomes or specific results that a business intends to achieve over a set period of time.

Describe the link between HR Management and the achievement of business objectives

he relationship between human resource management and business objectives is very important as it is staff who achieve the business's objectives and human resource strategies that help ensure objectives are achieved.
These objectives may include increased profit and sales, growth in market share, a positive customer experience and improved productivity.

Examples of HR objectives

Increase worker productivity
Develop sales skills
Improve product knowledge
Reduce number of accidents

What role does the human resource manager play in relation to business objectives in a large-scale business?

The human resource manager participates in determining business objectives with senior managers and ensures HR strategies align with the overall business objectives and strategies.

Define motivation

The drive for a person to apply individual effort over a sustainable period of time.

Define Maslow's Hierarchy of Needs

A motivation theory that ranks human needs in five sequential levels — physiological, safety, social, esteem, and self-actualisation. According to Maslow, employees are motivated to satisfy lower-level needs (like wages and job security) before progressing to higher-level needs (like recognition or personal growth). Managers can use this to tailor strategies that support each employee's current need level.

What are the advantages of Maslow's Hierarchy of Needs

Allows management to develop an understanding of individual needs — all individual employees are different and they all have specific needs.
Allows management to be aware that employees will be at different stages of development and that they will need to be motivated using a variety of methods.
The theory is fairly easy to understand — most managers should be able to make use of the Hierarchy of Needs and employees should be able to relate to it.

What are the disadvantages of Maslow's Hierarchy of Needs

Maslow's Hierarchy of Needs is only a theory — it is not supported by empirical evidence and the stages in the hierarchy do not apply to all individuals.
A manager making use of the theory may struggle to identify the stage at which each individual employee is — this may make it difficult to determine an appropriate strategy to motivate each employee.
The Hierarchy of Needs is very simplistic and one motivation strategy should be able to satisfy several needs at the same time.

Define Locke and Latham's Goal-Setting Theory

A motivation theory based on the idea that clear, specific, and challenging goals — when combined with feedback — improve performance.

What are the 5 principles of the goal-setting theory?

What are the 5 principles of the goal-setting theory?

The five principles are:
Clarity - clear goals
Challenge - goals must be difficult but achievable
Commitment - employee must be dedicated
Feedback - regular updates and support
Task Complexity - enough time and resources must be provided

What are the advantages of the goal-setting theory?

Many studies support the theory — that challenging and specific goals, together with commitment and feedback will motivate employees.

Staff will perform at a higher standard due to their clear and specific goals, leading to a higher rate of productivity.

Better relationships between management and employees will occur as managers work with each employee to collaboratively set goals and provide feedback.

What are the disadvantages of the goal-setting theory?

Setting goals that are too vague can lead to poor performance — goals that are not challenging (or that are overwhelming) can become demotivating.

Individual employee goals may clash with each other or with business objectives, or may not support the attainment of business objectives.

Employees may focus so intently on their goals that they ignore other aspects of their job.

Failing to meet a goal could be detrimental to an employee's confidence.

Define the four-drive theory

A motivation theory stating that employees are driven by four key needs — the drives to acquire, bond, learn, and defend — which must be satisfied simultaneously to effectively motivate behavior in the workplace.