Business Studies HRM Chunk 4 and 5

There are THREE main leadership styles:

1. Democratic

2. Autocratic

3. Laissez-faire approach

Autocratic (directive) approach

This leadership style is characterised by rigid decision-making with little/no participation of staff, limited flexibility and high levels of authority and obedience up the chain of command

Behavioural approach

these see managers as leading, motivating and communicating. This leadership style encompasses encouraging employee participation in decision-making, establishing effective two-way systems of communication, including feedback, and allowing for greater flexibility and negotiation of goals and tasks

Laissez-faire approach

managers exercise little control over their group, leaving them to sort out their own roles and perform their work without managing or participating in this process. This is effective for highly motivated and skilled teams.

Job Design

is the process of designing the content of a job and how it will interact with other jobs and employees, so as to motivate and retain an employee and achieve the business's goals

Job analysis

is an ongoing process, which is a detailed analysis of all the tasks, responsibilities, personal attributes and reporting relationships needed in a position

Job rotation

employees move from one job to another on a rotating basis. This leads to staff being multi-skilled and creates greater flexibility. However, this may still be repetitive and boring

Job enrichment

given more challenging tasks, responsibility, autonomy and decision-making power. However, this may over extend the employee, leading to burn out

Job enlargement

employees given additional tasks to increase variety and challenge involved in their position. However, this may overload an employee, and problems may arise if employees are not properly trained.

Advantages of specialisation

improve knowledge and skills, to increase output, to reduce errors and labour costs, and to control quality

Disadvantages of specialisation

may, however, bore employees and health issues can arise from repetitive movements

Advantages of internal recruitment

cheap relative to external recruitment, motivates all staff as they see development opportunities, and helps build employee commitment and loyalty

Disadvantages of internal recruitment

leads to rivalry for positions, and often there are a myriad of internal applicants who may become demotivated if rejected for the position

Advantages of external recruitment

wider applicant pool, prospective employees have new ideas, perspectives and skills

Disadvantages of external recruitment

lost productivity during induction, new employee may not fit the workplace culture/be accepted by employees

General skills

basic workplace skills; often transferable from one job to another e.g. the ability to work independently and communication skills. Businesses must choose individuals with general skills that fit their workplace culture

Specific skills

skills acquired through specialist training. Usually businesses seek such individuals due to skill shortages to fill gaps in their business. Employee poaching is frequently used to obtain the correct individua

training

aims to develop skills, knowledge and attitudes that lead to superior work performance in the job an employee currently holds

Development

is focused on enhancing the skills of the employee to upgrade their skills in line with the changing and future needs of the business. Such individuals usually aspire to fill managerial positions in the future

Performance appraisal can be either DEVELOPMENTAL or ADMINISTRATIVE:

Administrative: data/information collected is used in planning human resource functions e.g. rewards, benefits

Rewards - monetary

financial incentives provided to an employee for completing a task. These are often extrinsic e.g. incentive payments

Rewards - non-monetary

those rewards that do not have a financial value, such as flexible working hours. These may be either intrinsic e.g. the sense of achievement an employee derives from completing a job, or extrinsic e.g. holidays

Individual:

rewards given to individuals rather than groups - monetary or non-monetary. Useful when teamwork is not involved

Groups

rewards given to groups of individuals when performing tasks together. E.g. gain-sharing plans, whereby the benefits of success are reflected in rewards for teams, such as shares, cash bonuses or annual bonuses

Performance pay

is a system where a portion of an employee's (or group of employees') pay is handed over or not awarded unless certain results are achieved

Polycentric:

staffing approach that uses host country staffing with parent country staff in corporate management at its headquarters

Geocentric:

staffing approach that uses staff with the most appropriate skillset for a particular role and location, and builds a pool of managers with global experience

Ethnocentric:

staffing approach that uses parent-country staff in its organisation.

Negotiation

a method of resolving disputes when discussions between the parties result in a compromise and a formal or informal agreement

Mediation

the confidential discussion of issues in a non-threatening environment, in the presence of a neutral, objective third party. The third party is often a tribunal or government agency. This is a cost-effective method of dispute resolution

Courts and tribunals

all parties involved in an industrial dispute may take COMMON LAW ACTION and sue another for damages. Parties may also refer cases to the Fair Work Commission.

Conciliation

a process where a third party is involved in helping two other parties reach an agreement

Grievance procedures

formal procedures, generally written into an award or agreement, that state agreed processes to resolve disputes in the workplace. E.g. supervisor → middle manager, and so on. These help reduce the risk of an issue rapidly becoming a serious dispute

Arbitration

the process where a third party hears both sides of a dispute and makes a legally binding decision to resolve the dispute.

INDICATORS are performance measures that are used to evaluate organisational or individual effectiveness

These can then be compared to best practice businesses or internal divisions to determine weaknesses and strengths in a process called BENCHMARKING

Where Indicators are found

Indicators are gathered during HUMAN RESOURCE AUDITS, which are diagnostic tools used to evaluate HR policies and practices in order to identify problems and develop solutions in an attempt to rectify problems

CORPORATE CULTURE

is a series of values, ideas and norms that are shared by the people involved in a business

Corporate culture may be evaluated as an indicator of effectiveness by the 'internal process approach,' which encompasses elements such as:

A positive work climate, Team spirit, group loyalty and teamwork, Confidence, trust and communication, Interaction between the business and its parts

Purpose of Benchmarking

The purpose of benchmarking key variables, e.g. human resources planning and separation/termination rates, is to compare a business's performance in specific areas against other similar businesses or divisions, or against 'best practice' business. The business then initiates changes which foster improvement

Benchmarking usually occurs after a human resources audit, which may be performed externally or internally. Benchmarking may be undertaken in ways including:

1. Informal benchmarking

2. Performance benchmarking

3. Best practice benchmarking

4. Balanced scorecard benchmarking

1. Quantitative

2. Qualitative

Two types of data used for benchmarking

Quantitative

these demonstrates the actual effect of indicators in economic terms i.e. in terms of costs and profits e.g. variances in labour budgets, which reveal poor planning of staffing needs, higher unscheduled absenteeism, and so on

Qualitative

involves detailed feedback and research on key issues, which allows judgements to be made about changes in behaviour or quality of service provided. E.g. feedback from supervisors, consultative committees, customers and employees in organisational surveys provides useful insight into worker satisfaction, empowerment and customer service

Key Indicators of effectiveness

Staff Turnover, Absenteeism, Job Dissatisfaction, Lost Time Injury Frequency Rates,

STAFF TURNOVER

refers to the separation of employees from an employer, both voluntary and involuntary, through dismissal or retrenchment. It is often shown as a percentage of total staff numbers

ABSENTEEISM

refers to employee absences, on an average day, without sick leave or leave approved in advance

Job dissatisfaction

Stress

Internal conflict

High levels of absenteeism are very costly to business. High levels of absenteeism and lateness may indicate:

Occupational health and safety indicators are benchmarked internationally using a number of indicators, such as:

Lost Time Injury Frequency Rates:

lost-time injuries are events that result in a fatality, permanent disability or time of one day/shift or more lost from work. The formula is: Number of lost-time injuries x 1,000,000/Total hours worked in accounting period