IB Business Management Topic 2.1: HR Planning

Human Resource Management (HRM)

Involves the management function of using and developing people within a business to meet its organizational objectives.

Interrelated Roles / HRM Timeline

1 - Workforce planning (HR planning)
2 - Recruitment, selection & introduction of new employees
3 - Training & development of staff
4 - Performance mgt & appraisals
5 - Pay & remuneration packages

Ongoing
Disciplinary procedures
Welfare management of employees

Renumeration Packages

Total compensation allowance offered to employees for their services, alongside regular salary. Includes monetary & non-monetary incentives (eg. flexible work, company car, etc).

HR Planning (Workforce Planning)

Involves the management function of __**using and developing**__ people within a business to __**meet its organizational objectives.**__

Short-term Workforce Planning

Deals with existing and upcoming demands of an organization (e.g. arranging covering staff for resignations, retirements, maternity leaves, etc)

Long-term Workforce Planning

Looks at the HR needs of the business in the foreseeable future

How can workforce planning be achieved?

1. Historical data and trends

* e.g. change workforce size, popularity of part-time roles, etc.

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2. Sales & income levels

* Increase in business sales → more hiring needs

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3. Labor turnover rates

* The percentage of employees leaving the firm per year → higher turnover = more needs to recruit

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4. Flexibility & workload of staff

* A higher flexibility & skills = easier coping when in shortage. If overspecialized & higher workload = more hiring needs needs

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5. Demographic changes

* Gov. data changes e.g. number of female workers/graduates can help forecast HR needs.

Labor Turnover

Measures the percentage of the workforce that leaves the organization in a given time period, over one year.

Labor Turnover Formula

(No. employees leaving during period ÷ Average no. employed during period) × 100

Reasons why employees resign

CLAMPS
Challenge
Location
Advancement
Money
Pride/ Prestige
Security

Factors of Internal HR Planning

Concerned with 1) labour supply in a society, and 2) labour mobility.

Contributing factors towards labor supply

Net birth rate (no. births - no. deaths)
Net migration rate (immigrants (entering) - emigrants (leaving))
Retirement age: legal age when people can stop working and claim pensions
Women entering the workforce
Aging population

Opportunities/threats of an aging population

Threats
* Increased dependent population → smaller pool of labor, government expenditure contributing to those retired
* Reduced labor mobility

Opportunities
*Changes in consumption patterns → opportunities created (e.g. retired people go on more holidays)
* Changes in employment patterns → retaining experience by hiring as "consultants"

Labor Mobility

The extent to which labour can move to different locations and their flexibility in changing to different jobs (occupational mobility).

Contributing factors towards labor mobility

Ties of friends & family
Relocation costs & moving expenses
Fear of the unknown
High costs of living in particular areas

Factors of External HR Planning

Concerned with new communications technologies.

Advances in communications technologies (project management platforms, e-commerce and video conferencing), can bring more opportunities for people to work from home.

ICT in human resource planning can be used to support current practices and/or to improve workforce planning processes.

Aspects impacted by new communications tech.

Recruitment - Linkedln to advertise jobs; online application forms to speed up communication and reduce costs; the use of video-conferencing for job interviews.
Meetings - businesses with branches or facilities in different locations, including overseas, can reduce the costs of meetings by using video-conferencing technologies.
Appraisals - collaborative tools such as Google Suite can be used by the line manager and appraisees to set targets and review progress.
Flexitime and teleworking - WFH culture allows costs cutting for both the business and the employees, boosting labour productivity.
Online training courses - cheaper than off-the-job training with a specialist trainer. Also allows for convenience of location.

External vs. Internal Factors

External
* What's happening in the economy?
* What affects the pool of labour available?

Internal
* What's happening within the business?

Steps to recruit an employee

1. Conduct a job analysis
2. Produce a job description and person specification
3. Advertise the vacancy
4. Check applications and shortlist suitable candidates
5. Interview candidates
6. Conduct testing (if applicable)
7. Check references for shortlisted candidates
8. Job offer made to the BEST candidate
9. Issue and sign the contract of employment
10. Conduct induction for new recruits

Conduct a job analysis

The recruitment process that involves scrutinising the different components of a job to determine what it entails.

(Main roles and responsibilities? Skills and qualifications needed? What should be offered to attract the correct people?)

Produce a job description and person specification

What type of personalities? What values are required for the job? What kind of mindset should the candidate have?

Advertise the vacancy

Internal recruitment:
* The practice of hiring people who already work for the firm to fill a position

External recruitment:
* Hiring staff from outside the organization to fill vacant posts.

The importance of training

* Enhance efficiency and effectiveness of staff
* Improve quality of work
* Facilitate career and personal development of employees
* Develop multi-skilled and productive workforce
* Help staff adapt to change

On-the-job training

Training carried out whilst at the workplace - 'Learning by doing'

Introduction Training

Introducing new employees to the organization to help new recruits settle in quicker.

* E.g. meet key personnel, tour the office, learn about roles/policies

Mentoring

A more experienced member of staff (mentor) helps the worker (mentee) gain and develop specific skills and knowledge

Advantages and disadvantages of On-the-job

Advantages
* Relatively cheap using in-house specialists
* Relevant training targeted at issues directly related to the firm's needs
* Fewer disruptions to daily operations
* Help to establish working relationships from team working

Disadvantages
* Trainees may pick up bad working practices from the trainer
* Internal trainers may lack the most up-to-date training experience and skills
* Productivity is initially low as workers undergo the process of learning new skills
* Slows down the production of experienced workers

Off-the-job Training

* Training carried out off-site, such as at a tertiary college or training centre.
* Often requires specialist trainers for their expertise and equipment that are not available within the business.

Advantages and disadvantages of Off-the-job

Advantages
* Experts used for training

* Wider range of training can be provided
Technology-related
Health and safety
Customer relations

*No distractions/disruptions from colleagues and customers
*Networking can take place

Disadvantages
* Potential loss of output
* Expensive to hire specialists/equipment
* Skills and knowledge learned may not be entirely transferable

Cognitive training

Training and developing mental skills to improve work performance.

Cognitive training examples

Memory
Attention
Listening skills
Logic and reasoning
Visual and auditory processing
Self-control
Time management
Problem solving

Advantages and disadvantages of cognitive training

Advantages
* Cognitive skills enhances performance at work E.g. speed and accuracy

Disadvantages
* May not necessarily meet the specific needs of the business
* Difficult to measure the impact of the training and how long the effects last

Behavioral training

Identifying functional issues that could improve performance in the workplace by developing behavioral changes in the workforce.

Behavioral training examples

Team building
Ethical business practice
Emotional intelligence
Conflict resolution
Stress / anger management
Leadership skills
Business etiquette

Advantages and disadvantages of Behavioral training

Advantages
* Business objectives are addressed

Disadvantages
* May be hard to instill behavioral changes in certain individuals

Performance mgt and appraisal

The formal assessment of an employee's performance in fulfilling his/her job based on the tasks and responsibilities set out in their job description.

Allows for further growth and development and improvements

Types of appraisals

Formative
Summative
360 degree
Self appraisal

Formative appraisal

A planned and ongoing process in which appraisal evidence is used by employees to inform them about what to improve.

* Monitor the performance of employees' learning
* Help employees to identify their strengths and weaknesses and be addressed promptly

E.g. feedback on homework / daily catch-ups with Mr Thomas

Formative: occupations suitability

* Staff hired for a probation (trial) period
* Junior doctor
* Beginning teacher
* Graduate bank manager at the beginning, middle and end of their training

Summative

A written description of the employee's performance at work, summarizing personal performance and achievements during the year.

E.g. end of year reports / lesson observations

360 degree feedback

Collecting opinions from all relevant stakeholders!

Advantages and disadvantages of 360 degree feedback

Advantages
* Suitable for managerial positions

Disadvantages
* Group biases must be considered
* Some cultures do not allow subordinates to assess managers!

Self-appraisal

Employees appraise themselves based on predetermined criteria. Often used to compare to the appraisal carried out by line manager for further discussions

Reasons for leaving the job

* Resignation
* Retirement
* Dismissal
* Redundant

Dismissal

The termination of a worker's employment due to
incompetence or a breach of contract.

Types of dismissal

Incompetence
Misconduct
Gross misconduct
Legal requirements

Dismissal - Incompetence

A lack of ability, usefulness or effectiveness required to carry out the job

Dismissal - Misconduct

unacceptable behaviour such as being constantly late for work, harassing other employees, rudeness to customers

Dismissal - Gross Misconduct

Major misdemeanours (wrongdoings) e.g. theft, fraud

Dismissal - Legal requirements

Being dishonest about qualifications, abilities and experiences

Dismissal - Usual steps

1. Initial verbal warning
2. Official written warning for repeated misconduct
3. Any further repeated cases of misconduct results in worker being dismissed

Unfair dismissal

When an employee is dismissed without a valid, legal reason!!

E.g. wrong accusations, discrimination

Redundancies

When a business can no longer afford to employ the worker or when the job ceases to exist.

Aka. Retrenchment, Lay-off

Voluntary redundancies

When the employer asks for volunteers to leave. Offered a redundancy package (severance pay)

Compulsory / Involuntary redundancies

When the employer has to choose which workers to make
redundant.

HOW
* Last-in-first-out method
* Merit method → least productive workers

Alternatives to redundancy

Redeployment
* Transferring employees to another department or branch where vacancies exist

Reduce pay

Causes for changing employment patterns

1. Economic sector changes
* Industrialization → deindustrialization

2. Demographic changes
* Ageing population
* Women entering workforce

3. Characteristics and changing lifestyle of employees

Flexible work structures

1. Teleworking / Homeworking
2. Portfolio worker
3. Flexitime
4. Part-time employment
5. Migration of workers

Teleworking

Working AWAY from the office by using electronic forms
e.g. telephone, internet, e-mail

Call centers - to handle customer enquiries/complaints
Homeworking

Teleworking: Employees - Advantages and Disadvantages

Advantages
✓Job opportunities are created for those living in remote areas/those who have to care for families
✓Benefits of not having to commute e.g. travelling costs
✓Freedom of choice of how to work

Disadvantages
×Suffer from social isolation
×Face distractions at work
×Lack of training and career development

Teleworking: Business - Advantages and Disadvantages

Advantages
✓Flexible and extended working hours can be offered to customers
✓Reduce office overheads as less office space is needed

Disadvantages
×Managing, monitoring and controlling are more difficult
×Technological breakdowns can cause major disruptions
×Not suitable for all jobs - if confidentiality of work is high

Portfolio worker

A person who is employed in a number of different jobs, carried out simultaneously, usually on a part-time or temporary basis ("Freelance").

E.g. plumbers, electricians, landscape gardeners, designers

Flexitime

A system that requires employees to work for a core period, but the rest of the time is 'flexitime'

* Staff determine when they will work, subject to them getting their work completed by deadlines
* Shift work: different groups of people working at different time allocations

Part-time employment

* Work fewer hours than a full-time worker
* A larger pool of available workers to work part-time
E.g. students, mothers

Part-time employment - Advantages and Disadvantages

Advantages
✓Cheaper to recruit due to lower remuneration
✓More diverse skills and expertise in workforce
✓Workers may be more productive as less tired

Disadvantages
× Part-time workers may feel less valued to the workforce, lower sense of belonging → higher labour turnover

Migration of workers

People migrating OUTSIDE their home country for work purposes

Common examples in Hong Kong
* Domestic helpers
* Some of your teachers!!!

Why do people want to work abroad?

* Pay and remuneration - higher pay / lower tax rates
* Employment opportunities - attractive to low income countries
* Seasonal factors - farm workers may migrate during off-season
* Domestic instability - political instability, lack of business opportunities
* Higher standard of living - better career progression, educational opportunities for children

Outsourcing

"Subcontracting"

The practice of transferring internal business activities to an external firm.

When should outsourcing be used?

* Activities are not core to the functions of the business
* Lacks the specific skills or expertise
* Wishes to cut costs of production

Advantages and Disadvantages of outsourcing

Advantages
✓ Specialist workers are hired to high-quality standards
✓ Reduces labor costs
✓ Allows business to concentrate on its core activities

Disadvantages
× Quality of subcontractors needs to be monitored
× Could cause redundancies in the company → threaten job security

Offshoring

An extension of outsourcing that involves relocating business activities and processes abroad.

Reshoring

The transfer of business operations back to the country of origin.

Reasons for reshoring

* Increasing labor costs in countries like China
* Transportation costs increasing
* Increased demand for customization
* Product recalls and mass media coverage of unethical outsourced business practices
* Governments support and encourage reshoring