Unit 2: Human Resource Management

Human Resource Management

Human Resource Management

the business function that involves recruitment, training, compensation and motivation of employees to meet business objectives.

Workforce planning (Key Role of HR)

Forecasting how many and what type of employees are needed now and in the future.

• 1st Activity: gathering and analyzing data about the needs of the organization.

• 2nd Activity: developing responses to the HR needs that have been identified.

  A strategy can only be successful if a business has the right people to execute it.

Recruitment and Retention (Key Role of HR)

The process of seeking, finding and hiring people for a position in an organization.

Training and Development (Key Role of HR)

Teaching employees new skills or improving the skills they already have.

• Trained workers are more productive, motivated and take the business more resilient.

Appraisal (Key Role of HR)

An assessment of an employee's performance; can take many forms.

• Types of appraisal: formative, summative, 360-degree feedback, self-appraisal

• Role: improve employee’s performance, provide feedback, identify training needs, improve motivation

Dismissal and redundancies (Key Role of HR)

• Dismissal: When a business fires an employee from their job, usually because of poor work performance or misconduct.

• Redundancy: When the job someone is doing is no longer required, and the business eliminates the position.

Internal Factors that Influence HR Planning

• Structure and Size of organization

• Promotion (promotion to employees)

• Flextime (may change the working hours)

• Motivation (the greater, the easier HR)

• Budget (funding for salaries/benefits)

External Factors that Influence HR Planning

• Sociocultural changes (lifestyle, beliefs, values, religions, education)

• Technological changes (increased use of robots)

• Legal and Political changes

• Economic changes (recession, unemployment, labour mobility, temporary work)

Strategies for reducing resistance to change

• Participation of employees on decision making

• Planning (changes need to be planned)

• Communication between employees and management

• Negotiation (restricting resistance to change)

• Manipulation from management to employees

• Coercion (last resource, force them to accept by change by threating them of dismissal)

Delegation (types of organizational structures)

Assigning responsibility for a task to someone further down the chain of command.

• The passing of control and authority to others in the firm

Span of Control (types of organizational structures)

The number of people who report to a manager.

• a narrow span of control means that each manager has fewer people to supervise

Levels of Hierarchy (types of organizational structures)

The number of layers of authority in an organization.

• Tall (vertical) organizational structure: A type of business organization with many levels of hierarchy.

• A flat (horizontal) organizational structure: A type of business organization with few levels of hierarchy.

Chain of Command

The line of authority in an organisation, specifying who reports to whom.

Bureaucracy (types of organizational structures)

A system that involves multiple layers of authority and approval processes, often resulting in slow decision-making.

Delayering (types of organizational structures)

reducing the number of levels in the organizational hierarchy.

• Pros: reduce costs, improves communication, encourage delegation

• Cons: overloads of staff, longer decision making.

Centralization Structures

A situation where the decision-making an organization is held by one person, or a small group of people.

• Pros: Rapid decision making, better control, better sense of direction, efficiency

• Cons: Adds pressure, inflexibility, demotivating

Decentralization Structures

A situation where the decision-making powers are passed down to the lower levels in the organization.

• Pros: Input of workforce, teamwork, motivation

• Cons: costly, inefficiencies, loss of control

Matrix Structures

a structure in which team members report to multiple managers.

• Pros: allows greater autonomy, stimulates cooperation between departments, maximize skills

• Cons: added workloads, difficult to coordinate, time consuming

Organizational structure by product

where the organization is divided into different departments with different product.

• Can encourage competition, functions may be duplicated, no central of control

Organizational structure by function

the organization is divided into smaller groups based on specialized functional areas (marketing, production, finance, IT…)

• Works well on stable environments, unadaptability to changes

See entire glossary

Organizational structure by region

An organizational structure used by organizations with operations in different geographical locations.

Project-based (matrix) structure (HL)

organize their HR around particular projects or development plans (construction business, software engineering)

• Pros: flexibility, productivity, efficiency, motivation

• Cons: discontinuity, isolation, efficiencies

Shamrock structure (HL)

firms need to be able to adapt quickly to the dynamic changes that occur from the external environment.

Holacracy (HL)

A type of flat organisational structure where teams work autonomously to accomplish tasks and company goals

• Three key elements: Roles, circle structure, organic development, self-organizations, flexible leadership.

Management

The work of directing a business resources to achieve business objectives.

• Responsibilities: planning, coordinating, commanding, controlling, resolving.

Need to be able to distinguish the roles of managers and leaders.

Leadership

The use of strategic and creative thinking that inspires people to accomplish goals.

• Responsibilities: require to keep a company operating.

Need to be able to distinguish the roles of managers and leaders.

Autocratic leadership

the leader retains control of all decision-making and does not delegate.

• Suitable for: unskilled employees, crisis situations

• Cons: not feedback from employees, poor working relationships

Paternalistic leadership

the head of an organisation treats employees as though they are part of the family.

• Pros: Nurturing, develops workers, length of service, loyalty of workers

• Cons: controlling, hovering

See entire glossary

Laissez-faire leadership

the leader ‘lets go’ of decision-making and allows members of the group or team to make decisions.

• Suitable for: environments requiring creativity

• Cons: time consuming, delayed execution, relies on teamwork, encourages slack

Democratic leadership

a leader actively seeks employee participation in decision-making.

• Suitable for: situations where the leader is not always present

• Cons: decision-making is delayed, not suitable for crisis, costly, hard to maintain

Situational leadership

the leader adopts a suitable style for the place, time, people and the nature of the task or project.

• Suitable for: a large organization with diverse needs

Motivation

The reasons why a human being does something.

Taylor’s scientific management theory

he suggested that productivity would increase if jobs were optimized and simplified. He also proposed matching a worker to a particular job that suited the person's skill level and then training the worker to do that job in a specific way.

Maslow’s hierarchy of needs theory

A motivation theory stating that human beings have basic needs, psychological needs and self-fulfillment needs; basic needs have to be satisfied before psychological needs and self-fulfillment needs.

• Ignores non-financial factors, can lead to repetitive and monotous tasks, detrimental to produce

Herzberg’s two-factor theory

A motivation theory that claims that there are entirely different reasons for job dissatisfaction and for motivation; reducing factors that cause dissatisfaction will not result in motivation.

• Hygiene Factors: factors cause job dissatisfaction amongst employees

• Motivators: factors that influence a person to do something.

McClelland’s acquired needs theory (HL)

A theory claiming that human beings have three dominant needs that drive motivation: achievement, power and affiliation. Each person weighs up these factors differently.

Deci and Ryan’s self-determination theory (HL)

A motivation theory claiming that there are three factors that drive intrinsic motivation: autonomy, competence and relatedness.

• Autonomy: The ability of a person to make decisions for themselves and act independently.

• Competence: A feeling of capability to do things in the world.

• Relatedness: A feeling of connection with other people; a sense of belonging to a group.

Adam’s Equity Theory (HL)

claims that employee’s satisfaction in the workplace is determined by understanding fairness.

• Inputs: Time, effort, ability

• Outputs: Renumeration, recognition

Expectancy Theory (HL)

claims that humans are motivated to perform if they think that their performance will be recognized and appropriately rewarded.

Labor turnover

The percentage of workers leaving the business in a period of time.

• Causes: dissatisfaction with compensation, poor physical environment, toxic work culture, family circumstances, physical health, retirement

Financial Rewards

Rewards for employees that involve monetary compensation.

• Salary, wage (by time or by product made), commission, performance related pay (additional pay), profit-related pay, fringe payments ( company car, school allowance, memeberships)

Non-financial Rewards

Methods of recognising employee efforts and improving motivation through improved job design.

• Job enrichment, job rotation, job enlargement, empowerment, purpose, teamwork

Training

Teaching employees new skills or improving the skills they already have.

• On-the-job training: induction, mentoring, coaching, job rotation

• Of-the-job training: lectures, simulations, vestibule training

Organizational Culture (HL)

The beliefs, values, assumptions and practices of an organisation; differs from business to business, but will often reflect some cultural norms of the host country.

Handy’s Gods of Management theory (HL)

A theory of organisational culture claiming that there are four dominant cultures in business: power culture, role culture, task culture, and person culture.

Hofstede’s cultural dimensions (HL)

tool to help analyze cultural differences between national groups.

• Power distance

• Uncertainty avoidance.

• Individualism versus collectivism

• Masculinity versus femininity

• Long-term versus short-term orientation

• Indulgence versus restraint

Approaches to conflict by employees HL

• Negotiation or collective barganing

• Work-to-rule (bare minimun)

• Go slow (work at reduced speeds to damage productivity)

• Overtime ban (workers refuse to engage in overtime work)

• Strike action (a work stoppage)

Approaches to conflict by employers HL

• Threat of redundancies

• Changes of contract

• Lockout (denial of employment initiated by the management)

• Closure of the workplace