Business Management Unit 3 AOS 2 SAC Revision

Human resource management

The organization of employees’ roles, pay and working conditions.

Relationship between HRM and business objectives

Effective human resource management can ensure employees are satisfied and motivated by their roles, pay and working conditions, therefore encouraging them to contribute to achieving business objectives.

Example of the relationship between HRM and business objectives.

To make a profit: when employees have increased job satisfaction, the number of employees leaving the business is likely to decrease, meaning that the costs associated with recruiting and training replacement staff are likely to be reduced.

To improve efficiency: employees are more motivated and determined to complete work tasks, doing so in a more focused and error free manner, therefore allowing businesses to produce goods and services at a faster pace with fewer errors and discarded materials.

Maslow’s Hierarchy of Needs (definition & 1 feature)

Maslow’s hierarchy of needs is a motivational theory that suggests that people have five fundamental needs, and their sequential attainment of each need acts as a source of motivation.

Maslow’s theory suggests that lower-order needs (i.e, physiological and safety and security needs) must be fulfilled before a person is motivated to satisfy the higher order needs of the pyramid (social, esteem, self actualization needs).

Physiological needs (definition and 1 feature)

The basic requirements for human survival, such as water, food and shelter.

Applied to a business setting, employees fulfil their physiological needs by being paid a living wage to use on purchasing essential items such as meals and housing.

Safety and security needs (definition and 1 feature)

The desires for protection from dangerous or threatening environments.

When applied to a business setting, safety needs involve avoiding physical harm in the workplace through a business abiding by OH&S laws, and security needs involve having a stable income and job security.

Social needs (definition and 1 feature)

The desires for a sense of belonging and friendship among groups, both inside and outside the workplace.

A manager can satisfy these needs by encouraging team-based work, celebrating employee birthdays, and organizing collaborative events to commemorate important milestones.

Esteem needs (definition and 1 feature)

An individual’s desires to feel important, valuable and respected.

In the workplace, employees may seek to satisfy these needs by achieving promotions, prestigious job titles or financial bonuses in recognition of their performance.

Self-actualization needs (definition and 1 feature)

The desires for an employee to reach their full potential through creativity and personal growth.

A manager can facilitate this in the workplace through providing employees with challenging work, opportunities for skill and knowledge development and offering employees with work that enables them to use their creativity.

Why meeting one of Maslow’s needs may not be motivating staff

Once one need is met, it is no longer a motivator for employees and they will strive to achieve the next need of the hierarchy.

Employees of ____ receive a high salary, which satisfies lower order needs such as physiological needs and safety and security needs as they are able to buy essential items and have financial security.

Therefore, as lower order needs are satisfied, the high salaries will no longer be a motivator, and will instead by motivated by the sequential attainment of unmet higher order needs such as social needs, esteem needs and self actualization needs. ______ (relate to whatever case study).

Advantages of Maslow’s hierarchy of needs

• Can help managers determine which level of the hierarchy is motivating an employee. This therefore allows a manager to introduce targeted strategies that directly address specific employee needs.

• Employees who progress through the entire hierarchy and are able to sequentially obtain each need are likely to be at their best performance.

• Can keep employees motivated for a long time, as the sequential obtainment of each need takes time.

Disadvantages of Maslow’s hierarchy of needs

• It is difficult to measure success, as the levels of satisfaction gained at each stage can vary among people. For example, for some employees, it may only take monthly catch-ups to fulfil their social needs, while others may need to collaborate with different people every day to be satisfied.

• It may be time-consuming for a manager to determine the level of each individual employee, and implement appropriate strategies for each.

• Satisfying physiological and esteem needs may result in a direct increase in business expenses, as businesses need to offer opportunities for promotions and pay suitable wages.

Four Drive Theory (definition and features)

A motivational theory that suggests that people strive to balance four fundamental desires.

A manager may use each of the four drives simultaneously to motivate employees and create an environment in which they are able to achieve tasks to the best of their ability.

Drive to acquire (definition and 1 feature)

The desire to achieve rewards and high status.

Manager can increase employee motivation and fulfil this drive by rewarding employees with financial rewards (e.g., increased wages, performance based bonuses) and non-financial rewards (promotions, prestigious job titles, increased responsibilities) who make meaningful contributions towards business objectives.

Drive to bond (definition and 1 feature)

The desire to participate in social interactions and feel a sense of belonging.

A manager can fulfil this drive by promoting both work-related and personal interactions, through encouraging group work and collaboration, team building activities, celebrations and social events.

Drive to learn (definition and 1 feature)

The desire to gain knowledge, skills and experience.

Employees who are motivated by this drive seek to improve their capabilities at work through, training, mentoring and taking responsibility of new and more challenging tasks.

Drive to defend (definition and 1 feature)

The desire to protect personal security as well as the values of the business.

Reflects connection to the business and their willingness to protect it from competitors and negative publicity.

Advantages of Lawrence and Nohria’s four drive theory

• All four drives can be obtained simultaneously and are not restricted to sequential orders, therefore increasing motivation more efficiently.

• The model provides a simple approach for motivating employees and is easy for managers to implement.

• Acts as a means of engaging employees in their work as managers understand what they want and are motivated by.

Disadvantages of Lawrence and Nohria’s four drive theory

• Managers may find it difficult to balance all four drives simultaneously along with individual employee needs, meaning it can get confusing and disorganized.

• Training programs sponsoring the education of employees to fulfil the drive to learn or giving financial rewards for the drive to acquire can increase business expenses.

• Employees may not value all drives equally and therefore a balance between drive cannot be achieved.

Locke and Latham’s goal setting theory (definition and one feature)

States that employees are motivated by clearly goals that fulfil five key principles and appropriate feedback.

The theory suggests that goals should have clarity, commitment from employees, be challenging and complex, and that employers should provide feedback regarding employee progress.

Clarity (L&L)

Goals should be specific and easy to measure.

Employees should be able to clearly understand what is expected of them.

Commitment (L&L)

Employees should be involved in setting their goals.

Goals should incorporate the personal interests of employees along with the interests of the business.

Challenge (L&L)

The goal should be difficult enough to encourage employees to have to improve themselves in order to achieve it.

Task complexity

The goal should not overwhelm employees and should be achievable.

Employees should receive adequate training and time to achieve their goals.

Feedback (L&L)

Managers should constantly monitor the progress of employees to keep them on track, clarify misunderstandings, and encourage them to achieve their goals.

They should provide regular support to employees and adjust goals if needed.

Goal setting process

1. Manager and employee discuss the employee’s personal goals, and manager aligns employee goals with business objectives.

2. Manager and employee set a clear, achievable, challenging and complex goal together.

3. Manager regularly checks employee progress and provides support.

4. Manager celebrates and rewards the employee for reaching a goal.

5. Manager and employee set a new, more difficult goal together.

Advantages of Locke and Latham’s goal setting theory

• The process of managers and employees working together to set goals can improve levels of trust and the relationship between employees and management.

• An employee can clearly understand management’s expectations through straightforward goals and regular feedback.

• Employees may be more motivated to complete tasks if work goals align with their personal interests.

Disadvantages of Locke and Latham’s goal setting theory

• Failure to meet a goal may result in an employee losing confidence and feeling less motivated to contribute to achieving business objectives.

• The process of setting goals and providing feedback to each and every individual employee can be time consuming for management.

• It may be difficult for a manager to always align an employee’s personal goals with business objectives.

Similarities between Maslow’s hierarchy of needs and Lawrence and Nohria’s four drive theory

• Both theories focus on motivating employees holistically through addressing their physical, emotional and social desires.

• Both theories suggest that employees are motivated by the desire to feel a sense of belonging within the workplace through social needs and the drive to bond.

• Both theories suggest that employees are motivated by a desire to improve their knowledge and skills through self actualization needs and the drive to learn.

Differences between Maslow’s hierarchy of needs and Lawrence and Nohria’s four drive theory

• Maslow’s hierarchy of needs must be met in a sequential order, whereas Lawrence and Nohira’s four drive theory suggests that any drive can be relevant to an employee in no particular order.

• The hierarchy of needs states that employees are motivated to fulfil only one need at a time, whereas the four drive theory states that all needs can drive employee behaviour simultaneously.

Similarities between Maslow’s hierarchy of needs and Locke and Latham’s goal setting theory

• Both theories recognize that personal gain is a factor that can motivate employees. Esteem needs can be satisfied by providing jobs with higher status to employees, whilst goals fulfilling the commitment principle consider the personal objectives of employees.

• Both recognize the importance of feedback from management. Esteem needs can be satisfied by recognizing employees’ efforts, and goals that fulfil the feedback principle require management to acknowledge employee efforts in reaching their goal.

Differences between Maslow’s hierarchy of needs and Locke and Latham’s goal setting theory

• Maslow’s hierarchy of needs focuses on fulfiling each need in a sequential order, whereas the goal setting theory requires all principles to be incorporated simultaneously to motivate an employee.

• Maslow’s hierarchy of needs can be applied by a manager alone by observing employee needs, whereas the goal setting theory requires employee input to create goals collaboratively.

• The goal setting theory believes that an individual can be motivated purely by intrinsic factors, whereas Maslow’s hierarchy of needs focuses on both intrinsic and extrinsic motivators, such as physiological needs.

Similarities between Lawrence and Nohria’s four drive theory and Locke and Latham’s goal setting theory

• Both theories recognize that employees are motivated to achieve success. This can be through the drive to acquire a higher position or achieve the goal of being promoted.

• Both suggest that multiple factors motivate an employee at any given time. All four drives may be active simultaneously, and business goals should incorporate multiple principles simultaneously.

Differences between Lawrence and Nohria’s four drive theory and Locke and Latham’s goal setting theory

• The goal setting theory involves employee input, whereas the four drive theory is applied by a manager alone.

• The goal setting theory requires a manager to address each employee individually, whereas this is not necessary when applying the four drive theory.

• The goal setting theory suggests that an individual can be motivated through purely intrinsic factors, whereas the four drive theory also addresses extrinsic motivators through the drive to acquire.