Business Management Unit 3 AOS 2 (Human Resource Management)

Human resource management

the effective management of the formal relationships between the employers and the employees

Human resource manager

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

What is the HR managers responsibility for employees

to ensure they remain motivated and working towards achieving business objectives

Productivity

A measure of performance that indicates how many inputs it takes to produce an output

What does the successful management of employees lead to

More motivated, more productive and more likely they are to carry out strategies and achieve business objectives

Human resource strategies to increase market share

- Introduce motivational strategies that will improve employee motivation

Human resource strategies to increase sales

- Introduce performance related pay so employees are motivated to develop sales skills

What are human resources

The employees of the business that contribute to business objectives

Motivation

The individual, internal process that directs, energises and sustains a persons behaviour

Motivational Theories

- Maslow's Hierarchy of needs
- Goal Setting Theory (Locke and Latham)
- Four Drive Theory (Lawrence and Nohria)

What does high motivation result in

Increased productivity and better meeting business objectives

What does Maslow's hierarchy of needs state

Human needs are arranged in a 5-level hierarchy, where people begin at the lowest level of needs. Once each level of needs is fulfilled, these factors will no longer motivate staff, rather newer needs will emerge.

Tiers of Maslow's hierarchy and how they relate to a business (Need to get them in order)

-Physiological (Satisfactory remuneration)
- Safety (Safe working conditions, Job Security)
- Social (Teamwork, friends, support)
- Esteem (Responsibilities, Recognition, Promotions)
- Self-actualisation (Creativity, opportunities to learn

Strengths of Maslow's hierarchy of needs

- Allows HR to develop an understanding of individuals needs
- Fairly easy to understand and implement by HR

Weaknesses of Maslow's hierarchy of needs

- It is just a theory with no evidence supporting it
- May be difficult to identify what tier employees are at, with strategies may not being effective as the need has already been satisfied

What does Locke and Latham's Goal setting theory states

People are more motivated and perform better when they are aspiring toward and are able to achieve a goal. A goal needs to adhere to the five principles.

5 principles of Locke and Latham's Goal setting

- Clarity (Simple, clear and specific goals that are measurable)
- Challenge (Not too challenging, not too easy)
- Commitment (More input employees have the more motivated they are)
- Complexity (Straightforward and allow employee skills to develop)
- Feedback (Offering recognition for progress and outlines expectations)

Strengths of Locke and Latham's Goal Setting Theory

- Will motivate employees, improve performance and better meet business objective
- There are many studies that support this theory
- Easy to implement into all goals

Weaknesses of Locke and Latham's Goal Setting Theory

- Employees may focus only on there goal and ignore all other responsibilities
- Failing to meet a goal is demotivating for an employee
- Time consuming to apply to every business goal

The Four Drives Theory

There are four main drives that shape the way all humans think and behave. The drive to acquire, bond and learn are active drives, while the drive to defend is only active in face of threat.

What are the Four Drives

- Drive to Acquire (The desire for non-material things)
- Drive to Bond (Evoking a sense of belonging in the business)
- Drive to Learn (The need to understand the world around us, be challenged and faced with interesting and varied experiences)
- Drive to Defend (Motivation comes from removing fears and insecurities from the workplace)

Strengths of the Four Drive Theory

- The drives work independently, allowing management and employees to be flexible in behaviours or strategies implemented
- Four drives are easily adaptable to complicated environments
- Achieving the drives will improve productivity and meeting business objectives

Weaknesses of the Four Drive Theory

- Other drives exist and the theory does not outline all aspects that motivate people
- Some workplace applications involve competition between employees, which can have detrimental effects on productivity

Similarities between Maslow's and Locke and Latham's Theories

- Achieving a goal in Locke and Latham's Theory is similar to meeting esteem and self actualisation needs in Maslow's
- Both theories focus on achieving one thing at a time, one goal at a time/one need at a time

Differences between Maslow's and Locke and Latham's Theories

- Maslow's theory is ongoing, whereas locke and lathams is only for a short term goal
- Maslow focuses on the internal needs of the employees, whereas Locke and Latham focus on goals that are external to the employees

Similarities between The Four Drives Theory and Locke and Latham's Theories

- The manager needs to understand the needs of the employees, to set effective goals/satisfy the four drives
- Cooperation between employee and manager is important, with the manager providing feedback to the employee for their goals/understanding how each drive effects employees

Differences between The Four Drives Theory and Locke and Latham's Theories

- In Locke and Latham's an employee only attempts to achieve one goal at a time but employees are expected to desire all four drives at the same time
- Locke and Latham's focuses more on business objectives, whereas the Four Drives focus more on individual employee motivation

Similarities between Maslow's and the Four Drive's Theory

- Both theories outline human needs and behaviours, with the drives of the Four Drives similar to some of the needs in Maslow's hierarchy (Physiological need/Drive to acquire, Social need/Drive to bond)

Differences between Maslow's and the Four Drive's Theory

- Maslow's needs are hierarchies where one needs to be completed before the next, the Four Drives can all be satisfied at any time
- As Maslow is a hierarchy there is more importance placed on the higher needs, whereas the Four Drives are all given equal importance

Are rewards in Maslow's Hierarchy intrinsic or extrinsic

- Physiological and safety needs are extrinsic
- Social needs are a mix of both
- Esteem and Self-Actualisation are intrinsic

Are rewards in Locke and Latham's Goal Setting Theory intrinsic or extrinsic

- Employees may receive extrinsic rewards for completing a goal (Pay rise, Promotion)
- Employees may receive intrinsic rewards if the 5 principles are applied (Every principle increases satisfaction when goal is completed)

Are rewards in The Four Drive Theory intrinsic or extrinsic

- Drive to acquire is satisfied through extrinsic rewards
- Other Drives are satisfied through intrinsic rewards

Motivational Strategies

Methods of motivation that go beyond money but instead meet the individual needs and ambitions of the employees

5 Types of Motivational Strategies

- Performance Related Pay
- Career Advancement
- Investment in Training
- Support Strategies
- Sanction Strategies

Performance related pay

The monetary compensation provided to employees relative to how their performance is assessed according to set standards

Performance related pay examples

- Pay rises
- Bonuses
- Gainsharing (Giving money to employees for suggesting improvements to productivity)

Performance related pay Impact on motivation (Short and Long Term)

Short Term

- Initial impact but wears off reasonably quickly

Long Term

- Only a long term impact if the payments are ongoing

What Motivational theories does Performance related pay relate to

Maslow: Esteem and Physiological needs

The Four Drives: Drive to acquire

Performance related pay Advantages

- Will only apply when employees actual performance is improved
- There is an immediate boost to motivation

Performance related pay Disadvantages

- Motivation lessens as time goes on
- Other employees may expect similar rewards and thus lower morale

Career Advancement

The assignment of more responsibilities/authority to employees or the promotion of employees to higher positions

Career Advancement impact on motivation (Short and Long Term)

Short Term

- Immediate boost to self esteem

Long Term

- Improves loyalty, Self-actualisation

What Motivational Theories do Career Advancement Relate to

Maslow's: Security needs, Esteem needs, Self-Actualisation

Four Drives: Drive to acquire, Drive to comprehend

Career Advancement Advantages

- Retains valuable employees
- Promoted employees feel like they can contribute more, improving productivity

Career Advancement Disadvantages

- Promotion positions must have a purpose
- Promotion can cause resentment among other employees

Investment in Training

The direction of finance or resources such as time, into the teaching of skills to employees

Investment in Trainings impact on motivation (Short and Long Term)

Short Term

- Increases commitment and loyalty

- Creates a feeling that the business cares about development

Long Term

- Improved skills can heighten esteem

- Trained staff can meet more business objectives

What Motivational Theories do Investment in Training relate to

Maslow: Esteem need, Self Actualisation need

Goal Setting: Challaning, Clear

Four Drives: Drive to acquire, Drive to comprehend

Investment in Training Advantages

- Improved loyalty from greater job security
- Improve the productivity of employees due to them being more skilled

Investment in Training Disadvantages

- Training may be wasted unless there are sufficient jobs
- Employee may eventually leave wasting the cost of their training

Support Strategies

The assistance or services provided by the business to help employees cope with difficulties that may impede work performance

Types of Support Strategies

- Mentoring
- Counciling

Support Strategies impact on motivation (Short and Long Term)

Short Term

- Help Resolves employee issues

- Can resolve problems employees face

Long Term

- Improve employee loyalty and build positive relationships

What Motivational Theories relate to support strategies

Maslow's: Social needs, Security needs

Four Drives: The Drive to bond

Support Strategies Advantages

- Provided with little to no cost
- Support can develop positive relationships between employees and management

Support Strategies Disadvantages

- May be difficult to support all employees
- Employees may be dependent on support services

Sanction Strategies

A form of penalty or discipline imposed on an employer for poor performance of harmful behaviour

Types of Sanctions

- Loss of benefits
- Written or Verbal warning
- Demotion

Sanctions impact on motivation (Short and Long Term)

Short Term

- Reflection and assessment of performance

- Adjust behaviour and attitudes

Long Term

- Unless there is a constant threat there is no long term impact

What Motivational Theories relate to Sanctions

Maslow's: Security needs

Four Drives: Drive to Defend

Sanctions Advantages

- Can motivate employees to improve performance
- May quickly stop inappropriate or harmful behaviour

Sanction Disadvantages

- Can reduce a sense of belonging and can lower motivation
- Only motivates in the short term

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 employees

- Opportunity for promotion and self-improvement
- Improved job satisfaction through better job performance

Benefits of training for business

- Higher productivity through better job performance and more efficient use of human resources
- Goals and objectives more effectively met

Why do businesses need ongoing training

Technological changes

On-the-job Training

Training that occurs in the working environment and uses the equipment, machinery and documents that are present in the workplace. It is provided by someone who works at the trainees job.

Types of On-the-job Training

- Mentoring/Coaching
- Job Rotations
- Apprenticeships

Advantages of On-the-job Training

- Cost effective as there are no travel expenses
- Employees work while trained so are more productive
- Employees are in a familiar environment an are comfortable

Disadvantages of On-the-job Training

- Quality of the trainer may vary
- Bad habits of older staff are passed on
- Trainer may have to leave own duties to carry out training

Off-the-job Training

Training that occurs in a location away from the workplace, involving sending employees to a specialised training institution and provided by someone not in the business.

Types of Off-the-job training

- Conferences/Workplace
- Online training
- Simulations/RP's

Advantages of Off-the-job training

- Wider range of skills and qualifications
- More structured and organised
- Outside experts and specialist providing border experiences

Disadvantages of Off-the-job training

-May be too focused on theory with little prac
- More expensive due to fees and travel costs
- Lost working time while employees are away

Similarities between On-the-job and Off-the-job

- Both improve employees skills
- Both can motivate employees
- Both use someone more specialised

Diffrences between On-the-job and Off-the-job

- ON is real life, OFF are simulations

- ON specialists from inside the job, OFF specialists from outside the job

- ON involves actual work, OFF theory based

- ON mainly for current role, OFF could be futuristic

Succession Planning

Ensuring that managers in the business are able to step into senior management positions if vacancy occurs

Performance Management

A focus on improving both business and individual performance through relating business performance objective to individual employee performance objectives

Types of Performance Management Strategies

- Management by Objectives
- Appraisals
- Employee Self-evaluation
- Employee Observations

What does Performance Management Help to Inform

The motivational strategies, to determine what needs to occur to boost and employees motivation

Management by Objectives

A process by which management and employees agree on a set of goals for each employee, with these goals all contributing to the objective of the business as a whole

Advantages of Management by Objectives

- The more involved employees are with making goals, the more productive they will be
- Can improve communication and result in employees being more aware of business objectives
- There is clarity around performance and improvement

Disadvantages of Management by Objectives

- Time consuming and costly
- Failing to meet objectives can demotivate some employees
- Expectations of pay rises of rewards if objectives are met

Appraisal

the formal assessment of how efficiently and effectively an employee is performing their role in a business

Purpose of appraisal

- Identify training and development needs
- Identify new possible employee objectives
- Determine if employees should receive promotions or pay rises

Methods of appraisal

- Essay method (Manager keeps a journal of notes of all performance for each employee)
- Critical incident method (Manager keeps a journal of only good or bad aspects of performance)
- Comparison method (Employees ranked according to set criteria)

Advantages of Appraisal

- Facilitates communication and allows positive relationships between employees and managers
- Feedback can help employees improve
- Info from appraisal asist manager when making decisions about pay increase, dismissals or promotions

Disadvantages of Appraisal

- Can become time consuming
- Causes stress for both parties
- Staff who meet performance standards may expect pay rises or promotions

Employee self-evaluation

A process whereby employees carry out self-assessment based on a set of agreed criteria

Advantages of Employee self-evaluation

- Allows employees to be involved with performance management
- Allows business to gain an insight in how their employees perceive their own skills
- Can highlight the need for training

Disadvantages Employee self-evaluation

- Some employees may not wish to self-evaluate
- Employees may overstate their own performance of be dishonest

Employee Observation

-A strategy where a variety of opinions on the performance of employees is sought with the aim of arriving at a more comprehensive picture of past and current performance.

- Called the 360-degree method

Advantages of Employee Observation

- Allows a manager to gain a broad range of perspectives providing a comprehensive idea of overall performance
- Employees may imitate strengths of co-workers they observe

Disadvantages of Employee Observation

- Staff may feel stressed being observed
- Employees can be sabotage due to personal issues
- Staff that receive positive feedback may expect a pay rise or promotion

Types of Termination and weather it is voluntary or involuntary

- Retirement (Voluntary)
- Resignation (Voluntary
- Redundancy (Voluntary or Involuntary)
- Dismissal (Involuntary)

Retirement

Occurs when an employee decides to give up full-time or part-time work and no longer be a part of the labour force

Resignation

The voluntary ending of employment by the employee quitting their job due to; career advancement, dissatisfaction with their current job or wanting a lifestyle change

Redundancy

Occurs when a person's job no longer exist due to tech changes, a business restructure or a merger/acquisition

Difference between voluntary and Involuntary Redundancy

When an employee nominates themselves for a redundancy it is voluntary, however when an employee is asked to leave byt he business against their will it is involuntary

Dismissal

Occurs when the behaviour of an employee is unacceptable and a business terminate their employment