Business Management Unit 3 AOS 2

Human Resource Management

is the organisation of employees roles, pay, and working conditions.

Motivation

Motivation is the willingness of an individual to expend energy and effort in completing a task

Maslow's Hierarchy of Needs

Maslow's Hierarchy of Needs is a motivational theory that suggests people have five fundamental needs, and their sequential attainment of each needs acts as a source of motivation

Maslow's Hierarchy of Needs (Higher to lower)

Self actualization needs, esteem needs, social needs, safety and security, physiological needs

Physiological needs

Physiological needs are the basic requirements for human survival, such as food, water and shelter

Safety and Security

Safety and Security needs are the desires for protection and dangerous or threatening environments.

Social Needs

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

Esteem Needs

Esteem Needs are an individual desires to feel important, valuable, and respected.

Self actualization

are the desires for an employee to reach their full potential through creativity and personal growth

Maslow's Hierarchy of Needs (Advantages)

- can help managers determine which level of the hierarchy is motivating employees,

-satisfying social needs may not increase expenses,

-motivation can occur quickly when employees progress through lower levels.

Maslow's Hierarchy of Needs (Disadvantages)

-Not all employees will be motivated by the same need at once,

- It may be time consuming for a manager ti determine each level of each employee

- satisfying physiological and esteem needs may result in a direct increase in expenses

Lawrence and Nohria's four drive theory

a motivational theory that suggests that people strive to balance for fundamental desires.

Lawrence and Nohria's four drive theory (explained)

Acquire - Individuals are motivated to acquire status, accomplishments and power

Bond - Employees want to feel like they belong

Defend - People are driven to defend their position, accomplishments, colleague, etc

Learn & Comprehend - pushes people to seek out information and learn new things or how they work

Drive to Bond

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

Drive to learn/ comprehend

the desire to gain knowledge, skills and experience

Drive to acquire

the desire to achieve rewards and high status

Drive to defend

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

Lawrence and Nohria's 4 Drive theory (Ads)

- All four drives can be attained simultaneously and are not restricted to sequential order

- Satisfying drives can improve employee performance and business productivity, therefore increasing biz profits

- Four drives acts as a means to motivate employees and allow them to feel more engaged in their work.

Lawrence and Nohria's 4 Drive theory (DisAds)

- Managers may find it difficult to manage four drives simultaneously

- Some drives can be overlooked and therefore, an employees full potential may not be achieved

- Training programs and sponsoring the education of employees to fulfill the drive to learn can increase expenses

Locke and Latham's Goal setting theory

the goal setting theory is a motivation theory that states that employees are motivated by clearly defined goals that fulfill five key principles.

5 Key principles of Locke and Latham's GS theory

Clarity: Goals should be clear

Challenging: should be difficult enough to encourage

Commitment: Employees should be involved in setting their goals and incorporate personal interest

Feedback: Managers should provide regular support (monitor progress)

Task complexity: The goal should be possible and not overwhelm the employees.

Locke and Latham GS theory (Ads)

- The goals that align employees goals with achieving business objectives are likely to improve business performance.

- The process of managers setting goals with employees can improve levels of trust and create a better relationship between employees and managers

- employees may be more motivated to complete tasks if work goals align with personal interest

Locke and Latham GS theory (Disads)

It may be difficult for a manager to always align an employees personal goal with biz objectives

- employees may become more stressed and demotivated if they have too many goals at once

- The process of setting goals and providing feedback to each employee can be time consuming

Maslows Vs Lawrence and Nohria (SIMS)

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

- Both theories suggest employees are motivated by desire to improve their knowledge and skills through self actualisation and drive to learn.

Maslows Vs Lawrence and Nohria (DIFFS)

- Maslows must be met in a sequential order, whereas four drive theory suggests any drive may be relevant to an employee in no particular order

- The hierarchy of needs (Maslow) states that employees are motivated to fulfill only one need at a time, whereas the four drive theory states that all needs can drive employee behaviour simultaneously

Lawrence and Nohria Vs Locke and Latham (SIMS)

- Both theories recognise that employees are motivated to achieve success. this can be through drive to acquire a higher position or achieve the goal being promoted to a position of more responsibility

- Both suggest that multiple factores motivate an employee at any given time. All four drives may be active simultaneously and business goals should improve multiple principles simultaneously.

Lawrence and Nohria Vs Locke and Latham (DIFFS)

- The Locke and Latham theory involves employee input, whereas Lawrence and Nohria is applied by the manager alone

- Locke and Latham's theory requires a manager to address each employee individually, which is not necessary when applying Lawrence and Nohria's

Maslow's and Locke and Latham (SIMS)

-Both recognize the importance of feedback from management self esteem needs can be satisfied by recognizing employees efforts and goals that fulfill the feedback principle require management to acknowledge the employee efforts to receiving their goal. ?

- Both theories place emphasis on motivating through intrinsic factors. the goal setting theory involves setting intrinsic goals, whilst Maslows such as esteem and self actualization are also intrinsic motivation

Maslow's and Locke and Latham (DIFFS)

- Maslow's focuses on fulfilling one need at a time in sequential order, where Locke and Latham requires all principles to be incorporated simultaneously

- Maslow's can be applied by a manager alone by observing the needs of an employee, whereas, Locke and Latham requires input to create goals collaboratively.

Motivation strategies

Performance Related Pay, Career Advancement, Investment in Training, Support and Sanction,

Performance Related Pay

is a financial reward that employees receive for reaching or exceeding a set of business goals. (remuneration of pay rise, bonus, commission sales)

Performance Related Pay (Ads)

can be used to motivate many employees at once, which can improve overall performance.

Employees can be motivated quickly through the incentive of financial rewards.

PRP can make an organisation more attractive to high performing candidates and help retain top talent who seek recognition for their efforts.

Performance Related Pay (disads)

Employees may take harmful shortcuts to reach their set objective, potentially compromising quality.

Can increase the expense of wages significantly, particularly if the value of rewards increases overtime.

May have a negative impact on the biz's corporate culture if there are unhealthy levels of competition.

Career advancement

is the upwards progression of an employees job position. this can be achieved through promoting employees or giving them more challenging tasks.

Career advancement (Ads)

Promoting employees from within the business helps retain high performing employees, protecting the intellectual property of the biz.

Employees may feel more valued by the biz when promoted, improving morale.

Promoting employees from within the biz can be cheaper then recruiting employees.

Career advancement (Disads)

Limited senior positions can prevent career advancement from being used.

May not motivate employees immediately as promotion takes time to earn.

Some employees may not desire increased responsibility, so motivation may not increase through a promotion

Investment in training

Is allocating resources to improve employee skills and knowledge. (it equips employees with expertise required to perform at a higher level and can motivate them by providing opportunities to develop their abilities through their work)

Investment in training (Ads)

Their skills and knowledge gained from training may assist employees to complete tasks quicker.

Employees may feel more valued as the biz wants to advance their skills.

Investment in training (Disads)

Some employees may not value improving their skills and knowledge

Time consuming and can delay the competition of work tasks

Can be costly for a business.

Support

Involves providing employees with any assistance that improves their satisfaction at work. (allows them to feel valued, understood, and considered by their manager. Praising good performance, accommodating personal obligations, counselling)

Support (ads)

Employees who feel more supported are less likely to leave the biz.

Employees may feel more valued by managers, as their wellbeing is being considered

Implementation involves very few additional expenses.

Support (Disads)

May be ineffective if a manager does not have good interpersonal skills.

Can be time consuming for a manager to maintain relationships with staff

Hiring wellbeing support for the biz may be costly.

Sanction

involves penalizing employees for poor performance or breach of biz policies. (employees are motivated by sanctions as they fear punishment to fulfil BIZ expectations. verbal/written warnings, reduce employment hrs, fire employees)

Sanction (ads)

Can pressure employees to act in accordance with management instructions.

Can motivate employees immediately as they will improve performance quickly to avoid punishment.

Does not incur any immediate cost to implement

Sanction (disads)

Can create a negative corporate culture as tasks are completed out of fear.

Levels of trust between employees and management may decrease.

Replacing employees may be time consuming and costly.

Short Term Motivation (Positive effect)

PRP: may be motivated to improve performance quickly in order to grain financial rewards.

Career Adv: may be rapidly motivated if they're are taking on more responsibility in the workplace.

Invest in training: May be motivated in the short term by opportunity to learn new skills

Support: May be motivated in the short term by the opportunity to feel valued

Sanctions: May be motivated to quickly follow order to avoid punishment.

Short Term Motivation (Negative effect)

PRP: can create a negative environment due to competition nature.

Career Adv: may become resentful and demotivated if they believe they were not considered for a promotion

Invest in training: Taking time off work to participate in training programs may cause employees to lose momentum and consequently lack motivation

Support: N/A

Sanctions: May become resentful to their managers if they utilize threats and punishments, potentially leading to resignations and decreasing productivity.

Long Term Motivation (Positive effect)

PRP: history of reward and recognition for high performing employees, employees are more likely to be motivated by expectations of reward in the future.

Career Adv: May be motivated by ongoing opportunities to be promoted or take an additional responsibility

Invest in train: may feel constantly motivated by working environment which constantly promotes learning

Support: may be motivated for a long period of time when they feel valued by mgmt and are able to resolve issues efficiently

Sanctions; N/A

Long Term Motivation (Negative effect)

PRP: may become demotivated if they have to continually have to compete with their peers to achieve financial rewards.

Career adv: there may be a limited number of responsibilities an employee can absorb into their role within a business therefore, fewer career advancement opportunities etc.

Invest in training: May become demotivated by the consistent workflow interruptions caused by training programs

Support: N/A

Sanctions: overtime, employees can become desensitized to the threat or punishment and no longer be motivated by sanctions

On-The-Job training

involves employees improving their knowledge and skills within the workplace. enables employees to interact and become familiar with the equipment, machinery, or processes related in the workplace to their role.

On-The-Job training (ads)

Employees can perform their role while training, minimizes losses to productivity

Employees can quickly become familiar with work equipment, reducing time taken to complete their training.

Training employees internally is often less expensive than performing training externally, as there is no travel costs

On-The-Job training (disads)

The business may lack the amount of experience required to train employees (bad habits)

Employees completing training may become distracted by the workplace

Experienced employees are taken away from completing other duties to train employees, negatively impacting the biz particularly during busy periods.

Off - the - job training

involves employees improving their knowledge and skills a location external to the business

Off - the - job training (ADS)

errors made by employees during training do not occur on the site, decreasing expenses associated with waste

receiving training from professionals can enable employees to gain new perspectives on how to perform their roles to a higher standard

it doesn't take experience employees away from their jobs to train other employees, enabling them to remain productive in their own tasks

Off-The-Job training (disads)

businesses workflow may be disrupted if employees are away for training, lowering productivity

Paying external organisations to train employees is expensive

accommodation and travel costs can make training expensive especially when a group of employees are being trained

Management by objectives

(MBO)

involves both managers and employees collaboratively setting individual employee goals that contribute to the achievement of broader business objectives

MBO Ads

Aligning employee objectives with businesses overall objectives means that employees are always working toward biz goals - leading to improvement in performance

collaboration between managers and employees when setting objectives can foster positive workplace relationships

employee may gain a sense of achievement if they reach their goal, improving motivation

MBO disads

employee may take harmful shortcuts in their work in order to achieve their objectives, which can negatively impact progress towards overall biz objectives

failure to achieve personal objectives may be demoralizing

employees may become demotivated if they don't receive compensation or recognition after achieving objectives

Performance appraisals

involves a manager assessing the performance of an employee against a range of criteria, providing feedback, and establishing plans for future improvements.

Performance appraisals (Ads)

communication between managers and employees during one-on-one reviews can improve relationships

the results from the performance appraisal process can outline areas where employees are struggling, and training can be implemented to resolve them

increased communication between employees and managers can promote employees with clear direction on how to improve

Performance appraisals (disads)

employees may lose motivation if they receive multiple poor performance appraisals

this process can be time consuming as managers individually review each employees performance

training causes provided to address employees weaknesses can increase biz expenses

Self evaluation

involves an employee assessing their indivual performance against a set of criteria

Self evaluation (ads)

employer can gain insight into an employees understandning of their own strenghts and weaknesses and assign work accordingly

employees may be empowered to improve performance, as they are directly involved in their own performance management

self eval can save managers time, as employees evaluate their own performance

Self evaluation (disads)

if an employee is biased or dishonest in assessing their performance, a manager will not gain reliable info

those who struggle with their work may not recognise their weaknesses

criteria for self-eval process needs to be developed and this can be time consuming for managers

Employee observation

involves a range of employees from different levels of authority assessing another employee's performance against a set of criteria.

Employee observation (ads)

where an employee is unaware they are being observed, this allows for an accurate analysis of an employees performance

employees that are observing others may identify the strengths of other employees and then mimic their behavior

employees may be responsive to feedback provided by peers as they value their opinion

Employee observation (disads)

results may be misleading if employees are aware they are being evaluated, as they may only work harder in the presence of an observer

making other staff assess an employees performance can disrupt their normal workflow and biz productivity

the development of criteria for observers to use can be time consuming

Termination

the process whereby a business ends its employment contract with an employee

retirement

involves an individual deciding to leave the workplace/work force permanently as they no longer wish to work

Redundancy

involves an employee no longer working for a business because their is insufficient work or their job no longer exists

resignation

involves an employee voluntarily terminating their own employment, usually to take another job position elsewhere

Dismissal

involves involuntary termination of an employee who fails to meet required work standards or displays unacceptable or unlawful behavior

Entitlement considerations

are legal obligations an employer owes to its employees following the termination of their employment contract

Transition considerations

are social and ethical practices that a manager can consider implementing when terminating employment

Human resource managers

individuals who coordiante the relationships between employees and management within a biz (they recruit, train, hire, terminate employees. negotiate with employees and unions, mediate disputres. ensure minimum legal requirements for pay and conditions are met)

employees

individuals who are hired by a business to complete work tasks and support the achievement of its objectives

employer associations (side of the biz)

advisory bodies that assist employers in understanding and upholding their legal business obligations

Unions

organisations composed of individuals who represented and speak on behalf of employees in a particular industry to protect and improve their wages and working conditions

Fair work commission (tribunal)

Australia's independent workplace relations tribunal that has a range of responsibilities outlined by the fair work act

Awards

are legal documents that outline the minimum wages and conditions of work for employees across the ENTIRE INDUSTRY

Award ads

Transparency between employees is maintained - as they all receive the same wages and conditions

saves time - employees wages and conditions are determined by the FWC

cost effective, allowing a biz to minimize labor costs whilst remainin compliant with the law

Award disads

limited flexibility for different biz models

employees may be unsatisfied by only receiving the minimum wages and conditions

businesses lack the opportunity to develop a relationship with their employees

Enterprise agreements (aka agreements)

are legal documents that outline the wages and conditions of employees and are applicable to a particular businesses or group of businesses

Agreements (ads)

positive relationships between employees and employers may develop in the negotiation process

businesses have greater flexibility when setting wages and conditions

businesses may attract highly skilled and talented employees if it is paying wages that are above the industry average

Agreement (disads)

more costly than awards

inequality in wages and conditions may increase across industries

it can be a time - consuming process for employees and employers to negotiate

Awards and agreements

(SIMS)

Both awards and agreements must comply with the national employment standards (NES)

contractual disputes for both are handled by the fair work commission (FWC)

Awards and agreements

(DIFFS)

Awards:

-for a specific INDUSTRY

- developed by the fair work commission (FWC)

Agreement:

- for a specific BUSINESS

- reviewed and approved by the fair work commission (FWC)

- leaves employees better off than the relevant award

Dispute regulation process

a series of steps that disputing parties follow in order to resolve a disagreement and reach a resolution

Mediation

involves an impartial third party facilitating discussions between disputing parties to help each side of the conflict reach a resolution themselves.

Mediation (ADS)

when parties reach decisions together, it promotes positive relationships for the future

both disputing parties have control over the final decisions, meaning they are more likely to be satisfied at the end of the resolution process

it is less expensive than a formal dispute resolution processes as it usually occurs in an informal setting

Mediation (DISADS)

Time - consuming

there may be an unbalanced power dynamic between employees and managers, meaning employees could be coerced into accepting a resolution that they don't agree with

it may not be effective for resolving all businesses disputes as a final decision may not always be reached

Arbitration

involves an independent third party hearing arguments from both disputing parties and making a legally binding decision to resolve the conflict.

Arbitration (ADS)

it guarantees that a final decision is made by a third party, enabling a business to move forward from the dispute

the final decision is legally binding, which prevents the occurrence of the same dispute between the two parties

employees are not coerced into agreeing to a resolution as the likelihood of a power imbalance between disputing parties is reduced

Arbitration (DISADS)

this process may harm future workplace relations is one of the disputing parties involved is unhappy with final decision

the process of hearing both sides of the dispute is an external, court - like setting is time consuming for both parties.

most expensive desipute resolution process due to the costs incurred from conducting hearings. (Court)

Mediation and Arbitration

(SIMS)

both methods require an independent body or individual to be involved in resolving the dispute

both methods are more formal than resolving disputes within a workplace without a third party

Mediation and Arbitration

(DIFFS)

Role of 3rd party:

- mediator acts an an impartial referee and does not suggest resolutions, where arbitrator listens to both sides and makes a legally binding decision

Who makes decision:

MEDIATION - the parties

ARBITRATION - 3rd party (arbitrator)

Binding:

mediation - the decision is not binding

arbitration - the decision is binding; that there is a concept where the decision must be followed and enforceable by law

Formality:

mediation is less formal than arbitration