Business Management, Topic 2: Human Resources

Labour turnover

A measure of the rate of change of human resources within an organization, per period of time

Process of Recruitment

identification, application, selection

Person specification

A profile of the type of person needed for a job

Internal recruitment

the process of seeking employees who are currently within the firm to fill open positions

Advantages of internal recruitment

1. It generates applicants who are well known to the organizations

2. Generally faster than external recruitment

3. Finally vacancies through internal recruitment are generally cheaper and faster.

Disadvantages of internal recruitment

-Limit of new and fresh ideas

-Lower number of applicants

-Hiring someone internally means there is a vacancy created, so another person still has to be recruited

External recruitment

the process of seeking new employees from outside the firm

Training

Process of teaching a particular skill or knowledge, in order to develop an employee's competence in the workplace.

on-the-job training

Employee training at the place of work while he or she is doing the actual job.

Induction training

The training aimed at introducing new employees to a business and its procedures.

Mentoring

Process of training through an adviser or trainer (mentor), that personally supports less experienced colleagues in various aspects of their job role.

Advantages of on the job training

1. Specific to the actual job

2. Cost-effective

3.Easy to organize

Disadvantages of on the job training

- Employees can pick up bad working habits from the trainer

- Internal staff may lack the necessary skills

-The trainee may feel an "overflow of work" as they have to do their normal work as well as the training required.

Off-the-job training

Training that takes place away from the work area.

Advantages of off the job training

- Staff can concentrate fully on learning without any distractions

- Wide range of skills and qualifications can be taught, especially from specialists outside of the organization

Disadvantages of Off-the-job training

-Costs are high and tedious for just training an employee

-Employee may get distracted or have too much freedom

-Employees can leave the existing firm for better jobs elsewhere due to the knowledge that said employee has gained from the training

appraisal

Refers to formal assessment of an employee's performance with reference to the roles and responsibilities set out in the job description

Formative appraisal

Relies on giving the employee feedback. It is typically run in a one-to-three-year cycle.

Summative appraisal

type of appraisal which is usually a written description of a staff member's annual achievements and personal performance.

360-degree feedback

a performance appraisal process in which feedback is obtained from the boss, subordinates, peers and coworkers, and the employees themselves

Advantages of appraisals

- Positive feedback can motivate the employee

- Setting targets motivate staff and gives them a goal to work towards

- Training needs can be identified, increasing quality standards

Disadvantages of appraisals

- Negative feedback can demotivate employees

- Setting unrealistic targets can put staff under pressure

- Some employees do not like them as they feel under pressure

- Time-consuming to carry out which results in lost work time

-Feedback from certain appraisals can be likely biased, which gives inaccurate results

teleworking

Working away from an organisation's main office or base, using portable computers.

Flexitime

a system in which employees work a particular number of hours each week or month but can choose when they start and finish work each day

part-time worker

a form of employment where the workers hired work for fewer hours per week than those with a full-time job.

Outsourcing

Use of external providers for certain non-core business activities

Advantages of Outsourcing

-Reduce costs

-Access to specialists of different sectors of your business

Disadvantages of outsourcing

loss of control, benefits outweighed by long-term costs, no easy exit

Offshoring

the relocation of business processes and services to a lower-cost foreign location.

Advantages of offshoring

-Can move to countries that have lower tax, as well as cheap labor

-Makes HR cycle generally more cost-efficient

Disadvantages of offshoring

-Have to deal with the country's external factors that may influence operations

-Unethical labor practices may happen

-Lack of communication

Reshoring

Transfer of a firm's overseas operations back to its country of origin due to cost or competitive advantages.

Delegation

The assignment of new or additional responsibilities to a subordinate

Advantages of Delegation

1. Gives senior managers more time to focus on important, strategic roles

2. Shows trust in subordinates which can challenge and motivate them

3. Develops and trains staff for more senior positions

Disadvantages of delegation

-The role that the manager is delegating may have increased pressure due to the task that is being assigned.

-Loss of power/control generally in the company

Span of control

a number of subordinates who are directly accountable to a manager.

Levels of hierarchy

management structure of an organization based on the number of layers of formal authority.

Chain of command

Formal line of authority through which orders and decisions are passed down from senior management at the top to operational workers at the bottom.

Bureaucracy

Administrative systems of a business, such as the set of rules and procedures.

Centralization

structure in which decision-making authority is concentrated at a high level in the management hierarchy

Decentralization

Structure in which the decision making authority is distributed to lower level managers or other employees

Delayering

Reducing the number of levels in the organization's job structure

Flat/horizontal organizations

Organization that has few layers of management, hence having a wide span of control.

Advantages of flat/horizontal organizations

-Shorter chain of command, which improves communication in the organization|

-Decision-making is quick, as there is small span of control

Disadvantages of flat/horizontal organizations

-Puts pressure on subordinate that has the wide span of control

-Less control/supervision of workers, as line manager needs to supervise a large amount of people

Tall/vertical organizations

Tall organizational structure is one which has many levels of hierarchy. In these organizations, there are usually many managers, and each manager has a small span of control - they are in charge of only a small group of people. Chain of command is also passed down on many levels.

Advantages of tall/vertical organizations

-Motivation for workers in the lower levels of hierarchy, as there is opportunity for promotion

-Decision-making will attain the best possible outcome, as it is revised by many levels of the hierarchy before going to the top

Disadvantages of a tall/vertical organization

-Less control over the company's decisions

-Alienation of the workforce (Certain workers won't feel involved in the company, which demotivates them)

-Miscommunication problems

-Decision-making can be slow

Handy's shamrock organization

Organizational structure where it is believed that the core of an organization is based on three types of workers. (Outsourced workers, Flexible workforce, Professional core)

redundancy

when a job is no longer required so the employee doing this job becomes redundant through no fault of his or her own

dismissal

When an employer terminates an employee's contract of employment due to misconduct or poor performance.

autocratic leadership

leadership style that involves making managerial decisions without consulting others

Paternalistic leadership

A leadership style where the leader sees the workforce as an extension of the family, so decisions are to be made in the interest of the employees, as well as paying more attention to employees' wellbeing and social needs.

democratic leadership

a leadership style in which managers work with employees to make decisions, however, the final decision is to be made by the leader

laissez-faire leadership

A leadership style that leaves much of the business decision-making to the workforce - a 'hands off' approach and the reverse of the autocratic style

Taylor motivational theory

People only work for money, by motivating workers to be efficient and productive, he believed that this would reach more profit. Pay is based on the amount of output produced.

Maslow's Hierarchy of Needs

(level 1) Physiological Needs, (level 2) Safety and Security, (level 3) Relationships, Love and Affection, (level 4) Self Esteem, (level 5) Self Actualization

Herzberg's Motivation-Hygiene Theory

The idea that removing dissatisfaction (hygiene factors) and increasing factors that help staff gain job satisfaction (Motivators), in the workplace is essential to increasing motivation.

Adam's Equity Theory

A theory that states that people will be motivated when they perceive that they are being treated fairly; the idea that employees try to maintain equity between inputs (effort put into a job), and outputs (What they get out of the job), compared to others in similar positions.

Pink motivation theory

States that motivation is based on three factors, autonomy, mastery and purpose.

Autonomy: Workers should be able to have control over their work (Flextime, Part-time, freelance)

Mastery: Allows for people to become better skilled at something that matters to them as individuals. (People want to improve their work as it makes them feel better)

Purpose: Workers should be able to recognize the purpose of their work in terms of the company's 'grand' goal/vision.

salary

A fixed amount of money paid to an employee for each pay period.

Piece Rate Pay

Employees are paid for each item produced that meets the desired quality standard.

wages

An amount of money paid to an employee at a specified rate per hour worked.

commision

amount paid to an employee based on a percentage of the employees sales.

Role culture

Culture, in which employees have clearly defined roles and operate within a set of rules and guidelines. Bureaucracy

Task culture

Culture in which employees focus on achieving specific problems or projects.

Person culture

When individuals are given the freedom to express themselves and make decisions.

Trade union

Association of trade workers formed to gain higher wages and better working conditions

Collective bargaining

The process by which a union representing a group of workers negotiates with management for a contract involving their quality of life at work, wages, etc.

Strike action

A form of industrial action that involves employees refusing to work. This is usually the result of major industrial unrest such as large-scale pay disputes or serious grievances.

Overtime bans

A form of industrial action with workers complying with a labor union directive for members to disengage from working beyond their contracted employment hours.

Concilliation

a neutral third party acts as communication between parties, the immediate goal is to establish direct communication with the aim of finding common ground and constructive solutions, however, the conciliator does NOT provide a solution

Arbitration

settling a dispute by agreeing to accept the decision of an impartial outsider.