Chapter 2 BM

Effective Human Resource Management

Effective Human Resource Management

Ensuring the right people are in the right roles with support for success, creating a positive work environment, leading to higher productivity and competitive advantage.

Staff as an Asset and a Cost

Employees bring knowledge, skills, and expertise (asset) while generating costs like hiring, training, salaries, and benefits (cost).

Human Resources Planning

Focuses on identifying needed employees, recruitment, deployment, training, motivation, and monitoring performance for financial and operational control.

Labour Productivity

Measures output per employee over time, aiming to increase productivity for improved competitiveness.

Labour Turnover

Measures the proportion of employees leaving, indicating motivation, recruitment effectiveness, or alternative opportunities.

Labour Retention

Measures the proportion of employees staying, reflecting effective motivation, recruitment, or limited alternative opportunities.

Absenteeism

Measures staff absent during a period, with high levels causing cost increases, reduced output, and demotivation.

Internal Factors Influencing HR Planning

Factors within a business impacting HR planning, including business objectives, financial situation, organizational structure, labour relations, and organizational culture.

External Factors Influencing HR Planning

Factors outside a business affecting HR planning, such as economic conditions, labour market, technological advancements, legal environment, social and cultural factors, political factors, industry-specific factors, and competitive landscape.

Recent Trends in Workplace Change

Changes in working patterns like remote, hybrid, and flexible working, gig economy, emphasis on work-life balance, changes in occupations, working preferences, and working practices.

Resistance to Change

A common phenomenon in the workplace, especially when employees lack involvement in the change design and implementation.

Factors Contributing to Resistance

Fear of the unknown, loss of control, disruption of routine, lack of trust, lack of communication, perceived losses, and the pace of change.

Change Management Strategies

Approaches and methods adopted to navigate and implement change successfully in a business.

Organisational Structure

Outlines reporting relationships, roles, and responsibilities of employees in an organization.

Hierarchy

Describes the levels of authority within an organization, ranking positions from top to bottom.

Bureaucracy

An organization with many levels of authority, making decision-making and communication time-consuming.

Chain of Command

The formal line of authority flowing from top management to lower-level employees, defining reporting relationships.

Span of Control

Refers to the number of employees a manager can effectively supervise, affecting the layers of management.

Centralized and Decentralized Structures

Concentration of decision-making authority at the top vs. distribution throughout the organization.

Matrix Structures

Employees grouped based on functional expertise and specific projects, having dual reporting lines.

Tall Organisational Structures

Multiple levels of management, centralized decision-making, and a long chain of command.

Flat Organisational Structures

Fewer levels of management, decentralized decision-making, and a short chain of command.

Organisation by Product

Structure built around specific products or projects, combining functional areas with specialist teams.

Organisation by Function

Employees arranged into different functions like finance or marketing, focusing on expertise.

Organisation by Region

Structure found in businesses with operations in different geographical locations, responding to diverse needs.

Impact of External Factors

Changes in market conditions, technology, global expansion, and competitive pressures affecting organizational structure.

Project-based Organisation Structures

Employees assigned to projects full-time, led by project managers, promoting collaboration and specialized skills.

Shamrock Organisational Structures

A structure where core employees are supported by flexible and temporary workers, adapting to changing needs.

Shamrock organisation

Based on the belief that workers are the most important business resource, providing flexibility and adaptability.

Core Staff

Small group directly employed, holding key positions, responsible for strategic decision-making and well-paid with job security.

Flexible Workers

Work part-time, temporary, or contractual, providing flexibility and scalability to the business.

Outsourced Services

Involves external third-party providers handling specific tasks like IT support or HR, allowing focus on core competencies.

Leadership vs

Leadership focuses on vision and motivation, while management focuses on organization and efficiency.

Autocratic Leadership

Leader holds absolute power, makes decisions without input, effective in crisis situations or hierarchical organizations.

Paternalistic Leadership

Leader acts in a protective manner, providing guidance and support, fostering loyalty but limiting creativity.

Democratic Leadership

Involves employees in decision-making, encourages creativity, but can be time-consuming and lead to conflicts.

Laissez-faire Leadership

Minimal guidance, employees have autonomy, encourages creativity but can lead to inefficiency and lack of coordination.

Situational Leadership

Adapting leadership style based on employee readiness and the specific situation to maximize performance and development.

Employee Motivation

Inner desire propelling action, impacting productivity, reliability, and turnover rates in a business.

Taylor's Scientific Management

Focuses on breaking tasks into simpler ones, standardizing processes, and providing clear instructions for efficiency.

Maslow's Hierarchy of Needs

Theory outlining five tiers of human needs, applied to businesses to meet physiological, safety, belonging, esteem, and self-actualization needs.

Maslow's Hierarchy

A theory that suggests individuals have different needs which, when met, can lead to higher employee satisfaction and motivation.

Herzberg's Motivation-Hygiene Theory

Theory that divides factors affecting motivation into hygiene factors (prevent dissatisfaction) and motivators (increase satisfaction).

McClelland’s Acquired Needs Theory

Theory that individuals have three acquired needs - Achievement, Affiliation, and Power - influencing their motivations and behaviors.

Deci and Ryan's Self-Determination Theory

Theory focusing on three basic psychological needs - Autonomy, Competence, and Relatedness - crucial for intrinsic motivation.

Equity Theory

John Adams's theory explaining how individuals perceive fairness in relationships, striving for equity in inputs and outputs.

Expectancy Theory

Vroom's theory stating motivation depends on expectancy (effort leads to performance), instrumentality (performance leads to outcomes), and valence (value of outcomes).

Labour Turnover

Measures the proportion of employees leaving a business during a specific time period, affecting recruitment costs and productivity.

Labour Retention

Measures the proportion of employees remaining with a business during a specific time period, indicating staff stability.

Employee Appraisals

A process where a manager evaluates an employee's job performance, providing feedback and setting goals for improvement.

Appraisal Discussions

Reflect on employee performance and establish goals for the future.

Performance Measurement

Evaluation against tasks and responsibilities in the job description.

Advantages of Employee Appraisals

Feedback & Communication, Performance Improvement, Recognition & Motivation, Decision-Making.

Disadvantages of Employee Appraisals

Subjectivity, Anxiety & Stress, Time-Consuming, Inaccuracies.

Formative Appraisal

Ongoing feedback, Improvement-oriented, No or Low Stakes, Timely Feedback, Employee Involvement.

Summative Appraisal

Endpoint Assessment, Evaluation of Achievement, High-Stakes.

360 Degree Feedback

Feedback from multiple stakeholders, Comprehensive assessment of strengths, weaknesses, and training needs.

Self-Appraisal

Employees evaluate their performance, strengths, weaknesses, achievements, and set goals for improvement.

Recruitment

Process of attracting and identifying potential job candidates.

Selection

Choosing the best candidate for a job role, involving reviewing CVs, interviews, and assessment tasks.

Referees

Individuals who should know candidates in a professional capacity and provide positive feedback on their abilities.

Financial Rewards

Payments given to employees in return for their labor or improved performance.

Piecework

Payment method where employees are compensated based on the number of units or pieces they produce.

Commission

A percentage of sales revenue paid to workers who sell products or services.

Bonus

Additional payment given to staff for achieving specific goals, completing projects, or exceeding expectations.

Profit Share

Distribution of a portion of the company's profits among staff to encourage ownership mentality.

Performance-related pay

Staff payment based on performance to motivate better results.

Fringe Benefits

Non-wage compensations like medical insurance or company vehicles.

Empowerment

Giving staff authority and resources to make decisions, enhancing ownership and responsibility.

Team Working

Creating opportunities for staff to collaborate, leading to productivity and innovation.

Job Enrichment

Adding challenging tasks to a job to increase motivation and engagement.

Job Rotation

Moving staff between roles to expose them to new challenges and increase motivation.

Job Enlargement

Expanding job duties to include additional tasks, enhancing motivation and satisfaction.

Training

Teaching new skills to employees for improved performance.

Development

Enhancing existing skills of employees for better productivity.

Induction Training

Training new employees on company culture, policies, and job roles.

On-the-Job Training

Learning new skills while working in job roles.

Off-the-Job Training

Training outside the workplace through workshops, seminars, or online courses.

Corporate Culture

Shared values, beliefs, and practices shaping how people work together in an organization.

Culture Clash

Conflicts arising from diverse backgrounds, values, or communication styles in the workplace.

Aim of Communication

The purpose of communication is to exchange or transfer information.

Formal Communication

Communication channeled through a business's formal organizational structure, likely to be recorded.

Informal Communication

Communication outside official channels, unlikely to be formally recorded.

Strengths & Weaknesses of Communication Methods

Evaluation of various communication methods based on effectiveness.

Face-to-Face Communication

In-person interaction allowing for non-verbal cues, enhancing understanding.

Written Communication

Messages in written form providing a record but lacking non-verbal cues.

Phone Calls

Real-time communication enabling quick exchanges but lacking visual cues.

Video Conferencing

Virtual meetings allowing distant connections but hindered by technical issues.

Instant Messaging & Chat Applications

Fast text-based communication suitable for brief exchanges but lacking non-verbal cues.

Barriers to Communication

Factors hindering information flow and causing misunderstandings.

Sources of Conflict with Employees

Reasons for conflicts in the workplace at various levels.

Trade Union

Organization aiming to improve employment terms and conditions for workers.

Collective Bargaining

Negotiation process between trade unions and employers for agreements.

Industrial Action

Various approaches like work-to-rule and strikes used by trade unions.

Employer Approaches to Conflict

Strategies used by businesses to resolve workplace conflicts.

Conflict Resolution

Steps taken to solve disagreements in the workplace effectively.

Approaches to Conflict Resolution

Methods like conciliation, employee participation, and industrial democracy to resolve conflicts.