Chapter 4-6

Human Resources Management

  • Human Resource Management are all the activities involved in acquiring,m maintaining and developing an organization human resources



Phases of Human Resources 

  • Acquisition - Panning, Job Analysis, Orientations, Recruiting, and hiring new personnel

    • In the Acquisition Phase of HRM, managers determine future human resources needs and plan to meet those needs

  • Forcast Human Resources

    • Replacement Chart: A list of key employees and their possible replacements within a company

    • Skills Inventory: a computerized database containing information on this skills and experience of all current employees.

  • Maintenance - Involves employees retention, benefits, and Compensation

  • Development - Training and development, performance appraisal 



Planning Human Resources Supply

  • Job Analysis: A systematic approach that identifies and determines the job duties and requirements and their importance to the organization

  • The goal is to create job description and job specification, which form the bases of a job posting

    • Job Description: A list of the objective and responsibilities for a particular job

    • Job Specification: A lost of the qualifications required to perform a particular job.





Question An example: Job Description and Job Specification

A. MBA Degree and 2 years progressive work experience in operations research - Job Specification

B. Respsonible for performing investment analysis for stock and Securities - Job Description



Cultural Diversity in Human Resources

  • Cultural (or workplace) diversity: Differences among people in the workforce in terms of ethnicity, gender, religion, age, and physical or learning abilities.

  • Benefits of Cultural Diversity

    • Provides businesses a marketing edge

    • Drives creativity and innovation

    • Attracts top talent




Recruiting and Hiring Employees

  • Recruiting is the process of attracting qualified job applicants

  • Steps in the recruitment process:

  1. Attract candidate pool by recruiting: 

  • Internally through company memos or jobs postings

  • Externally through advertised job posting, job fairs, etc

  1. Screen Candidates - Review resumes and cover letters to eliminate candidates that don’t meet minimum qualifications

  2. Interview Candidates - Top candidates selected during the screening process get Interviewed

  3. Compare candidates - Select the top two or three candidates

  4. Check References 



Employee Compensation Strategies

  • Compensation - The payment employees receive in return for their labour

  • Fringe Benefits - Forns of indirect compensation including pensions, health insurance, and vacation 

  • Compensation plans must be:

  • Competitive enough to attract new talent

  • Fair enough to keep existing talent from leaving the company

  • Reasonable enough so that the company can still make a profits

Industry 

  • Compensation plans should be designed such that FINISH SLIDE

Level of Job

  • Decisions about the compensation levels are based on a job evaluation that determines the relative worth of jobs within the company 

Supply of Candidates

  • Companies will increase the compensation package for the position to attract and retain talent when there is a shortage of candidates in an industry 

On the Job Training

  • Trainee learns by doing the work under the supervision of an experineced employee or peer

Simulation

  • Use of roleplay scenarios

Classroom Teaching 

  • Accommodates many trainees at once and provides personal interactions for trainees

Online Training

  • Incorporates several modes of teaching like videos of classroom teaching, online quizzes, and simulations



The Legal Environment of HRM (Human Resource Management)

  • Employers are responsible for knowing and following HRM laws.

  • Aims of legislation regarding HRM practices: 

    • Protect employees rights

    • Promote job safety

    • Eliminate Discrimination

Chapter 5 - Pricing Strategies



The Importance of Price

  • Price means one thing to the consumer: the cost of something they want.

  • Price means another thing to the seller: Revenue

  • Internal Pricing and external pricing must be balanced to meet bottom line and customer needs.



What is Price?

  • That which is given up in exchange for acquiring a good or service

  • Includes the time lost while waiting for the good or service

  • Reasonable price = perceived value at the time of transaction



Price Considerations

  • Key considerations for determining prices: 

    • Cost incurred by the company

    • Maximum price customers are willing to pay

    • Competitors Price

    • Factors that affect product prices

      • Economic Conditions 

      • Industry 

      • Stage of a product life cycle



Break-Even Point

  • Number of units that must be sold for total revenue to equal total costs

  • Total Cost - Sum of fixed and variable costs for a particular quantity of production

    • Fixed Cost: Operating costs of a company E.g. Rent, Salaries, and marketing expenses

    • Variable Cost: Cost of producing or purchasing a product - Increases as the volume of production increases

  • Contribution Margin: Profit margin in a unit of sale

    • Calculated as sales revenue minus variable costs

  • Break-even is calculated by dividing the Fixed Cost by Contribution Margin (Total sales Revenue - Cost to make a product)

  • Formula for Total Cost (TC)

    • TC = Total fixed cost (TFC) + Total Variable Cost (TVC)



Unit Contribution

  • Profit margin in a unit of sale

  • It is the amount of money that each sale contributes to paying fixed costs

  • Unit contribution = Selling price per unit - Variable Cost



Price Skimming 

  • When?

    • New products

    • Perceived to have unique advantages

  • How?

    • High to start and then lower prices over time

  • When?

    • Market is willing buy at the premium

    • Prodcut is protected legally

  • Why?

    • Recover production costs quickly

    • Better to go in high and reduce than go in low and increase



Penetration Pricing

  • What? 

    • Charging a relatively low price for a product initially

  • Why?

    • To capture a large share of the market, reduce production costs

    • Market share objective 

    • Low Price can discourage competition from entering

  • When?

    • Price-Sensitive market

    • Competitive market, relatively homogeneous products, potentially large market



Status Quo Pricing

  • What?

    • Meeting the competition or going-rate pricing

    • Charging a price identical or very close to competition

  • Why?

    • Simple 

    • But it ignores demand and costs



Peak Loading Price

  • The pricing strategy wherein the high price is changed for the goods and services during times when their demand is at peak

Chapter 6 - Accounting Fundementals



Accounting: Systematically collecting, analyzing, and reporting financial information

Managerial Accounting: Provides information for managers within an organization

  • Used to make decisions about a company’s financing, investing, marketing, and operating activities.

  • Flexibility to provide reports about the revenue and costs associated with particular products, stores, or services offered.

Financing Accounting: Provides information for people outside an organization through the generation of standardized financial statements

  • Until 2011, all Canadian companies prepared their financial statements based on the Canadian Generally Accepted Accounting Principles (GAAP). GAAP was used to ensure accuracy and consistency in the way financial information was reported.

  • On January 1, 2011, Canada adopted the International Financial Reporting Standards (IFRS) for publicly traded companies. Adoption of the IFRS was designed to provide consistency in financial reporting internally and replace the GAAP, and today many countries are using IFRS.



The Accounting System

  • Paying an employee's salary

  • Purchasing raw materials from a supplier

  • Selling a product to a customer 

  • Purchasing a delivery vehicle

  • Receiving a loan from the bank





Types of Accounting

  • Reports may be in diffenet formats that help company managers make decisions

  • Who uses management accounting information?

  • Financial statements are prepared according to IFRS.

  • Who uses financial accounting information.



Balanced Sheet

  • Also termed as Statement of Financial Position {with the adopting of the IFRS}

  • Snapshots of a company’s financial position by stating Assets, Liabilities, and Owners Equity.



Income Statements 

  • Summary of how much a company earned over a period of time

  • Summarizes Revenue, COGS (Cost of goods and services), Operating expenses, and Net Income

  • Helps to analyze the companies performance

  • Allows to categorize firms

  • Cost of Goods Sold (COGS): Cost of producing or purchasing products for sale

    • Varies directly with sales volume or production volume 

  • Operating expense: 



Cash Flow Statements

  • It illustrates how the company’s operating, investing and financing activities affect cash flow over a period of time



Reading a Balance Sheet

  • Liquidity - the ease at which an asset can be converted to cash

  • Structure of the Balance sheet

  • Asset categories are listed in order from most liquid to least liquid

  • Assets and liabilities are divided between current and long-term 

  • Owners Equity = Assets - Liabilities 



Using Financial Ratios

  • Financial Ratio: a number that shows the relationship between two elements of a companies financial statements

  • Allow for a fair and accurate comparison between current financnial results and results from previous periods.

  • Profitability ratios tell you:

    • How effectively the company uses its resources to generate profits

    • Return on sales: Measures profitability by dividing net income after taxes by revenue.



Liquidity Ratio tells you:

  • The companies ability to convert assests to cash and pay its short term debts

  • Current Ratio: Measures liquidity by dividing current assets by current liabilities



Leverage Ratios Tell you: 

  • The level of debt compared to assets or equity

  • Debt to Equity ratio: Measures leverage by dividing total liabilities by owners equity

  • A ratio over 1 indicates that company has more debt than equity 

  • Higher ratio indicates higher level of debt which can pose risk for lenders and shareholders

 

Financial Ratios Formula 

  • Profitability Ratios - Returns on sale = Net income / Revenue

  • Liquidity Ratios - Current Ratio = Current assets/ Current Liability 

  • Leverage Ratios - Debt-to-Equity Ratio = total liability / Equity