JM

Business Unit 2

Definition & Role of HRM

  • HRM manages an organization's workforce to maximize productivity and employee satisfaction.

  • Key responsibilities include recruitment, training, performance management, and labor relations.

Workforce Planning

  • Analyzing future staffing needs based on business objectives.

  • Steps:

    1. Assess current workforce.

    2. Forecast future needs.

    3. Identify gaps.

    4. Develop action plans (hiring, training, restructuring).

The HR Cycle (Employee Life Cycle)

  1. Recruitment – Hiring employees.

  2. Onboarding – Introducing new hires to the company.

  3. Training & Development – Improving skills and career growth.

  4. Performance Management – Evaluating employee effectiveness.

  5. Retention – Keeping talented employees engaged.

  6. Separation – Managing retirements, resignations, layoffs.

2.2 Organizational Structure

Key Aspects of Organizational Structures

  • Hierarchy: Levels of management and authority.

  • Span of Control: Number of employees a manager supervises.

  • Chain of Command: Flow of authority and communication.

  • Delegation: Assigning tasks to subordinates.

  • Bureaucracy: Rules and procedures within the organization.

Types of Organizational Structures

  1. Tall (Hierarchical) Structure – Many levels, clear chain of command.

  2. Flat Structure – Fewer levels, faster decision-making.

  3. Matrix Structure – Employees work across multiple teams/projects.

  4. Project-Based Structure – Temporary teams formed for specific projects.

2.3 Leadership & Management

Differences Between Leaders & Managers

  • Leaders inspire and motivate.

  • Managers plan, organize, and coordinate resources.

Leadership Styles

  1. Autocratic – Centralized control, little employee input.

  2. Democratic – Employees participate in decision-making.

  3. Laissez-faire – Minimal supervision, high employee autonomy.

  4. Situational – Adapts leadership style based on circumstances.

Theories of Motivation

  • Taylor (Scientific Management): Employees motivated by money.

  • Maslow (Hierarchy of Needs): Psychological to self-actualization needs.

  • Herzberg (Two-Factor Theory): Hygiene (salary, job security) vs. Motivators (recognition, achievement).

  • McGregor (Theory X & Y):

    • Theory X: Employees are lazy and need supervision.

    • Theory Y: Employees are self-motivated and seek responsibility.

2.4 Motivation & Demotivation

Importance of Motivation

  • Motivated employees increase productivity, reduce turnover, and improve morale.

Financial Motivators

  1. Salaries & Wages – Fixed pay.

  2. Bonuses & Commission – Performance-based pay.

  3. Profit-sharing – Employees receive part of company profits.

  4. Fringe Benefits – Additional perks (e.g., company car, gym membership).

Non-Financial Motivators

  1. Job Enrichment – Adding more meaningful tasks.

  2. Job Rotation – Employees switch tasks to reduce boredom.

  3. Teamwork & Recognition – Enhancing social and psychological rewards.

Causes of Demotivation

  • Poor leadership.

  • Lack of career growth opportunities.

  • Low pay or lack of recognition.

2.5 Organizational (Corporate) Culture (HL Only)

Definition

  • The shared values, beliefs, and behaviors within an organization.

  • Influences decision-making, employee interactions, and business success.

Types of Corporate Cultures (Handy’s Model)

  1. Power Culture – Control centralized by a few key individuals.

  2. Role Culture – Clearly defined roles and hierarchy.

  3. Task Culture – Focus on teamwork and problem-solving.

  4. Person Culture – Employees are valued for their individual expertise.

2.6 Communication

Types of Communication

  • Formal vs. Informal: Official business vs. casual interactions.

  • Verbal, Written, Visual, Non-Verbal: Different modes of conveying messages.

Barriers to Effective Communication

  • Language differences, poor leadership, information overload, technology issues.

Ways to Improve Communication

  • Training, use of appropriate technology, active listening, clear feedback loops.

2.7 Industrial/Employee Relations (HL Only)

Trade Unions & Employee Representation

  • Trade unions protect worker rights and negotiate for better conditions.

  • Collective bargaining – Unions negotiate wages and policies with employers.

  • Industrial action – Strikes, work-to-rule, and boycotts.

Conflict Resolution Methods

  • Negotiation: Discussions between employees and employers.

  • Arbitration: Independent third party makes a binding decision.

  • Mediation: Third-party helps both sides reach an agreement.