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Human Resources:
Department responsible for the use of labour within the firm
Activities relating to the workforce are integrated and vital in helping the firm
achieve its corporate objectives
Aims to make the best use of HR in relation to the firms overall growth
HRM is the design, implementation and maintained of strategies to manage
people for optimum business importance
Nature of HR Objectives:
Targets pursued by the HR function or department
There are a number of HR objectives, the importance of which will vary according
to the firm, its products and the market
Influences on HR Objectives:
Internal:
Corporate objectives
Attitudes and beliefs of senior staff
The nature of the product
External:
State of the market
Price elasticity of demand for the product
Corporate image
Employment legislation
HR Strategies:
Medium-long term plan to achieve the HR objectives
Factors persuading implementation:
Japanese success in managing people using this approach
Changes in the organisational structure that leads to managers taking on
responsibility to manage people
Increasing popularity of psychological approaches to motivation
Hard HRM:
Treating employees as a resource to be used optimally
Employees are obtained cheaply, controlled and disposed of when necessary
Short term policy
Communication is mainly from the top downwards
Autocratic leadership with motivation from money (Taylor)
Easier for firms to adopt the size and composition for their workforce to match
the needs of the customer
Allows managers to retain control over the workforce and to direct operations as
they wish
Employees may be demotivated by this approach and result in high labour
turnover
Soft HRM:
Treats employees as the most valuable asset a firm has
Employees should be developed to maximise their value to the firm
Long term view
Employees are consulted and have control over their working lives
Democratic leadership with motivation through empowerment (Maslow)
Helps a firm develop a good employer reputation
Develops a more creative workforce
Difficult to alter workforce in response to changing market conditions and can be
very expensive
Competitive Advantage:
Soft HRM recognises the individual, outcome of which should be motivated and
committed employees; leading to fewer employer costs, higher productivity and
an increase in quality
Harm HRM focuses more on short term benefits
Problems may exist if a firms culture is not suited to the HRM strategy (Soft HRM
= People culture / Hard HRM = Power culture)
Implementing and changing the strategy may involve addition costs as everyone
adjusts
Guests Model:
Stresses the importance of integrating the various elements of the HR strategy
Close relationship between corporate strategies and HR strategies
Beneficial outcomes:
Commitment by employees to the firm
Supply quality goods and services
Flexibility of employees
HR outcomes are a package, only if all 3 are achieved can a firm expect to see a
change in behaviour
Skills Audit: A procedure used to identify the talents and abilities that employees
have which may not be fully used by the firm
Workforce Plan
Appropriate plans should be drawn up for the short, medium and long term
Contains:
Information on current workforce:
Number and type of employees
Skills audit identifying available
Skills, qualifications or qualities
Where the employees are employed
Age profile
Analysis of likely changes in the demand for the firms product
Analysis of the likely factors affecting the supply of labour
Recommendations needed to acquire the desired workforce
Internal:
Corporate plan
Marketing plans
Operational plans
Financial restraints
Nature of the firm
Cost:
Expenditure:
Recruiting
Training
Redundancy
Redeployment
Limits the extent of spending of the HR managers
Can provide an argument for not paying sums
Corporate Image:
A bad corporate image may harm its commercial performance
A good corporate image can have a competitive advantage from high
stakeholder self-esteem
Coordination with marketing will ensure positive news stories can be reported
Employer Branding:
Brett Minchington
Creating the image of the firm as a great place to work in the minds of key
shareholders
Lets firms compete effective recruitment, engagement and retention polices
It is how a firm presents and sells what it has to offer to both existing and
potential employees
Labour Productivity: Volume of output produced by workers over a given time
Trade Unions: An organisation formed with the objective of protecting and
enhancing the working conditions and economic positions of its members
Induction Training: Provision of jab-related skills and knowledge given to a new
employee
Organisational Structure
The way in which a firm is organised
Sets out:
Routes of communication
What has authority and responsibility
Roles and titles of individuals
The people to whom individual employees are accountable and those
whom they are responsible
Types of Structure:
Formal / Traditional Hierarchy:
Shares decision making throughout the firm
Gives all employees a clearly defined role and establishes their relationship with
other employees
A tall structure with a narrow span of control
Firm will be centralised
Senior managers expect to be treated with respect
Tradition is important
Communication in formal firms is principle downwards and uses established
routes moving down from senior to junior employees
Employees appreciate the possibility for promotion that exists
Departments may attempt to increase their size and prestige rather than acting
for the firms benefit
Decision making can become slower as communication has to pass through
many layers; as can coordinating objectives
Matrix:
Task orientated
Vertical chain of command operated through departments or units and horizontal
project or product teams
Employees can find it confusing having 2 managers because of divided loyalties
Expensive to operate
Entrepreneurial Structures:
Found in firms operating in competitive markets where rapid decisions are
essential
A few key workers at the form of the firm make all the major decisions
Heavily dependent upon the knowledge and skills of the key workers
Frequently used by charismatic and dynamic leaders
Effectiveness depends on:
Quality of management and decision making the core employees
Volume of work
Informal Structures:
Exist where the firm doesnt have obvious structure operate
Operates as a team receiving administrate support from others within the firm
Allows highly trained and motivated employees to organise their own working
lives and to take decisions with a high degree of independence
Lacks coordination and control from senior managers
Choice of Structure:
Consider a number of factors:
Size of the firm
Nature of the product
Skills of the workforce
Culture
Firms strategic objectives
Environment the firm operates in
Flexible Workforce:
Emerging trends:
Rising number of temporary workers
Part-time working
Self- employment
Contractors and consultants
Full time permanent employees
Flexible firm:
John Atkinson
Core workers are highly qualified and trained, motivated and in permanent
full-time employment
Peripheral workers would only be hired when necessary due to low skills or
high specialism and not required all the time
Annualised hour contracts
Zero hour contracts
Delegation:
Passing of authority to a subordinate within a firm
Senior managers still holds responsibility for making sure job is completed
Homeworking:
Works from home for a significant part of their working week
Allows employees greater responsibility for their own week
Reduces stress levels
Costs of firm can be reduced
Employees spend more time working
Once the main financial inducement has gone, the attractiveness of
homeworking is a firm is dismissed
The social dimension of work is important and homeworking removes that
Employees may not work as hard if unsupervised
Outsourcing:
Finding a person or firm outside the firm to complete part of the production
process
Reduces labour costs
Firm not have the necessary skills to complete the work to high quality
Communication between outsourced and permanent works may be poor
Global Delayering:
The implementation of a strategy of delayering stretched across many countries
Benefits may be greater than domestic delayering
Forces senior managers in a firm to look closely at and address many other
issues in a firm that may reduce its international competiveness
Individual Bargaining:
Enterprises seeking to make the most effective use of each and every member of
the workforce
Workers may be paid according to their contribution
Developing workers to encourage them to make the maximum contribution
Most commonly used when employees have substantial skills and are able to
negotiate on their own
Pay is determined by 1 or 2 systems:
Pay reviews
Management decisions
Employer Benefits:
Communication link between management and employees
Saves time as management dont need to speak to each individual
employee
Lesser likelihood of disputes occurring
Makes employees view manager as more democratic and creates an
atmosphere of mutual trust
Works Council:
A forum within a firm where workers and management meet to discuss issues
such as working conditions, pay and training
Elected representatives
All UK employers with 50 or more staff are obliged to keep employees regularly
informed
Form of industrial democracy
Other Types:
Factory / Office Committee: Elected by workforce as well as employers
representation
Staff Association: operate on behalf of a single firm or port of a larger firm
Arbitration:
Procedure for the settlement of disputes, under which the parties agree to be
bound by the decision of an arbitrator
Arbitration Act 1950/96
Non-Binding Arbitration: A neutral 3rd party makes an award to settle the dispute
that can parties can accept or not
Binding Arbitration: The parties have to take the award of the arbitrator
Pendulum Arbitration: A binding form where the arbitrator has to completely side
with one party
Mediation:
An independent, impartial mediator helps two or more individuals or groups
reach a solution thats mutually acceptable
Restore and maintain employment relationship if possible
Not legally binding
Conciliation:
Resolving individual or collective disputes in which a neutral 3 rd party encourages
the continuation of negotiation and the postponement of industrial action in the
hope a compromise will be reached
The fact the conciliator has no direct claim weakens their power and the fact
they may intervene creates delays as parties hope they will be favoured
Employment Tribunal:
An informal court room where legal disputes can be settled
3 Members:
Legally trained chairperson
Employer representation
Employee representation