Human Resource Management (HRM) concepts

HRM (Human Resource Management)

• HRM involves identifying and understanding all HRM functions.
• 'Labor force' or 'workforce' can refer to the nation's labor force, including employed, self-employed, and unemployed individuals.
• It can also refer to the people employed within a particular organization.
• Human resource management (HRM) is the function of deploying and developing people within an organization to meet business objectives.
• Workforce (or human resource) planning is the overall management of an organization's workforce to anticipate and meet staffing needs.
• Many entrepreneurs consider people a firm's most valuable asset, making workforce planning essential.
• Failure to optimize human resources results in problems.

Internal and External Factors Influencing HRM

• Internal factors that influence human resource planning include:
  • Size of the organization: Larger firms require more HR involvement for recruitment, training, appraisals, etc.
  • Strategic direction: Growth-focused organizations plan to recruit more workers and promote internally.
  • Organizational structure: Clear structures help HR managers identify vacant and redundant positions.
  • Finances: Sufficient funding is necessary for hiring, training, and worker development.
• External factors that influence human resource planning include:
  • Demographic change: Population trends affect the supply of human resources.
  • Change in labor mobility: The extent to which labor can move to different locations (geographical mobility) or change jobs (occupational mobility).
  • Immigration: Globalization encourages migration for work.

Flextime and Gig Economy

• Flextime is a system where staff determine their working hours, completing their work by set deadlines.
• Teleworking and home working are two common forms of flextime.
• The gig economy refers to labor markets where workers are on short-term, flexible, temporary contracts.
• Gig workers and independent contractors provide services on-demand or on-call, without permanent employment contracts.

Resistance to Change in the Workplace

• Professor John Paul Kotter found that the main reasons why the workforce will resist change include:
  • Self-interest
  • Low tolerance
  • Misinformation and misunderstanding
  • Different points-of-view (Interpretations of circumstances)
• Six strategies for dealing with resistance to change, include the following six methods, as advocated by John Paul Kotter and Leonard Schlesinger of Harvard Business School (1979).
  • Education and communication
  • Participation and involvement
  • Facilitation and support
  • Negotiation and agreement
  • Manipulation and co-option
  • Explicit and implicit coercion

Types of Organizational Structures

• The organizational structure of a business shows the interrelationships and hierarchical arrangements within the firm.
• Organizational structures arrange employees to show:
  • Job titles
  • Accountability
  • Responsibility
• The way people are organized determines reporting lines and authority.
• Delegation involves passing control and authority to others.
  • This is essential as the business grows as managers are unable to effectively control all aspects of the firm.
• Span of control refers to the number of people directly accountable to a manager.
  • Typically, the greater the seniority of the manager, the greater their span of control will be.
• Levels of Hierarchy refers to the organizational structure based on a ranking system.
  • The most skilled / senior employees are at the top of the hierarchy.
  • The least skilled / least senior employees will appear at the bottom of the hierarchy.
• Chain of command refers to the formal line of authority through which orders are passed down in an organization.
• Bureaucracy is the execution of tasks governed by official administrative and formal rules.
  • This can cause inefficiency and frustration due to unnecessary paperwork, long chains of command, excessive committees, and duplicate roles.
• Centralization structures have a small number of people at the top controlling decision-making.
  • Advantages: Rapid decision-making, better control, sense of direction, and efficiency.
  • Disadvantages: Added stress for senior staff, inflexibility, possible delays in decision-making, and demotivation.
• Decentralization structures share decision-making authority and responsibility among a greater number of people.
• Delayering is the process of removing one or more levels in the hierarchy:
  • It is designed to widen the span of control at each level and shorten the chain of command.
  • Advantages: Reduces costs, improves communication speed, and encourages delegation.
  • Disadvantages: Creates anxiety, insecurity, overloads staff, and can lengthen decision-making.
• Matrix structures organize employees from different departments to work together temporarily on a project.
  • Each member is accountable to both their department/line manager and the project manager.
  • Advantage: Improved communications, maximization of skills, and being cost-effective.
  • Disadvantages: Added workloads, difficulty coordinating, and being time-consuming.
• Organizational charts are diagrammatic representations of firms' formal structures.
  • Five important features shown by organization charts
• Flat or Horizontal structures have few levels of hierarchy, wider spans of control, decentralized decision-making, shorter chains of command, democratic leadership, and increased delegation.
• Tall or Vertical structures have many levels of hierarchy, narrow spans of control, centralized decision-making, long chains of command, autocratic leadership, and limited delegation.
• Flat structures have advantages: Increased opportunities for career development due to importance of delegation, improved communication due to fewer layers, cheaper to operate, reduces power distance between senior and junior staff.
• Tall structures have advantages: Quicker and more effective communication, easier to control and manage, increased efficiency and productivity due to specialization of labour, greater opportunities for promotion.
• Businesses are often organized by product, function, or region, clarifying each business function, outputs, and division locations.
• External factors influence HR planning, leading to restructuring into different organizational structures due to external changes.
• Organizational restructuring reorganizes human resources into a new structure when change is needed for competitiveness, incorporating new job roles, eliminating redundancies, reducing costs, focusing on key activities, incorporating new technology, ensuring effective skills utilization, selling parts of the firm, or merging with another company.

Leadership vs. Management

• Leadership influences, invigorates, and inspires others to achieve goals by fostering motivation, respect, trust, and loyalty.
• Management is the art of getting things done to achieve objectives by using and controlling resources effectively.
• A manager has decision-making authority.
• Leadership style refers to how managers and leaders provide direction, impacting staff motivation, productivity, and morale.
• Autocratic Leadership involves leaders making all decisions independently, not delegating, and instructing others.
  • Suitable for: Unskilled employees and crisis situations.
  • Drawbacks: No feedback, ignored opinions, and poor working relationships leading to absenteeism & turnover.
• Democratic leadership involves employees in decision-making.
  • Consults staff, considers views, and develops better morale
  • Suitable for:Situations where the leader is not always present.
  • Drawbacks: -Decision making is delayed. -Timely / costly for a large workforce. -Not suitable during crisis.
• Laissez-faire leadership is where This type of leader will: -have minimal direct input. -allow staff to make decisions. motivation

Motivation Theories

• Motivation refers to the desire, effort, and passion to achieve something.
• Taylor's theory assumes employees are primarily motivated by money.
  • Productivity could be improved by setting output and efficiency targets related to pay.
  • Taylor's theory in brief -Train and develop each employee. -Provide detailed instructions and supervision of each worker. -Divide work equally between managers and workers: -Managers plan the work using division of labour. -Workers perform the work in a standardized fashion. -Workers receive payment based on differentiated piecework.
  • Criticisms -Ignores non-financial factors. -Does not recognize that people can be independent thinkers. -Difficult to measure the output of professionals that focus on -mental output, rather than physical output. -Can lead to repetitive and monotonous tasks.
• Abraham Maslow (1908 – 1970) was an American social psychologist.
  • His most famous theory, the hierarchy of needs, discusses how people are motivated by different levels or categories of needs.
    • Maslow believed that the psychological (emotional and mental) needs of employees was what motivated people, not just money. -He developed a hierarchy of needs where people must be motivated by lower order needs before they can progress to higher order needs. -Criticisms: -Identification of workers' needs is difficult. -Not everyone has the same five needs. -Self-actualization needs are rarely permanently achieved.
• Professor Frederick Herzberg (1923 -2000) was an American psychologist.
  • Herzberg argued that in order to create any motivation in the workplace, it was essential to first remove the factors that cause dissatisfaction. -Herzberg's research resulted in two categories of factors affecting the level of motivation in the workplace. They are: -Hygiene factors -Working Conditions -Salary -Status -Security -Motivators -These are factors that can lead to the psychological growth of workers and hence increase satisfaction and performance at work. -Criticisms -Hygiene factors can be taken for granted. -Does not apply to low skilled jobs (the study was limited to engineers and accountants). -Employees may not want the extra responsibility and stress from having enriched / more demanding jobs.

Financial Methods of Motivation

• Financial rewards are methods used to motivate workers through some form of monetary payment.
  • Rewards can be time or output-based. -Salaries are financial rewards set at a fixed annual rate but paid on a regular basis.
    • Wages are the reward for labour services, usually expressed as an hourly rate (time) or as a measurable quantity of output (piece rate). -Commission pays workers a percentage of sales or output contributed. Performance-related pay (PRP) rewards employees who meet certain goals related to sales targets, competence, or successful contract completion. Profit-related pay is where some businesses try to motivate their workforce by linking pay to the level of profits of the firm.

Non-Financial Methods of Motivation

• Non-financial rewards are non-monetary factors that motivate people by offering psychological and intangible benefits.
• Job enrichment enhances the experiences of workers by giving more challenging tasks and more responsibility at work. -Benefits: -Gives employees a challenge. -Encourages employees to be more productive. -Employees feel rewarded. -Extra tasks could lead to future promotion.
• Job rotation involves workers switching between jobs (tasks) for a period of time. -Benefits: -Reduces boredom from overspecialization. -Makes it easier to cover for absent colleagues. -An employer will benefit from a more widely trained workforce.
• Job enlargement is broadening the number of tasks that an employee performs. -Benefits: -Prevents boredom with repetitive tasks.
• Empowerment is the delegation of decision-making power to workers, thereby helping to boost their morale.
• Teamwork refers to the combined efforts of a group of workers to achieve of an organizational goal.

Types of Training

• Training is the process of providing opportunities for workers to acquire employment-related skills and knowledge.
• This is training that is aimed at introducing new employees to the organization.
• On the job is training that is carried out whilst at the workplace.
• Off the job training that is carried out off-site (e.g. at a tertiary college or hotel conference room).

Communication Channels

• Communication is the transfer of information from one party to another.
• Channels of communication refers to the method(s) through which communication takes place.
• This refers to communication within the business organization.

Methods of Communication

• This refers to communication via the use of spoken words.
• This refers to communication methods that use the written word.
• This refers to the use of visual stimuli to communicate information or ideas.
• Except for oral communication, all forms of communication can come under the category of non-verbal communication.

Electronic communication

• Increasingly important in a global business world.
• Faster and cheaper communication over long distances.