Human Resource Management FITB

Human Resource Management (HRM)

• HRM is concerned with the human side of a firm.
• The HR manager is responsible for managing human resources within a firm.
• HRM is the process by which an organization attracts, develops, and rewards its workforce to contribute to achieving the organization's goals.
• There are six key functions of HRM: Manpower Planning, Recruitment and Selection, Training and Development, Performance Appraisal, Reward and Pay, and Employer-Employee Relations.

Manpower Planning

• Involves forecasting human resources needed for the future and planning to ensure the right staff in the right quantity are available to achieve firm objectives.
• The process includes analyzing skills and expertise within the firm and planning for staffing shortfalls or excesses.
• Manpower planning must consider the current and future economic climate.
• Ongoing training should be provided to upgrade skills of existing employees.
• The HR manager should be aware of staff retirements or leave and account for these factors.

Manpower Planning Process

• HR Audit: Analyze current skills and expertise in the firm to identify any current manpower shortfall or excess.
• Estimate Future Needs: Considering current and future business needs and the economic climate, estimate if there will be a future shortfall or excess of personnel.
• Make a Plan: Determine whether to increase or decrease manpower based on the audit results and future estimations. If there is a shortfall, HR will recruit new employees or up-skill current employees. If there is an excess, HR will make employees redundant.

Recruitment and Selection

• The process of finding, assessing, and employing the right people to fulfill the jobs needed to achieve the organization's goals.
• A common recruitment and selection process is often used in firms.

Recruitment and Selection Process

• Job Description and Person Specification: Documents outlining the duties and responsibilities of the job and the ideal candidate, respectively.
• Advertising: The HR manager advertises the position to attract suitable candidates. This can be internal (promoting a current employee) or external (using recruitment agencies, media advertising or professional social media).
• Screening and Shortlisting: The HR manager reviews applications and CVs to create a shortlist of the most suitable candidates.
• Selection: A process that may include interviews, aptitude tests, psychometric evaluations, group discussions, and panel interviews.
• Reference Checking: The HR manager verifies the potential employee's characteristics, skills, and abilities with provided referees.
• Job Offer: Following reference checking, the desired candidate is offered the job.
• Contract of Employment: A formal document outlining the terms of employment.

Training and Development

• Training provides employees with the skills, knowledge, and attitudes needed to perform their jobs effectively and efficiently.
• Development is a long-term approach to encourage existing employees to take on new challenges and reach their full potential. It focuses on professional development, leadership, and communication skills.

Types of Training

• Induction training: Familiarizes new employees with the business and helps them settle in.
• On-the-job training: Employees are trained internally by other staff with expertise in specific areas.
• Off-the-job training: Employees attend external courses and training provided by experts and colleges.

Development

• Development aims to prepare employees for new responsibilities and challenges in the workplace, helping them self-actualize. This could include mentorship programs or job rotation periods.

Training and Development Benefits

• Increased customer satisfaction due to higher-skilled staff.
• Improved skills and product quality.
• Enhanced employee morale and job satisfaction.
• Lower labor turnover rates.
• More flexible workers adaptable to changing market trends and technologies.
• Reduced workplace accidents through health and safety training.

Performance Appraisal

• The process of evaluating an employee's performance, progress, contribution, and effectiveness over a period, and assessing their future potential.
• Aims to achieve and sustain high performance standards for organizational success.
• Provides an opportunity for communication, clarification of objectives, and feedback, enabling improvements.

Performance Appraisal Methods

• Interviews.
• Observations.
• Written reports from departments to HRM.
• Measuring against previously agreed benchmarks and targets.
• Regular meetings.

Performance Appraisal Benefits

• Helps identify individuals for promotion based on demonstrated skills and achievements.
• Motivates employees to strive for improvement and reach targets.
• Identifies training and development needs, allowing for targeted training opportunities.
• Supports decisions about rewards, such as bonuses tied to performance.
• Enables feedback on employee performance, and clarifies expectations and goals.
• Improves industrial relations through open communication and clear conflict resolution procedures.

Reward and Pay

• HR managers aim to make their organization attractive to potential employees through rewards such as pay, incentives, and benefits.

Financial Rewards

• Time rate: Fixed amount per hour paid for a fixed number of hours per week.
• Piece rate: Payment for each unit produced or job completed, encouraging high productivity but potentially sacrificing quality.
• Bonus: A sum paid for reaching a specific target.
• Commission: Payment based on sales volume, directly encouraging sales.
• Profit-sharing schemes: Employees receive a share of the organization's profits.
• Employee share ownership schemes: Employees receive shares in the organization instead of cash bonuses.
• Benefits in kind: Non-cash payments to employees in the form of goods or services.

Non-Financial Rewards

• Promotion: Advancement to a more senior level, often with increased responsibility and recognition.
• Flexitime: Allows employees to choose their own work hours within a predetermined framework.
• Job sharing: Two employees split the responsibilities of a single position.
• Job enrichment/enlargement: Giving employees additional responsibilities, broader roles, and teamwork opportunities, enhancing job satisfaction.

Employer-Employee Relations

• Involves maintaining positive and harmonious relationships through communication, cooperation, and consultation.
• Aims to create a positive workplace culture where employees and management work together effectively.

Methods for Improving Employer-Employee Relations

• Open Communication: Increase transparency and two-way communication between managers and staff.
• Consultation: Involve employees in decisions that could affect their work.
• Cooperation: Encourage negotiation and collaboration between employers and employees.
• Grievance Procedures: Implement clear and fair procedures for addressing disputes.
• Training and Development: Provide opportunities for all employees to develop their skills and knowledge.
• Motivation: Implement recognition programs for good work and value employee contributions.
• Fair Treatment: Offer competitive pay, good working conditions, and treat employees with respect.
• Socialization: Organize team-building and social events to foster positive relationships between management and employees.

Benefits of Improved Employer-Employee Relations

• A happier, more motivated, and productive workforce.
• Enhanced problem-solving abilities and communication.
• Increased employee morale and job satisfaction.
• Clearer organizational goals and direction.
• Greater employee flexibility and adaptability.
• Reduced labor turnover rates.
• Lower risk of industrial disputes.