Chapter 10 Human Resources Management PDF

CHAPTER 10: Human Resource Management (HRM) Purpose & Roles Of HRM ❖ The role of HRM in meeting organisation objectives: recruitment, selection, training, induction, advice, guidance, workforce planning - Human resource management (HRM): the strategic approach to the effective ma...

CHAPTER 10: Human Resource Management (HRM) Purpose & Roles Of HRM ❖ The role of HRM in meeting organisation objectives: recruitment, selection, training, induction, advice, guidance, workforce planning - Human resource management (HRM): the strategic approach to the effective management of an organisation’s workers so that they help the business gain a competitive advantage. - The central purpose of HRM is to recruit, train & use the workers of an organisation in the most productive manner to assist the organisation in the achievement of its objectives. The roles of HRM Workforce planning – planning the future workforce needs of the business. It is also known as manpower planning. It involves the analysis and forecasting the number of workers and skills of those workers that will be required by the organisation to achieve its objectives. Thus, it involves forecasting the future demand for labour in the organisation and planning to meet it. It is accomplished through analysis of internal factors such as current and expected skills needs, vacancies and departmental expansions and reductions as well as external factors such as the labour market conditions. Workforce planning also involves a skills audit (Workforce audit). Workforce audit involves an assessment of staff capabilities and matching them against future needs. This is just a check on the skills and qualifications of all existing workers and managers. The HR manager will be checking on social, intellectual, technical, managerial and administration skills. Benefits of Workforce planning Planning for the future i.e to calculate the future staffing needs of the business To prevent the problems of too few or too many staff at the business To avoid many staff with wrong skills To achieve the objectives of the business in the future Factors influencing the number employees required in the future Future demand for the firm’s product Productivity of existing staff The objectives of the business i.e growth objective will imply that more staff will be required. Labour legislations i.e minimum wage laws from government encourages firms to workers with machines  Labour turnover i.e the higher the rate at which staff leave the business, then the greater will be the firm’s need to recruit replacement staff. Skills of existing staff i.e HR managers have insatiable appetite for better-qualified employees Recruitment & selection – recruiting & selecting appropriate employees & inducting them into the business. Developing employees – appraising, training & developing employees at every stage of their careers. Employment contracts – preparing contracts of employment for all employees & deciding on how flexible these should be: permanent / temporary, full- / part-time. Ensuring HRM operates across the business – involving all managers in the development of their employees – emphasising that this is not just an HR responsibility. Employee morale & welfare – monitoring & improving employee morale & welfare including giving advice & guidance. Morale and welfare are important to people at work. They affect people’s attitudes and willingness to work. Thus they influence how much effort workers will exert to their job. Employee Morale: refers to the feeling of enthusiasm and loyalty that a person has about a task or job. Employees must feel that what they are doing is worthwhile. If they feel that their work is valued by management, they are also likely to feel that they are valued both as employees and as individuals. Their morale will be high and employees tend to have a greater commitment and loyalty to their work. Employee Welfare: refers to the state of being happy, healthy or successful. Employees are often concerned about their health and safety at work. A business organisation which cuts corners on welfare is unlikely to get the best from its employees. Ways to maintain or improve staff morale and welfare Ensure that health and safety guidelines/ legislation is met. The physical welfare of employees can partly be assured by following health and safety measure. Offering help and guidance to employees who might be experiencing problems in their life outside work. E.g when a worker is worrying about her child’s deteriorating health condition. Provide medical facilities within the business in order for the employees to get treatment for any injuries. Dealing with issues that are demotivating employees Treating employees fairly - Incentive systems – developing appropriate pay systems (& other incentives) for different categories of employees. - Monitoring – measuring & monitoring employee performance Recruitment & Selection ❖ labour turnover, methods of recruitment & selection - (https://youtu.be/fb2d09xpvko) - Selection: involves the series of steps by which the candidates are interviewed, tested & screened for choosing the most suitable person for vacant post. - Recruitment: Refers to all HR activities that are aimed at finding and attracting job candidates who have the necessary knowledge, experience, qualifications and skills to fill a job. It involves identifying the need for an employee, devising a job description and finding a person suitable to fulfill the needs of the job. Reasons why businesses need to recruit people  To replace those who were dismissed  To replace employees who resigns or who have passed away  New employees for expansion  Employees who are promoted  Employees who retire - Labour turnover: measures the rate at which employees are leaving an organisation. - Labour turnover: Measures the rate at which employees are leaving an organisation. It is measured using the following formula Labour turnover = number of employees leaving x 100 Average number of people employed Example: ABC limited employees 500 employees on average in 2014. 50 workers left the business during 2014. Labour turnover = 50 workers x 100 500 workers Interpretation: labour turnover is increasing or is too high then it will be a signal that: Employees are not happy i.e low morale The business failing to recruit the right people Bad leadership or management Availability of better paid jobs elsewhere Potential Benefits of high labour turnover  Low-skilled and less productive staff might be leaving and creating space for highly skilled workers New ideas and practices are brought into the business by new workers Can benefit the business with the plans of reducing staff size i.e staff that will be leaving won’t be replaced Problems of high labour turnover High costs of recruiting, selecting and training new staff Difficult to establish team spirit as team members are constantly changing Low output level when a new worker is introduced and, or when the business is in the process of finding a suitable replacement. Lose of customers - Recruitment & selection process 1. Establishing the exact nature of the job vacancy & drawing up a job description 2. Drawing up a person specification 3. Preparing a person specification 4. Drawing up a shortlist of applicants 5. Selecting between the applicants - Recruitment methods Internal recruitment: when a vacancy is filled by someone who is an existing employee of the business External recruitment: when a vacancy is filled by someone who is not an existing employee & will be new to the business. Job Descriptions, Person Specifications, Job Advertisements ❖ purposes of job descriptions, person specifications & job advertisements - Job description: a detailed list of the key points about the job to be filled – stating all its key tasks & responsibilities. It lists the tasks & responsibilities the person appointed will be expected to carry out. It may also state the job title, location, nature of the business & the salary & conditions. - Person specification: a detailed list of the qualities, skills & qualifications that a successful applicant will need to have. It outlines the ideal profile of the person needed to match the job description. It may state qualifications, experience, interests & personality. - The job advertisement needs to reflect the requirements of the job & the personal qualities needed. Employment Contracts ❖ main features of a contract of employment - Employment contract: a legal document that sets out the terms & conditions governing a worker’s job. - A typical employment contract will contain the following features: Employee’s work responsibilities & the main tasks to be undertaken. Whether the contract is permanent / temporary Working hours & the level of flexibility expected, e.g. Part time / full time, working weekends / not, the payment method to be used for the job & the rate for it (e.g. Hourly rate). Holiday entitlement. The number of days’ notice that must be given by the worker (if they wish to leave) / the employer (if they want to make the worker redundant). Benefits of having an employment contact Both parties are clear about the terms and conditions that have been agreed  The employer and the employee both know what a person has been employed to do because this would be clearly stated in the contract that would be signed by both parties Any dispute about the terms and conditions of employment could be resolved by referring to the employment contract. Avoiding heavy fines or penalties What employees expect from employers Fair treatment by managers Fair wages Reasonable working hours and good working environment Holidays with pay Appropriate training Opportunities for promotion What employers expect from employees Punctuality Co-operation from employees Obedience to instruction Appropriate handling of facilities and equipment Loyalty and trustworthiness How can an employment contract be terminated? The employee can resign in order to take up employment elsewhere The employee might reach retirement age The employee might be in breach of contract and therefore the employer might be able to dismiss him The employee might have broken the terms of the contract causing the employee to wish to leave his/ her employment The term of the contract might have come to an end The employee might be promoted, in which case the roles and responsibilities would probably change. Redundancy & Dismissal ❖ difference between redundancy & dismissal - Dismissal: being dismissed from a job due to incompetence / breach of discipline. - Redundancy: when a job is no longer required, the employee doing this job becomes unnecessary through no fault of their own. This might be due to a fall in demand for a product/service / a change in technology. Redundancy might be voluntary / compulsory. Staff Morale & Welfare ❖ relationship between HRM, staff morale & welfare in a business including the concept of work-life balance - Work–life balance: a situation in which employees are able to give the right amount of time & effort to work & to their personal life outside work, e.g. To family / other interests. - This can be achieved by: Flexible working Teleworking – working from home for some of the working week. Job sharing – allowing two people to fill one full-time vacancy, although each worker will only receive a proportion of the full-time pay. Sabbatical periods – an extended period of leave from work. This can be for up to 12 months. Some businesses do not pay employees during this period but guarantee to keep the job open for them on return, but some businesses do pay employees a proportion of their full-time salary. - Employee morale & welfare Most HR departments will offer advice, counselling & other services to employees who are in need of support, perhaps because of family / financial problems. These support services can reflect well on the caring attitude of the business towards its workforce. When workers feel that the employer is concerned about their long-term welfare, then this is likely to lead to higher morale & a much stronger sense of loyalty & desire to do well for the business. Staff Training ❖ policies for diversity & equality - Equality policy: Refers to practices and processes aimed at achieving a fair organisation where everyone is treated in the same way. People have the right to be treated with equality, respect and dignity. All employees must have equal opportunities. Equality policy is violated when some employees are discriminated against e.g denying some employees an opportunity to receive skills training. Benefits of promoting Equality Can improve employee morale Greater commitment and effort from employees  The business can easily attract skilled and experienced personnel from other organisations - Diversity policy: practices & processes aimed at creating a mixed workforce & placing positive value on diversity in the workplace. Diversified workforce include employees: Who come from different backgrounds and cultures Who speak different languages With different levels of education Who differ in terms of age and gender Advantages of Diversity in business Creativity increases when diverse team members work together When a diverse team pulls together by focusing on their strengths, increased levels of productivity will be achieved Colleagues learn to value and respect one another even if they do not hold similar values and beliefs A diverse workforce brings different skills to the workforce, for example language skills Can lead to an increase in the customer base since some customers are attracted by a diversified sales force. The costs may include: higher recruitment costs longer recruitment process greater training needs communication barriers. ❖ The purpose of staff development/training as a means of securing required skills & motivating the workforce - (https://youtu.be/50pd35uhyb8) - Training: work-related education to increase workforce skills & efficiency. a)Induction Training: involves the introduction of new staff to the firm as they are told about its business and the way of operation. The HR manager should explain to the new worker the internal organisational structure, health and safety issues, and also company policy. The employee on the other hand has got the chance to ask questions. BENEFITS OF INDUCTION TRAINING  Helps employees to settle into their job quickly/familiarise workers with the business/provide information about the business so that he/she can easily cope with flow production Aware of health and safety/legal issues in the factory the new employee will know who to ask if there is a problem and this helps to prevent wastage of expensive raw materials Help keep productivity/efficiency high so that the business will remain competitive b)On-the-job training: training is done at the work station where an employee works. It can take the form of job training combined with related classroom instruction and apprenticeship. The trainee will be under the guidance of a highly skilled co-worker. Employees are trained by watching professionals do a job. It is only suitable for unskilled and semi-skilled employees. Advantages It can cut travel costs. The trainee may do some work while on training. They can actually be contributing to production while they are learning. Can be a motivator the trainers No special premises to hired or built It is cheaper since it uses existing skilled and experienced employees Disadvantages The trainer’s productivity is decreased because he/she must attend to the trainee’s problems If mentoring is not paid, the trainer may not be fully committed Some skilled and experienced employees are not good teachers. Mistakes made by the trainee may affect the business’s reputation Off-the-job Training: It takes place outside the work place. Workers go to another place for training e.g schools or private training colleges. It involves the use of specialised instructors. Advantages Employees can learn many skills. Employees can work during the day and attend training sessions in the evening. Any mistake that the trainee is going to makes are unlikely to affect the reputation of the business Training can lead to a recognised qualification Disadvantages outside trainers are very expensive output of the trainee is lost Trainee can also copy bad behaviours from the trainer. Benefits of training To the employer Improves motivation of staff Reduction of waste and scrap Quality services to customers May reduce labour turnover Helps to develop a positive culture in the organisation Increases productivity To the employee Employees may feel valued by the organisation Training improves promotional prospects May improve job satisfaction Employees are better able to cope with change.