Human Resource

Management

Higher Business Management

 Today…
Role and Importance of HRM
Functions of HRM
HRM Remit
Changing Patterns of Employment
Reasons for Sub-contracting
Human Resource Planning
The Shamrock Organisation
Labour Turnover
Manpower Planning
Role and Importance of Human
Resource Management (HRM)

The most valuable asset in any

organisation is its workforce.
It is the human resources that
generate wealth by providing services
and producing goods.
Care must be taken over employees
especially if they want to secure and
retain staff.
 Function of Human
Resources
HRP
Recruitment and Selection
Training and Development
Maintenance of Personnel Records
Legislation
Employee Relations
Grievance and Discipline
 HRM Remit
To promote a policy of continuous learning and
staff development
To recruit, develop and retain people with the
appropriate skills and attitudes required for
present and future jobs
To manage employee relations
To design, implement and manage remuneration,
reward and appraisal schemes
To maintain and improve physical and mental well
being of the workforce
To take account of all legislation relevant to
HRM
 Changing Patterns of
Employment
Decline in full-time, permanent work
Decline in heavy engineering
Increase in service sector
employment (call centre, IT)
Increase in women working (suited to
new areas of employment)
 Changing Patterns of
Employment
Teleworking
Flexitime
Part-time
Job Sharing
Fixed Contracts
Sub-contracts
 Reasons for
Sub-Contracting
More skilled workforce
Expertise
Economies of scale
Can concentrate on what you’re
good at
Saves money in
equipment/training
 Human Resource Planning
Factors affecting HRP:

Changing goals of a Competition

business Population Changes
Changes in Market Trade Unions
Changes in Government
Technology Legislation
 Labour Turnover
Costs of High Labour Turnover:

Costs of advertising, interviewing &

training new employee
Loss of production while place is
being filled
Low morale amongst other employees
 Manpower Planning
If firm’s labour If firm’s labour supply
< demand:
supply > demand:
Additional
Redundancy advertising
Retraining Retraining
programmes
Early retirement Increase pay & other
‘Natural wastage’ incentives
 Recap…
Role and Importance of HRM
Functions of HRM
HRM Remit
Changing Patterns of Employment
Reasons for Sub-contracting
Human Resource Planning
The Shamrock Organisation
Labour Turnover
Manpower Planning
 Today…
Motivation and Needs
Maslow
Herzberg
Factors of Motivation
Empowerment
Motivation & Needs
Maslow’s Hierarchy
of Needs

Needs at top more

important than at
bottom
But lower needs
have to be
satisfied first
 Herzberg’s Two Factor
Theory
Frederick Herzberg believed there were two
factors that affected people at work:
Hygiene Factors – ones with potential to cause
dissatisfaction at work (salary, working
conditions, status, over-supervision)
Motivator Factors – aspects of a job that can
lead to positive job satisfaction (achievement;
recognition; meaningful, interesting work;
psychological growth and learning)
 Factors of Motivation
pay levels
job security
promotional prospects
Responsibility
working conditions
fringe benefits
participation in decision-making
working in a team
 Motivation
Financial Methods
Flat rate, piece rate, commission. PRP,
profit sharing, share ownership

Non-Financial Methods
Empowerment, delegation, job
enrichment, job enlargement, job
rotation, quality circles
 Empowerment…
…providing the means by which
subordinates can exercise power over their
working lives.

It offers more responsibility and

independence, different from delegation
because there is more freedom to decide
what to do and how to do it.
Empowerment Benefits to
firm
Improved productivity
Increased staff motivation
Speedier decision making
Fresh ideas can improve quality of
decisions made
Organisation may become more competitive
Faster communication as there are fewer
levels in the organisation
Improved management/employee relations
Empowerment benefits to
employee
May feel valued
Greater chance of promotion
Improved pay
Improved skills
Employees may be given extra
training
Improved motivation
Criticisms of Empowerment
Is it more work for less money?

Not all workers like freedom and

responsibility. Some like to be told
what to do.
 Recap…
Motivation and Needs
Maslow
Herzberg
Factors of Motivation
Empowerment
 Today… Recruitment Stages
1. Identify a Job Vacancy
2. Conduct a Job Analysis
3. Prepare a Job Description
4. Prepare a Person Specification
5. Advertise the job vacancy
Internally or Externally
 Identify Job Vacancy
Could occur due to:

An employee leaving organisation

An employee being promoted
A new post being created
 Conduct Job Analysis
This identifies:
Tasks to be performed
Skills needed
Duties & responsibilities

Gives idea of ideal candidate

 Prepare Job Description
This states:
Job title
Location
Tasks
Duties & Responsibilities
Hours
Holiday Entitlements
Prepare Person Specification
A description of the type of person
suitable for post is drawn up. This
includes:
Qualifications
Experience
Personal qualities
Hobbies & Interests
 Advertising Post
Internal and External
Internal External

Newsletters Newspaper Adverts

Notice board Internet
Job Centre
Recruitment Agency
Schools/Colleges/
Universities
 Internal Recruitment
Advantages Disadvantages
Applicant & ability Limited skills pool
familiar to organisation
Organisation may have
Own Job needed to
invested in person be filled
through training Resentment from
Individual aware of overlooked staff
culture (no need for
induction training)
 External Recruitment
Advantages Disadvantages
Can target specific Expensive
sections of Time taken can be
population long
Wider job skills Successful
pool candidates may
No need to fill turn down job
another post
 Recap… Recruitment Stages
1. Identify a Job Vacancy
2. Conduct a Job Analysis
3. Prepare a Job Description
4. Prepare a Person Specification
5. Advertise the job vacancy
Internally or Externally
Today… Selection Methods
Interviews
Application Forms
CVs and References
Tests
Assessment Centres
Interviews
One-to-one
interview
Successive
interview
Panel interview
Application Forms
Initial contact,
checked against
the Person
Specification to
select suitable
candidates for
vacancy
Usually in
conjunction with CV
CV
Curriculum Vitae or
life history
Personal Details
Education
Qualifications
Work Experience
Hobbies/Interests
Additional Info
Tests
Attainment tests
Aptitude tests
IQ tests
Psychometric
tests
Medical tests
 Assessment Centres
Intensive
Activities:
assessment held
over one or two Team building
days Role Play
Interviews

Qualities looked for:

Social skills,
leadership qualities
& personality
Selection Methods: Validity at predicting work
% used by business performance
(0 = no use; 1 = very helpful)

Interviews 92 0.17
References 74 0.13
Assessment
Centres 14 0.40
Aptitude Tests 11 0.54
Graphology 3 0.00
Assessment Advantages Disadvantages

Mental useful predictors of Use of ability

Ability performance across tests can result in
tests (IQ) a wide variety of high levels of
jobs adverse impact
Are usually easy can be costly to
and inexpensive to develop &
Employmen administer
Structured administer
Unstructured
t interviews, based on interviews
interviews job analyses, tend typically have poor
to be valid validity
May reduce Skill of the
adverse impact if interviewer is
used in conjunction critical
with other tests
Assessment Advantages Disadvantages

Assessme Good predictors of Can be

nt Centres performance, managerial expensive to
potential, & leadership develop &
ability administer
Apply the whole-person Specialised
approach to personnel training
assessment required for
assessors;
Reference used to verify Reports are
checks information previously almost always
provided by applicants positive
May encourage
applicants to provide
more accurate
information
Recap… Selection Methods
Interviews
Application Forms
CVs and References
Tests
Assessment Centres
 Today…
Reasons for Training and Development
Training costs and benefits
Induction Training
Training Methods
 Reasons for Training and
Development
Improve staff performance
Improve productivity
Staff more flexible
Increase job satisfaction
Staff more motivated
Upgrade staff skills
Reduce injuries & accidents
 Training
Costs Benefits

Sending people Flexibility

on training costs Upgrade skills
Paying trainers Employee
Loss of output satisfaction
Induction Training
For new employees

Covers aspects of:

Company
procedures
Meeting colleagues
Tasks of job
Health & safety
 Training Methods
On the job – training
conducted at
employee’s place of
work

Off the job – training

occurs outside of work
e.g. university or
college
 Training Methods
“Sitting next to Nellie” – task demonstrated
then trainee undertakes task

Coaching – trainee taken through step by step

by trainer

Job Rotation – trainee learns tasks in different

departments/jobs

Self-paced/distance learning – trainee

receives resources and works on their own
 Recap…
Reasons for Training and Development
Training costs and benefits
Induction Training
Training Methods
 Today…
Staff Development
Appraisal
Reasons for Appraisal
Keeping Staff Records
Use of Records
Staff Development
Set targets and have
appraisals

Motivate Staff through:

Bonuses and financial
rewards
Employee of Month
Team building/social
events
 Appraisal
Assessment of staff performance
Uses Appraisal form then interview

Job focus = Looks for success in meeting goals

and targets
Person focus = looks for person’s skills and
qualities

Problems:
Difficult to measure
Personality clashes
 Reasons for Appraisal
To identify future training needs
Consider individual’s development
needs
Improve employee performance
Provide feedback on performance
Identify promotion hopefuls
Keeping Personnel Records
Keeps personal info on
every employee

Includes info on
appraisals, training
etc…

Conforms to the Data

Protection Act
 Uses of Records
Key Fields: Unique identifiers like National
Insurance Number (Glasgow City Council
uses this)

Attendance
Discipline
Performance
Communicating (Correspondence)
Selection of staff (promotion, training,
teams, specific jobs)
 Recap…
Staff Development
Appraisal
Reasons for Appraisal
Keeping Staff Records
Use of Records
 Today…
Employee Relations
Trade Unions
Trade Union Aims
Collective Bargaining
Grievance
Discipline
 Employee Relations
“The formal relationship between
employees and employers”
 Trade Unions
Organisation representing workers re: pay
negotiations, working conditions, dismissal,
redundancy

Collective bargaining is the basis of unions,

whereby a group of workers stand a better
chance to negotiate

Trade Unions are funded by annual

subscriptions by its members
 Trade Union Aims
To improve pay of its members
Improve working conditions
Support training & development of
members
Ensure members’ interests are
considered by employers
 Collective Bargaining
Begins with a change in existing contracts
Employers make offer to employee reps
Reps tell members & counter-claim occurs
Negotiations begin
Eventually a compromise is usually reached
 Grievance
Grievance is a complaint by employee
against employer

Can be taken up by:

Industrial tribunal
ACAS
Trade Union
 Discipline
Discipline procedures are taken
against employee by employers
Employees must be aware of rules
verbal & written warnings given
for breaking rules
Suspensions can follow then
dismissal
 Recap…
Employee Relations
Trade Unions
Trade Union Aims
Collective Bargaining
Grievance
Discipline
 Today…
ACAS
Negotiation
Consultation
Arbitration
Works Councils
Industrial Action
 ACAS – Advisory, Conciliation &
Arbitration Service
Provides impartial information to
people with problems at work
Prevents & resolves problems at work
Settles complaints about employee’s
rights
Run workshops & seminars on latest
employment issues & legislation
 Processes

Negotiation

Consultation

Arbitration
 Negotiation
Its purpose is to reach an agreement, but
needs some middle ground between the two
positions held.
Success of the firm should benefit both
employee as employers, so it is in their best
interests to come to a settlement.
Employers and employees discuss matters
that are important to both of them in order
to come to an agreement. It also involves
compromise.
 Consultation
Informing employees of new rules and
regulations that are being brought in is
consultation.
The changes may have been forced upon
the firm by the Government, therefore no
agreement is necessary and employees
views are not needed to be taken into
account.
Final decision lies with the organisation.
 Arbitration
When no agreement occurs, then a third
party, an independent arbitrator such as
ACAS is called in.
Arbitrators are neutral and unbiased and
will listen to both sides and offer a fair
and practical solution.
Binding arbitration is when both sides
agree to go with the decision of the third
party.
 Works’ Councils
They are set up by an organisation and
contains the same amount of employees and
employer representatives
Groups meet to discuss any proposed
changes before they are implemented.
Decisions reached by the council are
usually accepted by the workforce as their
representatives have been involved.
 Industrial Action
Employee Action Employer Action

Sit in Withdrawal of
Overtime ban overtime
Work to rule Lock out
Go slow Closure
Strike
 Recap…
ACAS
Negotiation
Consultation
Arbitration
Works Councils
Industrial Action
 Today… Legislation
Sex Discrimination Act 1975
Race Relations Act 1976
Employment Rights Act 1996
Equal Pay Act 1970
Office, Shops and Railway Premises
Act 1963
Health and Safety at Work Act 1974
Sex Discrimination Act
(1975)
Illegal to
discriminate
against employee
or job applicant
on grounds of
gender or
marital status
Race Relations Act (1976)
Illegal for
employers to
discriminate
against employee
or job applicant
on grounds of
ethnic
background
Employment Rights Act
(1996)
Covers:

Unfair dismissal

Redundancy

Maternity leave
Equal Pay Act (1970)
Pay conditions
must be equal
for employees
of the opposite
sex who are
performing
same work
Health & Safety at Work
Act (1974)
Covers:

Working
conditions
Provision of
safety equipment
Workplace
hygiene
Office, Shops and Railway
Act
Covers:
Operating dangerous
machinery
Seating & Storage space
Lighting
Fire
Temperature/ventilation
Premises, Toilets etc…

Not all workers like freedom

and responsibility. Some like
to be told what to do.
What are the main
objectives of HRM?
 Describe Maslow’s
hierarchy of needs and
describe how they are
satisfied through
employment
 Describe 3 strategies
that could be employed
to increase employee
motivation
 Describe how the
structure of the
workforce has changed
in recent years
 Describe the growing
importance of women at
work, and identify the
issues that HRM are
having to face
 What problems have
been presented to firms
who have reduced their
core workforce?
Describe the importance
of good Human
Resource Planning
 Describe the 5 main
roles that the HRM
department plays within
the organisation
 Identify the first 3
stages in the
recruitment process
 Describe the
advantages and
disadvantages for both
internal and external
recruitment
 Explain what
procedures are involved
in the selection process
 Identify and describe
the different methods of
training available to the
organisation
Describe the benefits of
a staff development
policy
 Identify the main
institutions involved in
employee relations
Describe the stages in
the employee relations
process
Identify two methods for
the successful
management of
employee relations
What should a contract
of employment include?
What information should
be contained in
personnel records?
 Identify the major
pieces of legislation of
concern to HRM
departments