2.1 Human Resource

Management

Human Resource Management The strategic approach to the effective

management of an organization’s workers so that they help the business gain a competitive edge.

Human Resource Planning Get the right number of people With the right skills With the right experience With the right competencies In the right jobs At the right time At the right cost

Workforce Planning - Forecasting Forecasting the NUMBER of staff required

Change in demand for product Staff productivity Business objectives Changes in employment law Labor turnover and absenteeism rate

Workforce Planning - Forecasting Forecasting the SKILLS of staff required

Keeping pace with technologyProduction methods, complexity of machinery,computer applications.

Flexible or multi-skilled staffRecruit and train workers with more than oneskill to be applied in many ways.

Labor Turnover Measures the rate at which employees are

leaving.

Can be measured by a calculation:

number of employees leaving per year X 100average number of people employed

(Expressed as a percentage.)

Labor Turnover

Drawbacks of high turnover Benefits of high turnover Costs of recruiting and selecting

new staff

Poor output and poor customer service while vacancies are filled

Difficult to establish employee loyalty and customer relationships

Difficult to establish “team spirit” and stable work groups

Low-skilled and less-productive staff might leave which could be replaced with better workers

New ideas and practices are brought into the organization by new workers

A business could have a planned reduction in staff, leaving employees are not replaced

Internal & External Factors – Demographic changes Population Growth or Decline

Opportunities: Easier to recruit as population increasesConstraints: May take years for population growth to affect the workplace

Immigration/EmigrationOpportunities: May be able to pay lower wagesor recruit highly skilled people from other countriesConstraints: Immigrants may need more training; emigration could lead to a country's “brain drain”

Aging populationOpportunities: Older works may be more reliable and loyal than younger workers and be more experiencedConstraints: Older workers may be less flexible and adaptable to new technologies

Labor Mobility Occupational Mobility

Workers are willing and able to move to different jobs requiring different skills

Geographical MobilityWorkers are willing and able to move to new regionsto take new jobs

High levels of skill and home ownership tend to make workers IMMOBILE. Why?

New Communication TechnologyInformation & Communication Technology or

ICT for short!

How does ICT affect the work place?

Recruitment What is the nature of the job vacancy?

Create a job description What skills are needed of the applicant?

Create a person specification Advertise

Include the job description and personspecification

Short list of applicantsReview CV’s (curriculum vitae – type of resume)

Conduct Interviews

Training- 4 TYPESOn-the-Job Training

New employee may be paired with an experienced employee. Induction Training is given to ALL employees which introduces them to company policies and procedures.

Off-the-Job TrainingIncludes college courses, training centers, or from a vendor.

Training - 4 TYPESCognitive Training“Brain Exercises” or “drill for skill”. Used to reinforce sustained attention, thinking before acting, listening and reading.

Behavioral Skills TrainingGeared toward effective communication with others:Communication Change management

Assertiveness Negotiating

Conflict management Presentation

Customer service Networking

Training & Poaching Training can be expensive. Why?

NOT training can be expensive. Why?

Well-trained staff can be recruited by other firms and leave for better paying jobs. This is called “POACHING”

Appraisal of Staff Usually completed annually – 1 X per year An appraisal form is used. Why? Employee and Manager discuss employee

performance. Employee and manager establish career

plans and skills to develop the employee. MBO – Management by Objective

Developing skills in and with employee agreement that furthers the objectives of the company.

Appraisals – 4 Types1. Formative: Uses formal and informal

assessment methods. It should be done in the spirit of being supportive to the employees development. Think: Molding the employee to be successful in our organization.

2. Summative: Used to measure success of employee or their efficiency. Benchmarks are set and the outcome could influence pay, bonuses, or promotions.

Appraisals – 4 Types3. 360-Degree Feedback: Assessments

are collected from “all around” the employee. Often used to assess training needs for the organization. Collections from: colleagues and peers subordinates supervisors customers

2. Self-Appraisal: Prior to the annual performance review the employee may be asked to self-evaluate themselves. This can be used for discussion purposes during the performance review meeting.

Dismissal Employee is unable to perform job duties

to the standard required by the company Employee may have broken a condition of

employment (example: failed random drug test)

Unfair dismissal may lead to lawsuits HR must assist employee with

improvement efforts before dismissal can occur to avoid lawsuits for unfair dismissal

Redundancy (Layoff) A workers job is no longer required by the

company. A replacement employee will not be hired. Causes of redundancy:

Job no longer required by the company Budget cuts Reduction in workforce

(RIF – Reduction in Force)

Retrenchment (Downsizing) A company policy of reducing

expenditures or redirecting focus to particular market, product, or service to become more financially secure.

This usually involves layoffs of employeesand restructuring expenses.

Employment PatternsTraditional:

Full-time employment contracts

Permanent employment contracts

Regular working hours each week

Working at the employer's place of work

New Patterns:

Part-time and temporary contracts

Teleworking from home

Flexible hours contracts

Portfolio Working (Charles Handy)

Employment PatternsWhy Changing Patterns?

Globalization

Need for flexibility

Outsourcing

Social and demographic changes

Employment PatternsScenario: Who should I hire?

Insurance company wants to employ 10

new telephone customer service advisers.

Who should I hire? Consider:

10 Full-time staff on permanent contracts

20 part-time staff or flexi-time workers

Temporary contract workers

Outsourcing

Advantages to Part-time/Temp Staff

Company Worker

Staff can work busy periods or not work slow periods

Ideal for some workers: students, parents with young children, elderly

More staff available when needed

Can combine more than one job with different companies

Staff can be “tried” before offering full-time contract

Telecommuting offers flexibility

Staff can telecommute

Disadvantages to Part-time/Temp Staff

Company Worker

More staff to “manage” Earn less than full-time workers

Effective communication is more difficult

May be paid lower than full-time workers

Motivation is more difficult

Lower job security

Telecommuting can produce lower productivity in workers

Less social contact when telecommuting

Core VS Peripheral Workers

CORE

Full-time

Permanent

Peripheral

Temporary

Part-time

Self-employed

Outsourcing, Offshoring, ReshoringOutsourcing: Using another firm to

perform duties or functions

Offshoring: Moving duties or functions to a business based in another country

Reshoring: Bringing back duties or functions that had previously been offshored or outsourced.

HR Activities Core/Non-CoreCore Non-Core

Eligible for outsourcing/off-shoring

Change management, strategic HR planning, policy development, pay and benefits strategy, cultural change programs, recruitment for senior management, succession planning, specialized training

Payroll, recruitment, training and workforce development, employee records management, pension administration, exit interviews, child care, legal advice and compliance, health insurance, and safety administration

Outsourcing HR Functions

Benefits LimitationsReduces costs Local knowledge of labor market

may be lost.

Increases efficiency by using HR specialists.

Cost savings may not be significant

Provides greater expertise in areas like employment law.

The process of outsourcing may give employees a sense of being controlled by outside agency.

Aids corporate growth – HR can be a constraining factor.

Outsourcing can never remove the responsibility of management to form good working relationships with their employees.

Remaining internal HR staff can focus on strategy and policy

In small business allows owners to focus on growing company, increasing profits, and gaining market share.

Impact HRM - InnovationPeople management strategies have

changed: Team work, regular appraisals, information sharing, empowerment, performance related pay

Results: Higher productivity Higher labor retention Attract high quality workers Intellectual contributions from employees

Impact HRM - Ethical Globalization of the workforce and

multinational companies has now created emphasis on ethical considerations

Results: Cultural awareness Bribery and corruption may be common place

in some countries Pay – not all countries are consistent with pay

levels of entry level workers or senior management

Impact HRM -CulturalCorporate culture can be influenced by the

culture within the organization and by the countries associated with it.

Organization Culture “Hard” HRM practices: Focus is on cutting

costs, using temp and part-time workers, and minimal training.

“Soft” HRM practices: Focus is on developing motivated staff that breeds loyal, hard-working employees who are self-fulfilled (happy)

Impact HRM -Cultural Corporate culture can be influenced by the

culture within the organization and by the countries associated with it.

National Culture Adapt to meet conditions of country Develop cultural sensitivity