Human Resource Management

Content

• Human Resource Management• Workforce Planning• Recruitment• Selection• Training • Methods of remuneration• Measurements of personnel effectiveness

Human Resource Management

• Human resource management looks at the best way to use a businesses personnel

• HRM covers:– Workforce planning– Recruitment and selection– Training– Appraisal– Motivation and employee rewards

Hard and Soft HRM

• Hard HRM – employees are treated as a resource, aim to pay them as low as possible, they need to be controlled

• Soft HRM – Employees are the most valuable asset of the business and they need to be developed to ensure they are being used optimally

Workforce Planning

• Businesses need to look at future labour needs• They have to ensure they have the right amount of workers

with the right skills and experience • Managers draw up plans looking at the number and type of

workers who they want to recruit• Also conduct a skills audit so they are able to establish

skills and experience of current workers

Workforce planning

• When planning the workforce managers need to know:– Sales forecasts for at least the next year– Employee turnover figures– Projected wage levels– Technological developments– Changes to laws impacting the working week

Recruitment and Selection

• This is the process of filling an organisations job vacancies by appointing new staff

• Job descriptions and person specifications are drawn up at the beginning of the process

Person specifications

• These set out the qualifications and qualities required in an employee

• These refer to the person and not the post• They include:

– Educational and professional qualifications required– Character and personality needed– Skills and experience wanted

Job descriptions

• These relate to the position available• They list the duties and responsibilities associated

with a specific job• They include:

– The title of the post– Employment conditions– Some idea of tasks and duties

Internal Recruitment• Internal recruitment – where a business looks to fill a

vacancy from existing staff• Advantages :

– Employee has awareness of a firms culture– Candidates may not need induction training– Provides promotion for workers– Avoids expensive advertising – Selection can be easier as know about candidates

• Advantages :– Limited skill base – May not be as high quality as external candidates especially for

senior jobs

External recruitment

• External recruitment – where a business looks to fill a vacancy from individuals outside the organisation

• Advantages– Can attract a more diverse group of candidates who bring fresh

ideas to the business– Increase in variety of skills

• Disadvantages:– Can be very expensive– Know less about the candidates

Methods of external recruitment

• There are a number of methods:– External advertising – the business advertises for the

employee directly – Headhunting firms – these firms identify suitable

candidates from competitors for a fee– Job centres – Employment agencies – match jobs and candidates for a

fee– Training schemes (government) this is lower risk and

cheaper

Recruitment Process

• Position is advertised externally / internally • Send out application packs• Receive candidate applications by closing date • Candidates applications are compared against the

person specification those with the best fit are invited for interview

• At interview the job description is used to form the basis of the questions

Selection

• These are the techniques used to decide who is right for the job

• They include:– Interviews– Psychometric tests– Assessment centres which can include:

• Role plays• Simulated work environments

Interviews

• Interviews are the most popular form of selection• They can involve one or more interviewer• They are a relatively cheap method • They can be unreliable as they don’t give a valid

picture of how someone will perform on the job

Training

• The provision of work-related education, either on-the-job or off-the-job, involving employees being taught new skills or improving skills they already have

Training Needs• Training is often a response to an internal or external

change e.g– The development and introduction of new products– Restructuring of the firm– The development and introduction of new technology– Changes to procedures– High labour turnover– Low morale– Changes in legislation

Induction training

• Education for new employees which involves learning about the way the business works

• It helps to:– Reduce turnover– Increase understanding of culture– Increase motivation– Mean employees contribute to organisation more quickly

External Training

• Outside the organisation• Appropriate if only a few employees with a specific

training need • Or if training needs are not specifically linked to

organisation• Meet with employees from other companies and

exchange ideas• Can make employees feel valued and increase

motivation

Internal Training

• Occurs inside the organisation• Appropriate if training needs are specific to the

individual organisation

On / Off the job training

• On the job – learn on the job usually by sitting next to an experienced employee

• Off the job – all forms of employee education apart from that at the immediate workplace

Methods of Renumeration

• Remuneration: pay – wages, salaries, bonus, PRP, commission, piece work

• Non Financial: praise, training, additional responsibility,‘perks’• Share Options: Opportunity to buy shares in the company at an

agreed price

Measurements of personnel effectiveness – Labour productivity

• Labour productivity – looks at how much work each worker does (output)

• Labour productivity = output per period / number of employees at work

• Need to remember that this can also be influenced by other factors such as efficiency of capital that is being used.

• This can be used as a basis for performance related pay • Labour productivity may be difficult to calculate for some

businesses

Absenteeism

• Absenteeism – the amount of time employees are having off work

• Number of staff absent (on one day) x100 / total number of staff

• Helps to measure the morale and motivation of the workforce

• If this is high it will cost the business money and decrease their profits

Labour Turnover

• Labour turnover – how many people are leaving each year

• Turnover = Number of staff leaving per year x 100 / average number of staff

• If this is high may be due to low wages and insufficient training causing poor morale

• Can also be due to problems with the recruitment process where the wrong staff are appointed

Health and Safety

• Health and safety = Number of working days left per year due to health and safety x 100 / total number of possible working days

• This is a measure of safety• Need to ensure this stays as low as possible

Summary • Human Resource Management looks at the people who work in a business• Hard models look at people as a financial resource, soft models look at the development of

staff• Workforce Planning is the process taken to look at future labour needs• Recruitment starts with a job description and person specification and allows the business to

find the right person• Internal and external recruitment – internal recruitment from inside the business, external

recruitment – recruit staff from outside the business• Selection – methods of choosing the right person for the job• Interviews are the most common method of selection • Training – how you educate staff to increase their skills and experience • Training can be on the job or off the job • Methods of remuneration – staff can be renumerated with financial and non financial

methods• Measurements of personnel effectiveness – these are ways to measure the performance of

the business and include labour productivity, labour turnover, absenteeism and health and safety