Staff as an Asset or Cost

• what is human resource management?


  managing the people within a business in order to achieve corporate objectives. this involves tasks such as recruitment and training employees as well as designing performance management schemes
• what is staff as an asset?


  when a business view employees as a valuable resource to be invested in and ideally retained in the long term.
• what is staff as a cost?


  when businesses view employees as an expense to be minimised
• advantages of staff as an asset?

  • more skilled employees
  • higher levels of staff retention
  • reduce recruitment and training costs in the long run
  • more motivated
  • higher labour productivity
  • good reputation as an employer
  • easier to attract skilled people
• disadvantages of staff as an asset?

  • higher labour costs
  • risk that business can invest in staff that then go work for rivals
• advantages of staff as a cost?

  • easy to adapt workforce
  • lower labour costs
  • employees can be tightly controlled
• disadvantages of staff as a cost?

  • demotivated staff
  • higher labour turnover
  • low productivity
  • poor reputation as employer
• can businesses view staff as both an asset and a cost at the same time?


  yes
• factors to consider when viewing staff?

  • businesses overall objectives
  • businesses source of competitive advantage
  • the nature of the work
• how are staff as an asset (1) vs staff as a cost (2) paid?


  1. competitive pay structure with suitable performance based rewards
  2. just enough to recruit and retain staff
• staff as an asset (1) vs staff as a cost (2) terms and conditions?


  1. reasonable holidays, sick leave, pensions
  2. minimum legal rights
• staff as an asset (1) vs staff as a cost (2) recruitment?


  1. effective recruitment processes
  2. cheap and inferior recruitment processes
• staff as an asset (1) vs staff as a cost (2) training?


  1. effective development and training programmes
  2. minimal investment with training
• staff as an asset (1) vs staff as a cost (2) motivation?


  1. the use of non-financial motivators and opportunities for promotion
  2. using financial incentives to boost productivity
• staff as an asset (1) vs staff as a cost (2) monitoring performance?


  1. appraisal systems focusing on addressing training and development needs
  2. imposing penalties on employees who dont meet targets
• staff as an asset (1) vs staff as a cost (2) communication?


  1. strong and regular two way communication
  2. minimal communication
• staff as an asset (1) vs staff as a cost (2) empowerment?


  1. employees take responsibility for work, are empowered and authority is delegated
  2. little empowerment or delegation
• staff as an asset (1) vs staff as a cost (2) job security?


  1. there is job security
  2. flexible working