2.5: making human resource decisions

• organisational structure


  refers to the levels of management and division of responsibilities within an organisation
• hierarchical structure


  an organisation with many layers of management, therefore creating a tall organisational pyramid
• hierarchical structure advantages


  - no conflicts of interest

  - clear chain of command

  - clear career structure and opportunities for promotion (possibly motivating)
• hierarchical structure disadvantages


  - inflexible and resistant to change due to long lines of communication

  - tacitly ilicit one way communication

  - few horizontal links between departments, which could cause chaos
• flat structure


  An organisation with few layers of hierarchy - presumably because each manager is responsible for many staff
• flat structure advantages


  - information is passed quickly

  - can respond quickly to external factors (e.g. competition)

  - wide span with managers delegating tasks

  - staff can make decisions without prior permission from the CEO
• flat structure disadvantages


  - few levels means fewer promotion opportunities, which may be demotivating

  - wide span of control means subordinates may have no one to seek help from

  - less time for planning
• managerial layers


  the hierarchical levels or tiers of authority within a company, spanning from the top executives to the frontline employees
• centralised organisation


  an organisation where the majority of decisions are taken by senior managers/owners and then passed down the organisational hierarchy
• centralised organisation advantages


  - clear chain of command preventing other parts of the business becoming too independent

  - easier to coordinate control from the centre (e.g. with budgets)

  - easier to show strong leadership with (usually) quicker decision making
• centralised organisation disadvantages


  - lack of authority down the hierarchy may reduce manager motivation

  - increases CEO workload

  - possibility of dictatorship

  - lack of specialisation

  - less dynamic, with local managers needing permission to make decisions
• decentralised organisation


  an organisation where authority is delegated down the chain of command to individual managers
• decentralised organisation advantages


  - (possibly) better customer service with decision making being closer to the customer

  - increases staff motivation with more responsibility

  - better ability to respond to local circumstances

  - faster decision making
• decentralised organisation disadvantages


  - duplication of roles, diseconomies of scale

  - lack of strong leadership when maybe needed (e.g. during a crisis)

  - difficulties in achieving tight financial control

  - coordination problems
• diseconomies of scale


  occur when a business grows too large, leading to increased average costs per unit of output due to inefficiencies and difficulties in managing a larger workforce
• barrier to communication


  anything that gets in the way of a message and prevents it from being received correctly
• what could be a barrier to communication

  - layers of management

  - jargon

  - sender's (in)ability to explain

  - technological problems (e.g. signal)

  - language barriers and time differences (if the business is multinational)

  - excessive/insufficient communication
• board of directors


  the governing body of an organisation that set strategies, oversee management and protect the interests of shareholders and stakeholders
• CEO


  a chief executive officer, the highest-ranking person in a company or other institution, ultimately responsible for making managerial decisions
• application form


  the series of questions a job-seeker must fill in when trying to get an employer interested in interviewing them
• CV


  sets out the person's qualifications, experience and any other relevant facts
• job description


  a short account of the main features and responsibilities of the job
• person specification


  A description of the type of person who would best fit the job based on their character, their experience, and skills
• external recruitment


  the process of seeking new employees from outside the firm

  + wider range of applicant with new, fresh ideas

  - costs incurred from advertising
• internal recruitment


  the process of seeking employees who are currently within the firm to fill open positions

  + employer is already familiar with the applicant (and vice versa)

  - may not bring new ideas and could lack the skills, especially if the job involves a brand new product
• references


  people who have known you for at least a year and can provide information about your skills, character, and achievements
• full time


  work for an employer of between 35-40 hours a week
• part time


  work for an employer for less that 35 hours a week
• flexible hours


  working for an employer with agreed hours/days over a year, but with no fixed time as to when these hours are carried out
• overtime


  time worked beyond the regular hours
• permanent contract


  an agreement between a company and an employee that work and income will be provided constantly into the long-term future

  + job security

  - less flexibility
• temporary contract


  an agreement between a company and an employee that work and income will be provided for a specific time period

  + more flexibility

  - no long-term job security
• freelance contract


  An agreement over one job between a company and self-employed worker

  + flexibility, variety of work and client choice

  - lock of job security, income instability and self management (which may be added workload)
• remote working


  when employees can work from home and do not have to come into a place of work - technology has made this more likely, as the internet and conference calls improve communication
• hybrid working


  when employees are able to do their jobs either in the office or from a remote location (e.g. home)

  + flexibility

  - distractions may be present at remote locations
• retention


  a measure of how many staff stay with the business each year
• why does staff training reduce the chances of staff leaving the business?

  they are more likely to feel values and satisfied with their job and so stay with the business - workers tend to be more enthusiastic/motivated about jobs that they are good at (which is outcome of training)
• formal training


  official training programme (e.g. a graduate training programme)
• informal training


  unplanned and extra advice that comes from conversations with colleagues
• self-learning


  teaching yourself by reflecting upon performance and how mistakes can be avoided