Chapter 10 : Human resource management

• Human resource management, or HRM, refers to the strategic approach to the effective management of employees so that they help the business gain a competitive advantage.
• HRM focuses on:

  • the recruitment and selection of new employees
  • measuring and monitoring employee performance
  • observing and improving employee morale and welfare
  • training employees
  • dismissing employees
  • workforce planning
• Workforce planning refers to forecasting the numbers of workers and the skills that will be required by the organisation to achieve its objectives.
• A workforce audit refers to a check on the skills and qualifications of all existing workers
• Labour turnover refers to the rate at which employees are leaving an organisation.
• A job description refers to a detailed list of the key points about the job to be filled, stating all of its key tasks and responsibilities.
• A person specification refers to a detailed list of the qualities, skills and qualifications that a successful applicant will need to have.
• An assessment centre refers to a place where a range of tests is used to judge job applicants on their potential ability to perform a particular role
• Recruitment is the first stage of the selection process, involving advertising vacancies and attracting applications from people interested in working for the company.
• Shortlisting is the second stage of the selection process, where managers select the most promising candidates from the pool of applicants.
• Selection refers to the series of steps by which the candidates are interviewed, tested and screened to choose the most suitable person for a vacant post.
• Recruitment refers to the process of identifying the need for a new employee, defining the job to be filled and the type of person needed to fill it, and attracting suitable candidates for the job.
• Selection methods include interviews, aptitude tests and psychometric tests.
• Both external and internal change can influence workforce planning and HRM decision making
• A reference refers to a comment from a trusted person about an applicant's character o previous work performance
• One reason why some businesses don't spend much on worker's training is because they think they will be later recruited by other businesses.
• HRM is a key factor in influencing the competitiveness of a business.
• The number of employees required depends on:

  • the product's forecasted demand - if more, then more workers
  • productivity level
  • business objectives
  • changes in law regarding worker rights
  • labour turnover
  • absenteeism rate
• High labour turn over is more likely in low unemployment areas
• Disadvantages to high labour turnover include:

  • difficult to maintain team spirit
  • difficult to establish customer loyalty due to lack of familiar contact
  • costs of recruiting, selecting and training new staff
  • poor output levels due to staff vacancies
• advantages of high labour turn over:

  • new workers bring in new ideas
  • reduces employee numbers
  • low skilled workers can be replaced with higher skilled ones
• Internal recruitment refers to when a business aims to fill a vacancy from within its existing workforce.
• External recruitment refers to when a business aims to fill a vacancy with a suitable applicant from outside of the business, such as an employee of another organisation
• An employee contract refers to a legal document that sets out the terms and conditions governing a worker's job
• Advantages of internal recruitment:

  • applicants already known to selection team
  • no need for induction training as applicants will already know the organisation's methods
  • often quicker than external recruitment
  • cheaper than external advertising and recruitment
  • gives internal staff a career structure and enables them to progress
  • applicants already understand the culture of the business well
  • if vacancy is for a senior post, workers won't have to get used to a new management style
• Advantages of external recruitment:

  • external applicants will bring in new ideas
  • wider choice of potential applicants
  • avoids resentment sometimes felt by existing staff if one of their colleagues is promoted above them
  • standard of applicants is higher
• Employee contracts impose responsibility on both the employer and the employee.
• Redundancy refers to when a job is no longer required, making the worker doing this job become unnecessary despite not being at fault.
• Work life balance refers to a situation in which employees are able to allocate the right amount of time and effort to work and to their personal life outside work
• Employee morale refers to the overall outlook, attitude and level of satisfaction of employees when at work
• Employee welfare refers to employees' health, safety and level of morale when at work
• Dismissal refers to being dismissed or fired from a job due to incompetence or a breach of discipline
• Unfair dismissal refers to ending a worker's employment contract for a reason that the law regards as being unfair
• Unfair dismissal reasons may include:

  • pregnancy
  • being a member of an union
  • discrimination - race, gender, religion, etc
• Dismissal reasons may include:

  • constant negative attitude at work
  • bullying other employees
  • inability to do the job despite sufficient training
  • disregard of required health and safety protocols
  • deliberate destruction of another employee's property
• work life balance is in imbalance due to:

  • customers expecting goods and services to be available outside of traditional working hours
  • globalisation leading to greater competitiveness
• The demands of working long and often unsociable hours may lead to employees having poor health and immense stress
• Multi skilling refers to the training of an employee in several skills to allow for greater flexibility within the business
• A flexible working pattern can improve productivity by reducing absenteeism and staff turnover rates
• job rotation allows employees to gain experience across different departments within a company