business unit 2 : human resources

• Human resources management


  The effective management of an organisation's employees so that they help the business achieve its objectives
• Human resource management (HRM)

  • Process of managing the personnel of the firm to ensure that the firm meets its objectives, including control and management of:
  • Terms and conditions of employment
  • Recruitment and training
  • Motivation
  • Wage bargaining
  • Pensions
• Role of Human Resources Management

  • Workforce planning

  Recruitment, selection and induction of new employees

  Training and development of staff

  Performance management and staff appraisals

  Reviewing pay and remuneration packages

  Disciplinary and grievance procedures

  Looking after the welfare of employees

  Budgeting and managing costs of employees

  Planning for future human resource needs for the business
• Workforce planning


  A continuous process to get the most from their human resources, referred to as the HR plan or workforce plan
• External factors influencing human resource planning

  • Demographic change

  Net birth rate

  Net migration rate

  Flexibility of the workforce

  Women entering/returning to the workforce

  Aging population

  Change in labour mobility

  Occupational labour mobility

  Geographical labour mobility

  Immigration

  Flexitime

  Technology

  Economic environment

  Gig economy
• Internal factors influencing human resource planning

  • Changes in business organisation

  Changes in labour relations

  Changes in business strategy

  Changes in business finance
• Good employer


  Samsung electronics company won the Forbes 2022 employer of the year award, with the main reason being pay being above the market average and the company also provides great benefits with heavy discounts on their products
• Bad employer


  Kraft Heinz company with an employee recommendation of 39%, most common reason of employee dissatisfaction is due to poor work-life balance
• Reasons for resistance to change in the workplace

  • Employees are accustomed to their current company structure

  Self-interest

  Low tolerance

  Misinformation

  Different points of view
• Ways to combat employee resistance

  Empowerment through professional learning sessions led by employees

  Role development

  Active listening

  Staff awareness

  Develop communication

  Staff ownership (having choice leads to motivation)
• Labour turnover


  The movement of employees into and out of a business in a given time period (usually a year) and is an indicator of how stable a business is
• High labour turnover


  Suggests workers are dissatisfied with some aspect of their employment situation, affects employee motivation and leads to an interruption in work practices and routines, communicates to employees that the business has a problem with some aspect of employment there
• Human resource management


  The effective management of a company's organisation regarding its employees and their welfare to ensure businesses achieve their objectives
• Importance of HRM for First State Bank

  • Can aim to have a competitive edge by having high-quality employees managed by HRM, which will increase customer margins and profits

  HRM training employees to be of high quality and sustained welfare in turn cause low turnover rates which therefore reduces recruitment expenses that the bank would otherwise have to accommodate. Ensures an element of consistency and low employee turnover
• Span of control


  Refers to how many subordinates are directly under the authority of a manager and whom managers are responsible for
• Levels of hierarchy


  Refers to how many levels of responsibility are in a business, each level indicates a level of seniority in the business
• Bureaucracy


  Indicates the importance of rules and procedures, a Bureaucratic organisation has many rules and procedures and set ways of doing things, delegation, initiative and flexibility are not likely
• Centralisation


  When all major decision making is maintained within a small group of managers operating close to the head of the business, likely to have autocratic leadership with higher levels of hierarchy and a narrow span of control
• Decentralisation


  Senior managers may maintain core strategic decisions, but another decision making authority is delegated to middle managers, delegation is more likely and leadership style is likely to be democratic
• De-Layering


  Occurs when a business reduced the levels of hierarchy by removing layers of management, the intention is to reduce bureaucracy and increase the decision-making capabilities of middle managers, it also reduces business costs as fewer managers are employed
• Advantages of flat/horizontal organisational structure

  • Less costly as it only has a few managers

  Quick decisions and actions can be taken because of fewer levels of management

  Fast and clear communication is possible among these few levels of management

  Eliminates the salaries of more managers – more cost-effective
• Disadvantages of flat/horizontal organisational structure

  • Loose control as there are many subordinated under one manager

  Tend to produce many generalists but no specialists. Specific job functions may not be clear.

  May limit the long-term growth of an organisation as management may decide against new opportunities in an effort to maintain the structure.

  Not as suitable for complex activities
• Advantages of tall/vertical organisational structure

  • The quality of performance will improve due to close supervision

  Control and supervision will become easy and convenient

  The manager gets more time to plan and organise the future activities

  The efforts of subordinates can be easily coordinated

  Tall organisation encourages the development of staff as specialists

  Employees recognise defined levels of leadership. Authority and levels of responsibility are obvious
• Disadvantages of tall/vertical organisational structure

  • Creates many levels of management which is more costly to employ

  There are many delays and distortions in communication, decisions and actions

  It is difficult to coordinate the activities of different levels

  Subordinates have little freedom as there is stricter supervision
• Hierarchical structure


  Shows which power and responsibility are clearly specified and allocated to individuals according to their standing or position in the hierarchy, this can be organised by product, function or region
• Advantages of product-based organisational structure

  • Product divisions can work well because they allow a team to focus on a single product or service.

  Having a senior executive makes it more likely the division will receive the resources it needs from the company

  A product division focus allows it to build a common culture that contributes to higher morale and better knowledge of the division's range of products.
• Disadvantages of product-based organisational structure

  • Product divisions may compete with each other for available financial resources and this might reduce cooperation between them,

  Divisions can result in compartmentalisation that results in a lack of coordination or even duplication of developments.
• Advantages of functional organisational structure


  • Grouping employees by functional skills e.g. marketing, can improve efficiency as specialists can collaborate and further develop through their expertise.

  Employees can capitalise on their specialised skills as a means to move up the ladder in a given department

  As each department specialises in a specific function, managers train and develop employees within their unit to be proficient
• Disadvantages of functional organisational structure

  • This structure lends itself to one-way (top-down) communication which is not as efficient.

  Few horizontal links between departments which can lead to a lack of of coordination between them.

  Managers can become tunnel-visioned as they are not encouraged to look at in problems from a different perspective outside their own function.

  Is inflexible and can lead to change resistance
• Advantages of regional organisational structure

  • Communication between representatives can be very direct and personal in a geographical organisational structure – rather than having to establish working relationships with people on the other side of the world through email and telephone.

  Grouping employees into regional sections can encourage the formation of strong, collaborative teams

  The ability to recruit local management offers companies the advantage of having leaders who are completely familiar with the local business environment, culture and legal climate.

  Tracking the performance of individual regional markets are simplified under this structure
• Disadvantages of regional organisational structure

  • Personnel can be duplicated in head office and regional offices.

  There may be conflict and unhealthy competition between different areas.

  It could make it more difficult to be consistent in core company beliefs e.g. ethical code of practice – from one area to the next.

  Inconsistent company strategies might be adopted in different regions as a result of poor coordination between regional offices.
• Matrix structure organisation


  Set up purely for the purpose of a project or initiative, after is complete the structure is disbanded
• The more creative a business, the more inclined the business is to have a flat business organisational structure as this allows for employee creativity and innovation as well as decentralisation of decision making
• Democratic leadership


  Also known as shared leadership, a style of leadership where members of the group (employees) contribute to decision-making
• Project-based organisation


  Designed to be more flexible and responsive to market demands, businesses' human resource is organised around many projects, project managers who run teams of employees focusing on individual projects, once the project is completed, the team split up and reassembles to being another project
• Advantages of project-based organisation

  • Flexibility

  Productivity

  Efficiency

  Motivational
• Disadvantages of project-based organisation

  • Discontinuity

  Isolation

  Inefficiencies

  Conflicting interests and priorities
• Shamrock organisation


  This model was suggested by Irish Management theorist Charles Handy, consists of core staff, peripheral workers (part-time, temporary and portfolio workers), and freelance/outsourced individuals or businesses
• Management's function


  The effective and efficient deployment of the resources of the firm. Good managers possess the ability to turn employee skills and talents into improved performance and the achievement of organisational goals.
• Difference between managers and leaders

  Managers organise, plan, accept responsibility, control employees and functions, specialise, minimise risk, set goals, delegate cautiously.

  Leaders innovate, are visionary, seek responsibility, creative, entrepreneurial, flexible, calculated risk takers, decision makers, set challenging goals, seek followers, seek excitement.