HRM questions

• Illustrate and explain the different ways businesses can be organised internally

  1. By system/department

  2. By product

  3. By geographical area
• Organisation by system


  The business is split into specialist areas that operate together to make sure the business runs efficiently
• Organisation by system


  • Production
  • Human Resources
  • Finance
  • Marketing
• Organisation by system

  • Successful outcomes depend on the interaction of the departments
  • Departments can end up working as a separate entity or treating themselves as the most important part of the business
  • It can be difficult to evaluate performance and success of a product as different departments are involved
• Organisation by product


  Each product is like a miniature company, with its own finance, marketing department etc.
• Matrix organisation


  Employees with similar skills are put together to complete tasks or projects but with more than one manager supervising
• Span of control


  The number of employees a manager is responsible for
• Factors that influence span of control include the skill and experience of the subordinates, the personality of the manager, the size of the business, whether the business is centralised and the extent to which the employees understand the direction of the business and their roles
• Long chain of command


  Many layers in the business hierarchy
• Short chain of command

  Few layers in the business hierarchy
• Levels of hierarchy


  The amount of layers that an organisation has
• Delayering


  Removing a layer of management to keep costs under control, allow employees more responsibility and improve decision making
• Delegation


  Assigning authority for particular functions, tasks, and decisions to others
• Empowerment


  Giving employees extra responsibility for the tasks they perform
• Organic (flat) structure


  Wide span of control, democratic leadership, encourages delegation
• Mechanistic (tall) structure


  Narrow span of control, more bureaucratic
• Centralised structure


  Decision-making firmly at the top of the hierarchy
• Advantages of centralised structure

  • Easier to implement common policies and practices
  • Prevents other parts of the business from becoming too independent
  • Easier to co-ordinate and control from the centre
  • Economies of scale and overhead savings easier to achieve
  • Greater use of specialisation
  • Quicker decision-making
• Disadvantages of centralised structure

  • More bureaucratic
  • Local or junior managers are likely to be much closer to customer needs
  • Lack of authority down the hierarchy may reduce manager motivation
  • Customer service does not benefit from flexibility and speed in local decision-making
• Decentralised structure


  Decision-making is spread out to include more junior managers and individual business units
• Advantages of decentralised structure


  • Decisions are made closer to the customer
  • Better able to respond to local circumstances
  • Improved level of customer service
  • Consistent with aiming for flatter hierarchy
  • Good way of training and developing junior management
  • Should improve staff motivation
• Disadvantages of decentralised structure

  • Decision-making is not necessarily strategic
  • More difficult to ensure consistent practices and policies
  • May be some diseconomies of scale
  • Who provides strong leadership when needed?
  • Harder to achieve tight financial control
• Benefits of organisational structure

  • Makes the business organised
  • Easy to see who is responsible for whom and who reports to whom
  • Allows the business to plan for the future
  • Employees can see where there are possibilities for promotion and how their role fits in
• Job description


  Sets out the job requirements, including the job title, who you report to, and the duties and responsibilities
• Person specification


  Includes the ideal characteristics the person needs to undertake the job, such as qualifications, previous experience, ability to work in a team, willingness to travel, ability to work under supervision or independently, and ability to use initiative and flexibility
• Characteristics in a person specification


  • Qualifications
  • Previous experience
  • Ability to work in a team
  • Willingness to travel
  • Ability to work under supervision or independently
  • Ability to use initiative and flexibility
• Internal recruitment


  When the business looks to fill the vacancy from within its existing workforce
• External recruitment


  When the business looks to fill the vacancy from any suitable applicant outside the business
• Advantages of internal recruitment


  • Cheaper and quicker to recruit
  • People already familiar with the business and how it operates
  • Provides opportunities for promotion within the business, which can be motivating
  • Business already knows the strengths and weaknesses of candidates
  • Less need for induction training
• Disadvantages of internal recruitment

  • Limits the number of potential applicants
  • No new ideas can be introduced from outside
  • May cause resentment amongst candidates not appointed
  • Creates another vacancy which needs to be filled
• Advantages of external recruitment


  • Outside people bring in new ideas
• Disadvantages of external recruitment

  • Longer process
  • More expensive process due to advertising and interviews required
  • Selection process may not be effective enough to reveal the best candidate
• Recruitment process


  1. Needs Analysis - create Job Description and Person Specification

  2. Advertising the post

  3. Selecting from applications (short listing)

  4. Interviews
• Induction training


  Includes meeting colleagues, meeting line managers, learning basic rules, expectations for the job, finding your way around, health and safety requirements, and disciplinary procedures
• On-the-job training


  Employees receive training whilst remaining in the workplace, using methods like demonstration/instruction, coaching, job rotation, and projects
• Disadvantages of on-the-job training

  • Quality depends on ability of trainer and time available
  • Bad habits might be passed on
  • Learning environment may not be conducive
  • Potential disruption to production
• Off-the-job training

  Employees are taken away from their place of work to be trained, using methods like day release, distance learning, block release courses, sandwich courses, sponsored courses in higher education, and self-study/computer-based training
• Advantages of off-the-job training

  • A wider range of skills or qualifications can be obtained
  • Can learn from outside specialists or experts
  • Employees can be more confident when starting work
• Disadvantages of off-the-job training


  • More expensive - e.g. transport and accommodation
  • Lost working time and potential output from employee
  • New employees may still need some induction training
  • Employees now have new skills/qualifications and may leave for better jobs
• Self-assessment


  Self-reflection as part of an appraisal system, but there is an issue of how objective the person will be