topic 2

• Human resource management (HRM)

  The management function of developing people within an organization to meet its business objectives
• Functions of HRM


  • Workforce planning
• Workforce planning


  The process of anticipating and meeting an organization's current and future staffing needs
• People are a firm's most valuable asset, so workforce planning is an essential part of HRM
• Internal and external factors that influence human resource planning

  • Demographic change
  • Change in labour mobility
  • Immigration
  • Flexitime
  • Gig economy
• Demographic change


  Changes in the characteristics and trends in a population will affect the supply of human resources in a country
• Impact of demographic change on human resource supply

  • Net birth rate
  • Net migration rate
  • Retirement age
  • Women entering/returning to workforce
  • Aging population
• An aging population means there will be an increasing shortage in labour supply
• Firms will need to be willing to appoint and retain older employees, even keeping them past retirement age
• Women and part-time staff will be more sought after to provide workforce flexibility
• Change in labour mobility

  The extent to which labour can move to different locations (geographical mobility) and be flexible in changing to different jobs (occupational mobility)
• Limitations on geographical and occupational mobility

  • Ties to friends and family
  • Attributes of the worker
  • Relocation costs
  • Fear of the unknown
  • Costs of living in a new area
  • Language and cultural differences
• Immigration


  Globalization has encouraged the migration of people for work purposes
• Reasons why worker migration occurs

  • Pay and remuneration
  • Employment opportunities
  • Seasonal factors
  • Domestic instability
  • Higher standard of living
• Flexitime


  A system whereby staff determine their working hours, subject to them getting their work completed by set deadlines
• Forms of flexitime


  • Teleworking
  • Homeworking
• Teleworking


  Working away from the office by using electronic forms of communication
• Homeworking


  Employees work from their own homes instead of going into an office
• Advantages of teleworking and homeworking for employees

  • Job opportunities
  • Suitable for those with family commitments
  • Flexible working hours
  • Little/no commuting
  • Autonomy in decision making
  • Possible income tax allowances
  • Increasingly affordable due to lower technology costs
• Disadvantages of teleworking and homeworking for employees

  • Huge reliance on ICT
  • Exceeding contracted hours
  • Social isolation and boredom
  • Less job security and trade union representation
  • Distractions at home
  • Lack of training and career development
• Advantages of teleworking and homeworking for employers

  • Reduced overheads
  • Flexible and extended working hours
  • Adjusting for peak and off-peak trade
  • Continuity of services
  • Lower absenteeism
  • Flexibility to deal with working time directives
• Disadvantages of teleworking and homeworking for employers

  • High set up costs
  • Recruitment and management challenges
  • Technological breakdowns
  • Lack of working space or data security at home
• Gig economy


  Labour markets where workers are typically on short-term, flexible and temporary contracts
• Benefits of the gig economy

  • Flexibility for workers, businesses and consumers
  • Workers have flexibility of working for multiple employers
  • Lower costs for businesses
  • Contractors and freelancers make extra income
  • More control of work-life balance
• Limitations of the gig economy

  • Lack of regular income, job security and benefits for workers
  • Lack of clear career path and social support
  • Bureaucratic tax filing for contractors
  • Burnout from multiple jobs/contracts
  • Risk to firm's reputation from poor outsourced services
• STEEPLE analysis


  A tool to identify opportunities and threats that will impact human resource management
• Despite lower average life expectancy and equal opportunities laws, no country allows men to retire earlier than women
• Reasons for resistance to change in the workplace

  • Uncertainty
  • Lack of trust
  • Disruption to routines
  • Fear of failure
• Delegation


  The passing on of control and authority to others in a firm
• Span of control


  The number of people who are directly accountable to a manager
• Levels of hierarchy


  The organizational structure based on a ranking system, with the most skilled/senior at the top and least skilled/senior at the bottom
• Chain of command


  The formal line of authority through which orders are passed down in an organization
• Bureaucracy


  The execution of tasks that are governed by official administrative and formal rules of a firm
• Centralization


  Organizational structures with a very small number of people at the top who control the decision-making
• Advantages of centralization


  • Rapid decision-making
  • Better control
  • Better sense of direction
  • Efficiency
• Disadvantages of centralization


  • Added pressure/stress for senior staff
  • Inflexibility
  • Possible delays in decision making
  • Demotivating
• Decentralization


  Organizational structures with decision-making authority and responsibility shared with a greater number of people
• Advantages of decentralization


  • Input from the workforce
  • Speedier decision-making
  • Improved morale
  • Improved accountability
  • Teamwork
• Disadvantages of decentralization


  • Costly
  • Inefficiencies
  • Greater chances of mistakes
  • Loss of control
  • Communication issues
• Delayering


  The process of removing one or more levels in the hierarchy to widen the span of control and shorten the chain of command