Human Resource Management

Human Resource Management

Content • Human Resource Management • Workforce Planning • Recruitment • Selection • Training • Methods of remuneration • Measurements of personnel effectiveness

Human Resource Management • Human resource management looks at the best way to use a businesses personnel • HRM covers: • Workforce planning • Recruitment and selection • Training • Appraisal • Motivation and employee rewards

Hard and Soft HRM • Hard HRM – employees are treated as a resource, aim to pay them as low as possible, they need to be controlled • Soft HRM – Employees are the most valuable asset of the business and they need to be developed to ensure they are being used optimally

Workforce Planning • Businesses need to look at future labour needs • They have to ensure they have the right amount of workers with the right skills and experience • Managers draw up plans looking at the number and type of workers who they want to recruit • Also conduct a skills audit so they are able to establish skills and experience of current workers

Workforce planning • When planning the workforce managers need to know: • Sales forecasts for at least the next year • Employee turnover figures • Projected wage levels • Technological developments • Changes to laws impacting the working week

Recruitment and Selection • This is the process of filling an organisations job vacancies by appointing new staff • Job descriptions and person specifications are drawn up at the beginning of the process

Person specifications • These set out the qualifications and qualities required in an employee • These refer to the person and not the post • They include: • Educational and professional qualifications required • Character and personality needed • Skills and experience wanted

Job descriptions • These relate to the position available • They list the duties and responsibilities associated with a specific job • They include: • The title of the post • Employment conditions • Some idea of tasks and duties

Internal Recruitment • Internal recruitment – where a business looks to fill a vacancy from existing staff • Advantages : • Employee has awareness of a firms culture • Candidates may not need induction training • Provides promotion for workers • Avoids expensive advertising • Selection can be easier as know about candidates • Advantages : • Limited skill base • May not be as high quality as external candidates especially for senior jobs

External recruitment • External recruitment – where a business looks to fill a vacancy from individuals outside the organisation • Advantages • Can attract a more diverse group of candidates who bring fresh ideas to the business • Increase in variety of skills • Disadvantages: • Can be very expensive • Know less about the candidates

Methods of external recruitment • There are a number of methods: • External advertising – the business advertises for the employee directly • Headhunting firms – these firms identify suitable candidates from competitors for a fee • Job centres • Employment agencies – match jobs and candidates for a fee • Training schemes (government) this is lower risk and cheaper

Recruitment Process • Position is advertised externally / internally • Send out application packs • Receive candidate applications by closing date • Candidates applications are compared against the person specification those with the best fit are invited for interview • At interview the job description is used to form the basis of the questions

Selection • These are the techniques used to decide who is right for the job • They include: • Interviews • Psychometric tests • Assessment centres which can include: • Role plays • Simulated work environments

Interviews • Interviews are the most popular form of selection • They can involve one or more interviewer • They are a relatively cheap method • They can be unreliable as they don’t give a valid picture of how someone will perform on the job

Training • The provision of work-related education, either on-the-job or off-the-job, involving employees being taught new skills or improving skills they already have

Training Needs • Training is often a response to an internal or external change e.g • The development and introduction of new products • Restructuring of the firm • The development and introduction of new technology • Changes to procedures • High labour turnover • Low morale • Changes in legislation

Induction training • Education for new employees which involves learning about the way the business works • It helps to: • Reduce turnover • Increase understanding of culture • Increase motivation • Mean employees contribute to organisation more quickly

External Training • Outside the organisation • Appropriate if only a few employees with a specific training need • Or if training needs are not specifically linked to organisation • Meet with employees from other companies and exchange ideas • Can make employees feel valued and increase motivation

Internal Training • Occurs inside the organisation • Appropriate if training needs are specific to the individual organisation

On / Off the job training • On the job – learn on the job usually by sitting next to an experienced employee • Off the job – all forms of employee education apart from that at the immediate workplace

Methods of Renumeration • Remuneration: pay – wages, salaries, bonus, PRP, commission, piece work • Non Financial: praise, training, additional responsibility,‘perks’ • Share Options: Opportunity to buy shares in the company at an agreed price

Measurements of personnel effectiveness – Labour productivity • Labour productivity – looks at how much work each worker does (output) • Labour productivity = output per period / number of employees at work • Need to remember that this can also be influenced by other factors such as efficiency of capital that is being used. • This can be used as a basis for performance related pay • Labour productivity may be difficult to calculate for some businesses

Absenteeism • Absenteeism – the amount of time employees are having off work • Number of staff absent (on one day) x100 / total number of staff • Helps to measure the morale and motivation of the workforce • If this is high it will cost the business money and decrease their profits

Labour Turnover • Labour turnover – how many people are leaving each year • Turnover = Number of staff leaving per year x 100 / average number of staff • If this is high may be due to low wages and insufficient training causing poor morale • Can also be due to problems with the recruitment process where the wrong staff are appointed

Health and Safety • Health and safety = Number of working days left per year due to health and safety x 100 / total number of possible working days • This is a measure of safety • Need to ensure this stays as low as possible

Summary • Human Resource Management looks at the people who work in a business • Hard models look at people as a financial resource, soft models look at the development of staff • Workforce Planning is the process taken to look at future labour needs • Recruitment starts with a job description and person specification and allows the business to find the right person • Internal and external recruitment – internal recruitment from inside the business, external recruitment – recruit staff from outside the business • Selection – methods of choosing the right person for the job • Interviews are the most common method of selection • Training – how you educate staff to increase their skills and experience • Training can be on the job or off the job • Methods of remuneration – staff can be renumerated with financial and non financial methods • Measurements of personnel effectiveness – these are ways to measure the performance of the business and include labour productivity, labour turnover, absenteeism and health and safety

Human Resource Management