Human Resource Management

Human Resource Management Chapter Nine Unit 4: Section 3: Part 2 Q5 OuTCOME: By the end of this chapter you should be able to: Explain the key functions of human resource management. Ms. Marshall 5th year business

What is HRM? HRM refers to the recruitment, training and retention of motivated staff and includes maintaining good industrial relations. Functions of the HRM include: 1. Manpower Planning/HR Planning 2. Recruitment and Selection 3. Training and Development 4. Performance Appraisals 5. Rewarding staff performance 6. Maintaining positive industrial relations 7. Fostering teamwork Ms. Marshall 5th year business

1. Manpower/HR Planning HRP/Manpower planning: identifies the future staffing needs of the business and plans to have the right number of staff with the right skills at the right time. It involves doing a human resource audit and estimating future human resource needs. The HRM must audit present manpower resources, forecast manpower needs, and then make a plan to either increase/decrease manpower. Ms. Marshall 5th year business

Steps in HR Planning 1. Forecast Future Demand How many employees and what skills will the business need in the future? 2. Calculate existing supply Conduct an audit of the existing employees. 3. Recruit/Redundancies If demand exceeds supply recruit more staff.If supply exceeds demand make some redundant. Ms. Marshall 5th year business

Monitoring labour turnover is part of a HRM’s job. HR Planning Labour Turnover is the rate at which employees leave the business Importance of Manpower Planning Efficiency: Ensures that the business always has enough workers to carry out the jobs needed to make the business a success. Cost Saving: Saves the business money by ensuring that not too many workers are employed. Reduce the wages bill. Causes of High Labour Turnover Poor recruitment: not a good fit to the company Poor pay or working conditions Discrimination, harassment, unfair treatment Better opportunities Poor industrial relations/low morale. Ms. Marshall 5th year business

2. Recruitment Recruitment and selection is concerned with finding or attracting potential candidates with the appropriate skills and then picking the most suitable candidates for employment. The Human resource manager must draw up a job description and person specification and then advertise the position. The applicants must be screened (short-listed). Selection is usually by means of an interview process. Ms. Marshall 5th year business

Steps in Recruitment 1. Prepare a Job Description 2. Prepare a Person Specification 3. Advertise the position 4. Screening/ Short Listing 5. Selection Tests if appropriate 6. Interview 7. Check References 8. Offer the job Ms. Marshall 5th year business

Recruitment – Steps 1,2,3 1. A job description describes the vacancy that needs to be filled, including the title, conditions, duties and responsibilities involved, the place of work and assessment arrangements. 2. A person specification describes the qualities required by the person who will fill the job description. These can include academic qualifications, work experience, relevant skills. 3. Using the job description and person specification advertise the job, e.g. in a newspaper. Recruitment can be either internal or external. Ms. Marshall 5th year business

Recruitment Internal recruitment: involves recruiting or redeploying staff from existing staff within the business. Sources: Promotion Demotion Transfer/redeploy External Recruitment: involves finding someone from outside the business. Sources: Personal contacts/Head hunting e.g. Institute of Education Newspaper/magazines Internet, e.g. irishjobs.ie Employment agencies Solas (Fás) Ms. Marshall 5th year business

Recruitment Internal Advantages Employee knows the business – less time to settle in Employer has seen their work first hand Provides a career path – motivational for workers. Cheaper and quicker than external recruitment. External Advantages New ideas Less jealousy Best qualified person Ms. Marshall 5th year business

Recruitment – Step 4 4. Shortlist applicants/Screening: the HRM will go through the CVs and covering letters and discard any which make a bad impression or do not meet requirements. Some jobs require a candidate to complete an application form which will ask specific questions about their personal details, education, experience and interests relevant to the job. A shortlist of the most promising candidates will be made. They will either have to take certain selection tests, if appropriate or will be invited for interview. Ms. Marshall 5th year business

Recruitment – Step 5, 6 5. Selection Tests: some jobs require you to take a test before you get to the interview stage. These frequently include IQ tests, aptitude tests and even personality tests. 6. Interview: a face-to-face conversation between the candidate and the business. Questions will be asked to determine: Will the candidate perform the job well? Will they get along with other staff/fit in with the ethos of the company? Contribute to the business? To avoid interviewer bias there are usually three people on an interview panel. They may deliberately put the candidate in a stressful situation to see how they react, i.e. a stress interview. Ms. Marshall 5th year business

Recruitment – Step 7, 8 7. Check References: most used to be written but more often now they are phone calls. 8. Offer the job: make contact, if they accept a contract of employment is drawn up and signed. Ms. Marshall 5th year business

3. Training & development • Training and Development • Training involves supplying the skills, knowledge and attitudes needed by employees to do their jobs better. On arrival new staff receives: • Induction training: orientation, refers to the general introduction to a business, their rules, regulations and policies. • On-the-job training: training which takes place in the workplace, e.g. observing a colleague • Off-the-job training: training which takes place outside the workplace, e.g. lectures • Staff development involves preparing the employees to take on more responsibility and new challenges in the workforce. They are taught multiple skills that can be used in many different jobs. • This makes them more flexible and more suitable for promotion. Ms. Marshall 5th year business

Training & Development Benefits of Training and Development: Better quality service to customers, resulting in fewer complaints and returns. Improved quality of production. Staff is better cared for and well motivated. This results in less industrial relations problems. Lower labour turnover rates due to high staff morale. Leads to a good reputation of the firm, attracting quality staff. Flexible and adaptable labour force allowing for changes to take place. This makes it easier to implement change such as new work methods and technologies. Ms. Marshall 5th year business

4. Performance Appraisal This is the process of evaluating the performances, progress, contribution and effectiveness of an employee. An interview/discussion may take place between the employee and HRM to discuss goal setting targets, expectations, problems employees may be encountering or resources needed in order to achieve targets. It ensures high performance standards in the business, leading to organisational success. It provides for two-way communication and clarification of objectives. Feedback is provided for employees on performance to enable improvements to be made. Regular reviews are vital to the performance appraisal process. Ms. Marshall 5th year business

Performance Appraisal Suitable for “outline” or OL • Benefits • Determines suitable pay levels: e.g. some employees may have met targets for a bonus. • Selects suitable candidates for promotion to posts of responsibility. • Monitors and evaluates the recruitment, selection and training and development policies and practices of the organisation. • Feedback is received on how people are doing their work and weak areas are identified so that performance can be improved. Training can be provided. • Provides for two-way communication and clarification of objectives. This helps motivate the employees for the future. Ms. Marshall 5th year business

Performance Appraisals Suitable for “discuss” “explain” Benefits for a business. Opportunity to review rewards (benefits structures): It may be used in determining pay increases or promotion. It can help a business to review & reduce the costs of reward and benefits packages such as pension schemes. Increased productivity: Performance appraisals are important for staff motivation, communicating and fostering a positive relationship between management and staff. This leads to greater productivity from employees. Ms. Marshall 5th year business

Performance Appraisal Retain the right staff: Helps a business identify top talent and ensures that these employees are retained and guided towards reaching the businesses plans and objectives. Identify poorly performing staff: A business can identify employees who are not reaching their potential. Restructuring of the business may occur to remove surplus layers of management i.e. delayering. Industrial relations: conflicts in the workplace may be highlighted through performance appraisals. This enables the business to help solve problems between management & employees and helps improve industrial relations in the workplace. It may improve loyalty to the organisation if positive rewards are given. Ms. Marshall 5th year business

5. Rewarding Staff Performance • Different methods of reward • It is the function of the HRM to negotiate the remuneration package employees are to receive. Employees may receive both monetary and non- monetary rewards. • Monetary rewards: Wages and salaries: Pay may be calculated by the flat rate, time rate, piece rate, commission or bonus schemes. • The Time Rate/ Piece Rate: With a time rate, payments are made of a fixed amount per hour for a fixed number of hours per week. If the employee works more than the fixed number of hours overtime is paid at different rates above the minimum e.g. time and a half or double time/ Piece Rate relates the payment for each unit produced or job completed, the more units produced, the more is earned. • A bonus is a sum of money paid to employees for reaching a certain target, e.g. for producing units above an agreed limit. • Commission is a type of piece rate where payment is made according to value of the amount sold, e.g. payments to a sales person (10%) in proportion to the level of sales achieved. It has the advantage of directly encouraging sales. • Fringe benefits would include ‘benefits in kind’ given to employees in the form of goods or services rather than money. Monetary examples include profit-sharing schemes, sick pay entitlements, subsidised medical insurance, pension schemes, etc. and non-monetary examples include meal/lunch vouchers, company cars etc. Ms. Marshall 5th year business

Rewarding Staff Performance Profit-related pay is an overall scheme where some of the organisation’s profit is paid to employees. It is paid to motivate the employees to increase the profit by reducing costs and/or increasing output and thus their own earnings. Employee Share Ownership Scheme. Shares in the business may be given to employees instead of cash bonuses, maintaining employee interest in the job. Share option schemes give employees an option to buy shares in a company at a specified price. Job promotion: to a more responsible /senior level in the organisation. Ms. Marshall 5th year business

How is financial remuneration determined? Demand for the skill: if the skill or qualification is in high demand then they may be offered attractive packages including bonuses and perks. E.g. shortage of teachers in England, Irish graduates are offered a grant to train there. Supply of the skill/ability: If very few people can perform this skill to this level that drives up the remuneration. E.g. Premier League footballers. Long training periods e.g. seven years to become a doctor. Salary should reflect these years as it is expensive to train for so long. The risk, danger and responsibility involved in the job: e.g. paying a security guard extra for the overnight hours. Trade unions may influence the paye.g. public sector unions are in talks at the moment to negotiate pay for Croke Park 2, Ms. Marshall 5th year business

Non-Financial Rewards Job satisfaction: the degree to which workers feel positive about their job and want to continue working with the firm. This can be improved by: Shorter working day, longer holidays Physical environment is pleasant and safe Flexible working arrangements e.g. job sharing, flexitime. Job enlargement: introduces a variety of tasks into their job description. Job enrichment: means providing employees with work requiring greater responsibilities and more input into the firm. Ms. Marshall 5th year business

Importance of Pay & Rewards Motivates employees to work harder and produce better quality products and services.Increases sales and profits. Makes the company more attractive to employees so they can attract the best possible staff. Reduces labour turnover: thissaves money as it costs to recruit and train staff. Ms. Marshall 5th year business

6. Promoting good industrial relations Employer and Employee Relationships The quality of the relationship that exists between employers and employees determines the quality of industrial relations between the parties. The implementation of the various health, safety and welfare regulations in the workplace together with interest in, and support for, the social and recreational needs of employees, e.g. sport and social clubs, has a very positive effect on employee morale. Ms. Marshall 5th year business

How can HRM maintain positive relations? Regular Open communications: regular meetings, encourages feedback, builds trust and keeps employees informed. Grievance Procedures: procedures for conflict situations. Train Managers: taught how to manage conflict and communicate with employees. Careful Selection: employees that will fit in and subscribe to the company’s beliefs and ethos. Train Employees: so they can do their job to the best of their ability. Valuing Employees: treating them as assets, treat with respect. Provide for job satisfaction. Implementing Health & Safety Regulations Teamwork Ms. Marshall 5th year business

Promoting good industrial relations • Benefits: • Employees are motivated to work to the best of their ability. • All personnel are working towards the same goal. • Flexibility is increased. • Lines of communication are open and clear. Ms. Marshall 5th year business

7. Teamwork Working together to achieve a common goal. Forming: initial meetings, staff are usually polite and discuss the job that has to be done. Storming: conflict begins to occur as members of the team want to establish themselves as a leader. Rows often occur. Norming: members resolve their conflict and the leader is established. Trust grows and standards are set for all members to stick to. Performing: all cooperate and focus on getting the job done. Ms. Marshall 5th year business

Teamwork - Advantages For the Business Better decisions: more creativity and diversity. Increases motivation: leads to lower turnover and harder worker employees. Better quality products: everyone works to the best of their ability so as not to let the others down, a team will see more solutions to problems than one person alone. Improves relationships in a business: leads to less industrial conflict, reducing the chance of strikes and improving the companies reputation. For the Employee Employees experience greater job satisfaction as all members’ efforts are taken into account. They are better motivated as participation in teams satisfies the social needs of employees (Maslow). Employee’s communications skills and interpersonal skills improve as they are working in a group and dealing with different personalities. This is a good experience for employees, as effective communication skills will help prepare employees for leadership roles within the business. When working in isolation employees might find it difficult to take tough decisions. However, with the mutual support and protection of a team, these tough decisions are easier for employees to make e.g. a decision on making workers redundant. Successful teams progress through the team development stages of forming, storming, norming and performing. A successful team will mean less industrial relations problems and lessconflict, saving the employee the stress associated with industrial action. Ms. Marshall 5th year business

No need to do repeat questions again Recent Exam Questions 2010 Section 3 Part 2 (A) Explain what is meant by performance appraisal. (B) Outline the benefits of performance appraisal for a business. (20 marks) 2008 Section 3 Part2 Q2. (A) Performance Appraisal, Training & Development and Managing Employer and Employee Relationships are important functions of a Human Resource Manager. Explain the functions underlined above and analyse the benefits of two of the functions for the business organisation. (25 marks) (B) Outline the different methods of reward used to motivate employees in a business. (15 marks). Ms. Marshall 5th year business

Recent Exam Questions 2004 Section 3 Part 2 (2011 – 15 marks) Outline the benefits of teamwork to the employees of a business organisation. (20 marks). 2003 Section 3 Part 2 Q4. (A) Outline the functions of a Human Resource Manager (25 marks). 2013 Mock Exam Discuss Performance Appraisal, Training and Development and Recruitment and Selection (15 marks). 2012 Mock Exam Explain the term Performance Appraisal. Outline the benefits of Performance Appraisal for the employees in a business. (20 marks). Ms. Marshall 5th year business

2005 ABQ Marking Scheme Section 2. Applied Business Question (ABQ) (80 marks) (A) Enterprising Skills /Characteristics (5 at 4 marks) (1 + 1 + 2). Illustration from text of the ABQ. (Total 20 marks) (B) Human Resource Manager 5 points at 6 marks each (2 + 2 + 2). Must have reference to text of ABQ. (Total 30 marks) (C) Management Activities 3 at 10 marks (2 + 6 (3 + 3) + 2) (Link). Relevant to the text of the ABQ. (Total 30 marks) Ms. Marshall 5th year business

Human Resource Management