Human Resource Management (HRM) is the strategic approach to the effective management

of an organization’s workers so that they help the business gain a competitive advantage.

Human Resource Planning is the process of analyzing and forecasting the number of workers
and the skills of those workers that will be required by the organization to achieve its objectives
(Workforce Planning).

HRM aims to recruit capable, flexible and committed people, managing and rewarding their
performance and developing their key skills to the benefit of the organization. Human resource
planning aims to get the right number of people with the right skills, experience and
competencies in the right jobs at the right time at the right cost.

Occupational mobility of labour: The extent to which workers are willing and able to move to
different jobs requiring different skills.

Geographical mobility of labour: The extent to which workers are willing to move to a new
geographical region to take up new jobs.

Workforce Planning

Workforce planning involves two main stages:

1. Forecasting the number of staff required

2. Forecasting the skills required

Forecasting the number of staff required depends on: 

 Forecasting demand for the firm's product

 The productivity levels of staff
 The objectives of the business
 Changes in the law regarding workers' rights
 Labour turnover and absenteeism

Labour turnover: A measure of how many people leave a business over a given period of time.
It is usually expressed as a percentage of the total labour force

Absenteeism: Frequent absence from work or another place without a good explanation

Forecasting the skills required depends on:   

1. The pace of technological change in an industry

2. The need for flexible or multi-skilled staff
Workforce audit:  A check on the skills and qualifications of existing employees.

Workforce Plan:  Thinking ahead and establishing the number and skills of the workforce
required by the business to meet its objectives.

Human Resource Management:

Planning and Forecasting

HR departments need to calculate the future staffing needs of the business to try and avoid
having too few or too many staff with the wrong skills. HR departments must respond to the
corporate plan of the business and the objectives this contains. If the overall business plan is to
expand production and develop products for foreign markets, then this must be reflected in the
workforce plan. The starting point for the workforce plan is always the workforce audit.

Recruitment

Recruitment: The process of identifying the need for a new employee, defining the job to be
filled and the type of person needed to fill it, attracting suitable candidates for the job and
selecting the best one.

5 steps in the recruitment and selection process:  

1. Establish the exact nature of the job vacancy and draw up a job description
2. Draw up a person specification
3. Prepare a job advertisement reflecting the requirements of the job and the personal
qualities looked for
4. Draw up a short list of applicants
5. Conduct interviews

Job description: A detailed list of the key points about the job to be filled, stating the key tasks
and responsibilities of it.

Person specification: A detailed list of the qualities, skills and qualifications that a successful
applicant will need to have.
 Training

There are three main types of training you should be familiar with:         

1. Induction training is given to all new recruits. It has the objective of introducing them to
the people that they will be working with most closely, explaining the internal
organisational structure, outlining the layout of the premises and making clear essential
health and safety issues.
2. On-the-job training involves instruction at the place of work. It is often conducted either
by the HR managers or departmental training officers. Watching or working closely with
existing experienced members of staff is a frequent component of this form of training. It
is cheaper than sending recruits on external training courses and the content is controlled
by the business itself.
3. Off-the-job training entails any course of instruction away from the place of work. This
could be a specialist training centre belonging to the firm itself or a course organised by
an outside body, such as a university or computer manufacturer, tom introduce new ideas
that no one in the firm currently has knowledge of. These courses can be expensive, yet
they may be indispensable if the firm lacks anyone with this degree of technical
knowledge.

Training: Work-related education to increase workforce skills and efficiency

On-the-job Training: Instruction at the place of work on how a job should be carried out

Off-the-job training:  All training undertaken away from the business; e.g., work-related
college or university courses.

Induction training: Introductory training programme to familiarise new recruits with the key
people and systems used in the business and the layout of the business site.

Staff Appraisal

Staff Appraisal: The process of assessing the effectiveness of an employee judged against pre-et
objectives.
Appraisal is often undertaken annually. It is an essential component of a staff development
programme. The analysis of performance against pre-set and agreed targets with the setting of
new targets allows the future performance of the worker to be linked to the objectives of the
business.
 Dismissal of employees

Dismissal: Being removed or 'sacked' from a job due to incompetence or breach of discipline.
Dismissal could result from the employee being unable to do the job to the standard required. It
may also be that the employee has broken one of the crucial conditions of employment.

Contract of employment: A legal document that sets out the terms and conditions governing a
worker's job.

Unfair dismissal: Ending a worker's employment contract for a reason that the law regards as
being unfair.

Redundancy: When a job is no longer required so that the employee doing this job becomes
redundant through no fault of her own.

Employment Patterns and Practices

Traditional employment pattern and practices: 

 full-time employment contracts

 permanent employment contracts for most workers
 regular working hours each week
 working at the employer's place of work

Changes in employment pattern and practices: 

 part-time and temporary employment contracts

 teleworking from home
 flexible contract hours
 portfolio working

Portfolio working: The working pattern of following several simultaneous employments at any
one time

Teleworking: Staff working from home but keeping in contact with the office by means of
modern IT communications

Main reasons for changes in employment patterns and practices:

 Focus on competitiveness, driven by competitive pressures from globalisation, by cutting

overhead labour costs
 Need for greater labour flexibility with the rapid pace of technological change
  Greater opportunities for outsourcing, especially in low wage economies
 Changing social and demographic patterns; e.g., increasing single parent families that can
struggle with full-time employment

terms Definitions
The intrinsic and extrinsic factors that stimulate people to take actions that
Motivation
lead to achieving a goal
Comes from the satisfaction derived from working on and completing a
Intrinsic motivation
task
Comes from external rewards associated with working on a task, for
Extrinsic motivation
example pay and other benefits
Explain the actual factors that motivate people; i.e. what motivates
Content theories of
workers. Herzberg, for example, looked at hygiene factors and motivators,
motivation
whilst McClelland studied the need for achievement, affiliation and power.
Scientific Specialisation and division of labour lead to greater levels of productivity.
management Taylor introduced a piece-rate payment system to link pay with
(Taylor) productivity levels.
1. Select workers to perform a task
2. Observe them performing the task and note the key elements of it
3. Record the time taken to do each part of the task
Taylor: How to 4. Identify the quickest method recorded
improve worker 5. Train all workers in the quickest method and do not allow them to make
productivity any changes to it
6. Supervise workers to ensure that this 'best way' is being carried out and
time them to check that the set time is not being exceeded
7. Pay workers on the basis of results
A motivation theory that outlines the five levels of needs, from the
Maslow's Hierarchy requirement to satisfy basic physiological needs through to self-
of Needs actualisation. Maslow argued that until a lower order need is met, people
cannot progress onto the next level of needs.
1. Self-actualisation (top of pyramid)
Maslow's Hierarchy 2. Esteem needs
of Needs (ranked 3. Social needs
high to low) 4. Safety needs
5. Physical needs (bottom of pyramid)
 Reaching one's full potential; e.g. challenging work that stretches the
Maslow - Self-
individual - this will give a sense of achievement. opportunities to develop
actualisation
and apply new skills will increase potential.
Respect from others, status and recognition of achievement. Give
Maslow - Esteem
employees recognition for work done well - status, advancement and
needs
responsibility will gain the respect of others.
Trust, acceptance, friendship, belonging to the group and social facilities.
Maslow - Social
Working in teams or groups and ensuring good communication to make
needs
workers feel involved.
Protection from threats, job security, health and safety at work. A contract
Maslow - Safety of employment with some job security - a structured organisation that
needs gives clear lines of authority to reduce uncertainty. Ensuring health and
safety conditions are met.
Maslow - Physical Food, shelter, water, rest. Income from employment high enough to meet
needs essential needs.
A sense of fulfilment reached by feeling enriched and developed by what
Self-actualisation
one has learned and achieved
1. Not everyone has the same needs as is assumed by the hierarchy
2. In practice it can be very difficult to identify the degree to which each
need has been met and which level a worker is 'on'
Limitations of 3. Money is necessary to satisfy physical needs, yet it might also play a
Maslow's approach role in satisfying other levels of needs such as status and esteem
4. Self-actualisation is never permanently achieved - as some observers of
the hierarchy have suggested. Jobs must continually offer challenges and
opportunities for fulfilment, otherwise regression will occur.

Maslow's Hierarchy
of Needs (the
pyramid)

A theory of motivation based on management perceptions of worker

attitudes in the workplace. Theory X managers are authoritarian and
McGregor's Theory
assume that employees need to be supervised. Theory Y managers assume
X and Theory Y
that employees seek recognition and praise for their contributions and
achievements.
 McGregor's term for describing managers that perceive their employees in
Theory X a pessimistic way; i.e., subordinates need constant supervision, prefer to
(McGregor) be told what to do, avoid work if they can, and do not seek any
responsibility.
Is an optimistic management stance towards worker attitudes; Theory Y
Theory Y
managers believe that employees do have initiative, want praise and
(McGregor)
recognition for their achievements, and like taking responsibility at work .
Theory X
1. Dislike work
(McGregor)
2. Will avoid responsibility
managers believe that
3. Are not creative
workers:
Theory Y
1. Can derive as much enjoyment from work as from rest and play
(McGregor)
2. Will accept responsibility
managers believe that
3. Are creative
workers:
Herzberg's Two Looked at the factors that motivate employees, namely motivators and
Factor Theory. maintenance (hygiene) factors
Hygiene factors Parts of a job that do not increase job satisfaction but help to remove
(Herzberg) dissatisfaction, such as reasonable wages and working conditions
Motivators Factors that increase job satisfaction and motivation levels, such as praise,
(Herzberg) recognition and responsibility
Aims to use the full capabilities of workers by giving them the opportunity
Job enrichment
to do more challenging and fulfilling work
1. Assign workers complete units of work
Three main features
2. Provide feedback on performance
of Job enrichment
3. Give workers a range of tasks
Found that workers are most motivated and productive when they are able
Mayo's Hawthorne
to have some social interaction with their fellow workers and management
Effect
takes an interest in their well-being.
Conclusions of 1. Changes in working conditions and financial rewards have little or no
Mayo's work: effect on productivity
2. When management consult with workers and take an interest in their
work, then motivation is improved
3. Working in teams and developing a team spirit can improve
productivity
 4. When some control over their own working lives is given to workers,
such as deciding when to take breaks, there is a positive motivational
effect
5. Groups can establish their own targets or norms and these can be greatly
influenced by the informal leaders of the group
McClelland - three 1. Achievement motivation (n-ach)
types of motivational 2. Authority/power motivation (n-pow)
need: 3. Affiliation motivation (n-affil)
A person with the strong motivational need for achievement will seek to
reach realistic and challenging goals and job advancement. There is a
McClelland: n-ach
constant need for feedback regarding progress and achievement and the
(achievement
need fore a sense of accomplishment. Research has suggested that this
motivation)
result-driven attitude is almost always a common characteristic of
successful business people and entrepreneurs.
A person with this dominant need is 'authority motivated'. The desire to
McClelland: n-pow control others is a powerful motivating force - the need to be influential,
(power motivation) effective and to make an impact. There is a strong leadership instinct when
authority is gained over others, it brings personal status and prestige.
The person with need for affiliation as the strongest motivator has a need
McClelland: n-affil
for friendly relationships and is motivated towards interaction with other
(affiliation
people. These people tend to be good team members - there is a need to be
motivation)
liked and popular and to be held in a high regard.
Look at why people behave in a certain manner and how motivation can
Process Theories of
be maintained or stimulated. These theories look at what people think
motivation
about when deciding whether or not to put in the effort to complete a task.
Vroom's Expectancy Individuals choose to behave in ways that they believe will lead to
Theory outcomes they value. Individuals will have different sets of goals.
Individuals have different sets of goals and can be motivated if they
believe that:
Motivation in 1. There is a positive link between effort and performance
Vroom's Expectancy 2. Favourable performance will result in a desirable reward
Theory 3. The reward will satisfy an important need
4. The desire to satisfy the need is strong enough to make the work effort
worthwhile
Vroom's Expectancy 1. Valence - the depth of the want of an employee for an extrinsic reward,
Theory - 3 beliefs such as money, or an intrinsic reward such as satisfaction
2. Expectancy - the degree to which people believe that putting effort into
 work will lead to a given level of performance
3. Instrumentality - the confidence of employees that they will actually
get what they desire regardless of what has been promised by the manager
A theory that states that people will be motivated when they perceive that
Adams and Equity
they are being treated fairly; the idea that employees try to maintain equity
Theory
between inputs and outputs compared to others in similar positions
Hourly wage rate Payment made to a worker for each hour worked
Piece rate A payment to a worker fro each uniot produced
Salary Annual income that is usually paid on a monthly basis
Commission A payment to a sales person for each sale made
Performance-related
A bonus scheme to reward staff for above-average work performance
pay
A bonus for staff based on the profits of the business - usually paid as a
Profit-related pay
proportion of basic salary
Any financial extras beyond the regular pay cheque, such as health
Fringe benefits
insurance, life insurance, paid vacation and/or retirement
Employee share Employee benefit scheme intended to motivate employees by giving them
ownership schemes a stake in the firm's success through equity participation.
1. Encourages greater effort and faster working
Advantages of Piece-
2. The labour cost for each unit is determined in advance and helps set a
rate payment sytems
price for the product
1. It requires output to be measured and standardised (which is difficult if
each product is different)
Disadvantages of 2. It may lead to falling quality and safety levels as workers rush to
Piece-rate payment complete units
sytems 3. Workers may settle for a certain pay level and won't be motivated to
produce more than a certain level
4. It provides little security over pay level
1. Gives security of income
2. Gives status compared to time rate or piece rate payment systems
Advantages of
3. Aids in costing (salaries won't vary for one year)
Salary payment
4. Is suitable for jobs where output isn't measurable
sytems
5. Is suitable for management positions where staff are expected to put in
extra time to complete tasks and assignments
 1. Income is not directly related to effort and productivity levels
Disadvantages of
2. It may lead to complacency of the salary earner
Salary payment
3. Regular appraisal may be needed to assess whether an individual should
sytems
move up a salary band (can be an advantage if positive appraisal)
1. Staff are motivated to improve performance if they are seeking to
increase financial rewards
Advantages of
2. Target setting can help to give purpose and direction to the work of an
Performance-related
individual
pay payment sytems
3. Annual appraisal offers the opportunity for feedback on the performance
of an individual
1. It can fail to motivate if staff are not driven by the need to earn financial
rewards
Disadvantages of
2. Team spirit can be damaged by the rivalry generated
Performance-related
3. Claims of manager favouritism may undermine relationships
pay payment sytems
4. Less autonomy for workers as they need to conform to the system that
generates bonuses
+ Job enlargement
Non-financial
+ Job enrichment
methods of
+ Team working
motivation:
+ Empowerment
Attempting to increase the scope of a job by broadening or deepening the
Job enlargement
tasks undertaken
Production is organised so that groups of workers undertake complete
Team working
units of work
Involves the restructuring of a job - usually with employees' involvement
Job redesign
and agreement - to make work more interesting, satisfying and challenging
Managers passing on tasks or responsibilities to their subordinates. This
Delegation can motivate workers who wish to increase their responsibility and be
recognised for their abilities
A non-financial motivator which involves a line manager giving her
Empowerment subordinates some autonomy in their job and the authority to make various
decisions
Measures the level of output per worker. It is a measure of motivation
Productivity because employees tend to be more productive with increased levels of
motivation
Remuneration The overall package of pay and benefits offered to an employee
A form of job enlargement that involves giving workers a number of
Job rotation different tasks at the same level of complexity in a prescribed order. It
helps reduce the problems of repetition and boredom in a job.
1. Workers are likely to be better motivated as social and esteem needs
(c.f. Maslow) are more likely to be met
2. Better motivated staff should increase productivity and reduce labour
turnover - both will help reduce business costs
3. Teamworking makes fuller use of the talents of the workforce. Better
Advantages of
solutions to problems will be found as those most closely connected with
teamworking
the work participate in suggesting answers
4. Teamworking can reduce management costs as it is often associated
with delayering an organisation - fewer middle managers will be required
5. Complete units of work can be given to teams - a key feature of job
enrichment
1. Not everyone is a team player. Some individuals are more effective
when working alone. Training may need to be offered to members who are
not used to working collaboratively in groups.
2. Teams can develop a set of values and attitudes which may contrast or
Disadvantages of conflict with those of the organisation itself, particularly if their is a
teamworking dominant personality in the group. Teams will need clear goals and
assessment procedures to ensure that they are working towards the
objectives of the organisation at all times.
3. The introduction of teamworking will involve training costs and there
may be some disruption top production as the teams establish themselves.

Formal and Informal Types of Communication

Formal communication is that which devices support from the organisation structure. It is
associated with the particular positions of the communicator and the recipient in the structure.

Formal communications are mostly of the written type such as company manuals, handbooks
magazines, bulletins annual reports and are designed to meet the specific need s of the
organisation.

Informal communication is based on the informal relationships that grow up in an organisation

and is commonly referred to as "the grapevine". It may be conveyed by a nod, a glance, a
gesture, a smile, and even silence.
Whereas formal communication is generally more articulate, direct and has got official backing,
informal communication is more indirect, less explicit and somewhat spontaneous and flexible. It
serves the social needs of the individuals in the organisation and a manager can utilize the
grapevine as a positive aid.

However it may also contain distorted information and may even degenerate into gossip and
rumour and other negative outlests of expressions by people in the organsiation.

The speed at which information flows through a grapevine is often astounding. The grapevine
cannot be destroyed and hence should receive conscious attention of management.