HUMAN RESOURCES MANAGEMENT

NOTES

2.1 Human resource management (HRM)

 is the practice of recruiting, hiring, deploying and managing an
organization's employees.
 Comprises the recruiting, hiring, training, motivation, retaining
and reward of human resources within the business.
 Is the organising, coordinating, and managing an organisation’s
current employees to carry out an organisation’s mission, vision
and goals.
 the purpose of HRM is to make sure that the business has the
appropriate human resources to enable it to meet the business
objectives.

The role of HRM in meeting organisational objectives

 Train employees to ensure maximum productivity
 Salary administration and determination
 recruit new staff when additional personnel are required
 Select the most suitable employees
 preparing contracts of employment for all staff and deciding on
whether these should be permanent or temporary, full or part
time workers
 Ensuring HRM operates across the business through involving
managers in the development and training of employees
 Improving workforce morale and welfare
 Developing appropriate pay systems for different categories of
workforce
 Giving guidance and advice and ensuring appropriate work-life
balance
 Measuring and monitoring workforce performance
 dealing with disciplinary and grievance procedures

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 giving advice to employees who want to know what training and
skills they need to acquire if they are to progress to a higher
level within the business.
 negotiating with different stakeholders involved in the business,
eg employees, management and trade unions.
 dismissing employees when appropriate
 carrying out the process of redundancy procedure when
necessary
 responsible for workforce planning
 Ensure that labour legislations are followed

Workforce planning
 is to assess the number of employees and skills required to meet
the future needs of the business.
 is the process of analyzing, forecasting, and planning workforce
supply and demand, assessing gaps, and determining target
talent management interventions to ensure that an organization
has the right people with the right skills in the right places at the
right time to fulfill its mandate and strategic objectives.
 It involves the analysis and forecasting the number of workers
and skills of those workers that will be required by the
organisation to achieve its objectives.
 means thinking ahead to establish the number of employees and
the skills required in the future to meet the business’s planned
objectives.
 It is also known as manpower planning.

The reasons for a workforce plan

 It helps organizations identify future human resource needs.This
is done by looking at factors such as the organisation's strategic
plans, business plans, and future goals. This information is used
to identify the number and type of employees that will be
needed to achieve the organisation's objectives.

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 it ensures that the right people are in the right jobs at the right
time. This is done by matching employees' skills and abilities to
the job's requirements. This helps to ensure that employees can
contribute to the organisation's success and that the
organisation can meet its goals.
 helps to avoid or minimise surplus staff and associated costs.
This is done by ensuring that the organisation has the right
number of employees with the right skills and abilities. This
helps to avoid the need to lay off employees or to hire new
employees when the organisation's needs change.
 helps to develop a pool of potential candidates for future
vacancies. This is done by identifying the skills and abilities that
will be needed in the future and by developing plans to ensure
that employees acquire these skills. Further, it helps to ensure
that the organisation has a pool of qualified candidates to
choose from when vacancies arise.
 helps to ensure that the organisation has necessary skills and
competencies to meet its future goals and objectives. Human
resource management can evaluate skills and abilities for future
development plans. It is all about helping to bring people and
organizations together. Coming together helps to accomplish
and meet a certain set of goals.
 Planning for the future i.e to calculate the future staffing needs
of the business
 To prevent the problems of too few or too many staff at the
business
 To avoid many staff with wrong skills
 To achieve the objectives of the business in the future

The role of workforce plan

 They help businesses to deal with changes (such as the impact
of new technology or changes in consumers’ tastes) by ensuring

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 that they have the right employees in terms of numbers, work
locations and skills.
 Workforce plans help businesses to prepare for changes in the
workforce, such as the introduction of new production-line
machinery or a significant proportion of employees leaving
through retirement.

Measurement of labour turnover

 labour turnover refers to the ratio of a number of employees who
leave a company through attrition, dismissal or resignation to
the total number of employees on the payroll in that period.
 This ratio measures the proportion of a workforce leaving their
employment at a business over some period of time, usually one
year.
 It's used for measuring employee retention.
 also known as staffing turnover
 is calculated as follows;

Turnover = Number of staff leaving during the year x 100%

Average number of staff

Example:
ABC limited employees 100 employees on average in 2024. 54
workers left the business during 2024.
REQUIRED
Calculate labour turnover

Solution
Labour Turnover = Number of staff leaving during the year x 100%
Average number of staff

= 54 x 100%

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 100

= 54%

Reasons for high labour turnover

 Low wages
 inadequate training
 lack of motivation
 poor working conditions
 ineffective recruitment procedures, resulting in the appointment
of inappropriate staff.
 redundancy (organisational down sizing)
 retirement.
 dismissal of some of the employees
 Availability of better paid jobs elsewhere
 employee relocation
 employee dissatisfaction
 poor company culture
 negative view of management
 unfavourable leadership style

The implications of high and low labour turnover for a

business

a) Negative impact on high labour turnover

 reduced productivity
 increased time on recruiting and training new employees
 decrease morale on remaining employees
 loss of company and brand knowledge
 difficult to establish customer loyalty due to a lack of regular,
familiar contact
 difficult to establish team spirit
 loss of customers

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 Difficult to establish team spirit as team members are constantly
changing
 higher costs of training and recruitment
 talent and experience drain
 loss of revenue
 Reputation suffers so business becomes less attractive

Positive impact of high labour turnover

 low-skilled and less-productive staff might be leaving and could
be replaced with more carefully selected workers
 new ideas and practices brought into an organisation by new
workers
 high labour turnover can help a business plan to reduce
employee numbers, as workers who leave will not be replaced

Assignment question
Discuss the impact of low labour turnover to the business
organisation. [20]

Short answer questions

1. Define the term ‘human resource management’. [2]
2. Define the term ‘workforce plan’. [2]
3. Explain one importance of workforce plan to the business
organization. [3]
4. Explain two possible benefits to a business of an effective system
of human resource management. [6]
5. Explain one possible effect of a high level of labour turnover in a
business. [3]
6. A business has 2 000 employees. During the year, 700 leave its
employment. Calculate its rate of labour turnover. [3]

2.1.3 Recruitment and selection

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Recruitment
 is 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 to be filled and
selecting the best.
 is the process of finding, screening, hiring and eventually on
boarding qualified job candidates.

NB
 Recruitment and selection will be necessary when the business
is expanding and needs a bigger workforce employees leave and
need to be replaced.

The recruitment process

 is defined as a process that provides the organization with a pool
of qualified job candidates from which to choose.

1. the human resources department use the HR plan to decide

number and type of employees needed. the nature of the vacancy is
established.
2. preparations of job adverts, job descriptions and person
specifications
3. advertise the job ( inside or outside the business)
4. Receive job applications
5. prepare short list for selection, matching applications and person
specifications
6. select employees using interviews

Job description
 list the duties and responsibilities associated with a particular
job.
 contain the following information:

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  the title of the post
 employment conditions
 some idea of tasks and duties
 the key aims and responsibilities of the job
 where the job fits into the organization.

Advantages of job description

 Provides a clear idea of what a job involves so they can select
the best candidate
 Saves time / money / makes selection easier and the business
won’t get applications from people who cannot do the job
 As a basis for drawing up a contract and the business can be
sure that all duties will be carried out on-board
 Helps decide basis for pay
 Help create person specification
 Helps create appropriate job advert
 Helps resolve disputes between managers and subordinates

Person (job) specification

 is a description of the qualifications, skills, experience,
knowledge and other attributes (selection criteria) which a
candidate must possess to perform the job duties.
 it describes the skills, knowledge, and qualities needed to
perform a particular job.

Recruitment methods
 Once managers have prepared job descriptions and person
specifications, a decision has to be made as to how to recruit the
necessary employees.
 There are a number of recruitment methods which the HRM can
adopt;

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Job advertisements
 is when the job or vacant is advertised in newspapers, radios
and other social media platforms.
 The advert needs to be targeted so as to attract suitable
applicants while dissuading unsuitable candidates from applying.
 An effective job advertisement should contain sufficient
information to attract and engage potential employees but not
too much so as to discourage them from applying.

Employment agencies
 this is where the task of advertising a job role and identifying
suitable candidates for interview is outsourced to an
experienced external recruiter.
 provide employers with details of suitable applicants for posts
they may have vacant.
 they charge considerable fees for bringing together employers
and potential candidates.
 Businesses may use employment agencies to recruit highly
specialist employees or those with skills that are scarce.
 Although this is a costly method of recruitment, agencies often
have skills and contacts that many businesses do not possess.

Online recruitment
 allows businesses and other organisations to use their websites
to recruit potential employees cheaply and from any part of the
world.
 This method of recruitment can increase the number of
applicants and the quality of employees who are eventually
employed.
 Online advertising can reach much larger audiences, increasing
the number of applicants.
 Equally, this form of advertising can be targeted, as relevant
groups help to improve the quality of applicants.

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 Websites operated by both businesses and governments bring
together those seeking work and businesses intending to recruit.

Other methods of recruitment

 Firms headhunt employees who are currently working for other
organisations in order to offer them employment.
 Those employees who are headhunted are usually either senior
managers or people with specialist skills, perhaps in short
supply.
 Specialist executive recruitment agencies exist which can target
precisely the right type of candidates, but they normally charge
high fees.

Internal recruitment
 is when the selected candidate already works for the
organisation
 involves filling job vacancies from within the organization.
 This can be done through internal job postings, employee
referrals, promotions, or transfers.

Advantages of internal recruitment

 Applicants may already be known to the selection team.
 Applicants will already know the organisation and its internal
methods so there is no need for induction training.
 The culture of the organisation will be well understood by the
applicants.
 It is often quicker than external recruitment.
 helps in recognizing and utilizing the existing talent pool,
fostering employee growth and retention, and boosting
employee morale.
 It is likely to be cheaper than using external advertising and
recruitment agencies.

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 It gives internal staff a career structure and a chance to
progress.
 If the vacancy is for a senior post, workers will not have to get
used to a new style of management.

Disadvantages of internal recruitment

 can cause dissatisfaction for those not promoted
 can cause line management problems for the promoted person if
they now supervise former colleagues
 there might be a better applicant externally

External recruitment
 is when the successful applicant does not currently work for the
business.
 is the process of sourcing candidates from outside the
organization

Advantages of external recruitment

 External applicants will bring new ideas and practices to the
business, which helps to keep existing employees focused on the
future rather than the past.
 There is a wider choice of potential applicants, not just limited to
internal staff.
 It avoids the resentment sometimes felt by existing staff if one
of their colleagues is promoted above them.
 The standard of applicants could be higher than if the job is open
only to internal applicants.

Disadvantages of external recruitment

 the new employee does not know the internal structure of the
business as well as someone who already works there
 internal applicants might be unhappy that a stranger has got the
job. they might feel undervalued by the business.

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Selection methods
 Selection is the process of determining the most suitable
candidate for the job among which would have been attracted
through the recruitment exercises.
 It involves the picking of candidates from a group of applicants.
 The selection method used within the company is important as it
should not be relatively expensive compared to the importance
of the job.
 It should be non discriminatory in terms of ability, personality
intelligent, race and other factors.
 A number of selection techniques exist.

Curriculum vitae
 take various forms but are all designed to record key information
about potential employees, such as their education, professional
qualifications and experience in previous employment.
 This is designed to help managers to match employees to person
specifications which detail the requirements of the job.
 Thus, they can form an important element of the early stages of
the selection process.

Résumé
 are very similar to the CV.
 it normally summarises the applicant’s relevant job experience,
education and training.
 is usually sent to employers with a covering letter which may
contain additional information.

Application forms
 Some businesses supply application forms for prospective
employees to complete.
 These are normally used in place of CVs and résumés.

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 They offer the advantage that businesses can ensure that all
applicants have the chance to supply the information that is
required to make the selection decision
 Also, because the application forms are in a standard format, it
can be easier to compare candidates’ applications.

NB
 CVs, résumés and application forms all tend to be used early in
the selection process, and they can be a useful means of
screening candidates and deciding which to invite to interview or
other method of selection.
 They are particularly valuable if a business receives a large
number of applications for a position.

Interviews
 These remain a popular form of selection technique and are the
most common in different countries.
 Interviews can involve one or two interviewers or even a panel.
 Candidates can be asked a series of questions designed to test
their knowledge of, and suitability for, the job.
 Some interviews (sometimes called competency-based
interviews) may require candidates to undertake specific job-
related tasks to assess their skills.
 They are relatively cheap and allow the two-way exchange of
information, but are unreliable as a method of selection.
 Some people perform well at interview, but that does not
necessarily mean they will perform well at work.

References
 Many employers ask candidates to supply references at some
stage in the recruitment and selection process.
 These are written by former employers or by other people in a
position of authority who may know the candidate well.

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 They will set out the candidate’s strengths and possibly their
weaknessesand provide potential employers with a further
indication of the applicant’s suitability for the post.
 References are not always accurate.
 For instance, an employer may give an employee an
undeservedly good reference if they want to get rid of them.

Testing
 Testing as part of the selection process can take a variety of
forms.
 Psychometric tests are very common; these can take two forms.
 An aptitude test provides candidates with opportunities to
demonstrate their skills and abilities in relation to the job.
 Personality tests examine the likely behaviour of potential
employees and how they might respond to certain situations in
the workplace.
 They involve numerical and written questions and can help to
assess how well the applicant might fit in with existing
employees.

Assessment centres
 Managers are aware of the high costs of poor selection decisions
and this has led to the heavy use of assessment centres.
 Many managers believe that this is a more reliable method of
selection.
 In such centres, a number of candidates are subjected to a
variety of selection techniques over a period of between two and
four days.
 is used to describe a collection of assessment methods applied
to a cohort entry where specifically designed tests and exercises
are worked through by all applicants.
 the activities span several days and include a series of tests,
group activities and interviews.

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 at the end of the process, assessors meet for a final discussion
to determine an overall weighting of candidates.

Employment contracts
 is a legal agreement between an employer and an employee,
setting forth the terms and conditions of the employment
arrangement.
 It is a legally binding agreement designed to protect the rights of
employers and employees
 does not have to be issued immediately upon an employee
starting work, but its conditions are in force from the time an
employee commences employment.

Contents of employment contract

 the employee’s and employer’s names
 date when employment began
 the scale (and rate) at which the employee will be paid and the
frequency of payment
 the employee’s usual hours of work
 holiday entitlement and other benefits such as pensions
 the job title and a summary of duties
 the location or locations of the work
 details of any trade union agreements relating to the job
 disciplinary procedures
 grievance procedures
 the notice from either side to terminate the employment
contract.

Redundancy
 refers to a process of terminating employees from their
employment due to different business reasons.

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 occurs when workers’ jobs are no longer required, perhaps
because of a fall in demand, a change in technology or the need
to cut costs.
 Occurs when an employee volunteers to be dismissed for
reasons of redundancy.
 this is part of a company policy of retrenchment to save on costs
to remain competitive.
 is a legal reason for an employer to dismiss an employee, but it
can only occur if a job no longer exists.
 If redundancies are to take place, then guidelines are normally
followed to ensure that the correct person or people are made
redundant.

Reasons for redundancy

 A business closes down and all its employees are made
redundant.
 The jobs of some employees are replaced by new technology.
 A business moves some of its operations overseas and some
jobs are lost as a consequence. (relocation of the business)
 the economic status
 When a business, or part of it, shuts down completely.
 The work of an employee is being completed by others.
 poor human resources planning
 falling demand for the product
 insolvency of the business

Voluntary redundancy
 is the process of an employee choosing to take redundancy.
 occurs when an employer, wishing
 to make redundancies, invites employees to apply for
redundancy in return for a financial compensation package.
 This is meant to terminate employment in exchange for some
kind of redundancy payout.

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 This form of redundancy can help to maintain the morale of a
workforce at what can be a very difficult time for a business.
 normally offers a greater financial payment to employees

Involuntary redundancy
 is the temporary suspension or permanent termination of the
employment of an employee or, more commonly, a group of
employees (collective involuntary redundancy) for business
reasons, such as personnel management or downsizing
(reducing the size of) an organization.
 is where employees are selected for redundancy and they have
no choice in the matter.
 This is likely to occur when a large number of employees are to
be made redundant and insufficient people are willing to take
voluntary redundancy.
 often damage the morale and performance of the workforce.
 has remained the most efficient means for a company to cut
costs.

The differences between voluntary and involuntary

redundancy
Voluntary redundancy Involuntary redundancy
 offered to a specific age  is not age specific and can
group and experience level affect any employee
irrespective of their age and
the number of years they
have spent in the
organization.
 voluntary redundancy  Involuntary redundancy
program allows eligible programs target employees
employees to choose whether for job loss despite their own
or not to participate’ in the wishes.
redundancy campaign.

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 occurs when the job still  occurs when the job no
exists but one of the other longer exists
conditions may apply.
 voluntary redundancy  Whereas it is not so with
packages offer more in terms involuntary redundancy
of financial compensation because sometimes what
than compulsory redundancy. leads to the redundancy is
beyond the control of the
employer.
 when an employer invites  the employee doesn’t have a
employees to put themselves choice as regards accepting
forward for voluntary the redundancy or declining.
redundancy, the employee
reserves the right to refuse
applications.

Dismissal
 is when the employment contract of worker is terminated by the
employer because of inappropriate actions of the employees.
 is the terminating a contract of employment because an
employee has not fulfilled the conditions of the contract in some
way.

Reasons for dismissal

 stealing goods or property from the business
 Gross misconduct e.g stealing
 Incompetence even after sufficient training has been given
 Continuous negative attitude
 Intentional destruction of an employer’s property
 Bulling of other employees
 Failure to disclose relevant details when being offered
employment.

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Fair dismissal
 is where an employee or member of staff is dismissed from their
employment for a justifiable reason.
 It is the type of dismissal in which the employer terminates the
employment relationship by proving the reason for termination.

Reasons for fair dismissal

 inability to do the job even after sufficient training has been
given
 continuous negative attitude at work
 disregard of required health and safety procedures
 deliberate destruction of an employer’s property
 bullying of other employees.

Unfair dismissal
 is the terminating of the employee’s employment contract for a
reason that the law regard as being unfair.
 The affected employee can report to the civil court so that the
court can deal with such unscrupulous employers.
 When dismissal is judged to be unfair, the employee will get
damages from the firm.

Reasons for unfair dismissal

 pregnancy
 a discriminatory reason, for example the race, gender or religion
of a worker
 being a member of a union.
 Family reasons
 For minor cases without giving first or second warning.
 a non-relevant criminal record, if the employer has previously
been aware of criminal record

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Assignment
Explain the differences between unfair and fair dismissal [6]

Morale
 is the satisfaction felt by employees within the workplace.
 refers to the feeling of enthusiasm and loyalty that a person has
about a task or job

Welfare
 is a broad term covering a wide range of facilities that are
essential for the well-being of a business’ employees.
 Employees are often concerned about their health and safety at
work. A business organisation which cuts corners on welfare is
unlikely to get the best from its employees.
 Improving the working conditions with excellent hygiene
facilities and safety equipment is another effective way of
improving employee welfare.

Ways to maintain or improve staff morale and welfare

 Ensure that health and safety guidelines/ legislation is met. The
physical welfare of employees can partly be assured by following
health and safety measure.
 Offering help and guidance to employees who might be
experiencing problems in their life outside work. E.g when a
worker is worrying about her child’s deteriorating health
condition.
 Provide medical facilities within the business in order for the
employees to get treatment for any injuries.
 Dealing with issues that are demotivating employees
 Treating employees fairly.

The relationship between HRM, employee morale and

welfare in a business

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 Human resource management can play a central role in
developing and improving the morale and welfare of employees.
 Recruiting people with the intention of developing their skills and
improving their performance throughout a long-term relationship
is at the heart of what is called ‘soft’ human resource
management.
 Such an approach to HRM may well seek to develop the skills of
employees and to encourage them to work with the business for
long periods of time.
 Using this ‘soft’ approach to HRM also offers benefits to the
business of providing good facilities for employees.

The concept of work- life balance

 Refers to a situation in which employees are able to give the
right amount of time and effort to work and to their personal life
outside work.
 The term work–life balance refers to the time an employee
spends on work-related duties compared with time spent on non-
work activities.
 Employees must have enough time to attend to their private life.
 Thus employees must get time to spend with their loved ones.
 Working long hours and also denying employees breaks can lead
to stress and poor health.
 The management must assist employees to achieve a better
work-life balance.
 The aim is to maintain a sensible balance that allows career and
ambition needs to met as well as family and friendship needs
and commitments.

Methods that can be used to achieve a better work-life

balance
 Flexible working i.e allowing some employees to come at busy
periods of the day but not during slower periods.

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 Teleworking i.e working from home for some of the working
week
 Job sharing i.e allowing two people to fill one full-time job,
although each worker will only receive a proportion of the full-
time pay
 Sabbatical periods i.e an extended period of leave from work.
Some business do not pay employees during this period.

The impact of diversity and equality in the workplace on a

business

Diversity policy
 in a workplace context, refers to recognizing the differences
between individual employees and also the differences that may
exist between different groups of employees.
 refers to practices and processes aimed at creating a mixed
workforce and placing positive value on diversity in the
workplace.
 Businesses that operate diversity policies will treat people as
individuals and will value the benefits that diverse individuals
and groups in a workplace may offer to a business.
 Employee diversity could be based upon gender, race and
ethnicity, disability, religion, sexuality, class and age.
 Diversified workforce include employees:
 Who come from different backgrounds and cultures
 Who speak different languages
 With different levels of education
 Who differ in terms of age and gender

Promoting diversity in the workplace impacts on business

by:
 capturing a bigger market share as consumers are attracted by a
diverse sales force

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 employing a more qualified workforce as selection is based on
merit and not on discrimination
 increasing creativity because individuals from different
backgrounds approach problem-solving in different ways
 achieving cultural awareness, leading to improved knowledge
about foreign markets
 promoting diverse language skills, which allows businesses to
provide products and services internationally.
 Colleagues learn to value and respect one another even if they
do not hold similar values and beliefs
 Can lead to an increase in the customer base since some
customers are attracted by a diversified sales force.

The costs may include:

 higher recruitment costs
 longer recruitment process
 greater training needs
 communication barriers.

Equality
 policies related to equality are intended to create a fairer society
where all employees can contribute and fulfil their potential.
 Businesses that promote equality in the workplace do not base
recruitment and dismissal decisions, pay, promotions and other
benefits on employees’ race, sexuality, gender, age, religion or
national origin.
 One key aspect of this is to operate policies that allow all
employees the opportunity to reach senior positions in a
business, irrespective of their age, gender, ethnicity or sexual
orientation.

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 This is considered necessary as many groups, such as women
and minority ethnic groups, are under-represented in senior
positions in businesses.
 This can mean that the skills and abilities of such employees are
wasted.
 By including such groups, businesses can become more
competitive and successful.

Promoting equality in the workplace impacts on business by:

 creating an environment with high employee morale and
motivation
 developing a good reputation and the ability to recruit top talent
based on fairness
 measuring employee performance by their achievements at
work, not by any discriminatory factor.
 Greater commitment and effort from employees
 The business can easily attract skilled and experienced
personnel from other organisations

2.1.6 Training and development

Reasons for training

 To facilitate the introduction of new technology
 To prepare existing employees for succession purposes
 To develop workers in order to enable them progress
 To provide employees with the skills, knowledge and aptitude
 To improve worker morale

Different types of training:

induction

on-the-job


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off-the-job

the impact of training and development on a business

employee development to encourage intrapreneurship

employee development to encourage multi-skilling and
flexibility


Management and workforce relations

how cooperation between management and the workforce can be of
benefit to both
the impact on employers and employees of trade union involvement
in the workplace including their role in collective bargaining

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