Tuesday, 25 October 2011

human resource management notes


human resource management - introduction
What is HRM?
Human Resource Management ("HRM") is a way of management that links people-related activities to the strategy of a business or organisation. HRM is often referred to as "strategic HRM". It has several goals:
t  To meet the needs of the business and management (rather than just serve the interests of employees);
t  To link human resource strategies / policies to the business goals and objectives;
t  To find ways for human resources to "add value" to a business;
t  To help a business gain the commitment of employees to its values, goals and objectives
The link between Human Resources and Business Strategy
All elements of the business strategy have implications for human resources, as illustrated in the table below. The challenge for management is to identify and respond to these HR challenges:
Examples of Key Strategy Issues
Possible Human Resource Implications
What markets should the business compete in?
What expertise is required in these markets? Do existing management and employees have the right experience and skills
Where should the business be located to compete optimally?
Where do we need our people? How many do we need?
How can we achieve improvements in our unit production costs to remain competitive?
How productive is the workforce currently? How does this compare with competitors? What investment in the workforce (e.g. training, recruitment) and their equipment is required to achieve the desired improvement in productivity?
How can the business effect cultural change?
What are the current values of the workforce. How can the prevailing culture be influenced/changed to help implement a change programme?
How can the business respond to rapid technological change in its markets?
What technological skills does the business currently possess? What additional skills are needed to respond to technological change? Can these skills be acquired through training or do they need to be recruited?
An important part of HRM is the Human Resources Plan. The purpose of this plan is to analyse the strategic requirements of the business in terms of manpower - and then to find a way of meeting the required demand for labour. This is the subject of a separate revision note.
Study Notes: People Management
HRM - Objectives of HRM
Whilst the precise HR objectives will vary from business to business and industry to industry, the following are commonly seen as important HR objectives:
Objective
HR Actions
Ensure human resources are employed cost-effectively
Pay rates should be competitive but not excessive
Achieve acceptable staff utilisation
Minimise staff turnover
Measure returns on investment in training
Make effective use of workforce potential
Ensure  jobs have suitable, achievable workloads
Avoid too many under-utilised or over-stretched staff
Make best use of employees skills
Match the workforce to the business needs
Workforce planning to ensure business has the right number of staff in the right locations with the right skills
Effective recruitment to match workforce needs
Training programmes to cover skills gaps or respond to changes in technology, processes & market
Consider outsourcing activities that can be done better and more cost-effectively by external suppliers
Get the right number and mix of staff at each location where the business operates in multiple sites and countries
Maintain good employer / employee relations
Avoid unnecessary and costly industrial disputes
Timely and honest communication with employees and their representatives
Sensitive handling or potential problems with employees (e.g. dismissal, redundancy, major changes in the business)
Comply with all relevant employment legislation
Study Notes: People Management
The Recruitment Process
For most businesses, large or small, the task of identifying what work needs doing and who should do it is a continuous challenge!
The recruitment process
It is rare that a business of any size operates for long without having to recruit or remove employees. For example, consider why a business might need to recruit staff:
  • Business expansion due to
    • Increasing sales of existing products
    • Developing new products
    • Entering new markets
  • Existing employees leave:
    • To work with competitors or other local employers
    • Due to factors such as retirement, sick leave, maternity leave
  • Business needs employees with new skills
  • Business is relocating – and not all of existing workforce want to move to new location
The world of work is also changing rapidly:
  • Increase in part-time working
  • Increased number of single-parent families
  • More women seeking work
  • Ageing population
  • Greater emphasis on flexible working hours
  • Technology allows employees to communicate more effectively whilst apart
  • People rarely stay in the same job for life
Businesses need to understand and respond to these changes if they are to recruit staff of the right standard – and keep them!
So what is workforce planning?
Workforce planning is about deciding how many and what types of workers are required
There are several steps involved in workforce planning:
  • The workforce plan establishes what vacancies exist
  • Managers produce a job description and job specification for each post
Job description
  • Detailed explanation of the roles and responsibilities of the post advertised
  • Most applicants will ask for this before applying for the job
  • Refers to the post available rather than the person
Job specification
  • Sets out the kind of qualifications, skills, experience and personal attributes a successful candidate should possess.
  • A vital tool in assessing the suitability of job applicants
  • Refers to the person rather than the post

Study Notes: People Management
Internal and external recruitment
A manager can recruit in two different ways:
  • Internal recruitment is when the business looks to fill the vacancy from within its existing workforce
  • External recruitment is when the business looks to fill the vacancy from any suitable applicant outside the business
Of course, the option to use BOTH internal and external recruitment can be used. This is often the case for senior management appointments.

Advantages
Disadvantages
Internal Recruitment
Cheaper and quicker to recruit
Limits the number of potential applicants
People already familiar with the business and how it operates
No new ideas can be introduced from outside
Provides opportunities for promotion with in the business – can be motivating
May cause resentment amongst candidates not appointed
Business already knows the strengths and weaknesses of candidates
Creates another vacancy which needs to be filled
External Recruitment
Outside people bring in new ideas
Longer process
Larger pool of workers from which to find the best candidate
More expensive process due to advertising and interviews required
People have a wider range of experience
Selection process may not be effective enough to reveal the best candidate
The four most popular ways of recruiting externally are: 
  • Job centres – Government agencies to help the unemployed find jobs or get training
  • Job advertisements - the most common form of external recruitment.  Where a business chooses to advertise will depend on the cost of advertising and the coverage needed (i.e. how far away people will consider applying for the job)
  • Recruitment agency - Provides employers with details of suitable candidates for a vacancy and can sometimes be referred to as ‘head-hunters’.  They work for a fee and often specialise in particular employment areas e.g. nursing, financial services, teacher recruitment
  • Personal recommendation - Often referred to as ‘word of mouth’ and can be a recommendation from a colleague at work.  A full assessment of the candidate is still needed however but potentially it saves on advertising cost
When recruiting externally, the business will almost certainly have to produce a job advertisement.  The objectives of the advertisement are to:
  • Inform audience of potential candidates about opportunity
  • Provide enough information to both inform and interest possible applicants
  • Help “screen” or dissuade unsuitable applicants
  • Obtain most number of suitably qualified applicants for post advertised

Study Notes: People Management

Job description
What is a job description?
A job description sets out the purpose of a job, where the job fits into the organisation structure, the main accountabilities and responsibilities of the job and the key tasks to be performed.
Why is a job description important?
A job description has four main uses:
Organisation - it defines where the job is positioned in the organisation structure. Who reports to who.
Recruitment - it provides essential information to potential recruits (and the recruiting team) so that they can determine the right kind of person to do the job (see person specification)
Legal - the job description forms an important part of the legally-binding contract of employment
Appraisal of performance - individual objectives can be set based on the job description
Contents of a Job Description
The main contents of a job description are:
- Job Title: this indicates the role/function that the job plays within an organisation, and the level of job within that function (e.g. Finance Director would be a more senior position than Financial Accountant - although both jobs are in the "finance department")
- Reporting responsibilities: who is the immediate boss of the job holder?
- Subordinates; who reports directly TO the job holder?
- Main purpose - who is involved in the job overall
- Main tasks and accountabilities: description of the main activities to be undertaken and what the job holder is expected to achieve (e.g. in the case of the Management Accountant, this might include "Complete monthly management accounts by 10th working day of each month and prepare report on all key performance variances")
- Employment conditions
Study Notes: People Management
Recruitment interviews - selecting the candidates
An interview is the most common form of selection and it serves a very useful purpose for both employer and job candidate:
For the Employer:
  • Information that cannot be obtained on paper from a CV or application form
  • Conversational ability- often known as people skills
  • Natural enthusiasm or manner of applicant
  • See how applicant reacts under pressure
  • Queries or extra details missing from CV or application form
For the Candidate
  • Whether job or business is right for them
  • What the culture of company is like
  • Exact details of job
There are though other forms of selection tests that can be used in addition to an interview to help select the best applicant.  The basic interview can be unreliable as applicants can perform well at interview but not have the qualities or skills needed for the job. 
Other selection tests can increase the chances of choosing the best applicant and so minimise the high costs of recruiting the wrong people.  Examples of these tests are aptitude tests, intelligence tests and psychometric tests (to reveal the personality of a candidate). 
Managers selecting candidates for a high level post in an organisation may even send applicants to an assessment centre.  In such centres candidates undergo a variety of tests, role-plays and simulations for a number of days.

Once the best candidate has been selected and agreed to take up the post, the new employee must be given an employment contract. This is an important legal document that describes the obligations of the employee and employer to each other (terms and conditions) as well as the iniStudy Notes: People Management

Job analysis
The management of a business need to determine what work needs to be done. Job analysis is a key part of this need.
Job analysis concentrates on what job holders are expected to do. It provides the basis for a job description, which in turn influences decisions taken on recruitment, training, performance appraisal and reward systems.
What is contained in a job analysis?
A job analysis would typically contain:
Job purpose
What is the job meant to do - and how does this related to other parts of the business?
Job content
Duties and responsibilities
Accountabilities
What results / outputs is the job holder responsible for?
Performance criteria
How will the job holder's performance be measured?
Resource requirements
E.g. equipment, location

How is a job analysis carried out?
Several techniques should be used to complete an effective job analysis:
- Research business documents - e.g. procedures manuals
- Ask relevant managers about the requirements and purpose of the job; what are the key activities; what relationships does the job have with other posts. Develop a comprehensive profile through these discussions
- Interview the existing job holder (if the job already exists) -e.g. ask store managers in retail stores and build a profile from asking those who actually do the job
- Observe the job holders to see what they really do
The key information that needs to be collected includes:
- Job title
- Main duties and tasks
- Targets and performance standards that the job holder is required to achieve
- The amount of supervision that is normally given / freedom of decision-making in the job
- Skills and/or qualifications needed for the job (including personal skills)

tial remuneration package and a number of other important details.

Study Notes: People Management

Advertising a job
The Objective of Recruitment Advertising
The objectives of recruitment advertising are to:
(1) Attract suitable candidates, and
(2) Deter unsuitable candidates
What makes a good job advert?
Whilst there are no hard and fast rules about the contents of a job advert, the following features are likely to be in an effective advertisement:
Accurate - describes the job and its requirements accurately
Short - not too long-winded; covers just the important ground
Honest - does not make claims about the job or the business that will later prove false to applicants
Positive - gives the potential applicant a positive feel about joining the business
Relevant - provides details that prospective applicants need to know at the application stage (e.g. is shift-working required; are there any qualifications required)
Content of a job advert
Most job adverts contain:
- Details of the business/organisation (name, brand, location, type of business)
- Outline details of the job (title, main duties)
- Conditions (special factors affecting the job)
- Experience / qualifications required (e.g. minimum qualifications, amount of experience)
- Rewards (financial and non-financial; the financial rewards may be grouped together under a total valued "package2 - e.g. total package circa £50,000)
- Application process (how should applicants apply, how to; deadlines)
Choice of medium
What kind of advertising medium should be chosen? The following factors are relevant:
Type of job: senior management jobs merit adverts in the national newspapers and/or specialist management magazines (e.g. the Economist, BusinessWeek). Many semi-skilled jobs need only be advertised locally to attract sufficient good quality candidates
Cost of advertising: National newspapers and television cost significantly more than local newspapers etc
Readership and circulation: how many relevant people does the medium reach? How frequently (e.g. weekly, monthly, annually!. Is the target audience actually only a small fraction of the total readership or Viewer ship?
Frequency: how often does the business want to advertise the post?

Study Notes: People Management

Person specification
What is a person specification?
A person specification describes the requirements a job holder needs to be able to perform the job satisfactorily. These are likely to include:
- Education and qualifications
- Training and experience
- Personal attributes / qualities
How does this compare with a job description?
A job description describes the job ; a person specification describes the person needed to do the job. A person specification can, therefore, form the basis for the selection of the most suitable person to fill the job.
How should a person specification be created?
The most common approach now used by recruiters is to use what are known as "competencies" to design the person specification. These are then classified as "essential" or "desired" to determine which are most important.
Competencies might include some or all of the following:
- Physical attributes (e.g. state of health, aged, speech)
- Attainments (e.g. highest level of education completed, relevant market experience, ability to supervise/manage)
- Aptitudes (e.g. verbal reasoning; numerical aptitude)
- Interests (social activities; sporting activities)
- Personal circumstances (e.g. ability to work shifts; full or part time)
Person specifications have to be prepared and used with great care. In particular, it is important to ensure that the list of essential or desired competencies does not lead to unlawful discrimination against potential employees.

 Study Notes: People Management

Training (introduction)
Training can be defined as:
The process of increasing the knowledge and skills of the workforce to enable them to perform their jobs effectively
Training is, therefore, a process whereby an individual acquires job-related skills and knowledge
Training costs can be significant in any business. However, many employers are prepared to incur these costs because they expect their business to benefit from employees' development and progress.
Training takes place at various points and places in a business.  Commonly, training is required to:
  • Support new employees (“induction training”)
  • Improve productivity
  • Increase marketing effectiveness
  • Support higher standards of customer service and production quality
  • Introduction of new technology, systems or other change
  • Address changes in legislation
  • Support employee progression and promotion
Effective training has the potential to provide a range of benefits for a business:
  • Higher quality
  • Better productivity
  • Improved motivation - through greater empowerment
  • More flexibility through better skills
  • Less supervision required (cost saving in supervision)
  • Better recruitment and employee retention
  • Easier to implement change in the business
Effective training starts with a “training strategy”.  The three stages of a training strategy are:
  • Identify the skills and abilities needed by employees
  • Draw up an action plan to show how investment in training and development will help meet business goals and objectives
  • Implement the plan, monitoring progress and training effectiveness
Given the costs involved, you might not be surprised to learn that many businesses do not invest enough in training. 
Some firms don’t invest anything in training!  Here are the most common reasons for under-investment in training:
They fear employees will be poached by competitors (who will then benefit from the training)
  • A desire to minimise short-term costs
  • They cannot make a justifiable investment case
  • Training takes time to have the desired effect – management are impatient!
  • Sometimes the benefits of training are more intangible (e.g. morale) than tangible – so they are harder to measure

Study Notes: People Management

Induction training
What is induction training?
Induction training is training given to new employees.
The purpose of the induction period (which may be a few hours or a few days) is to help a new employee settle down quickly into the job by becoming familiar with the people, the surroundings, the job and the business.
It is important to give a new employee a good impression on the first day of work. However, the induction programme should not end there.
It is also important to have a systematic induction programme, spread out over several days, to cover all the ground in the shortest effective time.
Devising an effective induction training programme
The induction programme should be drawn up in consultation with all those involved. Depending on the size and complexity of the business this may include:
• Senior management (including directors)
• Supervisors or line managers
• Personnel officers
• Health and Safety managers
• Employee or trade union representatives
What induction training involves
Usually induction involves the new employee meeting and listening to different people talk about aspects of the business.
Other methods include written information, audio visual aids and group discussion.
The following items should be covered in an effective induction programme:
• Introduction to the business/department and its personnel/management structure
• Layout of the buildings (factory / offices)
• Terms and conditions of employment (explaining the contract of employment)
• Relevant personnel policies, such as training, promotion and health and safety
• Business rules and procedures
• Arrangements for employee involvement and communication
• Welfare and employee benefits or facilities
Study Notes: People Management
On-the-job training
With on the job training, employees receive training whilst remaining in the workplace.
The main methods of one-the-job training include:
  • Demonstration / instruction - showing the trainee how to do the job
  • Coaching - a more intensive method of training that involves a close working relationship between an experienced employee and the trainee
  • Job rotation - where the trainee is given several jobs in succession, to gain experience of a wide range of activities (e.g. a graduate management trainee might spend periods in several different departments)
  • Projects - employees join a project team - which gives them exposure to other parts of the business and allow them to take part in new activities. Most successful project teams are "multi-disciplinary"
The advantages and disadvantages of this form of training can be summarised as follows:


Advantages
Disadvantages
Generally most cost-effective
Employees are actually productive
Opportunity to learn whilst doing
Training alongside real colleagues
Quality depends on ability of trainer and time available
Bad habits might be passed on
Learning environment may not be conducive
Potential disruption to production

 Study Notes: People Management

Off-the-job training
This occurs when employees are taken away from their place of work to be trained.
Common methods of off-the-job training include:
  • Day release (employee takes time off work to attend a local college or training centre)
  • Distance learning / evening classes
  • Block release courses - which may involve several weeks at a local college
  • Sandwich courses - where the employee spends a longer period of time at college (e.g. six months) before returning to work
  • Sponsored courses in higher education
  • Self-study, computer-based training
The main advantages and disadvantages of this form of training can be summarised as follows:
Advantages
Disadvantages
A wider range of skills or qualifications can be obtained
Can learn from outside specialists or experts
Employees can be more confident when starting job
More expensive – e.g. transport and accommodation
Lost working time and potential output from employee
New employees may still need some induction training
Employees now have new skills/qualifications and may leave for better jobs
Study Notes: People Management
Workforce planning
For most businesses, large or small, the task of identifying what work needs doing and who should do it is a continuous challenge!
It is rare that a business of any size operates for long without having to recruit or remove employees. For example, consider why a business might need to recruit staff:
  • Business expansion due to
    • Increasing sales of existing products
    • Developing new products
    • Entering new markets
  • Existing employees leave:
    • To work with competitors or other local employers
    • Due to factors such as retirement, sick leave, maternity leave
  • Business needs employees with new skills
  • Business is relocating – and not all of existing workforce want to move to new location
The world of work is also changing rapidly:
  • Increase in part-time working
  • Increased number of single-parent families
  • More women seeking work
  • Ageing population
  • Greater emphasis on flexible working hours
  • Technology allows employees to communicate more effectively whilst apart
  • People rarely stay in the same job for life
Businesses need to understand and respond to these changes if they are to recruit staff of the right standard – and keep them!
So what is workforce planning?
Workforce planning is about deciding how many and what types of workers are required
There are several steps involved in workforce planning:
  • The workforce plan establishes what vacancies exist
  • Managers produce a job description and job specification for each post
Job description
  • Detailed explanation of the roles and responsibilities of the post advertised
  • Most applicants will ask for this before applying for the job
  • Refers to the post available rather than the person
Job specification
  • Sets out the kind of qualifications, skills, experience and personal attributes a successful candidate should possess.
  • A vital tool in assessing the suitability of job applicants
  • Refers to the person rather than the post



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