Unit 3.6 Decision Making to improve Human
Resource performance
Human resource management (HRM) IS concerned with the management of people.It is the aim of
maximising the contribution of workers towards meeting an organisations objective.
§ Maximum benefit from employees at the minimum cost
Hard HRM:
Treats employees simply as a resource of the business (like machinery & buildings)
Strong link with corporate business planning – what resources do we need, how do we get them and
how much will they cost Focus of HRM: identify workforce needs of the business and recruit &
manage accordingly (hiring, moving and firing)
Key features
§ Short-term changes in employee numbers (recruitment, redundancy)
§ Minimal communication, from the top down Pay – enough to recruit and retain enough staff
(e.g. minimum wage)
§ Little empowerment or delegation
§ Appraisal systems focused on making judgements (good and bad) about staff
§ Taller organisational structures
§ Suits autocratic leadership style
Soft HRM
Treats employees as the most important resource in the business and a source of competitive
advantage
Employees are treated as individuals and their needs are planned accordingly Focus of HRM:
concentrate on the needs of employees – their roles, rewards, motivation etc
Key features
§ Strategic focus on longer-term workforce planning
§ Strong and regular two-way communication
§ Competitive pay structure, with suitable performance-related rewards (e.g. profit share,
share options)
§ Employees are empowered and encouraged to seek delegation and take responsibility
§ Appraisal systems focused on identifying and addressing training and other employee
development needs
§ Flatter organisational structures
§ Suits democratic leadership style
,Which is best? Soft or Hard HRM?
Hard HRM
§ The "hard" approach to HR might be expected to result in a more cost-effective workforce
§ Decision-making is quicker and focused on senior managers.
§ Can keep control, people are less likely to make mistakes
§ pays relatively little attention to the needs of employees and a business adopting a genuinely
§ "Hard" approach might expect to suffer from higher absenteeism and staff turnover and less
successful recruitment.
§ They do not utilise their employees to their full potential, could be missing out on increasing
profits.
§ Demotivational for the workforce, high absenteeism
Soft HRM:
§ Rewards employees performance and motivates staff more effectively
§ Increase staff morale, valued, loyal
§ However, the danger of taking too "soft" an approach is that when all the employee benefits
are added up, the cost of the workforce leaves a business at a competitive disadvantage.
§ Extra training is time consuming and expensive
,Human Resources Objectives
Employee engagement- the level of emotional investment that employees make in the business (the
passion, involvement, and motivation that they bring to their work)
Talent Development
§ This involves the identification and development of potential future business leaders who are
going to make a long term contribution to the firm
Pros Cons
Cheaper They may leave you to work for someone else,
competitors
Train them to work for you Lack of experience
Young – mould them into what you want- Expensive
opportunities.
Loyal, flexible Time consuming
A lot to offer Head hunted
‘open’ to learn, create less problems
Profitable
, Training
§ Aims to improve both the knowledge and skills of employees with the goal of improving
productivity and motivation
Types of Training What is it used for Pros Cons
Induction programme Used so that people can Help you to familiarise Expensive, time consuming
settle in e.g. tour of the yourself with the May not be a success
building environment
Decreases shock and
anxiety, confusion
On the job training Training whilst you’re at Learning from experienced Can pick up bad habits
work e.g. shadow a current people Tedious, boring
member of staff Time consuming
Off the job training Training away from the Gain outside knowledge Expensive
place of work from specialists. Time consuming
High quality skills and
training
Varied learning styles
Kaizen (theory of training)
§ A Japanese philosophy of continuous improvement of working practices, personal efficiency
and marginal gains.
Diversity
HR needs to think about diversity in all positions from the board of directors to the floor staff
A diverse workforce has a better understanding of consumer trends and target market, wider variety
of skills, ideas and experiences
§ better delivery
§ more relatable to customers
§ improved customer service
Equalities Act 2010
Supporting employee, employer relations
§ Based upon good communication. HR listens and responds to employee concerns
§ employees who are given responsibilities feel valued and trusted
§ Improving the relationship can reduce absenteeism and labour turnover. If employees feel
engaged, they’re more likely to be loyal to a business
§ breakdown in relations can lead to decreased productivity, low morale and even strike action
§ Relationships work best when values of the employee align with the value of the employer.
,Alignment of Values:
A firms core values outline the way a business behaves and influences the decisions they make
Becomes a central point of reference for everyone within the organisation
Employee skills, numbers and location
As a business grows, they’re likely to experience significant changes in their labour force needs
Relocation – different location mean changing labour costs
Expansion- business growth might require extra staff to cope with additional demand
Production and automation- with the innovation of new technology a firm may need fewer
employees
Internal and external factors influence HR objectives:
,Analysing HR performance:
Labour Turnover:
Problems of high turnover
§ Increased recruitment and training costs
§ Increased pressure on remaining staff
§ Disruption to productivity
§ Harder to maintain required standards
Factors that affect staff turnover
§ Types of businesses - seasonal staff turnover
(e.g. holiday parks)
• Pay and other rewards
§ Working conditions
§ Opportunities for promotion
§ Competitor actions
§ Standard of recruitment
, Improving organisational design
Hierarchy - a system in which members of an organisation after ranked according to relative status
or authority. Helps to fulfil employees need for order and security
Chains of commands- the unbroken line of authority and responsibility that extends top of the
organisation all the way down to the bottom. The route which information travels
§ An organisational chart visually demonstrated a company’s internal structure and the roles,
responsibilities, and relationships between individuals within a firm
§ The chart sets out who has authority and responsibility to make decisions
§ It shows who individual employees are accountable to (who is directly above them in the
hierarchy) and who employees are responsible for (who is directly below them in the
hierarchy)
Tall Structure
§ Organisations with lots of levels.
§ Long chain of command
§ Affects communication- messages take a
long time to get from the top to the bottom
§ Decision takes a long time and there’s a lot
of paperwork to deal with (slow decision
making)
§ Senior management are quite distant
Narrow span of control –not directly in control of
many people so can monitor much more closely
If the Span of control is too narrow then workers can become demotivated as they feel that they’re
being micromanaged by interfering bosses
