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Decision making to improve human resource
performance
Chapter 20
Setting human resource objectives
It is common to contain a numerical element + timescale. Managers are able
to judge performance. It can be a target which should motivate, especially
if monetary or rewards are offered. It is possible to set HR objectives in
relation to any measurable aspects of employee performance. Comparing
workforce performance against these objectives helps to assess the
achievements + guides future actions to take.
HR objectives are valuable as many businesses are judged by customers on
employee performance. Setting challenging HR objectives for employee
performance should meet the needs + expectations of customers. High
expectations of employees results in favourable publicity.
HR objectives help identify aspects causing problems early + allow
corrective action. Otherwise diagnosis may be delayed until sales decline
or customers switch.
Employee performance is a competitive weapon in services. Customers
interact regularly with employees. Better service offers greater value + to
charge higher prices using quality as a USP. Achieving high standards
requires clear HR objectives with the right number of skilled + engaged
employees in the right places with aligned values.
Types of human resource objectives
Labour productivity
Objectives on the quantity of products employees should produce over a
period of time. Common in manufacturing + construction as it is simple to
measure. Amazon workers were expected to collect material for orders
every 33 seconds. This can assist controlling costs. Efficient employees
reduce production costs per unit, enhancing competitiveness.
The number and location of workforce
Labour needs change over time. Growth, relocating or automation may
require a different workforce. It is essential to meet the needs of
customers + provide quality. Having the correct size workforce in the right
place assists achieving quality service. This can be challenging for
seasonal businesses. E.g. Royal Mail requires additional employees at
,Christmas. HR objectives for a flexible workforce. Technology impacts HR
location objectives e.g. teleworking + emails.
Employee engagement and involvement
Employee engagement describes the connection between a business’s
employees and its mission, goals and objectives.
Employee involvement exists in a business in which people are able to have an
impact on decisions and actions that affect their working lives.
The CIPD definition gives 3 dimensions to employee engagement:
– Intellectual engagement - thinking hard about the job + how to do it
better
– Affective engagement - feeling positively about doing a good job
– Social engagement - actively taking opportunities to discuss work
related improvements with others.
Employee involvement (employee voice) as an objective seeks to enable
employees to contribute to improve performance. Forms:
– Considering employees’ ideas and opinions.
– Employee representatives e.g. employee forums
It intends to improve employee performance. They are more likely to be set
by a democratic + ‘soft’ approach.
Training
Improving work related skills + knowledge of employees. Learning and
development policies set out the workforce capabilities, skills or
competencies required, and how these can be developed.
Research by the CIPD reveals that an average of £303 per employee per year
was spent on training in 2013. Training adds to costs but can improve
performance + attract talented employees - this is important for
businesses in the tertiary sector.
Developments in technology means training is more important. The BBC
offers +700 training courses, to ensure they are up to date with
technological developments in broadcasting + media.
Talent development
Fulfilling employee’s potential. Success may depend on retention + talent
development. Because of:
– Competition
– Shortages of skilled employees
– Growing need for specialist + creative employees.
Diversity
,Aim to treat people as individuals + value the benefits of diversity.
Employee diversity could be based upon gender, race, disability, religion,
sexuality, class + age.
Many implement equality alongside diversity where all employees
contribute + fulfil their potential. This is necessary as minority groups are
under represented in senior positions, their skills + abilities are wasted.
Governments have placed employment legislation to ensure that
businesses design + implement policies for diversity + equality. Eg the
Equalities Act in 2010. This offers protection against:
– Direct + indirect discrimination
– Harassment
– Victimisation
The Act identifies a number of ‘protected characteristics’. This should
encourage diversity + promote equality. A diverse workforce allows an
understanding of market needs, comprised of diverse consumers. A
reputation for diversity + equality attracts talented + skilled employees -
‘employer branding’.
Alignment of values
Core values underpin behaviour + influence decisions. They should remain
relatively unchanged and provide a reference point for decisions. They can
help gain a competitive advantage. Aligning values supports fulfilling the
business’s vision.
However, publicising core values is not valuable unless employees hold
similar values. This can reinforce the business’s identity + loyalty with
stakeholders + help attract staff.
Influences on human resource objectives and
decisions
Internal influences
Corporate or overall objectives
HR objectives must assist achieving corporate objectives.
Profit maximisation - reducing labour costs.
Attitudes and beliefs of the senior managers
● ‘Hard’ HR approach
Treating employees as a resource to be used optimally. Employees are
obtained as cheaply as possible on short term, zero hour contracts.
● ‘Soft’ HR approach
, Employees are the most valuable asset of a business + should be
developed to maximise their value. This is a long term approach.
Employees are developed in response to changing market conditions.
Type of product
If skilled labour is required then training and talent development are
important. Capital intensive firms require less skilled labour. Some retailers
with distinctive images (eg ethical) may focus on aligning values.
External influences - PEST-C
The technological environment
Automation + Teleworking.
The economic environment
Wages have risen. Managers need to revise the number of employees +
locations. Asda implemented a 5 year plan showing a confidence in the UK
economy.
The social environment
Ethical + environmental considerations. The market for ethical products in
the UK grew by 12% during 2012. Lush Retail Ltd - it is opposed to testing
on animals. HR objectives align values.
The competitive environment
If demand is price elastic - HR objectives to reduce labour costs. If
demand is price inelastic - HR objectives on issues other than costs.
The political environment
Laws to protect labour encourage HR objectives to develop potential of
their workforces as it is difficult to hire + fire employees at will. The
Equalities Act (2010) is taken into consideration when establishing HR
objectives.
Chapter 21
Analysing human resource performance
Calculating and interpreting human resource data
Labour productivity
Impacts costs + prices charged. Productive workers produce larger
quantities of output per worker per time period. It is easy to calculate +
interpret. A higher figure is preferable - increases profit margins or to
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