HR Management Mark Fielding- Pritchard 1

Management stylePerformance evaluationBehavioural aspects 1.) Budget constrained style  Manager evaluated on ability to achieve budget in the short term  Manager will be criticised for poor results. For example, if spending exceeds the limit set  Job related pressure  May result in short-term decision making at the expense of long term gain.  Can result in poor working relations with colleagues  Can result in manipulation of data 2.) Profit conscious style  Manager evaluated on ability to reduce costs and increase profit in the long term.  For example, a manager will be prepared to exceed the budgetary limit in the short term if this will result in an increase in long term profit  Less job related pressure  Better working relations with colleagues  Less manipulation of data Hopwood, 3 Management Styles 2

Management style Performance evaluationBehavioural aspects 3.) Non- accounting style  Manager evaluated mainly on non-accounting performance indicators such as quality and customer satisfaction  Similar to profit concern style but there is less concern for accounting information  Requires significant and stringent monitoring of performance against budget Hopwood, 3 Management Styles 3

Importance of Human Resources People are fundamental to the organisation Strategic Significance Operational Significance 4

Recruitment Process Right skills Right Attitude Individual can assess organisation 5

Appraisal Process Control  Judgemental  Set strategic objectives  Measureable targets  Performance against targets  Organisational performance Development  Training and development needs  Design plan 6

Difficulties in Appraisals  Confrontation  Judgemental  Chat  Bureaucracy  Event  Nothing done 7

Target Selecting Relevant Achievable Controllable Prioritised 8

Measurement of Performance 3 Approaches InputsBehaviour Results and Outcomes 9

Victor Vroom  Force = valence x expectancy  Valence = strength of desire  Expectancy = probability of achieving 10

Purpose of Reward System Recruitment & Retention Fair & Consistent Basis of Reward Motivation 11

Maslow Self Fulfilment Ego Social Safety Basic/ Physiological 12

Linking Reward to Performance Advantages Incentive Goal Congruence Attract & Retain Signalling Culture 13

Linking Reward to Performance Disadvantages ‘Misprioritising’ Unmotivated if don’t agree with criteria Stress Basis of calculation? Team, individual, company etc 14

Gibson & Chew  Structure structure structure  Use the question to guide you  Write a scratch plan  Monitor time and question relevance 15

Gibson & Chew Appraisal Process a) 1 Functional Identify and address weaknesses Identify areas of interest Discuss problems Identify training courses & development Operational Better plan teams Better plan work Discover process weaknesses, minimise risk Identify experience opportunities 16

Gibson & Chew Appraisal Process a) 2 Potential Benefits Better motivated staff, efficiency Better motivated staff, retention Better motivated staff, easier recruitment Improved performance to reaching overall firm strategic goals 17

Gibson & Chew Appraisal Process b) 1 Current System Clearly isn’t working Not timetabled Performance not reflected in bonus Not taken seriously No benefits 18

Gibson & Chew Appraisal Process b) 2 Control  Set strategic objectives  Measureable targets  Performance against targets  Organisational performance Development  Training and development needs  Design plan Set Objectives of New Process 19

Gibson & Chew Appraisal Process b) 3  Having set objectives design system to fulfil objectives  Gain support from 2 senior partners  Timetable  Link results to salary, promotion, rewards  Measure results, feedback, improve process 20

Q54 Lincoln & Lincoln a)  Structure structure structure  10 marks  Pick 3 or 4 ratios and go with those  Profit, revenue, cash, receivables days, staff costs 21

Q54 Lincoln & Lincoln a) North Revenue falling Smallest region East Revenue/ rising High staff costs West Good growth Poor WC management 22

Q54 Lincoln & Lincoln b) 1 Good  Based on profit  Overhead allocation is (presumably) consistent Bad  Not controllable  Depends on overhead allocation methods  Single measure, based on profit alone Link performance measures to slide 22 23

Q54 Lincoln & Lincoln b) North Revenue change Gross profit margin Market share East Revenue change Staff costs/ revenue Staff utilisation West Revenue growth Market share WC management, debtors days, current ratio, (inventory if relevant) 24

Q54 Lincoln & Lincoln c) Senior Management Very rigid. Change to reflect differences and new targets Creative Staff Again rigid. No note taken of new skills, improved performance 25

Q54 Lincoln & Lincoln c) Buying Staff Looks ok but budget set at HQ. Perhaps consider localising budget process Account Managers You would expect to see some commission and bonus element 26

Q54 Lincoln & Lincoln c) Admin Staff Looks ok but it depends what thye are doing. Admin, filing clerks ok, but finance department staff? Also some element of bonus based on performance & company performance would be more motivating 27