2.1 Human Resource Management

Human Resource Management The strategic approach to the effective management of an organization’s workers so that they help the business gain a competitive edge.

Human Resource Planning Get the right number of people With the right skills With the right experience With the right competencies In the right jobs At the right time At the right cost

Workforce Planning - Forecasting Forecasting the NUMBER of staff required Change in demand for product Staff productivity Business objectives Changes in employment law Labor turnover and absenteeism rate

Workforce Planning - Forecasting Forecasting the SKILLS of staff required Keeping pace with technology Production methods, complexity of machinery, computer applications. Flexible or multi-skilled staff Recruit and train workers with more than one skill to be applied in many ways.

Labor Turnover Measures the rate at which employees are leaving. Can be measured by a calculation: number of employees leaving per year X 100 average number of people employed (Expressed as a percentage.)

Labor Turnover Drawbacks of high turnover Benefits of high turnover Costs of recruiting and selecting new staff Poor output and poor customer service while vacancies are filled Difficult to establish employee loyalty and customer relationships Difficult to establish “team spirit” and stable work groups Low-skilled and less-productive staff might leave which could be replaced with better workers New ideas and practices are brought into the organization by new workers A business could have a planned reduction in staff, leaving employees are not replaced

Internal & External Factors – Demographic changes Population Growth or Decline Opportunities: Easier to recruit as population increases Constraints: May take years for population growth to affect the workplace Immigration/Emigration Opportunities: May be able to pay lower wages or recruit highly skilled people from other countries Constraints: Immigrants may need more training; emigration could lead to a country's “brain drain” Aging population Opportunities: Older works may be more reliable and loyal than younger workers and be more experienced Constraints: Older workers may be less flexible and adaptable to new technologies

Labor Mobility Occupational Mobility Workers are willing and able to move to different jobs requiring different skills Geographical Mobility Workers are willing and able to move to new regions to take new jobs High levels of skill and home ownership tend to make workers IMMOBILE. Why?

New Communication Technology Information & Communication Technology or ICT for short! How does ICT affect the work place?

Recruitment What is the nature of the job vacancy? Create a job description What skills are needed of the applicant? Create a person specification Advertise Include the job description and person specification Short list of applicants Review CV’s (curriculum vitae – type of resume) Conduct Interviews

Training- 4 TYPES On-the-Job Training New employee may be paired with an experienced employee. Induction Training is given to ALL employees which introduces them to company policies and procedures. Off-the-Job Training Includes college courses, training centers, or from a vendor.

Training - 4 TYPES Cognitive Training “Brain Exercises” or “drill for skill”. Used to reinforce sustained attention, thinking before acting, listening and reading. Behavioral Skills Training Geared toward effective communication with others: Communication Change management Assertiveness Negotiating Conflict management Presentation Customer service Networking

Training & Poaching Training can be expensive. Why? NOT training can be expensive. Why? Well-trained staff can be recruited by other firms and leave for better paying jobs. This is called “POACHING”

Appraisal of Staff Usually completed annually – 1 X per year An appraisal form is used. Why? Employee and Manager discuss employee performance. Employee and manager establish career plans and skills to develop the employee. MBO – Management by Objective Developing skills in and with employee agreement that furthers the objectives of the company.

Appraisals – 4 Types 1. Formative: Uses formal and informal assessment methods. It should be done in the spirit of being supportive to the employees development. Think: Molding the employee to be successful in our organization. 2. Summative: Used to measure success of employee or their efficiency. Benchmarks are set and the outcome could influence pay, bonuses, or promotions.

Appraisals – 4 Types 3. 360-Degree Feedback: Assessments are collected from “all around” the employee. Often used to assess training needs for the organization. Collections from: colleagues and peers subordinates supervisors customers 2. Self-Appraisal: Prior to the annual performance review the employee may be asked to self-evaluate themselves. This can be used for discussion purposes during the performance review meeting.

Dismissal Employee is unable to perform job duties to the standard required by the company Employee may have broken a condition of employment (example: failed random drug test) Unfair dismissal may lead to lawsuits HR must assist employee with improvement efforts before dismissal can occur to avoid lawsuits for unfair dismissal

Redundancy (Layoff) A workers job is no longer required by the company. A replacement employee will not be hired. Causes of redundancy: Job no longer required by the company Budget cuts Reduction in workforce (RIF – Reduction in Force)

Retrenchment (Downsizing) A company policy of reducing expenditures or redirecting focus to particular market, product, or service to become more financially secure. This usually involves layoffs of employees and restructuring expenses.

New Patterns: Employment Patterns Full-time employment contracts Traditional: Full-time employment contracts Permanent employment contracts Regular working hours each week Working at the employer's place of work New Patterns: Part-time and temporary contracts Teleworking from home Flexible hours contracts Portfolio Working (Charles Handy)

Social and demographic changes Employment Patterns Why Changing Patterns? Globalization Need for flexibility Outsourcing Social and demographic changes

Employment Patterns Scenario: Who should I hire? Insurance company wants to employ 10 new telephone customer service advisers. Who should I hire? Consider: 10 Full-time staff on permanent contracts 20 part-time staff or flexi-time workers Temporary contract workers Outsourcing

Advantages to Part-time/Temp Staff Company Worker Staff can work busy periods or not work slow periods Ideal for some workers: students, parents with young children, elderly More staff available when needed Can combine more than one job with different companies Staff can be “tried” before offering full-time contract Telecommuting offers flexibility Staff can telecommute

Disadvantages to Part-time/Temp Staff Company Worker More staff to “manage” Earn less than full-time workers Effective communication is more difficult May be paid lower than full-time workers Motivation is more difficult Lower job security Telecommuting can produce lower productivity in workers Less social contact when telecommuting

Core VS Peripheral Workers Temporary Part-time Self-employed CORE Full-time Permanent

Outsourcing, Offshoring, Reshoring Outsourcing: Using another firm to perform duties or functions Offshoring: Moving duties or functions to a business based in another country Reshoring: Bringing back duties or functions that had previously been offshored or outsourced.

Non-Core Eligible for outsourcing/off- shoring HR Activities Core/Non-Core Core Non-Core Eligible for outsourcing/off- shoring Change management, strategic HR planning, policy development, pay and benefits strategy, cultural change programs, recruitment for senior management, succession planning, specialized training Payroll, recruitment, training and workforce development, employee records management, pension administration, exit interviews, child care, legal advice and compliance, health insurance, and safety administration

Outsourcing HR Functions Benefits Limitations Reduces costs Local knowledge of labor market may be lost. Increases efficiency by using HR specialists. Cost savings may not be significant Provides greater expertise in areas like employment law. The process of outsourcing may give employees a sense of being controlled by outside agency. Aids corporate growth – HR can be a constraining factor. Outsourcing can never remove the responsibility of management to form good working relationships with their employees. Remaining internal HR staff can focus on strategy and policy In small business allows owners to focus on growing company, increasing profits, and gaining market share.

Impact HRM - Innovation People management strategies have changed: Team work, regular appraisals, information sharing, empowerment, performance related pay Results: Higher productivity Higher labor retention Attract high quality workers Intellectual contributions from employees

Impact HRM - Ethical Globalization of the workforce and multinational companies has now created emphasis on ethical considerations Results: Cultural awareness Bribery and corruption may be common place in some countries Pay – not all countries are consistent with pay levels of entry level workers or senior management

Impact HRM -Cultural Corporate culture can be influenced by the culture within the organization and by the countries associated with it. Organization Culture “Hard” HRM practices: Focus is on cutting costs, using temp and part-time workers, and minimal training. “Soft” HRM practices: Focus is on developing motivated staff that breeds loyal, hard-working employees who are self-fulfilled (happy)

Impact HRM -Cultural Corporate culture can be influenced by the culture within the organization and by the countries associated with it. National Culture Adapt to meet conditions of country Develop cultural sensitivity