AS Business Studies 9609
Business Studies – Human Resources
- The purpose of human resource management
- Hard and Soft Human resource management
- Workforce planning and recruitment
- Employee training and development
- Reasons for Reducing the Workforce (Redundancies or Dismissals)
Human resource management
The difference between a Hard versus Soft human resource management approach is how the business treats and views the employees. When you read a case study it’s important to consider how the business is treating employees as this will tell you if the business is using a soft or hard human resource approach.
Exam tip
Workforce planning should be closely linked with the long-term objectives and external factors influencing the business.
Hard HRM
Employees are treated as a resource, and aim to pay them as low as possible, they need to be controlled. In businesses that use a hard HRM approach managers tend to treat employees like any other resource. As a result, employee relations are likely to be strained with unhappy employees. Often businesses with a Hard HRM approach experience high labour turnover.
Soft HRM
Employees are considered the most valuable asset of the business and they need to be developed to ensure they are being used optimally. As a result, managers tend to prioritise employee welfare leading to increased levels of motivation with lower labour turnover rates.
Workforce planning
The wrong number of workers with the wrong skills could be disastrous for a business. Workforce planning avoids this problem.
Labour productivity looks at how much work each worker does (output) Labour productivity = output per period/number of employees at work
Need to remember that this can also be influenced by other factors such as the efficiency of the capital that is being used. This can be used as a basis for performance-related pay
Workforce planning is when a business analyses and forecasts the numbers of workers and the skills of those workers that will be required by a business to achieve its objectives.
Workforce audit is a check on the skills and qualifications of all existing employees and managers.
Absenteeism
The amount of time employees off work (sick)
Number of staff absent/total number of staff x 100
Absenteeism rates can help measure the morale and motivation of the workforce. High absenteeism rates will cost the business money and decrease its profits.
Labour turnover measures how many employees are leaving each year. Number of staff leaving per year / average number of staff x 100
High labour turnover rates indicate that employee wages are too low or training is insufficient causing poor morale. The recruitment process could also be a cause if the wrong employees are appointed.
A contract of employment is a legal document that sets out the terms and conditions governing an employee’s job. Every employee will sign two copies, one to keep and one copy for the business.
The precise legal requirements of employment contracts are likely to vary between different countries.
Dismissals occur when employees are sacked (fired) from a job due to incompetence or breach of discipline. Unfair dismissal is ending an employee’s employment contract for a reason that the law regards as unfair. Redundancy is when a job is no longer required, so the employee doing this job loses the job through no fault of his or her own.
When planning the workforce managers need to know
- Sales forecasts for at least the next year
- Labour turnover rates
- Projected wage levels
- Technological changes, laws or other external impacts
Recruitment is the process of identifying the need for a new employee (vacancy), defining the job to be filled and the type of person needed to fill it, attracting suitable candidates for the job and selecting the best candidate.
A job description is a detailed list of the duties and tasks about the job to be filled stating all its key tasks and responsibilities.
The person specification is a detailed list of the qualities, skills and qualifications that a successful applicant will need to have.
Employee Training
The costs of not training employees are high as workers will be less productive and less motivated. Employee training should be integrated into the business activities. Training occurs when employees receive work-related education to increase workforce skills and efficiency. Often training can be used to attract candidates.
On-the-job training is instruction at the place of work on how a job should be carried out. Off-the-job training is all training undertaken away from the business, for example, work-related specialist courses.
Induction training is when employees are introduced to the business and allow for clarifying key policies.
One reason commonly given for not training employees is that well-trained employees will then be ‘poached’ by other businesses.
Employee appraisal
Appraisal is the process of assessing the effectiveness of an employee judged against preset criteria. Appraisals are conducted by the managers within a business and provide an opportunity to give the employees feedback and discuss ways to improve employee performance. Employee appraisals and training are a continuous process. This provides opportunities for training and development, for the future needs of the business and increases employee motivation.
Reasons for Reducing the Workforce (Redundancies or Dismissals)
Circumstances may require a business to reduce the number of workers by making redundancies. In cases where employees have breached the contract of employment or individual workers may need to be dismissed due to poor performance. Businesses have to go about solving these problems the right way by following the correct procedures.
Reasons for making redundancies:
- Technological advancements
- Financial performance of the business
- Demand factors
- Reorganisation
Reasons for dismissing employees include:
- Repeated poor performance
- Serious misconduct
When employee performance is not up to standard the business should first offer training and support. When poor performance is due to employee behaviour such as lateness the business must also provide warnings before an employee can be dismissed.
Section A 1.5 Human Resources Practice for Paper One
Section B 1.5 Human Resources Practice for Paper One
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