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HRM - "strategic approach in effective employee-management to achieve business'

obj and gain competitive adv"

- involves recruitment, training, appraisal, dismissal and redundancy
workforce planning (HR planning): "ensuring suitable access to talent by analysi
ng & forecasting no. of workers and skills required by the org. to achieve its o
workforce audit: chekinging existing employees' skills and qualifications
workforce plan: no of workers and skills required over a time period in the futu
-must respond to corporate plan and reflect business' obj. (eg. expansions, deve
loping new products, etc)
1. forcasting NUMBER of employees needed; dependent on
> product demand (infl. by market conditions, season,
competitors, trends in cons. tastes)
-level of productivity (output per worker)
eg. efficient machinery=less staff required
-business obj.
eg. accomodating growth
less staff if cutting costs
-law changes regarding worker's rights (change in min. wage/
max working hrs)
>labour turnover and absenteeism rate
higher rate turnover=more need to recruit replacement
high absenteeism=more staff to ensure availability
------2. forecasting the SKILLS required; dependent on
> pace of tech. change eg. skilled machine operators production
> need for flexible or multi-skilled staff (for adaptability)
over-specialised workers hv diff. adapting to change in
demand/market conditions

labour turnover - "rate at which employees leave an org."

> no of emp leaving in a year/avg no. of people employed*100
> high rate means discontent employees, low morale, (possibly) e
mploying the wrong people (bc of recruitment policy), likely in areas of low une
mployemnt, part time and temp. employment
drawback of high labour turnover:
cost of recr, selecting, training new stadd
poor output due to vacanies
difficulty establising loyalty/familiarity w customers
difficulty establishing team spirit and stabe work groups
potential benefits
carefully selected new staff>old staff (in terms of skill and pr
new ideas and practices
rationalisation (increase efficiency by dispensing unneccesary p
ersonnel), leaving staff will not be replaced+no cost for dismissal

labour turnover lower than the industry average has merit but might mean few opp
ortunities for advancement and grwoth
-----------demographic changes (opportunities vs constraints)
> natural pop. growth (or decline)
increase in working pop.=easier to recruit
take years before they impact working pop.
>net migration (immigration compared w emigration)
easier to recruit employees from other countries
at lower pay; they may be highly qualified
"brain drain" reduce competitiveness
training immigrants (language/cultural issues)
> ageing population
older=more loyal and reliable and more experienc
older=less fleble and adaptable (esp towards new
occupational mobility of labour: extent to which workers are willing and able to
move to diff jobs requiring diff skills
high=helps a country achieve economic efficiency as structural unemploym
ent becomes low
>MEDC tends to be immobible bc
high lvl of home ownership, reluctant to move
high lvl skill due to education
>LEDC and emerging market countries (despite strong family/ethni
c ties) are higher bc:
not much people hv homes
low skill=can undertake low skilled jobs in diff industr
-------geographical mobility of labour: extent to which workers are willing to move geo
graphically to take up new jobs
> high degree between rural and urban areas=overcrowding
, poor living conditions
> gov. policies to increase labour mobility
relocation grants for key public sector workers
>job centers that advertise vacancies nationally
training and retraining programmes for unemploye
new communication technologies changing the structure of economies
ICT and
modernization impacting industries thus skills needed, some jobs are lost foreve
r but new job opportuniies are created.
makes communication relay more time and place efficient
find more efficient way of producing g&s w fewer employees
geographical flexibility
substutution of manual task (record keeping, repetitive assembly work)
support (engineering and architecture)
-----RECRUITMENT: "process of identifying the need for a new employee, defining job v
acancies and the specifications of a person needed to fill it, attracting candid

ates and selecting the best one"

1. establish nature of the vacancy
>job description: "list of key points, tasks and responsibilitie
s of a job" (will attract potential recruit if they are suited to the position)
detail of the task to be performed
place in hierarchical structure
working conditions
assessment method and measuring of performance
2. person specification: detailed list of qualities, skills and qualific
ations looked for in suitable applicants
3. job ad reflecting no 1 and 2
advantages of internal recruitment: applicant...
is already well known
already know the org. and internal method; no need for
induction training
culture is well unerstood
cheaper; bc no ad/recruitment agency
gives internal staff career struscture and a chance to
no need to get used to style of management approach
advantages of external recruitment:
new ideas and pracitices (existing staff bcomes focus on
the future instead of how things usually have been done)
wide choice of potential applicants
avoid resentment (colleague becomes ur boss)
higher standard
4. shortlist based on application form and CV
5. interview (if they are the one)
assessment: achievement, intelligence, skills, interests
, personal manner, physical appearance, personal circumstances
---TRAINING: "work related education to increase workforce skills and efficiency"
4 main types of training
on the job: day2day, while working
watching or working closely
cheaper than external courses
controlled content
induction training: introductory program; introd
uces recruits to colleagues and explaining the way things work there (internal o
rganisational structure) and layout of business site
off the job: time off for external training away from bu
to introduce new ideas not currently present in the fir
expensive but degree of technical knowld. may be
cognitive traning: "brain excercise" improving core abil
ities (such as thinking skills) to improve understanding and learning
behavioral training: develop interpersonal skills to be

poaching: staff may leave after training qualifications for a be

tter paying job
untrained staff are less productive, inflexible, less satisfacto
ry customer service, bored, demotivated, prone to accidents (untrained on safety
---------appraisals: "process of assessing the effectiveness of a
n employee in meeting certain criteria", suggesting area of action/improvement/r
>allow stakeholders to review performance during a timef
formative: formal/informal; qualitative; focused on deta
ils, supportive, no sense of failure or success (bc no score)
summative: success against predeterminted benchmarks
influences pay grade, bonuses, internal promotio
should be first discussed & agreed by employee t
o be effective
360 degree: all around, summative assessments from colle
agues, subordinates, supervisors, internal/external customers
>used to assess training, development needs, com
petence for succesion planning
>used as a basis for discussion (why a 6?)
employees leave a business due to termination, dismissal, redundancy
termination: failure to meet obligations in the contract of employment (legal do
cument w governing terms and conditions)
dismissal: being removed or "sacked" due to breach or incompetence
>civil court actioi\n may result if they are not according to company po
licy or the law, leading to substantial damages
unfair dismissal: ending a worker's employment contract that the law reg
ards as unfair
redundancy: job no longer required so employee becomes redundant
eg. to reduce losses, budget cuts
announcements hv effect on job security in other employees and stakehold
ers may react negatively if firm seems uncaring/unethical


traditional work pattern and practices:
> full time employment contracts
> permanent
> regular working hours each week
>working at the employer's place of work
>part time and temporary employment contracts
>teleworking: from home using modern IT communications
>flexible hours
>portfolio working: working pattern w several simultanous employments
------------main reason for changes
>focus on competitiveness (globalisation, rationalisation of overhead la
bor cost)

>need for flexibility

>greater opportunity for outsourcing (esp in low-wage economies
> changing social and demographic patterns (eg full time is hard for sin
gle parents)
flexi-time contract: allows staff to be called in when it is most convienient eg
busy times
temporary employment contract: lasts for a fixed time period (eg 6 months)
part time employment contract: less than the normal full working hours (eg 8hrs/
week instead of 40)
ADVANTAGES of part time and flexi-time contracts:
>busy periods but not slack times meaning reducing overhead, off
ering competitive adv as they can give good customer service without substantial
cost increases
>good availability of employees (if some are sick/absent)
>measure efficiency before full-time contract
>teleworking=smaller office space=save overhead
>ideal for certain workers
> combine jobs at diff firm=variety
> teleworking= organize time at home while working
DISADVANTAGES of part time and flexi-time contracts:
> more employees to manage
> hard to hold meetings w everyone (greater reliance w written c
ommunication), hard to establish teamwork bc some might hv not met
> part time may hv less motivation bc feel less involved
> teleworking may lead to lower productivity bc not easily monit
> earn less than full time workers
> may get lower rate
> inferior security and working conditions (rights are available
in all EU member states, not all over the world)
> teleworking = less social contact
adv and disad of temporary employment are similar to the above.
(CIRCLE) combination of core (full time, permanent) and peripher
al (temp, part time, self employed)
outsourcing: contracting other/3
rd party org. to carry certain functions/areas (onshore/offshore)
CORE vs NON-CORE hr activities
non-core can be outsourced
most commonly outsourced hr:
payroll admin.
employee recruitment (some/all)
training and dev (some/all)
hr information systems (eg employee record)
pention admin.
exit interviews
child/elder care assistance
equal opp. compliance/reporting
legal advice
legal compliance
health/safety admin.

core should be left inhouse

CORE (or strategic) are those hving direct impac
t on org. performance/competitive edge esp employee perf., org culture, change,
inhouse hr function most likely to add value:
change management
strategic HR planing
dev and maint. of HR policies
remineration/benefits strategy (as distinct from
cultural change prog.
recruitment & selection for key jobs
succession planning
specialised training (eg unique tech/skills req)
offshoring: relocation of business process to be outsourced to another c
ountry due to cheaper labor/faster production
>same adv/disadv as outsourcing ++
> further cost saving by employing in low-wage c
>communication prob bc distance & language
> will the offshore business employ workers full
y informed of the host country's law/practice/culture
re-shoring (in-shoring): reversal of offshoring; 'bringi
ng HR back home' or "transfer of a business' process or operation back to its co
untry of origin"
Potential benefits (outsourcing)
>reduces overhead employment costs
cheaper wages and same lvl service as host country esp in india where 80% offsho
re market is
> HR specialists
>business can instead focus on strategic issues
(eg effective workforce planning) instead of admin.
> department not generally adds value, business
can instead focus on core activities (producing, meeting customers' need profita
Potential limitations (outsourcing)
> not cheap
> though specialist, analysts argue they dont hv
insight on business' culture/attitudes thus inappropriate decision/advice
>doesnt earn rev. they can add value by RDATR so
do we trust outsiders to do that
> lack of integration w other dept.
> offshoring bcome victim of its own success: de
mand workers from india rises so local wages grow and in time could undermine th
e comp. position of firm (which is why some are starting to repatriate/reshore)


>IN hrm (eg. teamwork, regular appraisals, quality circles, info. sharin

g, empowerment, performance pay, job enrichment

>higher productivity
>higher labour retention
>attract high quality employees
>greater contribution from employees
>competitive advantage
>matrix org. structure lets project teams work though major dev
>delegation to junior managers; shows initiative & take importan
t decisions
>extensive & continuous training programmes
>reg appraisals to identify training needs & career plans
>entrepreneurial culture; encourage risk taking/dont penalise fa
ilure but rewards success well
Ethical considerations
>lack of cultural awareness
>emp must be prepared for overseas bc diff customs/practices
>unprepared can be seen as lack of respect
>emp should be prepared as diff countries diff law
>environment of persuasive corruption (eg brazil and indo)
>diff pay levels for expats make it hard for them in teamwork w
natives (discr.)
>bus may face the issue wthr to narrow the gap by increasing pay
of natives
Cultural diff
1. culture of org
>"hard HRM" approach focused on cutting costs (eg temp PT contracts), of
fering max flex w min training costs
>usually businesses focused on max profits/returns to SH
>"soft HRM" approach focused on dev staff to reach self-fulfillment and
thus motivated to work hard and stay w the business (loyal)
>usually social enterprises


>may increase recr/induction longterm bc more temp workers
>demotivated bc less job security=may reduce bus' efficiency and
>bad publicity rgd treatment between core-peripheral (might lead
to negative consumer/pressure group)
>not suitable for pro/qualif emp (eg accountants/research scient
ist) bc they need to be retained & dev to contribute fully to org
>incr global competition makes hard HRM competitive bc lowering
>flex labour=fixed become variable cost=easier to control
>emp hv to compete for perm job security=motivation/productive
>workers trained&dev fully by org can gain employment more easil
y at higher pay
*limit for soft is strength for hard, vice versa

2. National cultures
>no one way to dev sensitivity to how other cultures operate