Mr Mao Chinese takeaway has grown to 30 outlets in the North West and

plans to go national. At present it has no HR department. How important

is it to establish a human resources function within the business?
Justify your answer. (20)

The main goal of HR is to ensure that a business achieves the maximum benefit
from its employees at the minimum cost, and the HR department needs to make
sure that the business has the right number of employees with the right skills,
qualifications and qualities.
It is very important that Mr Mao’s Chinese Takeaway has an HR department within
the business because of the many beneficial functions they have. One of these
functions is setting HR objectives to manage staff successfully ; Matching the
workforce to business, Helping employees reach their full potential and Supporting
employees/employer relations. Objectives like these are vital to any business that
wants to expand and improve because they are the key to increasing productivity,
efficiency and morale. For Mr Mao’s business they will need a workforce that feels
valued and trusts their employers, this is so that they are loyal and use their high
morale to increase productivity in order to reduce cost per unit (increasing profits)
and funding the planned outlet expansion that is desired.
The department will also be involved in HR planning, this will involve anticipating
future staffing needs ; how many, what kind and assess the potential supply of new
workers. The HR department will also be involved in the external or internal
recruitment of candidates that would suit the business. This is important for Mr Mao’s
Chinese takeaway because they will need higher levels of employment with the
increased number of their restaurants, and also more skilled workers due to the
strenuous task of nationalising the business. HR plans the employees training and
development ; on-the-job training and off-the-job training. As well as managing HR
flow in tough times i.e. having too much labour during tough times with low demand.
HR is also involved in the motivation of employees ; Taylor and Scientific
Management, Maslow’s hierarchy of needs and Herzberg’s hygiene and motivating
factors. Helping workers reach self-actualisation and giving the business a
competitive advantage in terms of their reputation, labour turnover, efficiency and
customer satisfaction.
However an HR department may not be necessary for this business because they
already have managed to build and grow to a total of 30 outlets without one and are
still very ambitious. Spending money and time on an entire new department may be
pointless if the labour turnover and productivity are already sustainable. A lot of the
tasks from HR can be outsourced which is cheaper and quicker.
To conclude, the business does not necessarily need an HR department and it
depends on how they are doing (in terms of labour turnover and employee morale),
however in terms of the long term future of the business it would be something that
could improve the business for employees and customers (happier stockholders).