2.

1
TOPIC 2.1: FUNCTIONS AND EVOLUTION OF HUMAN
RESOURCE MANAGEMENT
2.1.1 - Human resource planning
Human Resource management (HRM)
the management function → using and developing people within a business to meet
organizational objectives (1.3)
HRM entails interrelated roles, such as:
workforce planning (human resource planning)
recruitment, selection and induction of new employees
training and development of staff
performance management and staff appraisals
reviewing pay and remuneration packages
disciplinary and grievance procedures
looking after the welfare (wellbeing) of employees.
people add value to a firm's output
people are a firm's most valuable resource/asset

Workforce Planning
Human Resource planning (or workforce planning)

management process of anticipating and meeting an organization's current and future

staffing needs.
Short-term workforce planning → existing and upcoming demands of an organization
e.g. employing workers to cover for staff who are about to resign, retire, or go on
maternity leave.
Long-term workforce planning → human resource needs for the business in the
foreseeable future
e.g. the Walt Disney Company recruited and trained employees up to two years before
Hong Kong Disneyland was opened.

Workforce planning can be achieved by looking at:

Historical data and trends
change in the size of the workforce over the past few years
popularity of part-time and flexible working hours
(note that:) past data is not indicative of what actually happens in the future
 Sales and income levels
higher levels of income and spending in the economy → more jobs created → higher
employment
Labour turnover rates
measure the number of employees who leave a firm as a percentage of its workforce, per
year.
higher staff turnover rate, more workers a firm will need to recruit
as turnover rate increases, so does the need for more workers
flexibility and workload of staff
highly flexible and skilled workforce may be able to cope if there is a sudden shortage of
staff.
Firm where people are over-specialized and where workload is mounting → might be
necessary to employ more staff.
Demographic changes
government data regarding changes in the demographics of the workforce
such as the changes in the number of female workers in the economy
or the number of graduates
these information can help managers forecast their human resource needs

EXAM TIP!
The term labour force (or workforce) can mean one of the two things. It is very important to put
them in the correct context.
Workforce (or labour force) can refer to the nation's labour force.
i.e. all those available for work (the employed, the self-employed and the unemployed).
Workforce can also refer to the people employed in a particular organization
i.e. the firm's workforce.

2.1.2 - Labour turnover

Labour turnover measures the percentage of the workforce that leaves the organization in a given
time period, usually one year.
Formula → labour turnover =
number of  staf f  leaving

total number of  staf f
× 100

Firms such as McDonald's and Burger King are likely to accept nigher rates of labour turnover mainly
due to the nature of the job → relatively low wages paid to unskilled workers.
The main reasons why people leave their jobs can be summed up by MJ Yate using the acronym
CLAMPS as the six acceptable reasons:
1. C hallenge
2. L ocation
3. A dvancement
4. M oney
5. P ride (or Prestige)
 6. (Job) S ecurity
low labour turnover → managers have recruited the right people for the job → exiting employees are
content and motivated at work
high = labour turnover → staff are incompetent or lack job satisfaction → could also be because of
better job opportunities and remuneration packages offered by other employers
a high labour turnover rate will add to the costs of recruiting and training new staff in addition to the
lost productivity when experienced staff leave.
Opposite of labour turnover is staff retention .
the benefits of high staff retention are the opposite of the drawbacks of high staff turnover →
they are inversely related.
high staff retention → firms motivate their workers and develop a positive organizational culture
regularly offer staff training for both personal and professional development
sound leadership is present and workers feel more valued → boost morale → staff see their
employers valuing their contributions and development.
Employers benefit from the resulting employee loyalty

2.1.3 - Internal and external factors that influence

human resource planning
internal factors (such as labour mobility) and external factors (such as new communications
technologies) both influence human resource planning.

Demographic change
Demography - the study of population characteristics and trends..
Supply of human resources in a country is affected by demographic changes in the workforce
Demographic changes can be caused by changes in various factors:
The net birth rate
is the difference between the number of births and deaths per period time.
in the long term, countries with a high net birth rate will have a larger supply of human
resources
The net migration rate
measures the difference between the number of people entering a country (immigrants)
and the number of people leaving (emigrants)
net migration figure = positive → supply of human resources will increase
The retirement age
legal age when people can stop work and claim money from their pensions
retirement age raised → automatically increases the number of people in the labour force
i.e. those of legal working age.
Countries such as France, Ireland, Japan, Taiwan and the UK have plans to gradually
increase their retirement age to 68.
Women
the entering/returning of women to the workforce → boosts human resource supply
 modern societies show the increase in number of women working part-time → businesses
and staff are given more flexibility in determining their working hours
A distinct demographic change in economically developed societies is increased longevity

Ageing population
is when the average age of the population increases
effects:
increased dependent population
dependent population: people below the working age, people out of work, and retired
people
they are "supported" by the working population of taxpayers.
ageing population → less people will be working in proportion to those who retired → adds
pressure on taxpayers
reduced labour mobility
young people → geographically and occupationally mobile.
fewer
labour immobility reduces the flexibility and international competitiveness of a country's
workforce
changes in consumption patterns
different age groups → different spending patterns
ageing population → create opportunities for firms → catering more mature age groups
change in employment patterns
more people going to university → average age of people entering the workforce increases
ageing population → firms more likely to retain staff beyond retirement age due to labour
supply shortages.
some firms may consider relocating overseas if domestic labour is insufficient or not
suitable

Changes in labour mobility

mobility of labour - the extent to which labour can move to different locations (geographical
mobility) and the flexibility in changing to different jobs (occupational mobility)
more mobile workers (both geographically and occupationally)→ higher supply of labour

Limitations on geographical mobility:

friends and family ties → key constraint for most people's geographical mobility
relocation costs (moving expenses)
i.e. remortgaging property and consideration of different house prices
fear of the unknown → people may prefer 'home comforts' ( familiarity )
cost of living in a particular area (i.e higher cost of housing and other city expenses) → deter
people from relocating in these areas → reducing potential supply of labour
language and cultural differences → limit international mobility
Limitations on occupational mobility:
occupational mobility tends to be greater with acquired attributes of a worker (i.e. education,
qualifications, skills, experience, and training
more acquired attributes, greater occupational mobility
younger people → often change careers → usually more occupationally mobile
mature workers → less willing to take risks by changing careers → they may think they are too
'old' to retrain or may have more financial commitments
people highly specialized in area of expertise → can be immobile
employer discrimination → can hinder occupational mobility of workers
i.e. discrimination against people's age, gender, religion or race

New communication technologies

newer opportunities for people to work from home due to advances in mobile and internet
technologies
Information and Communications Technologies (ICT) in human resource planning can be used to
support current practices (activities) in workforce planning and/or to change (improve) workforce
planning progress.
Examples:
Recruitment
online application forms → speed up communication and reduces cost
video-conferencing → job interviews
examples, LinkedIn; company websites or commercial providers
Meetings
video-conferencing technologies → reduce costs of meetings
helpful for businesses with branches or facilities in different locations, including
overseas
ex, Skype (for smaller businesses) → cut communication cost
Appraisals
google docs → a collaborative tool allowing line manager and appraisees to set targets and
review progress
more efficient than emailing appraisal documents to and from different parties
Flexitime and teleworking
work away from office or at home enabled by mobile technologies
cut costs for both business and employees
effective use → boost labour productivity
Online training courses
cheaper than off the job training/course
e.g. IB teachers can enroll for online courses for a fraction of the costs of a face-to-face
IB workshop

2.1.4 - Recruitment and selection

visual explanation of process:
- managers may want to verify:

possible
reason
- exp s: skills and training required to do the job rewards needed to recruit and retain the post holder
ansion
of bus
- to iness
replace
- pos staff
sible who
reason decide
s for to leav qualifications and personal qualities needed for the job
- sta vacanc e the
rting y: orga
a new nization
- purs job
uing
- spe
nding
higher
educat RECRUITMENT AND SELECTION - scrutinising different components of a job such as routine tasks and responsibilities
more ion
- fire time
d for with
miscond family
uct - 2 documents are made

person specification

Based on page 122 of texbook. -> job description

- a document
[[2.1]]
- profiles the IDEAL candidate such as
- a document
- qualifications
- outlines details of a particular job
Job becomes available within the organization - skills
- refers specifically to what the job what the employer seeks
- experiences
ENTAILS rather than the type of person
- lists the PERSONAL ATTRIBUTES that a successful
for the job
applicant should have, e.g.
- include: job titles, roles, duties, responsibilities
of the post holder
ability to think critically
BEFORE RECRUITING -> managers carry out a job analysis

ability to lead a team

rigid job descriptions can

LIMIT the potential of workers
After job analysis, HR manager will produce a job advertisement good job descriptions especially as business constantly
have an experience organizational cgange
'element of
FLEXIBILITY'

Job will be advertised e.g. of a typical statement in a job description allowing flexibility
Good job advertisement -> attract only SUITABLE applicants who have the POTENTIAL
'and any other reasonable job assigned by the employer

5 'TRAPS'
- try to get as many suitable people as possible to apply for the vacant job
T ruthful no exaggeration or misleading claims about the job, pay, or organization - the two documents made during job analysis are important in objectively
assessing the suitability of applicants.
may attract applicants but is UNETHICAL -> leads to long-term problems
can also be used to gauge training needs

R elevant
succinct attract attention and interest
and for conducting job appraisals

A ccurate PRECISE person specification and job description

minimize unsuitable applicants

P ositive encouraging and upbeat attract people to apply

S hort advertising space is EXPENSIVE

only put APPROPRIATE and NECESSARY info

labour is an essential factor of production needed for the provision of any good or service
hiring the correct people → ensures the effective function of business
recruitment and selection process → time consuming and expensive → managers must ensure
effective steps in the process

Recruitment and selection process

1. job becomes available; vacancy of position → caused by:
business expansion
staff replacement (who decided to leave)
staff may leave for various reasons
starting a new job
pursue higher education
spend more time with family
fired for misconduct
2. Managers will carry out a job analysis
involves scrutinizing different components of the job
routine tasks and responsibilities of the post holder
determine what the job entails
helps create two important documents needed for the recruitment and selection of staff:
job description and person specification
job description → a document that outlines the details of a particular job
refers specifically to what the job entails
includes job title and roles, duties, and responsibilities of the post holder
good job descriptions also have an element of flexibility → exploit the skills of the
employees
rigid job description → limit the potential of workers → business constantly experience
organizational change
typical statement in a job description that allows such flexibility is 'any other
reasonable job assigned by the employer'
person specification → a document that profiles the ideal candidate , i.e. the qualifications,
skills, and experiences sought by the employer
also lists personal attributes that the successful applicant should have, such as
 the ability to lead a team and
to think critically
3. After initial job analysis, managers will produce a job advertisement then advertise the job
job advertisement produced → get as much suitable people as possible to apply for a vacant job
the two documents produced from the job analysis will help objectively assess the suitability
of applicants
can also be used to gauge training needs and for conducting job appraisals
after making the job advertisement → advertise
includes important information like
hours of work
rate of pay
fringe benefits (2.4)
contact details for business
deadline date for receiving applications
usual to advertise a job both internally (within organization) and externally (outside
organization)
a good advertisement will ultimately attract only suitable applicants who have the
potential to do the job
the human resource managers consider 5'TRAPS' in designing effective job
advertisements
T RUTHFUL → no exaggeration or misleading claims about job
exaggeration and dishonesty → attract more applicants → are unethical and leads
to problems in the long term
R ELEVANT → succint
attract people's attention and interest
A CCURATE → job description and person specification must be precise
minimize the number of unsuitable applicants for a job
P OSITIVE → encouraging and upbeat ads
attract people to apply for the job
S HORT → only appropriate and necessary information
advertising spaces are expensive

Box 2.1.a Summary of the recruitment process

1. Conduct a job analysis to determine the firm's need to hire new employees
2. Produce a job description and person specification
3. Advertise the vacant post
4. Check applications and shortlist suitable candidates
5. Interview the shortlisted candidates
6. Perform aptitude testing (if applicable)
7. Check references for shortlisted candidates
8. Job offer made to the best candidate
 9. Issue and sign the contract of employment
10. Carry out induction of new recruit

The application process

applicants for a job usually apply using a combination of three methods
Application form
standardized form → select appropriate applicants for a job
questions made on the form to meet specific needs
answers from candidates → consistent format → employers can compare like-with-like
Curriculum vitae (CV)
also known as a resume
document outlining an applicant's
education
employment history
skills
professional qualification
employers → see the candidate's achievement → judge whether the experiences meet the
requirements of the job
Cover letter (or letter of application)
introductory letter
applicants state which position they are applying for and why they should be considered
for the job
HR managers → quickly browse through potential applications without reading all the CVs
or application forms first
(many will be unsuitable)
Today, emailing CV to apply or using an online application form are common → speeds up
recruitment process and cuts costs (printing and mailing) for the business.

The selection process

shortlisting
a process of sifting through applications to identify suitable candidates for a job
a stage that precedes the interview in the recruitment process
compares application form and CV of a candidate against job description and person
specification
helps identify the most suitable applicants for a job interview
three main methods used to select the best candidate for a job
1. interviews
2. testing
3. references

Interviews
 most common method of selection
a two-way dialogue between the interviewer and interviewee → helps managers make more
informed decisions when selecting the best candidate for a job
interviewer - representing employer
interviewee - candidate applying for the job
interviews...
provide a chance for an employer to meet with the applicant face-to-face → employer will get a
better idea of the applicants
are they suitable for the job(s) offered?
will they fit the organization?
provide applicants with more information about the job and the business → determine if they
will be happy to work at the organization
interviews need to be well planned and conducted professionally
ex. appropriate venue organized without disruptions,
appropriate questions prepared to avoid negative discrimination,
available job description and person specification
interviewers have studied candidates' CV and references
successful interviews require managers to have good interview skills
interviews can take various forms:
video-conferencing interviews → use ICT tech to save costs of physical meeting
telephone interviews → takes place over the phone → useful in telesales
face-to-face interviews → meet and talk physically → ranges from one interviewer to several
interviewers ( panel interview )
group interviews → number of candidates interviewed simultaneously → judge candidate
behavior in situations; e.g. whether they are timid, assertive or extroverted, or natural leaders
purpose of interview process → find and appoint the best candidate for the vacant job
applicants can improve their chances of success at interview by reflecting on common sense
protocol (Box 2.1.c)
linked to the job description and person specification

Box 2.1.b Interviewee etiquette

Do...
Prepare - research the organization and the industry;
plan on how to get to the venue (on time!)
re-read CV and letter of application
prepare answers to questions likely asked at the interview
Dress appropriately - first impressions count → can have a major impact on the interviewers
Practice interview skills - helps you answer questions more concisely and confidently
Don't
Be late - you will have a very bad impression; no one likes waiting!
 Be critical - condemning others (i.e.previous bosses and colleagues) will not impress the
interviewing panel
Falsify answers - dishonesty to interview questtions may eventually surface, with devastating
consequences

2 categories of interview questions:

behavioral-based questions
assesses a candidate's behavioral pattern and initiative
situational-based questions
assesses an applicant's judgement ability
drawback and limitations of the interview:
very time consuming
a person's ability is not actually tested
candidates can lie or hide the truth
interview → may not pick up the lack of desired qualities, experience or skills needed for the job
→ other forms of selection such as testing and references are used

Box 2.1.c Ten common interview questions

1. Why do you want this job?
2. What do you know about this organization?
3. Why do you think that you will fit into this organization?
4. What are your key strengths?
5. What are your main weaknesses and what have you done about them?
6. Which leader/person do you admire the most? Why?
7. Describe your key responsibilities in your last job.
8. Who was the most difficult person you had to work with and how did you manage this?
9. What are your key interests and how might these help you in this job?
10. Why did you leave your last job?

Testing
time consuming BUT
reduces costs incurred in the long run
main types of testing used in recruitment:
psychometric tests
assess a candidate's personality to gauge to attitude of potential recruits and their
motivation level
used for those candidates applying for senior positions
to ensure fitting into the organization's culture
aptitude tests
 examine the ability and skills of potential employees
example → secretarial job
speed and accuracy in typing
test ability to cope under pressure (e.g. in-tray exercise)
problem solving skills
intelligence tests
calculate the mental ability of an applicant
i.e. skills in
numeracy
literacy
reasoning
general knowledge
trade tests
used to examine a candidate's skills in specific profession
useful when
standards or skills cannot be judged from an interview or from a candidate's
application form
ex. voice tests are used when recruiting television newsreaders and radio presenters.

References
are written statement about an applicant from an independent source
i.e. previous employer
referees - people who write references
may be asked to confirm the strengths and suitability of an applicant
references serve as
a final safety check to ensure the information given by candidates in their application form, CV,
and interview are accurate and truthful.
employers can then determine the suitability of the applicant for the advertised job(s).

The contract of employment

a suitable candidate appointed (offered the job) → they are entitled by the law (in most countries)
recover either a signed contract of employment or a written statement of the terms and conditions of
their employment.

Box 2.1.d Contents of an employment contract

1. Job title
2. Specific duties of the job
3. Date the job starts (and ends, if the agreement is a finite contract)
4. Hours and days of work
5. Rate(s) and method of pay
6. Holiday and sick pay entitlements
 7. Pension scheme arangements
8. Outline of disciplinary procedures
9. Period of notice that must be given where employment is terminated (from either party)
10. Names and signatures for both parties, and dated on the contract

Induction
final stage of the recruitment process
helps new recruits settle into their new roles
also applies to internally recruited staff (duration and breadth of induction is less)
Recruitment can be categorized as
internal
external
internal recruitment
involves hiring people who already work for the business to fill a vacant post
might happen when business restructures its organization of human resources (see 2.2)
OR when internal candidates are successful in applying for promotional spots within the
firm
usually advertised on staff notice boards, newsletters, or via emails.

Table 2.1.a Advantages and disadvantages of internal recruitment

Advantages
cost effective → cheaper and quicker to
recruit from within an organization
less down-time → internal people already
familiar with the culture of the business and its
operation → easily adapt and settle quickly into
new post → minimal down-time
less risk → external recruitment could be
risky (actual abilities and skills not truly tested
in the recruitment process) → internal
recruitment → ensure that job is filled with a
highly suitable candidate
motivational → act as a form of motivation →
providing internal people with opportunities
for promotion suggests that managers value
their employees → internal promotion →
employee loyalty and commitment to firm
Disadvantages
fewer applicants → limits number of
potential applicants → external candidates
could be of better quality but are overlooked
'dead-wood' → difficult to get new ideas
into the business without external recuits →
outdated working practises (known as dead
wood) because staff have been there for too
long
time-consuming → redeploying, relocating,
promoting an internal candidate → leads to
another unfilled vacancy → process is
potentially more time consuming
internal politics → resentment and conflict
amongst fellow workers unsuccessful for the
internal post may arise → working environment
becomes ucomfortable → if no internal
candidates available, external recruitment will
be used
some terms:

down-time
time used to get familiar with the operations of a business rather than time actually spent on
getting work done

external recruitment

the process of hiring people from outside the business

various methods of external recruitment include:

newspaper advertising
common method → wide audience → right targets are hard and advertising is costly
specialist trade publications
used to better target the right audience
e.g. management jobs in the UK supermarket are advertised in 'The Grocer'
(www.thegrocer.co.uk)
teaching jobs are published in the 'Times Educational Supplement' (www.tes.com)
internet advertising
use of internet to advertise jobs → used more by businesses
may use...
specialist recruitment websites
own company websites
internet advertising → global reach → incurs relatively low costs
commercial employment agencies
agents → advertise and interview suitable applicants for a job and make recommendations
for selection to the hiring firm.
using agents costs money (they charge a fee for their services)
but saves a huge amount of time for the employer who might also prefer to rely on the
recruitment expertise of the employment agency
job centres
non-profit organizations funded by the government → help people find employment
businesses can advertise their vacancies at a job centers free of charge
job centers tend to be used for advertising relatively low paid jobs so they might not
be suitable for some businesses.
headhunting
poaching of a person from their current employer
person is sought from experience, expertise, and knowledge
to entice them to leave their current job, the hiring company will try to offer a
contract, including a pay deal, that is simply too good to resist
university visits
business → visit specific universities → advertise job
 visiting universities → large pool of potentially suitable and talented people to choose
from.
employee referrals
personal recommendations by current employee → knows people with necessary skills and
qualities to fill a job vacancy
in the business world → sometimes it is who you know that matters instead of what

Table 2.1.b Advantages and disadvantages of external recruitment

Advantages
'new blood' → new ideas and ways of
thinking from people → sharing of best practise
and give the business insight to how a rival firm
might have done things
wider range of experiences → external
recruits may be more qualified or more suitable
than internal candidates → experiences and
skills gained from previous employer
larger pool of applicants → wider range and
larger number of people applying for the job →
increawses the chance of finding the ideal
candidate for the job
Disadvantages
greater degree of uncertainty → managers
take a risk when hiring external recruits (they
do not really know the candidates or their
ability to do the job effectively) → the hired
external recuits may not fit into the corporate
culture
time-consuming → external recruitment
takes longer than internal recruitment →
advertising, shortlisting, interviewing and
checking references all take up valuable
management time → adhering to anti-
discrimination laws in recruitment makes the
process longer
expensive → external recruitment can be
very expensiv (e.g. costs of job adverts in
newspapers) → time used up by managers
involved in the recruitment process

2.1.5 - Training
training
process of providing opportunities for workers to acquire employment-related skills and
knowledge
the amount and nature of training required will vary from one job to another
some jobs → require constant training or updating of skills and qualifications (such as those in
the law or medical professions)
other jobs only require basic training to be carried out (such as unskilled machine operators in a
factory)
training → important investment in (what is perhaps) the organization's most valuable asset
the general objectives of training and development include:
enhance → staff efficiency and effectiveness
improve → quality of work by employees → including customer service
facilitate career and personal development of employees
 develop multi-skilled and productive workforce
help staff adapt to change
technological changes
organizational changes
social changes
legal changes
the general benefits of training include:
better skilled and more flexible workforce → organizational targets being met
improved competence → greater efficiency and better productivity → reduce costs
less repetition due to errors
higher morale → workers progress within the organization
may help reduce absenteeism and reduce staff turnover, as staff feel valued by employers
who have invested in them.
workers → improve chances of promotion as they become more skilled
easier to attract good quality workers → good reputation for training and developing staff
staff → more confident and competent in their roles
employees adapt better to change
updating skills and being multi-skilled → workers are better able to cope with
organizational change
workforce becomes more flexible, motivated, and productive
if the benefits of training are greater than the costs, it is deemed to be financially justified
drawbacks of providing training opportunities
the financial costs
i.e. the course fees for training and the loss of output whilst workers are being trained
time consuming to plan and effectuate
take manager's valuable time
there is no guarantee that employees will stay at the business after being upskilled
upskilled is defined as
gaining new skills, knowledge, and qualifications through training
note:
training → specific to tasks and responsibilities of a certain job
development → focuses on enhancing the personal skills of a person
developing these personal skills help the employee to be more effective and flexible
in their jobs
Types of Training
On-the-job training
this includes induction and mentoring
Off-the-job training
Cognitive training
Behavioral training

On-the-job training
 on-the-job training
refers to training carried out whilst at the workplace
e.g. training is delivered by a head of department, supervisor or other specialist
trainees learn from the skilled colleague delivering the training at the place of work
this type of training involves 'learning by doing'

Quote by Confucius
"I hear and I forget. I see and I remember. I do and I understand."

Table 2.1.c Advantages and disadvantages of on-the-job training

ADVANTAGES ADVANTAGES

can be relatively cheap → firm uses in-
house specialists to facilitate the training
relevant → training is tareted at issues
directly related to the firm's needs
fewer disruptions to daily operations →
trainee is still 'at work' rather than being
trained overseas, for example.
establish relationships at work → team
working is involved
location is convenient for workers and
tainers → they do not have to go off-site
trainees may pick up bad working practices
from the trainer (i.e. short cuts and lazy habits)
internal trainers → may lack the most up-
to-date trainings experience and skills
on the job training can be expensive →
trainers are unable to conduct their own work
whilst facilitating training
productivity is initially low → workers
undergo the process of learning new skills

induction training
a type of on-the-job training aimed at introducing new employees to the organization.
purpose → help new recruits settle in quicker
can help avoid costly mistakes being made by new employees who are not aware of the
procedures or code of behavior required to carry out their duties
can also help new recruits to integrate into the corporate culture of the organization
induction training may require a new recruit to:
meet key personnel
i.e. employee's line manager and members of the department
tour the premises
including the recruit's main areas of work
learn about the new job roles and other relevant duties and specific procedures
look at the company policies and practices
e.g. rest breaks, health and safety policy, and fire or emergency evacuation procedures.

Table 2.1.d Advantages and disadvantages of induction training

 ADVANTAGES ADVANTAGES

establishes clear expectations and good planning, delivering and overseeing an

working habits from the start
helps new recruts to understand the of the
organization
settling in more quickly → new recruits can
contribute to the organization more promptly
morale boosted → new staff feel welcome
and are more confident and competent in their
jobs
induction programme can be very time
consuming
key staff nbeed to be 'freed' from their
other duties → involved in providing induction
information overload → counter productive
for new staff who have to absorb new
information
the length of induction programmes can
be very long , espescially in large and
disparate firms

mentoring
a type of on-the-job training involving a partnership between two people - the mentor and the
mentee
the mentor→ a experienced member of staff → helps the mentee gain and develop specific skills and
knowledge

Definition of Mentoring by Oxford School of Coaching and Mentoring

"to support and encourage people to manage their own learning in order that they may maximise
their potential, develop their skills, improve their performance and become the person they want
to be."

as part of job training, junior managers might shadow ( observe and learn from ) more senior
managers.
essentially, the mentor acts ad a 'guide on the side' , providing advice and pointing the mentee in
the right direction in terms of career opportunities and development
mentors asks questions and challenge mentees to reflect on their own career development
a useful acronym to remember the role of a mentor is MENTOR : someone who...
M otivates
E ncourages
N urtures
T rains
O bserves
and R ecords (the progress of) the mentee

Table 2.1.e Advantages and disadvantages of mentoring training

ADVANTAGES ADVANTAGES
 synergy is created → mentor shares
personall experiences, skills, and knowledge
with others, thus expanding staff development
mentoring can be informal (thus benefiting
the organization indirectly), as well as formally
(where goals are recorded and progress
monitored )
there is a qualitative difference between a
mentor-mentee relationship and a manager-
subordinate relationsghip → the former is more
authentic and has longer lasting. benefits
effective mentoring creates a safe
environment for mentees to reflect and discuss
openly and honestly, without fear of negative
consequences on their job
planning, delivering and overseeing a
mentoring programme can be very time
consuming for senior managers
mismatched pairing of mentor and mentee
→ cause problems - stress, anxiety, and conflict
→ counterproductive
effective mentoring requires long-term
commitment from both mentor and mentee →
can affect their workload negatively → making
time to meet is not always easy in busy firms
using internal employees as mentors →
require training (mentors should have
opportunities to be trained too) → adding costs
to the business

Off-the-job training
off-the-job training
refers to training carried out off-site
e.g. @ a tertiary or hotel conference room
experts are usually used for their particular expertise (although internal trainers can be used to lead
the training)
off-the-job → may involve day-release for training or attendance at evening classes
key personnel (e.g. middle managers) → common to be chosen to attend these training courses →
expected to cascade (pass on) the skills and knowledge acquired to the rest of their team members
common for those who attend off-the-job training to give the employer and service provider →
official feedback
e.g. questionnaire → suitability of course content → extent to which participants feel the training
will help to improve their work

Table 2.1.f Advantages and disadvantages of off-the-job training

ADVANTAGES ADVANTAGES

experts who might not exist or be availabel
internally, are used to provide the training
a wider range of training can be provided,
e.g. first aid, ICT, customer relations
management, health and safety, risk
management, or even foreign languages (for
certain professions)
no distractions or disruptions from
colleagues and customers as the training is
there is a potential loss of output whilst
workers attend the off-site training course
hiring specialist trainers and the venue can be
very expensive → may be a need to reimburse
staff for transportation and accomodation costs
(for residential courses)
debatable whether all the skills and
knowledge learnt are relevant and therefore
transferrable to the business
 conducted off-site finding the time for staff to cascade the
networking can take place → employees information and knowledge from the off-site
get to meet other people who form the basis of training course can be difficult
business contacts

Cognitive training
cognition → the ability of the brain to learn and think
cognitive training
training and developing mental skills to improve work performance
based on the notion that the ability to learn is fundamental to success in the workplace
cognitive training includes learning activities to help
improve memory
attention
listening skills
logic and reasoning
visual and auditory processing
self-control
time management
and problem solving
such training is designed to help workers improve their mental processes, acquire new knowledge,
aid decision-making and solve work-related problems
cognitive training is used in many professions such as accounting, finance and insurance that use
cognitive courses and tests to develop their worker's mathematical skills
e.g accountants → cognitive training to improve the speed and accuracy of bookeeping tasks.
Research by psychologists has shown that highly skilled individuals benefit the most from cognitive
training.
limitations :
many cognitive training courses do not cater for the needs of trainee s who have different needs
or goals
developing relevant and applicable cognitive training can be expensive
some training are available but might not meet the organization's needs
somewhat difficult to measure the to measure the impact of the training and how long the
effects last
supporters of cognitive training argue that improvements from cognitive training are key
determinants of job performance and career advancement
development of the brain → key to learning capacity and ability to perform at work

Behavioral training
behavioural training
deals with identifying functional issues that could improve performance in the workforce by
developing behavioural change in the workforce
 based on the notion that training is meaningless unless a desirable change in behavior takes
place.
behavioral training enables participants to move towards this desired change
e.g. a firm's goal = improved customer satisfaction → enhance customer relations and
customer service
aim of behavioral training → advance personal and professional effectiveness
examples of behavioral training:
team building
developing team cohesiveness to improve productivity
ethical business practice
raising awareness of business ethics and codes of practice
emotional intelligence
identifying, assessing, and controlling the emotions of individuals
motivation training
motivating individuals, teams, and the workforce
conflict resolution
managing conflict in the workplace
stress management
identifying and handling stress, including staff wellbeing
anger management
understanding and leading others in the organization
leadership skills
understanding and leading others in the organization
business etiquette
organizational, regional, national and international cultural norms
critics of behavioral training argue that the benefits, if any, are short lived, as people naturally
default to their innate behavior
supporters of behavioral training believe that such training provides people with the
necessary skills, knowledge and tools to solve work-related problems
empirical studies show that social and psychological factors play important roles in labor
productivity.

2.1.6 - Appraisal
appraisal
the formal assessment of an employee's performance in fulfilling his/her job based on the tasks
and responsibilities set out in their job description
it is common for appraisals to be conducted on an annual or quarterly basis by a more senior
member
main reasons for appraisals
assess and record an employee's performance in line with his/her job description and targets
assist staff in reflecting on their performance at work
provide an opportunity to praise staff for their good work
 identify any barriers hindering the performance of an employee
identify appropriate training and development needs of the appraisee
set new targets and goals for continuous improvement
aid professional development, helping employees to plan their careers
aid management in assessing the suitability of individuals for a pay rise or promotion
appraisals → performance management → the continuous process involving the planning, reviewing,
and mentoring of employees in order to enhance work performance
managers will use a range of data, information, meetings and interviews to assess each employee

Box 2.1e Typical questions asked in appraisal meetings

What has gone well for you this year? What has not gone so well for you?
What are your key strengths and weaknesses (areas for development)?
What can be done to help improve your overall performance in the workplace?
What are your training and development needs to help your professional development?
Where do you see yourself in five year's time?

the appraisal system usually enables employees to respond to professional discussions

communication is two-way, allowing worker to inform the employer about their training needs and
professional aspirations
line managers → provide constructive feedback to the appraisee in order to provide support to
continuous professional reflections and development

Table 2.1.g Advantages and disadvantages of appraisals

ADVANTAGES ADVANTAGES

used to set targets → leads to personal and
professional development
appraisals allow managers to objectively
praise staff on their strengths and for their
contributions in the workplace
appraisals → can be a useful method of
getting valuable feedback from the staff
managers often aggregate the findings of
appraisals to identify common strengths and
areas in need of improvement → training and
development needs can be better planned
appraisals can be used as part of job
evaluation to work out levels of pay → can be
done by looking at the different tasks,
responsibilities, skills, qualirications and
challenges that a job entails. The appraisal
appraisals are time consuming and can be a
costly exercise
confidential feedback must be given, and
follow-up action requires funding and monitoring
; otherwise the process is meaningless
appraisals can be rather subjective as
perceptions and relationships at work can
interfere with the process
staff may get offended by the comments
from the appraiser, especially about areas of
weakness
many appraisers lack the skills, experience
and confidence to carry out appraisals
effectively → diminishes the credibility of the
process and the findings
 process can then allow a business to
objectively reward more demanding jobs with
higher rates of pay
employees can experience unecessary
anxiety and stress if appraisals are linked to pay
→ can also be a daunting experience for both
the employee and appraiser, especially with
upwards appraisals (a worker appraises his or
her line manager)

Types of Appraisal
Formative
Summative
360-degree feedback
Self-appraisal

Formative
formative appraisal
a planned (formative) and ongoing process → appraisal evidence is used by employees to
inform them about what to do to improve their work practices
enables managers and appraisees to engage in performance about their own contributions,
encouraging employees to think about their own contributions to the workplace
formative assessment is commonly used in schools , e.g. teachers mark an end-of-topic test,
grade it, and add written comments to inform students about how to improve
formative appraisal → often used for appraising staff hired for a probation (trial) period
e.g. formative assessment of a junior doctor, beginning teacher or graduate bank manager at
the beginning, middle and end of the training placement
this process helps the appraisee modify work practices to improve overall attainment
goals of formative appraisal:
monitor the performance of employees' learning
help employees identify their strengths and weaknesses (areas that need developing)
help managers recognize areas where staff are struggling so that any problems can be
addressed promptly

Summative
summative appraisal
a written description of an employee's performance at work, summarizing personal
performance and achievements during the year
the summative appraisal usually has recommendations for improvement (targets for a subsequent
appraisal)
used to hold staff accountable for their work, often testing the knowledge and competence of
employees
e.g. summative appraisals of teachers → lesson observations carried out by line managers
 similar to summative report that students might get in schools, often following a major test or
end-of year examination, showing them what they have learned during the semester or
academic year
goal of summative appraisal → evaluate the performance of contribution of workers by comparing
this with a predetermined standard or benchmark
i.e. to make a professional judgement of a worker's competency and to identify areas in need of
improvement

360-degree feedback
360-degree appraisal
involves collecting evidence about the appraisee's job performance from peers, subordinates,
line managers or other parties (such as suppliers or customers) who have direct contact with
the employee
opinions and comments → obtained through questionnaires or interviews
questions are mainly focused on the core competencies of the appraisee
360-degree appraisals are a popular method of appraising managers → aim → providing useful
and practical feedback → improve managgerial effectiveness
HOWEVER, such appraisals often rely heavily on opinions rather than factual evidence.
this makes 360-degree appraisal not suitable for all businesses → it is important for
managers to consider group norms and subcultures before embarking with 360-degree
appraisals.

Self-appraisal
self appraisal
involves employees appraising themselves based on predetermined criteria .
apraisees → expected to be honest about their strengths and weaknesses → expected to set realistic
targets for improvement
some self appraisal systems require workers to rate themselves.
quite often, the self appraisal is compared to the assessment carried out by the line manager and
then used as a basis for subsequent discussions

Steps of appraisal (regardless of type):

staff records and reports → used to evaluate the performance of an employee over the past year

a formal and structured appraisal meeting → conducted to allow the appraisee to reflect on personal
performance
feedback is important and an action plan might be formulated by both parties

appraiser completes a written report of the appraisal

there is often a rating system used to judge the performance of the appraisee, perhaps ranging
from 'Outstanding' to 'Unsatisfactory '
 both appraiser and appraisee sign the final written report

at times, there might be a countersignature from a more senior manager, such as the supervisor of
the appraiser to ensure that the appraiser has carried out the assessment accurately and objectively.

If an appraisee has an overall rating below 'Moderate' , the following actions can be taken:
issue an advisory letter to the employee (similar to issuing a warning letter)
counseling the appraisee and giving advice on shortcomings in the appraisee's job
performance,
i.e. discussion of strategies for improvement
dialogue concerning the consequences if there is no improvement in the job performance
closely monitor the performance of the appraisee, perhaps by calling for quarterly reports or
more frequent updates.
if no improvements are made within the agreed time period, action is taken to dismiss the
employee

2.1.7 - Dismissal and redundancies

employment can be terminated in one of four situations:
dismissal
redundancy
retirement → workers withdraw from workforce due to their age
resignations → employee chooses to leave their job
dismissal
the termination of a worker's employment due to incompetence (unsatisfactory performance) or
a breach of contract
in everyday language, this is when a person is 'sacked' or 'fired'
dismissal must be done fairly with a good case
dismissal is seen as being fair in the following situations:
incompetence - a lack of ability , usefulness or effectiveness required to carry out the job, i.e.
underperformance in the job
misconduct - unacceptable behavior → constantly late for work, harassing other employees,
rudeness to customers or frequently missing deadlines.
Employees will usually get a series of warnings for their misconduct before being
dismissed
gross misconduct - major misdemeanor (wrong doings) such as theft, fraud, endangering
others or being drunk at work.
Gross misconduct can lead to instant dismissal without any warning
legal requirements - if an employee does not have the necessary skills or requirements for the
job, then the employer can legally dismiss the worker
e.g. a worker may have been dishonest about their qualifications, abilities and experiences
the three-step process of dismissing a worker
 initial verbal warning about misconduct or unacceptable conduct at work
can be put in writing as a record of the warning
common → valid for one year
no reoccurrence of misconduct → warning is void
official written warning for repeated misconduct
formal meeting → employer issues warning to employee (allowed to bring colleague to
hearing; morale support)
action plan and timeframe for improvement discussed and written
dismissal of worker resulting from further repeated cases of misconduct
may or may not involve severance pay (a final payment for employment services),
depending on the specific circumstances and the legal system
both parties sign the letter of termination
common for employer to have a witness → aggrieved employee does not make false
accusations later
NOTE:
in all stages, evidence must be gathered and presented
e.g. records of appraisal meetings, email records, customer feedback, witness
statements, or even closed-circuit television (CCTV) recordings
employers also need to show evidence of providing support and opportunities for the
employee to make improvements
also important → managers must communicate the dismissal with the rest of the team who
may be concerned about their own job security and to prevent rumors spreading.

Box 2.1.f You're fired! Grounds for immediate dismissal

the employee is unfit for the position during the probation (trial) period
there is a significant breach of the rules and regulations set by the employer, e.g. violation of
health and safety at work
neglect of duty
corruption that leads to substantial damage to the employer's to the employer's financial
interests

Not all cases of dismissal are justified

unfair dismissal
occurs when an employee is dismissed without a valid or legal reason.
e.g. → wrongly accused of gross misconduct such as theft
in most countries, the employee would have the legal right to take the case to a court
hearing
if the employee can prove his or her innocence, the court can demand reinstatement of the
employee and/or financial compensation for the loss of earnings and mental stress caused.
two main causes of unfair dismissal:
 discrimination
and constructive dismissal
e.g. an employer might discriminate against a worker's age, race, gender, ethnicity,
sexual orientation or religion (which does not affect the job) so dismisses that person
for such reasons.
in countries with equal opportunities legislations, women cannot be dismissed
because they are pregnant → to do so would be seen as an unfair dismissal
constructive dismissal occurs when a worker is forced into resignation because the employer
has made it very difficult for the worker to continue their job
eg. the employer might have changed the terms and conditions of employment without
any consultation with the employee → change in responsibilities of house work
in all cases of unfair dismissal the employee has the legal right to seek compensation from the
business

redundancies (also known as retrenchments or lay-offs )

occur when a business can no longer afford to employ the worker or when the job ceases to
exist
e.g. many retail workers are hired temporarily during the busy trading period prior to
Christmas but are laid-off (made redundant)

two main options when businesses have to retrench workers:

voluntary redundancies
take place when the employer asks for volunteers to leave
are offered a redundancy package (severance pay) such as three months' pay
amount of redundancy pay depends on the workers' salary, benefits, and the length of
time that they have worked for the organization.
the least likely option to cause conflict and hardship to workforce
compulsory redundancies (or involuntary redundancies)
occurs when the employer has to choose which workers to make redundant
two ways in which this can be done:
LIFO method (last-in-first-out)
this method makes the newest recruits in the team redundant
percieved to be fairer
may lose productive workers
retention by merit
the least productive workers are made redundant first
perceived to be highly subjective (a worker might be laid off because the
manager doesn't like them rather than due to their ability to do their job)
can be beneficial if unproductive and inefficient workers are removed from the
business.

in some countries and jobs, it is possible for the employer to issue finite (fixed term) contracts
 at the end of the contract, the employer can assess whether it is worth rehiring the worker,
based on past performance and on the financial position of the business
alternatively, somebusiness choose to reduce pay instead of making some staff redundant.
for larger businesses, another option is to redeploy staff → transferring employees from a
department or branch that no longer requires their services to other areas of the business
where vacancies exist.
in reality, redeployment → not usually an option for mostt businesses
redeployment can cause anxiety and demotivate workers who transferred to an unknown
environment

2.1.8 - Changing employment patterns and practices

changes in employment patterns and work practices such as
increase in the number of people working flexitime

Employment sector
the four employment sectors in an economy (1.1)
primary
secondary
tertiary
quarternary
country develops and prospers → proportion of workers employed in the primary sector falls → shift
to secondary industries → then finally the tertiary and quarternary sector
In developed economies, the tertiary sector accounts for the largest proportion of employment →
highly skilled people employed in the quarternary sector
e.g. less than 2% of people in the USA, UK, and France work in agriculture → over 75% of the
working population are employed in the services sector

Ageing population
there has been a decrease in net birth rate in many developed economies
the size of the future workforce will fall
people are living longer → average age of workers will tend to rise → ageing population
the shortage in labour supply will affect workforce planning, recruitment and training
firms will be more willing to appoint and retain older employees
more flexible in keeping staff beyond retirement age
women and part-time staff will be sought after → they provide more workforce flexibility

Flexible work structures

Charles Handy's theory of the shamrock organization (2.2)
suggests that businesses will gradually use fewer core staff to improve their flexibility
reducing the number of core staff and employing more part-time workers helps business reduce
their labour costs
 greater flexibility → larger number of people work from home
implications of flexible working patterns:
organizational restructurings
less likely for a traditional organIzational structure (2.2)
firms will employ various combinations of core, part-time and peripheral staff
flexitime
consultants contractors, part-time employees → allowed to work the hours that suit their
individual needs
flexible working hours offered → cater for people needing to balance work with other
priorities; childcare, higher education
changing recruitment practices
hiring more flexible workers (in terms of location, working hourse, and skills)
they are more likely to employ more part-time and temporary staff.
retention of core staff
key employees → reatined for outstanding skills and expertise → offering first-rate financial
rewards
training
firms will be less likely to invest in training, except for their core staff
there will be pressure for staff to constantly update their skills
firms can pay for this (core staff) or people mau have to update employment skills at their
own
workers have to be more flexible and adaptable → people have to be prepared to move between
occupations and perhaps industries to maintain employment
a multiskilled and flexible worker will be highly attractive to potential employers
example of flexible working practices:
teleworking
homeworking
portfolio working
part-time employment
flexitime

Teleworking
teleworking
refers to working away from the office by using electronic forms of communication
e.g. telephones, the internet, and email
a term coined by Jack Nilles in 1973
popular in USA, Canada, Sweden, Finland, and the UK
trend is partly caused by the increasing problems communting in central business districts but
mainly due to the technological advances in ICT
businesses that use teleworking
insurance firms
banks
 market research firms
airlines
such businesses have 'call centers' where a dedicated team of workers deal with customer enquiries
and complaints on the telephone → frees up management time → individual branches do not need to
deal with so many enquiries from customers
teleworkers can be mobile, such as sales people who spend most of their time commuting and
visiting clients
homeworking
a category of teleworking whereby people work from their own home
advances in technology → allow employees to operate in almost any location (i.e. wireless
broadband, WiFi- and movile technologies) → number of teleworkers will increase

Table 2.1.h Advantages and disadvantages of teleworking and homeworking for

employees
ADVANTAGES DISADVANTAGES

job opportunities , especially for thhose
living in remote areas
suitable for those who have to care for
family members, e.g. parents of young children work, often exceed working time directives
or elderly parents
flexible working hours
benefits of not having to commute , e.g.
travel costs, time and stress
autonomy in decision-making and choice
of how teleworkers organise their work
income tax allowances for using personal
property for conducting business activity
reduction in costs of ICT systems → more
people can work from home
there is a huge dependence on the use and
reliability of ICT software and hardware
teleworkers, partly due to the nature of their
teleworkers might suffer from social
isolation (including boredom)
there is often less job security and less
trade union representation for teleworkers
employees are likely to face distractions
working at home, especially those with young
children
teleworkers and homeworkers tend to suffer
from a lack of training opportunities and career
development

Table 2.1.h Advantages and disadvantages of teleworking and homeworking for

employers
ADVANTAGES DISADVANTAGES

reduced office overheads as less prime office
locations and space are needed
flexible and extended working hours can be
offered to customers
flexible working practises enable the firm to
cater for peak and off-peak trade
continuity of service from those with young
children or other dependents
set up costs (such as the cost of ICT
equipment) can be very high
teleworking requires tight control in
recruitment as not everyone has the right
profile, e.g. initiative, experience, and self-
motivation
management, monitoring and control are
more difficult as staff are off-site
 research shows teleworkers have a lower
absenteeism rate than office workers
flexibility to deal with working time
directives (laws), which govern the maximum
hours of work per time period
technological breakdowns can cause major
disruptions to the business
teleworking is not always possible , e.g. lack
of space at home or lack of security and
confidentiality of data being held at home

Portfolio working
portfolio worker
a person employed in a number of different jobs carried out simultaneously , usually on a part-
time or temporary basis
e.g. the portfolio worker might be completing a project for one business whilst conducting
market research for another and prociding consultancy services for yet another
organization
the portfolio worker charges a fee for each unit of work carried out
portfolio working increases the flexibility and mobility of an organization's human resources
advantage → the variety of experiences can contribute to a more fulfilling career for the portfolio
worker
disadvantage → lack of job security
ad hoc employment opportunities mean that the portfolio worker might not have any contracts at a
particular point in time whilst being very busy at other times with several projects being undertaken
concurrently
Willian Bridges wrote about similar trends in his book, Job Shift (1994)
he used the term dejobbing to esplain the increasing number of people becoming independent
workers rather than the conventional meaning of being an employee
e.g. couriers → often classified as 'self-employed' and are responsible for their own costs,
although they carry out work for various organizations

Part-time employment
increasing number of females and students opting to work part-time and the benefits of labour
flexibility → increasing number of part-time workers
advantage → part time employers are cheaper to employ for the business
part-timers are generally entitles to lower remuneration (pay and benefits) compared with full-
time workers
part-timers are easier to replace
there is a large pool of people that can work part-time, such as
working mothers
full-time college and university students
helps keep wages relatively low and gives the employer plenty of choice
part-timers are said to be 'easy to hire and fire'
part-time employment gives a business more flexibility
i.e. easier to adjust working hours to accomodate fluctuations in demand
 hours can be reduced during off-peak periods and raised again during busier trading times
disadvantage → part-time employees tend to feel less valued → less loyal to a business
can negatively affect level of motivation, productivity, and labour retention
a huge amount of time and resources are consumed in hiring, inducting and training new part-
time staff
since labour turnover tends to be higher among part-timers, this ongoing process can be
expensive and uses up a lot of valuable management time
it may be more cost effective for some firsm to hire full-time workers from the outset

Flexitime
traditional working hours for many industries in Western economies was from 9 am until 5 pm → this
rigid system no longer applies to the vast majority of businesses
alternative 1 → shift work
shifting work with different groups of people working at different time allocations
such as a team of workers on a 9 am to 5 pm shift and another team on a 12 pm to 8 pm
shift
alternative 2 → flexitime
a system which requires employees to work for a core period (say from 9 am to 1 pm) but the
rest of the time is 'flexitime'
staff will determine when they will work, subject them to getting their work completed by
set deadlines
shift work and flexitime can help extend normal working hours of a business
this generates more sales and/or get more work done
offering flexitime can improve a firm's image as it is seen to be providing equal opportunities to staff
unable to work standard hours due to their other important commitments
flexitime is also beneficien to employees → they are given a greater degree of freedom to balance
their work and personal life
flexible work patterns, practices, and preferences, such as portfolio working and teleworking →
average number of hours worked has increased
this trend can provide opportunities for businesses to earn more money for each extra hour
that they stay 'open' for trading

Migration of workers
migrant worker
a person who is engaged in a remunerated activity in a state of which he or she is not a natuonal
migrant workers contribute to the economic growth of the host country through their production,
consumption and the payment of taxes
many migrant workers also remit a significant proportion of their pay back to their home country →
benefit the country of origin
reasons for migration of workers
pay and remuneration
 many multinationals attract migrant expatriate workers, especially those in senior posts,
by offering them better pay and remumneration
relocation allowance
subsidised housing
medical cover
education allowance (for those with children)
employment opportunities
unemployment and poverty may prompt many workers in low income countries to seek
work elsewhere
high income countries experiencing economic growth have an increased need for labour,
especially unskilled labour
seasonal factors
farm workers, for example, might migrate during off-peak seasons, to find empployment in
other countries
domestic instability
political instability , the lack of security , and limited business opportunities in the
domestic economy are key drivers for migrant workers
higher standard of living
migrant workers → seek a better lifestyle so immigration provides such a possibility
working overseas may provide better career prospects for migrant workerw and more
educational opportunities for their children

2.1.9 - Outsourcing, offshoring and re-shoring

outsourcing
the practice of transferring internal business activities (functions) to an external firm as a
method of reducing costs
subcontractors (the outsourced firm) → able to carry out the outsourced work for less than their
clients are able to, without compromising quality
uses of outsourcing
when activities are not core to the function of the business
when the business lacks specific skills or expertise
to cut costs of production
outsourcing used if it leads to productivity gains and cost advantages
many multinational companies, both manufacturers and service providers, have
outsourced operations abroad in order to benefit from significantly lower labour costs

Box 2.1.g Typical business activities/functions that are outsourced

catering
cleaning
customer service call centers
maintenance of information communications technology (ICT) systems
 manufacturing of parts and components
property management and maintenance
public relations
recruitment and selection (recruitment agencies)
security systems
training and development (continuous professional development)
Table 2.1.j Advantages and disadvantages of outsourcing
ADVANTAGES
specialists are hired to carry out the work
to high quality standards → particularly
important if the business does not have the
necessary skills and expertise available
internally to carry out the outsourced functions
different subcontractors will bid (or tender) for
the outsourced work → the one with most
attractive overall package will be awarded the
contract → the subcontracted work is provided
at competitive rates, enabling the business to
control its own costs without jeopardixing
quality assurance
helps reduce labour costs → outsourced
workers are not employees of the organization,
e.g. they are not remunerated with holiday pay,
bonuses, sick leave or pension contributions
outsourcing allows he bsusiness to
concentrate on its core activities , i.e what its
best at doing → can help to improve overall
efficiency of the organization
outsourcing improves workforce flexibility →
e.g. there is no need to recruit employees
during busier trading period as subcontractors
can be used to increase output → during less
busy periods, there is no need to reduce
(internal) staffing as the outsourced firm is
responsible for staffing
Offshoring
offshoring
ADVANTAGES
in their aim to 'cut costs' , subcontractors
have been known to 'cut corners' by hiring
under-aged, illegal and unqualified workers →
led to substandard quality and conflict
between the contractor and subcontractor
quality management can become more
difficult → subcontractors are relied upon for
thwuality of the outsourced work → things can
go wrong, such as conflicting views about the
quality of the output. allowing external parties
to have such a large influence on the reputation
of a business can be potentially disastrous
subcontractors need to be monitored to
ensure that deadlines are met and quality
standards are observed → increases costs of
administering all outsourced activities
outsourcing can initially cause redundancies
in the organization → needs to be managed
carefully as it will affect the level of staff morale
and motivation within the firm
outsourcing and offshoring have often been
associated with unethical practises , such as
the exploitation of labour in less economically
developed countries → involve poor working
conditions, long working hours, low pay, child
labour, and absence of health and safety policies
 an extension of outsourcing that involved relocating business activities and processes
abroad
it is possible to offshore work but not outsource it
American and British firms dominate the practice of offshore outsourcing
this has made countries such as India and the Philippines highly attractive locations due to
their large pool of educated English-speaking workers who earn significantly less than their
western counterparts
e.g. of popular outsourced activitities in the Philippines
call centers
financial management
computer software
development
offshore outsourcing of production activities and resources can help a business to get around
protectionist measures used by foreign governments (1.5)
critics of offshoring (including offshore outsourcing) have complained about quality management
issues
the benefits of offshoring are also subject to change in the external environment (1.5)
e.g. cost savings from offshoring may be wiped out simply because of adverse fluctuations in
the exchange rate
similarly, if the host country experiences high rates of inflation and continual rises in minimum
wages, then the business may need to reconsider the use of offshoring

Re-shoring
reshoring
the transfer of business operations back to their country of origin
the reverse of offshoring outsourcing
re-shoring has become more popular as the cost-effectiveness of offshoring has declined for many
European and American companies
reasons for re-shoring as a human resource strategy:
product recalls and mass media coverage for outsourced business practices that are unethical
have caused concerns for multinational companies
improving and monitoring the quality and consistency of output is easier if production is
re-shored
China losing its status as the 'workshop(factory) of the world'.
Labour costs in China have risen sharply as the coiuntry continues to experience
phenomenal economic growth .
Rising wage demands in China mean that it is cheaper to produce in other Asian countries
such as Vietnam and Bangladesh.
The rising value of China's currency, the renminbi, has also taken its toll
transportation costs continually rising means that it has become more cost-effective for
businesses to be located nearer to their customers
the increased demand for customization of products has meant the need for businesses to be
more responsive to customer demands and market changes
 e.g. Starbucks coffee compared to regular coffee from a convenience store
domestic governments → supported and encouraged re-shoring
in order to bring back jobs and balance government budgets

2.1.10 - Human resource planning and the CUEGIS

concepts
workforce flexibility
refers to the ability of workers to multi-task and adapt to changes in the business
multitasking in this case is to carry out a range of different tasks or jobs simultaneously
highly effective managers consider the cultuiral impacts of human resource planning
in some cultures, appraising senior staff is regarded as disrespectful and intimidating
globalization and innovation require human resource managers to think about how ICT tech
contribute to workforce planning
in a globalized and increasingly complex business world, organizations have used ICT to solve many
of their problems and to improve productivity
ICT is increasingly used as a tool to improve the capabilities, efficiency and functions of the
organization and its workforce