Unit 3: Human Resource Management

Unit code Y/508/0487

Unit type Core

Unit level 4

Credit value 15

Lecture 03 (Apr. 2 hrs)

 Learning Outcomes
By the end of this unit a student will be able to:

1. Explain the purpose and scope of human resource management in terms of

resourcing an organisation with talent and skills appropriate to fulfil business
objectives;

2. Evaluate the effectiveness of the key elements of human resource management in

an organisation;

3. Analyse internal and external factors that affect human resources decision-making
including employment legislation;

4. Apply human resource practices in a work-related context.

 Pass and merit and distinction criteria For this section

P1 Explain the purpose and the functions of HRM, applicable to workforce planning and
resourcing an organisation.

P2 Explain the strengths and weaknesses of different approaches to recruitment and selection.

M1 Assess how the functions of HRM can provide talent and skills appropriate to fulfil business
objectives

M2 Evaluate the strengths and weaknesses of different approaches to recruitment and selection.

D1 Critically evaluate the strengths and weaknesses of different approaches to recruitment and
selection, supported by specific examples.
1.1 The nature and scope of HRM:

1.1.1 Definitions of HRM.

1.1.2. What are the main functions and activities of HRM.
1.1.3. The ‘Best Fit’ approach vs ‘Best Practice’.
1.1.4. The hard and soft models of HRM.
1.1.5. Workforce planning.
1.1.6. Types of labour market, labour market trends and PESTLE.
1.1.7. The internal labour market.
1.1.8. Analysing turnover, stability and retention.
1.1.9. The impact of legal and regulatory frameworks.
1.1.10. The impact that advances in technology have had upon
improving the efficiency of HR practices.
 1.1 The nature and scope of HRM:

1.1.6. PESTLE.
• All organizations need to identify external factors within their
environment that could have an impact on their operations.

• A popular tool for identifying these external factors is the PESTLE

Analysis, which can be used to help you consider Political, Economic,
Social, Technological, Legal, and Environmental issues.
 1.1 The nature and scope of HRM:
Political
Political: These factors determine the extent to which a
Economic
Social government may influence the economy or a certain industry.
Technological
- Government policies
Legal - Trading policies
Environmental
- Funding, grants and initiatives
- Wars, terrorism and conflicts
- Elections and political trends
- Internal political issues
- Inter-country relationships
 1.1 The nature and scope of HRM:
Political
Economic: These factors are determinants of an economy’s
Economic
Social performance that directly impacts a company and have long
Technological
term effects.
Legal
Environmental - Taxation
- Inflation
- Interest
- Economy trends
- Seasonality issues
- Industry growth
 1.1 The nature and scope of HRM:
Political
Social: These factors analyze the social environment of the market, and
Economic
measure determinants like cultural trends, demographics, population
Social
analytics etc.
Technological
Legal - Demographics - Consumer buying patterns
- Views of the industry - Ethical issues
Environmental - Lifestyle trends - Consumer role models
- Cultural Taboos - Major events and influences
- Consumer attitudes and opinions
 1.1 The nature and scope of HRM:
Political
Technological: These factors pertain to innovations in technology that may
Economic
affect the operations of the industry and the market favorably or unfavorably.
Social
Technological - Emerging technologies
- Maturity of technology
Legal
- Technology legislation
Environmental - Research and Innovation
- Information and communications
- Competitor technology development
- Intellectual property issues
 1.1 The nature and scope of HRM:
Political
Legal: These factors have both external and internal sides. There are certain
Economic
laws that affect the business environment in a certain country while there are
Social
certain policies that companies maintain for themselves. Legal analysis takes
Technological
into account both of these angles and then charts out the strategies in light of
Legal
these legislations.
Environmental
- Consumer protection
- Current legislation - Health and safety regulations
- Future legislation - Tax regulations
- International legislation - Competitive regulations
- Regulatory bodies and processes - Industry-specific regulations
- Employment law
 1.1 The nature and scope of HRM:
Political
Environmental: These factors include all those that influence or are
Economic
determined by the surrounding environment.
Social
– Climate
Technological – Weather
– geographical location
Legal – global changes in climate
– environmental offsets
Environmental
1.1 The nature and scope of HRM:

1.1.7. The internal labour market.

Internal labor markets (ILM) are an administrative unit within a

firm in which pricing and allocation of labor is governed by a set
of administrative rules and procedures. The remainder of jobs
within the ILM is filled by the promotion or transfer of workers
who have already gained entry.
 1.1 The nature and scope of HRM:

1.1.8. Analysing turnover, stability and retention.

Employee turnover

• Employee turnover refers to the proportion of employees who leave

an organisation over a set period (often on a year-on-year basis),
expressed as a percentage of total workforce numbers.

Total number of leavers over period x 100

Average total number employed over period
 1.1 The nature and scope of HRM:
1.1.8. Analysing turnover, stability and retention.
Employee retention

• Retention relates to the extent to which an employer retains its

employees and may be measured as the proportion of employees
with a specified length of service (typically one year or more)
expressed as a percentage of overall workforce numbers.

Number of staff with service of one year or more x 100

Total number of staff in post one year ago
 1.1 The nature and scope of HRM:
1.1.9. The impact of legal and regulatory frameworks.

Employment legislation deals with the body of laws that helps to maintain
smooth relationship between employees and employers. Issues involving
discrimination, legal working ages and safe working conditions are involved by
the legislation.
 1.1 The nature and scope of HRM:
1.1.9. The impact of legal and regulatory frameworks.

Some of the laws are stated below:

1. Equal pay act 1970

2. National minimum wage rate act 1998
3. Employment rights act 1996
4. Sex Discrimination Act 1975
5. Race Relations Act (1976)
6. Disability Discrimination Acts 1995 – 2005
7. Employment Relations Act 2004 :
8. Work and Families Act 2006
9. Data Protection Act 1998 etc
 1.1 The nature and scope of HRM:

• The Sex Discrimination Act 1975 covers discrimination in the following areas:
 1.1 The nature and scope of HRM:
Race Relations Act (1976) :

• Race Relations Act is a 1976 act established by the Parliament of the United
Kingdom to prevent discrimination on the grounds of race.

• The act covered racial, colour, nationality, ethnic and national origin
discrimination in the fields of employment, the provision of goods and
services, education and public functions.
 1.1 The nature and scope of HRM:
Equal Pay Act 1970:

First introduced in 1970 and amended in 1984, the Equal Pay Act gives a female the right to be

paid as much as her male colleague if the job is the same or broadly similar.

• Women are still paid 17% less than male.

• The Equal Pay Act tends to cover indirect sex discrimination as well as direct discrimination.
 1.1 The nature and scope of HRM:
Disability Discrimination Acts 1995 - 2005

• Disability discrimination legislation exists to protect disabled people from discrimination

in the workplace and in the provision of goods and services, among other areas.

• The terms of the Acts and their interpretation are somewhat complex, but the basic

situation is that employers have to make reasonable adjustments to enable disabled

people to obtain and keep employment, and service providers have to make reasonable

adjustments to remove barriers to access by disabled people.

 1.1 The nature and scope of HRM:
EU Working Conditions - Working Time Directive

To protect workers’ health and safety, minimum rules are needed on working time in all EU
Member States. Under the EU’s Working Time Directive, each Member State must ensure
that every worker is entitled to proper rest times and manageable working conditions.
 1.1 The nature and scope of HRM:
Employment Relations Act 2004 :

The purpose enacting was to amend the law relating to the recognition of trade unions and
the industrial action taken by the organizations .
• To make further provision concerning the enforcement of legislation relating to minimum
wages;

• To make further provision about the amalgamation of trade unions;

 1.1 The nature and scope of HRM:
Work and Families Act 2006 :
• The Work and Families Act 2006 (“the WFA 2006”) sets out the framework for improvements
to existing rights in relation to maternity and adoption leave, and pay, and flexible working
rights from April 2007.
National Minimum Wage act 1998:
• The National Minimum Wage Act 1998 created a minimum wage across the United Kingdom
 1.1 The nature and scope of HRM:
Data Protection Act 1998
• The Data Protection Act 1998 (DPA) is a United Kingdom Act of Parliament which defines UK
law on the processing of data on identifiable living people.

• DPA is the main piece of legislation that governs the protection of personal data in the UK.

• Although the Act itself does not mention privacy, it was enacted to bring UK law into line with
the EU data protection directive of 1995 which required Member States to protect people's
fundamental rights related to personal data.
 1.1 The nature and scope of HRM:
1.1.10. The impact that advances in technology have had upon
improving the efficiency of HR practices.

• New skills required

• Downsizing
• Collaborative work
• Telecommuting
• Internet and intranet revolution
• Business environmental change
• Development of technology
• Service improvement