Human

Resource
Management
Strategy
Unit 7.3
By: Ally, Ruhansa, Luke, Christine
 TOPICS COVERED:

01 Approaches to human resource

management 04 Strategies for improving
employee performance

02 Flexible Workers
05 Roles of IT and AI in human resource
management

Measurement, causes and consequences

03 of poor employee performance
 HRM APPROACHES
Human resource strategy - it is a medium to long term plan that is implemented to achieve the business’
human resource (HR) objectives - It is a central element of a business’ approach to human resource management
(HRM).
A number of factors have persuaded UK businesses to implement HR strategies. Such as:
- Japanese business have had apparent success in managing people using this approach, they have been seen
to gain significant competitive advantage from managing a human resource that produces high-quality
products at minimum cost.
- Changes in organisational structure have led to many managers taking on responsibility for managing
people within the organisation.
Techniques such as delayering and the development of empowered teams have been an integral part of the
implementation of HR strategies.
- The increasing use of psychological approaches to motivation has encouraged the adoption of HR strategies
which demand styles of working that meet the social and psychological needs of employees.
- The adoption of flatter organisational structures and psychological techniques of motivation are essential
elements of HR strategies.
- Organisations that adopt these techniques and structures would naturally move towards adopting some type
of HR strategy.
 HARD HR STRATEGIES
- Some firms operate ‘hard’ HR policies, treating employees as a resource to be used optimally
- Such firms regard employees as yet another resource to be deployed as efficiently as possible in pursuit of
strategic targets.
- Employees are obtained as cheaply as possible, controlled and then disposed of when necessary.
Eg: manufacturing businesses (The pay is fully based on the performance)

ADVANTAGES
● easier for businesses to adapt the size and
composition of their workforces to match the
needs of their customers
● It can result in lower costs, especially in the
short term
● It allows managers to retain control over the
workforce and to direct operations as they
wish
● This approach can assist a business in
maintaining its focus on its corporate
objectives.
DISADVANTAGES
● level of labour turnover might be very high
● Employees may be demotivated by this
approach to employment.
● This approach relies heavily on pay as a
motivator and ignores the potential of
social and psychological factors to
motivate employees and improve their
performance at work.
 SOFT HR STRATEGIES
- This approach is based on the notion that employees are perhaps the most valuable asset a business has and they
should be developed to maximise their value to the organisation
- This makes a long-term approach essential. Employees are seen as a resource to be valued and developed over time
and in response to changing market conditions.
Eg: When the manager tries to make the employee understand his value and takes a more encouraging route to boost the
performance.

ADVANTAGES
● It can help a business to build a reputation for being a
‘good’ employer.
● The pay and conditions on offer are attractive and the
employer ensures that employees receive regular
training to improve their skills and enhance
promotion prospects.
● it can improve knowledge management within a
business
● lower level of labour turnover
● it may also develop a more creative workforce.
● motivate the employees
DISADVANTAGES
● It can be very expensive ,especially in the short
term.
● These costs could be waste
● Higher rates of pay and good working
conditions can also add to an employer’s costs.
● The soft HR strategy is likely to rely heavily on
full-time and permanent employees, and thus
the business might have surplus capacity if
demand falls and little potential to increase
output if demand rises.
 FLEXIBLE WORKFORCE
➔ A flexible workforce only exists when businesses place less reliance upon
permanent full-time employees and make greater use of other forms of
employment such as part-time, temporary and zero-hours contracts.
➔ Having a flexible workforce can provide the business with a competitive
advantage. For example, when the business is facing high levels of demand and
sales, it can call on more workers to enable and increase production.
➔ On the other hand, if the business is facing low demand and low sales, the
business doesn't need to incur unnecessary costs by employing idle workers.
 TYPES OF FLEXIBLE WORKFORCES
CORE AND PERIPHERAL WORKERS

- An idea by John Atkinson who explained that flexible

workforces comprise of a core workforce and a
peripheral workforce.
- Core workers would be highly qualified and trained.
They would be motivated and would be permanent full
time employment with security of employment.
- Peripheral workers would be hired when necessary.
They are low skilled or have highly specialised skills
that are not required all the time.The peripheral workers
can be employed part time using a temporary contract
USING TEMPORARY WORKERS
- These types of workers have employee contracts that only exist for a specific
period of time (around 6 months).
- They are employed only for a limited period of time to meet the needs for
additional staff during busy periods or to provide specialist skills
- For example, staff employed by some theme parks.
PART-TIME WORKING
- Part time workers are workers that work less than 35 hours a week
- Sometimes two people share a full time job, each working for a part of the normal
working week. This is known as job sharing.

ANNUALISED HOURS CONTRACTS

- It operates when an employer states the number of hours the employee
must work over a whole year. Employees may be employed longer
hours during busy weeks and have a reduction in hours during quieter
periods.
- For example, employees in the agriculture industry.
 ZERO-HOURS CONTRACTS
- This exists when an employer does not have to
offer the employee any fixed hours of work and
the employee does not have to except any hours
given.
- They only work and receive pay when both the
business and employee agree to do so.
- They receive the same rights as a standard
employee such as the minimum wage and
holiday pay.
- For example, providing catering services at
events
FLEXITIME
- a way of working which allows employees to fit their working hours around their
individual circumstances.
- This design gives the employee more freedom
- They have to work the agreed core hours but has the flexibility to fit the remainder of
their hours to suit their circumstances.

SHIFT WORKING
- An employment practice that is designed to allow businesses to carry out their core
activities for 24 hours a day.
- Gives them a competitive advantage by offering 24 hour service
- For example, industries such as health care.

JOB SHARING
- When two employees share a fulltime job, each working for a part of the normal working
week
- Brings the business benefits if they have complementary skills and work more efficiently
than one person
- Communication may be a problem
 COMPRESSED WORKING HOURS

- An employment practice in which an employee normally works full time

but in fewer than the normal number of days per week
- They can take time off work for personal reasons and make up the time
by working longer hours at other times in the week
- Employers may not always have key employees available at critical times
unless the system is very well managed
- For example, someone working a 5 day working week could ask to work
monday-thursday but start their day earlier and finish later in order to
make up for their total number of hours
 THE GIG ECONOMY
- It’s based on flexible, temporary or freelance jobs often involving connecting with
clients or customers through an online platform.
- They are not classified as employees but as contractors. As a consequence, they do
not receive guaranteed hours of work or amounts of pay.
- For the business, using workers in this way can be effective in means of
controlling labour costs. This is because they are only employed when required
and the employer does not have to pay for associated costs such as holiday pay or
pension costs as they are not classified as an employee
- workers incomes are insecure as they are not guaranteed specific hours of work or
levels of income
- - can disrupt a person's work-life balance and sleep patterns.
- For example, Ubereats and fedex
Advantages of flexible working
contracts
● Managing fluctuations in demand
effectively
● Lower cost of employing people with
specialist skills
● Reduction in training
● Can help manage work-life balance
● Supports employees meeting other
commitments
● Reduction in expenditure on traveling
Disadvantages of flexible working
contracts
● Communication is less effective
● Some contracts may lead to higher
labour turnover
● Some contracts can damage employee
motivation or performance
● Insecure employment and uncertain
earning
● Some forms of flexible contract may
result in social isolation
MEASUREMENT, CAUSES AND
CONSEQUENCES OF POOR
EMPLOYEE PERFORMANCE
- Managers need to measure employee performance to
assess the efficiency and competitiveness of a
workforce
- It also helps assess whether a workforce is fully
motivated.
METHODS TO MEASURE
EMPLOYEE
PERFORMANCE
There are several indicators the HRM can use to
assess the level of employee performance:
● Labour productivity
● Labour turnover
● Absenteeism
● Health and safety
 LABOUR PRODUCTIVITY

● If output per worker over time increases overtime, the labour productivity is increasing.
It also means that, given constant wage rates, labour costs per unit of output are falling.

● There are several reasons why labour productivity might increase overtime;
- Improved motivation
- More efficient capital equipment
- Better employee training
- Improved operational efficiency (no time wasted for new supplies or materials to
arrive)
● This ratio measures the proportion of the workforce leaving their employment at a
business over some period of time, usually one year.
● Some factors may contribute to high levels of labour turnover such as;
- Low wages
- Inadequate training
- Lack of motivation
- Ineffective recruitment procedures and appointing the wrong staff
- Redundancy and Retirement
- Businesses seek to manage labour turnover by bringing new ideas into the
business and bringing new employees with enthusiasm.
● Absenteeism occurs when an employee is not present at their workplace. This
could be due to illness or industrial accidents.
● Thus, it is used as a measure of the morale and motivation of a workforce.
● High levels of absenteeism can dramatically increase a business's cost
- This measures the safety of the working environment. A dangerous working
environment not only lowers employee morale but many also damage
performance of the workforce.
- Absence due to accidents and injuries in the workplace increases the labour
costs incurred by the firm and can lead to adverse publicity.
 The Causes of Poor
Performance
● Poorly designed jobs
● Inappropriate leadership and
management styles
● Demotivation
● Insufficient resources
● Ineffective recruitment and
selection
The Consequence of Poor Employee
Performance
● Competitive disadvantage
● Lower levels of innovation
● Reputation of a poor employer
● Higher recruitment and training
costs
Strategies for improving employee performance

Approaches a business can take to improve the performance of its

employees:
1. Training
2. Motivation methods
3. Pay systems
4. Employer branding
5. Management of objectives
 TRAINING
● Training- the process whereby an individual acquires job related skills
and knowledge.
● Training is one approach a business can take to improve employee
performance.
ADVANTAGES DISADVANTAGES

● Improves employee performance- when ● Can be expensive

managers are taught and trained to ● Risk of employees obtaining more career
handle employees well. opportunities outside the business after
● Training employees on health and safety being trained and gaining new skills.
methods- they feel safe in the work
environment.
● Decreases the supervision needed
 MOTIVATION
Motivation- the factors that encourage employees to work towards a
goal.

What a motivated workforce leads to:

● High productivity
● Low labour turnover
● Low levels of absenteeism

How a business can motivate the workforce:

● Redesigning jobs
● Working in teams
● Empowering employees
● Motivation theories- Herzberg’s two factor theory, Maslow’s
Hierarchy
 PAY SYSTEMS
● Monetary methods such as piece rate, performance related pay, time rate and bonuses increases productivity
in the business as employees may feel motivated.
● Team pay- the method of linking the pay of employees to the level of performance that they have achieved in
a team. All members of a team are paid when they achieve a set target.

TEAM PAY INDIVIDUAL MERIT PAY

● Rewards team work ● There is internal competition

● Increases flexibility to changes ● Decreases flexibility to changes
● Work as a group to improve work ● Withholds information
systems.
● Encourages information sharing and
communication.
 EMPLOYER BRANDING
Employer branding- the business is perceived as a good place in the minds of the
employees, stakeholders (customers), and shareholders.
Importance of having a good employer brand:
1. Leads to low labour turnover
2. Encourages employees to stay in the business
3. Can attract people to come work in the business
4. Creates a strong company culture
5. Boosts employee morale
 MANAGEMENT OF OBJECTIVES
Management by objective- management technique for setting clear goals for a
specific time period and monitoring progress.
ADVANTAGES
● Improves communication within the
organisation.
● Motivates employees- clear goals are
set.
● Highlights training needs- increases
efficiency.
DISADVANTAGES
● Specific targets can be hard for some
employees to achieve- de motivates
them.
● Objectives can become out of date.
● Employees should be committed to
achieving the goal.
 Types of technology and HRM:
Trends in technology that influence ways in which HR operates within a business:

Data analytics Cloud computing Mobile technology

use of AI technology to interrogate data stored stores vast amount of data and its this increases and improves
on cloud based databases has transformed the accessibility can encourage employees communication between HR and other
amount of information available to HR to work collaboratively. employees.
specialists.

The internet of things

Social Media
this is used for recruitment and works with AI and the cloud to
selection and communication. gather data from employees
wearables and other devices.
 HOW TECHNOLOGICAL ADVANCES
AFFECT HRM
1. The recruitment and selection process can be very costly in a business.
2. Using technology can reduce costs and time when recruiting and selecting employees.
It can scan and analyse CV’s and application forms to select the best one.
3. Social media has played a big part in recruiting employees by putting out detailed
advertisements which can lower recruiting costs and the time taken.
4. AI helps HR teams to evaluate large number of applications quickly and efficiently.
5. AI may be able to take over the recruiting process from humans.
 MANAGING THE PERFORMANCE OF
EMPLOYEES
● Usually employee performance is observed by HR managers but new
performance management softwares now tracks employee performance
continuously, sets and updates targets, and provides feedback to employees.
● Employee wearables- clothing that incorporate some computing and software
technologies.
● It is used to monitor employee’s productivity by tracking employee’s location
and activities. It can also be used to provide augmented instructions. It can
identify if the employee is engaging in hazardous activity and intervene if its
necessary.
 COMMUNICATION BETWEEN HR AND
OTHER EMPLOYEES
1. Using emails, putting up notices on notice boards, and having physical meetings with a lot of
employees have been a form of poor and ineffective communication.
2. Technology has helped make communication faster and better.
3. Businesses now use online methods such as Skype, Zoom, Slack and BaseCamp to exchange files,
have meetings and to send out any information and messages. Using these improves communication
between HR and employees.
4. Good communication within the business leads to high productivity as employees know what exactly
they need to do and what not to do.
 CREATING A MORE DIVERSE
WORKFORCE
What diverse workforces lead to:
● High levels of productivity
● High profitability
● Increases creativity
● Improved cultural awareness
● Increase in marketing opportunities

How technology can be used in diverse workforces:

1. Monitor recruitment practices for diversity

2. Analyse HR data- identify salary gaps between different ethnicities/gender/races - this
therefore creates a positive work environment.
 Changing role of HR within a business due to
technology
Technology has allowed HR managers to spend less time on basic administrative tasks.

Role of technology:
● Databases can replace physical files allowing time effective searches, analysis to take place,
and low storage costs.
● Storing information on cloud systems allows lots of data to be analysed efficiently and
quickly.
● HR specialists can produce accurate reports quickly.
● Payrolls and other HR records can be updated quickly and give access to all authorized
people in the business.
● Gives time to HR managers to devote to strategic matters. For example, ensuring the
business matches human resources to the business’ needs.