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Human Resource Objectives and Strategies

Human Resources:
Department responsible for the use of labour within the firm
Activities relating to the workforce are integrated and vital in helping the firm
achieve its corporate objectives
Aims to make the best use of HR in relation to the firms overall growth
HRM is the design, implementation and maintained of strategies to manage
people for optimum business importance

Nature of HR Objectives:
Targets pursued by the HR function or department
There are a number of HR objectives, the importance of which will vary according
to the firm, its products and the market

Matching the Workforce to the Firms Needs:

The firm needs to have sufficient employees and skills to ensure that it can meet
the needs of its customers and to provide the best quality goods or services
Recruit employees, make some redundant and redeploy others; as well as
training some to prove the necessary skills

Making Full Use of the Workforces Potential:

Potential can exist in:
Underutilised employees
Overworked or stressed employees
May be underused because:
Skills are untapped
Employees and underutilised

Maintaining Good Employee/Employer Relations:

Makes strike and industrial action less likely
Attracts high calibre and better qualified applicants
Maintain a positive corporate image
Communications may be highly effective

Influences on HR Objectives:
Corporate objectives
Attitudes and beliefs of senior staff
The nature of the product

State of the market
Price elasticity of demand for the product
Corporate image
Employment legislation

HR Strategies:
Medium-long term plan to achieve the HR objectives
Factors persuading implementation:
Japanese success in managing people using this approach
Changes in the organisational structure that leads to managers taking on
responsibility to manage people
Increasing popularity of psychological approaches to motivation

Hard HRM:
Treating employees as a resource to be used optimally
Employees are obtained cheaply, controlled and disposed of when necessary
Short term policy
Communication is mainly from the top downwards
Autocratic leadership with motivation from money (Taylor)
Easier for firms to adopt the size and composition for their workforce to match
the needs of the customer
Allows managers to retain control over the workforce and to direct operations as
they wish
Employees may be demotivated by this approach and result in high labour

Soft HRM:
Treats employees as the most valuable asset a firm has
Employees should be developed to maximise their value to the firm
Long term view
Employees are consulted and have control over their working lives
Democratic leadership with motivation through empowerment (Maslow)
Helps a firm develop a good employer reputation
Develops a more creative workforce
Difficult to alter workforce in response to changing market conditions and can be
very expensive

Competitive Advantage:
Soft HRM recognises the individual, outcome of which should be motivated and
committed employees; leading to fewer employer costs, higher productivity and
an increase in quality
Harm HRM focuses more on short term benefits
Problems may exist if a firms culture is not suited to the HRM strategy (Soft HRM
= People culture / Hard HRM = Power culture)
Implementing and changing the strategy may involve addition costs as everyone

Guests Model:
Stresses the importance of integrating the various elements of the HR strategy
Close relationship between corporate strategies and HR strategies
Beneficial outcomes:
Commitment by employees to the firm
Supply quality goods and services
Flexibility of employees
HR outcomes are a package, only if all 3 are achieved can a firm expect to see a
change in behaviour

Skills Audit: A procedure used to identify the talents and abilities that employees
have which may not be fully used by the firm
Workforce Plan
Appropriate plans should be drawn up for the short, medium and long term

Components of Workforce Plans:

1) Consider the corporate objectives of the firm
2) Consider how HR can be managed to assist in achieving the corporate
3) Set objectives
4) Make a judgment about the size and type of the workforce the firm will
5) Compare the available workforce to the desired one
6) Review internal and external supply of labour
7) Decide upon policies necessary to convert the existing workforce into the
desired one
Creating a HR planning group can speed up the process of HR planning and help
to ensure that it truly meets the needs of all parts of the firm

Information on current workforce:
Number and type of employees
Skills audit identifying available
Skills, qualifications or qualities
Where the employees are employed
Age profile
Analysis of likely changes in the demand for the firms product
Analysis of the likely factors affecting the supply of labour
Recommendations needed to acquire the desired workforce

Information Required To Make The Plan:

Sales forecasts for next couple of years
Forecasts of labour turnover and potential future entrants
Information regarding future wage rates for the type of employees hired
Number of people entering training/education courses
Anticipated changes in output of workforce
Technological developments

Influences of Workforce Plans:

Sales forecasts
Demographic trends
Wage rates
Technological development
Changes in legislation

Corporate plan
Marketing plans
Operational plans
Financial restraints
Nature of the firm

Issues of Implementing Workforce Plans:

Employer-Employee Relations:
A damaged relationship may lead to the workforce resisting changes and taking
industrial action causing loses of sale and revenue
A good relationship can assist the process with good communication and
commitment ensuring things are done efficiently

Limits the extent of spending of the HR managers
Can provide an argument for not paying sums

Corporate Image:
A bad corporate image may harm its commercial performance
A good corporate image can have a competitive advantage from high
stakeholder self-esteem
Coordination with marketing will ensure positive news stories can be reported

Values of Using Workforce Plans:

Allows for interpretation of HR with the firm
Encouraging managers to think of that most efficient and effective responses
Opportunity to consult other managers
Can assess objectives to see if they are feasible

The Plans Value:

Depends on forecast accuracy
Economy may perform differently than expected
Competitors may alter their behaviour or new competitors emerge
The further into the future the plan extends the less value it holds

Employer Branding:
Brett Minchington
Creating the image of the firm as a great place to work in the minds of key
Lets firms compete effective recruitment, engagement and retention polices
It is how a firm presents and sells what it has to offer to both existing and
potential employees
Labour Productivity: Volume of output produced by workers over a given time
Trade Unions: An organisation formed with the objective of protecting and
enhancing the working conditions and economic positions of its members
Induction Training: Provision of jab-related skills and knowledge given to a new
Organisational Structure
The way in which a firm is organised
Sets out:
Routes of communication
What has authority and responsibility
Roles and titles of individuals
The people to whom individual employees are accountable and those
whom they are responsible

Types of Structure:
Formal / Traditional Hierarchy:
Shares decision making throughout the firm
Gives all employees a clearly defined role and establishes their relationship with
other employees
A tall structure with a narrow span of control
Firm will be centralised
Senior managers expect to be treated with respect
Tradition is important
Communication in formal firms is principle downwards and uses established
routes moving down from senior to junior employees
Employees appreciate the possibility for promotion that exists
Departments may attempt to increase their size and prestige rather than acting
for the firms benefit
Decision making can become slower as communication has to pass through
many layers; as can coordinating objectives

Task orientated
Vertical chain of command operated through departments or units and horizontal
project or product teams
Employees can find it confusing having 2 managers because of divided loyalties
Expensive to operate

Entrepreneurial Structures:
Found in firms operating in competitive markets where rapid decisions are
A few key workers at the form of the firm make all the major decisions
Heavily dependent upon the knowledge and skills of the key workers
Frequently used by charismatic and dynamic leaders
Effectiveness depends on:
Quality of management and decision making the core employees
Volume of work

Informal Structures:
Exist where the firm doesnt have obvious structure operate
Operates as a team receiving administrate support from others within the firm
Allows highly trained and motivated employees to organise their own working
lives and to take decisions with a high degree of independence
Lacks coordination and control from senior managers

Accountability and Responsibility:

The extent to which a named individual is held responsible for the success or
failure of particular policy, project or piece of work
Staff should know what authority has been given to them and by whom;
recognition of achievement will produce motivation (Herzberg)
Clear lines of communication can also make managers overcautious in case a
decision turns out badly

Choice of Structure:
Consider a number of factors:
Size of the firm
Nature of the product
Skills of the workforce
Firms strategic objectives
Environment the firm operates in

Adapting Structure in Improve Competitiveness:

Reduction in the number of layers in a hierarchy within a firms structure
It reduces costs
Improved responsive by bringing senior managers and customers close together
Motivates employees further down the hierarchy
Improved communication
Loss of valuable knowledge and experience
Retaining may be maybe
Can lead to intolerable workloads and high level of stress

Centralisation and Decentralisation:

A centralised firm is one in which the majority of decisions are taken by senior
Rapid decision making
Ensures firm is following the objectives
Decentralisation gives greater authority to employees lower down the structure
Allows subordinates to be fully motivated
Reduces workloads of senior managers

Flexible Workforce:
Emerging trends:
Rising number of temporary workers
Part-time working
Self- employment
Contractors and consultants
Full time permanent employees
Flexible firm:
John Atkinson
Core workers are highly qualified and trained, motivated and in permanent
full-time employment
Peripheral workers would only be hired when necessary due to low skills or
high specialism and not required all the time
Annualised hour contracts
Zero hour contracts

Passing of authority to a subordinate within a firm
Senior managers still holds responsibility for making sure job is completed

Works from home for a significant part of their working week
Allows employees greater responsibility for their own week
Reduces stress levels
Costs of firm can be reduced
Employees spend more time working
Once the main financial inducement has gone, the attractiveness of
homeworking is a firm is dismissed
The social dimension of work is important and homeworking removes that
Employees may not work as hard if unsupervised

Finding a person or firm outside the firm to complete part of the production
Reduces labour costs
Firm not have the necessary skills to complete the work to high quality
Communication between outsourced and permanent works may be poor

Global Delayering:
The implementation of a strategy of delayering stretched across many countries
Benefits may be greater than domestic delayering
Forces senior managers in a firm to look closely at and address many other
issues in a firm that may reduce its international competiveness

Teleworking: Working from and is dependent upon technological forms of

Employer-Employee Relations
The Nature and Importance of Communication:
Theory of Communication:
Communication is the transfer of information between people
A transmission mechanism is the means by which one communicates
Sender: body who commences the process
Message: the information the body wishes to send
Medium: way in which the message in communicated
Audience: target group
Feedback: analysing the number of people who respond
Internal communication is between individuals or groups within the firm
External communication is between firm and another organisation
Formal communication is the exchange on information and ideas within and
outside a firm using official channels
Informal communication takes place outside the official channels of a firm
The role of managers is to communicate with all stakeholders
Great quality communication has benefits
Encouraging and listening to the views and opinions of all employees with
feedback should improve motivation
Provides a greater understanding of differences in cultures and onions within a

Managing Communication with Employees:

Communication Mediums:
The method of communication will depend upon the circumstances and nature of
the firm
Electronic mail
Video conferencing

Issues in Communicating With Employees:

Operating the nature of effective communication information needs to flow in
both directions to allow for feedback
Using the appropriate management style offers employees the chance to
participate in decision making and encourages communication
Adopting the structure to encourage effective communication allows employees
greater control of their working lives and authority encourages communication at
all levels in the firm

Barriers to Effective Communication:


Collective and Individual Bargaining:

Collective Bargaining:
Negotiations between management and employees representation over pay and
other conditions of employment
The terms of negotiations are binding upon the entire workforce
Employment Relations Act 2000:
Trade unions with 50% of a firms workforce can demand union recognition
More than 10% can call for a ballot that needs support from 40% to

Individual Bargaining:
Enterprises seeking to make the most effective use of each and every member of
the workforce
Workers may be paid according to their contribution
Developing workers to encourage them to make the maximum contribution
Most commonly used when employees have substantial skills and are able to
negotiate on their own
Pay is determined by 1 or 2 systems:
Pay reviews
Management decisions

Method of Employee Representation:

Trade Unions:
An organisation of workers established to protect and improve economic position
and working conditions of its members
Organised on a region basis
Maximising pay
Achieving safe and secure working conditions
Attaining job security
Participating in and influencing decisions in the workplace
Higher social security benefits
Improved employment legislation
Improved quality of provision by the NHS
Protecting members interests over issues
Negotiate pay and conditions
Provide members with personal services
Communication link between management and employees
Professional negotiation on employees behalf
Employee Benefits:
Negotiation of pay and conditions
Protection from unsafe working conditions
Associate services

Employer Benefits:
Communication link between management and employees
Saves time as management dont need to speak to each individual
Lesser likelihood of disputes occurring
Makes employees view manager as more democratic and creates an
atmosphere of mutual trust

Works Council:
A forum within a firm where workers and management meet to discuss issues
such as working conditions, pay and training
Elected representatives
All UK employers with 50 or more staff are obliged to keep employees regularly
Form of industrial democracy

Other Types:
Factory / Office Committee: Elected by workforce as well as employers
Staff Association: operate on behalf of a single firm or port of a larger firm

Methods of Avoiding and Resolving Industrial Disputes:

Industrial Disputes and Industrial Action:
Industrial disputes is a disagreement between an employer and its employees
Industrial action is a measure taken by employee groups meant to reduce the
firms productivity:
Work to rule
Sit in
Go slow

Methods of Avoiding Industrial Disputes:

A No-Strike deal is an agreement between employers and unions whereby in
return for a pack and conditions package the union agrees to refrain from strike
for a period of time
Unions will look less confrontational and improve their public perception
and attract new members
Single Union agreements is when an employee agrees to be represented by one
Advisory, Conciliation and Arbitration Service is an independent body established
Prevent and resolve industrial disputes
Resolve individual disputes over employees rights
Provide impartial information and advice
Improve the understanding of industrial relations
Improve work practices to reduce the possibility of disputes

Damage of Industrial Disputes:

Damage for business:
Loss of sales and profit
Damage to customer satisfaction
Damaged relationship with staff

Damage for Employees:

Loss of pay
Potential loss of job
Risk of legal action

Methods of Resolving Industrial Disputes:

Legislation introducing tougher requirements would be more effective and

Procedure for the settlement of disputes, under which the parties agree to be
bound by the decision of an arbitrator
Arbitration Act 1950/96
Non-Binding Arbitration: A neutral 3rd party makes an award to settle the dispute
that can parties can accept or not
Binding Arbitration: The parties have to take the award of the arbitrator
Pendulum Arbitration: A binding form where the arbitrator has to completely side
with one party

An independent, impartial mediator helps two or more individuals or groups
reach a solution thats mutually acceptable
Restore and maintain employment relationship if possible
Not legally binding

Resolving individual or collective disputes in which a neutral 3 rd party encourages
the continuation of negotiation and the postponement of industrial action in the
hope a compromise will be reached
The fact the conciliator has no direct claim weakens their power and the fact
they may intervene creates delays as parties hope they will be favoured
Employment Tribunal:
An informal court room where legal disputes can be settled
3 Members:
Legally trained chairperson
Employer representation
Employee representation