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Human Resource Management

Human Resources

Managing employee relationships is the role of the Human

Resource department
Human Resource Management is a process of valuing and
developing people at work, this includes:

Recruitment and selection

Employee communication and engagement (participation) to increase
employee retention
Training and development

Labour turnover & staff retention

Labour turnover & staff retention

Labour turnover refers to the proportion of a

workforce that leave during a period of time (usually
one year)
Labour turnover = number of staff leaving during the period x 100
average number of staff

Staff retention refers to the ability of a firm to keep its


Reasons for high labour turnover

Poor leadership and management leading to low

Lack of training and development
Few opportunities for career progression
Ineffective recruitment and selection procedures
leading to inappropriate workers being appointed
Poor working conditions
Poor communication

Drawbacks of high labour turnover

The disadvantages of having a large proportion of staff

leaving each year include:
The cost of recruiting replacement workers
The cost of training the new workers
Loss of productivity whilst replacements are found
Loss of experienced workers
Negative impact on reputation

Improving staff retention

Financial methods of motivation e.g.

Profit share
Fringe benefits

Non financial methods of motivation e.g.

Employee engagement and empowerment

Training and development
Promotion opportunities

Improved Human Resource Management procedures

Training and development

Training and development

Training provides work related education which

helps employees to acquire the knowledge and skills
needed to carry out their jobs
Development helps workers develop and broaden
their capabilities to assist their career progress.

Importance of T&D

A well trained workforce leads to:

Greater productivity
Good quality products and services
More motivated staff
Lower labour turnover and absenteeism
Greater ability to deal with change
More flexibility

Leadership styles

Leadership & management



The act of establishing direction,

purpose and the necessary
capabilities among a group of

Organising human and physical

resources to achieve business aims
and objectives

Leaders have certain qualities such

The ability to influence others

Managers perform a range of

functions such as:
Setting objectives
Co-ordinating activities
Reviewing performance

According to Peter Drucker:

Management is doing things right; leadership is doing the right things.

Autocratic (authoritarian)
Features of autocratic management:
The manager retains control and takes all the decisions
There is little consultation with workers
Subordinates are expected to obey instructions


Autocratic management allows

quick decisions to be made
Often necessary during crisis
Can ensure that the direction of
the organisation remains in line
with organisational objectives

Workers may become dependent

on the managers
Little creativity is encouraged
Employees may not be given the
opportunity to express their ideas
May lead to workers feeling
ignored or demotivated

Features of democratic management:
Employees are encouraged to participate in and influence decision
making e.g. through suggestions schemes, quality circles and worker
Information is shared with team members
A single-status culture is encouraged


Democratic management can gain

commitment, especially during
periods of change
Employees are more likely to buy
into decisions
Motivation may improve

Decision making can become


Features of laissez-faire management:
Little direction is given to the workers
Broad guidelines may be provided but the day-to-day influence of
managers is limited
Subordinates are free to make decisions


Useful for skilled, creative and

well-trained employees
Can motivate workers as they have
more control over their working

Decision-making can become very

time-consuming and may lack
May lead to chaos if good
teamwork, feedback and working
relationships are not evident


What is communication

Communication refers to the transmission of

information from a sender to a receiver, via a given
Two-way communication involves some kind of
feedback from the receiver back to the sender.

Importance of effective communication

Effective HRM requires effective communication for:

Business decision making without the relevant
information decision making can be hindered
Motivating workers and creating employee
engagement through two-way communication
Co-ordinating the activities of workers
Developing workers to progress their career within
the business

Methods of communication
Within businesses a huge range of information is
communicated using a range of methods e.g.
The financial performance is communicated through
formal, written reports
Instructions are passed through face-to-face
Information is sent via email or shared using an
internal intranet system

Classifying communication
Verbal e.g. face-to-face and telephone conversations.

Understanding may be checked straight away and body

language may be used, but there is no permanent record
of the communication for future reference
Written e.g. letters and emails. Written communications
can be kept and re-read if necessary however meaning
can sometimes be misconstrued as it is not possible to
check understanding or convey any body language
Visual/Images e.g. signs and posters. Visual
communications may have more impact than written

Classifying communication
Internal communication occurs within the firm

e.g. between the marketing and finance departments

External communication occurs between the firm
and someone outside the business e.g. with a
customer or supplier
Formal communications these use methods
which are officially recognised by the organisation
e.g. the weekly newsletter, letters and reports
Informal communications these methods are not
officially recognised e.g. a chat by the water cooler

Problems of poor communication

Poor communication can lead to:
Low morale and poorly motivated workers

implementing change
Lack of overall direction for the firm
Slow decision making
Pressures from stakeholders who wish to be kept
Missed opportunities.