1. Human Resource Management
Employees are an important component of every business. Realization of this fact was behind the rise of personnel management, the specialized task of ob-taining the people a company needs and then overseeing their trading, evaluation, and compensation. In the 2010 top management also began to realize that, with the right jobs, businesses can compensate for short-falls in other areas. The term human resource management was adopted by many companies to reflect the attitude that workers are of strategic importance; human resource managers became integral members of management teams plotting a course through rough economic seas. Many companies focus on the training and supervision of their managerial employees so that they have the resources they need for steady growth.
Human resource management is becoming more complex and crucial as the 1990s approach. Technology and the business environment are changing at an accelerating pace, creating mismatches between workers skills and employers needs. Human resource managers must figure out how to keep good workers when economic difficulties make pay freezes necessary; how to lay off workers equitably; how to retrain workers to enable them to cope with increasing automation and computerization, how to deal with increasingly complex (and expensive) employee benefits, such as pensions and health insurance; how to encourage employees to work more productively; and how to cope with the challenge of equal opportunity in employment. Given the growing importance and complexity of human resource problems, it is scarcely surprising that all but the smallest businesses employ specialists to deal with them.
What exactly do human resource department do? Every human resource staff must perform this series of functions: planning, recruiting and selecting employees, training and developing workers, and appraising employment performance. A human resource staff gets involved in accommodating changes in employment status and in administering pay and employee benefits.
2. Internal and External Recruitment
Firms may recruit internally through promotion or redeployment of existing employees. This offers benefits:
- it is cheaper as it avoids the need for expensive external advertising,
- candidates will have experience of the business and may not require induction training,
- selection may be easier as more is know about the candidates. However, problems exist in recruiting internally.
- selection is from a smaller pool of available labour and the caliber of candidates may be lower. This can be significant for senior appointments,
- difficulties can result if employees are promoted from within former colleagues may resent taking orders from those they formerly worked along-side.
Managers may be keen to have a wider choice of candidates and therefore advertise externally. The advantages of this approach are:
- it is likely that higher quality candidates will be available following external recruitment even if advertisements are only placed in local media,
- external candidates will bring fresh ideas and enthusiasm into the business.
The personnel department prepares the necessary documentation for the recruitment process.
Job adverts contain the following information:
- the job title
- some description of duties
- the name of the business
- possibly salary and working hours.
The advert may be local for a relatively unskilled job. Highly skilled and professional positions might require advertising nationally or even internationally.
Job descriptions may act as the basis for drawing up the advert for the post and relate to the position rather that the person. Typically, job descriptions contain the following information:
- the title of the post
- employment conditions
- some idea of tasks and duties
- to whom employees are responsible
- likely targets and standards employees are expected to meet.
Person or job specifications
Person or job specifications set out the qualifications and qualities required in an employee. The list might include:
- education and professional qualifications required
- character and personally traits expected
- physical characteristics needed
- experience necessary.
Recruitment can be an expensive exercise but is less costly than appointing the wrong employee and perhaps having to repeat the process.
Because of the costs involved in recruiting the wrong people, firms are investing more resources and time in the recruitment process. A number of techniques of selection exist:
- interviews remain the most common form of selection and may involve one or two interviewers or even a panel interview. Interviews are relatively cheap and allow the two-way exchange of information but are unreliable as a method of selection. Some people perform well at interview, but that does not necessary mean they will perform well when in the post,
- psychometric tests reveal more about the personality of a candidate than might be discovered through interview. Questions are frequently used to assess candidates management skills or ability to work within a team,
- aptitude tests may provide an insight into a candidates current ability and potential. Such tests can also be used to assess intelligence and job-related skills.
5. Measuring employee performance
Managers need to measure employee performance in an objective way for the following reasons:
- to assess the efficiency (and competitiveness) of the workforce,
- to assist in developing the workforce plan,
- to confirm that the businesss human resource planning is contributing directly to the achievement of the corporate objectives. One of the factors influencing an organizations workforce plan is the performance of its exiting employees. This will highlight the need for training, further recruitment or, perhaps, redundancy or redeployment. There are a number of ways a business can assess the performance of its current labour force.
If workers are producing a similar or greater amount each day, weekly or month than employees of rival businesses, then productivity may be satisfactory. However, such comparisons may be simplistic: factors such as wage rates, the level of technology and the way the labour turnover could be caused by many factors:
- inadequate wage levels leading to employees defecting to competitors
- poor morale and low levels of motivation within the workforce
- the selection of the wrong employees in the first place, meaning they leave to seek more suitable employment
- a buoyant local labour market offering more (and perhaps more attractive) opportunities to employees.
Injuries and illness can be genuine causes of absenteeism. However, other more potentially damaging causes exist. Low morale, poor working conditions, inadequate training and stressful demands may all lead to employees taking time off, absenteeism is expensive as quality and productivity can suffer and overtime payments may be necessary for absent employees.
6. Financial methods of motivation
In spite of the belief of some writers, such as Herzberg, that money is not а positive motivator (although lack of it can demotivate), рау systems are designed to motivate employees.
a) Piece-rate рау.
Piece-rate рау gives а payment for each item produced. This system encourages effort, but often at the eкpense of quality. Piece rate is common in the agriculture and textile industries but is difficult to аррlу in service industries.
Commission is а payment made to employees based on the value of sales achieved. It can form а11 part of а salary package.
с) Profit-related рау.
Profit-related рау gives employees а share of the profits earned by the busness. This is an approach adopted by the John Lewis Partnership. It encourages аll employees to work hard to generate the maximum profits for the business. It offers firms some flexibility: for ехаmрlе, in less prosperous times, wages can fall along with profits, so reducing the need for redundancies.
d) Performance-related рау.
Performance-related рау is а topical but controversial technique used in many industries from teкtiles to education. It needs to be tied into some assessment or appraisal of еmрlоуее performance. Whatever criteria are used to decide who should receive higher рау, the effect can be divisive and damaging to еmрlоуее morale.
е) Share ownership.
Employees are offered shares in the company in which they work. ASDA operates such а scheme. Shares сan be purchased through savings schemes (e.g. by shop-floor employees putting aside а few pounds each week). Share options offer senior managers the opportunity to purchase shares in the company at а discounted price at an agreed future date. However, share ownership mау cause discontentment if this perk only available to the privileged few.
In general` terms, appraisal is used to assess еmрlоуее performance. Appraisal usually takes the form of an interview with the individua