People - HRM

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Human Resource Management - Text Book
What is Human Resource Management?
HRM views activities relating to the workforce as integrated and vital in helping the
organisation to achieve its corporate objectives. People are viewed as an important
resource to be developed through training. Thus, policies relating to recruitment, pay
and appraisal, for example should be formulated as part of a coordinated human
resource strategy. HRM aims to make the best use of human resources in relation to the
businesses overall gaols. HRM involves a strategic planning of the management of
In comparison, personnel management considers the elements that compromise managing
people (recruitment, selection, wages and so on) as separate elements. It does not take
into account how these parts combine to assist in the achievement of organisational
objectives. At its simplest, personnel management within a business carries out a series
of unrelated tasks.
In spite of the potential benefits, many firms do not engage in human resource planning
and management.
Why have firms adopted HRM?
A number of factors has persuaded UK businesses to implement HRM.
A principle argument is that the Japanese have had apparent success in managing
people using this technique. The Japanese have been seen to gain significant
competitive advantage from managing a human resource that produces high quality
products at minimum costs. It is human resource management that is credited with
achieving this match between employee behaviour and organisational objectives.
Changes in the organisational structure have led to many managers taking on the
responsibility for managing people within the organisation. Techniques such as
delayering and having empowered teams have been an integral part of the
implementation of HRM. Acquiring, developing, motivating and rewarding employees
are it is argued best done by managers and colleagues close to the employees in
question. Under HRM managers can carry out many of the more routine tasks of
traditional personnel management.
The increasing popularity of psychological approaches to motivation has
encouraged the adoption of HRM. Human resource management demands 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 HRM ­ organisations that adopt these techniques and
structures would naturally move towards HRM.
Types of Human Resource Management
Many companies have opted to select only elements of the HRM package that fit in with
the philosophies, management style and corporate objectives. For example a firm might
choose to implement rigorous selection and appraisal methods but ignore other aspects
particularly developing employees through training.
There is not a single HRM policy. Different firms have interpreted the philosophy in
different ways.
Hard HRM
some firms operate hard HRM 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 disposed of when necessary

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Soft HRM
Other firms use a soft HRM. This approach is based on the notion that employees
are perhaps the most valuable assets 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.…read more

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Once this comparison is complete the firm can decide upon policies (e.g.
recruitment, training, redeployment, & redundancy) necessary to convert the
existing workforce into the desired one.
The plan will specify how the business will implement it human resource policies. An
important element of the plan is a skills audit to identify the abilities and qualities of
the existing workforce. This may highlight skills and experience of which managers were
unaware.…read more

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Production may become capital intensive requiring fewer employees with greater
skills. Alternatively a business might wish to give employees more responsibility for
production as it adopts total quality management. This may require the workforce
plan to prepare for delayering and empowerment.
4. Financial Constraints
Workforce planning operates within tight financial guidelines. Training, recruitment,
redeployment and even redundancy are expensive. Firms operating a soft approach to
HRM may be prepared to grant a larger budget for workforce planning as they seek
to develop their employees.…read more

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In a business environment subject to an increasingly rapid change, a number of factors
influence businesses in the design of their reward systems for employees. Managers and
shareholders expect that the reward system will prove cost effective. Bonuses should
encourage employees to work harder and strive to meet corporate objectives, not just
be payment for work they would have completed anyway.…read more

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Since the implementation of the minimum wage employers have faced additional
problems in using piecework systems. Employers using piecework have to ensure
that their employees earn at least the minimum wage rate per hour.
Wages & Salaries
Wages are paid weekly and expressed as a weekly sum, while salaries are paid
monthly and stated as an annual figure.
Fringe Benefits
Fringe benefits are often referred to as `perks'; they are extras that an
employee receives as part of their reward package.…read more

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Share Ownership
This can be a development of profit sharing schemes. Some businesses pay their
employees share of the profits in the form of company shares.
Under share options managers have the opportunity to buy company chares at
some agreed date in the future, but at the current share price. So if the price of
the shares raises it will allow managers to buy them at a discounted price and sell
them on and make a profit.…read more

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Absenteeism = Number of Staff Absent (on one day) _ X 100
Total Number of Staff
Absenteeism occurs for a variety of reasons including industrial accidents and illness.
The term is frequently used to describe a situation where an employee is absent from
work frequently and without good reason. 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 costs.
3. Labour Turnover
Labour Turnover = No.…read more

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Such employees should be aware of the goals of the organisation and understand
how they can contribute towards the attainment of them.
Under this scenario a business should incur less recruitment costs, enjoy higher levels of
productivity and a reduction in faulty products. It may attract top class applicants to
vacancies because of its reputation as a caring and enlightened employer. All of these
factors should make the organisation more competitive and better able to cope with the
rigors of operating in international markets.…read more

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Human Resource Management ­ Class Notes
Key Terms
Personnel Management
Personal management is the range of tasks necessary to administer to a
business's employees (short term) for example, recruitment, training, the welfare
and discipline of the staff.
Human Resource Management (HRM)
HRM is the process of making the most efficient use of business employees (long
Workforce Plan / HR Plan
Before a business recruits or trains employees it must establish future labour
needs.…read more


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