Unit 6: AS Business Studies Notes


Unit 6: Chapter 20: Setting Human Resource Objectives 

Remember: the four business functions are marketing, operations, finance and human resources.

HR objectives often contain a numerical element and a timescale. Managers responsible for HR will set the target, it will be consistent with other functional objectives and contribute to the achievement of overall corporate objectives. 

It is beneficial for businesses to set HR objectives. One, the performance of the business can be judged (e.g. product quality, productivity, customer feedback). Two, a measurable target of employee performance can be motivating. Thirdly, many businesses are judged by employee performance to meet customer expectations which also is good for publicity. Finally, using objectives helps managers to identify areas where there’s issues quickly. 

Employee performance is a vial competitive weapon for many service businesses in particular. Businesses with employees offering better service to customers will offer greater value, potentially higher prices and use that as a USP. Clear HR objectives must be set so the employees are good and in the right places with correct values. 

There are many types of HR objectives. 

  1. Labour Productivity

Relating to product quality that employees produce, on average, over a time period. These are widely used but more commonly in manufacturing/construction industries. These objectives assist in controlling costs, employees being efficient will lower average costs which enhances business price competitiveness.

  1. Number and Location of Workforce

Labour needs of a business will change over time. A difference workforce will be required - whether a business moves overseas, using more tech, new products. 

This objective is essential, a business needs enough employees to meet needs and provide best quality. Having the right amount of employees can be difficult, especially for businesses facing seasonal demand. 

Technology developments have influenced objectives for location. 

  1. Employee Engagement and Involvement

Employee engagement describes the connection between employees and its mission, goals and objectives. The CIPD define it as “being positively present during the performance of work by willingly contributing intellectual effort, experiencing positive emotions and meaningful connections to others.” 

Therefore CIPD believe there’s three dimensions to employee engagement.

  • Intellectual engagement (how to do job better)

  • Affective engagement (feeling good about doing good)

  • Social engagement (taking the chance to talk about work improvements with others)

Employee involvement as an objective seeks employees contributing to improving their business continuously. It is normally manager initiated. It takes various forms - considering employee ideas/opinions or employee representatives. Objectives in this area are intended to improve employee performance, likely set by a democratic leader and ‘soft’ HRM approach.

  1. Training

Training is a process where an employee gains job-related skills and knowledge. It may add to costs, but it is beneficial, resulting in improved performance and can attract the best staff.

Rapid technology developments mean training as a HR objective is more relevant, staff need to know how to work following changes.

  1. Talent Development 

This differs from training. Talent development focuses on fulfilling employee potential so they can shape future business performance. Research