2.1. Functions and evolution of HRM

Human Resource planning (workforce planning)

HRM is the process of evaluating an organization’s human resource needs, finding people to fill those needs, and getting the best work from each employee by providing the right incentives and job environment. It has the overall aim of helping an organization achieve its goals.

Why is HRM important?

Particular benefits of HRM are:

• Increased productivity: developing employee skills might make employees more productive
• Enhanced group learning: employees work more and more in multi-skilled teams
• Reduced staff turnover: training and developing staff often reduces turnover rates. This increases the effectiveness of operations and profitability as staff become more experienced.
• Encouragement of initiative: organizations can gain significant advantage from encouraging and exploiting the present and potential abilities of the people within them.

Human Resource Management

HRM is based on the assumption that the management and deployment of staff is a key strategic factor in an organization’s competitive performance. HRM requires top management involvement and the promotion of culture and values, so that employees’ commitment as opposed to their consent is obtained.

Tyson and Fell

Tyson and Fell suggest four major roles for human resource management which illustrate the shift in emphasis to the strategic viewpoint:

a) To represent the organization’s central value system (or culture)

b) To maintain the boundaries of the organization (its identity and the flow of people in and out of it)

c) To provide stability and continuity (through planned succession flexibility and so on)

d) To adapt the organization to change

The Human Resource Cycle

A common approach to viewing HR is as a five-stage cycle of recruitment, selection, induction, appraisal/training/development and termination. Another relatively simple model that provides a framework for explaining the nature and significance of HRM is the human resource cycle.

Labour Turnover

Labour turnover (or “staff turnover” as it is sometimes called) is all about employee retention - i.e. the ability of a business to convince its employees to remain with the business.

Labour turnover is defined as the proportion of a firm’s workforce that leaves during the course of a year. The formula for calculating labour turnover is, therefore:

Types of Training

Human Resource development

Human resource development is the process of extending personal abilities and qualities by means of education, training and other learning experiences. The overall purpose of employee and management development include:

● Ensuring the organisation meets current and future performance objectives by

● Continuous improvement of the performance of individuals and teams, and by

● Maximising people’s potential for growth and promotion.

Training and the Organization

The benefits for the organization of training and development are outlined in the following table;

Benefit

• Minimise the learning costs - training and development programs ensure staff, and the organization as a whole, have the skills required to deliver the business strategy
• Lower costs and increased productivity - correlation between training and productivity
• Fewer accidents and better health and safety - EU health and safety directives require a certain level of training
• Less need for detailed supervision - training is an aspect of empowerment
• Flexibility - training ensures that people have the variety of skills needed -multiskilling
• Recruitment and succession planning - training and development attracts new recruits and ensures that the organization has a supply of suitable managerial and technical staff to take over when people retire
• Change management - training helps organizations manage change by educating them about the change and equipping them with the skills to implement it successfully
• Corporate culture - can be used to build a culture or direct it in a certain way (values guidance)
• Motivation - training programmes can increase commitment to the organisation’s goals

Training and the employee

Benefit

• Enhances portfolio of skills - Employee becomes more attractive to employers and more promotable
• Psychological benefits - The trainee might feel reassured that they are of continuing value to the organization.
• Social benefit - People’s social needs can be met by training courses – they can also develop networks of contacts
• The job - Training can help people do their job better, thereby increasing job satisfaction

Possible shortcomings of training

Training is not always the answer to performance related problems.

• It is irrelevant to problems caused by faulty organization, layout, methods, equipment, employee selection and placement.
• Cost, time, inconvenience, apathy and unrealistic expectations of training in the pat may restrict its effectiveness
• Limitations imposed by intelligence, poor motivation and the psychological restrictions of the learning process also restrict its effectiveness.

Cognitive Training

Attempt to give training within a theoretical context. The various methods under the cognitive approach provide the rules for how to do something, written or verbal information, demonstrate relationships among concepts etc. Focus is on changes in knowledge and attitude by learning.

Methods that come under Cognitive Approach

1. Lectures

2. Demonstrations

3. Discussions

4. Computer-based Training (CBT)

Behavioural Methods

Attempt to give more practical training to the trainees. The various methods in this method allow the trainee to behave in a real fashion. These methods are best used for skill development.

Methods that come under behavioural methods

1. Games and simulations

a) Business games

b) Role plays

c) In-basket techniques

d) Equipment simulators

e) Case studies

Evaluating Training

Validation of training means observing the results of the course and measuring whether the training objectives have been achieved.

Evaluation of training means comparing the actual costs of the scheme against the accessed benefits which are being obtained. If the costs exceed the benefits, the scheme will need to be redesigned or withdrawn.

a) Trainees’ reaction to the experience: course assessment sheets completed after training can ask trainees whether they thought the training programme was relevant to their work and whether they found it useful.

b) Trainee learning: measuring what the trainees have learned on the course by means of a test at the end of it. A further test can be taken some time after the course to see if the trainee has retained the knowledge learnt.

c) Changes in job behaviour following training: this is relevant where the aim of the training was to learn a skill

d) Organizational change as a result of training: finding out whether the training has affected the work or behaviour of other employees not on the course.

e) Impact of training on the achievement of organizational goals: seeing whether the training scheme has contributed to the achievement of the overall objectives of the organization

f) Trainer assessment: the trainer can complete an assessment that identifies gaps in trainee knowledge or other deficiencies

g) HR review: human resources employees can conduct a critical review that evaluates the training using a range of information to see if the organization’s objectives for the training have been met.

Appraisal and types of appraisal

Appraisal is the systematic review and assessment of an employee’s performance, potential and training needs.

Why are appraisals needed?

Employee appraisal can be viewed as a control tool as it aims to influence employee behaviour and maximise utilisation of the organization’s human resource. The process of appraisal is designed to review performance over the past period and improve it in the future.

Appraisals are needed for a number of reasons

a) Managers and supervisors may obtain random impressions of employees’ performance but rarely form a coherent, complete and objective picture.

b) They may have a fair idea of their employees’ shortcomings but may not have devoted time and attention to the matter of improvement and development.

c) Judgements are easy to make but less easy to justify in detail, in writing or to the subject’s face

d) Different assessors may be applying a different set of criteria, and varying standards of objectivity and judgement. This undermines the value of appraisal for comparison, as well as its credibility in the eyes of the appraisee.

e) Unless stimulated to do so, managers rarely give their staff adequate feedback on their performance.

Appraisal Techniques

Self-appraisal

1. It saves the manager time as the employee identifies the areas of competence which are relevant to the job and their relative strengths in these competences.

2. It offers increased responsibility to the individual which may improve motivation.

3. This may be a way of reconciling the goals of both the individual and the organization

4. It may overcome the problem of needing skilled appraisers, therefore cutting training costs and reducing the managerial role in appraisal.

5. In giving the responsibility to an individual, the scheme may offer more flexibly in terms of timing, with individuals undertaking ongoing self-evaluation.

However, people are often not the best judges of their own performance. Many schemes combine the two – the manager and subordinate fill out a report and compare notes.

Upward appraisal

Here employees are not rated by their superiors but by their subordinates. The followers appraise the leader.

● Subordinates tend to know their superior better than superiors know their subordinates

● As all subordinates rate their managers statistically, these ratings tend to be more reliable – the more subordinates the better (gives a more representative view)

● Subordinates’ ratings have more impact because it is unusual to receive ratings from them. Information that flows up the hierarchy may be different to that which flows down – this quality makes the information worthy of attention.

Problems with the method include fear of reprisals, vindictiveness, and extra form processing. Some bosses in strong positions might refuse to act, even if a consensus of staff suggested that they should change their ways.

180/360 degree appraisal

180 degree appraisal involves the manager obtaining feedback from the appraisee’s colleagues and peers. It may be used as an alternative to, or in addition to, feedback received from the appraisee’s supervisor. The use of 180 degree appraisal gives a wider picture than simply relying on the individual’s supervisor. It may also prevent the supervisor from providing unfair feedback on the appraisee because they know the manager will also obtain feedback from others.

360 degree appraisal involves taking downwards, upwards and customer appraisals together – so it involves the collection of feedback on an individual’s performance from a range of sources. Sources may include:

● The person’s immediate manager

● People who report to the appraisee perhaps divided into groups

● Peers and co-workers. Most people interact with others within an organisation, either as members of a team or as the receivers or providers of services. They can offer useful feedback

● Customers. If sales people know what customers thought of them, they might be able to improve their technique.

● The manager personally – all forms of 360 degree appraisal require people to rate themselves.

Interviews and Counselling

The extent to which any discussion or counselling interview is based on the written appraisal report varies in practice.

Maier (The Appraisal Interview) identifies three types of approach to appraisal interviews

a. The tell and sell method: the manager tells the subordinate how they have been assessed and then tries to sell the evaluation and the improvement plan.

b. The tell and listen method: the manager tells the subordinate how they have been assessed, and then invites the subordinate to respond.

c. The problem-solving approach: the manager abandons the role of critic altogether, and becomes a counsellor or help. The discussion is centred not on the assessment, but on the employee’s work problems. The employee is encouraged to think solutions through, and to make a commitment to personal improvement.

Outsourcing, off shoring and re-shoring as human resource strategies

Outsourcing

HR outsourcing is when you hire another company to manage your HR responsibilities rather than dealing with them in house. This frees up personnel hours and allows you to focus on what’s really important – running and developing your business. But as with outsourcing any other business process, HR outsourcing has its pros and cons.

See https://www.personneltoday.com/hr/hr-outsourcing-hro-an-in-depth-guide/

Ethics and HR

Ethical behaviour

Ethics refer to a code of moral principles that people follow with respect to what is right or wrong.

Ethics in business is ‘the application of ethical values to business behaviour’. Businesses have ethical values, based on the norms and standards of behaviour that their leaders believe will best help them express their identity and achieve their objectives.

Issue of Trust

Whatever the situation, there is a public expectation that organisations will act ethically. This is known as the ‘trust me’ model and was the case for many years when most businesses were owned by families. The model changed to ‘involve me’ as more evidence is needed of an organisation’s ethical credentials.

In recent times trust in businesses has fallen and increasingly more evidence is required to demonstrate it. In an attempt to counter this lack of trust, many corporations developed ethical strategies and policies to provide guidance and training to their employees. The strategy is set by the leadership and feeds into all areas of the business, becoming part of the cultural DNA of the organisation.

Social Responsibility Policies and Reports

CSR policies explain the organization’s approach to helping the community and reducing the environmental impact of the organization. CR reports include figures and statistics covering areas of the organization’s carbon footprint and impact on the environment. These can be added to more conventional assessments such as staff turnover to provide a wide ranging picture of the organization.