The learning outcomes (or assessment objectives) for this section of the IB Business Management syllabus are:
Role of human resource management (AO2)
Internal and external factors that influence human resource planning (for example, demographic change, change in labour mobility, immigration, flexi-time, gig economy) (AO2)
Reasons for resistance to change in the workplace (AO2)
Human resource strategies for reducing the impact of change and resistance to change (AO3)
AI Mindmap Brainstorm: The role of human resource management in business
What is Human Resource Management?
Video (10:56): https://youtu.be/bI9RZjF-538?feature=shared
Try to write a definition of human resource management
Compare your definitions with these. Would you change your answer?
Kognity: "The business function that involves recruitment, training, compensation and motivation of employees to meet business objectives."
Another Textbook: “HRM is a broad term used to describe the overall management of an organization's workforce, e.g. attracting, selecting, training, assessing, rewarding and retaining workers.”
Investopedia: “Human resources (HR) is the division of a business that is charged with finding, recruiting, screening, and training job applicants. It also administers employee benefit programs.”
Activity: Charades of the functions of Human Resource Management:
Workforce Planning
Recruitment and Selection
Training and Development
Appraisals / Performance Management
Pay and Remuneration
Discipline and Grievances
Employee Welfare
What internal factors influence human resource planning?
What external factors influence human resource planning?
Why are people resistant to change?
Activity: Skit
It is now mandatory to:
1) buy school lunch or 2) clean the school
How can we help people accept change?
Education and Communication
Participation and Involvement
Facilitation and Support
Negotiation and Agreement
Manipulation and Co-Option
Explicit and Implicit Coercion
Questions A, B, C, D, (E is optional)
Questions A, B, C, D, E, (F is optional)
What you should know
By the end of this subtopic, you should be able to:
define the following terms: (AO1)
human resource management
workforce planning
demography
ageing population
recruitment
training
appraisal
dismissal
redundancy
labour mobility
immigration
flexitime
gig economy
unemployment
explain the role of human resource management (AO2)
distinguish between the internal and external factors that influence human resource planning (such as demographic change, change in labour mobility, immigration, flexitime and gig economy) (AO2)
analyse the reasons for resistance to change in the workplace (AO2)
examine human resource strategies for reducing the impact of change and resistance to change (AO3)
https://quizlet.com/_c30s9s?x=1qqt&i=4jrhob
https://www.gimkit.com/view/633ce20241ca190021e3385e
Ageing population
A higher average age of the population.
Appraisal
An assessment of an employee's performance; can take many forms.
Demography
The statistical study of population trends, such as birth rates, death rates, age distribution, and net migration rates.
Dismissal
The employer’s decision to terminate a worker’s employment contract, usually due to the worker’s incompetence and/or a breach of their employment contract.
Flexitime
A form of flexible work practice that enables employees to work a set number of core hours each week, often at the office during peak periods of the day and/or week.
Gig economy
Labour markets in which people are on short-term, impromptu, temporary contracts. This includes freelance worker and independent contractors.
Human resource management
HRM is a broad term used to describe the overall management of an organization's workforce, e.g. attracting, selecting, training, assessing, rewarding and retaining workers.
Human resource planning
Activities that managers engage in to forecast their current and future needs for human resources
Labour mobility
Measures the extent to which workers have the ability and willingness to move between geographical locations and/or occupations for their employment.
Immigration
The movement of people from one country to another country for residence.
Redundancy
Occurs when an organization no longer has a job for the employee or when the employer can no longer afford to hire the employee, i.e., the job ceases to exist.
Training
This is the provision of work-related education, either on-the-job or off-the-job, such as instructing and teaching (or mentoring) employees how to perform certain tasks in their job.
Workforce planning
Also known as human resource planning, this refers to the ongoing process through which the current and future human resource needs of a business are identified and anticipated.
Recruitment
The process of seeking, finding and hiring people for a position in an organisation.
Unemployment
A situation where a person of working age is able and willing to work, but cannot find or get a paid job.
Human resource management (HRM)
is the function of the management to recruit, train, compensate and develop people employed within the business to meet the aims and objectives of the organisation.
Human resource management (HRM) is a broad term used to describe the overall management of an organization's workforce. This includes roles such as attracting, selecting, training, assessing, motivating, rewarding, and retaining employees. Essentially, the role of HRM is to make the most efficient use of an organization’s workers.
Roles:
Recruitment - hiring the right number of appropriately qualified and suitable workers at the right times to fill job vacancies.
Induction - training for new employees to get acclimatised with the norms and operations of the organization.
Retention - retaining/keeping workers at the organization by meeting the needs of employees.
Appraisals - the formal procedure of assessing the performance and effectiveness of employees in relation to their job description.
Absenteeism - dealing with issues that arise when employees are unable to attend work.
Dismissal - letting go of workers no longer needed, often due to underperformance or misconduct in the workplace.
Redundancies - letting go of workers if/when their jobs are no longer needed, perhaps due to a prolonged economic recession.
Training and development - improving the competencies, productivity, and skills of workers.
Performance appraisals - holding workers accountable for their performance/conduct at work.
Workforce planning (human resource planning)
involves forecasting how many and what type of employees are needed now and in the future. It's a broad term used to describe the overall management of an organization's workforce.
It is a systematic process that assesses the current and future needs of an organization’s workforce and sets out actions necessary to meet these human resource needs through recruitment, training, financial and non-financial rewards, and organizational structures.
Includes:
Gathering and analysing data about the needs of the organisation. This includes data about the roles and numbers of employees, labour turnover within the organisation and the business objectives.
The human resources department also needs to understand the impact of changes in the external environment on the business and its labour needs.
HR managers play a vital role in ensuring that the right people in the right numbers are hired, at the right time, deployed in the right place and at the right time.
Case Study 1 - The absenteeism costs of the common flu in the USA
The USA spends $10.4bn per year in direct medical expenses - that's around $28,493,150 per day!
The country loses $15.3bn a year from the common flu due to loss of earnings (which is equivalent to 17 million workdays a year!)
Productivity losses amount to more than $21 billion a year (or over $57.53 million per day).
Case Study 2 - Accusations of employee exploitation at iPhone factory
One of the key issues of using an offshoring strategy is the potential for suppliers to exploit workers, especially in parts of the world where labour laws are not so stringent.
In December 2020, it was reported that workers at an iPhone factory in India were being exploited by the Taiwanese-run Wistron Infocomm Manufacturing company, based near Bangalore - India’s IT hub. Workers were said to have smashed glass panels with rods and flipped cars on their side in protest. Local media sources reported that the factory workers claimed to not have been paid for up to four months yet were being forced to do additional shift work. A trade union representative claimed that there was “brutal exploitation” of factory workers in sweatshop conditions at the iPhone factory. Labour activists say the government legislation makes it difficult for workers to strike.
Labour disputes and industrial unrest are not uncommon in India, where many workers are still paid poorly and are provided with few if any social security benefits. Wistron Infocomm Manufacturing said in the statement that it “pledged to follow local labour [laws] and other related regulations”. The factory in India employs around 15,000 workers.
Source: adapted from the South China Morning Post, 13th December 2020
Layoffs Reach Amazon 2022 Q3
Internal Factors:
Internal factors are those within the control of the organization, such as the remuneration (pay and benefits) to its staff. More examples:
Size of the organization – The larger the firm, the more involved it needs to be in human resource planning. Not only do larger firms need to recruit more workers, they are more involved in training, appraisals and other related human resource matters.
Strategic direction of the organization – For example, if growth is a priority, the organization will plan to recruit more workers and internally promote some employees to senior positions.
Organizational structure – A clear organizational structure helps workforce planning. For example, the HR manager can identify vacant positions and jobs that are redundant, thus can plan how best to address these gaps in the firm.
Finances of the organization – Effective workforce planning cannot happen without sufficient funding being available. Growth enables the firm to gain more revenue, which will provide it with the finances to hire and pay for more workers. Training and professional development opportunities for workers also require finance.
Motivation in the workplace – The level of motivation in an organization is an important internal factor affecting workforce planning. The higher the level of motivation, the more productive workers tend to be, and the lower the labour turnover rate. The human resources department needs to keep records of why people leave the organization in order to retain their employees.
Corporate culture of the organization – The culture of the organization affects how the HR department operates. In turn, this influences its approach to HR matters such as working hours, flexitime, teamworking, appraisals, job sharing (where two employees share a single job), training and professional development opportunities, dismissal and redundancies, outsourcing, and the internal promotion of staff.
Case Study: Hiring seasonal staff at the Royal Mail
A real world example of the need to hire seasonal staff is the UK's Royal Mail which hired 33,000 additional workers for the Christmas period in December 2020. The temporary staff worked mainly work in postal sorting offices, delivery (vans) and data centres. These temporary workers helped to provide support to more than 115,000 postmen and women in permanent roles at the Royal Mail.
Although the Royal Mail usually hires additional staff during seasonal peaks, the surge in recruitment of extra workers has also been due to the rise in online shopping, which has been accelerated by the global coronavirus crisis.
External Factors:
External factors are those that are beyond the control of the organization, such as the legal minimum wage or other employment legislation. These external factors include:
Demographic change
Change in labour mobility
Immigration
Flexi-time
Gig economy
1. Demographic change
Demography is the study of population and population trends. Demographic change refers to variations in the structure of the population that influence human resource planning. This might include developments and trends in the population, such as:
Total population
The average age of the population
Distribution of the population by ethnicity
Gender distribution
Educational attainment levels, and
Average household income
Official retirement age in the country.
Better employment opportunities for women
Eg: Retirement age, selected countries
2. Change in labour mobility
Labour mobility measures the extent to which workers have the ability and willingness to move between geographical locations and/or occupations for their employment. Increasing and maintaining labour mobility ensures a more efficient allocation of human resources.
There are two types of labour mobility: occupational mobility and geographical mobility.
(i) Occupational mobility
Occupational mobility refers to the ability and willingness of employees to do another job or pursue a different career. Occupational mobility can be improved if employees have the necessary qualifications, experience and skills to move from one job to another. Occupational immobility occurs due to impediments such as rules and regulations.
Example:
Doctors, accountants, lawyers are limited because need very specialized training and licensing requirements
An increase in remote working has increased labour mobility.
(ii) Geographical mobility
Geographical mobility refers to the ability and willingness of employees to relocate to another location or country for work reasons. Some jobs require their employees to travel long distances for work purposes, such as delivery truck (lorry) drivers, pilots, and sales executives.
Geographical immobility occurs due to the unwillingness of workers to move to another area. Such impediments to geographical mobility include: family ties to a geographic location, relocation costs, lower wages and salaries, fewer benefits, higher property prices, or higher costs of living in the new location.
(i) Occupational mobility
Occupational mobility refers to the ability and willingness of employees to do another job or pursue a different career. Occupational mobility can be improved if employees have the necessary qualifications, experience and skills to move from one job to another.
Example:
Doctors, accountants, lawyers are limited because need very specialized training and licensing requirements
3. Immigration
Migrant workers are people who move to other locations or countries in search of job opportunities.
For example, many people from rural areas move to the cities in search of employment opportunities as well as better-paid jobs.
Many citizens of one country temporarily work in another country.
Examples
Teachers working overseas in international schools.
400,000+ foreign domestic helpers who work in Hong Kong Special Administrative Region of the People's Republic of China (HKSAR), representing more than 5% of the population of economy. Most of these foreign workers come from the Philippines, Indonesia, and Thailand.
Studies have consistently shown that migrant workers contribute net benefits to an economy. Not only do they raise tax revenues for the government and provide marketing opportunities, they also contribute to the economic prosperity of the country.
4. Flexi-time
Flexible hours agreed and scheduled by the management and the employee.
Flexi-time is a form of flexible work practice that enables employees to work a set number of core hours per week, often at the office during peak periods of the day and/or week.
The management may decide to change the working practices in the business to ensure more flexibility for employees.
Examples:
may change the working hours
allow working from home
provide more opportunities for teamwork
create job-sharing where two people share a single job. Human resource management will have to change policies, practices and training to ensure that employees are successful with new working arrangements.
5. The gig economy
The gig economy (sometimes referred to as the on-demand economy) refers to labour markets in which workers are given short-term or one-off contracts, such as freelance work, rather than long-term or permanent jobs.
Gig workers (sometime referred to as platform workers) are on-call, independent contractors who enter into formal agreements with on-demand businesses to provide certain services to the firm's customers. This is usually done through an online platform or mobile app. Gig workers are paid for each individual job (or "gig") they do, instead of traditional payment methods such as wages per hour or salaries per month. Essentially, workers in the gig economy are more like entrepreneurs (self-employed) than traditional employees of a business.
Examples of Gig Workers
Accountants
Babysitting and child minding services
Cleaners
Couriers / drivers (e.g., DPD, DHL, FedEx)
Food delivery (e.g., Uber Eats, Deliveroo)
Gardeners and landscapers
Management consultants
Massage therapists
Mechanics (car repairs and maintenance)
Painters and decorators
Personal shopper
Pet carers, such as dog walkers
Photographers
Plumbers
Translation services
Taxi drivers (e.g., Uber, Bolt, Lyft)
Tutors
Website designers
Advantages of the gig economy
Workers enjoy freedom and flexibility as they can choose which jobs they want, as well as when and how long to work for. This is ideal for people who prefer part-time employment.
There is the potential to earn a significant amount of income as gig workers often work for multiple businesses on a job-by-job basis.
The flexibility also enables some people to have a better work-life balance, such as working parents of young children.
Businesses can gain from reduced costs of production as they do not need to hire so many full-time workers (along with the pay and benefits associated with full-time employment) and office space.
The lower costs of production for businesses mean they can provide more price-competitive goods and services to customers.
Disadvantages of the gig economy
A gig economy reduces the need for full-time workers in the traditional economy, possibly limiting people's potential for career development.
Gig workers do not have fixed employment contracts, so may lack job security and a stable income. This could mean that without sufficient jobs/projects, gig workers are not guaranteed to earn even the national minimum wage. There is also pressure for gig workers to continually look for the next job especially as competition for gigs has increased.
As self-employed people, gig workers have set-up costs of their own, such as the need to purchase their own bicycles or motor vehicles for delivery-related services.
The lack of a full-time employment contract also means gig workers may miss out on employee rights and benefits, such as paid sick leave, holiday pay, redundancy pay, and maternity leave. They also often miss out on the social aspects of traditional work with colleagues, managers, and customers .
Workers and customers who are not tech-savvy or who do not use online services, such as mobile apps, may be left out despite the potential benefits of the gig economy.
The increased use of temporary workers changes workforce planning for human resources departments.
Self-interest
This is when an employee believes that their own interest is different from the organisation’s objectives. The employee may resist change because it will have negative consequences for their own wellbeing or goals.
Low tolerance
Many, though not all, people prefer an environment of order and stability. Change means that there will be new ways of doing things, and it will require adaptation from employees. People may be fearful of change. Instead of seeing change as an opportunity for growth, employees may view change as a situation filled with unpredictability and problems.
Misinformation & Misunderstanding
If the reasons behind the change are not communicated clearly, employees may feel uneasy about it. Perhaps they think there is no good reason for any change and so act to block the change.
Interpretations of circumstances (different assessment of the situation)
People can have different perceptions of a situation. Employees may believe that management does not know what it is doing. Again, if the reasons for the change are not communicated clearly, then misunderstandings can arise.
Change management refers to processes and techniques used to plan, implement and evaluate changes in business operations.
Business organizations are dynamic in nature and are always subject to the forces of change.
How can managers or human resource departments deal with change in a way that is positive and non-threatening?
Strategies for dealing with resistance to change include the following six methods, as advocated by John Paul Kotter and Leonard Schlesinger of Harvard Business School (1979).
1. Education and communication
Inform staff early about upcoming changes through clear communication. This reduces rumors and helps staff understand the reason for changes.
2. Participation and involvement
Allow staff to provide input and feedback during the change process. This gives them ownership and helps ensure success.
3. Facilitation and support
Provide resources like training to help staff adjust to changes. Counseling can help alleviate fears about new changes.
4. Negotiation and agreement
"Carrot" approach
Bargain incentives to limit resistance, like compensation for changes to contracts or jobs. Look for compromises that still meet goals.
5. Manipulation and co-option
Bring in representatives of those resisting change but covertly aim to change their view to support changes. These representatives, such as labour union leaders, are usually given a symbolic role but the reality is that their view will not affect the desire of management to push for the change. This approach can backfire if seen as unethical.
6. Explicit and implicit coercion
"Stick approach". Force change through threats if other approaches don't work. While changes may be accepted, this often breeds long-term resentment versus buy-in.
Additional Step - Planning
Changes should be introduced in stages with feedback loops to address concerns at each stage. This allows time for staff to understand changes and feel ownership. Larger changes especially require planning and a phased approach to change implementation. While planning takes more time, it builds important buy-in from staff and ensures changes are introduced smoothly. Rushing changes risks reducing support and increasing resistance from staff.
Review Questions
1. What is meant by human resource management?
2. What is human resource planning?
3. What are demographic changes and how do these influence human resource planning?
4. What is an ageing population and what are the consequences
of this for workforce planning?
5. What is meant by labour mobility?
6. What is meant by net migration?
7. What is flexitime?
8. How does teleworking differ from homeworking?
9. What are the advantages and disadvantages of flexitime for employers?
10. What are the advantages and disadvantages of flexitime for employees?
11. What is the gig economy?
12. What are the advantages and disadvantages of the gig economy for employees?
13. What are the advantages and disadvantages of the gig economy for employers?
14. What are the main reasons for resistance to change in the workplace?
15. What are the main human resource strategies for reducing the impact of change and resistance to change?