2.

1 Functions and
evolution of HRM
Benefits of planning and HRM

People add value to the output of an organisation,

therefore good recruitment, selection and training
of staff allows a business to gain a competitive
advantage.
Short-term workforce planning deals with
existing and upcoming demands for an
organisation.
long-term workforce planning looks at potential
future trends and the foreseeable resource needs.
 Benefits of planning and HRM

Effective workforce planning can be achieved by analysing

Historical trends and data
Sales revenue, GDP and disposable income
Labour turnover rates
Flexibility of staff and current staff workload
Demographic changes (internal and national)

Activity
Read the article (HRM planning). How would you suggest that businesses
react to the information provided in the article? Explain your proposed
response in as much detail as possile, highlighting both the positive and
negative impacts.
 Labour Turnover

Labour turnover measures the percentage of the workforce

that leaves the organisation in a given time period.

Activity
Calculate the labour turnover if a business has a total
workforce of 150 and 30 members of staff leave during the
year.
Extension
Is this a small or large percentage? explain your answer
 Labour Turnover
What might cause a business to have a high labour
turnover?
1. Challenges
2. Location
3. Advancement
4. Money
Pride

CLAMP
5.

6. Security

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 Labour Turnover

Pros and cons of high labour turnover

Advantages Disadvantages
1. Opportunity for fresh ideas and 1. Cost of recruiting and training
up to date market knowledge 2. Reflects poor morale in
from new employees. workforce and so low
2. Workers with specialist productivity levels
knowledge can be employed 3. Loss of productivity while new
rather than having to train up worker settles in
existing employees.
 Internal and external factors
influencing human resources

The supply of human resources in a country is affected

by both internal and external factors. Businesses need
to understand these changes so that they can respond
appropriately.
The following factors can affect the supply of labour
Demographic changes in the workforce.
Changes in labour mobility
New communications technologies
 Demographic changes in the
workforce
Demographic changes can be caused by the
following;
Changes in the net birth rate
Net migration rate
Retirement age
Introduction of women into the workforce
Change in employment patterns (people entering the
workforce later due to increased numbers attending
university)
 Changes in labour mobility
The mobility oflabour is the extent to which labour can move to
different locations (geographical mobility) and their flexibility in
changing to different jobs (occupational mobility)
The more mobile labour is the higher the supply of labour that is
available.
Factors affecting labour mobility include;
Family, friends and social ties
Relocation costs
Uncertainty avoidance
Education level/skills (higher = more mobile)
Language and culture Age (younger people tend to be more
Cost of living occupationally mobile)
highly specialised skillset reduces labour mobility
discrimination
Home ownership
 New communications technologies
Changes in technology can bring both
opportunities and threats to human resource
planning.
One example of this is the prevalence of
teleworking (working from home) and flexitime.
Activity
Research the following
1. From a businesses perspecitve what has been the impact of national
lockdowns on HRM
2. Research how internet communication technologies have affected the
following functions; Recruitment, Appraisals & Training
 Recruitment and selection

Job description -
Document outlining the
details of a job including
roles, duties and
responsibilities.
Person specification -
Document that profiles
the ideal candidate, such
as the qualifications,
skills, and experiences
sought by the employer.
 Application process

Application form - Standardised form produced by the

business for selecting appropriate applicants for a Job.
Curriculum vitae (CV) - A document outlining an
applicants education, employment history, skills and
professional qualifications.
Cover letter - An introductory letter written by the
applicant, stating which position is being applied for
and why the applicant should be considered for the job.
 Recruitment and selection

The interview process allows the

employer the chance to meet ☑
applicants face to face to assess their
suitablility for the job. ☑ ☑
Interviews need to be well planned
and conducted professionally. ☑
Types of interviews
Video-conferencing
Telephone interviews
Face-to-face interviews
Group interviews
 Interviews

Two main types of questions used

Behavioural-based questions - used to assess a
candidate's behavioural pattern and initiative.
Situational-based questions - are used to assess an
applicants judgmental ability.
https://www.youtube.com/watch?v=zhUgaKb0s5A

Activity
Create a set of questions that the principal of the school
should ask to a potential new teacher.
Extension
Include a mix of situational and behavioural based question
 Testing
Psychometric tests - assess personality and level of
motivation. It is important to recruit people who will fit
into the culture of the organization.
Aptitude tests - examine the ability and skills of potential
employees.
Intelligence tests - calculate the mental ability of an
applicant.
Trade tests - used to examine a candidates skills in a
specific profession.
 Internal recruitment

Advantages Disadvantages
Cost effective Smaller pool of people
to choose from
Less down time
(induction) No new ideas
Time consuming (second
Less risk unfilled vacancy)
Motivational Internal politics
 External recruitment

Advantages Disadvantages
New ideas Uncertainty
Wider range of Expensive
experiences/skills Time consuming
Larger poo; of applicants (advertising,
shortlisting)
 Training
Training is the process of providing opportunities for
workers to acquire employment-related skills and
knowledge.
Training (when done effectively) can;
Improve efficiency
Enhance quality Activity
Create a flexible labour force What are the
drawbacks of
Reduce errors
training?
Improve staff motivation and company reputation
 Training

Training can be categorised into

On the job training
Off the job training
Behavioural training
Cognitive training
 On the job training

On-the-job training refers to training carried out

whilst at the workplace. This can be done by a
head of department, supervisor or other specialist.
Two methods of on the job training include;
Induction training
Mentoring
On the job training
 Induction training

Induction training is used for new employees in order

to enable them to be productive quickly and easily.
Advantages Disadvantages
Establishes clear employee Time consuming to plan and
expectations (culture). monitor (key staff memebers)
Helps to ensure employees can Potential for information
contribute immediatly. overload.
Makes the new employee feel
respected and valued (employee
turnover)
 Mentoring

Mentoring is another type of on-the-job training

involving a partnership between two people - the
mentor and the mentee.
Advantages Disadvantages
Effective mentoring creates a Time consuming for senior
safe environment for mentees to member.
reflect and discuss issues openly Requires long term commitment
Less formal (good for and can be difficult in busy
motivation and creating firms.
relationships) Personality clash between
mentor and mentee.
 Off the job training

Off-the-job training entails any course of

instruction away from the place of work. Eg,
specialist training centre, university course.
 Behavioural training

Targets functional issues that can lead to increased

worker performance by changing certain
behaviours. Eg, Team building, conflict resolution,
stress management, leadership skills

Advantages Disadvantages
Improves productivity. Human nature is difficult to
(motivation) change. This often means results
Effective leaders require social of behavioural training are short
skills. lived.
 Cognitive Training

Is designed to train and develop the mental skills of

employees to improve their performance.
Can focus on improving memory, attention, listening
skills, logic and reasoning, time management and
problem solving.
Advantages Disadvantages
Helps overall decision making Can be expensive
and congitive ability Does not fit the needs of every
Improves learning capacity individual
which should improve career
advancement
 Human Resource Management

Four stages or HR plan

1. Recruitment
2. Training
3. Appraisal
4. Termination or dismissal
 Appraisal
The analysis of performance against pre-set and agreed
targets with the setting of new targets allows the future
performance of the worker to be linked to the objectives of
the business.

Advantages Disadvantages
Can be used to set targets and Time consuming
reward employees (motivation) Can cause negative reaction
Can be used to work out levels from employee if not done well
of pay. Based on human assessment
helps identify underperforming (therefore can be biased)
employees
Helps identify training required
by employees.
 Appraisal

Types of appraisal
Activity
Formative
Research each of the
Summative following methods of
360-degree feedback appraisal;
Defnition
Self-appraisal Examples
Advantages and
disadvantages
 Appraisal

In order to ensure appraisals are effective the

following steps can be taken;
Not linked to pay or promotion
Separate to disciplinary – positive
Minimal paperwork
Honest exchange of views
 Dismissal and redundancies
Dismissal means the termination of a worker's employment due to
incompetence (unsatisfactory performance) or a breach of contract.
Redundancies (also known as retrenchments) occur when a business
can no longer afford to employ the worker or when the job ceases to
exist.
Dismissal process

Initial verbal warning

Official written warning (plan and timeframe for improvement
set out)
Letter of temination
 Dismsissal
Reasons for dismissal may include

Incompetence
Misconduct (usually following a series of warning)
Gross misconduct
Legal requirements (employee does not have necesary
skills/qualification)
 Unfair dismissal

Unfair dismissal occurs when an employee is

dismissed without a valid or legal reason. This
could potentially be because of;
Discrimination
Constructive dismissal (changes to terms of employment
that employees are unable to fulfill)
Untruthful allegations

Activity
Find an example of an interesting unfair dismissal case online and summarise
it?
Extension
Explain the potential solution to the situation
 Redundancies

Voluntary redundancies - The employer asks for

volunteers to leave. They are offered a redundancy
package (severance pay). This depends on the
workers' salary, benefits and time.
Involuntary/compulsary redundancies - The
employer chooses which workers to make
redundant (LIFO or retention by merit)
 Outsourcing

Definition
Outsourcing or subcontracting is the process of
transferring internal business activities to external
firms.
Offshoring
Outsourcing or subcontracting to foreign locations.
 Why offshoring?

Salary of architect in USA - $3,000 per month

Salary of architect in Philippines - $250 per month
Salary of Java programmer in USA - $60,000 per
year
Salary of Java programmer in India $5,000 per year
British Airways save $23m per year for every 1,000
jobs offshored to India
Outsourcing and subcontracting
Advantages Disadvantages
Cut costs of production Problems with redundancies
Specialised sub contractors Less control over
Subcontractors bid for contracts subcontractors
Cuts labour costs by having less Unethical practices
employees External environment changes
Concentrate on core activities
Flexibility
Take advantage of protectionist
measures
 Reshoring

In-housing
The reverse of outsourcing. Operations moved
internally to gain more control.
Reshoring
The reverse of offshoring. Bringing back business
functions to the home country.
 Reshoring
Advantages Disadvantages
Shorter Lead Times Difficult to find skilled labour
Increased Responsiveness To Potentially lower productivity
Customer Demands (specialisation)
Improved communication and Higher labour costs
supply chain management
Perception of quality allows for
premium pricing
Government initiatives to
reshore activity (fewer tariffs)
 Activity
With the help of your textbook (p130-135), research the
following flexible work structures impact on HRM;
Flexitime
Homeworking & Teleworking
Portfolio working
Part-time employment
Migration of workers
Add the notes to your google docs pages.