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DP IB Business Management: HL Your notes
2.1 Introduction to Human Resource Management
Contents
Human Resource Planning
Recent Trends in Workplace Change
Resistance to Change & Change Management
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Human Resource Planning
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An Introduction to Human Resources
In common with all resources, a businesses employees , known as its human resources, need to be
managed
Effective human resource management is important as
It ensures that the organisation has the right people in the right roles with the right support and
with opportunities to succeed, as well as a positive work environment
This will lead to higher productivity, improved efficiency and a competitive advantage
Diagram: effective human resource management
How effective human resource management can provide a competitive advantage
Staff represent both an asset and a cost to a business
Staff are an asset to a business as they bring knowledge, skills, and expertise to the business
Staff can increase productivity, drive innovation and enhance customer service, all of which
contribute to the success and profitability of the business
Staff can help to build a positive reputation for the business through their interactions with
customers, suppliers, and other stakeholders
Staff also generate costs for a business and, for many businesses, staffing costs are one of the
largest costs they have. These costs include
Hiring and training workers
Managing workers as managers have to be hired
Paying the salaries and wages staff
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Additional benefits such as company cars, pensions, healthcare, etc
Letting workers go often requires (redundancy payments) Your notes
Human Resources Planning
Human resource planning focuses on identifying how many and what kind of employees are needed
It looks at how employees will be
Recruited and deployed (used)
Developed and trained
Motivated, managed and led
Staff costs can make up a large proportion of a businesses costs
Careful planning and objective monitoring of employee performance are key elements of
effective financial and operational control
Human Resources Metrics that are Useful to a Business
Human Resource Explanation
Metric
Labour Labour productivity is a measure of output per employee over a specified
Productivity period of time
Businesses aim to increase the level of labour productivity to improve
competitiveness
Labour Turnover Labour turnover measures the proportion of employees leaving a business
during a specific time period
High levels of labour turnover can indicate poor motivation, ineffective
recruitment procedures or attractive alternative opportunities for workers
Labour Retention Labour retention measures the proportion of employees remaining with a
business during a specific time period
High levels of labour retention can indicate effective motivation and
recruitment procedures or few alternative employment opportunities for
workers
Absenteeism The absenteeism rate is a measure of the proportion of staff absent from
work during a specific period of time (e.g. a day, week or month)
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High levels of absenteeism can cause problems
Sick pay and the hiring of temporary staff to cover for those absent Your notes
increases costs
Output is likely to be temporarily reduced
Other staff may become demotivated if they have to cover for absent
workers
Internal Factors that Influence Human Resource
Planning
There are factors inside and outside of the business which can impact on the human resources
planning process
Internal Factors which may Impact Human Resources Planning
Factor Explanation
Business The business's goals, objectives, and long-term plans influence the
Objectives & required workforce skills, competencies and size
Strategy
Entering a new market may require changes to be made to the number
and type of employees required
E.g. UK cafe chain Prêt à Manger plans to double the size of its business
by expanding into five new markets, which will require the recruitment
of at least 3,000 Team Members and Baristas by the end of 2023
Financial Situation Budget constraints may influence decisions related to hiring, training, pay
and benefits
Businesses in financial difficulty may struggle to offer attractive packages to
attract employees
To raise their salary offer, they may have to reduce spending on training
and development
E.g. Alphabet plans to make significant savings as a result of slowing
sales growth by reducing its global workforce by 12,000 and changing
how often equipment - such as laptops used by workers - is replaced
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Organisational The structure of the organisation, including its hierarchy, reporting
Structure relationships and departmental divisions
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Changes in the organisational structure may require changes to workforce
planning, such as redeployment, redundancy or additional recruitment
For example, Consumer goods company Unilever announced its
intention in January 2022 to cut 1,500 jobs as part of a restructure of its
global operations
Labour Relations The relationship between managers and workers and whether workers are
members of trade unions can have a significant impact upon the workforce
planning process
Where worker organisation is strong, human resources are more likely to
meet the demands of employees with regards to pay and conditions
In 2022, unionised workers at the Port of Felixstowe who had engaged in
a series of disruptive strikes were rewarded with a pay increase of 15.5
per cent over two years
Where there is little or no worker organisation, human resources are likely to
have more flexibility over these changes
Organisational The organisational culture may include a strong work life balance resulting in a
Culture higher likelihood that additional workers will be recruited when the demand
is there
A recent study by TalentLMS of U.S. tech industry employees revealed
that 45% of employees who experience a toxic work environment plan
to quit their job because of it
External Factors that Influence Human Resource
Planning
A range of factors beyond the control of a business can also impact the human resources planning
process
Diagram: external factors and HR planning
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External factors that affect human resources planning
Economic conditions
The state of the economy, including factors such as economic growth, inflation, and
unemployment rates
During periods of economic growth, a business may need to focus on attracting and retaining
staff to meet increased demand
During economic downturns, they may need to implement cost-cutting measures such as
redundancies or hiring freezes
Labour market
The supply of suitable employees and the impact of factors such as skills shortages, labour
mobility and immigration
Spain recently changed its migration laws to recruit more foreigners from overseas for
industries with labour shortages and its primary focus for 2023 is to hire carpenters,
plumbers, electricians and other workers involved in construction
Technological advancements
Rapid technological change can disrupt industries and job roles, affecting HR planning
Automation, artificial intelligence (AI), and other emerging technologies can lead to changes
in job requirements, skills needed and workforce composition
HR planning must anticipate these shifts and consider re-skilling or up-skilling to meet future
workforce needs
Legal and regulatory environment
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Laws and regulations related to employment, labour relations, health and safety and immigration
In 2021, changes to employment law in Greece provided workers with the right to flexibility to Your notes
the eight-hour working day where employees are allowed to work up to 10 hours on one day
and fewer on another or take time off, as well as the right to not have to respond to emails after
hours
Social and cultural factors
Social and cultural factors such as societal values and demographic trends
Workforce diversity and inclusion, flexible work arrangements, work-life balance and
employee wellbeing are examples of areas where social and cultural factors are external
factors that influence workforce planning
French laws recognise the custom for a long lunch break and provide for five weeks paid time
off for employees, as well as protecting the limit of a 35 hour working week - companies
can’t force employees to work overtime and if they do, they’re well-compensated for it
Political factors
Changes in government policies, political stability and geopolitical factors
Shifts in labour laws, changing tax regulations and immigration policies and cross-border
trade agreements are often political focuses which can impact human resources planning
Australia is currently experiencing a national skills shortage in a number of occupations and its
governments plan to fill this gap with a combination of training local Australians and recruiting
immigrants - current in-demand skills include construction, civil engineering and nursing
Industry-specific factors
Different industries may face unique external factors
Healthcare organisations need to consider factors such as changing regulations,
demographic shifts, and advancements in medical technology
Competitive landscape
The environment in which a business competes for labour and the actions and strategies of
competitors influence workforce planning
HR planning should consider the organisation's position in the market and align recruitment
strategies so that the pay and benefits reflect that
In the UK, businesses recruiting hospitality, health and social care workers and professional
services staff and are starting to seek talent outside traditional sources by focusing on
candidates’ skills and potential rather than qualifications and industry experience to widen the
pool of candidates
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Recent Trends in Workplace Change
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Recent Trends in Workplace Change
Both internal and external factors have contributed to a range of developments in the working
arrangements adopted by businesses around the world
External factors include the desire amongst workers to achieve a better work-life balance and
rapid technological developments
Internal factors differ from business to business and may include changes in organisational
structure, business objectives and attitude to meeting stakeholders' needs
Diagram: changes in the working environment
Recent changes in the working environment
Changes in Working Patterns
For many years, employees were locked into a system of working from the office for the hours of 9-5
Recently, a number of factors have changed the working patterns of many employees
Reasons for Changes in Working Patterns
New Trend Explanation
Remote, Hybrid and During the Covid pandemic many organisations moved to remote work
Flexible Working setups to ensure business continuity and the safety of employees
Employees worked from home and many continue to do so
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Flexible work arrangements including flextime and compressed
workweeks (completing hours in 4 days instead of 5) have also become
more common Your notes
Employees have greater control over their schedules
Many companies have adopted hybrid work models
Employees work remotely for a portion of the week and come into the
office for team meetings or collaborative projects
Gig Economy and More individuals are opting for freelance or contract work
Freelancing
Digital platforms have made it easier for people to find freelance
opportunities and connect with clients
Workers have flexibility and autonomy in choosing projects and
working hours
Emphasis on Work- Employees are seeking more flexible work arrangements to better
Life Balance integrate their personal and professional lives
Employers have implemented policies that support work-life balance,
such as wellness initiatives, family-friendly policies and mental health
resources
Changes in Rapid technological change has meant that some jobs have experienced
occupations significant reductions in demand
Examples include telephone operators, data and word processing
roles and travel agents
There is an increasing demand for software programmers and digital
marketers
Changes in Working Preferences
Workers are increasingly moving away from the traditional pattern of a full time, continuous career
with the same employer
There are numerous ways in which employees are making changes to their working patterns
Diagram: changes to working patterns
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Examples of changes to working patterns
Job sharing involves two or more employees work at different times to complete the tasks required
for one job
Work is typically shared on a weekly basis, with job sharers communicating regularly to ensure
tasks are not missed
This provides employees with flexibility whilst the employer benefits from the task being
completed
Employees may take a career break where they decide to stop working for a period of time before
returning to work in the same career
New parents often take career breaks until children are old enough to commence formal
education
A sabbatical is a formalised career break, frequently used by employees to study or engage in
other developmental activity such as travel
Downshifting involves a senior employee relinquishing their position to move to a lower-paid position
with fewer responsibilities
Downshifting may occur when individuals change career or as workers approach retirement
Changes to Working Practices
The nature of work routines has changes significantly in recent years
Full-time roles with permanent contracts are in decline
A range of alternative work routines are growing in popularity
Diagram: changes to working routines
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Examples of alternative working routines
Teleworking involves working at home or from any other location away from the traditional workplace
Advances in communications technologies have allowed workers to work anywhere with a reliable
internet connection
Worker may attend a workplace from time to time for meetings or other essential purposes
Flexitime allows employees to work a specific amount of hours of work at times of their own choosing
Workers can fit work tasks around their other responsibilities such as childcare
Part-time work is where employers work for fewer hours than those expected in a full time role
Employees on temporary contracts work for a business for a specific period of time, often through an
employment agency
There are increased calls for businesses to offer the opportunity for employees to fulfil hours of work
over four days of the week, rather than five
Between 2015 and 2019, Iceland ran a large 4-day workweek pilots with close to 2,500 people
participating
The trial was considered an overwhelming success among researchers, with employees reporting
improved well-being, work-life balance and productivity
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Resistance to Change & Change Management
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Reasons for Resistance to Change in the Workplace
Businesses operate in a continuously changing business environment
Changing internal factors such as business growth, new business ownership or internal
restructuring
Changing external factors such as changes to the market or technological advancements
Resistance to change is a common phenomenon in the workplace
This is especially true when employees have little say in the design and implementation of the
change
The existing organisational culture can also play a significant role in resistance to change, e.g. if
the business culture is deeply rooted in tradition, resistance to change is more likely whereas an
innovative and flexible culture may mean that employees are more receptive to change
The following factors contribute to employee resistance
Diagram: reasons for resistance to change
Factors that contribute to employees' resistance to change
Fear of the unknown
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Many individuals find comfort in familiarity and could be worried about how the change will affect
their roles, responsibilities, and job security
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New technologies, systems or processes often require employees to learn unfamiliar new skills
Employees may fear that existing knowledge and skills will become obsolete, making them less
valuable or potentially leading to job loss
Loss of control
Change often involves a shift in power dynamics and decision-making processes
Employees who are accustomed to a certain level of autonomy and control may feel threatened
by the change
They may be concerned about how the change will impact their decision-making authority or
influence within the business
Disruption of routine
Employees may be comfortable with their current ways of working and are hesitant to adapt to
new methods
They may perceive the change as an inconvenience or an added burden that disrupts their working
life
Lack of trust
If employees doubt the intentions behind the change or have past experiences of broken
promises or inconsistent communication they may be sceptical about the benefits of the
proposed change
Lack of communication and inclusion
When employees feel excluded or uninformed about the reasons for the change, its implications
or how it will be implemented they are more likely to resist it
Perceived losses
Even if the change brings overall benefits, employees may focus on what they feel they have lost
such as reduced autonomy, changed job responsibilities or altered relationships with colleagues
The pace of change
It's important to find a pace for change that is appropriate for the situation and which takes into
account the needs and concerns of employees
If the pace of change is too fast
It can create resistance from overwhelmed workers who feel unprepared and that they don't
have enough time to adjust
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It may not be properly thought through or planned, resulting in poor execution
It may be difficult to communicate effectively leading to misunderstandings and confusion Your notes
amongst the workforce
If the pace of change is too slow it can result in
A lack of adaptability and innovation
A loss of momentum leading to delays or even the abandonment of the change
Communication efforts becoming stagnant leading to disinterest and disengagement
Change Management Strategies
Change management strategies refer to the approaches and methods adopted to successfully
navigate and implement change in a business
Diagram: the change management process
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Steps in a Change Management Process
There are many different types of strategies (e.g. Kotter's Change Management)
These strategies all have several steps in common and if a business follows these steps, then it
should help to reduce resistance to change and improve the quality of the transition
Common Steps in a Change Management Process
Steps in Sequence Explanation
1. Identify the Change & Clearly communicate the vision and reasons behind the change, its
Communicate Clearly benefits and the expected outcomes
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Regularly update employees at all levels to keep them informed and
address any concerns or questions they may have
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Provide support throughout the change process, recognising that
change can be stressful for employees
2. Plan & Resource the Ensure that adequate resources are identified and available in order
Change to implement the change
A lack of resources is an indicator that the change has not been
properly planned which may undermine employees' faith in the
proposed change
3. Provide Strong Leaders should demonstrate their commitment to the change and
Leadership provide a clear vision that inspires employees to embrace the change
Leaders should also lead by example and be visible throughout the
process
4. Engage Stakeholders Identify key stakeholders who will be affected by the change and
involve them early in the process
Seek their input, address their concerns, and actively engage them in
decision-making
This helps build support and ownership for the change.
5. Train & Develop Provide adequate training and development programs to equip
employees with the skills and knowledge needed to adapt to the
change
This could include workshops, seminars, online courses, or
coaching sessions
The goal is to ensure employees feel confident and competent in their
new roles
6. Appoint Change Agents Appoint change agents or champions within the organisation who can
help drive and facilitate the change process
These individuals should be enthusiastic, influential, and capable of
supporting and encouraging others during the transition
7. Provide Feedback Gather feedback throughout the change process by regularly
assessing progress, identifying any barriers or resistance and making
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adjustments if needed
Collecting and acting on feedback from employees demonstrates
that their opinions are valued and helps to reduce resistance to Your notes
change
[Link] Success Recognise and celebrate milestones and achievements along the
way
For example, acknowledge individuals and teams for their
contributions and share success stories to inspire others
This boosts morale, motivates employees, and reinforces the
positive aspects of the change
Large-scale changes can be overwhelming so it's often beneficial to break them down into smaller,
manageable phases
This allows employees to adapt gradually and build momentum as they experience early
successes, helping generate support for further change
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