6.

Human Resource Management

Human Resource Management (HRM): Strategic approach to the e ective
management of an organization’s workers so that they help the business gain a
competitive advantage.

The functions of HRM:

1. Workforce Planning: Determination of number and type(skill) of workers needed for

the future

2. Recruitment / Hiring: Evaluating and selecting appropriate employees and

inducting them into the business.

3. Employment contracts: Preparing contracts of employment for all employees and

deciding on how exible these should be: permanent or temporary, full- or part-time.

4. Developing employees: Appraising, training, and developing employees at every

stage of their careers.

5. Dismissal: Process of ending the employment

6. Ensuring HRM operates across the business: Involving all managers in the
development of their employees emphasizing that this is not just an HR
responsibility.

7. Employee morale and welfare: Monitoring and improving employee morale and
welfare including giving advice and guidance
fl
ff
 Workforce Planning
Workforce planning is planning future skills and number of workers needed to achieve
business objectives.

Reasons for and Role of a Workforce Plan:

• Strategic Alignment:
Workforce planning ensures that the composition and skills of the workforce align
with the organization's strategic goals, enabling e ective execution of business
objectives.

• Talent Acquisition and Retention:

It facilitates the identi cation of current and future talent needs, aiding in recruitment
strategies and e orts to retain key employees.

• Adaptation to Change:
Workforce plans help organizations adapt to changing circumstances, whether due
to industry shifts, technological advancements, or economic uctuations, ensuring
agility and resilience.

• Succession Planning:
The plan plays a crucial role in succession planning, identifying potential leaders
within the organization and preparing for seamless transitions in key positions.

• Cost Optimization:
Workforce planning contributes to cost optimization by aligning sta ng levels with
organizational needs, preventing oversta ng or shortages that may impact nancial
e ciency.

• Enhanced Productivity:
By ensuring that the right people are in the right roles with appropriate skills,
workforce planning enhances overall productivity and e ciency.
ffi
ff
fi
ffi
ff
ffi
fl
ffi
fi
 Labour Turnover
Measures the rate at which employees are leaving an organization. It is measured by:

Causes of high labour turnover:

• Demotivation of workers within the organization for di erent reasons for example
monotony and poor management etc.
• Competitors might be o ering better paid jobs or perks causing employees to leave
• Nature of the industry for eg. fast food restaurants.
• There can be lack of recognition from the employers
• Employees may be overwhelmed by the amount of work
• The employees may not be happy with the company culture
• There may be lack of exibility in the job leading to unsatis ed employees
• There can be poor learning and development opportunities

Costs of high labour turnover:

• Costs of recruiting, selecting and training new staff

• Poor output levels and customer service due to sta vacancies
• Di cult to establish loyalty and regular, familiar contact with customers
• Demotivating working environment and lack of team spirit
• Maslow’s ‘social’ needs unful lled if co-workers leave frequently.
• As the turnover rate increases, the costs will increase faster
• Labor turnover can destroy the brand image in the market
• Loss of valuable knowledge and expertise from the business
ffi
fl
ff
fi
ff
ff
fi
 Recruitment and Selection
Recruitment: The process of identifying the need for a new employee, de ning the
job to be lled and the type of person needed to ll it and attracting suitable
candidates for the job.

Selection: Series of steps by which the candidates are interviewed, tested, and
screened for choosing the most suitable person for vacant post.

Steps of recruitment process

New employees will be hired when the business is expanding or when the workforce
needs to be replaced. The process of recruitment and selection involves the following
steps:

1. Job description
A detailed list of the key points about the job to be lled stating all its key tasks and
responsibilities. Establishing the exact nature of the job vacancy and drawing up a
job description This provides a complete picture of the job and will include:
• job title

• details of the tasks to be performed

• responsibilities involved

• place in the hierarchical structure

• working conditions
• how the job will be assessed, and performance measured.
fi
fi
fi
fi
 A good job description will contain the job title, details of the tasks and
responsibilities and method of payment. It will save the business’s time by ltering
out people unwilling to ful l what the job demands.

2. Person specification

A detailed list of the qualities, skills, and quali cations that a successful applicant will
need to have. This is an analysis of the type of qualities and skills being looked for in
suitable applicants. It is clearly based on the job description because these skills can
only be assessed once the nature and complexity of the job have been identi ed.

The person speci cation is like a ‘person pro le’ and will help in the selection
process by eliminating applicants who do not match up to the necessary
requirements. Hence, a person speci cation should contain the qualities and skills
required of successful applicants such as university degrees, speci c skills such as
communication, driving etc.

Example of a job description vs a person specification

Job description Person specification

• Degree required: BBA

• Job title: Sales manager
• Skill required: Specialised in
• Main responsibilities: MS o ce and basic
managing sales data at the accounting
o ce
• Experience: Atleast 4 years
• Location: based in Lahore in the sales department
office
• Age: between 25-45
• Payment system and timings:
Monthly salary Rs. 80,000, 40 • Other skills required: Must
hours a week. be willing to adapt to
changing technology.

3. Job advertisement

Needs to re ect the requirements of the job and the personal qualities needed. It can
be displayed within the business premises particularly if an internal appointment is
looked for or in government job centers, recruitment agencies and newspapers
increasingly businesses are using the internet to advertise vacancies and people
interested in the job are encouraged to apply online. This saving a great deal of time
for both the recruiting business and potential applicants.
ffi
ffi
fl
fi
fi
fi
fi
fi
fi
fi
fi
Some specialist businesses o er online recruitment services such as Job train and Hire
Serve and they assist businesses in preparing an e ective online advertisement for the
vacant positions. The channels to advertise jobs can be:
• Employment agencies

• Online on social media

• Job sections in newspapers

• Government job centres

4. Shortlisting and selecting applicants

A small number of applicants are chosen based on their

application forms and personal details, of contained in a CV
(curriculum vitae). References may have been obtained in
order to check on the character and previous work
performance of the applicants

When drawing up the shortlist of applicant, the business will

be faced with the dilemma of choosing between recruiting
someone from within the organization or from outside the
organization.

Interviews: This is when employees are called in for a face-to-face discussion and
judging whether actually the employee is what he/she displays by his/her CV.
Moreover, the business can even probe further and can ask follow-up questions from
the applicants’ CV to have a better insight to whether the employee is actually suitable
for the job.

Aptitude tests/Assessments: An aptitude test is a way for employers to assess a

candidate's abilities through a variety of di erent testing formats. This will help the
business in nding out whether the applicant has the perosnality and intelligence levels
to complete the required tasks successfully and on time.

Role-plays: A role play interview is an interview format in which th potential employer

presents the potential employee with a scenario to act out. It enables employers to see
if the applicant can handle di erent situations for example con ict resolution.

CV’s: A curriculum vitae, often abbreviated as CV, is a document that job applicants
use to showcase their academic and professional accomplishments. It is used to apply
for positions within areas where a person's speci c knowledge or expertise is required.
This helps the employer compare to these quali cations to the person speci cation.
fi
ff
ff
ff
fi
fi
ff
fl
fi
 Employment contracts

Care needs to be taken to ensure that they are fair and accord with current
employment laws where the worker is employed as it is a legally binding document. A
typical employment contract will contain the following features:

• Employee’s work responsibilities and the main tasks to be undertaken.

• Working hours and the level of exibility expected, e.g., part time or full time,
• Holiday entitlement.
• The number of days’ notice that must be given by the worker (if they wish to leave)
or the employer (if they want to make the worker redundant).

Internal & External Recruitment

Internal Recruitment: Filling vacancies by hiring people from inside the organisation.
Benefits
• Applicants may already be known to the selection team
• Applicants do not need induction training
• Culture of the organization will be well understood by the applicants
• Often quicker than external recruitment
• Likely to be cheaper than using external advertising and recruitment agencies
• The employees will feel motivated that promotion is possible
• It will gives existing workforce opportunities for diversifying tasks, promotion etc.

Limitations
• Creates con ict amongst colleagues, as in many situations it can be di cult to
embrace a new boss.
• May leave a Gap in the Existing Workforce.
• Results in an in exible culture
• Business will have limited network, reach and talent pool where in many cases it
might be necessary to go beyond referrals to nd the best people for certain
positions.
• Limited expertise in the business and the business might lack ongoing development
in the eld and expertise for specialized roles.
fi
fl
fl
fl
fi
ffi
External Recruitment: Filling vacancies by hiring people from outside the
organisation.

Benefits:
• External applicants will bring in new ideas and practices to the business – this helps
to keep existing sta focused on the future rather than ‘the ways things have always
been done.
• Should be a wide choice of potential applicants – not just limited to internal sta
• Avoids resentment sometimes felt by existing sta if one of their colleagues is
promoted
• Standard of applicants could be higher than if just limited to internal sta applicants
with new pool of applicants

Limitations
• Higher risk as the external recruitment process can attract candidates who are not
relevant or worthy of the open position
• Greater cost of recruitment and selection
• It can also damage employee morale because current employees may feel this
lessens their chances for promotion.
• It can take longer and cost more than hiring from within the organization.
• Employment agencies may not be trusted
• Employees may have a limited understanding about the company and it may take
them time to adjust

Redundancy and Dismissal

Dismissal is being sacked from a job due to incompetence

or breach of discipline on occasions it will be necessary for
an HR manager to discipline an employee for continued
failure to meet the obligations laid down by the contract of
employment. Dismissing a worker is not a matter that
should be undertaken lightly.

Unfair dismissal is ending a worker’s employment contract

for a reason that the law regards as being unfair. There are certain situations in which
dismissal can be considered UNFAIR or in breach of employment law. These include:

• Pregnancy
ff
ff
ff
ff
• A discriminatory reason, e.g., the race, gender or religion of a worker
• Being a member of a trade union
• A non-relevant criminal record – if the employer has previously been unaware of a
criminal record, it is not a reason for dismissal unless it is central to the job.
• Dismissing an employee without giving them a notice period or notice pay.
• Not giving someone the full notice period they're entitled to

Fair dismissal is when employers need to be able to show that one of the following is
true and, except in the case of gross misconduct, that the agreed procedures have
been followed:

• Inability to do the job even after su cient training has been given
• A continuous negative attitude at work, which has badly a ected the
employees
• Continuous disregard of required health and safety procedures
• Deliberate destruction of an employer’s property
• Bullying of other employees.
• Breaking the law
• Redundancy ie. no need for the skill any further
• Poor performance in required tasks
• Other substantial grounds

Redundancy is when a job is no longer required, the

employee doing this job becomes unnecessary through no
fault of their own. The business makes these workers
redundant or lays them o , to save costs or survive. A
business will be called unethical if a large portion of
employees are made redundant. This is because the rate of
unemployment rises and a ects multiple stakeholders
adversely. Unlike dismissal, redundancy is due to no fault of
the workers. Businesses may use a ‘natural wastage’ strategy
whereby workers who are leaving are not replaced. Whereas,
‘voluntary redundancy’ policies are risky as the most skilled
workers will opt out rst.
fi
ff
ff
ffi
ff
 Employee Morale and Welfare
HR department will assist their employees in matters of personal or nancial problems
through counselling sessions, advice, special loans and grants, etc.
Work-life balance: State of equilibrium where a person equally prioritizes the demands
of one's career and the demands of one's personal life.
Common Reasons for Poor Work-Life Balance

1. Increased Responsibilities at Work

A rise in job responsibilities can contribute to poor work-life balance, as employees
may nd it challenging to manage additional tasks within their standard working hours.

2. Working Longer Hours

Long working hours, often beyond the standard schedule, can lead to poor work-life
balance, impacting personal time, relaxation, and overall well-being.

3. Increased Responsibilities at Home

Balancing increased responsibilities at home, such as caregiving or household duties,
with work demands can create stress and strain on an individual's work-life
equilibrium.

4. Increased Expenses without Salary Increase

When living costs rise, and salaries remain stagnant, employees may feel compelled to
work more to meet nancial demands, contributing to an imbalance between work and
personal life.

5. Bad or Overbearing Bosses

Negative management styles or overbearing bosses can create a stressful work
environment, making it challenging for employees to detach from work during personal
time.

Ways to Improve Work-Life Balance

1. Flexible Working Hours

Implementing exible working hours allows employees to adjust their schedules to
better suit their personal needs. This can enhance autonomy and contribute to a
healthier work-life balance.

2. Teleworking – Working from Home

O ering teleworking options provides employees with the exibility to work from home,
reducing commuting time and allowing for a more comfortable and personalized work
environment.
ff
fi
fl
fi
fl
fi
 3. Job Sharing
Job sharing involves two individuals sharing the responsibilities of one full-time
position. This arrangement not only provides exibility for employees but also ensures
continuity in the role.

4. Sabbatical Periods
Providing opportunities for sabbatical periods allows employees to take extended
leaves from work, enabling them to recharge, pursue personal interests, and return to
work with renewed energy.

5. Find a Mentor for Advice & Insight

Encouraging employees to nd mentors can provide valuable advice and insights on
achieving a better work-life balance. Mentors can share experiences, o er guidance,
and help individuals navigate career challenges while maintaining a healthy personal
life.

Equality & Diversity

Equality policy: Practices and processes aimed at achieving a fair organization where
everyone is treated in the same way and has the opportunity to ful l their potential.
Diversity policy: Practices and processes aimed at creating a mixed workforce and
placing positive value on diversity in the workplace.
Benefits:
• Greater employee motivation and lower labor turnover.

• A diverse workforce will enable a grasp of di erent languages and cultures that
improve communication with customers worldwide.
• It will engage interest of highly quali ed employees from around the world wanting
to work for the company.
• Customers who care for ethical practices, may also be willing to pay higher prices.
• A diverse workforce will give the company a better global reputation.

Drawbacks:
• Poor communication and reduced teamwork

• Increased con ict due to people coming from di erent backgrounds

• Reduced social cohesion

• O shoring can become a point of emphasis with diversity in the workplace.

• Lessen the amount of trust that exists

• Some teams may become hostile during an increase in diversity

ff
fl
fi
fi
ff
fl
ff
fi
ff
 Costs of con ict for business and employees

Business:
• Businesses will be seen as a risky investment

• Halt in production results in lower productivity

• There can be a damage in relationship between the workforce and management

which will harm the business reputation
• Time will be wasted

• Higher employee turnover and the costs that come with it

Employees:
• Employees may be replaced by technology resulting in loss of nancial security

• Loss of motivation and job security due to unstable working environment

• Lack of clarity on roles and responsibilities

• High absenteeism rate

Bene ts of cooperation for employers and employees

Business:
• Stable working environment attracts quali ed people

• Lower labor turnover and associated costs

• Employee morale and productivity improves

• Better company reputation amongst stakeholders

Employees:
• Greater job security

• Greater role in decision making

• Lesser loss of pay due to disputes and increased benefits

• Supportive working environment helps with stress and improves motivation

fi
fl
fi
fi
 Training and Development

1. Induction training is given to all new recruits. It has

the objectives of introducing them to the people that
they will be working with most closely, explaining the
internal organizational structure, outlining the layout
of the premises and making clear essential health
and safety issues, such as procedures during a re
emergency. Moreover, introduction to the workforce
and brie ng on safety procedures and health
standards.

2. On-the-job training involves instruction at the place of work. This is of conducted

either by the HR managers or departmental training of icers. Watching or working
closely with existing experienced members of sta is a frequent component of this
form of training. It is cheaper than sending recruits on external training courses and
the content is controlled by the business itself.

3. O -the-job training entails any course of instruction away from the place of work.
This could be a specialist training center belonging to the rm itself or it could be a
course organized by an outside body, such as a university or computer
manufacturer, to introduce new ideas that no one in the rm currently has
knowledge of. These courses can be expensive, yet they may be indispensable if
the rm lacks anyone with this degree of technical knowledge. It is mostly
conducted by external organization such as a university and includes specialized
knowledge that the rm is not familiar with.

Benefits Costs
Lower labour turnover Pro ts will reduce due to high costs
Trained workers may leave for better
Higher motivation levels
jobs
Greater productivity and quality of The working process may be halted
work for the training to take place
Renowned company reputation in the choosing the right trainer is
market challenging.
quality depends on the trainer's
Flexibility encouraged
qualifications
Up-skilling employee Training sessions can be complicated
ff
fi
fi
fi
fi
fi
ff
fi
fi
 Employee Development to Encourage Intrapreneurship

Entrepreneurial Training Programs

O ering training programs focused on entrepreneurial skills equips employees with the
mindset and tools to identify and pursue innovative opportunities within the
organization.

Encouraging Risk-Taking
Creating a culture that values calculated risk-taking allows employees to explore new
ideas without fear of failure, fostering an intrapreneurial spirit within the workforce.

Cross-Functional Exposure
Providing opportunities for employees to work across di erent departments
encourages a broader perspective, facilitating the identi cation of innovative solutions
and intrapreneurial initiatives.

Recognition and Rewards for Innovation

Establishing recognition programs and rewards for innovative contributions motivates
employees to actively engage in intrapreneurial activities and showcases the value
placed on entrepreneurial thinking.

Employee Development to Encourage Multi-Skilling and Flexibility:

Cross-Training Programs
Implementing cross-training programs allows employees to acquire skills beyond their
primary roles, enhancing versatility and adaptability within the organization.

Flexible Learning Opportunities

Providing exible learning opportunities, such as online courses and workshops,
enables employees to acquire new skills at their own pace, fostering continuous
development and multi-skilling.

Job Rotation Initiatives

Job rotation exposes employees to di erent roles and responsibilities, promoting a
diverse skill set and enhancing exibility in handling various tasks within the
organization.

Mentorship and Coaching Programs

Mentorship and coaching programs connect employees with experienced colleagues
who can guide them in acquiring new skills and navigating di erent aspects of the
business, enhancing exibility.
ff
fl
fl
fl
ff
fi
ff
ff
Trade unions
Objectives of Trade Unions

Providing Assistance and Services to Members

Impact on Employees: Ensures members have access to support, advice, and
resources for workplace-related issues.
Impact on Employers: May contribute to a more engaged and satis ed workforce,
potentially reducing con icts.
Participating in Organizational Decisions
Impact on Employees: Fosters a sense of inclusion and representation in decision-
making processes.
Impact on Employers: Encourages a collaborative workplace culture, potentially
enhancing employee morale and commitment.
Collectively Bargaining for Better Pay and Conditions
Impact on Employees: Secures improved wages, bene ts, and working conditions.
Impact on Employers: Necessitates negotiation but can lead to a more satis ed and
motivated workforce.
Working to Improve the Quality of Public Services
Impact on Employees: Strives for enhanced working conditions and resources in public
service sectors.
Impact on Employers: May contribute to a more e cient and motivated public service
workforce.
Political Campaigning and Industrial Action
Impact on Employees: Represents a collective e ort to in uence political decisions and
address workplace issues.
Impact on Employers: Can pose challenges during industrial actions but may also
prompt constructive dialogue and resolution.
Having Increased Job Security
Impact on Employees: O ers a sense of stability and protection against arbitrary job
loss.
Impact on Employers: Requires considerations for long-term workforce planning and
stability.
fl
ff
ff
ffi
fi
fl
fi
fi
 Bene ts of Trade Unions
Reduced Chances of Industrial Dispute
Impact on Employees: Promotes a collaborative approach to con ict resolution,
reducing the likelihood of disruptive disputes.
Impact on Employers: Fosters a more stable and harmonious work environment.

Professional Communication with Management

Impact on Employees: Facilitates open channels for communication, preventing
disruptions and misunderstandings.
Impact on Employers: Encourages a positive and transparent relationship between
management and employees.

Better Pay, Job Security, Holidays, and Bene ts

Impact on Employees: Enhances overall job satisfaction and well-being.
Impact on Employers: Contributes to a motivated and loyal workforce, potentially
improving productivity.

Safer and Supportive Work Environment

Impact on Employees: Ensures a focus on workplace safety and a supportive
atmosphere.
Impact on Employers: Contributes to improved employee well-being, reducing
accidents and enhancing overall productivity.
fi
fi
fl