Human Resource Management in
Human resource management is a dynamic activity in any
organisation as it takes place against a changing economic,
technical, legal and social background.
It is important for learners to appreciate that effective human
resource management means getting the best out of the
people who work for an organisation in order to ensure the
organisation fulfils its purposes, whether it is a football club
winning the premiership, or a hospital increasing the success
rates for medical operations.
On completion of this unit you
Know the factors that are involved in human resource
planning in organisations
Know how organisations motivate employees
Understand how to gain committed employee cooperation
Understand the importance of managing employee
performance at work.
You are employed in the human resources department of a large IT
consultancy. The business is involved in several large
scale projects for
private and public sector clients. Working in IT systems design, planning
and delivery, the consultancy requires people with specific technical
skills. These need to be combined with an ability to work well within
teams, and to work flexibly in a fast
changing environment. The
consultancy has recently won a new IT project with a national
government agency. The project will be staffed by some people already
house, but a new recruitment drive will be needed.
This success coincides with an internal review of the HR function so your
, feels this is a good time for serious
investigation of HR. You and
are both going to attend a local
partnership meeting which will be attended by representatives from the
local authority, the regional development agency, the Learning and Skills
Council and others. He has volunteered to do a presentation about how
the IT sector is coping with the local labour market and he has asked
that you to prepare some material on HR that can be handed out at the
and retaining staff
Assignment 1: Acquiring and retaining staff
P1: Describe the internal and external factors to consider when
planning the human resource requirements of an organisation
Create a leaflet that describes the main internal and external
factors which must be considered when an organisation is planning
its HR requirements. Use images and diagrams if you wish.
Internal planning factors:
demand for products
and services, new products and services, new markets, technological
change, location of production; skills requirements; workforce profiles
(age, gender, ethnicity, ability)
External planning factors:
supply of labour (international, national,
regional, local, long
term trends, short
term trends); labour costs;
workforce skills; government policy; labour market competition;
changing nature of work; employee expectations
permanent, temporary, casual work; impact of automation; demand for
products and services
All organisations need to consider their human resources needs because it is impossible to deliver a business strategy
unless there are staff in place with the right combination of skills and aptitudes. In order to do this, HR planning must
take place. There are many factors to be taken into account.
Internal factors in HR planning
These are usually governed by the demand for products and services. A business might decide to alter production
from one product to another so that it can target a new market. This may produce a need for staff with new, or
different, skills and knowledge. Existing staff might be able to retrain to acquire the new skill. This is a responsibility o
the HR department and must be a part of the plan. For a business that delivers a service, the same applies. Changes in
demand for a service cause new skills to be required.
Technology changes all the time. This covers office equipment, computers and software, as well as the technology
used in production. The point is that technological change can require staff to retrain or update their skills. It is poor
management practice to acquire new technology without establishing that staff can use it. Location of production A
decision to relocate requires considerable planning. For example, some time ago, the Civil Service decided to relocate
some government offices from London to north
east England. Staff considerations formed a major part of the
planning. Would staff be willing to move from London? Would people in the area have the right skills to fill any
Another factor impacting on HR planning is the current profile of the workforce. If many staff are nearing retirement
age, or if there is a substantial gender or racial imbalance, then the organisation may need a recruitment programme.
External factors in HR planning
Supply of labour
HR planners must take account of the local labour market. A business must be able to recruit staff
with the necessary skills, abilities and aptitudes. This is crucial
most jobs require a range of
specialist skills, there are few unskilled jobs available. So HR planners need to know how many
people in the local labour market have the skills the business needs? Planners must also consider
demographics. Is the local workforce growing or in decline? What is the age structure of a workforce?
Cost of labour
This is a crucial area. Today, UK businesses face international competition from companies located in
countries with lower staff costs. For companies with global operations, it can be quite an easy
decision to relocate production to regions where labour is cheaper. This was the main reason why
Electrolux closed its factory in Durham, and moved production to Poland (see case study 1).
All HR planners must take government policy into account, particularly in relation to national
insurance, taxation, contracts and employment law. Businesses considering relocating or starting
operations in a new area will want to know the government’s regional policy. Will government
(national and local) be supportive of any move?
Changing nature of work
People today want their work to be balanced with their family life. Companies wanting to attract
calibre staff may need to offer terms and conditions that reflect this desire.
M1: explain why human resources planning is
important to an organisation
Add a separate section to your leaflet that fully explains
why HR planning is important to an organisation.
people as organisational resources; skill sets
job specific, generic; skill acquisition; skills audit, skill
transferability; impact of technology
P2: describe how the employee skills required to do
the jobs in an organisation are identified
Now produce further background material for the
Take four different jobs that exist within an
organisation. Create a brief written summary of the
various skills (such as numeracy, IT, people skills)
needed to do these jobs.
Draw up a diagram such as a flow chart to show how
the organisation identifies that these skills are required
in a job role. Use illustrations to show any
documentation that could be used.
Here is an outline structure for the presentation.
What is motivation? Why is it important?
Motivation theory: the old approach
Taylor’s approach: more pay leads to more work
Motivation theory: newer approaches
Slides 9 & 10
How these ideas can be implemented in an
How do organisations put these approaches into practice?
P3: Outline how an organisation’s motivational practices and
reward systems are informed by theories of motivation
HR managers are looking at ways of ensuring that the IT consultancy
continues to attract the very best candidates including the top graduates
from HE institutions. The policy is to attract, retain and develop the best
Create a presentation to describe at least four theories of motivation.
Outline how the organisation’s motivational practices and reward
systems can be informed by these theories.
theories of motivation
Taylor, Mayo, Maslow,
Herzberg, McGregor, McClelland, Vroom
related pay; pension schemes; profit
sharing; employee share options; mortgage subsidies; relocation fees;
bonuses; company vehicles; loans/advances; childcare; school fees;
corporate clothes; staff discounts; flexible working; leave; health care;
extended parental leave, career breaks; cafeteria incentive schemes; salary
M2: compare the use of motivation theories in an organisation
Now extend the presentation you prepared in task 3 by
investigating the use of motivational theories in a real
organisation. You can choose any organisation that you are
familiar with. (It does not have to be an IT consultancy.)
the use of motivation theories in the organisation
you choose to investigate
D1: suggest, with justifications, ways of improving motivation
in an organisational setting
, with justifications, ways of improving employee
within this organisation
or M2 and D1
Motivation in practice
A study of how one organisation seeks to motivate its employees. A set of slides
that address these questions.
Does the organisation empower workers?
Does it listen to them?
Are workers allowed to contribute?
Do managers encourage feedback?
Does the business have different reward systems for particular groups of
Does the business encourage social interaction?
What is the structure of the business?
can this practice be improved? Ideas for how this organisation can improve
employee motivation and raise morale might include introducing or enhancing:
rewards for performance
flexible work patterns.
Assignment 2: Employee performance
Describe how organisations obtain the co
employees through the contract of employment and employee
describe how employee performance is measured and
explain how the results from measuring and managing
performance inform employee
assess the importance of measuring and managing
employee performance at work
P4 Describe how organisations obtain the co
operation of employees through the contract of
employment and employee involvement techniques
in the most appropriate format
the contents and purpose of a
contract of employment. If you are able, provide some examples with your
the various ways in which an organisation such as the IT consultancy can
involve employees in the
. For example, you might consider things like staff
Contracts of employment:
contractual entitlements (pay, hours of work, leave, notice
period, pension benefits); employee and employer rights; types of employment contract
(full time, fractional, part time, temporary, casual); disciplinary procedures; grievance
procedures; union membership; codes of behaviour
Employee involvement techniques:
membership of work groups
councils, quality circles, intra
organisational groups (transnational, national, site
specific); suggestions schemes; devolved authority and responsibility; open
communications (formal, informal, top
up, lateral); types of
communication (newsletters, company bulletins); organisational culture (ethos, values,
mission); national accreditation (Investors in People (IIP), Charter Mark, International
Standards Organisation (ISO))
Sample answer for P4 (a)
Gaining employee co
operation through the contract of employment
contract of employment is an agreement between employer and employee. It establishes
rights and duties of both parties
these are called the terms of the contract.
[Learners could provide examples of specific terms here from a real employment context.]
The main terms of contracts of employment usually include:
hours of work
sick pay arrangements
disciplinary or grievance procedures
period of notice.
Employees are entitled to a written statement of the main terms of employment within eight
weeks of starting work.
The terms of a contract bind both parties. These cannot be changed unless the employee
resigns, or there is a mutual agreement to change them. How does this help to assure co
operation of employees? Because employees commit to the terms that are offered, this gives
the employer the right to expect staff to abide by the terms. Employers, for their part, must
follow the procedures that have been agreed, such as in relation to the period of notice.
Sample answer for P4
operation through employee involvement
The job of any manager would be impossible without a degree of staff co
decisions have an impact upon employees. Managers who take decisions in isolation and without any
consultation with their staff can often find that they have difficulty implementing these decisions
because they meet with staff resistance. The old
fashioned management practice tended to based on
the principle that employees should be instructed and sometimes bullied into working. They had to
‘do what they were told’. Managers took decisions without reference to staff opinion.
Communication was always top down. Today, modern managers try to seek staff views. Many
organisations create opportunities for staff to express their views and opinions.
There are several mechanisms for involving employees:
work groups, such as quality circles, works councils
used to discuss particular issues
these can be very successful in saving money and time, managers
the best suggestions
such as staff newsletters, the organisation’s intranet, bulletins
Investors in People
More fundamentally, an organisation can devolve authority and responsibility. This is sometimes
called empowerment. By enabling staff to make decisions without reference to senior managers, the
organisation hopes to speed up decision making and encourage greater employee commitment.
All this requires a positive organisational culture in which employees have a real sense of
participation and involvement. The ideal is to create a feeling among staff that their opinions and
actions really matter.
P5: describe how employee performance is measured and managed
M3: explain how the results from measuring and managing performance inform
D2: assess the importance of measuring and managing employee performance at work
task focuses on staff performance measurement
to describe the various ways in which staff performance can be measured.
how the results from this process can be used to plan staff development.
the importance of measuring and managing staff performance at work.
performance indicators (achievement against
targets); goal theory; SMART (specific, measurable, achievable,
sales targets, growth targets, financial
targets, waiting times, pass rates, punctuality, attendance;
probation; appraisal; supporting employees
mentoring, monitoring, buddying; occupational health; managing
workloads; delegating authority; responsibility; capacity; competence;
autonomy; linking rewards to performance; discipline; employee
development(training, learning, job rotation, accelerated promotion,
Sample answer for P5 (a)
Staff performance is crucial to the success of an organisation. Good management is about being able to motivate staff to work
the best of their ability. Every employee in an organisation has a job description. However, this only sets out the responsib
overall purpose and context of a job role. It helps line managers if job objectives are stated in SMART terms
that is, specifi
measurable, achievable, realistic and time constrained. This provides clear targets and goals for the employee. This view has
a huge impact on management theory (see, for example, Locke’s goal theory).
This section should describe the various ways in which employee performance can be measured.
A series of specific examples could provide with appropriate commentary. These examples could include:
say, a 10% increase in sales of X by Y
say, a 10% decrease in costs by...
say, an increase in market share by 3% by...
in customer service situations
pass rates, retention rates, success rates, attendance rates
Benchmarking against competitors.
This section should summarise the ways in which performance can be managed. This would include:
performance appraisal (IPRs)
using targets as part of process
employee support through mentoring, monitoring and buddying
in relation to issues such as stress management
managing staff workloads
delegating authority and responsibility
to empower staff
creating reward schemes
to take account of superior performance
letting staff use their initiative
basing this on results of the targets setting
judged on ability to meet targets.
Sample answer for
How results from target and goals setting can inform staff
During an appraisal system or individual performance review, a line manager can
refer to the previous year’s targets and measure the extent to which they have
The employee can refer to the targets and offer explanations if he or she has fallen
short. In a joint review of the year’s work, the manager and employee can agree
staff development programmes that might assist. Specific examples should be
provided here from learners’ research. These might include situations in which the
better IT skills
teamwork skills, management skills, etc.
The targets that are set for training and development are agreed. If there are
problems then a programme of remedial development can be used to assist the
Sample answer for D2 (c)
Why measuring performance is
A summary of the ways in which performance management
techniques could be important to an organisation should be followed
by learner judgement of whether they actually believe they are
valuable. All judgements should be justified.
They could be important because they:
are a motivator for employees
provide a focus for appraising staff
enable managers to identify weaknesses
provide a practical basis for remedial actions and staff
give specific criteria for managers to judge performance.