Business 6
Human resource management
Human resource objectives
—> Setting Human resource objectives
– Clear targets that help a business plan and manage its workforce more effectively
-> Improves business performance
-> Supports strategic planning
-> Enables measurement and control
-> Helps attract investment and leadership support
Different types of HR objectives
– Employee engagement
– Talent development
– Training diversity
– Alignment of employee and employer values
– Number, skills and location of employees
Soft HRM Approach
– Focuses on employees as valuable long term assets
– Emphasises motivation, engagement and development
– Often linked to higher staff retention and job satisfaction
– Eg John Lewis Partnership
Hard HRM Approach
– Treats employees more like a resource to control and minimise costs
– Focuses on efficiency, short term contracts and minimal employee involvement
– Often linked to lower labour costs but higher labour turnover
– Eg. Sports Direct
Human resource performance
—> Calculating and interpreting human resource data
Use of HR data
– Identify problems
– Plan ahead
– Improve performance
– Control costs
– Labour turnover - measures the proportion of employees leaving a business during a specific
time period
Labour turnover = no. Of staff leaving / average no. Of staff x 100
, Internal and external factors that affect about turnover
Internal
-> Poor management
-> Poor recruitment and selection
-> Low wage levels
External
-> Local economy where workers are attracted to employe,to opportunities elsewhere
-> Improved transport links that provide opportunity for workers to seek work across a wider
geographical area
Consequences of high labour turnover
– Increases recruitment and selection costs
– Increased induction and training costs
– Lower productivity levels as workers settle into new roles
– Labour productivity - measures output per worker during period of time
Labour productivity = output / no. Of workers
Higher labour productivity —> lower labour costs per unit —> improved efficiency —> competitive
edge
Employee costs as % of turnover = employee costs / turnover x 100
– Labour costs per unit - measures how much it costs in wages to produce one unit of output
Labour costs per unit = total weekly wages / no. Of units produced
Influences on employee costs as % of turnover
– Wage levels and contracts
– Productivity
– Technology
– Industry type
– Revenue performance
How HR data supports decision making
– Labour turnover: high turnover may lead business to invest in better training, improve
management or raise pay to improve retention
– Labour productivity: falling productivity could trigger a review of equipment, working
conditions or staff training needs
– Labour cost per unit: rising labour costs may push a business to automate processes or
reallocate staff more efficiently
– Employee costs as % of turnover: if employee costs are growing faster than revenue,
business may need to restructure or freeze recruitment
Organisational design
Human resource management
Human resource objectives
—> Setting Human resource objectives
– Clear targets that help a business plan and manage its workforce more effectively
-> Improves business performance
-> Supports strategic planning
-> Enables measurement and control
-> Helps attract investment and leadership support
Different types of HR objectives
– Employee engagement
– Talent development
– Training diversity
– Alignment of employee and employer values
– Number, skills and location of employees
Soft HRM Approach
– Focuses on employees as valuable long term assets
– Emphasises motivation, engagement and development
– Often linked to higher staff retention and job satisfaction
– Eg John Lewis Partnership
Hard HRM Approach
– Treats employees more like a resource to control and minimise costs
– Focuses on efficiency, short term contracts and minimal employee involvement
– Often linked to lower labour costs but higher labour turnover
– Eg. Sports Direct
Human resource performance
—> Calculating and interpreting human resource data
Use of HR data
– Identify problems
– Plan ahead
– Improve performance
– Control costs
– Labour turnover - measures the proportion of employees leaving a business during a specific
time period
Labour turnover = no. Of staff leaving / average no. Of staff x 100
, Internal and external factors that affect about turnover
Internal
-> Poor management
-> Poor recruitment and selection
-> Low wage levels
External
-> Local economy where workers are attracted to employe,to opportunities elsewhere
-> Improved transport links that provide opportunity for workers to seek work across a wider
geographical area
Consequences of high labour turnover
– Increases recruitment and selection costs
– Increased induction and training costs
– Lower productivity levels as workers settle into new roles
– Labour productivity - measures output per worker during period of time
Labour productivity = output / no. Of workers
Higher labour productivity —> lower labour costs per unit —> improved efficiency —> competitive
edge
Employee costs as % of turnover = employee costs / turnover x 100
– Labour costs per unit - measures how much it costs in wages to produce one unit of output
Labour costs per unit = total weekly wages / no. Of units produced
Influences on employee costs as % of turnover
– Wage levels and contracts
– Productivity
– Technology
– Industry type
– Revenue performance
How HR data supports decision making
– Labour turnover: high turnover may lead business to invest in better training, improve
management or raise pay to improve retention
– Labour productivity: falling productivity could trigger a review of equipment, working
conditions or staff training needs
– Labour cost per unit: rising labour costs may push a business to automate processes or
reallocate staff more efficiently
– Employee costs as % of turnover: if employee costs are growing faster than revenue,
business may need to restructure or freeze recruitment
Organisational design
