Chapter 16 - human resource management strategy

●​ Human resource strategy is a long-term plan for the management of an

organisation’s human resources
●​ Without a proper HRM strategy the business will have the wrong number of
employees, with inappropriate skills, poor employee performance, inappropriate
employment contract, etc
●​ Hard HRM and Soft HRM
○​ Hard HRM is an approach to managing employees that focuses on cutting
costs
■​ Theory X and taylor’s approach
■​ Obtained as cheaply as possible to keep labour cost per unit low
■​ Little concern over work-life balance
○​ Soft HRM is an approach to managing employees that focuses on their
development so that they reach self-fulfilment and are motivated to work hard
and stay within the business
■​ Theory Y and herzberg’s views on motivation
○​ A hard HRM is now being adopted for more peripheral workers and soft HRM
for core workers
○​ What are the long-terms effects of Hard HRM to the business;
■​ Increase in recruitment and induction training costs as workers
frequently leave
■​ Demotivated workers as there is little job security, this affects the
business with lower productivity, reducing business efficiency and
profitability
■​ Bad publicity caused due to pressure groups
●​ Employment contract
○​ Full-time employment contract is an employment contract that is for a
complete working week
○​ Permanent employment contract is a contract that employs a worker unless
they are dismissed, made redundant or decide to leave the organisation
○​ Temporary employment contract is the contract that is only offered for a fixed
period of time. The contract can be renewed but the employer does not have to
do this
○​ Part-time employment contract is offered to those employees who have to
work for a certain number of hours (less than that of the full-time employment
contract
○​ Zero-hour contract is when there is no guarantee of the minimum number of
hours per week, but the worker must be available for work when called
●​ Gig economy is when temporary, flexible jobs are common and workers are hired as
independent contractors and freelance employees
Advantages and disadvantages of the employment contracts
Full-time employment contract and Permanent employment contract
Advantages Disadvantage

Fulfils Security needs defined by maslow Labour costs are fixed

Employee loyalty Contracts are inflexible

Employers are likely to finance training

programmes, therefore helps keep
employees motivated

Temporary employment contract, Part-time employment contract & Zero-hour contract to a

business
Advantages Disadvantage

Fixed labour costs are reduced More employees to manage than if they
were full-time

Competitive advantage for the business as Effective communication is difficult as there

costs of labour significantly reduces is a greater number of workers

More workers are available for call upon Teamwork culture is difficult to establish
during sickness and therefore no time lost
during production

Efficiency of workers can be assessed Workers may have a zero-hour contract with
before they are offered a full-time multiple employers and hence may not be
employment contract available always

Temporary employment contract, Part-time employment contract & Zero-hour contract to a

employee
Advantages Disadvantage

flexibility and control over when to work, Part-time pays less

creates a good work-life balance

Greater variety of work experience Security of employment and working

conditions may be inferior

May give similar income to a full-time Fewer training opportunities

●​ Flexible employment contracts

○​ Flexitime arrangement is when employee can fit their working hours around
their individual needs and accommodate other commitments outside of work
○​ Home working is working from home for a specific number of days
 ○​ Annualised hours contract is a contract offering a specific number of hours of
work over the whole year
○​ Job sharing is 2 employees voluntarily share responsibilities of one full-time
job
○​ Compressed working hours is the number of hours per week of a full time job
but worked in fewer days
●​ Why will labour productivity increase
○​ Improved employee motivation
○​ More efficient capital equipment
○​ Employee training
○​ Improved operations efficiency, no more buffer time of receiving raw
materials
●​ Absenteeism is a measure of the rate of workforce absence as a proportion of the
employee total
○​ (Number of days of employee absence / total number of workdays) * 100
●​ Hard strategies for improving employee performance focuses on warning
employees, disciplines if targets are not met and dismissal if the work is of poor
quality
●​ This however will lead to lower motivation which reduces motivation further. On the
other hand, there is a decrease in costs in the short-term
●​ Soft strategies include regular performance appraisal, 2-way communication, quality
circles, additional training to increase operational efficiency, financial incentives
linked to profits such as ESOPs, MBO
●​ Though this increases costs of training and meetings, there is a greater level of
motivation from these strategies
●​ Management by objective (MBO) is establishing a management information system
to compare actual performance and achievements against pre-set objectives for each
department or employee
○​ Would be used by managers who follow a theory Y approach
○​ Job enrichment
○​ Agreed and discussed with the managers and employees​
■​ Advantages of MBO
●​ Sense of focused direction
●​ Avoid conflicts as everyone is working to the same overall
target
●​ Control device; measure success or failure against the targets
■​ Limitations of MBO
●​ Time-consuming as it has to be discussed, agreed and then
implemented
●​ Objectives can become out-dated very quickly
●​ Non-compliance with managers as they believe in theory X
approach