Business Management Unit 4- The Human Resource Management Function

Methods Used to Conduct Job Analysis

- interview - questionnaire - observation - supervisory reports - log books and daily work diaries

Interpersonal Skills

Skills used by a manager when dealing with people on a personal basis, such as being able to lead, motivate, communicate, manage conflict and build team rapport

Attitudinal Survey

Systematic method of determining what employees think about their job, supervision and the organisation

Job Analysis

Systematic process of gathering information relating to a job being performed

Dismissal

Termination of an employment contract due to incompetence or indiscipline

Aptitude Test

Test of special abilities (e.g. clerical, language, artistic) that are required for a specific job

HRM's Relationship to Business Objectives

The Human Resource function is imperative to achieving an organisation's objectives because it is within this function that employees are motivated, which can decrease staff turnover and increase staff morale, therefore productivity is maximised which would subsequently increase the success of the organisation.

Application

The act of applying for a job or advertised vacancy; the letter or communication used in expressing interest in a job or advertised vacancy

Relationship of Employee Relations to Business Objectives

The aim of employee relations is to achieve an optimum working relationship between the employees of an organisation and management. In doing so, the level of conflict will be decreased and leads to a harmonious work environment. This in turn will create optimum worker and organisational productivity, resulting in greater organisational competitiveness.

Remuneration

The amount a person is compensated (paid) for performing work tasks (job); it can take the form of cash and/or fringe benefits; it can be referred to as a salary or wages

Employee Motivation

The employee's willingness or drive to exert high levels of effort to reach organisational objectives, while also satisfying individual employee's need to achieve.

Establishment Phase

The first phase which involves establishing the employment relationship between an organisation and an employee.

Change Agent

The individual leading or guiding the process of change in an organisational situation

Business Strategy

The long term plan of action adopted by an organisation to achieve its goal and objectives.

Human Resource Management

The management of a wide range of responsibilities relating to the human (employees) function within a business, in order to increase both the employees' and organisational efficiency.

Job Security

The probability that an individual will keep his or her job. Job insecurity can lead to decreased levels of motivation demonstrated by employees as well as decreased levels of loyalty and commitment to the organisation.

Development

The process designed to develop skills necessary for future work activities and responsibilities

Recruitment

The process of finding the best qualified pool of applicants

Induction

The process of introducing new workers to their place of work, their job role, their colleagues, supervisors, management and corporate culture. A good induction program is important as it includes welcoming new employees and helping them to feel like a part of the organisation, therefore reducing staff turnover. It also provides an opportunity to communicate and reinforce the corporate culture, and provide information that helps employees understand their entitlements and responsibilities and the performance expectations and means the new employee will become effective and reach expected performance levels more quickly.

Training

The process of providing an employee with the knowledge of specific skills needed to do a job

Employee Relations

The relationship between employees (or their representatives) and employers (or their representatives), encompassing all aspects of their working lives, including wages and conditions of employment based on optimum working relationships

Maintenance Phase

The second phase where the role of the HR manager is to ensure the organisation retains productive and efficient employees who are loyal and committed to the organisation

Corporate Culture

The shared values and beliefs of an organisation, which can influence the actions and decision-making style of managers and employees

Performance Management

The system used to improve organisational, functional and individual performance through linking the objectives of each; it assesses all phases of the employment cycle

Termination

The third and final phase of the cycle and results from decisions made by either the employer or the employee to end the employment contract and relationship.

HR Manager Skills

• Communication and listening skills - these are vital, as most disputes can be solved with effective communication • Negotiation skills • People skills • Team building • Planning and leadership skills • Understanding and knowledge of workplace relations laws and how they apply • Problem-solving skills • Decision-making skills.

Redundancies Commonly Arise When

- an employer is closing part or all of its business - an internal organisational restructure occurs - new technology is introduced - a business is relocating - the duties of a position are reallocated to other employees - the business merges with or is acquired by another business

Similarities Between Centralised and Decentralised Approaches

- Both use rewards as the minimum terms and conditions of employment for an entire industry - Both have some degree of union involvement - Both are legally binding

Differences Between Centralised and Decentralised Approaches

- Decentralised approach is flexible whereas centralised is inflexible - In a centralised system, awards are industry-wide and were used as the main type of wage determination and contract whilst in a decentralised system, the awards are a 'safety net', acting as minimum standards, yet ultimately they are replaced by other contracts such as enterprise bargaining approaches

Types of Employer Association

- Industry associations- employers from the same industry group e.g. Mining Council of Australia - Professional associations- made up of members of professional groups e.g. Australia Medical Association - Peak bodies- employers from a variety of industry types e.g. Australian Industry Group

Appraisal Methods

- Management by objectives (MBO)- involves setting specific, measurable objectives with an employee and then periodically reviewing the employee's performance - Comparative standards- a form of performance appraisal where one employee's performance is compared to or ranked against the performance of another employee - Absolute standards- a method of performance appraisal involving the independent evaluation of an employee's performance by their manager - Critical incidents- method of appraisal involving the appraiser/manager recording observations or events of good or poor employee performance

Three Levels of Analysis

- Organisational analysis - the entire business is analysed to determine where training activities should be concentrated to best achieve its strategic objectives. - Task analysis - the individual jobs to be performed are analysed to determine whether any skill deficiencies are evident. - Person analysis - each employee is assessed to determine what kind of training is required

Types of Employment Contracts

- Permanent full-time basis => employees are entitled to receive a salary or wage, leave entitlements and superannuation - Permanent part-time basis => employees are entitled to receive a salary or wage, leave entitlements and superannuation. work fewer hours than full time - Casual basis => short term, irregular or seasonal work. paid on a daily or hourly basis and do not have access to sick leave and annual leave - Fixed-term basis

Performance Appraisal Outcomes

- Remuneration and rewards - Training and development - Counselling - Job promotion - Job rotation/transfer - Termination

Factors That Allow for Optimal Workplace Relations

- The adoption of a participative management style facilitates a sense of ownership of decisions for employees as they feel their contribution is valued when they are part of the decision-making process. A team approach to planning and decision making develops employee trust. Employees who are consulted feel valued and in turn develop a loyalty to the organisation. - Effective communication skills and methods allow employees to interact openly with management, and feel valued and are less inclined to resort to industrial action when dealing with workplace conflict - Provision of fair pay and working conditions and recognition of employee achievement and effort creates a positive workplace atmosphere.

Aim of Employee Relations

- To achieve optimum working relations between employees and management - To focus on using specific strategies to retain, reward and motivate effective and skilled employees - To create optimum worker and organisational productivity, which leads to increased business competitiveness

Types if Remuneration

- Wages => worked out on an hourly basis for a working week - Salary => annual figure usually paid on a monthly or fortnightly basis - Salary packages => performance-based pay (bonus), superannuation entitlements - Benefits => e.g. paid maternal leave

Three Phases of the Employment Cycle

1. Establishment phase - HR planning - Job analysis and job design - Recruitment - Selection - Employment arrangements - Remuneration 2 Maintenance phase - Induction - Training and development - Recognition and reward - Performance management 3 Termination phase - Termination management - Entitlements - Transition issues

Fair Work Australia Institutions

1. Fair work Ombudsman- promotes legislative compliance, educates, informs and provides assistance. Appoints Fair Work Inspectors 2. Fair Work Inspectors- assists employers and employees to comply with National Employment Standards (NES), awards and collective agreements. Bring court proceedings to enforce employee and employer rights and obligations

Steps in Appraisal Process

1. Identify and establish performance appraisal objectives. 2. Evaluate or appraise the employee's performance through a combination of observation and analysis 3. Review performance and provide feedback to the employee. Strengths must be recognised and rewarded, weaknesses overcome with assistance

Process of Recruitment

1. Identifying human resource requirements- ensuring that the people recruited and ultimately selected have the skills and attributes required by the organisation to assist in achieving corporate business objectives 2. Recruitment source- internal or external recruitment 3. Recruitment methods- advertising, electronic recruiting, government employment agencies, personnel and management recruitment consultants and outplacement firms

Selection Process

1. Receipt of application 2. Screen and short list 3. Interviews 4. Testing 5. Reference checking 6. Offer job to best applicant

Employment Contract

A formal written agreement between an employer and an employee setting out the legal obligations of each party; an informal or oral agreement may also be entered into

Job

A group of tasks performed by an employee

Quality Circle

A group of workers who meet regularly to discuss quality and production issues; any proposed changes to production methods are then put forward to management

Functional Manager

A manager responsible for just one organisational activity, e.g. finance, human resource management

Staff Manager

A manager who provides specialist advice or assistance to functional managers

Herzberg's Two-factor Theory

A motivational theory that states that two factors, hygiene and motivators, affect job satisfaction. Hygiene factors are lower-order needs that can't motivate people, but the absence of them can result in overall dissatisfaction within a job (e.g. pay doesn't motivate people but if it's too low it will cause dissatisfaction). Hygiene factors include pay, job security, working conditions, interpersonal relations in the workplace and rules and policies Motivators are higher-order needs that are linked to job satisfaction and performance, and include recognition, achievement, opportunity for advancement,the work itself, challenging work and giving greater responsibility to team members. Pro's => Encourages challenging work which can enhance creativity and innovative ideas for the organisation, thus assisting in the achievement of organisational objectives. Increases employee motivation, thus overall productivity.

Locke's Goal Setting Theory

A process theory of motivation that focuses on the process of setting and attaining goals. To be effective, workers and the manager should both be involved in negotiating the goals and the goals need to be established using the SMART principle (specific, measurable, attainable, relevant and time-bound) as well as providing periodic feedback on performance to employees. In the setting of goals, two factors are thought to be important: goal difficulty and goal specificity. Goal difficulty refers to the extent to which a goal is challenging and states that, to a certain extent, motivation will increase as the difficulty of a task increases. Furthermore, clearly defining a goal will also increase the probability of achieving it. Pro =>The setting of goals lead to increased efforts, task focus and persistence, all of which led to improved performance of both the individual and the organisation. Con =>If the goals are too difficult, employees can lose motivation as they will think that the goal is unattainable. If goals are not achieved, employee morale could decrease as they feel they have failed and thus could result in increased staff turnover and decrease productivity.

Union Collective Agreement

A written agreement made between an employer(s) and a union(s) that sets out the terms and conditions of employment; an agreement may cover businesses run by more than one employer

Employee Collective Agreement

A written collective agreement made between an employer and the employees, setting out terms and conditions of employment

Job Description

A written description of a job's title, duties and responsibilities, including its location on the organisational chart

Maslow's Hierarchy of Needs

Abraham Maslow's representation of human needs in the form of a pyramid or hierarchy, are ranked with the most basic needs (physiological and security needs) situated at the bottom of the hierarchy, progressing to higher level needs at the top (social, esteem and self-actualisation needs). This theory states that the lower levels must be accomplished before an individual can move to the next stage and that once a particular need is satisfied it is no longer a motivator. The five stages include: 1. Physiological needs, e.g. providing pay to employees 2. Safety needs, e.g. long term contract 3. Social needs, e.g. birthday parties, working teams 4. Esteem needs, e.g. promotion, good performance ratings such as 'employee of the month' 5. Self-actualisation, e.g. challenging work allowing for creativity and innovative ideas Pro's => By successfully accomplishing all stages, the organisation will have an effective motivational strategy that allows employees to exert high levels of efficiency and morale, therefore increasing the overall productivity of the organisation. Con's => It can be hard to determine what stage an employee is on and therefore can be ineffective

External Recruitment

Advertised outside the organisation and candidates can come from anywhere Pro => a larger pool of applicants who are likely to provide fresh insights, new approaches and new ways of solving problems to the organisation Con => advertising and interviewing new employees is time-consuming, more difficult and costly. There is also limited career advancement of existing employees, therefore decreasing their motivation.

Internal Recruitment

Advertising the position within the organisation and allows for staff to be promoted Pro => Lower costs because an induction process and paying for advertising will not be required. It also acts as a motivator and morale booster for employees as they are promoted Con => No new ideas, skills and approaches to problem solving are introduced, which could stifle creativity and innovation

Award

An agreement that sets out minimum terms and conditions of employment relating to an industry

Trade Unions

An organisation formed to represent and protect the rights of workers in a particular industry Benefits: - Campaigns for better pay and work conditions - Provides support at the workplace level - Threat of unemployment - Taking action for safer workplace - Acts as a spokesperson to the media

Employer Associations

An organisation that provides a range of advice to employers and represent their interests on employee relations issues Benefits: - Represent and assist employer groups - Promote their common interest in employee relations - Share information and offer mutual support on their rights and obligations - Acts as a spokesperson for members of their organisational type - Represent employers during bargaining over wages and conditions

Application Form

Basic source of employment information covering qualifications, experience and other job-related data

Measuring HRM Effectiveness

Commitment- Employee's identification with and attachment to their job and the organisation. Affects greater loyalty, increased team-work and reduced staff turnover Competence- Employee's ability to achieve the organisation's objectives Cost effectiveness- Eliminating unnecessary work, reducing staff turnover and improving employee's efficiency and productivity Congruence- Agreement between management and employees. Harmony in a working environment. Adaptability- The organisation's readiness for change and innovation Performance- Employee's productivity levels. Organisation's profitability and success. Job Satisfaction- Employees feeling good and positive at work and can decrease levels of staff turnover Employee Motivation- Employee's drive to achieve goals

Capabilities

Competence to perform a task

Internal Environmental Pressures on HRM

Corporate culture- a positive corporate culture can result in motivational work environment Organisational structure- can impact on employee's productivity, e.g. a flatter structure is more flexible and informal and can influence job design, decision making and skills and abilities of employees Employees- greater demand for balance between work and family life, which can impact on need for workplace flexibility.

Job Specification

Detailed listing of the personal skills and characteristics required to perform a particular job

Performance Appraisal

Determining how well employees have performed their jobs, providing feedback to employees and establishing plans to improve performance

Training Needs Analysis

Diagnoses the current problems and future challenges that need to be overcome through use of a training program

Government

Enacts laws that directly control and influences the conduct of employee relations in areas such as: - Employee contracts - Taxation - OH&S - Equal opportunity - Pay and working conditions- establishes institutions to manage this environment - Responsible for economic management which impacts on economic activity rates and wage levels

Fair Work Act 2009 (Commonwealth)

Federal legislation that established the roles and powers of Fair Work Australia, the Office of Fair Work Ombudsman and the Fair Work Divisions of the Federal Court and the Federal Magistrates Court

Rewards and Recognition

Financial Rewards: - wages - salary - superannuation - performance-related pay Non-financial Rewards: - promotion - career development - travel, entertainment vouchers or film tickets - recognition

Work-Life Balance

Flexibility between personal life and job commitments. Such as the ability to leave work early to attend child's parent/teacher conference.

Job Design

Grouping together of tasks for a particular job, which should incorporate variety and challenge for the job holder

External Environmental Pressures on HRM

Legal- e.g. equal employment, leave entitlements, discrimination, health and safety and termination Environment- can create new employment areas e.g. environmental pollution, energy conservation. Technology- can create more flexibility and impact on job design, recruitment, selection and training. Social/cultural- changing values and attitudes have led to changes in dress code, style of work, recognition of minority groups, smoking and job security. Industrial/employee relations- e.g. unions, can affect job design and pay rates

Job Enlargement

Making a job bigger or more challenging by combining various operations at a similar level (horizontal); acts to increase motivation and job satisfaction

Job enrichment

Making a job more challenging so workers are required to use their full capabilities and gain personal growth

Line Management

Management responsible for and having direct authority over subordinates within their area of authority

Retrenchment

Occurs when an employee whose employment is terminated by reason of his or her job becoming redundant

Fair Work Australia

One-stop shop for information, advice and assistance on workplace issues It has the power to: - Vary awards - Make minimum wage orders - Approve collective agreements - Determine unfair dismissal claims - Assist employers and employees to resolve workplace disputes

Termination Management

Outplacement services- services provided to assist employees who have been retrenched to gain new work and manage the stress associated with losing their job. Assistance can include counselling to counteract negative feelings, improving résumé-writing skills, preparing for job interviews including interview practice, and make phone calls to organise interviews and print relevant documents. Transition services- services provided to employees who are retiring and need assistance to organise their finances, lifestyle planning and volunteering activities.

Compensation

Payments and/or benefits paid to an employee in exchange for their labour

Human Resource (HR) Planning

Planning for future personnel needs, taking into account both internal activities and factors in the external environment. During human resource planning, management must ensure that the required human resources will be available to achieve the organisation's strategic plan.

Impact of Termination

Positive: - cutting of non-productive employees - reduction in costs Negative: - loss of talent - cost of replacement - decline in morale - breakdown of effective teams - productivity could increase or decrease (depending on effectiveness of departing employee)

Selection

Process undertaken by an organisation to decide whether to make a job offer to a candidate

Occupational Health and Safety

Providing a safe and healthy work environment.

Equal employment opportunity (EEO)

Providing people with a fair and equitable opportunity to succeed without any form of discrimination based on age, sex, race or nationality

Reward

Recognition (financial and non-financial) for a job well done or to act as a motivator to perform a job

Human Resource Manager's Role

To develop a strategic, client-oriented and market-driven approach within the human resource function in order to adapt to the current dynamic operating environment and achieve both employees' and the organisation's objectives. Specifically, the HR manager's role includes performance management, HR planning, training and development as well as translating business strategies into action in order to increase employees' and organisational efficiency and achieve business objectives.

Competency-Based Training

Training that focuses on the ability to perform specific tasks to a predetermined standard

Competency Testing

Undertaken by using business games such as a role play or work stimulation exercises to judge how the applicant will handle various work situations.

Resignation

Voluntary termination that occurs when an employee leaves the workplace, usually to go to another job

Retirement

Voluntary termination where an employee decides to leave the paid workforce

Employee's Expectations

What an employee demands from the organisation and employers. This includes: - to be paid a fair wage - to finish work on time - to work in a safe and healthy work environment - to have the opportunity for promotion - to be able to negotiate flexible working arrangements - to have time off

Conditions of Employment

What an employer has agreed to give the employee in return for their work. Such as: - number of hours from employee - annual leave entitlements, e.g. sick leave - public holidays - redundancy pay

Employer's Expectations

What the employer expects or demands from the employee. This includes: - that employees comply with health and safety policies and procedures - that employees are skilled and willing to be trained and developed - that employees arrive on time and leave at the scheduled time - that customers are given good customer service - to achieve the organisational objectives in satisfactory manner

Centralised system (of employee relations)

Where awards (pay and working conditions) were determined by a central body (AIRC) relating to an industry Pro => All documents about pay and work conditions are government-determined, therefore there is a certainty of pay and work conditions for employees working in the same industry. As a result, employees won't feel demotivated as their colleagues are being paid equal amounts. Con => Reduces the potential for employees to have flexible pay and work conditions, which can decrease motivations and therefore job satisfaction. It also eliminates the potential for rewarding and recognising employees for a job well done which can furthermore decrease staff morale and motivation

Decentralised system (of employee relations)

Where employers and employees at each workplace determine their pay and working conditions and work through their differences without outside interference Pro => allow organisations and employees to negotiate pay and working conditions, thus increasing the opportunity for productivity gains through improved staff motivation and job satisfaction. It also creates a more inclusive environment where both parties are working together which can increase employee's loyalty and commitment to the organisation. Con => Can be more time-consuming as employers have to undertake negotiations. Can increase the likelihood of industrial disputes. Employers can take exploit employees

Flexible Work Practices

Work practices that allow employees to balance work and family responsibilities, e.g. variable working days/weeks. Creating a work environment that takes into account the impact of family responsibilities on employees will lead to a more loyal and committed employee, which will translate into greater job satisfaction and better work performance.

Job Rotation

Workers are moved between different jobs to increase variety of work and to create a flexible workforce