Select your language

Suggested languages for you:
Log In Start studying!
StudySmarter - The all-in-one study app.
4.8 • +11k Ratings
More than 3 Million Downloads
Free
|
|

All-in-one learning app

  • Flashcards
  • NotesNotes
  • ExplanationsExplanations
  • Study Planner
  • Textbook solutions
Start studying

Human Resources

Save Save
Print Print
Edit Edit
Sign up to use all features for free. Sign up now

Want to get better grades?

Nope, I’m not ready yet

Get free, full access to:

  • Flashcards
  • Notes
  • Explanations
  • Study Planner
  • Textbook solutions
Business Studies

HR should be every company's killer app. What could possibly be more important than who gets hired?"

-Jack Welch

Human resource management (HRM) is a crucial part of any business. Without HRM, organisations would not be capable of effectively recruiting and retaining employees, improving and enhancing the organisation, and they would not be able to maintain a healthy working environment. So, what exactly is human resource management? How can decision-making improve HR performance? and what are the human resource activities that can improve employee performance? Let's find out!

Human resource management

In order to truly understand the importance of human resource objectives, we first have to define what human resource management is.

Human resource management (HRM) is a strategic approach to effectively and efficiently manage people in an organisation in a way that will facilitate the organisation to achieve a competitive advantage.

Setting HR objectives

Setting goals allows the organisation to plan and assign resources. Making certain business decisions can a lot of time and require many resources.

If a company needs to increase its labour force, it needs a process to recruit, select, induct and train employees. This can be facilitated by effective HRM.

The benefits of having good HRM are:

  • Reduced costs due to higher productivity, greater efficiency, and higher quality products.

  • Increased value-added, hence increased profits. This can be due to higher quality products, better service to customers, and innovation built on the performance and determination of the workforce. A workforce that is determined and motivated will be willing to do its work in the best possible way, and hence, provide good quality products.

  • More employee engagement and involvement

  • Talent development

  • Improved employee turnover

  • Good conflict management

To learn more about setting HR goals, check out our explanation on the Human Resource Objectives.

Decision-making to improve human resource performance

Let's take a look at the role HRM has in business decision-making.

Human resource management

When we talk about decision-making in HR, it refers to a process that involves everyone. The decisions made by this function cover the whole employee lifecycle, from the period of talent identification, hiring, performance supervision, and compensation, to contract end. HR relies on market data and also internal responses, to allow better and quicker decision making.

The link between HRM and organisational goals

All HRM decisions have a direct connection to company goals.

If a company's goal is to become a market leader, they need to create an achievement-oriented company culture. This can be done through HRM, by implementing an outstanding recognition policy for example.

The function of HR, however, is becoming more complicated, as well as more crucial. Companies understand the significance of recruiting and retaining highly skilled workers. Retaining employees and preventing turnover can be one way of reducing costs. Productivity is also subject to its employees. Human resource managers are responsible for keeping employees satisfied and ensuring they comply with regulations.

To learn more about decision-making in HRM, check out our explanation on Human Resource Management.

How can human resources be improved?

Now, let's take a look at how effective HRM can improve a business.

Improving organisational design

Organisational design is the process of arranging organisational structure so that it is in line with its culture and goals.

Businesses are organised so they function effectively and efficiently. Businesses may contemplate improving and changing their design when:

  • There is a need for a formal structure to prevent confusion and disorder.

  • The old organisational design is not engaging and motivating enough for the employees.

  • The product/service quality of the organisation needs improvements.

Improving motivation and engagement

Motivation is the desire of the employee to perform or accomplish something.

Employee engagement is the degree to which employees feel determined to work for the organisation and contribute to its success.

The advantages of a motivated and engaged workforce are:

  • High-quality products with added value and less waste.

  • Lowers costs via efficient productivity and innovation.

  • Increased employee retention and thus decreased recruitment costs.

Improving employer-employee relations

Employer-employee relations refers to the relationship that exists between the two parties. The quality of the relationship will determine how well work-related problems are resolved. The benefits of good employer-employee relations are:

  • Employee loyalty

  • Employee retention

  • Preventing conflicts

  • Increased productivity

Measuring the effectiveness of HR management in improving performance

HRM can affect business performance in a variety of ways. This is why it is important to analyse HR performance and examine its overall impact on the organisation.

Measuring HR performance

Performance analysis is a method of evaluating the performance of a particular project, team or the whole organisation against set goals and objectives.

In HR, performance analysis can provide assistance in reviewing an employee’s contribution to an assignment/project.

In order to analyse performance, an organisation should be able to interpret the following:

  • labour turnover and retention rates

  • labour productivity

  • employee costs as a percentage of turnover

  • labour cost per unit.

Recognising the strong influence that HR has in a company is an essential sign of how successful the company will be in the future. The following considerations explain how HR performance can be measured and interpreted.

Efficiency

It is important to measure the efficiency of the HR department at applying policies, programmes, and schemes to effectively engage and manage employees. For instance, a company should examine the level of regularity, responsiveness, quality, and efficiency with which HR delivers services. Specific measures may include the type of problems the HR department is able to solve on average or the cost ratio of HR to the entire business costs.

Output

Output needs to be measured if HR is applying policies and strategies to maximise the recruitment, development, engagement, output, productivity, and retention of employees. This measure may comprise the percentage of newly hired employees, promotions, retention of employees, whether employees accomplished their learning goals, and the way performance is influenced.

Management of teams

It is important to consider how effective management strategies are at promoting positive morale, active engagement, the contribution of employees and teams, and overall productivity. The development of the team can be measured by tracking employee absenteeism and personal development plans.

Human resource management activities to improve employee performance

There are multiple ways in which human resource managers can ensure that they increase employee performance.

Conduct a survey

Try to find out what barriers are getting in the way of productivity with the help of an employee survey. If there are no systems in place for this, then there are several online platforms that permit the creation of surveys.

Incorporate flexible work

With the change of circumstances as a result of the pandemic, several employees might want to have the opportunity to work from home for the long term. Based on the role, flexible work programmes may increase employee productivity and reduce environmental stress, enabling better focus, decreasing unplanned meetings, and improving employee performance.

Modernise technology and tools

If the company has hired the best talent but uses outdated technology and tools it might obstruct productivity and create a sense of irritation among employees. While technology is expanding and improving all the time, it is essential to constantly update the tools needed so that processes run efficiently.

Constraint budgets make it difficult for employees to do well and innovate. Therefore, even with the best workforce, it will be harder for the company to improve employee performance, retain employees, and entice the best candidates in the future.

To learn more about how business improves employee performance, check out our explanation on Employer's Training and Development.

As a result, over time organisations have realised the increasing importance of human resource management and the advantages it brings for the organisation in terms of a satisfied workforce, lower employee turnover, greater employee involvement and engagement. All these factors will benefit the organisation in the long term if tackled with the right strategies.

Human Resource Performance Management - Key takeaways

  • Human resource management (HRM) is an approach for employee management in an organisation to facilitate competitive advantage.

  • Setting goals allows the organisation to plan and assign resources.

  • Organisational design is the process of arranging the organisation’s structure in line with its culture and goals.

  • Employer-employee relations denote the relationship that exists between the two parties. It involves any interaction and contact, for example, communication and work policies.

  • HR can be improved by enhancing the hiring process, educating employees, having clarity about expectations, and having reward programmes.

  • Human resource management can be measured through efficiency, output, team management, and human capital.

  • Improving employee performance can be achieved through surveys, incorporating flexible work options, and modernising technology and tools.

Frequently Asked Questions about Human Resources

In order for productivity to increase, businesses should emphasise achieving future objectives with strategies that will escalate employee productivity. This can be done by making the employees more motivated by offering them positive training and an environment which contributes to their satisfaction and therefore, helps with employee retention.

Some of the ways to improve HR are by enhancing the hiring process, educating the employees, having clarity about expectations, and having rewards programmes.

The human resource division of a business is in charge of the 'people' aspect of operations. Human resource management (HRM) is a strategic approach for effectively and efficiently managing people in an organisation in a way that will facilitate competitive advantage.

People in human resources are in charge of recruiting, selecting, training and managing employees. Additionally, human resource employees and managers also deal with administrative tasks like payroll and employee benefits programmes.

Human resources is important because it is in charge of recruiting and training skilled workers deemed to be a good match for the company. They are also in charge of retaining employees and making sure that employees are satisfied with the company, which is essential for the company's operations.

Final Human Resources Quiz

Question

What is organisational design?

Show answer

Answer

Organisational design is the process of organising the company’s structure so that it is aligned with organisational culture and objectives. Organisations are aimed to be designed in a way that they function the most effectively and efficiently as possible.

Show question

Question

What is a hierarchy?

Show answer

Answer

The structure of the way the decision-making process flows in the organisation.

Show question

Question

What is the difference between rigid and flat hierarchies?

Show answer

Answer

Organisations that follow rigid hierarchical structures, implement formal protocols, employees have clearly defined roles and responsibilities. The communication within and between hierarchical levels is usually formal. In contrast, organisations that follow a flat hierarchy design do not formally establish employees’ roles and responsibilities instead employees have flexibility regarding their duties and responsibilities. Additionally, communication between employees and managers is usually informal.

Show question

Question

What are the key elements of organisational design?

Show answer

Answer

The chains of command, the span of control and levels of hierarchy.

Show question

Question

What are the key reasons for improving organisational design?

Show answer

Answer

Organisational growth, the current organisational structure is complex and costly, employees need more motivation and the quality of a company’s services or goods requires improvement

Show question

Question

What are the key tips for improving organisational design?

Show answer

Answer

  1. Solving business problems first
  2. Maximising efficiency of the employees
  3. Building accountability and responsibility in all organisational levels
  4.  Build on existent organisational strengths
  5.  Ensuring that hierarchy fits the organisational purpose

Show question

Question

Why should the organisational redesign focus on employees?

Show answer

Answer

Because employees are the ones who bring value to the organisation. So, the goal is to develop an organisational design that will fit their needs and motivate them to work effectively.

Show question

Question

In what key ways organisational redesign can be focused on people?

Show answer

Answer

By focusing on workforce roles, workforce loads and job allocation.

Show question

Question

What are the key methods of improving organisational design?

Show answer

Answer

Delayering, Delegation and Employee empowerment.

Show question

Question

What is meant by Delegation?

Show answer

Answer

This is the process of assigning tasks and responsibilities to another person. For example, authority can assign tasks to other managers at the lower level and reduce top-levels management’s workload and help them to focus on main tasks.

Show question

Question

What is the key organisational design model?

Show answer

Answer

The Mckinsey 7s model.


Show question

Question

What are the key elements of the Mckinsey 7s model?

Show answer

Answer

There are seven of them which fall into either the hard or soft elements category.

Hard elements are: Strategy, Structure, Systems

Soft elements are: Skills, Staff, Style, Shared values


Show question

Question

How can redesigning the organisation can benefit a business?


Show answer

Answer

Changing organisational design can help businesses to keep up with the new trends and execute new strategies.

Show question

Question

What is an example of how organisational redesign has benefited the organisation?

Show answer

Answer

For example, if the company transitions from a start-up to a bigger company. To implement this new transition effectively the company needs to alternate its design. When the company was a start-up, a flat and informal structure worked effectively. However, once it becomes a bigger organisation it needs to adapt its design and implement a more formal structure with more hierarchical levels to organise the workforce effectively. This change of organisational design can assist the company to organise its workforce and achieving organisational goals.

Show question

Question

What is job design?


Show answer

Answer

Job design is the process of establishing employees’ duties and responsibilities that will be included in their roles. 


Show question

Question

What are the key elements involved in job design?


Show answer

Answer

The key elements involved in the job design are 1) Task 2) Motivation 3) Resource allocation 4) Reward system.


Show question

Question

What is meant by the job design element ‘resource allocation’? 


Show answer

Answer

In this context resource allocation means that the company allocates its resources in the most effective and efficient way possible to maximise employees’ productivity and innovations in their roles.

Show question

Question

What are the important aspects of job design?


Show answer

Answer

1) Job simplification 2) Job rotation 3) Job enrichment 4) Job enlargement

Show question

Question

What is meant by the ‘Job enlargement’?


Show answer

Answer

This is when more duties and tasks are added to the job role horizontally, meaning that even though the variety of duties and tasks will increase the employees will stay at the same hierarchical level.

Show question

Question

Why job design is important?


Show answer

Answer

Job design is important because it is a guidance that employees will follow when performing their roles. Additionally, a well-designed job will help employees to develop their skills, increase motivation and productivity which will have a positive impact on the company’s performance.

Show question

Question

What is an example of a poorly designed job?


Show answer

Answer

An example of a poorly designed job is when duties that are listed in the job description are unclear, involve too many or two little tasks.


Show question

Question

What are the outcomes of the poorly designed job?

Show answer

Answer

The poorly designed job can bring negative outcomes for the company such as low-performance rates, high staff turnover.

Show question

Question

What are the steps involved in the job design process?

Show answer

Answer

The job design process involves key steps, which are:

  • Deciding on important content that will be displayed on the job description
  • Consideration of skills and techniques that are required to perform a job
  • Deciding on the job hours in regards to if the job will be full time or part-time 
  • Avoiding listing tasks that can be done by machines
  • Make sure there are no occurring conflicts with other jobs
  • Establishing the relationships in the organisation that the role requires

Show question

Question

Why job design process is important when designing jobs?

Show answer

Answer

The job design process is important as it helps HR managers to design job that is effective and important in the organisation. Moreover, by following this process managers can avoid errors such as setting employees wrong working hours.

Show question

Question

What are the main job design models?

Show answer

Answer

The key job design models are Taylorism, Socio-technical systems approach and Core Characteristics model.

Show question

Question

What are the key aspects of the Socio-technical systems approach?

Show answer

Answer

The key aspects include:

  • The designed job should fit organisational goals
  • The employee’s needs should be considered when designing a job
  • Establishing good relationships with peers and supervisors 
  • Create an environment in which employees feel supported
  • Technical requirements that are needed to perform a job should be displayed
  • This design should provide a high-quality working life for employees
  • The changes to the job design should be made consistently according to changing environmental pressures.

Show question

Question

What are the key differences between the Socio-technical systems approach and the Taylorism model?

Show answer

Answer

The socio-technical systems approach is focusing on the social and technical aspects of the job and highly focuses on making a job that will fulfil employees’ needs. On the other hand, Taylorism focuses on implementing scientific methods that increased the maximisation of efficiency rather than the fulfilment of employees.

Show question

Question

What are the main job characteristics?

Show answer

Answer

The main job characteristics are Skill variety, Task Identity, Task significance, Autonomy, Feedback.

Show question

Question

What is the example of task significance?

Show answer

Answer

Task significance is the extent to which a task is important in the organisation. For example, a doctor has a high task significance as not everyone will be able to do their job and their role requires qualifications. Doctors’ everyday tasks of consulting patients are important for hospitals to function.

Show question

Question

If the job characteristics are incorporated into the job design what are the experienced psychological states by employees?

Show answer

Answer

The experienced psychological states are:

  • Experiences of meaningfulness
  • Experiences of responsibility
  • Knowledge of outcomes

Show question

Question

How the incorporation of job characteristics into the job design will impact organisational performance?

Show answer

Answer

The incorporation of job characteristics will help employees to experience positive psychological states which will lead to outcomes such as increased job satisfaction, motivation and productivity. This will positively impact the organisation as organisational performance are likely to improve.

Show question

Question

What is the definition of Hackman and Oldham’s job characteristics model?

Show answer

Answer

Hackman and Oldham’s job characteristics model is one of the key models regarding employees’ motivation at work. This model focuses on looking closer into the individual task design included in the job role rather than the job as a whole.

Show question

Question

What are the other ways to name Hackman and Oldham’s model?

Show answer

Answer

 The Job Characteristics Theory (JCT) and Core characteristics model.

Show question

Question

What does the model focus the most on?

Show answer

Answer

This model focuses on increasing employees’ satisfaction at work by incorporating job characteristic elements into the job design. The five elements are Task variety, Task identity, Task significance, Task anatomy and Task significance.

Show question

Question

When was this model created?

Show answer

Answer

 in the 1970s

Show question

Question

What are the principles of this model?

Show answer

Answer

Task variety, Task identity, Task significance, Task anatomy and Task significance.

Show question

Question

What is meant by the task identity?

Show answer

Answer

 Task identity means that tasks that are assigned to employees should feel whole and complete. Meaning that employees’ involvement in the task should be from start to the finish rather than only being responsible for adding small parts to the whole task.

Show question

Question

 If job characteristics are implemented what psychological states will the employees’ experience?

Show answer

Answer

 Experience of meaningfulness, the experience of responsibility and experience of outcomes.

Show question

Question

How does implementation of feedback benefit employees?


Show answer

Answer

 Feedback will benefit employees as it will communicate the further improvements that employees could be making in their job roles. This will assist employees in improving their work performance.


Show question

Question

What is an example of task significance?

Show answer

Answer

 For example, temporary employees such as administrators have low task significance as the majority of people will have the ability to send emails and answer phone calls. On the other hand, the doctor has a high task significance as not everyone will be able to do their job and their roles require qualifications. Moreover, doctors everyday tasks of consulting patients are important for hospitals to function.

Show question

Question

What is the difference between task identity and task significance?


Show answer

Answer

The task identity means that tasks that are assigned to employees should feel whole and complete. Meaning that employees’ involvement in the task should be from start to the finish rather than only being responsible for adding small parts to the whole task. On the other hand, task significance means the extent to which a task has importance in the organisation.

Show question

Question

 What are the key advantages of Hackman and Oldham’s job characteristics model?


Show answer

Answer

1) The model provides a clear and simple structure that can be easily incorporated into the job design 

2) The model has a clear connection between the job characteristics and outcomes of employees’ satisfaction at work. 

3) This model communicates how to design jobs in a way that they are motivating, engaging and challenging for employees 

4) This model positively influences employees’ performance.

Show question

Question

 How can this model contribute to achieving organisational goals?

Show answer

Answer

This model aims to increase employees’ satisfaction at work and more satisfied employees are likely to work harder and perform better. Better employees performance will contribute to achieving organisational goals.

Show question

Question

What are the key limitations of this model?


Show answer

Answer

1) This model may be outdated and may not fit the current trends of effective job design. 

2) This model does not take into account that some employees do not need these job characteristics to be satisfied at work 

3) This model does not focus on individual employees needs in regards to job satisfaction.

Show question

Question

Why may this model not fit the current job design trends?


Show answer

Answer

Hackman and Oldham’s model assumed that all organisations should incorporate similar job characteristics in their job designs. However, now organisations design jobs based on their core competencies and each job design includes different features to be effective. The job characteristics model follows the ‘one fits all approach’ this approach to job design may not be fitted to today’s trends.

Show question

Question

Do all employees need to have job characteristics implemented into their roles to be satisfied?

Show answer

Answer

No, because some employees may not desire to have job characteristics incorporated in their jobs such as flexibility of organising their work or be required to have a variety of skills to perform a job. This may even cause employees burdensome and dissatisfaction.

Show question

Question

What is the human resource flow?

Show answer

Answer

Human resource flow describes the way employees ‘flow’ throughout the organisation. It explains employees’ journey from the begging when entering the company to the end when exiting the organisation.

Show question

Question

How many steps are included in the human resource flow model?

Show answer

Answer

3 steps.

Show question

Question

What are the steps included in the human resource flow model?

Show answer

Answer

Inflow, Throughflow, Outflow.

Show question

Question

What does human resource flow describe?

Show answer

Answer

The employee’s life cycle in the organisation.

Show question

60%

of the users don't pass the Human Resources quiz! Will you pass the quiz?

Start Quiz

Discover the right content for your subjects

No need to cheat if you have everything you need to succeed! Packed into one app!

Study Plan

Be perfectly prepared on time with an individual plan.

Quizzes

Test your knowledge with gamified quizzes.

Flashcards

Create and find flashcards in record time.

Notes

Create beautiful notes faster than ever before.

Study Sets

Have all your study materials in one place.

Documents

Upload unlimited documents and save them online.

Study Analytics

Identify your study strength and weaknesses.

Weekly Goals

Set individual study goals and earn points reaching them.

Smart Reminders

Stop procrastinating with our study reminders.

Rewards

Earn points, unlock badges and level up while studying.

Magic Marker

Create flashcards in notes completely automatically.

Smart Formatting

Create the most beautiful study materials using our templates.

Sign up to highlight and take notes. It’s 100% free.