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2.1 Introduction to human resource management

Role of HRM

  • Human Resource Management (HRM) is the process of managing people within an organization to achieve business goals. This includes tasks like:

  • Planning for staffing needs

  • Recruiting and hiring employees

  • Training and developing employees

  • Evaluating employee performance

  • Managing employee compensation and benefits

  • Handling disciplinary issues

  • Ensuring employee well-being

How can human resource planning be achieved

  • Historical data: Examining past workforce size, part-time employment, and flexible work patterns can provide insights but isn't always predictive.

  • Economic conditions: Increased income and spending typically lead to job growth.

  • Employee turnover: High turnover rates indicate a need for increased recruitment and training.

  • Workforce flexibility: A skilled and adaptable workforce can handle fluctuations better than an overspecialized one.

  • Demographic trends: Changes in the workforce composition (e.g., more women, graduates) can impact future staffing requirements.

What are the 5 R’s of Human Resources

  • Recruitment - Higher costs of recruitment, induction and training. 

  • Resources - Increasing resources and management time spent on dealing with personnel problems, rather than achieving organizational objectives. 

  • Reservations - Lower morale and higher levels of uncertainty suffered by existing staff who experience continual change mean that employees are more reserved and less productive.

  •  Returns - Lower levels of labour productivity, profits and competitiveness.

  •  Reputation - Poorer corporate image as the business cannot retain or motivate its staff

Internal and external factors influencing HRM (Demographic change)

  • Demographic change refers to shifts in population characteristics such as age, gender, and birth rate. These changes significantly impact the supply of human resources in a country.

  • Key factors influencing demographic change include:

  • Net birth rate: The difference between births and deaths.

  • Net migration rate: The difference between immigrants and emigrants.

  • Retirement age: The legal age to stop working.

  • Female workforce participation: The percentage of women in the labor force.

  • Longevity: The average lifespan of a population.

Changes in labor mobility

  • Labor mobility refers to the ability of workers to move geographically and occupationally. Higher mobility generally leads to a greater supply of labor.

  • Factors limiting geographical mobility include:

  • Personal ties: Friends and family.

  • Cost of living: Housing and other expenses.

  • Cultural and language barriers: Especially for international mobility.

  • Factors influencing occupational mobility include:

  • Age: Younger people tend to be more mobile.

  • Specialization: Highly specialized workers may have limited options.

Immigration

  • Migrant workers are individuals who work in a country that is not their native land. Millions of people migrate for work, driven by various factors.

  • Common reasons for migration include:

  • Higher pay and benefits: Multinational companies often offer attractive packages.

  • Lower taxes: Some countries have favorable tax rates.

  • Employment opportunities: Economic growth in high-income countries creates demand for labor.

  • Seasonal factors: Agricultural work may be seasonal.

  • Domestic instability: Political unrest or economic hardship.

  • Higher standard of living: Improved lifestyle and opportunities for children.

  • Migrant workers contribute to the host country's economy through:

  • Production: Adding to the workforce.

  • Consumption: Spending money.

  • Tax payments: Contributing to government revenue.

Flexitime 

  • Flexitime is a flexible work arrangement where employees work a core period and have flexibility in determining their working hours within a specified time frame. This system has become increasingly popular, especially after the COVID-19 pandemic.

  • Benefits of flexitime include:

  • Improved work-life balance: Allows employees to manage personal commitments.

  • Reduced overtime costs: Can help manage labor costs.

  • Enhanced company image: Demonstrates a commitment to equal opportunities and flexibility.

Teleworking

  • Teleworking is the practice of working remotely using technology. It was popularized in the 1970s and has gained significant traction due to advancements in technology and increasing challenges with commuting.

  • Common industries that utilize teleworking include:

  • Insurance

  • Banking

  • Market research

  • Airlines

  • Teleworking often involves call centers, where employees handle customer inquiries remotely. This frees up time for on-site management and allows for greater mobility among teleworkers, such as salespeople.

Homeworking

  • Homeworking is an aspect of flexitime whereby people work from their own homes. According to the International Telework Association and Council (ITAC), the number of people working from home in the European Union pre-COVID-19 (during business hours) was approximately 15% but rose to almost 40% by 2020. With advances in technology (such as wireless and mobile technologies) which allow employees to operate in almost any location, the number of homeworkers and teleworkers will continue to rise post-pandemic.

Homeworking

Advantages of teleworking and homeworking for employees

  • Job opportunities: In remote areas.

  • Flexibility: For caregivers and those with personal commitments.

  • Reduced commute: Saves time, money, and stress.

  • Autonomy: Greater control over work organization.

  • Tax benefits: Potential tax breaks for using personal property for work.

  • Lower costs: Decreased technology costs make teleworking more accessible.

Disadvantages of teleworking and homeworking for employees

  • Technology reliance: Dependence on reliable software and hardware.

  • Overwork: Potential for working excessive hours.

  • Social isolation: Lack of face-to-face interaction.

  • Job insecurity: Reduced job protection and union representation.

  • Distractions: Home environment can be disruptive.

  • Limited training and development: Fewer opportunities for career advancement.

Advantages of teleworking and homeworking for employers

  • Reduced overheads: Lower costs for office space.

  • Flexible hours: Extended hours for customers and employees.

  • Adjusted peak times: Adaptability to busy periods.

  • Reduced absenteeism: Improved attendance among workers.

  • Working time directives: Compliance with work hour regulations.

Disadvantages of teleworking and homeworking for employers

  • Set-up costs: High initial investment in technology.

  • Recruitment: Finding suitable candidates with self-motivation and initiative.

  • Management: Difficulty in monitoring and controlling off-site workers.

  • Continuity of services: Potential disruptions from workers with childcare responsibilities.

  • Technological breakdowns: Issues with equipment and software.

  • Space and security: Limited home workspace or concerns about data security.

Gig Economy

  • The gig economy is a labor market characterized by short-term, flexible, and temporary work arrangements. Workers often operate as independent contractors, providing services on-demand through online platforms.

  • Key features of the gig economy:

  • Short-term contracts: No permanent employment.

  • On-demand work: Services provided as needed.

  • Online platforms: Connecting workers with clients.

  • Examples of gig economy services:

  • Ride-sharing (Uber, Lyft)

  • Food delivery (DoorDash, Grubhub)

  • Task completion (TaskRabbit)

  • Freelancing (Upwork, Fiverr)

  • The gig economy has grown significantly due to advancements in technology and a shift towards more flexible work arrangements.

Advantages of the gig economy

  • Flexibility: Adaptable to individual needs for workers, businesses, and consumers.

  • Opportunities: Increased opportunities for portfolio workers.

  • Work-life balance: Greater control over work-life schedules.

  • Lower costs: Reduced labor costs for businesses.

  • Additional income: Opportunities for extra earnings for contractors and freelancers.

Disadvantages of the gig economy

  • Job security: Lack of permanent employment.

  • Benefits: Limited fringe benefits like health insurance and sick pay.

  • Income: Inconsistent income compared to traditional employment.

  • Career path: Difficulty in progressing professionally.

  • Social support: Reduced support from colleagues and managers.

  • Tax returns: Responsibility for filing taxes independently.

  • Burnout: Stress and exhaustion from multiple contracts.

  • Challenges for businesses:

  • Outsourcing risks: Reliance on contractors who may not deliver satisfactory service.

  • Corporate image: Potential damage to reputation if contractors underperform.

Resistance to change the workplace

  • Resistance to change is a common barrier to effective human resource management. Professor John Paul Kotter identified four primary reasons for this resistance:

  1. Self-interest: Employees may prioritize their own concerns over organizational goals.

  2. Low tolerance for change: People prefer familiarity and stability.

  3. Misinformation: Lack of clear communication leads to misunderstandings.

  4. Different assessments: Disagreements between management and staff on the need for change.

Six change approaches to address this

  1. Education and communication: Inform and educate stakeholders.

  2. Participation and involvement: Include employees in the decision-making process.

  3. Facilitation and support: Provide support during the change process.

  4. Negotiation and agreement: Offer incentives for acceptance.

  5. Manipulation and co-option: Involve representatives of those resisting change.

  6. Coercion: Use intimidation tactics as a last resort.

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