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Human Resource Management - Business Impact

Paper Type: Free Essay Subject: Business
Wordcount: 4633 words Published: 24th May 2017

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People are commonly considered to be an organisations' greatest asset simply because they have the power as individuals to decide. They decide on strategic, tactical and operational levels to obtain the most favourable results from whatever situation arises. It is therefore extremely important to train and develop the human resources as it determines a company's success. Over the past few decades, a growing awareness of the importance of the HRM process has lead to continual improvements in the field; thus causing more competence.

In order to create efficiency in communication, training and general management, individuals were put in charge especially to manage the people within an organisation. Slowly this progressed and became a common department in any common organisation.

Human resource management is a particularly important area which transcends all primary activities. It is concerned with those activities involved in recruiting, managing, training, developing and rewarding people within the organisation

The firm will need an overall workforce (or human resource) strategy. In achieving this, HRM will need to work closely with other departments to ensure the firm is employing people with the right skills and right time

The HR plan contains an assessment of:

National and local changes in the population, analysed by numbers, ages, skills and location

An analysis of the current internal labour supply

Consideration of any proposed developments in the company's organisation, location and structure.

This information can be used to evaluate the likely effects on labour turnover, the implications for recruitment, expected training requirements for existing and anticipated new staff, and the probable effects on morale and labour relations.

The main difficulty of creating a workforce plan is the problem of estimating future demand for labour. Demand will change as a result of the firm changing strategy (e.g. new markets opening up, existing market demand falling), and competitor actions. Organisation adopt a core and periphery approach, employing a core of highly trained full-time staff, which is supplemented by a periphery of part time- often temporary- employees. This can bring greater staffing flexibility, although part-time staff may lack motivation, and communication becomes more difficult. HRM emphasises that people are an organization key source due to their flexibility, creativity and commitment.

Communication takes place within the organization and with outside agencies internal communication may flow down the hierarchy through the chain of command or may be more informal. External communication tends to be more formal, taking place with the major external stakeholders: suppliers, customer, shareholders, the government and public.

1.2: Assess the purpose of strategic human resource management activities in an organization.

Internal scanning explains and documents the makeup of the current supply of the workforce and the human resources activities within an organization. It looks at the composition and diversity of the workforce, including what type of skills and jobs are available, what type of human resources policies and programs already exist, what is the culture and structure of the organization, and what are the trends in regard to tenure, turnover rates, etc. In addition, consideration should be given to such issues as prevailing personnel problems, managerial attitudes concerning human resources, etc.

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External scanning tracks trends and developments in the external environment, documenting their implications for human resources management and ensuring they receive attention in the human resources planning process. This assessment looks at: 1) how the economy is performing both locally and nationally, 2) how technology is expected to change and how these changes will influence the type and number of jobs available and the skills and education needed for these jobs, 3) what the current and future labor market looks like regarding the availability of certain occupations and the people necessary to fill them, 4) the requirements are for current or future government regulations, such as affirmative action and equal employment opportunity or regulations which influence agency-specific programs, 5) identifying the sources for competition in terms of attracting people (salary, benefit packages, etc.), and 6) what overall trends can be identified that could influence an organization such as the movement towards decentralization and restructuring.

Vetter (1967) defined human resource planning as the process by which management determines how the organization should move from its current manpower position to its desired position. Through planning, management strives to have the right number and the right kinds of people, at the right places, at the right time, doing things which result in both the organization and the individual receiving maximum long-run benefits. Contemporary human resource planning occurs within the broad context of organizational and strategic business planning. It involves forecasting the organization's future human resource needs and planning for how those needs will be met.

It includes establishing objectives and then developing and implementing programs (staffing, appraising, compensating, and training) to ensure that people are available with the appropriate characteristics and skills when and where the organization needs them. It may also involve developing and implementing programs to improve employee performance or to increase employee satisfaction and involvement in order to boost organizational productivity, quality, or innovation (Mills, 1985b). Finally, human resource planning includes gathering data that can be used to evaluate the effectiveness of ongoing programs and inform planners when revisions in their forecasts and programs are needed.

1.3: Evaluate the contribution of strategic human resource management to the achievement of an organisation's objectives

Functions of Human Resources Management (HRM) include various key activities important in business development. The HR Manager decides for the organization's staffing needs and then decides whether to employ by independent contractors or hire employee to fill these needs, recruiting and training the best employees. The HR Manager must ensure that these employees are high performers and deal with performance issues; and ensure that the personnel and management practices used conforms with various regulations Activities in HRM also include managing employee benefits and compensation, employee records and personnel policies. An organization must ensure that employees are aware of personnel policies which conform to the current organization regulations. These policies are often in the employee manuals, which all employees have. There are seven (7) major HRM processes namely: HR strategy, Recruiting, Assignment, Development, Reward, Protection, and Personnel administration. HR strategy is the strategic approach that the HR manager will undertake. This strategy is composed of objectives, goals and processes on how to attain the organization's business objectives and goals.

Task 2

To: Etcetera Ltd

From: Human resource manager

Subject: Human Resources planning

2.1 Analyse the business factors that underpin human resource planning in an organisation.

Human resource planning is a systematic series of continuing processes that determines the needs of an organisation and plans them accordingly (Bennison and Casson 1984). The reason human resources are planned is due to the simple need that any successful business needs - efficiency. Planning eliminates wasted time and resources by preparation. The planning process is divided into several stages; analysing current human resource utilisation, forecasting the demand for human resources, forecasting the supply of human resources, developing action plans and evaluating the planning process.

Human Resource Management (HRM) is a strategic and coherent approach in managing an organization's most valued assets- the individuals who are working collectively and contributes in achieving success of the objectives of the business. The terms 'human resource management' (HRM) and 'human resources' (HR) have largely replaced the term 'Personnel Management' as a description of the processes involved in managing people in organizations

2.2 Assess the human resource requirements in a given situation

With the development of technology, data collection and presentation has become much more sophisticated and efficient. HR planners can use computer technology very effectively to analyse data about the workforce. Information such as experience, length of service, qualifications, potential attendance, productivity, efficiency and personal data have all contributed to the accurate analysis of human resource utilisation.

With the use of this data it has become easy and efficient to forecast possible situations regarding specifically HR demand.

As mentioned above, the analysed data can be efficiently used to determine current conditions. It is especially important to forecast demand in time in a dynamic working environment where new products and premises are bound to increase.

Corporate plans are also projected into a shared system to co-ordinate forecasting. In some cases however there is no data that can project future requirements; these cases would be linked to general economic, political or industrial change.

Existing human resources classified by organisational demography, more specifically by department, occupation, skill level, status, age, gender, aptitudes, experience, qualifications, job history, length of service and ethnicity.

Specific work history; absenteeism, commitment, involvement and disciplinary matters.

Ensuring all personnel/HRM activities help to add value by helping the organisation achieve its objective.

Motivating workers to achieve improved performance

Action plans are based on a comparison of forecast demand and forecast supply. This will determine deficits and surpluses.

Evaluation is suggested to be based on outputs rather than inputs. Storey and Sissons have a variety of techniques such as simple audits to conclude if targets have been met, how many vacancies have been filled and how much costs were reduced.

2.3 Develop a human resource plan for an organisation

To develop a human resource plan for Electra this below Five Major Stages in workforce planning link the strategic and human resources planning processes.

Collecting Data and Information



Action Plans

Feedback and Evaluation

1. Collecting Data and Information: At the strategic planning level, an organization conducts a number of assessments to determine its long-range objectives, usually for up to five years. At this level, the human resources planning process assesses such issues as strategic plan implications, factors external to an organization, and the internal supply of employees over the long-run. Human resources collect data and information to analyze and assess these types of issues, but do not make detailed projections. Data and information are collected through scanning internal and external environments of an organization.

2. Forecasting: The strategic plan eventually breaks down into operational plans that state specific objectives an organization wants to accomplish over the next six months to one year. This will, in turn, forecast future human resource needs. The focus for human resources becomes forecasting the number of currently available employees with the appropriate skills and educational levels to meet operational plans. This information is drawn from internal and external assessments, but is further refined for these plans. The forecasting process highlights the supply and demand principle of the model. Strategic and operational plans determine the necessary human resource requirements (demand) needed, while the human resources planning process forecasts the availability (supply) of human resources.

3. Reconciliation: Reconciliation identifies those gaps that occur between supply and demand. This process focuses an organization on specific human resource issues that need to be addressed. This allows an organization to move forward with its operational plans.

The process of reconciliation helps identify what the major gaps or "sources of pain" are in managing human resources. In addition, through reconciling an organization is able to develop a sense of urgency and build commitment to action regarding its "sources of pain."

4. Action Plans: Action plans represent programs and policies needed to address the gaps identified in the reconciliation process. To be successful and ensure accountability, action plans must outline specific responsibilities, timelines, staff, and financial resources necessary to address those gaps.

5. Feedback and Evaluation: Feedback and evaluation are critical to the success and effectiveness of the workforce planning process. These two mechanisms are ways to retrieve information to evaluate and make adjustments to the process.

Feedback: Feedback mechanisms should be designed to retrieve information so programs and policies can be evaluated to determine how well the process works. This provides input to update strategic or organizational plans. Inadequate feedback mechanisms or plans can cause small problems to grow into large problems that impede the overall process.

Evaluation: In implementing evaluation mechanisms, it is important to first determine what is to be measured. Normally, human resources strategies are measured in terms of implementation or completion of actual programs. But to provide more meaningful information, measures have to be designed to determine the effect the action plans have had on the defined issues. Therefore, it is important to identify specific measures and target levels to be achieved and what the end results should be.

2.4 Critically evaluate how a human resource plan can contribute to meeting an organisation's objectives.

Human resource planning has traditionally been used by organizations to ensure that the right person is in the right job at the right time. Under past conditions of relative environmental certainty and stability, human resource planning focused on the short term and was dictated largely by line management concerns. Increasing environmental instability, demographic shifts, changes in technology, and heightened international competition are changing the need for and the nature of human resource planning in leading organizations. Planning is increasingly the product of the interaction between line management and planners. In addition, organizations are realizing that in order to adequately address human resource concerns, they must develop long-term as well as short term solutions. As human resource planners involve themselves in more programs to serve the needs of the business, and even influence the direction of the business, they face new and increased responsibilities and challenges

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3.1 Explain the purpose of human resource management policies in organisations

There are lot of purpose of human resource management policies was known to manage the employees within an organisation in many aspects; such as recruitment, selection, evaluation, motivation, general management and termination. One can argue that not much has changed and it is still the same as HRM, but from comparing the process over the past few decades, we can see that the process has actually evolved quite significantly.

Human resource management, unlike personnel management, has become a process that is very closely linked with the other departments of an organisation. This helps the HRM department to foresee and prepare for possible circumstances; such as increased workloads and redundancies.

Below is a table of perceived differences between Personnel Management and Human Resource Management (Beer and Spector, 1985):

Strategic integration: HRM is integrated with the organisations' strategic plans.

High commitment: management of people ensures employees are genuinely pursuing the goals of the organisation.

Flexibility: HRM policies are subject to change; meaning innovations and changes in the business fields will be anticipated by HRM and the policies thereby structured.

High quality: the process of human resource management is done with high quality to ensure high quality results. This will eventually affect the quality of goods/services provided.

3.2 Analyse the impact of regulatory requirements on human resources policies in an organisation

Human resources manager plays many varieties of roles in the organisations. Following are some of his/her role to carry out on daily basis.

Guidance Role - Directly involves with company's HR Policy making, and implementation those policies,

Advisory role - Offering specialist service to the employers and employees. Offering advice for line managers for changes in legislations, conducting appraisals, etc. For employees, advice about their rights, counselling, Etc.

Service Role - Carrying out various administrative tasks e.g. payroll, giving reference, and delivering of Human Resources Management Programs. (Recruitment, Selection, welfare so on)

Control/auditing role - Analysing personal indices. (Such as labour turn over, wage cost) monitoring performances carrying out bench marking

Planning/organizing role - Forecasting future man power needs, adopting new labour practices.

Human resource planning: forecasting organisation's future labour and skills requirements.

Recruitment: Attracting more suitable applicant required by HR plan

Selection: Selecting most suitable employees

Retention: retaining staffs by promoting and motivating

Exit Management: managing termination of the employment, retainment, dealing with grievance procedure.

Task 3

To: Head of TESCO human resource department

From: Independent human resource consultant

Subject: Reviewing human resource department

4.1 Analyses the impact of an organisational structure on the management of human resource organization structure:

The study of organizations includes a focus on optimizing organizational structure. According to management science, most human organizations fall roughly into four types:

Pyramids or hierarchies

Committees or juries

Matrix organizations


An organizational structure is a mostly hierarchical concept of subordination of entities that collaborate and contribute to serve one common aim. Organizations are a number of clustered entities. The structure of an organization is usually set up in one of a variety of styles, dependent on their objectives and ambience. The structure of an organization will determine the modes in which it shall operate and will perform. Organizational structure allows the expressed allocation of responsibilities for different functions and processes to different entities. Ordinary description of such entities is as branch, site, department, work groups and single people. Contracting of individuals in an organizational structure normally is under timely limited work contracts or work orders or under timely unlimited employment contracts or program orders. (Robbins, S.F., Judge, T.A. (2007))

There are four formats of Tesco. They are Tesco, Tesco Extra, Tesco Metro and Tesco Express. Tesco Express is small in size and scale compare to other Tescos. So the decision making process is shorter and quicker which is important for an organisation of this nature. Tesco Express has a flat structure.

There are four duty managers who get the ideas to how to handle the workload from the Site Manager. They run the shifts and they have team leaders working under them who take part in decision making to some extent.

Stock controller and administrator also a major character in the organisation. They have to do specific task and also if they get time, they must help other colleague's work.

On the last level of the organisation there are customer service assistants. They deal with the customers directly. They serve the customers on the tills and they do the shelf filling as well. They are the major part of our management team

4.2 Analyses the impact of organisational culture on the management of human resources

Organizations are as individual as nations and societies. They have widely differing cultures, and these are reflected in their values, ideals and beliefs. The organization's culture is what gives meaning and purpose to the work lives of its members. An organization culture influences its strategy, its ways of doing business and they it responds to change. A strong culture will be beneficial if it focuses on need to change proactively. The culture of an organisation influence the way in which it operates, so it is necessary to understand the culture before deciding how people might contribute to the success or failure of the organisation.

Put in simple terms, the culture of an organisation can be defined as:

'The Way We Do Things Here!'

Our organisation has a task culture. Task culture-'It is very much a small team approach - the network organisation - small organisations co-operating together to deliver a project. The emphasis is on results and getting things done. Individuals empowered with discretion and control over their work is flexible and adaptable.'(Charles Handy, 1985).

In our organisation, Tesco Express, we have team-based approach to perform any job. Team work plays the major role to achieve organizational objectives. The culture of our organization is working as a team, co-operating each other to achieve our goals and objectives. In the team all the staffs are empowered, so they feel motivated and important at work. All the staffs are empowered to make decisions to some extent and they are given responsibilities within the team. So the staffs feel valued and responsible for their jobs. In my work place has nearly 20 Staff. This staffs are from different ethical background and different countries, so various behaviours of team members' mesh together in order to achieve objectives. We all work hard successfully in our team. Our manager guides us to do our work properly.

4.3 Examine how the effectiveness of human resources management is monitored in an organisation

The Human resource department is the company's greatest asset; because without man power, everyday business functions could be completed. That is why it is important to maximize organizational effectiveness, human potential-individuals' capabilities, time, and talents-must be managed. Human resource management works to ensure that employees are able to meet the organization's goals. Company's today are continuously changing. Organizational change has an impact not only the business but also its employees; the company at all time should be considerate to its entire employee. The company and employees should work together in harmony to remain productivity, and the HR manager is the bridge for the company and the employees to understand each other.

Every organisation aims to keep a good staff retention record. However, retaining staff can be very time consuming and expensive. To retain staff is to give them reason to stay. This is normally done by giving employees incentives in addition to salary. These incentives normally take financial form; however, other psychological incentives work just as well. These psychological incentives can be as simple as verbal encouragement. This ultimately leads to motivation; therefore better performance.

Other forms of psychological incentives include added responsibility and work challenges. Employees not only work for money, they work also to satisfy their psychological needs. As long as incentives are fair, employees will carry on working with more conviction. This will lead to good retention levels and result in lower costs in terms of recruitment.

4.4 Make justified recommendations to improve the effectiveness of human resources management in an organisation.

HR manager it is my role to ensure that the organizations objectives and goals are followed by all personnel. Constant communication with the employees and evaluating their performance in their work will help me in this role. Problems in terms of the organization's work force must be immediately resolved in order to prevent unnecessary complexities. Our workforce is the organizations valued asset. It is my duty as HR manager to ensure that these assets will remain an asset for the organization; keeping our workforce productive and competitive in our business.

The HR manager is a both a business and a strategic partner of the company. The HR manager contributes to the development and accomplishments of the company's business strategies and objectives. As a strategic partner, the HR manager designs the company's work positions: hiring, reward, recognition, and strategic pay; performance development and appraisal systems; career and succession planning; and employee development. As business partners, the HR manager have to think like business people, know finance and accounting, and be accountable and responsible for cost reductions and the measurement of all HR programs and processes. The HR manager can be considered as an employee sponsor or advocate, because of the integral role the HR manger plays in the company success due to his knowledge about and advocacy of the people. The expertise of the HR manager includes the manager's expertise in creating a work environment in which people will be motivated to work, productive and happy in the company. The HR manager provides employee development opportunities, assistance programs, gain sharing and profit-sharing strategies, due process approaches in solving corporate problems and schedule regular communication opportunities. The HR manager contributes to the company by constantly assessing and ensuring effective HR function. It is also the role of the HR manager to the company's mission, vision, values, goals, and action plan.

Managers within the organization will help in handling our personnel. As a big organization with branches and different departments, it will be difficult to handle all the organizations personnel. Line managers can help in managing this problem. Line managers will be the one responsible in handling the personnel under their respective jurisdiction.

They will be the one in charge to report to the HR manager all the progress and problems of an employee hey handle. The organizations HRM will be centralized, where the HR manager handles all the personnel through the line managers. By this means all problems in terms of the organization's personnel will be given enough attention and priority.


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