Unit 4: Managing people and change Area of Study 1 – The Human Resource Management Function

Chapter 4 Review Human resources are the employees of an organisation (the workers). HR Managers are responsible for workplace tasks that relate to the employment, retention and termination of employees. Employees are the most important resource in an organisation. Therefore, they should be looked after so that the organisation’s objectives can be achieved

The role of HRM The role of HRM is to ensure that employees are satisfied with their jobs. They are then more likely to work productively, helping managers to achieve organisational objectives.

HRM and performance indicators Key performance indicator HRM strategies linked to business objectives Profit HR managers need to ensure wages are appropriate (not too high) Training can be costly, but may provide benefits. Staff satisfaction, shown by staff turnover rate The recruitment process is costly, so retaining staff who have the required skills and knowledge is essential. Work/life balance strategies could assist in attracting and retaining valuable staff. Efficiency leading to increased productivity If workers have been properly trained, their efficiency levels should increase. Competitiveness If workers are motivated they will work hard, leading to a more competitive organisation. LSOs that have reputation for providing good working conditions, training opportunities and career paths will attract the highest quality applicants when recruiting. This also gives the LSO a competitive edge.

Employee expectations Human resource managers need to recognise differences in employee expectations as this is linked to motivation and satisfaction, and therefore overall performance and productivity. HR Managers must adjust their practices to meet the needs and expectations of employees. Employee expectations include: conditions of employment (leave & remuneration), OHS, Job security, work/life balance

Ethics and social responsibility Ethics relate to the way business is conducted Socially responsible management is the way in which LSOs give something back to the community in which they operate Ethics and socially responsible management must relate to HR in some way – i.e. they must relate to the employment cycle, motivation, employee relations or employee expectations regarding conditions of work

Ethics in HRM Includes practices within the organisation as well as legislation such as the Equal Opportunity Act 1995. In workplace terms, equal opportunity is closely related to managing diversity – acknowledging the differences between workings and making the most of them. There are also laws that regulate workplace bullying and harassment – making employers vicariously liable if they have not taken reasonable steps to prevent discrimination and harassment.

Social responsibility in HRM The key area of HRM that reflects social responsibility is an organisation’s leave policies. Some companies such as Telstra and ANZ allow its employees to take leave and undertake voluntary work. This is also good for the organisation as employees appreciate the opportunity to contribute to their community and this can enhance motivation, leading to increased productivity and company profits. There is also a positive benefit for the community.

Theories of motivation Understanding employees’ motivation and being able to implement strategies to increase motivation leads improved staff retention, productivity and overall profits. Maslow’s hierarchy of needs theory suggests that people will progress from the most basic needs to the higher levels once each need is satisfied. HRM needs to recognise all levels and ensure that the organisation provides for these needs through its HR strategies. Each employee will be at different stages so a range of strategies may need to be implemented.

Herzberg’s two-factor theory This theory suggests that there are two sets of factors that explain employee motivation. The hygiene factors (such as salary and benefits, relationships with colleagues, physical working conditions and work security) can cause dissatisfaction if they are not present or are low. If they are present or high, then there is no dissatisfaction with the job. Improving hygiene factors will only decrease job dissatisfaction but will not increase job satisfaction. The motivator factors (which relate to employees’ sense of achievement, recognition, responsibility, promotion, growth and the work itself) may increase satisfaction in the job if they are present. If they are not present then it will result in no satisfaction in the job. Motivator factors are a source of job satisfaction. Only the motivator factors are motivational in the long-term. The presence or absence of these factors is the key to employee satisfaction, motivation and performance. Making people’s jobs more interesting and varied can be one strategy for increasing motivation. Other things include focusing on achievement, recognition and responsibility.

Locke’s goal-setting theory Locke argued that specific and challenging goals led to better task performance than vague or easy goals. When employees have clear and properly set goals they are more likely to be motivated to achieve them. Providing feedback or communication about whether results have been achieved motivates employees to achieve more and encourages them to set higher goals for themselves. Setting goals should take into account the ability level of the employee. HRM should have sound knowledge of employees, their skills, knowledge and characteristics. Setting goals is a two-way process between manager and employee. Employees are more likely to then accept and commit themselves to achieving those goals.