1. Approaches to HRM A2 Business Studies

2. Aims and Objectives Aim: Understand different approaches to HRM Objectives: Explain the internal and external influences on HRM objectives Analyse soft and hard HRM Evaluate soft and hard HRM

3. Starter Give two HRM objectives a business may wish to achieve. Give an example of a business who adopted a cost minimisation objective.

4. Internal Influences on HRM In groups brainstorm internal influences on the setting of HRM objectives

5. Internal Influences How might each of the following affect HRM objectives? Use examples to justify your answer: – Corporate objectives – Production strategies – Marketing strategies – Financial strategies

6. Internal Influences Corporate objectives – May include growth/product development but all will require changes to workforce planning. Production strategies – E.g. loss of jobs through a change to capital intensive production Marketing strategies – A new campaign may impact on training and recruitment Financial strategies – E.g. cost minimisation may result in job losses or training cuts

7. External Influences on HRM In groups brainstorm external influences on the setting of HRM objectives

8. External Influences Market and Economic changes – Through the course of the business cycle workforce planning will change, eg. In recession there will be a focus on cost minimisation resulting in redundancies. – http://www.bbc.co.uk/news/business-17695234 http://www.bbc.co.uk/news/business-17695234

9. External Influences Technological changes – Advances may result in movement towards capital intensive production, or may improve training. Skills shortages – There are shortages of some skilled workers, which can prevent company growth. Firm may have to increase motivations for job – salaries, healthcare. – http://www.bbc.co.uk/news/business-14146169 http://www.bbc.co.uk/news/business-14146169

10. External Influences Population change – As the UK population rises, there are fewer school leavers to fill vacancies, and older people are staying in employment longer as they are living longer!

11. External Influences Government and legislation – Changes in EU and national laws, impact on discrimination, working hours and minimum wage.

12. Approaches to HRM Possible to categorise types of HRM into ‘soft’ and ‘hard’ policies.

13. ‘Soft’ HRM Concerned with how employees are managed. Based on the belief that they are the most important asset of the business. Concerned with motivation and communication. People are led rather than managed. They are involved in determining the HRM objectives.

14. ‘Hard’ HRM Considers employees to be a resource of the organisation to be used as necessary to achieve the corporate objectives. Control is in the hands of management. Their role is manage numbers effectively, keeping the workforce closely matched with requirements in terms of both behaviour and bodies.

15. ‘Soft’ &‘Hard’ HRM Analysis Key features sheet. Sorting task: Sort the factors in strengths or weaknesses of each HRM approach.

16. ‘Soft’ HRM Analysis Strengths Rewards motivate employees to encourage innovation and quality. Training and development allow the employee to fulfil their needs which will improve motivation. Recruitment costs fall as labour turnover rates and absenteeism falls. Weaknesses Trade unions may create tension between management and employees if employers are seen to be weak. It relies on an organisational culture which embraces long-term training and development and acceptance of the need to delegate responsibility.

17. ‘Hard’ HRM Analysis Strengths Lower training costs. Comp.adv can be achieved through cost minimisation – lean production and wages. Reward is linked to pay and so possible to achieve positive relationship between output and pay. Weaknesses Can lead to high labour turnover and absenteeism, which are costs to the business. May be difficult to recruit new employees if the firm has a reputation for hiring and firing. Limited delegation and empowerment can demotivate employees and reduce quality.

18. EV: Which approach is better? It depends on… The type of business! The “hard” approach to HR might be expected to result in a more cost-effective workforce where decision- making is quicker and focused on senior managers. However, the danger of taking too “soft” an approach is that when all the employee benefits are added up, the cost of the workforce leaves a business at a competitive disadvantage. Often best to have a mix of both!