Transcript A2 Business Studies

A2 Business Studies
FURTHER HRM
Productivity Gaps ...
Read the case study on Pg 195 ...
You will be asked to comment on the points to think about
What if FURTHER HRM?
OK, so you should know the basics of HRM from last year ... The importance of the
role of the HRD and it’s role ...
FURTHER HRM will be looking at:
Measuring and improving employee performance
Monitoring and applying labour legislation
Managing industrial relations between workforce and management
Measuring and Monitoring EE Performance
So, how would you assess the level of employee performance in a
business?
Labour Productivity
Absenteeism
Labour Turnover
Customer Complaints
Wastage Levels – to some industries!
Reject Rates – to some industries!
How to measure the top 3 !!!
Labour Productivity
Measurement of Labour Productivity ...
What might the
reasons be for
increased
productivity?
• Motivated Staff Total Output in time period (eg 1 year)
A2 ... Capital
REMEMBER
... Total Staff Employed
• Reliable
Equipment
• Training
When
analysing
data,
it is sometimes
not
will managers
be looking
for?
•What
Involving
workers
inQuantitative
the “process”
(Kaizan,
QC’s)
entirely
reliable?
Reducing
rates
due
increased
efficiency/higher
productivity
• Better
running
oftothe
business
- getting more
efficient internally
Consider EXTERNAL factors outside your control ...
What will be happening to labour cost per unit?
• Supplier
strikes
Hopefully
dropping!
(assuming a fixed wage rate!)
How might
you measure
performance
in the Service Sector?
• Competitors
having
better machinery/equipment
Transport?
How can this improve the competitiveness of a business?
Hotels?
Lower costs than rivals could mean you can afford to lower your prices 
Banking?
Absenteeism Rates
Measurement of rate of absence as a proportion of the employee total ......
Motivational Factors ...
No of Staff Absent x100 (%)
Totalto
Noabsenteeism
of Staff
Which theorist relates
being
a measurement of motivation?
Industries most affected are the ones that provide Customer Service
HERTZBERG ...
Why is absenteeism so costly to a business?
“hygiene” factors could cause a lack of
Bad customer experience = non returning customers 
motivation, resulting in poor attendance ...
Cost of replacement staff! Temp workers don’t come cheap (neither does
overtime!)
Poor working conditions = illness
Being observed closely = stress
Labour Turnover
Measurement of rate at which employees are leaving the business ......
No of staff leaving (year)
Ave number of staff employed
x100 (%)
An organisation employs 200 staff, and 30 leave in the year = 15%
Is this high or low?
Reasons for high turnovers could be?
 Poor retention policy
 Poor recruitment policy
 Low morale/contentment
 Low unemployment
All will depend on the industry
and type of job!
Restaurants? Part time/students!
Scientists/lawyers ...
Labour Turnover
But, there are benefits of having a high labour turnover!
 Can replace lazy or less skilled staff with more efficient and
productive ones
 New ideas and creativity are generated
 Rationalisation – business policy – some organisations will chose to
keep staff turnover high to reduce numbers ...
BUT – remember it can be very costly for the whole replacement
process!
So, how can you improve performance?
Firstly, find out WHY performance is not as efficient!
Spending money on more effective and expensive machinery will not
help it is management/training issue!
REMEMBER – LINK ALL OF THIS TO MBO !!!
So, what can help?
Theory Y approach – delegate and involve workers
Regular appraisals – agree targets – if targets aren’t met ???
Training – challenge and motivation
Theory X approach – imposed instructions and tasks
QC’s – responsibility and suggested solutions
Financial incentives $$$$$$ - profit sharing/share options
The State and Industrial Action ...
How does the State intervene in Industrial Relations?
IR Laws
Arbitration Councils
It’s own policies (the government is a big employer!)
Most people feel it is their right to be part of a union, so the State
needs to be able to control how they are run and organised!
It is the responsibility of the government to protect workers and
provide improving Industrial Relations conditions!
Labour Management Relations ...
There are 3 approaches to labour-management relations :
You will need to EVALUATE this form of management!
1. Autocratic Management – “take it or leave it”
are the
What will happen ifWhat
you were
not advantages?
happy with your working
Lower Costs through low wages
conditions and 
complained?
BUTon– athere
drawbacks
What if you are
shortare
term
contract ...
or employed day to
day? Will you have any rights?
No labour security – for workers = low motivation!
Nocountries
time to train
workerswith
to a good
standard
Some
still operate
very weak
labour protection
No common
objectives
or don’t
knowfor
what
they areof!!!
legislation
 - workers
have–not
protection
conditions
No participation
or involvement for workers to help improve
work/pay
etc
the businesss
The State and Industrial Action ...
2 COLLECTIVE BARGAINING
Very powerful unions that represent whole or large parts of an
You
needwages
to EVALUATE
this formofofemployment
management!
industry
– might
for higher
or conditions
Consider ...
Strong foothold during times of low unemployment and a growing
• National Agreements – not suitable for small businesses (costs)
economy, as managers can’t easily replace the workforce!
• Strikes = disruption = reduced output = loss of sales = reduced profits
• Unions
can powerful
result in lack
investment
to retrain or
Can
be very
andofcan
uphold –a workers
businessunwilling
from producing
running
all together
– ifaccommodating
most workers overseas
decide tocountries
strike like Japan!
• Loss
of industry
to more
The State and Industrial Action ...
3 LABOUR/MANAGEMENT COOPERATION
Actively involving union and workers in decision making
Less confrontation – more productivity
Fewer strikes
MBO more harmonious – agreed targets and happy workers 
Can be a more competitive business – very important in an ever
changing and demanding global economy
How can Unions get what they want?
Types of Industrial Action
Negotiations
Go Slow- working at a minimum pace than usual to put “light”
pressure on the employer.
Can be costly for the business – particularly if a seasonal product!
Workers might lose out on bonuses paid for productivity
Work to Rule- only do what your contract states!
Overtime bans – costly for manufacturing during busy periods
Strike Action – Business closure – most extreme
How can Employers get what they want?
Ways of getting profit and growth ...
Negotiations
PR – media can gain public support – pressure the unions to settle
Threaten redundancies! Pressure unions to agree terms
BUT – bullying ???
Change of Contract - when up for renewal, write in guaranteed overtime working
conditions and minimum work rates!
Closure – Shut the business down! Extreme, but could be cheaper!
Lock-Outs- short term closure – don’t pay workers for a while! They will pressure
the unions to agree a settlement!
So, which side of an industrial dispute has the
greatest power and influence?
This is what you will need to consider should an exam
question come up regarding IR power and influence ...
When would the union and employee be the strongest?
When would the employer be the strongest?