Functions and Evolution


Human resource management: strategic approach to managing the workforce, so they help achieve the business objectives, thereby gaining a competitive advantage.

Workforce audit: check on the skills/qualifications of existing employees

HR Planning: analyzing and forecasting the number of employees and skills required in the future time period for the business to achieve its objectives.

2 steps in HR Planning:

Forecasting the number of employees required, depends on:

Forecasting the skills required, depends on:

Labour turnover: rate at which employees leave a company in a year

(number of employees leaving in 1 year / average number of people employed) × 100

High LT Reasons:



Drawbacks (High LT)

Low-skilled/less productive staff may leave who may be replaced with better employees

Costs of recruitment/training of replacement staff

New ideas/practices brought in by new employees

Poor output levels & customer service due to job vacancies until new ones are recruited

Not a drawback for a company going through rationalization

Difficult to work in groups when employees are constantly changing


Difficult to maintain contact with customers 


Rationalization: reorganization of company to increase its operating efficiency. Eg: higher sales with less costs by laying off employees.


Factors that influence hR planning

Demographic change




Natural population growth

Easier to recruit

High birth rate may take time to have an impact on the actual working population

Ageing population

Older people are believed to be more experienced, loyal, reliable and have “people” skills than youths

Unadaptive to the dynamic business environment. Eg: new workplace technologies

Net migration

Able to get employees who are highly qualified/ for low wages from other countries

Brain drain resulting in reduced competitiveness

Immigrants may need more training e.g. cultural/language issues


Changes in labor mobility

Occupational mobility: willingness to switch to a new job that requires new skills

Geographical mobility: willingness to change one’s geographical region for a new job

Developed countries have less LM because of home ownership and “high level skills” that makes one over specialized, thereby rendering one unable to work in different industries.

Government incentives for mobility:

Technological change


HRM Duties


Recruitment: identifying the need for an employee, defining the job position and the type of person needed to be filled, attracting suitable candidates & choosing the best one.


- Job description: a detailed description of the vacant position, key tasks and responsibilities associated with it.


- Person specification: list of the qualities, skills and qualifications required of the applicant

- Prepare a job ad (newspaper, recruitment agencies, government job centers, firm’s premises/website

- Shortlist of applicants: based on CV, references from past employers

- Conduct interviews: sometimes based on 7 point plan


Internal recruitment

External recruitment

No need for induction training

New ideas brought in 

Gives chance for the internal staff to progress

Resentment from the co-workers resulting from promotion avoided 

Cheaper than using advertising/recruitment agencies

Higher standard of applicants compared to internal staff

Applicants are well known to the selection team

Would be a wide choice of potential applicants

Culture of the organisation is well understood


Don’t HAVE to get used to new style of management


Quicker than external recruitment




Training: work related education to increase workforce skills and efficiency

Costs: well-trained employees may be subject to “poaching” whereas undertraining employees may result in less productivity.

Types of training:




Employee Appraisal

Employee Appraisal: assessing the effectiveness of an employee judged against present objectives.







Contract of employment: a legal document that sets out the terms and conditions governing a worker’s job

Dismissal: being removed or ‘sacked’ from a job due to incompetence/ breach of discipline

Unfair dismissal: dismissing someone for a reason that the law regards as “unfair”

Redundancy: when a job is no longer required so the employee doing this job becomes redundant through no fault of his or her own


Employment patterns/Practices


Traditional employment

Modern employment

Full time/permanent contracts

Part-time, temporary contract

Working at the employer’s place of work

Teleworking: working from home whilst keeping contact with the office

Regular working hours each week

Flexible working hours


Portfolio working: working several jobs simultaneously


Outsourcing: using another business (a ‘third party’) to undertake a part of the production process.


Consequences of changes in employment patterns

Flexi-time contract: allows staff to be called in at times most convenient to employers and employees, e.g. at busy times of day

Temporary contract: lasts for a fixed time period, e.g. six months

Part-time contract: less than the normal full working week of, say, 40 hours, e.g. eight hours per week

Core workers: full time, permanent

Peripheral workers: temporary, part-time, self-employed


Disadvantages (employers)

Reduced overhead costs since employees come in only at a specific time/telework, doesn’t stay at the office the whole day 

Difficulty in communication and working in groups

Efficiency can be measured before employees are offered a full-time


Less motivation due to feeling of involvement in the business, low productivity levels of employees (telework)

More employees available to be called upon in case of absenteeism

More employees to “manage” than full-time employees.


Disadvantages (employees)

Ideal contract for certain workers (students, single parents)

Earn less than full time workers

Able to do “portfolio working” providing variety in working life

Less job security; less motivation

Allows one to organize their OWN working day but at home(telework)

Less social contact


HR Practices/Strategies

Offshoring: relocation of a business process to the same/another company in another country

Reshoring(in-shoring): reversing offshoring. Transfer of a business operation back to the country of origin.

HR Non-Core Activities (outsourceable): e.g. payroll administration, employee recruitment, HR information systems (e.g. employee records), exit interviews, child care assistance

Strategic HR activities(Core): have a direct impact on organizational performance and provides it with a competitive edge e.g. HR planning, dismissals/redundancies, specialized training (e.g. organization has unique technology and skills requirements).



Limitations (outsourcing)

Cost savings as HR is an overhead (especially if outsourced to countries with low wages)

Not always saves costs

Focus more on core activities production, customer service etc.

Should recruitment and training be trusted to an outside business?

Access to HR specialists as businesses find it difficult to justify employing these

specialists directly.

Outside analysts can’t always give the best ideas as they can’t really gain an insight into the culture and attitudes that exist within a business isn’t understood.

Can use HR resources for workforce planning rather than administration

Lack of integration of the business decisions made by HR with other departments of the business


distance/language creates communication problems (offshoring)


Employees may not be well-informed about the laws, practices regarding HR in the country that’s outsourcing


Hard HRM: focuses on cutting costs, e.g. using temporary and part-time employment contracts, offering maximum flexibility but with minimum training costs

Soft HRM: focuses on developing staff so that they reach self-fulfillment and are motivated to work hard and stay with the business


Limitations Soft HRM

Hard HRM

Lack of benefit from Flexi-time contracts as this cuts costs, gains a competitive advantage 

Increase recruitment/induction trying costs in the long term

Job security for employees discourage them from being productive

Less job security demotivates employees

Risk of having well-trained employees poached

Bad publicity regarding treatment of workers, division between core and peripheral staff – might lead to negative consumer and pressure group actions against the company.

Flexi-time contract means that fixed costs of employment is replaced by variable costs which are easier to control

not suitable for professional, qualified employees, e.g. accountants or research scientists



View count: 1174