Human Resource Management (HRM)

HRM is the process of making the most effective use of the employees within an organisation, which in turn helps the firm reach its corporate objectives.

HRMHRM includes: • Human Resource Planning• Recruitment and selection• Training and development• Performance appraisal• Remuneration• Disciplinary procedures• Grievance procedures• Health and safety• Employee welfare• Termination of contracts of employment• Legislation

Workforce planning

Workforce planning is the process of forecasting the

workforce requirements of the business for future years. It is one of the central activities of

HRM

Workforce planning

Planning the number of workers needed:1. Examining the overall objectives of the

firm2. Using past data to analyse expected

levels of customer demand and sales3. Estimating level of labour turnover4. Management views5. Expected changes in working practices

Workforce planning : Effectiveness of the workforce

Four main measures of assessing the performance of the workforce:

1. Labour turnover (%)2. Absenteeism (%)3. Labour productivity 4. Health and safety (%)

Workforce planningExternal factors that may affect

availability of external labour:1. Rate of unemployment in the area2. Extent of the infrastructure in the area3. Government incentives and subsidies4. Availability of workers with the

necessary skills and qualifications5. Number of competitors in the area6. Level of benefits / minimum wage

Workforce planning

Possible problems associated with workforce planning:

• Will the new employee mix with the existing workforce?

• Changes in the external environment

Methods of remunerationMake sure you familiarise yourself with the

following methods (covered in U2 of the AS course):

• Piecework• Time rates (salary and wages)• Performance-related pay• Profit share• Share ownership• Fringe benefitsFinancial incentives can be used to meet HRM

objectives. For example, they can improve productivity and reduce absenteeism.