Human Resource Management and Performance

This assignment delves into the crucial relationship between Human Resource Management (HRM) and organizational performance. It encourages students to examine various HRM practices, their influence on employee behavior, and ultimately, how they contribute to an organization's success. The assignment likely requires students to analyze relevant theories, research studies, and potentially real-world examples to demonstrate this connection.

HUMAN RESOURCE MANAGEMENT

Table of Contents
INTRODUCTION......................................................................................................................1
TASK 1......................................................................................................................................1
1.1 Difference between personnel management and human resource management..............1
1.2 Function of the human resource management in contributing to organisational purposes
................................................................................................................................................2
1.3 Role and responsibilities of line managers in human resource management...................2
1.4 Impact of the legal and regulatory framework on human resource management............3
TASK 2......................................................................................................................................3
2.1 Reasons for human resource planning in organisations...................................................3
2.2 Stages involved in planning human resource requirements.............................................4
2.3 Recruitment and selection process in two organisations..................................................5
2.4 Effectiveness of the recruitment and selection techniques in two organisations.............5
TASK 3......................................................................................................................................5
3.1 Link between motivational theory and reward.................................................................5
3.2 Process of job evaluation and other factors determining pay..........................................6
3.3 Effectiveness of reward systems in different contexts.....................................................7
3.4 Methods organisations use to monitor employee performance........................................7
TASK 4......................................................................................................................................8
4.1 Reasons for cessation of employment with an organisation............................................8
4.2 Employment exit procedures used by two organisations.................................................9
4.3 Impact of the legal and regulatory framework on employment cessation arrangements.9
CONCLUSION........................................................................................................................10
REFERENCES.........................................................................................................................11

INTRODUCTION
Human resource management is a system of managing people and dealing with their
grievances present in the company. It is an organised and well-structured process which
possess all the functions of management such as planning, organising, recruiting, training,
and controlling etc. The increasing competition in the market has modified the role of human
resource manager to successfully compete with others and remain in the competition. The
demand of skilled workforce is also increasing with the increase in demand of human
resource managers. Many of the company lack behind because of the gap between the
existing employees and required workforce. Company is needed to give emphasis on the
activities related to human resource management. Also, while focusing on the functions of
HRM, company is required to comply with all the relevant laws and regulations and changes
in the policies and procedures of labour law. The below report explains various functions of
human resource management in small and medium enterprise like Posh Nosh Limited which
is newly forming HR department in the company.
TASK 1
1.1 Difference between personnel management and human resource management
There are no any huge differences between personnel and human resource management as
HRM is an advanced version of personnel management.
 Personnel management is a traditional approach of managing people whereas human
resource management is a modern approach of managing and calculating the strengths of
an individual in a company.
 Personnel management gives emphasis on administering personnel, staff welfare and
labour relations. HRM focuses on recruiting, developing, maintain, and motivating human
resources of a firm (Need, 2006).
 People are assumed as an input for obtaining desired output in traditional method of
personnel management whereas in HRM people are taken as a valuable and important
asset of an organisation.
 Under personnel management, less training and development opportunities are provided.
In HRM, high development opportunities are delivered.
 Top level management makes decision following various laws and regulations in
personnel management. In HRM decisions are taken by involving the entire workforce
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after considering authority, decentralization of employees and competitive environment
etc.
 Increased production and satisfaction of employees is given emphasis under personnel
management. In HRM, focus is given on culture, productivity, effectiveness, and good
participation of employees.
 Under personnel management, concern is towards personnel manager. Whereas, in human
resource management, concern is towards all the level of management from top to bottom.
 Personnel management is a routine function, whereas HRM is a strategic function.
It is concluded from above differences that for achieving efficiency, Posh Nosh Limited
should adopt human resource management activities. Further, there will be more confusion
and misunderstanding if proper communication between managers and employees is not
encouraged.
1.2 Function of the human resource management in contributing to organisational purposes
Some of the important functions of human resource management are:-
 Recruiting right person for right job at required time;
 Delegating proper work to employees based on their skills and competencies;
 Offering adequate remuneration after properly evaluating performance of employees
Since human resource is considered as a valuable asset of the company, the
effectiveness of Posh Nosh Limited will be reduced if one wrong person is selected and
recruited. The main aim of HRM is to improve the productivity and overall revenue of the
company while improving the performance of human resources of an organisation. As a
result distribution of income to employees is also a strategic decision which should be taken
after due evaluation of performance of an individual. Hence, it is one of the critical function
of human resource management which impact the operations of the company (Guest, Michie,
Conway and Sheehan, 2003).
Moreover, one other main function of HRM is to assign work to employees based on
their skills, capability, knowledge, and experience. For effective results, it is recommended
that company should provide short trainings to their employees. This helps company because
trained employees get motivated and as a result they contribute more to an organisation.
Other than training, it is also required to communicate company’s desired goals and
objectives so that employees are well-guided what they have to achieve by their contribution.
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1.3 Role and responsibilities of line managers in human resource management
Line managers are the supervising authority whom employees have to direct report on
their current and completed assignment. Their basic role is to manage and control their
juniors. The responsibility of line managers is to deal with all the issues relating to their
subordinates and take initiative to solve it in their hands (Daley, 2006). The various other
responsibilities are as follows:
 Employing right person having skills as required by the company;
 Providing training to employed person according to the job assigned;
 Improving the knowledge, efficiency and performance of employees;
 Controlling high cost of company as related to human resource of the company
(HUMAN RESOURCES PLANNING, 2012).
1.4 Impact of the legal and regulatory framework on human resource management
Practices of human resource management in SME should comply with all the policies
of labour law pertaining to the area in which company is operating. It includes all the local,
state and federal law related to human resource of the company. The law includes effective
management of human resource involving their remuneration, working hours, retirement
procedure, and other benefit to employees.
Federal law: It includes provisions of various daily activities related to employees which
includes working hour, remuneration, safety and security, termination procedure which
should be followed by Posh Nosh Limited (Purcell and Hutchinson, 2007).
State law: This involves provisions related to employee’s medical, workers compensation,
minimum required notice period and other various factors related to human resource of a
company (Jenkins, 2016).
As a human resource manager, it is recommended to Posh Nosh Limited to follow all the
guidelines of law related to human resource to avoid any future discrepancy.
TASK 2
2.1 Reasons for human resource planning in organisations
Human resource planning in a business operating at a small and medium size is a
critical function as it require various activities to be undertaken. Posh Nosh Limited should
properly manage human resource as it is a high value asset which have its impact on the
operations of an organisation. This can be possible in any company through effective
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planning. It support company in making decision about selection, recruitment, training and
development, remuneration, motivation etc. HR planning and business planning goes hand in
hand as, HR planning help an organisation to find out such asset that helps business to grow.
Likewise, HR planning supports a firm to manage all related factors (Daily and Huang,
2001).
There is a shortage of employment because there is lack of manpower with required
skills and competencies to work according to the company. Hence, planning of HR helps
company to overcome such issue by finding a person with required capabilities. With the
increased technology and globalisation, there is need to modify the operations of the
company. This may include making new fresh recruitments based on advanced knowledge as
possessed by an individual. Such recruitment which may improve the productivity of
business in order to remain competitive can be possible through effective HR planning
(Mirror, 2002).
2.2 Stages involved in planning human resource requirements
The stages are as follows:
 Analyzing organizational objectives: The manger should analyze the objectives of
different fields of organization such as production, finance, marketing, sales and
expansion that gives the ideas about the work to be done in an organization.
 Inventory of present human resources: The manger should analyze the number of
individuals, their performance, capacity and potential from the updated human resources
information storage system. Moreover, they can examine the internal sources (i.e.,
employees from within an organization) and external sources (i.e., candidates from
various placement agencies) to fulfill various job requirements (Gelade and Ivery, 2003).
 Forecasting demand and supply of human resources: In this stage, the manager of Posh
Nosh Ltd. estimates requirement of human resources at different positions according to
the job profile. Along with this, there should be an accurate matching of job specification
and job description of any specific work, and the profile of individual should be suitable
according to it.
 Estimating manpower gaps: Under this, the surplus or deficit of workers will be provided
with comparison of human resource demand and human resources supply. Here, the
deficit comprises the quantity of employment of workers whereas surplus signifies
termination.
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 Formulating the human resources action plan: The mangers plan for the human resources
depend on whether there is deficit or surplus in an organization (Lepper and Greene,
2015).
 Monitoring, control and feedback: Under this stage, the manager execute the human
resource action plan by allocating individuals as per requirements. Also they monitor the
plan strictly to identify the deficiency and remove it (Brown and Reilly, 2009).
2.3 Recruitment and selection process in two organisations
The recruitment and selection process is different in Accenture which is leading IT
company having all integrated system and Posh Nosh Limited which is a SME. The main
differences arises due to internal hiring and final selection process. In SME, internal
recruitment like employee referral, job positioning, and job bidding is encouraged more.
However, in big companies like Accenture, a comprehensive approach is promoted where
right person is appointed having required skills and competency. Moreover, Accenture
follows multiple step recruitment process which makes it more practical and accurate which
is not so promoted in SME till now (Somers and Nelson, 2001).
2.4 Effectiveness of the recruitment and selection techniques in two organisations
It is essential to effectively analyse the recruitment process so that required changes can
be done in order to achieve objectives of Posh Nosh Limited and Accenture. Posh Nosh
Limited follows a simple and easy step to recruit employees in the company. At the time of
recruitment, company appoint right person for right job. Firstly, employees are hired through
internally and then outside recruitment is undertaken. But, Accenture follows strategic step
for recruiting employees externally and terminating the excess unwanted employees
(Ployhart, 2006).
In order to evaluate the effectiveness of a process, time required under full recruitment
process is analysed. It is analysed that time utilisation is more in Accenture as compared to
Posh Nosh Limited which follows internal recruitment first. Also, the employee turnover
shows the level of effectiveness of recruitment process. Higher turnover rate relates to less
effectiveness and lower rate of employee turnover relates to high effectiveness of recruitment
process. The workforce turnover rate is high in Posh Nosh Limited as compared to
Accenture. This evaluation explains if any shortage is there related to interest of candidates to
contribute into business (Spencer and Spencer, 2008).
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TASK 3
3.1 Link between motivational theory and reward
Two motivational theories are followed under a reward system of a company. These
theories include expectancy theory and reinforcement. On one hand, Expectancy theory refers
to the method in which employees relate the work contributed by them and the reward which
they expect to be received. As the expectation level increases, motivation among employees
also increases. On the other hand, reinforcement refers to the methods like increasing pay,
promotion etc. which enhance the performance of employees at workplace. Also, in addition
to this theory, there are negative reinforcement activities that helps company in discouraging
poor performance of employees (Chen and Huang, 2009).
Moreover, besides the above explanation, there are certain motivational theories which
can be adopted in order to improve the performance of employees and their effectiveness.
Hertzberg theory of motivation refers that motivation in employees is enhanced by two
factors such as hygiene and motivation factor. Motivational factor includes environment of
working, culture, recognition, compensation, challenging job etc. While, hygiene factor
involves pay scale and compensation to employees (Boxall and Purcell, 2011).
Hence, from the above it can be concluded that reward system and motivation are
linked to each other. Company can reward their employees by motivating them through
adopting various ways. It is also recommended that Posh Nosh Limited should employ good
reward system in a company so that employees are motivated to contribute their best in a
business. In this regards, company should adopt Hertzberg theory (Sheldon, 2016).
3.2 Process of job evaluation and other factors determining pay
Process of job evaluation helps management to know which job and employee should
be paid higher than others. Many different ways can be used to evaluate job such as job
grading, comparison of performance, job ranking etc. Posh Nosh Limited follows job
evaluation process in order to calculate the remuneration and wages to workers (Stanton,
Salmon and Rafferty, 2013). Below mentioned guidelines can be followed by company to
effectively undertake job evaluation process:
 Mark a job and not an individual;
 Examine discriminating factors among different jobs;
 Examination should be made based on real facts and figures;
 The results should be free from biasness and unfairness (Eccles and Wigfield, 2002).
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If the above mentioned guidelines are followed by company, it benefit the company in
various ways including:
 Well-structured job;
 Helps in further job profile;
 A systematic process to evaluate job.
Furthermore, the following factors should also be considered by company for determining the
salary of employees. These are –
 Labour union – Union of workers influences management to receive higher remuneration
by collectively negotiating with the company (DESMARAIS, 2015).
 Perception – The adequacy of remuneration not only depends on amount of pay but also
depends on perception of a person receiving the amount.
 Ability to pay – Union of workers often demand high due to the ability of company to pay
more such as at time of high profits, union may demand bonus (Judge, Bono and Locke,
2000).
3.3 Effectiveness of reward systems in different contexts
There are various ways to prove improved performance of employees other than
increased payment like appraisal system, non-monetary benefits, non-contributory pension
scheme, child care, non-cash perquisites, life insurance, other general insurance etc. But,
increased pay assist the increased performance and effectiveness of employees. Generally,
company undertake different other schemes also in order to improve and support performance
of employees (Price, 2007).
From the above, it can be suggested that Posh Nosh Limited should adopt various
reward schemes in their business as developed by HR managers while giving emphasis on
organisational objectives. Moreover, a single reward does not satisfies employee all the time.
In this regards, company should provide a mix of both intrinsic as well as extrinsic rewards
so that performance of employees increases and objectives of business are achieved (Bartol
and Srivastava, 2002).
Either intrinsic or extrinsic rewards not only complement quantitative aspect in
employee’s performance but also improvement in qualitative aspect of performance like
loyalty, and full attendance etc. Moreover, there are some employees whose confidence level
boost by intrinsic reward and for some employees it increases by providing extrinsic rewards
(Bianca, 2016).
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3.4 Methods organisations use to monitor employee performance
Posh Nosh Limited adopt simple rating system for reviewing performance of
employees. But, as the skilled workforce increases and competition becomes higher, there is
need to adopt behavioural checklist method. This is a method of statement mentioning the
column as effective and ineffective behaviour of workers at the workplace. There should be
match between the actual behaviour and expected behaviour of workers at the workplace.
This method is well-suited for SME like Posh Nosh Limited. This is because this method is
used to give focus on output and behaviour of employees along with outright instead of
comparative standards (Singh, 2000).
Behavioural checklist method is useful for Posh Nosh Limited because it supports
business to ask evaluators to define instead of only evaluating the behaviours of employees at
workplace. As a result, this method is favoured by most of the companies. This method has
effective result because it is based on the personal experience of workers and not based on
comparison (Bratton and Gold, 2012).
TASK 4
4.1 Reasons for cessation of employment with an organisation
The employees resign from current workplace because of some following reasons:
 Personal issues: This defines that the actual reason is not known by employees and
proper exit interview is not taken by managers. For retaining employees in a company
for longer period, it is essential for HR managers to undertake exit interview and get
the knowledge about resignation.
 Compensation: This is a reason for most of employees as they do not receive
remuneration according to their level of contribution. In this regards, Posh Nosh
Limited should provide remuneration after proper evaluation of employee’s
performance (Naus, Van Iterson and Roe, 2007).
 Family reason: Some of the employee leave company for family reason such as
migrating to other place to settle down.
 Performance: This is again a basic reason for many employees. This is because
sometimes employee’s skills do not matches with the operating work to be undertaken
in the company. As a result, performance of employees decreases which causes a
reason to resign. In this context, HR managers should hire a person with appropriate
skills according to the operations of company (Majumder, 2014).
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Following strategies can be adopted by company in order to reduce staff turnover:
 Improvement in recruitment process – As the competition and technology increase,
company should modify their recruitment process.
 Appreciation – Many of the employees resign because of lack of recognition of their
contribution, In order to reduce number of resignation, Posh Nosh Limited should adopt
appreciation method to recognition employee’s performance (Dowling, 2008).
 Training and development – Every company has its own style of working. Sometimes
this does not matches with the concepts of employees. In such situation, company
should provide training to employees so that their performance increases.
4.2 Employment exit procedures used by two organisations
Different exit procedure is adopted by Accenture which is a public company having
integrated operating system providing IT based consulting services and Posh Nosh Limited
based on type of resignation by employees.
Accenture:
 Company request foe exit on the online portal of company
 System generates employee’s resignation letter and transfers to manager
 Manager after receiving the system generated resignation letter, approach employee to
know about the reason for resignation
 Managers arrange meeting and try to retain employees
 Even after employee wishes to leave the company because of some unavoidable reason,
then manager and employee mutually decide a last day of working (Collins, 2001).
 At last day working, employee handover all the company related documents and
assignments allotted.
Posh Nosh Limited:
 Proper exit policy – This is a general method were according to the required notice period,
employee submit the manual resignation letter to the manager. During the notice period,
employee completes all the pending assignments and handover all the company related
documents to managers on the last date (Cole, 2002).
 Exit checklist – The employees who are resigning, fill up the checklist form and submit to
managers
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 Exit interview – Managers call employee for exit interview after receiving the checklist
and try to find out the reason of their resignation. If employees face any issues which can
be solved by managers then managers should try to retain employees by solving their
grievances as early as possible.
4.3 Impact of the legal and regulatory framework on employment cessation arrangements
Posh Nosh Limited fulfil all the legal requirements of law relating to HR as led by
government of UK. The law supports employee by providing job security to employees as
company cannot terminate employee without any genuine reason. If managers do so then
workers has right to file a suit against company for terminating and following unlawful
practice against employees. Moreover, Posh Nosh Limited avoid terminating employees
based on discrimination related to age, gender, nationality, religion, and culture etc.
Additionally, retiring employees because of any physical condition is illegal practice for
which employees can raise their voice. Further, in case of required termination, company
should provide various retirement benefits to employees (Armstrong and Taylor, 2014).
CONCLUSION
The above report concludes that because of having effective function of human
resource management, Posh Nosh Limited should adopt various practices related to HRM in
their company. Also, overall productivity of company is increased after effectively managing
the employees by following different practices. Further, company should evaluate the
performance of employees appropriately and based on that remuneration should be provided
to employee. Moreover, it is concluded that proper exit procedure should be followed by
Posh Nosh Limited and managers should know the reason about employee’s resignation and
try to retain them after solving their grievances.
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