Importance of Employee Relations in HRM Decision Making

This article discusses the importance of employee relations in the decision-making process of HRM. It highlights the benefits of maintaining healthy relations, such as reducing absenteeism, improving performance, and increasing employee engagement. It also explores strategies for promoting employee engagement in organizations.

Human resource
management

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 : Objective & Functions of HRM for workforce planning and resourcing.......................3
P2 : Strength and Weaknesses of approaches of recruitment & selection.............................5
P3 : Benefits of HRM practices for employer & employee...................................................7
P4 : Effectiveness of HRM practices for enhancing organisational profitability & productivity
................................................................................................................................................8
TASK 3 ...........................................................................................................................................9
P5 : Importance of employee relation in the process of HRM decision making ..................9
P6 : Aspects of employment legislation & effect on HRM decision making.....................10
TASK 4..........................................................................................................................................11
P7: Application of HRM practices in a workplace...............................................................11
CONCLUSION..............................................................................................................................15
REFERENCE.................................................................................................................................16

INTRODUCTION
Human resource is a organisation function that is to enhance the productivity of whole
workforce. Present report is based on Merrill Lynch that is a UK based investment management
organisation. Report is to achieve the objective of higher Competitive advantage that consist of
objective and functions part of workforce planning, strength weakness of different recruitment &
selection approach (Kianto, Sáenz and Aramburu, 2017). There are some aspects that are helping
in performing the function of human resource such as job advertisement, job description, person
specification, interview questions and last is the final job offer letter that is sent to candidate.
Further there is discussion of HR practices that can benefit both employer and employees along
with the importance if employee relations and the employee legislation.
TASK 1
P1 : Objective & Functions of HRM for workforce planning and resourcing
HRM: it is a function that is concern with utilisation of Present human resource sin a
organisation by performing functions such as planning, organisation and then controlling the
overall activities of organisation (Mousa and Othman, 2020). Further there is planning according
to laid objectives.
Nature of HRM:
 It is applied on all types of organisations
 Main objective is to motivate and inspire the workforce
 Human resource management is focussing on development of employee according to
their existing potential.
 Maintaining of cordial relations among employees working at different levels.
 It is a multi disciplinary activity that is focussing on utilisation of knowledge.
Scope:
 HRM is dealing with functions of planning, procurement.
 It is concern with working environment and facilities to be provided to employees
 From point of industrial relations human resource management is covering the aspect of
union management relations, disciplinary procedures, grievance handling, joint
consultation and dispute settlement.
Purpose & functions of HRM:

The main objective of HRM is to manage the organisation requirement of workers in order to
enhance their efficiency. Following functions in context of Merrill Lynch are mentioned below:
 Job Analysis: In this function there is description of the job such as experience,
qualification, skill set, ability that is used for defining the details of job (Haneda and Ito,
2018). In this the specific requirements of a vacant job position is presented to make a
candidate develop insights of knowledge and skills that are required and according to that
they can apply or not apply for a job offer.
 Human resource planning: It is a function of HRM that is used for accomplishing
organisation goals. In the research is conducted for the purpose of collecting information
related to present and future human resource needs. It can help in forecasting according
to changing values, attitudes and employee behaviour to understand its impact on
organisation.
 Employee welfare: This function is also performed by benefits, services and facilities
that are offered to employees according to employee competence.
 Personnel research: Human resource department has to perform the function of research
to gather opinion of employees, working environment, leadership, welfare activities of
employees. This research is very helpful in understanding the level of employee
satisfaction, employee termination and what has been the rate of employee turnover.
 Recruitment & selection: For achievement of organisations objectives there is pool of
resource created in Merrill Lynch in order to procure competent individuals.
 Performance management: This function is going to help in evaluation of employee
contribution according to performance standards. It will facilitate HR department to plan
incentives and training requirements (Presbitero, 2017).
 Compensation: This is a function that is associated with hiring of employees, offering
them remuneration and benefits according to level of performance. In Merrill Lynch there
is planning of compensation according to job position hold by each employee.
There are two approaches of HRM that is used in Merrill Lynch for planning workforce:
 Hard approach: It is a approach where employees are treated as one of the crucial
resources for achievement of organisation goals. In this there are strict measures that are
used by the top management to instruct employees to work according to laid regulations.

 Soft Approach: In this approach employee's are individual units and help in achievement
of competitive advantage. In Merrill Lynch there is use of higher employee participation
to enhance their contribution towards their assigned responsibilities.
P2 : Strength and Weaknesses of approaches of recruitment & selection
Recruitment: It is a process where a talent pool is created by inviting applicants for job.
There are large number of candidates who apply for a particular position then there is
scrutinising of all applications (Azeez, , 2017). According to which two sources of recruitment
are selected:
Internal source of recruitment is used when a organisation is willing to fill their vacancies by use
of means like referrals, transfer, promotion. Vacancy has to be filled by available employees that
leads to process being economic and fast.
Strength  It helps in managing time as there is no
looking for extremal sources to hire
employees.
 There is higher employee engagement.
Weaknesses  It sometimes creates resentment among
manager and employees.
 This limits the applicants pool.
External sources of recruitment: It is a process to fill the vacancies externally by
hiring new talent and qualified employees with the required skills by use of sources like campus
recruitment, employment agencies, walk ins. This sources helps enhancing new enthusiasm and
ideas in Merrill Lynch.
Strength  There is enhancement of fresh skilled
Candidates.
 There are no internal conflicts, high
competitive spirit and generation of
creative ideas.
Weakness  There is high cost and process is time
consuming

 There is presence of high risk and there
are high amount of unsuitable
applicants.
Selection: It is a process where a suitable candidature is selected by screening, interview
process to analyse competence of individual. There is discussion of strength & weakness as
mentioned below:
Written test: It is a approach that is used to analyse the aptitude, skills, ability and
individual personality of a candidate by way of a written test (Nieves and Quintana, 2018) (Hee,
and Jing, 2018). In this according to the specific skill requirement a written test is framed to
asses a Candidate based on present knowledge level that is very crucial to perform a particular
job roles & responsibilities.
Strength  There is assessment of present
competence and developmental abilities
of a individual
 It helps in making a detailed analysis of
the skills and knowledge level of each
employee that is very helpful for
human resource managers to measure
the intellect level of prospective
employee.
Weakness  There can be unreliable conclusions
that can lead to inaccuracy of test.
 Sometimes some job profiles require
both technical knowledge and
competence to practically use such
knowledge. If a person is not able to
apply the knowledge practically then it
may lead to no proper functioning and

may affect the productivity of
organisation & employee.
Analysis: While selecting a employee Merrill Lynch can use the interview or selection
process that depends on job complexity. If a particular job requires high amount of technical
skills only in that case it can be used otherwise this method may not be suitable enough on case
of job requiring higher practical knowledge.
TASK 2
P3 : Benefits of HRM practices for employer & employee
Human resource management is focussing in management of people so that overall
efficiency can be enhanced (Bouaziz and Hachicha, , 2018). This functions helps in motivating
employees, offering them amenities and identification of employee needs that can be fulfilled
with the help of recruitment process.
Benefits for Employers Benefits to employee
Training & development Merrill Lynch can identify the
training needs, skills,
capabilities so that employees
are able to adapt to latest
technology (Arvanitis, Seliger
and Stucki, 2016).
There can be use of different
development sessions that can
be used by HRM to help
employees to upgrade their
knowledge to
Recruitment HRM practise can help Merrill
Lynch to have right employees
on right job.
HRM Practices help
employees to be competitive
so that they can be motivated
and retained for longer time
period.
Resolution of conflicts Merrill Lynch can help in
solving of issues by forming
procedures and guideline that
Employees can be managed by
helping to resolve all the issues
that can help in reduction of

can helps in solving of
conflicts.
negative impact on both
employees and organisation.
P4 : Effectiveness of HRM practices for enhancing organisational profitability & productivity
In every organisation HR department is very crucial to attain a competitive advantage.
Human resource help in enhancement of profitability by improvement of efficiency of
employees. HR practices can help in high growth.
Merrill Lynch is considering tools such as Employee performance management &
monitoring. This is one of the important aspects that is used by organisations on order to work
towards enhancing employee productivity (Belizon, , Morley, and Gunnigle, 2016). There is a
technique such as 360 degree feedback that is adopted by managers and employees according to
their pre set objectives. 360 Degree feedback system is used to review feedbacks from person
who are around a individual. It consist of employees superiors, subordinate, peers. There is a
mixture of around 8-10 person that is used for taking timely feedbacks from all such individuals
and then a feedback report is prepared.
360 degree feedback is a tool that is used to enhance the management role of human resource
managers. In Merrill Lynch feedback is reported and further development plan can be created if
there are some areas in which the individual is lacking. There is support provided to help in
achievement of goals and further followed by follow up process.
Strength:
Development tool: 360 Degree feedback is very helpful in increasing the process of self
awareness that is a individual is able to develop insist about their overall personality, strength,
beliefs, motivation.
Multiple sources: There are lot of individuals who are contributing towards the feedback that
can help in development of a objective and valid feedbacks.
Career development: Organisation can be benefited as it will help in the process of career
development planning and further execution.
Weakness:
Conflicting feedback: Feedback can be conflicting in some situations as there is no surety of the
feedback is accurate.

Importance of leadership: Leaders in organisation have a belief that feedback is very important
to enhance their contribution.
Different methods in organisation:
Types of payment and reward system.
There are some specific type of reward systems that can be used in Merrill Lynch by managers.
It consist of differentiation as mentioned below:
Intrinsic vs extrinsic rewards:
Intrinsic rewards are those that are self initiated rewards such as a person having feeling of
accomplishment for being part of team. In Merrill lynch there is use of shorter working weeks,
rotation of jobs and flexible working timings that are used to provide employees required
freedom.
Extrinsic rewards consist of fringe benefits promotion that comes external from management. If
a employee is having feeling of personal growth or achievement then it is recognised as intrinsic.
If there is salary than rewards are extrinsic.
Financial vs non Financial:
Rewards can be financial in form of bonus, profit sharing, wages.
Non financial rewards are those that are related to the non monetary benefits that are ordered to
employees.
Performance vs membership rewards:
The rewards that organisation rewards policies can be based on membership or performance
criteria. In Merrill lynch also rewards are formed according to employee level of performance
(Armstrong and Taylor, 2020). Membership based rewards consist of profit sharing benefits,
salary enhancement, cost of living benefits that can be provided to employee if they are
contributing beyond a exceptional level towards organisation.
TASK 3
P5 : Importance of employee relation in the process of HRM decision making
Employee relations are the efforts that are made by employers to manage relations with
their workforce. Merrill Lynch can maintain good relations with their workforce by discouraging

of disputes and enhancement of understand. These relations will be helpful for both employer &
employee as mentioned below:
 Healthy relations can be maintained that can help in reduction of absenteeism and
increasing the comfortability with other co workers so that there can be improvement of
performance conflict solving.
 It leads toward enhancing productivity of each individual. This will help in enhancing
organisations productivity as employee productivity is linked to organisation's
productivity. There is high participation and involvement of employees. This leads to timely
suggestions and solving of problems if any faced by the workforce (Collings, Wood, and
Szamosi, 2018).
Employee engagement is a tool that can help employees feel that they are one of the crucial
aspects of a organization. Strategy has to be formed according to prevailing situation. Some of
strategies adopted in Merrill Lynch for promoting employee engagement are mentioned below:
 Encouragement of flexibility according to working schedule and increasing loyalty of
employees.
 HR management in Merrill lunch has made a policy of taking timely feedbacks from their
employees that is helping them in understand if they are facing any type of conflicts or
issues and resolving them fast.
P6 : Aspects of employment legislation & effect on HRM decision making
Employment legislation that consist of employee rights and related to formulation of
employer employee relationship. It is aimed at protection of employees there are several
elements of employee legislation that includes employment relationships, working conditions,
working hours, remuneration, benefits, industrial relations. There are certain effects of
employment legislation in the process of HRM decision making:
 Minimum wages Act 1998: This act is created to ensure a minimum wage is paid by
employers, in Merrill Lynch. It is a act that is discussed on the amount of wages that are
offered to employees. There is a need to focus on the wage criteria that a certain specific
amount has to be compulsorily paid to employees.

 Health & safety act 1974: This act is covering employees in a organisation. In Merrill
Lynch this is is going to help in ensuring that all measures are taken to enhance the
working conditions of employees. Proper amount of security has to be provided to
employees and their health conditions must be monitored.
 Equality Act 2010: This act is focussed on protection of employees from any type of
discrimination at workplace. There are some legislations such as Gender anticipation Act
1975, Race relation Act 1976, Disability discrimination act 1965. all the provisions of
these acts have to be considered to protect employees from indirect or direct harassment.
This act is also focussed on providing fair treatment to employees (Sparrow, Brewster
and Chung, 2016). In Merrill lynch this will lead to ease in decision making process.
 Data protection Act 1988: DPA is a act of parliament that came in 1988. it was
introduced to direct about the information and the overall details of personnel that has to
be protected by organisation. There should be no loss of information or leaking of
information on part of organisation. In Merrill Lynch it is the responsibility of the human
resource department to ensure that this information is not leaked or lost by organisation.
TASK 4
P7: Application of HRM practices in a workplace
The HR department of Merrill Lynch is focussed on adoption of practices so that skilled
and talented employees can be hired. HR department has to perform some specific activities so
that employees can be hired according to their knowledge and skill of their workforce, there are
different aspects such as Job description, Offer letter person specification that has to be used in
the remitment & selection process.
Job Advertisement:
HR Manager required
HR department
There is requirement of applications for vacancy of a HR manager
Candidates must have below mentioned skills:
 Graduation completed
 Post graduation with specialisation in HR
 Effective communication skills

 Experience of one year
Important dates:
Applications invited 5-10 September, 2020
Scruitining of applications 12/09/20
Date of interview 15 September, 2020
Applicants are requested to mail their CV by 10th September, 2020 on:
[e-mail]
Job description:
It is used for the purpose of describing the details of a particular job position. It helps in
developing a insights for the prospective candidate about the requirements in a job position that
they are applying. Below discussed is the job description fore the post of a HR manager in
Merrill Lynch.
JOB DESCRIPTION
Organisation: Merrill Lynch
Section: Human resource department
Designation: - HR manager
Job summary
Candidate has to perform the functions associated with HR manager. Functions such as
recruitment, selection, hiring, training will have to be performed.
Role: -
 Resolution of conflicts
 Analysing employee requirements
 Coaching employees
 Solving employee issues

Interview questions:
After there has been rejecting of inappropriate applications there is a requirement to
select the suitable candidates for direct interview round. In this there are some questions that are
prepared to analyse competence of a candidate. In case of Merrill lynch for the present vacant
position of a human resource manager there are some set of questions that have been prepared by
Interviewee in order to asses the candidate.
1. Please tell me something about yourself apart from what is written in your CV?
2. What are your strength that will help in performing your job duties?
3. What can be your motivation to enhance your performance at workplace?
4. What can be a creative technique to deal with conflicts at workplace or issues faced by your
employees?
5. How you will be working towards the required performance standards?
Job offer letter:
It is the last stage in which a employee if finally selected in organisation and it is being
communicated that there has been selection. Offer letter is sent as a means of communication to
received the confirmation about final joining date.
Mr/Ms,
Address
City, State code
Dear Mr./Ms.
We are happy to inform you that you are selected based on the interview for position of Human
resource manager in Merrill Lynch. We would like to further know your acceptance and
confirmation on the joining date. Other details related to your final pay slip and benefits are
mentioned in the attachment with this mail.
Joining date: 1st October, 2020
Working hours: 10:00 am to 6:30 pm
Salary:
Compensation benefits: Food facility, accommodation, conveyance facility. If you are
accepting this offer letter than mail your response. Apart from this any further queries can be

mailed on this mail id.
HR department
Merrill Lynch
Signature _____________________________
Date ----------------------------
Waiting for your revert.

CONCLUSION
From the above discussion it can be said that HR department is working towards ensuring
proper functioning of organisation to enhance the contribution of employees. There is a need to
properly formulate the policies to ensure the recruitment & hiring process. Healthy employee
relations are necessary to increase the process of understanding and building of friendly culture.
There are many legal acts that have been passed by government to posses legal boundaries on
organisation with regards to policies for their overall workforce.

REFERENCE
Books & Journal
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Mousa, S.K. and Othman, M., 2020. The impact of green human resource management practices
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Haneda, S. and Ito, K., 2018. Organizational and human resource management and innovation:
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Presbitero, A., 2017. How do changes in human resource management practices influence
employee engagement? A longitudinal study in a hotel chain in the Philippines. Journal of
Human Resources in Hospitality & Tourism, 16(1), pp.56-70.
Azeez, S.A., 2017. Human resource management practices and employee retention: A review of
literature. Journal of Economics, Management and Trade, pp.1-10.
Nieves, J. and Quintana, A., 2018. Human resource practices and innovation in the hotel
industry: The mediating role of human capital. Tourism and Hospitality Research, 18(1),
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Hee, O.C. and Jing, K.R., 2018. The Influence of human resource management practices on
employee performance in the manufacturing sector in Malaysia.
Bouaziz, F. and Hachicha, Z.S., 2018. Strategic human resource management practices and
organizational resilience. Journal of Management Development.
Arvanitis, S., Seliger, F. and Stucki, T., 2016. The relative importance of human resource
management practices for innovation. Economics of Innovation and New
Technology, 25(8), pp.769-800.
Belizon, M.J., Morley, M.J. and Gunnigle, P., 2016. Modes of integration of human resource
management practices in multinationals. Personnel Review.
Armstrong, M. and Taylor, S., 2020. Armstrong's handbook of human resource management
practice. Kogan Page Publishers.
Collings, D.G., Wood, G.T. and Szamosi, L.T. eds., 2018. Human resource management: A
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Sparrow, P., Brewster, C. and Chung, C., 2016. Globalizing human resource management.
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Online
Human Resource Management (HRM), 2018 [online], Available
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