HR and Financial Management: Strategies for Business Success

This report delves into the interconnected fields of Human Resource (HR) and Financial Management, highlighting their critical roles in organizational success. It begins by emphasizing the significance of the HR department in maximizing operational efficiency, employee satisfaction, and change management. The report explores motivation as a key HR function, discussing various theories like Maslow's hierarchy of needs and McGregor's theory X and Y, along with practical motivational techniques. A case study of the John Lewis Partnership plc illustrates successful employee motivation strategies. The report then shifts to financial management, defining its core functions of planning, organizing, directing, and controlling financial activities. It underscores the importance of financial functions in identifying financial needs, ensuring smooth operations, and providing options for finance procurement. The role of the finance manager is outlined, including responsibilities related to financial planning, investment decisions, and shareholder wealth maximization. Finally, the report discusses various sources of finance, categorized by time period and ownership, providing a comprehensive overview of financial management strategies.

HR AND
FINANCIAL
MANAGEMENT

Table of Contents
REFERENCE............................................................................................................................................7
Books and journals............................................................................................................................7

Motivation is the crucial function that is played by the HR department in order to
maximize the operational efficiency of the business and achieve satisfaction of the
employees. The project shall be highlighting the human resource department of the company
and its significance for the business. It shall also be reflecting motivation and its theories that
are applied by the business with respect to boost their morale and fulfill the organizational
objectives of the business. Lastly it shall be discussing the steps taken in motivating the
workforce with respect to an organization and how it ensures the success of the organization.
HR stands for the human resource which is a department in every business
irrespective of the size or business operations that are being conducted. It facilitates several
functions like recruitment, selection, training, development and administering the employee-
benefit programmes (Bratton and Gold, 2017). Its major role is to manage and motivate the
employees of the company such that they direct the activities to the path of success and
achievement of the goals of the organization. They also play prominent role in the company
in terms of change management and its easy acceptance by the employees, this is done to
foster innovation, uniqueness and competitive advantage among the competitors in the
industry.
Motivation is derived from the word “motive” which means the goals, needs, wants
and desires. Such goals in reference to the business can be both personal as well as
organizational. The integration of both types of goals ensures success in the company (Yusof,
Said and Ali, 2016). Motivation can be referred to as influencing and guiding the actions and
behaviors of the employees in order to achieve the organizational objectives of the company.
It is a driving force that builds morale and enthusiasm in the employees to perform better and
increase the operational efficiency. It also maximizes their level of satisfaction such that and
hence retains the employees with the company.
Motivational activities are of major significance to the business as it performs some
crucial roles like personnel management, change management, employed retention, employee
satisfaction, better relations between management and workers, quality management and
maximize the productivity of business. It can be used for achievement of both personal and
organizational objectives which satisfies the needs of employees as well as organization and
can be beneficial for the growth of both (Teo and etal., 2016). There are various techniques
that are used by the HR manager to maintain the motivational level in the employees like
training, feedbacks, grievance redressal and employee rewards and recognition. This
maintains the energy level, commitment, flexibility and creativity in their operations.
Maslow`s need hierarchy theory of motivation is the most famously used theory in the
management which is postulated by Abraham Maslow. The theory is based on the concept
that employees in an organization the employees stay motivated to perform the business
operations only when their personal needs and goals are fulfilled. The theory suggests that the
needs of an individual starts from low level and goes up to higher levels of desires (Allen and
etal., 2016). The employees need begin from the physiological requirements that are
necessary for the survival of an individual like food, clothing and shelter. After the
fulfillment of basic necessities the employee reaches to the second level of need hierarchy
which is safety and security of income, employment and protection against any threats that
could arise. The next is the need of belongingness and love which can be established through
relationships and association with the family, friends, colleagues and society. At the higher

level the employee wants to maximize the self- esteem and self- actualization needs such as
status, respect, recognition and personal development.
The theory basically highlights that in order to guide and direct the employees towards the
goals of the organization, personal interests must also be considered.
The McGregor`s theory X and theory Y is formulated by Douglas McGregor. The theory is
based on the idea that the motivation of the employees must be undertaken keeping in mind
the inherent characteristics that are borne by them. The theory suggests to divide the
employee groups among two labels that is theory X and theory Y in which the prior is
negative and the latter is positive in nature. The theory X type of workers who portray the
negative characteristics like laziness, self-centeredness and lack of growth and ambition
(Badubi, 2017). For such people strict control of management is required and negative
motivation like punishments are provided for incompletion of the given tasks. On the
contrary the staff that is included in theory Y like those possessing the qualities of
responsibility, efficiency and acceptance towards change. Positive motivation techniques like
rewards, recognition and power to initiate are provided to such employees.
The John Lewis Partnership plc is a British company which deals in supermarket and
departmental stores business. It has expanded its operations in the line of banking and
financial services and retail activities. It is headquartered in London and is among the top
three non-traded companies in UK. It has been established as a trust which is operated on the
behalf of its employees who are the partners of the company.
The company is considered to be one of the best companies in UK in terms of
providing motivation to its employees and boosting their level of satisfaction in the company.
The major reason for the motivational factor in the organization is that it is employee-owned
business. All the partners of the business have stake in the profits and losses of the business
(Cook and Artino Jr, 2016).
Apart from that the value system that is followed by the company which integrates the
personal interest of all its employees and has a shared commitment, creates the scope for
motivation and satisfaction among them.
The no discrimination and biases policy is also one such factor that can boost the
morale of the employee and drive them to give their best performance to the company
(Beckmann and Heckhausen, 2018).
The change management is undertaken by proper training and developmental activities in the
organization with the timely feedbacks as to the change that is required by the employees of
the company.
One of the major steps taken is the employee engagement in the key decision-
making process of the company by welcoming their initiatives and ideas (Oliveira and
França, 2019). Ultimately this helps in motivating the employees and impacting their
performance in the organization.
Financial management can be referred to the function which comprises of strategic
planning, organizing, directing and controlling the financial activities of the business. It
involves managing the finances of the organization from the acquisition to the utilization

such that the costs can be minimized and the benefits can be maximized (Finkler, Smith and
Calabrese, 2018). The project shall be providing the basic understanding of the concept of
financial management. It shall be showing the importance of the financial functions that are
undertaken within a business. Apart from that it shall discuss the role of finance manager in
the company. Lastly it shall be suggesting the various sources of finance that can be used by
the company for financing the short term and long-term needs of the business.
Financial management is the key function as performed by the finance department of
an organization which constitutes of financial planning, organizing and controlling of finance
(Madura, 2020). It refers to efficient procurement of finances by minimizing the cost of
acquisition, utilizing the resources such that idle money is avoided and utmost profitability
can be gained. After that the controlling strategy measuring the deviations from the set
standards is undertaken.
This process involves the major decisions like the investment, financial and the
dividend decision-making. The investment decision involves the capital budgeting or
purchasing of the fixed asset decisions. The financial decisions are regarding raising the
finance from the various long-term and short-term alternatives and the cost of its acquisition
(Kembauw and etal., 2020). And the dividend decision of the financial management is
concerned with proportion of the profits to be provided to the shareholders and the remaining
to be retained in the business.
Finance functions in an organization play crucial role as finance in any company is
the backbone for conducing smoothly the business operations. By properly handling the
finance, the business can maximize its profitability and the future growth prospects. There is
some major importance of the finance functions in the businesses: -
The major importance that it poses to the company is in identifying the needs of
finance like it can be for incorporating diversification or modernization in the business, to
install the new technology, expansions in the new product line and rehabiliting the existing
business lines. These needs are the driving forces for the procurement of finances (Ekpo,
Etukafia and Udofot, 2017).
The finance functions of the business help in smooth and efficient conduct of the
operations, it improves the liquidity position of the company such that all the short term as
well as long term obligations can be fulfilled by the business. The finances shall also prove to
be important source in the future growth and prosperity of the company.
One of the most prominent importance that the financial functions lead to the business
are that they provide various options and alternatives in selection of the source of finance.
After evaluation of the available sources, the most optimal source of finance is chosen which
minimizes the cost and simultaneously maximizes the returns of the company (Geddes and
Schmidt, 2020).
The role of the finance manager is to conduct the finance functions timely and
efficiently in the business. The roles and responsibilities begin with assessing the need of
finance, deciding on the capital structure to be used, evaluating the various sources of finance
and its implementation to acquire the capital (Balaban, Župljanin and Ivanović, 2016).
Apart from the acquisition, it is concerned with its effective utilization by not
maintaining idle funds, management of cash, ascertaining the returns that are delivered from
the investment decisions and judgements regarding the risk and return portfolio.
The finance manager of the company also ensures continuous updates based on the
share market and maximization of wealth of shareholders of the company. They are also to
decide regarding the right amount of dividend to be paid to the owners such that the level of
satisfaction is also maximized and simultaneously required profits are maintained in the
business.

Sources of finance are the various alternatives from which finance can be acquired by
the business for the fulfillment of the organizational objectives. They can be classified on the
basis of time period, sources of generation and the ownership. On the basis of time period the
funds can be arranged from short term as well as the long-term sources. The short-term
sources are one which provides the finance for less than a year.
The long-term source of finance includes the equity share capital, preference share
capital, debentures, bonds, venture capital and the asset securitization. These funds are
provided to the company for incorporations expansions and modernizations in the business as
they are provided for a period more than a year. The cost of all finances is different as some
involve fixed obligation while the others are situationally determined by the company. Also
retained earnings can be used in the form of long-term finance.
The equity and preference share capital are raised from the public at large who in
return acquire ownership in the company and the voting rights in the decision-making
process. Apart from that they are paid a part of the profits as dividend in which the preference
shareholders get the preferential rights.
The debentures and bonds are issued to raise the finance and pose fixed obligation for
the company where interests are paid on the fixed rate on the value of debentures. They are
risky in case of shortage of funds. Venture capital is a form of private equity where the
investors invest in start-ups having growth potential and take part of the profitability of the
business (Fischer and Krauss, 2018).
The short-term finance involves the bill discounting, providing factoring services, advances
from the customers and short-term working capital loans from the bank. These sources of the
finance are for less than one year and are supposed to be to meet the short-term obligations.
In the bill discounting the trade bills which are due on the future date shall be used by the
company to acquire finance (Ortiz‐de‐Mandojana and Bansal, 2016). This is done by
discounting it with the bank at less than the value and the difference is the interest paid. At its
due date the bank shall collect the amount from the customer.
Factoring is another source of arranging short term finance where the accounts receivable is
sold to the third party at a discounted rate. And the finance so arranged shall be utilized in the
business.

REFERENCE
Books and journals
Bratton, J. and Gold, J., 2017. Human resource management: theory and practice. Palgrave.
Yusof, H. S. M., Said, N. S. M. and Ali, S. R. O., 2016. A study of organizational culture and
employee motivation in private sector company. Journal of Applied Environmental and
Biological Sciences. 6(3). pp.50-54.
Teo, S. T. and etal., 2016. Person–organization fit and public service motivation in the
context of change. Public Management Review. 18(5). pp.740-762.
Allen, M. L. and etal., 2016. The importance of motivation, weapons, and foul odors in
driving encounter competition in carnivores. Ecology. 97(8). pp.1905-1912.
Badubi, R. M., 2017. Theories of motivation and their application in organizations: A risk
analysis. International Journal of Innovation and Economic Development. 3(3). pp.44-51.
Cook, D. A. and Artino Jr, A. R., 2016. Motivation to learn: an overview of contemporary
theories. Medical education. 50(10). pp.997-1014.
Beckmann, J. and Heckhausen, H., 2018. Motivation as a function of expectancy and
incentive. In Motivation and action (pp. 163-220). Springer, Cham.
Oliveira, R. and França, C., 2019. Agile Practices and Motivation: A quantitative study with
Brazilian software developers. In Proceedings of the Evaluation and Assessment on Software
Engineering (pp. 365-368).
Financial Man
Finkler, S. A., Smith, D. L. and Calabrese, T. D., 2018. Financial management for public,
health, and not-for-profit organizations. CQ Press.
Madura, J., 2020. International financial management. Cengage Learning.
Kembauw, E. and etal., 2020. Strategies of Financial Management Quality Control in
Business. TEST Engineering & Management. 82. pp.16256-16266.
Ekpo, N. B., Etukafia, N. and Udofot, P. O., 2017. Finance manager and the finance function
in business sustainability. International Journal of Business, Marketing and
Management. 2(1). pp.31-38.
Geddes, A. and Schmidt, T. S., 2020. Integrating finance into the multi-level perspective:
Technology niche-finance regime interactions and financial policy interventions. Research
Policy. 49(6). p.103985.
Balaban, M., Župljanin, S. and Ivanović, P., 2016. Sources of Finance for Entrepreneurship
Development. Economic Analysis. 49(1-2). pp.48-58.
Fischer, T. and Krauss, C., 2018. Deep learning with long short-term memory networks for
financial market predictions. European Journal of Operational Research. 270(2). pp.654-
669.
Ortiz‐de‐Mandojana, N. and Bansal, P., 2016. The long‐term benefits of organizational
resilience through sustainable business practices. Strategic Management Journal. 37(8).
pp.1615-1631.