Human Resource Management Report: Small Company Limited Analysis

This report provides a comprehensive analysis of Human Resource Management (HRM) practices, focusing on Small Company Limited in the UK. It begins by differentiating between personnel management and HRM, highlighting the advantages of the latter for the company. The report then delves into various HR functions, including recruitment, training and development, performance management, and employee relations. It explores the roles and responsibilities of line managers, emphasizing their involvement in recruitment, mentoring, appraisal, and termination processes. The report also examines the legal and regulatory aspects impacting the company, such as the Sex Discrimination Act, Equal Pay Act, and European Working Time Directive. Furthermore, it discusses the need for HR planning and its benefits, including improved recruitment and cost reduction. The report also covers recruitment and selection, motivational theories, reward systems, job evaluation, performance monitoring, and employment cessation procedures, along with relevant legal frameworks. The report concludes with a call to action for Small Company Limited to adopt strategic HRM practices to enhance its performance and employee relations.

HUMAN RESOURCES MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION............................................................................................................................1
TASK 1............................................................................................................................................1
1.1: Difference between Personnel management and HRM...................................................1
1.2: Various HR Functions.....................................................................................................2
1.3: Roles and Responsibilities of Line Manager...................................................................3
1.4: Legal and Regulatory Aspects.........................................................................................4
TASK 2............................................................................................................................................5
2.1: Need for HR planning......................................................................................................5
2.2: Steps in HR Planning.......................................................................................................6
2.3: Comparing Recruitment and Selection............................................................................6
2.4: Effectiveness of Recruitment and Selection....................................................................7
TASK 3............................................................................................................................................8
3.1: Examining the link between the motivational theory and reward system.......................8
3.2: Evaluating the process of job evaluation.........................................................................9
3.3: Determining the effectiveness of different type of reward system..................................9
3.4: Methods for monitoring the employee's performance.....................................................9
TASK 4..........................................................................................................................................10
4.1: Reasons for Cessation of employment..........................................................................10
4.2: Exit procedures used in two business organisation.......................................................11
4.3: Current regulatory and legal framework impacting employees....................................11
CONCLUSION..............................................................................................................................12
REFERENCES...............................................................................................................................13

TABLE OF FIGURES
Figure 1: Roles and Responsibilities of Line Manager...................................................................4
Figure 2: Steps in HR Planning.......................................................................................................7

LIST OF TABLES
Table 1: Difference between personnel and human resource management.....................................2

INTRODUCTION
Human Resource Management (HRM) is one of the key concepts that aid management in
dividing the whole work in easier manner along with boosting the productivity level. With this,
company is able to attain the objectives by enhancing the morale and performance level of
employees. In the present era of modernisation and globalisation, every company is trying its
best efforts to maintain a strategic and prominent position in the vast international economy. For
accomplishing this purpose, they are laying their major concern over implementing the aspect of
strategic management within the workplace (Osman and Galang, 2011). By following this
concept, the organisation tends to treat its employees as the core asset of the company rather than
mere cost. The companies now-a-days are focusing on undertaking various human resource
practices in order to retain the best and eligible employee within the organisation thereby
reducing overall staff turnover. This will benefit the entity to increase its productivity and
enhance its performance in the tough trading corporate environment. In this context, present
report is prepared to gain deep knowledge regarding different aspects of HRM (Hendry, 2012).
Here, as per provided case study, Small Company Limited of the UK is focused which is facing
issue related to employee management as it lacks HRM. Main purpose of this report is to
highlight the benefits of varied aspects of HRM to mention Small Company and to boost its
performance level.
TASK 1
1.1: Difference between Personnel management and HRM
The evolution of personnel management in the UK started before the First World War. It
is one of the world's traditional approaches of controlling and managing the entire workforce
within the company's structure. It generally focuses on maintaining the physical and
administrative evidences in an appropriate and systematic way. Doing these benefits, the
organisation is attaining equality within its workplace (Provan and Kenis, 2011). In simple
words, the concept of personnel management can be explained as a systematic and suitable
process of conducting managerial activities such as planning, staffing, controlling, directing and
training of employees in a very effective way. Contrary to this, HRM is much wider concept
which lays a significant concern over integrating the essential and vital activities of personnel
management with the company's goals, objectives and strategies.
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Table 1: Difference between personnel and human resource management
PERSONNEL MANAGEMENT HUMAN RESOURCE MANAGEMENT
It can be defined as an approach or function
that exists with a motive to appoint human
resource within organisation and develop
general employee-employer relationship.
HRM is a formal system that has been shaped
with a motive to recruit, select, develop and
empowered the manpower.
It is more inclined towards traditional
approach focusing just on core HR function
i.e. absence mechanism, salary development,
recruitment and selection.
It is a modern approach that aims to fulfil the
function of personnel management along with
empowering them and developing healthy
relations.
Indirect and informal set of communication. Formal communication.
It emphasises on routine function. It is more inclined towards strategic function
such as succession planning, employee
engagement and etc.
Transactional management. Transformational management approach.
From the differences that been highlighted above, it is required that mentioned Small
Company must opt for HRM as it is more advance and systematic approach to deal with
employees. From this, appropriate policies will be developed through which issue of conflict and
discrepancies can be reduced. Further, it will help in developing healthy relations with
employees and hence; can be able to retain them for longer time in the organisation (Armstrong
and Taylor, 2014). Motivation among employees is another aspect which makes HRM more
feasible than that of personnel management. This will eventually improves the performance of
personnel as well.
1.2: Various HR Functions
Cited company can implement following functions of HRM in order to enhance the
productivity and efficiency. These are discussed as follows: Routine Task: It is required that Small Company must implement routine function of HR
in practice in order to streamline the basic activity of management. This includes
recruitment and selection to fill vacant position, payroll, reward management and
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motivation. Through this, company will be able to manage the basic things of employees
in effectual manner. Training and development: Employees need to offer with sound training and
development session so that their skills can be shaped accordingly. This needs to be
focused by HR manager of mentioned company and conduct training on regular basis. It
will aid in enhancing the performance level as well (Wright and McMahan, 2011). Performance Management: Small Company must implement this HR function, as it is
very crucial in determining the incentive and appraisal of employees. Here, factors need
to be identified by HR manager upon which performance of employee will be evaluated. Employee Relations: To retain skilled employees, it is required to develop healthy
relationships with employees. By implementing this function, the company can able to
practice talent management from which overall efficiency of company gets enhanced. Implementation of impressive employee engagement techniques- With a view to reduce
its overall staff turnover, the Small Company should lay its major concern over
undertaking various employee engagement techniques within its workplace (Khan, 2010).
It should provide its individual employees with exotic motivational tools which help the
workforce to attain a strong sense of trust, loyalty, confidence and commitment towards
effectively achieving the organisation's success within the standard time frame.
 Recruitment and selection process- This is one of the most important functions of HR
department. The HR team of the concerned company is highly and crucially responsible
for hiring, recruiting and selecting the right candidate for the right job designation within
the company. Failure of this would result the company in facing sudden downturn in its
overall productivity and performance in the hyper competitive environment.
1.3: Roles and Responsibilities of Line Manager
Since the cited company is small in size, therefore following roles and responsibilities are
fulfilled by Line manager: Selection and Recruitment: Due to small in size, line manager needs to assist HR
manager within the context of recruitment and selection so that vacant position across
company can be filled (Werner and DeSimone, 2011). Also, it helps to save time and cost
in selection process as large number of applicants can be interviewed at a time.
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Figure 1: Roles and Responsibilities of Line Manager Mentoring: It is one of the basic roles of line manager which assist employees in
completing the work as per company’s standards. It also aids in identifying the loopholes
and helps in correcting the same so that overall quality of work does not get hamper.
From this, subordinates can also able to learn working pattern from the line manager. Appraisal: Performance appraisal must be practice by line manager as he is the one who
is well versed with the performance his subordinates. This aids in appraising the salary as
well which leads to motivation. However, it is required that line manager must practice
this role in unbiased manner in order to develop healthy relations with employees. Termination: It is one of the key roles that need to be fulfilled with due care so that
morale of other employee does not get hamper (Ng, Schweitzer and Lyons, 2010). In this
regard, line manager needs to keep an eye on poor performing employees so that either
they can be developed or terminated to save cost. Planning of managerial activities- The line manager is crucially responsible for planning
the company's managerial activities in a very significant and effective way. The line
manager here lays great concern over setting the appropriate and suitable target which
benefits the Small Company to attain the leading heights of company's success within the
predetermined time frame (Garg and Kapellusch, 2011).
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SelectionandRecruitmentMentoringAppraisalTerminationPlanningofmanagerialactivitiesSupervisionofsubordinates

 Supervision of subordinates- Line managers have the responsibility to identify the
capabilities and strengths of its individual employee and thereafter assigning them roles
and responsibilities which matches with their set of interest, knowledge and experience.
Also, they possess the responsibility of supervising their subordinates, motivating and
training them for their effective and impressive contribution towards the success of the
said entity.
1.4: Legal and Regulatory Aspects
Mentioned Small Company needs to focus on following legal act while developing sound
HR driven atmosphere at the workplace: Sex Discrimination Act 1995/97: It is required that the company should not discriminate
the employees or applicants on the basis of sex at any moment. It must be borne in mind
by management in order to develop healthy working environment. Equal Pay Act 1970: Moreover, Company must not offer less pay to female employees
than that of male. It is one of the basic mind-set of management and hence; same needs to
be considered in order to get rid from situation of conflict (Cascio and Boudreau, 2010). Disability Discrimination Acts 2005: This law states that company cannot discriminate
among employee on the basis of disability. Hence, Small Company needs to offer same
set of salary and position to disable person as well. European Working Time Directive: As per this, Company cannot make its employee
work for more than 48 hours a week. This needs to be considered while developing shift
for work. Due to this, Small Company needs to hire more number of employees for same
job role (Stanton and Nankervis, 2011).
 National Minimum Wage: Further, mentioned Company needs to adhere with minimum
wage guideline in order to stay away from dispute and penalty.
TASK 2
2.1: Need for HR planning
HR planning can be defined as a mechanism for determining the needs of individual
within organisation in order to ensure that decision with regards to recruitment and selection can
be taken. It is highly advisable to the Small Company for adopting the concept of HR planning in
order to manage whole process of human resource in effectual manner. In this context, the
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company will witness varied benefits from it (Singh and et.al., 2010). Through this, HR manager
will be having prior information about the positions that are vacant in the future. Based on this
facet, sound decision should be taken for recruitment. Also, it gives time to HR manager of
thinking and analysing that either to go for internal recruitment or external. Moreover, HR
manager is able to gain idea regarding demand and supply of employees in the market upon
which, recruitment decision is taken.
Further, it aids in determining the skill set which must be possessed by individual while
appointing for particular position. Moreover, deviation in skill can be identified through HR
planning which assist in recruiting employees in desired manner. From this, overall cost of
recruitment and selection can be reduced. Hence, it is advised that Small Company must adopt
the concept of HR planning in order to appoint employees in appropriate manner.
Apart from this, the vital significance of implementing a systematic and impressive HR
planning in Small Company are discussed as follows-
 To identify the total number of employees the company.
 Complete and maximum utilisation of the existing company's human resources.
 To evaluate and determine the types of employees working within the concerned
company's.
 To build a competitive and winning edge in the volatile and increasingly competitive
business environment.
 To gain employee job satisfaction and enjoyment within the workplace.
 To maximise its total sales and productivity in the corporate world.
By analysing and discussing the importance of HR planning in an organisation, it can be
concluded that Small Company should lay its major concern over undertaking such HR planning
within its work area as it brings tremendous benefits to the company and helps it to achieve
higher economies of scale thereby gaining a prominent position in the international market.
2.2: Steps in HR Planning
As a part of conducting HR planning, following steps need to be considered by Small
Company for optimal output: Reviewing Objectives: First of all, HR manager needs to review business objectives so
that decision can be taken whether to recruit more number of employees or not. It is the
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foremost step that aids in assessing the need of employees within organisation (Dawes
and Larson, 2011).
Figure 2: Steps in HR Planning HR inventory report: After this, HR manager needs to develop the inventory where
information related to total number of employee will be attained along with vacant
position. From this, decision will be taken regarding the number of employees to be
recruited. Forecasting demand and supply: After assessing the needs of employees, forecasting of
demand and supply is done where HR manager assesses whether there is high demand of
manpower or not. This aids in developing action plan where mode and time of
recruitment is taken. Action Plan: It is the stage where HR manager recruits and selects the employee with a
motive to fill the vacant position in desired manner. Further, it helps in determining the
training and development need as well and same is offered in order to boost the capability
of employees.
 Follow up: Here, evaluation is done that whether the need of employee is met or not.
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2.3: Comparing Recruitment and Selection
For the purpose of comparing recruitment and selection process, Vodafone and Small
Company are taken into account. From this, it is evident that Vodafone has complex process of
selection as that of Small Company. As a part of recruitment, Vodafone uses both internal and
external mode whereas Small Company uses only external mode (Chandra and et.al., 2011).
Further, selection starts with filtering of CV on the basis of person specification in Vodafone.
However, no such practice is done in Small Company. Here, CV is received by HR manager and
each applicant is called for interview. In contrary to same, candidates who meet with requirement
are called for interview. After this, HR level interview is conducted at Vodafone and then
intellectual tests are conducted where skills and competencies of each candidate is examined. In
Small Company, only HR level interview is done where all basic and technical information is
asked. Here, communication and confidence level of employees is judged.
Besides this, Vodafone chooses candidates for next levels who scored 60% in it and they
are leaded to final interview where ultimate filtering is done and selected and candidates are brief
with salary and other terms and conditions (Ulrich, 2013). Contrary, final interview is taken at
Small Company and candidates are selected for the vacant position.
2.4: Effectiveness of Recruitment and Selection
Based on the above discussion, it is evident that Vodafone has sound recruitment and
selection process which eventually aids in selecting the most competent and skilled employees.
Further, this process aids in removing unwanted candidates in initial stage and only from which
considerable amount of time is saved by HR manager and same is used in selection process as
well. Contrary, Small Company has simple process but it becomes time consuming, as there is no
filtering mechanism in between (Bratton and Gold, 2012). Due to this, HR manager needs to
incur huge time, cost and efforts in the selection process.
The recruitment and selection process plays a vital role in benefiting the company to gain
exotic performance and productivity in the fast changing global and corporate environment. By
selecting the right applicant for the correct job, the company is able to save its cost and increase
its overall profit margin thereby enhancing its total productivity across the globe. With this
context, it can be said that the concerned process of selecting and hiring the right candidates
brings various fascinating advantages to the company. It allows the Small Company to
8

effectively and impressively expand its business across the globe and achieve higher economies
of scale by gaining worldwide recognition.
Apart from this, the major difference between the recruitment and selection process of
Small Company and Vodafone is that prior company focuses on recruiting people from internal
sources and Vodafone focuses on external sources of recruitment. In internal source of
recruitment, Small Company selects the employee from within the organisation in the form of
transfers and promotion. This brings no benefit to the company, as the organisation is not able to
get fresh ideas and innovations in its working environment. Vodafone, on the other hand, recruits
the employees from external sources in order to gain fresh talent and ideas to achieve company's
success and to bring innovation in the work processes. For this, it conducts campus interview and
selects and hires the eligible and competent fresh talent for the organisation.
TASK 3
3.1: Examining the link between the motivational theory and reward system
There is an interconnection seen in the motivational theory and the type of reward system
which might be adopted by the manager of Small Company. In this regard, it can be said that
with the help of different motivational theories, manager of corporation can make selection of
one specific motivational approach. For example, Herzberg two factors are being regarded as one
of the most effective motivational theories (Monk and Wagner, 2012). This theory entails about
the two different types of factors such as hygiene and motivational.
On the basis of given motivational factor, manager of cited firm can make decision that
whether it should adopt financial or non financial form of reward system. For example, if firm
has identified that its employees feel more motivated then, they are offered with different non
financial factors such as increasing job responsibilities and promotions etc. Then, in the given
situation, manager of Small Company should make use of non financial reward system. This is
because; with the help of this, manager of firm enhances motivational level of its workers.
Besides this, it is recommended to the cited firm that it should enhance the motivation
level of its workers by making use of combination of both monetary and non-monetary means
such as assigning higher job responsibilities, giving promotion to workers and bonus etc.
(Employee Motivation, 2012). Through this way, firm can fulfil the needs and demands of
different types of workers.
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3.2: Evaluating the process of job evaluation
Job evaluation is being regarded as the systematic approach for determining the worth of
work. It is very important for Small Company to analyse the worth of different types of job
(Jiang and et.al., 2012). This is because; through this way only, firm can make correct and
effective decision about the salary which is being associated with the specific job. In this regard,
number of steps are assessed with the help of which manager of cited firm can examine the value
of specific job. At first, manager of firm should prepare the documents such as job description
and specification. With the help of given document, manager examine the importance of
different types of job. On the basis of these documents, in the next phase, manager should give
rating to different jobs. For this purpose, it can use factor comparison method. Finally, manager
can set money for the specific job (Naff, Riccucci and Freyss, 2013).
Besides this, there are some other factors as well which needs should be considered by
Small Company with an aim to examine the value or worth of job. It consists of experience of
employees and skills possess by them and the area where they will work (Top 4 Methods of Job
Evaluation, 2015).
3.3: Determining the effectiveness of different type of reward system
The reward system is of two types such as financial and non financial. Both forms have
their own effectiveness and ineffectiveness. For example, financial form of reward system such
as giving bonus and incentives should be employed by the firm, if it considers that basic need of
employees is of money (Correll, Benard and Paik, 2007). The given form is effective as it helps
in fulfilling the money related needs and demands of the workers. But, it has been critically
evaluated that the given form of method will be proved as ineffective if it will be used for those
employees who work at high level position. This is because; these individuals already work in
high salary structure thus; the given means will not be proved as motivational factor for them.
Hence, for such type of workers, non-monetary reward system such as higher job responsibilities
and promotion will be proved as more effective.
3.4: Methods for monitoring the employee's performance
There are examined some methods with the help of which manager of Small Company
can monitor the performance of its employees. The method could be benchmarking. On the basis
of give method, firm can set some performance standards for its employees which later on can be
10

compared with the actual performance of the workers. Hence, through this way, manager of cited
firm can draw the conclusion that whether its employees are working towards the right direction
or not (Mowday, Porter and Steers, 2013). Furthermore, through this way only, manager of
Small Company can examine that its employees are working well or not.
Besides this, another method could be taking feedback from the customers of firm. For
instance, if buyers have given positive feedback regarding the performance which is being given
by employees then, in the given situation, effectiveness of the employee's performance could be
monitored. Furthermore, the other methods which the Small Company can implement for
measuring the employee performance within its work area includes- Trial and error method- By undertaking this technique, the stated organisation takes into
consideration the total activities of its individual employees and renders them with
appropriate feedback whether negative or positive with a view to rectify their major
mistakes in a systematic and significant way.
 Observation method- By observing the daily working activities of its employees along
with their behaviour, attitude and level of contribution, the company is able to effectively
measure the overall performance of its individual employee in a very effective manner.
TASK 4
4.1: Reasons for cessation of employment
Generally, there exit some legal reasons which force employees to leave the business
venture. Many times, the reason for leaving can be personal issues as well which they face either
with employees or any member or client related to organisation (Shepherd and DeTienne, 2005).
Some of the major reasons of employees exit have been discussed down under:
 Unclear aims and objectives of venture
 Not familiar relationship with boss
 Unclear relationship with superior and peers
 Not good working atmosphere and working conditions
 Bad salary, reward and appraisal policy
Manager within the Small Company has to undertake various measures in order to
achieve organisational goals and objectives (Davies, 2011). With proper practice, organisation’s
revenue, turnover and profits will get increase and firm will be getting competitive advantage
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over the major competitors who are working in same business. Some of the practices which
venture has to consider are:
 Manager should hire skill candidates and discuss the, regarding the organisational
functioning. Further, the job designation and work should be clear that to whom the
individual should report.
 Organisation also needs to implement right compensation and benefits schemes. This can
be set by giving priority to pay packages, flexible work schedules and different other
incentives structures.
4.2: Exit procedures used in two business organisation
Small Company should have clear and specific exit procedures. The time when
organisation receives employee resignation, venture has to decide the last working day for
employee (Singh and et.al., 2010). This resignation should be given for one month before the
candidate plans to leave the venture. Manager of firm has to intimate him/her regarding the task
which is due and needs to get completed by him/her only.
Further, to identify the reason why employee is leaving, manager should focus on exit
interview. This should be between these two parties only and manager focuses on identifying the
reason of leaving. By taking the employee's suggestion, manager tries to retain them by
considering some of their needs and make necessary changes in their plans and policies.
On the contrary side, exit interview in Vodafone is different where employee has to give
6 weeks time before leaving the venture. Manager here emphasise on giving perquisites and
increase their pay scale so that they get retained (Wilson and Eilertsen, 2010).
4.3: Current regulatory and legal framework impacting employees
Small business organisation has to follow all the rules and regulations which are imposed
by the UK government body. These laws give protection to employee’s interest and if any
venture found guilty then, legal actions will be done on enterprises (Wright and McMahan,
2011). Further, if organisation terminates any employee without valid reason then, the individual
can sue the case against the manager or mentioned business organisation. Apart from it, no
organisation can terminate employee, if he/she is suffering from any sort of disabilities or illness.
Acts have also been made in order to protect the interest of pension schemed employees.
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CONCLUSION
From the above report, it is evident that small business organisation has to consider HR
function effectively so that they will be able to recruit the best of the individuals within
enterprise. This report is evident of human planning process where assessing manpower, demand
and supply forecasting for proper management of employees is considered within enterprise.
Moreover, organisation follows various legal and regulatory acts which are based on employees
benefit welfare and their maintenance. The report proved successful in gaining insight into
crucial significance of HR planning in an organisation regarding work area along with various
performance measurement tools which the Small Company should undertake with a view to
measure the contribution levels of individual employees towards the organisation's success.
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