Importance of Human Resource Management in Business

This report delves into the critical role of Human Resource Management (HRM) in business organizations. It begins by differentiating between personnel management and HRM, highlighting the strategic importance of the latter. The report then outlines the core functions of HRM, including recruitment, staffing, training and development, and performance management, emphasizing their contribution to achieving organizational goals. The responsibilities of line managers in HRM are examined, along with the impact of legal and regulatory frameworks on HRM practices. Furthermore, the report explores the reasons behind human resource planning, detailing the stages involved. It contrasts the recruitment and selection processes of two retail giants, Asda and Tesco, evaluating the effectiveness of their respective techniques. Finally, the report provides insights into motivational theories, reward systems, and employee performance monitoring, offering a comprehensive overview of HRM's multifaceted role in driving business success.

Importance of Human Resource Management in Business Organization
INTRODUCTION
Human resources management plays very important role in the success and growth of a
business enterprise. In other words, it is also considered as the personal management in a
business enterprise. Further, it can be defined as the process in which systems and processes
are developed to manage people within organizations. Effective management of human
resources helps businesses to accomplish goal and objectives in the best possible manner
(Becker and Huselid, 2006). Other than this, it also helps companies to allocate best person
for the vacant position in the same. The present report depicts differences between personal
and Human Resources Management (HRM). In addition to this, it also explains the purpose
of HRM within an organization. Some of the key roles and responsibilities of line managers
are also highlighted in this report. Further, it also explains the reason of human resources
planning and stages involved in the same. After going through this report, one can understand
the link between motivational theory and reward. Moreover, effectiveness of reward systems
and use of different methods to monitor employee performance is explained.
TASK 1
1.1 Difference between personnel and human
resource management
One of the major differences between personnel management and human resource
management is that prior is an old and traditional approach that focuses only on
people in organization whereas latter is an modern approach which is used to
manage people and their strengths in organization (Armstrong and Taylor, 2014).
Further, it can be stated that personnel management is a routine function whereas
human resources management is a strategic function. The pay in personnel
management is based on job evaluation of employees but in human resources
management pay grade is determined on the basis of employee’s performance. The
concept of personnel management was limited to employee welfare and developing
healthy relations with labour. HRM deals with recruitment, selection, management
and motivation of workers in a business enterprise. The role of management is
transactional in personnel management whereas in HRM management plays

transformational role. Other than this, personnel management possess slow decision
making but fast is observed in HRM. People are considered as an input to achieve
desired goals and objectives in personnel management (Datta, Guthrie and Wright,
2005). On the other hand, in HRM, employees are treated as one of the most
important assets which can help organizations to achieve their aim and objectives.
The training and development sessions provided in HRM are also more as compared
to the sessions provided in personnel management. Therefore, it can be stated that
human resources management is far more effective way to manage people in
organization in comparison to personnel management.
1.2 Function of the human resource management in
contributing to organisational purposes
Human resource management is considered as a very important part of an
organization. Further, some of its core function includes recruitment, staffing,
training and development and dealing with performance of employees (Becton and
Schraeder, 2009). It can be stated that manpower plays a significant role in success
of business enterprise. During the process of recruitment, HRM deals with areas such
as defining vacancy, personal specification, job description and advertisement
regarding the same. In addition to this, HRM also plays crucial role in the process of
selection by choosing the best and most eligible candidate among all the applicants.
Organizations purpose cannot be achieved if the employees are not skilled and
productive. Therefore, the practises of HRM focus on training and development of
people within a business enterprise. This results in enhancing skills, motivational
level and knowledge of employees which further leads to accomplishment of
organization’s aim and purpose. Along with this, HRM also take care of employee’s
performance and it is also one of its major functions (Storey, 2007). At regular
intervals, HRM practises are used to examine performance of people within a
company. Further, measures are also taken to enhance the same in order to achieve
the purpose of organization. Thus, it can be stated that HRM functions contributes a
lot in the growth and success of businesses.

1.3 Role and responsibilities of line managers in
human resource management
Line managers are the one who are responsible to take care and manage teams and
people within an organization. Further, these managers have various kinds of roles
and responsibilities which are required to be accomplished in effective manner. In
big organizations such as Asda, the lines managers perform the role of managing
employees (Guest, 2011). In addition to this, they are also responsible for providing
technical expertise to people who works under them. It is the duty of Asda's line
manager to monitor quality of all its products and services. On the other side, in
organizations such as Nike, line managers are also responsible for engagement of all
its employees. They are the one who develops effective culture within organization.
Line managers encourage open culture and communication that supports
engagement of all workers. Other than this, in organization such as Next Plc, line
managers are responsible for the performance appraisal of all employees. It can be
also stated that the structure of performance appraisal is determined by HR
managers but line managers are the one who implements the same (Meredith
Belbin, 2011). They often conducts one-to-one meeting with workers in order to
identify their problems and take feedback from them. It is required by line manager
to listen and take interest in the feedback provided from the employees. Other than
this, they are also responsible for maintaining decorum and discipline within the
workplace. They also take care of performance related to pay which enhances
motivation of workers.
1.4 Impact of the legal and regulatory framework on
human resource management
Legal and regulatory framework makes a direct impact on the human resource
management of an organization. It can be expressed that the practices and policies
of HRM needs to comply with healthy and safety legislation, employment laws and
other regulations. Further, HRM practices must address any kind of changes in the
above stated the laws and legislation. Human resource management deals with
process of recruitment and selection where people are hired for vacant post in
organization (Kotey and Slade, 2005). As per the regulations, HR manager is required
to use fair and transparent policy at the time of recruitment and selection. Along
with this, candidates should be selected on the basis of their qualification,

experience, skill set and abilities. The legal and regulatory framework forces
organizations such as the Tesco to change its existing HRM practices. On the other
side, it has also encouraged the organization to provide equal opportunities for
growth and development to all its employees. It is only because of the legal and
regulatory framework that better pay and working hours are being provided to
employees of Tesco (Hayton, 2005). Apart from this, the framework has also
encouraged organization to provide safe and hygienic working environment to all its
members’ staff. All these changes have increased the overall cost of operations and
have also made modifications in existing HRM practices of organizations such as
Tesco.
TASK 2
2.1 Reasons for human resource planning in
organisations
The key objective behind carrying out human resources planning is that it helps
companies to identify the exact number of employees required. In simpler terms,
human resource (HR) planning helps in ensuring adequate supply of employees or
manpower whenever it is required. Organization carries out HR planning at frequent
intervals in order to meet the future demand of employees in best possible manner
(Armstrong and Taylor, 2014). One of the main reasons why HR planning is carried
out is that it helps business enterprise to cope up with the changes. Organizations
such as Asda and Tecso are required to make changes as per the changing external
environment in which these businesses operate. Human resource planning helps in
making employees capable enough to cope up and adopt changes. Another reason
for carrying out HR planning is that it helps the above stated two retailers to get the
best and most talented staff members. Effective plans can help in selection of the
most eligible candidate for the vacant position in the organization (Becker and
Huselid, 2006). It can be stated that despite of high unemployment rate, businesses
such as Asda and Tecso faces problem related to hiring of skilled and capable
employees. Therefore, effective HR plans help these firms to overcome from the
problem related to unavailability of skilled workforce (Becton and Schraeder, 2009).
On the other hand, human resources planning are also carried out with the motive of
meeting growth and expansion needs of businesses (Aswathappa, 2005). Another

reason behind carrying out HR planning is that it helps organizations such as Asda
and Tecso to make the best and optimum use of all their employees. The gap
between demand and supply of human resources is easily managed by carrying out
effective HR plans.
2.2 Stages involved in planning human resource
requirements
Human resource planning can be termed as the process in which effective plans are
developed to meet the future demand of people within organization. The stages
involved in human resource planning of Sainsbury are mentioned below as:
Assessment of human resource- The process of HR planning in Sainsbury begins with
the assessment of its internal and external environment (Harzing and Pinnington,
2010). This helps the organization to become aware of its core strengths and
weaknesses along with future opportunities and major threats. On the basis of this,
the future requirement of human resources is being identified.
Checking out the existing inventory of human resources- Sainsbury starts
identification of its current number of employees, their skills, strength and
weaknesses in the second stage of HR planning. In order to meet the requirement of
job, both internal and external sources are also examined by Sainsbury.
Demand and supply forceasting- The third stage of human resource planning
consists of forecasting the future demand and supply of employees in Sainsbury. Job
description and personal specification are being developed for the vacant position
(Jackson, Schuler and Werner, 2011). Along with this, sources are also evaluated
from where the identified demand can be satisfied by Sainsbury.
Estimations of manpower gaps- Sainsbury finds out deficit and surplus of human
resources by comparing their demand and supply. In situation of deficit, the
organization starts employing people whereas in case of surplus, it stares
terminating workers (Datta, Guthrie and Wright, 2005).
Implementation of action plan- The action plan of Sainsbury's human resource is
based on deficit or surplus. On the basis of this findings, action plan are
implemented which consists of major activities such as recruitment, selection,
training development etc.

2.3 Comparison of recruitment and selection process
in two organisations
Asda and Tesco are the two popular retail chains of United Kingdom. Further, both
these organizations operate with large number of employees. The recruitment and
selection procedure which are followed in Asda are completely different from what it
has been implemented at Tesco (Kotey and Slade, 2005). Asda gives preference to
internal sources and then moves to external sources whereas Tesco directly seeks
for external sources of recruitment and selection. Whenever, there is a vacant
position in organization, Tesco starts publishing ads on newspapers and other
related media to invite applicants. On the other side, Asda try of lower down its cost
on recruitment and training of new employees by seeking for existing employees
that can fill vacant position (Guest, 2011). In case, if the organization is not able to
find eligible employee then it looks for external sources. The process of selection of
Asda also differs from Tesco. There are three rounds of interview which are carried
out Asda in order to select employee for vacant post. On the other side, Tesco
follows a proper procedure of selection in which preliminary interviews are carried
out, written test are conducted, employee interviews, medical examination are
arranged and then appointment letter is provided to the applicant (Aswathappa,
2005).
2.4 Effectiveness of the recruitment and selection
techniques in two organisations
The technique which has been used by Asda and Tesco are effective in various
terms. The process of recruitment and selection which is used by Asda can be
termed as effective because it lowers down the cost of advertisement and training.
Whenever a post gets vacant, Asda tries to fill the same with its existing employees
(Jackson, Schuler and Werner, 2011). Therefore, to a certain extent, it is not required
to invest on advertisement to invite applicants for the vacant post. Further, the
existing employee is already familiar with working environment, culture and no
training is required for him. This directly results in cutting down the cost incur in
training (Meredith Belbin, 2011). Along with this, Asda's process of recruitment and
selection also creates satisfaction among its existing employees as they are provided
opportunities of promotion on priority basis. On the other side of this, the process
which has been adopted by Tesco is effective because it bring fresh and new talent

in the organization (Hayton, 2005). With the help of external sources, Tesco is made
available with wide variety of choices to fill the vacant position. Other than this, a
well structured process of selection helps in selecting the best and most eligible
candidate among all the applicants. Therefore, it can be stated that both the
methods adopted by Tesco and Asda are effective in their own way.
TASK3
3.1 Link between motivational theory and reward
From a long run, the importance of motivation is seen around the corporate world for
retaining employees at the workplace. In general words, motivation is seen as the
process by which individual behaviour can be changed while satisfying their needs
and wants. The organizations make use of different motivational theories so as to
keep employees motivated for the better performance (Herradón, 2008). The
motivational theories used by the companies are divided into two major sections
such as content theories and process theories. The content theories are emphasised
on what motivations are, on the other hand, process theories presents that what is
the real process of motivating an individual.
To the flip side on a coin, reward is a monetary value that is gained by the workers
during job period. Rewards can be paid in both forms i.e. financial or non- financial.
Financial rewards is provided to employees against their performance however, non-
financial somewhat related when organizational rewards employees in terms of
promotion, achievement and praise. The link between rewards and motivation
directly leads to organizational efficiency (Srimannarayana, 2006). For an example:
UK organizations generally design incentive system as to encourage people to attain
objectives. The role of rewards is in providing direct motivation to the workforces in
successfully completing their jobs.
Prior to describe, role of motivation in real organization, it is important to identify the
motivational theory which fits to the scenario. According to Vroom expectancy
theory, the motivation level of individual working in an organization depends upon
how much rewards they want. In this aspect, if an employee knows that he / she will
get good monetary or non-monetary benefits for his/ her good performance then he /
she will defiantly put more efforts. The mentioned theory is based three elements i.e.
valence, expectancy and instrumentality. However, valence denotes the emotional

attachment of employees with rewards. Instrumentality denotes to the perception of
employees to attain outcomes by increasing their productivity. At last the
expectancy represents that rewards lead to expected performance (Prince, 2011).
For an example: Tesco is a leading retailer of UK who offers range of scale and the
reward systems to increase the moral of employees. Financial and non financial
rewards are provided to workers to keep them motivated whereas company also
uses number of motivation theories. The financial rewards system includes special
offers and discounts to attain employee motivation for improved work.
3.2 Process of job evaluation and other factors
determining pay
Job evaluation is a process used by the corporate entities with the aim of
extinguishing the relative value of jobs within the organization. This is quite
important process to evaluate to each job and determining the pay scale. However,
it is quite important for employers to define clear reason for job evaluation as prior
to conduct it. During the Job evaluation, three major factors are to be focused on
including: knowledge required for effective performance; complexity of the decision
making role; and the authority or control invested with the job position. For this task,
knowledgeable Human resources specialists decide on the effective evaluation of job
(Becton and Schraeder, 2009). There are two major methods of conducting job
evaluation i.e. quantitative and qualitative, among which one is to be chosen for a
time to make successful job analysis for a post. However, the process of job
evaluation is complex, but, it is required to conduct a specific analysis of a job for
determining pay scale. The points below represent the process of job evaluation
within an organization:
 Gaining acceptance is important to gain taking from the board of members for
designing job analysis for a new or vacant post
 Creating job evaluation committee is the second step of job evaluation process.
 This is really important to determine jobs that are to be evaluated
 Preparation of Job description (Schuler and Jackson, 2008)
 This is quite important to choose the method of evaluation
 Commencement of job evaluation program
 Periodic reappraisal of programme

Nonetheless, there are many factors that affect the determination of pay scale for a
particulate Job. The points are explained below in the following points:
Organization Size: The size of organization is the major factors that determines
pay scale, usually, it considers that a big organization pay good salaries due to size
and competition available in the market.
Seniority of Job position: To decide over the pay scales for a particular job, seniority
of job position is a major factor. On the basis of seniority, the job evaluation
committee determines the pay (Jackson, Schuler, and Werner, 2011).
Profitability targets of the organization: The pay scale of company is
determined after deciding the profitability targets. The objectives of profits are to be
looked at the time of deciding pay scales for a job post.
Skills and experience required for a Job: The requirements within a candidate
commencing the role and responsibilities of the vacant post is the major factors that
is considered while determining the pay scales for a job. However, industry sector
and well as performance of employees is also a base of determining pay scale for a
job (Armstrong and Taylor, 2014).
In regard to the retailing organizations, pay scale is determined and the existing
competitors pay scale for the similar post. For example: Tesco determines pay scales
while considering availability of labour in the market, competitors pay scale as well
as the law within UK labour market regarding direct and indirect financial payments.
In addition to that pay scales are determined while considering time and
performance required for the post. The workers of Tesco are provided overtime for
their extra work and piecework system is also used by Tesco.
3.3 Effectiveness of reward systems in different
contexts
Reward system is the foremost requirement of an organization for the purpose of
motivating people at the workplace. Intrinsic and Extrinsic rewards are two kinds of
different rewards which are paid to the employees against their improved
performance. The extrinsic rewards are one of tangible rewards including bonuses,
gifts, compensation, salary raise, and commissions (Grobler, 2005). On the other
hand, intrinsic rewards are used to provide personal satisfaction to workers. Such
kinds of rewards include information, promotion, recognition, feedbacks, trust and
relationship, etc (Chand, 2014). The effectiveness of reward systems can be seen in

terms of motivating employees towards higher performance as well as keeping
employees satisfied with their jobs. In this regard, employee bonus systems are
considered as positive strategies that are used for providing actual motivation. This
is to be noticed that within Tesco, bonus systems consider the factors such as
attendance, customer service, quality, group and individual performance so as to
reward an individual on overall basis. The bonuses provided to employees increase
employees' motivation and productivity/ performance. Salary raise which is included
in an extrinsic reward system is seen as the most significant motivators for workers
as it improves employee's performance; hence, overall organizational performance
increases. Promotion, on the other hand, is effective reward system in which
employees are motivated by transferring to higher positrons (Grobler, 2005). This is
considering being effective system in improving employee's morale and job
satisfaction. The rewards system provides a good chance to organization for
boosting profits and bringing out positive psychological contract among employees
and the organization.
3.4 Methods organisations use to monitor employee
performance
Measurement and monitoring of employee performance is important to provide them
better pay scale and rewards. In other words, it is the most important task of
motivating people towards improved performance and providing feedbacks. Tesco
uses different methods to measure the performance of employees and rewarding
them. Observation and feedback are the two major methods that are used by Tesco
so as to monitor the performance of their employees'. As pre the performance
monitoring system, Tesco hires an expert so as to monitor employee performance
who provides straightforward feedback on individual performances. The
observational methods are important for in rendering straight shape to the workers
of what is expected from them (Jackson Schulerand Werner, 2011).
Furthermore, Tesco uses performance standards to judge individual performance on
the basis of per-determined standards. The actual performance of individual working
in the organization is compared with the performance standards. Using this method,
company focuses on monitoring performance under realistic and measurable criteria.
The performance of individual is measured in terms of time, quality, effect, cost,
quantity and the manner of performance. Performance evaluation is also used by

Tesco to find out the actual job performance of employees against selected
performance standards. For this, Tesco employees' are interviewed for providing
information regarding their performance and are guided for creating a plan to
improve existing performance. It was found that Tesco uses "360-degree appraisal"
methods in which Tesco's stakeholders evaluate individual performance.
TASK 4
4.1 Reasons for cessation of employment with an
organisation
Cessation of employment is termed as an end of the employments period due to his /
her resigning or taking retirement from the job. However, after the death of
employee, the procedure of cessation of employment changes and such process
must be completed as soon as possible. In general terms, cessation of employment
is done in two major cases as resigning or taking retirement from the job (Cessation
of Employment, 2016). There can be many reasons for cessation of employment with
an organisation that are explained in the following points:
Salary issues: Due to the issues of salaries many people leave the job. In the well
furnished retailing market where organization like a Tesco and Sainsbury operates, a
huge gap between salary packages can be seen. It is major reason for cessation of
employment.
Conclusion of fixed employment period: In many of organization, the employees
are appointed for a fixed period for the completion of a task. The major reason of
cessation of employment, in such case is of completion of Job duration (Cessation of
Employment, 2016).
Employee fired: The employees can be fired from the organization just because of
their misconduct, damaging the property, falsifying records of company as well as
violating company’s rules.
Layoffs: The reasons may be temporary and permanent suspension from a position
just because it is not required for the organization.
Low level of performance: The low level of performance of employees can be a
reason of Cessation of employment (Cessation of Employment. 2016).
Employee/manager relationship: Many times, employees of UK organizations
leave the job because of tension between employees and the management as well

as poor relations with the same. In addition, when manager fails to satisfy the needs
of subordinate they leave the job, hence employee turnover increases.
4.2 Employment exit procedures used by two
organisations
The procedure of handling the situation of employee leaves is considered as exit
policies. The exits procedures are used when employees resign or retire from the
organization. There are two major types of exit policies such as voluntary and
involuntary. Whenever some organizations lave the company, it is denoted as
voluntary leave, on the other had when employees are forced to leave organization,
it called as involuntary exit (Armstrong and Taylor, 2014). At the time of leaving
organization, the employees have to fulfill the all requirement and to clear the exits
forms. Within UK organization, Voluntary retirement scheme and Golden hand shake
are the major policies that are used by company to encourage employees for leaving
the job at earlier phases. However, it is used at the time when employees and
employers both take it as a benefit. For an example: TESCO is seen with offering
VRS and Golden shake to seniors employees on the other hand, employees of Tesco
are liable to go through the exits policies when leaving organization. The employees
are asked about the reasons of leaving jobs which will further provide benefits in
terms of finding out the ways for decrease employee turnover. However, the leading
entity of UK hospitality organization conducts personal exit interviews with
employees for asking the reasons for leaving the job (Chand, 2014). The importance
of Exit interviews is that the company can work upon the reasons so as to decrease
employee turnover. The employees of Marriott are asked about their perception
about working environment, working style and so on. The loopholes of company are
to be identified so that employees can be retained for a longer period of time. At
last, it can be said that with the help of exit policy company can improve motivation
among employees are can retain them.
4.3 Impact of the legal and regulatory framework on
employment cessation arrangements
The major aim of designing the framework on employment cessation arrangements
is to improve the employee’s retention status and to complete legal settlements
during exit of employees from the organization. In accordance with the Employment