Unit 3 Assignment on HRM Planning
Diploma in Business
Unit Number and Title
Unit 3 HRM Planning
Unit 3 Assignment on HRM Planning describes the concepts of human resource management regarding the retention, motivation and appraisal of employees. This unit also focuses on the legal matters for cessation of employment and exit procedures. Learners will learn about the difference between the personnel and human resource management. It gives the idea about the hr management and the role of line managers in HRM. The unit continues with the description of human resource planning. Planning of human resource is very crucial and involves the decision of recruitment and selection techniques. The importance of right people on right job is described very clearly in the unit.
Learners will learn about the motivational theories and their link with the reward system. Reward system is described as the system or process of providing benefits to the employees according to their performance. Mechanism of cessation of employment is very well explained in this unit and it further provides the knowledge about the legal framework and its impact on the cessation arrangement of the organisation.
1.1. Differentiate between personnel management and human resource management
Both the terms, personnel management as well as human resource management are related to the management of the employees in the organization. Traditionally the practice that was used to manage the employees is known as personnel management and the modern practice of employee management is the human resource management.(Mahmood, 2014)
There are some differences between both the management approaches in consideration with their functioning. (Armstrong and Armstrong, 2009)
Human resource management
Managing employees using traditional ways
Managing employees using modern ways
Department works according to pre decided rules and regulations
Department works according to the situational changes
Personnel department is only related to administration
Human resource department has relation with all other departments as the managers of each department works for human resource functions.
Treat employees as inputs for organizational goals.
Treat employees as asset for the completion of organizational goals.
Personnel manager act as the mediator between the workers and the top management people. Personnel department is only for the welfare of employees on the executive posts
Human resource management is for the top management also.
Let us take examples of the organizations that are using the above approaches.
- NHS, UK: NHS, UK is the organization that is using personnel management for managing the employees. In NHS, UK the personnel management department is linked only with the admin department. The role of the personnel manager is limited to recruitment functions.
- Sainsbury Human resource management: The human resource management department of Sainsbury has been awarded as the best hr department in 2010. They work for the employee welfare as well as for the training of new employees. The managers of each department in Sainsbury engaged in the practices of training and development for the employees working under them.(J-sainsbury.co.uk, 2016).
1.2. Assess the function of the human resource management in contributing to organisational purposes.
The achievements of organisational goals are not only dependent upon the operations but also deals with the human resource department. Human resource department is the foundation of the organisation. Recruiting right people on right time and at right place is a very crucial work to be done by the human resource department. The management of employees in the organisation is very important for the completion of short term as well as long-term goals of the organisation. The satisfaction of the employees leads to efficient working. It is the duty of the human resource department to bring this feeling of satisfaction in terms of money as well as the working environment.
Human resource management in HSBC: HSBC has very wide employee strength with 26000 employees. This suggests that there is diversity of workforce in the organisation that helps in dealing with different situations. The employees of HSBC are the priority of the organisation and this is the reason that the organisation has one of the best human resource management departments. (HSBC.com,2016).
Functions of human resource department in HSBC that contributes in organisational purposes:
- Proper selection of human resource
- Proper training and development to the employees
- Application of motivational and appraisal practices
- Proper selection of human resource: Appropriate and proper selection of employees is a very important task in the banking industry. Success of banking industry is based on customer satisfaction, so the employees in the bank should know how to deal with the customers. Proper selection leads to the skilful employees who can generate ideas and approaches to attract customers for improving the business.(Armstrong and Armstrong, 2009)
- Proper training and development: Training and development is a very important function of human resource management. As HSBC focuses on customers, so they need to train their employees on the skills like communication skills, personality development etc. HSBC has regular conduction of development programs that update the employees of the organisation with new technologies and current economic status.
- Application of motivational and appraisal practices: HSBC treats its employees as assets. The human resource department of HSBC very well know the importance of motivating employees to enhance their performance. Many reward programs have been introduced by HSBC to appraise their employees for motivating them. (HSBC.com,2016).
Above all practices of human resource management leads to better performance of the employees that contributes in the organisational purposes.
1.3. Evaluate the role and responsibilities of line managers in human resource management.
Line managers are the direct reporting managers. Each department in the organisation has the line manager to manage his team. Suppose if there are three departments in an organisation like marketing, finance and HR than all the three departments are controlled by a manager who heads that particular department. Human resource department has the duty of managing all the employees in the organisation but the line mangers have the duty of managing their team. Line managers support the functions of HRM.
HR functions of line managers:
- Performance management: It is the duty of the line manager to manage the performance of the employees working in his department. Human resource department acts on the broader basis.
- Motivation: As we know that, the human resource department practices the function of motivating the employees but it is done under the control of line managers. The need of conducting motivational programs is determined by the line managers only.(Gilbert, De Winne and Sels, 2015)
- Appraisal: The human resource department determines the appraisal policy but line managers take the judgement of giving appraisal. This is because the line managers had better know about the performance of his team rather than the HRM department.
- Performance pay: The payment of employees is influenced by the ratings given by the line managers. Human resource only has the duty to pay them but how much to pay is decided by the reports generated by the line managers for an employee.
Duty of line managers in HSBC:
- Recruitments: After completing the aptitude test by the candidates, they need to be interviewed by some of the experience interview panel. That panel involved the line manager of that particular department for which the candidate has been shortlisted.
- Employee engagement: Employee engagement refers to the involvement of employees in the process of decision making . This is the responsibility of the line manager to involve his team under the process of making decision on any issues related to that particular department. (HSBC.com,2016).
1.4. Analyse the impact of the legal and regulatory framework on human resource management.
The legal and regulatory framework affects the HRM policies formed by the organisations in UK. Some of the government regulated acts such as Employment Act (1996); Minimum Wages Act (2016), Sex Discrimination Act (1975) etc influence the HRM practices of the organisation. The organisations cannot form the HRM policies according to their will. The policies are formed in consideration with the regulatory framework by the government.
Impact of legal acts on HRM:
- National Minimum Wages Act: National minimum wages act in UK suggests that the employees in the age of 16 and above should be paid with the minimum amount that is decided by the government in every industry.(Lussier and Hendon, 2013)
- Performance management: Around 80% of the UK companies practice performance appraisal for their employees. 55% of them conduct the appraisal program annually, 7% do it quarterly and the rest of them do it twice a year.
- Equality Act 2010: This act suggests that the employers should treat the equal level employees equally in terms of payment, sex, race, religion etc. Below are some of the acts, which form the legal framework of HRM:(Sekhri, 2010)
- Equal Pay Act
- Sex Discrimination Act
- Race Relations Act
- Disability Discrimination Act
- Employment Equality (Religion or Belief) Regulations 2003
- Employment Equality (Sexual Orientation) Regulations 2003
- Employment Equality (Age) Regulations 2006
2.1 Analyse the reasons for human resource planning in organisations.
Human resource planning means observing the present human resource and mapping out the plan of staffing by linking it to the goals and objectives of organisation. Human resource department determined the need of taking decisions regarding the rightsizing of the organisation in consideration with the achievement of organisational objectives by the process.(Armstrong and Armstrong, 2009)
Reasons for human resource planning:
- Turnover: If there is high turnover in the organisation in comparison to the recruitments than the there is a need to conduct human resource planning. High turnover leads to less number of employees in respect to the requirement. There is a need to plan retention strategies to retain the talent.
- Rightsizing: Human resource planning is used in rightsizing of the organisation. It means that right number of employees should be present in the organisation at right time to perform the task.
- Recruitment and selection: The human resource department should ensure that the methods of recruitment and selection are apt for meeting the organisational human resource requirement.
If we look at the scenario given in the task, it suggests that there is a need to change the recruitment process according to the requirement of the human resource in the organisation. The new HR manger should be appointed to make the human resource planning policies.
Employee planning is very necessary for the organisation to achieve its goals. If there is no appropriate human resource present in the organisation, it will badly affect the functioning of the organisation in achieving its objectives.(Hoch and Dulebohn, 2013)
2.2 Outline the stages involved in planning human resource requirements.
Human resource planning provides the framework according to which the staffing decisions have been made by the human resource department. It is a systematic process and involves the following steps:(Lussier and Hendon, 2013)
- Determination of goals: This is the first step that deals with the identification of the objectives of the organisation. It tells us about where the organisation wants to reach and about the future goals of the organisation.(Hoch and Dulebohn, 2013)
- Auditing of past processes: In this step, auditing of past processes takes place. This provides us with the knowledge of the strategic environment in which the organisation has been working in respect to the current scenario. By this information, human resource department can make the decisions over the changes that need to be done. This also helps in forecasting the future of HR in the organisation.
- Matching of number of employees: This step involves the matching of the number of employees working in the organisation with the requirement of human resource. This helps in rightsizing of the organisation.
- HR resource planning: Now starts the planning process. In this step, organisation focuses on making career plans for employee growth as well as for the growth of organisation.
- Follow-up: This is the last step in which all the planning processes should be monitored and controlled. Human resource department keeps a check upon the processes and make changes, if they found any deviation of processes from the plan.(Hoch and Dulebohn, 2013)
2.3 Compare the recruitment and selection process in two organizations.
Recruitment and selection process in the organisation given:
The process is very simple. It involves the following steps:
- Telephonic interview: Some of the questions have been asked to the candidate.
- What are your life’s goals,
- What is your main motivation in applying for this role,
- If you were to be anything in life what would it be,
- Tell me about your last 4 jobs (they needed 4 jobs to apply).
- Applicants are then asked to complete a psychometric assessment and an aptitude test.
- Face to face interview: After completion of telephonic interview and assessment test, the shortlisted candidates undergo face-to-face interview.(Mahmood, 2014)
Recruitment process of Tesco:
Tesco has a very systematic process of recruitment and selection:
- Internal recruitment: Tesco first look for the internal employees to fill the vacant designations.
- External recruitment: If there is no appropriate internal candidate to fill the post than Tesco advertise about the vacancy through different mediums. Some of the mediums are newspapers, website, online portals, telly and radio ads etc.
Selection process of Tesco:
- Screening: First step of selection process is screening the CV’s of the applicants who have applied for the job.
- Assessment test: After screening, the shortlisted candidates give the assessment tests that are conducted by the internal managers.
- Interview: The selected candidates now go for the interview round. Line managers are also present in the judgement panel with the HR to judge the skills of the candidate.(Tesco-careers.com, 2016)
2.4 Evaluate the effectiveness of the recruitment and selection techniques in two organisations.
Recruitment and selection process plays a very vital role in the organisation. It is very important recruit the right people on right job. As we know that, the human resource is the foundation of the organisation so it is very necessary to recruit right candidates with right skills. The process or techniques used to recruit and select candidates should match with the goals of the business organisation .
In Tesco, the recruitment and selection process or techniques are very effective as it helps in filling the vacant position with the skilled candidates. It is an expensive process but in turn provide the organisation with the appropriate employees. Tesco has low turnover rate as the candidates who has been selected by the employer highly skilled.
In the given organisation, the techniques of recruitment and selection is not that much effective. The criterion of judging the candidates is not appropriate. There is no HR manager to select the candidate as the finance manager is acting as an HR manager. The organisation is not getting the right candidates because the recruitment process is so weak. The information of the vacancy is not reaching to the correct candidates. (Sparrow, 2006).
3.1 Assess the link between motivational theory and reward.
As we know that motivation at workplace is very necessary for the employees to perform. Many factors can motivate employees. The factors could be rewards, recognition, involvement, etc. The motivation factor of an individual depends on his choice. Different individuals may have different factors to motivate. (Gilbert, De Winne and Sels, 2015)
Different theorists have introduced many motivational theories. All the theories are related to the rewards either monetary or other benefits. Virgin Media identifies that one of the factor that motivates its employees is reward.
If we talk about the human relation theory, virgin Media again realised that by this theory the employee’s performance is affected by the attention they get during performance. Virgin Media stepped forward to apply this theory and introduced programs like NPS championship, SHOUT, VOCE, etc to provide recognition to its employees.
Maslow has also proposed a need hierarchy theory that was criticized by saying that it has no relation with the motivation of employees. Media accepted this theory also and introduced an employee survey in which question is asked regarding training and development, work environment etc.
The application of these theories results in the motivation of employees by providing them with the rewards in terms of monetary rewards, recognition, involvement, etc.
3.2 Evaluate the process of job evaluation and other factors determining pay.
Job evaluation is the process of identifying the worth of job. It refers to determining the skills and characteristics that are related to the job. Evaluating a job helps in comparing the job specification with other jobs in the organisation. The job evaluation process also helps in determining the pay scale of the job. According to the responsibilities and skills, the pay scale of the job has been decided. (Lussier and Hendon, 2013)
Process of job evaluation:
- Job analysis: Job analysis is the process of analysing and gathering the information related to job.
- Job rating: Job rating is the process of rating the characteristics associated with the job that determines the pay ratio of the job accordingly.
Other factors determining pay:
- Reward system: The reward system helps in associating the pay scale to the job. This method is widely used by the organisations including Virgin Media. Virgin Media use bonus schemes like ASPIRE field pay and rewards scheme to provide competitive salaries to the employees according to their performances.
- Job structure: The structure of the job also determines its pay scale. It tells us about the level of the job and the job with higher pays is associated with the top management. (de Waal and Jansen, 2013)
- Compensation allocation: Compensation allocation means allocating the compensation or benefits according to the responsibilities associated with the jobs.
- Employee share option plans: This method allow the employees to become a part owner of the organisation by rewarding with some of the shares of the company.
Virgin Media commonly used reward system as the basis to determine the pay of the job. Reward system of Virgin Media is very effective as it provides monetary as well as other rewards to the employees like; recognition, insurance benefits, pension schemes, staff saving schemes, etc.(Businesscasestudies.co.uk, 2016)
3.3 Assess the effectiveness of reward systems in different contexts.
The reward system in Virgin Media is very effective. They have introduced almost all the theories of motivation to provide appraisal to its employees. The reward system in Virgin Media is based on the performance of the employees. Virgin Media provides the apprenticeship program for the trainees and train them properly. They organise an event for recognition of the apprentices after their successful completion of the training programs. It gives the trainees opportunity to continue their career with Media. This recognition attracts the new talent to work with Virgin Media.The reward system of Virgin Media is also effective in motivating the employees. The employees who get 9 or 10 awarded with monetary reward. The score is known as net promoter score. Employees who score 10 also get recognition in NPS hero championship organised by Virgin Media. This somehow motivates and retains employees or talent within the organisation. The organisation also focuses on engaging the employees by taking feedback from them. The yearly survey has been organised to get the relevant answers of the questions from the employees. This gives them a feeling of belongingness and in turn motivates them to work for the organisation efficiently. (Businesscasestudies.co.uk, 2016) Employees stick to the organisation that focuses on their career progress. The top management from Virgin Media conduct regular meetings with the employees to take reviews about the performance, set objectives, discuss progression, etc. This helps in retaining employees within the organisation. The progression in an individual’s career also helps in the growth of the organisation. The reward system of Virgin Media is very effective to retain, motivate and attract employees. The employees get the rewards in the form of recognition, career progression and monetary rewards.
3.4 Examine the methods organisations use to monitor employee performance.
It is very necessary for the organisation to monitor the performance of its employees. Monitoring performance lets us know about the quality and quantity of the employee’s work in concern with the goals of the organisation. The need of training can only be analysed by monitoring the performance of the employees. There are many methods to monitor the performance of the employees. Some of them are: (Noe, 2006)
4.1 Identify the reasons for cessation of employment with an organisation.
The reasons for the termination of Faisal:
- Poor performance: Faisal has an experience of 15 years in the restaurant business depending on which he gets the job in Chicken Master. Unfortunately, during his job period he was found to be performing in a very bad manner. Bob, who was the owner of the company, tries to coach him but still there was no improvement in the performance of Faisal. He was not supervising the workers properly and ultimately Bob fired him after six months of his employment.(Edralin, 2008)
- Violating company rules: Faisal used to spend his working hours on watching pornography. Half of the time, he was found to spend his workday time in emailing his wife or doing other household works. He is using the company’s equipment to design his own restaurant that was against the company rules. Cessation of employment means termination of the job. There can be various reasons for the termination of the job. The reasons can from any side, either from the employee or from the employer.
- Voluntary cessation: Voluntary cessation means termination of job by the will of the employee. Employee relationship himself is resigning from his job by his choice. The reasons for the resignation:(Mondy, Noe and Gowan, 2005)
- Poor working environment
- Dissatisfaction of job
- Health issues
- Employee gets better opportunity
- Involuntary cessation: The involuntary cessation refers to termination of the job by the employer. Due to some of the causes, employer terminates the job of the employee without his will. The reasons for involuntary termination:
- Poor performance: If the performance of the employee is not up to the mark then the employer can cease his job.
- Breaking company’s law: If an employee is not working according to the rules and regulations of the company then the employer can terminate him. Following are some of the actions by which the job of an employee can be terminated:
- Discrimination towards other employees
- Damaging the property of the organisation
- Restructuring of organisation: This is another involuntary reason for termination of the employment. Economic up’s and down’s as well as need of rightsizing leads to termination of jobs from the organisation
4.2 Describe the employment exit procedures used by two organisations.
There are following exit procedure by which the job of an employee can be terminated. Either the employee himself leaves the job or the employer terminates the job without employee’s concern.
- Retirement: Retirement refers to termination of job because an employee has completed his work years in the organisation. The retirement age is fixed for the employees in the organisation. Some employees take the voluntary retirement because of the health issues or because of the old age.
- Resignation: Resignation refers to termination of job according to the will of the employee. In this exit procedure, the employee himself resigns from his job with the prior notice period mentioned in the employment contract.(Cousot and Cousot, 2012)
- Dismissal: Dismissal refers to the firing of employee against his will. Many reasons can lead to dismissal of an employee. The causes of dismissal can be but not restricted to following:
- Poor performance: If the performance of the employee is found to be continuously unsatisfied then he can be dismissed from the job.
- Violation of company’s law: If an employee breaks the rules and regulation of the organisation then the employer can dismiss him.
- Criminal record: Employer can dismiss an employee if he has been found guilty of any crime.
- Breaking confidentiality: If employee working in an organisation passes the important and confidential data of a company to other organisation then he must be considered faulty and this becomes the reason for his dismissal.(Mondy, Noe and Gowan, 2005)
- Redundancy: Redundancy is the termination of employee because he is no more needed to do that job or we can say that the job is not available further. There can be many reasons for redundancy. Some of them are:
- Rightsizing or downsizing
- Mergers and acquisition
- Cutting down the hierarchy
Tesco practices all the above stated procedures for exiting the employees. It depends on the situation and the employee that which method is to be used for his exit. The exit procedure of Tesco is very systematic and conducted according to the guidelines of the company policy. In the case of chicken master, dismissal is used as the exit procedure to terminate the job of Faisal due to poor performance and violation of company rules.
4.3 Consider the impact of the legal and regulatory framework on employment cessation arrangements.
The cessation process of the employee is bind by some legal and regulatory framework. The contract has been signed between the employee and the organisation. That contract comprises all the legal rules associated with the job. The major legal regulations regarding the cessation of employment are:(Edralin, 2008)
- Notice period
- Dues of pay
- Employment tribunals
- Notice period: Notice period is describes as the pre decided period of time before which the notice or termination of the job should be given. The notice should be given by both the parties that is employer and employee, whosoever is terminating the job. (Cousot and Cousot, 2012)
- Dues of pay: any dues regarding the payment should be cleared before the last working day of the employee.
- Employment tribunals: These courts resolve the disputes between the employee and the employer. The employee or employer can file a case on each other if there are legal issues between them.(Mahmood, 2014) In the case of Chicken master, Faisal filed a case against Bob on charge of race and age discrimination. Now, it is the duty of the employment tribunal to investigate on the case. Bob should take advice from ACAS code of practice regarding the matter. ACAS is a code of practice that gives advice to the employee as well as the employer regarding the disputes.
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Human resource is the asset to organisation. It needs to be managed properly. Human resource management includes managing all the processes starting from recruitment to the exit of that employee. There is a very important role of line managers in human resource management. Human resource management is also about motivating the employees not just by monetary rewards but also by providing them with other benefits. These other benefits includes open working environment, recognition in the organisation and involvement in the decision-making processes. For managing the human resource, it is very necessary to plan. Human resource planning refers to determining the need of the number of employees in the organisation in concern with the achievement of goals and objectives. Exit procedures or cessation employment is also the part of human resource management. Cessation and termination of employees is very much affected by the legal framework and regulations by the government.
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