Human Resource Management Strategy: Approaches To Human Resource Management (Copy)

7.4 Human Resource Management (HRM) Strategy

7.4.1 Approaches To Human Resource Management (HRM)

1. Meaning Of Human Resource Management (HRM)

• Definition: HRM is the strategic approach to managing an organisation’s workforce to achieve its objectives.
• Focuses on recruitment, training, motivation, performance, and employee welfare.
• Balances business needs with employee satisfaction.
• HRM is vital in strategic management as human capital is often the most valuable resource.

2. Approaches To HRM: Hard vs Soft

A. Hard HRM

• Definition: Managing employees primarily as a resource to be used efficiently, similar to machines or capital.
• Focus on cost minimisation, control, productivity.
• Decision-making is centralised.
• Little employee involvement in decision-making.

Advantages:

• Lower labour costs (e.g., outsourcing, temporary staff).
• Easier control over workforce.
• Quick decision-making in crises.
• Efficient for routine, standardised jobs.

Disadvantages:

• Low employee morale and motivation.
• High labour turnover.
• Poor employer brand reputation.
• May reduce productivity in the long term.

Example:

• Amazon warehouse staff monitored strictly using digital systems.

B. Soft HRM

• Definition: Treating employees as the most valuable asset, focusing on motivation, training, and empowerment.
• Emphasises two-way communication and employee welfare.
• Decision-making is often decentralised.

Advantages:

• Higher employee motivation and commitment.
• Encourages innovation and intrapreneurship.
• Better customer service due to motivated staff.
• Improves retention and reduces turnover.

Disadvantages:

• Higher costs (training, benefits, flexible contracts).
• Managers may find it harder to control employees.
• Risk of inconsistency in decision-making.

Example:

• Google and Facebook → provide high levels of employee autonomy and workplace benefits.

Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change A2 Level Business Full Scale Course

3. Flexible Working Contracts

Definition:

• Work arrangements that provide employees with flexibility in hours, location, or workload.

Types Of Flexible Working

4. Measurement Of Poor Employee Performance

Ways To Measure Performance:

• Labour Productivity
  • Formula: Labour productivity = (Output ÷ Number of employees)
• Labour Turnover
  • Formula: Labour turnover (%) = (Number of employees leaving ÷ Average number employed) × 100
• Absenteeism Rate
  • Formula: Absenteeism (%) = (Number of staff absent ÷ Total workforce) × 100
• Customer Complaints → increased complaints signal poor performance.
• Quality Control Data → higher defect rate = lower performance.
• Missed Deadlines → failure to achieve targets.

Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change A2 Level Business Full Scale Course

5. Causes Of Poor Employee Performance

• Lack Of Motivation
  • Low pay, poor working conditions, limited career growth.
• Poor Training
  • Employees lack required skills.
• Lack Of Resources
  • Insufficient tools, outdated technology, poor facilities.
• Weak Leadership
  • Lack of guidance, unclear instructions, poor communication.
• External Factors
  • Personal problems, health issues, stress.
• Demotivation
  • Lack of recognition.
  • Over-control, limited autonomy.
  • Poor work-life balance.

6. Consequences Of Poor Employee Performance

• For Business
  • Lower productivity and output.
  • Higher costs due to inefficiency.
  • Lower quality → customer dissatisfaction.
  • Damage to reputation.
• For Employees
  • Stress and frustration.
  • Poor career development.
  • Disciplinary action or dismissal.
• For Stakeholders
  • Shareholders: reduced profits and dividends.
  • Customers: poor service/product quality.
  • Community: reduced employment opportunities.

Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Accounting Full Scale Course

7. Strategies For Improving Employee Performance

• Training And Development
  • On-the-job training.
  • Off-the-job training (workshops, courses).
  • Improves skills and productivity.
• Motivation And Incentives
  • Financial rewards (bonuses, profit-sharing).
  • Non-financial motivators (job rotation, recognition, empowerment).
• Improving Communication
  • Clear instructions, regular feedback.
  • Encourage two-way communication.
• Setting Clear Objectives
  • Use of SMART objectives:
    • Specific, Measurable, Achievable, Realistic, Time-bound.
• Performance Appraisal Systems
  • Regular reviews of employee performance.
  • Identifying strengths, weaknesses, and development needs.
• Improved Leadership
  • Leaders with high emotional intelligence motivate and guide effectively.

8. Management By Objectives (MBO)

Definition:

• A process where managers and employees agree on specific, measurable objectives.
• Employees are responsible for achieving targets within a set timeframe.

Steps In MBO:

1. Set overall corporate objectives.
2. Break into departmental objectives.
3. Agree on individual targets with employees.
4. Implement plans to achieve objectives.
5. Monitor progress through regular reviews.
6. Evaluate performance against objectives.
7. Reward success and provide feedback.

Advantages:

• Increases employee motivation.
• Improves coordination across departments.
• Provides clear targets for performance appraisal.
• Links individual goals with corporate strategy.

Disadvantages:

• Time-consuming process.
• Too much focus on targets may reduce creativity.
• May increase stress for employees.
• Difficult if objectives are unclear or unrealistic.

Example:

• A bank sets annual loan growth targets for each branch → managers and staff align with corporate objectives.

Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change A2 Level Business Full Scale Course

9. Changing Role Of IT And AI In HRM

• Recruitment
  • Online applications, AI screening of CVs.
  • Use of LinkedIn, job portals.
• Training And Development
  • E-learning platforms, virtual reality (VR) training.
  • AI-powered personalised learning paths.
• Performance Management
  • Digital performance tracking (KPIs, dashboards).
  • Data analytics for productivity evaluation.
• Employee Engagement
  • Chatbots for HR queries.
  • Online surveys for employee feedback.
• Workplace Flexibility
  • Remote working platforms (Zoom, Slack, MS Teams).
  • Monitoring tools for remote performance.
• Strategic Planning
  • AI analyses workforce trends for HR planning.
  • Predicts skills shortages and training needs.

Example:

• IBM uses AI-driven HR tools to predict employee attrition and provide career development pathways.

10. Quick Revision Tables

A. Hard Vs Soft HRM

B. Causes Of Poor Employee Performance

C. Strategies To Improve Performance

Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change A2 Level Business Full Scale Course

11. Strategic Implications

• Hard HRM
  • Suitable for cost-focused strategies.
  • May harm long-term employee loyalty.
  • Useful in industries with low-skilled, routine work.
• Soft HRM
  • Supports growth, innovation, and differentiation strategies.
  • Improves employee retention.
  • Fits businesses with dynamic, competitive markets.
• Flexible Working
  • Helps attract and retain skilled employees.
  • Reduces absenteeism.
  • Supports CSR by improving work-life balance.
• MBO
  • Aligns individual performance with corporate objectives.
  • Provides clear measurement of success.
  • Useful in performance-driven organisations.
• Technology And AI
  • Increases efficiency in HRM processes.
  • Improves data-driven decision-making.
  • Supports remote and flexible working.
  • Risk: over-reliance on technology reduces human contact.

12. Quick Examples

13. Exam Pointers

• Define hard vs soft HRM.
• List types of flexible working contracts with advantages and disadvantages.
• Know how to measure poor performance (labour turnover, productivity, absenteeism).
• Link causes of poor performance to motivation theories (Maslow, Herzberg, McClelland).
• Use formulas:
  • Labour productivity = (Output ÷ Number of employees).
  • Labour turnover % = (Number of employees leaving ÷ Average employed) × 100.
  • Absenteeism % = (Number of staff absent ÷ Total workforce) × 100.
• Explain MBO process with steps and importance.
• Discuss role of IT and AI in modern HRM (automation, data analysis, e-learning, recruitment systems).
• Always provide advantages, disadvantages, and evaluation in context.

Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change A2 Level Business Full Scale Course