2.1 Human Resource
Planning
Unit 2 – Human Resources
YR12 IB BUS MGT
WHAT IS HRM?
• Human resource management
refers to the management
function of using and
developing people within a
business in order to meet the
objectives of the organisation.
HUMAN RESOURCE PLANNING
• Also known as ‘workforce planning’
• This is the management process of
anticipating an organisation’s current and
future staffing needs.
• It includes the number of employees
required and the type of worker sought.
WHAT FACTORS WOULD THE FOLLOWING
BUSINESSES HAVE TO CONSIDER WITH
THEIR WORKFORCE PLANNING?
Carrefour
Liverpool FC Management
ANTICIPATING THE HUMAN RESOURCE
NEEDS
• Historical data and trends. Such as the change in size of the
workforce over the past few years.
• Sales and income levels. Employers will require more workers
if the level of customer demand is rising.
• Labour turnover. This measures the number of employees who
leave a firm as a percentage of its workforce per year. The higher
the staff turnover the more people the firm will need to recruit.
• Demographic changes. E.g. Data showing changes in the
number of female workers or the number of graduates can help
forecast HR needs.
• Technological changes. Advances in technology, such as ecommerce, can bring both opportunities and threats. E.g. people
can work from home, however, capital intensive firms may not
require as many workers in the future.
• What about external influences?
SUPPLY OF LABOUR & DEMOGRAPHIC
CHANGES
• The net birth rate: the difference between the number of births and
deaths per period of time. Countries with a high birth rate will have a
larger supply of human resources.
• The net migration rate: the difference between the number of
immigrants to emigrants.
• The retirement age: the legal age where people can stop working and
claim money from their pension. Countries with an increasing number of
elderly people may increase the retirement age. In Hong Kong there is
no retirement age.
SUPPLY OF LABOUR & DEMOGRAPHIC
CHANGES
• The flexibility of the workforce: businesses with multiskilled people tend to have a more flexible workforce.
Businesses that employ a large proportion of part-time
workers use their workforces flexibility to quickly change
according to the needs of the business.
• The level of unemployment: (economic factor) high
unemployment means a high labour supply.
• Women: A more positive attitude to female
workers boosts the supply of human resources.
• Mobility of labour: This refers to the extent to which labour
can move to different locations or job roles
FURTHER FACTORS AFFECTING THE
SUPPLY OF HUMAN RESOURCES
• The internal workforce: if the current workforce can
adapt to change, then it may not have to hire externally
• Competition: existing and potential workers will
consider the packages on offer from rival firms.
• Cost of living: cost of housing etc. may deter people
from locating in certain areas.
• Cost and availability of transport: Businesses located
within good transport networks will attract a larger supply
of workers.
• Unemployment: high in an area means a business will
be able to pay a low wage rate.
DEMOGRAPHIC CHANGES
• At times, there may be surplus Human
resources. During off-peak for example,
many temporary or part time workers are not
required. This increase the available labour
supply. If there is excess labour supply the
business has two real choices:
– Redundancy – their services are no longer
required so their job disappears
– Redeploy – relocate workers to other
departments or to parts of the organisation in
need of extra staffing
AGEING POPULATION
• One demographic change in modern society is the
longevity of the population which has led to an
ageing populations. E.g. the average age of the
population increases. The effects include:
• Increased dependent population – this includes
those who are below the national working age and
those above retirement age.
• Reduced labour mobility – labour immobility
reduces the flexibility of a countrys workforce
making it less internationally competitive
AGEING POPULATION
• Changes in consumption practices – different
age groups have different spending patterns.
Therefore an ageing population can create
opportunities to cater for more mature groups.
• Changes in employment patterns – with more
people going to university than ever before the
average age of people entering the workforce has
also risen. Coupled with ageing population this
means that firms are more likely to retain staff
beyond their retirement age due to labour supply
shortages. If domestic supply falls too short
business may consider international relocation?
Recruitment & Selection
• Labour is arguably the most important of
the four factors of production. Therefore
effective recruitment and selection is
essential to a business.
• The recruitment and selection process is
both time consuming and expensive.
• A vacancy can arise because of the
following:
– Expansion of the business
– Replace staff who have left
Summary of the recruitment
process
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10.
Job analysis
Job description and person specification
Advertise the vacant post
Short-list
Interview
Aptitude test
Check references
Offer job
Sign contract of employment
Carry out induction training
Job advertisement
• The aim of this is to get as many people
as possible to apply for the post.
• Advertisements are often placed in trade
journals, local and national newspapers.
Job description
• This outlines the details of a particular job.
• It will include the job title and the roles and
duties to be undertaken.
• A good job description will leave scope for
an employee to be flexible (link to
organisational change)
Person Specification
• This document gives the profile of a
perfect candidate.
• It will include qualifications, skills and
experience.
• Some jobs state physical attributes.
– Both the person specification and job
description are used to establish training
needs.
Job advertisement
• This will often include
– Hours worked
– Rate of pay
– Fringe benefits (non-monetary rewards)
– Contact name and address
– Deadline
• Often advertised internally and externally
5 TRAPS
• A good job advertisement should be: – Truthful
– Relevant
– Accurate
– Positive
– Short
• Why do job advertisements differ from
country to country?
The application process
• Application form
• CV
• Covering letter
• Why might a firm ask for an application
form to be completed rather than a CV?
• It is common today for firms to use an
online application form.
The selection process
• Once the application forms or CVs have
been received the HR manager will shortlist the candidates, using the job
description and person specification.
• The next stage is to invite short-listed
candidates to interview
Recap
• What is the 10 stages to the recruitment
process?
• What is the purpose of a job description?
• What is the purpose of a person
specification?
Testing
• What are the limitations of interviews?
• Because of the limitations of interviews testing is
often used.
– Psychometric tests are an assessment of a person’s
personality. It measures an applicants personality
– Aptitude tests these test the skills of an applicant, for
example typing speed
– Intelligence tests these test the mental ability of a
candidate, such as numeracy and literacy.
– Trade tests these examine a candidates skill level which
cannot be determined from an interview, for example news
readers will have a voice test.
References
• These are written statements about an
applicant from an independent source,
such as a previous employer.
• Referees will be asked to confirm the
strengths and weakness of a candidate.
• This check confirms the information on the
CV is correct.
The contract of employment
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Job title
Job role and job specification
Date the job starts and ends
Hours and days of work
Rate and method of pay
Holiday and sick pay entitlements
Pension scheme arrangements
Outline of disciplinary procedures
Period of notice that must be given when
employment is terminated by either party
• Names and signatures of both parties
Interviews
• 2 way process
• Gives the employer a chance to meet the
candidate face to face (in person or video
conferencing)
• A suitable environment must be selected
• Can range from one interviewer or a panel
• Time consuming
• Can you think of any limitations to
interviews?
Alec Roger.s seven point Munro-Fraser’s five-fold
plan
system
Physical make-up, appearance and
speech
Impact on others, mannerisms and
physical make-up
Attainments, education and training
Qualifications, acquired knowledge
General intelligence, reasoning and
accuracy
Innate (natural) abilities, ability to
comprehend
Specialised aptitudes
Motivation, determination to succeed
Interests, hobbies sports
Emotional adjustment, ability to handle
stress and get on with people
Disposition, outlook temperament
Circumstances, ability to work unsocial
hours
Types of questions
• Behaviour-based questions are used to
assess an applicant’s behavioural pattern
and initiative. E.g. “explain an example of
when you…”
• Situation-based questions are used to
assess an applicants judgemental ability.
E.g. “If one of your team-members were
constantly late what would you do?”
10 common interview questions
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4.
Why do you want the job?
What do you know about the organisation?
What makes you think you will fit into the organisation?
What are your key interests and how might these help you in
this job?
5. What are your key strengths?
6. What are your main weaknesses and what have you done
about them?
7. What was the most difficult person you worked with and how
did you manage this?
8. What leader/person do you admire the most and why?
9. Describe your key responsibilities in your last job
10. Why did you leave your last job?
Interview do’s and don’ts
Do’s
Prepare- research the organisation and its
industry; plan how to get to the venue on time!
Read your letter and CV. Prepare questions
Dress appropriately- First impressions count
Practise interview skills
Don’ts
Be Late!
Be critical
Task
• In pairs write model answers to the 10 common
questions
• Extension work- come up with 3 of your own
interview questions
Employment rights (HL)
In November 2000, Coca-Cola was
made to pay out $192.5 million in
lawsuit allegations that they treated
black workers unfairly.
Ant-discrimination legislation
• These laws make it illegal to show prejudice against individuals
because of their gender, race, religion, disability, marital status or
age.
• The laws should help to provide equal opportunities to everyone
in society.
• Sex discrimination laws: in 2001 1.6 million female workers
alleged that men were favoured over women for promotion and
pay.
• Racial discrimination laws: mean it is illegal to discriminate
employees because of their nationality, ethnic background or the
colour of their skin.
• Disability discrimination laws: mean it is unlawful for
employers to mistreat a person because him or her has a
disability.
Positive discrimination
Modelling agencies can recruit only women
Chinese restaurants can only employ
Chinese people
An all girls school can employ a female PE
teacher.
Something to think about!
Positive Discrimination in the Police Force
Equal pay legislation
• This means it is illegal to pay people
differently if they are doing the same job.
• It is possible to pay people more if they
have higher qualifications and greater
experience.
• Geographical considerations are also
possible, why?
Health and Safety at Work
• Health and Safety at Work Acts (HASAWA) cover
the provision of safe and adequate working
conditions.
• Adequate facilities such as washrooms and lighting.
• Training must be provided so that workers know
how to operate equipment and machinery in a safe
manner.
• Costs of implementing HASAWA is high, however
the company should benefit long term from lower
absenteeism and less claims for accidents at work.
Statutory benefits
• Statutory Sick Pay- Payment to a worker who is off sick. Firms
may request a doctors note.
• Statutory Maternity Pay- Payment made to female workers
who are expecting a baby. They are also guaranteed their
position on their return to work.
• Statutory Paternity Pay- Payment made to male workers
whose partner is expecting a baby. However, they receive a
shorter time.
• Adoption leave- As above
• Statutory Holiday Pay- Payment made to employees during
statutory holidays such as Christmas and New Year.
• Retirement Pension Scheme- Contribution made by
employees for when they retire also known as superannuation.
National Minimum Wage (NMW)
• As of Jan 2010
– UK= £5.73 per hour for workers aged 22 years and older
– A development rate of £4.77 per hour for workers aged 1821 inclusive
– £3.53 per hour for all workers under the age of 18, who are
no longer of compulsory school age
• NMW means that all businesses must pay
no less than this rate of pay.
• NMW is normally stated per hour.
Wal-Mart Case Study
• 1) What employment rights became issues
for Wal-Mart?
– Race Relations Act
– Sex Discrimination Act
– Equal Pay Act
– National Minimum Wage
– Statutory Benefits
Wal-Mart Case Study
• 2) Justify why employers such as WalMart need to be aware of employment
legislation?
– Public Relations Image – Consumers will
stay loyal to the company if they see the
company being loyal to their employees rights
– Investors – Shareholders and possible future
investors may want to see the company
adhering to the law before they invest
Wal-Mart Case Study
• 2) Justify why employers such as Wal-Mart
need to be aware of employment legislation?
– Staff Motivation – current and future staff will not
be very productive if their rights are being violated
– Overall, based on the huge settlements WalMart has had to pay out to employees in the
past, it is extremely important Wal-Mart
becomes aware of the employment legislation,
mainly to improve the overall image of the
company for staff, customers and
shareholders
Starters
• http://www.businessstudiesonline.co.uk/Gcse
Business/Activities/Module2/ObtainingWorker
s/RecruitmentProcess/The%20Recruitment%
20Process.html
• http://www.businessstudiesonline.co.uk/Gcse
Business/Activities/Module2/ObtainingWorker
s/JobOrPerson/Job%20or%20Person.html
• http://www.businessstudiesonline.co.uk/Gcse
Business/Activities/Module2/ObtainingWorker
s/RecruitmentLawsDragDrop/frame.htm
Focus Questions
• 1. What is internal and external
recruitment?
2. What are some methods of appraisal?
3. How does training effect a company?
4. What are the employment trends?
Internal Recruitment Advantages
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Cost Effective
Less down-time
Less Risk
Motivational
Internal Recruitment Disadvantages
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Fewer Applicants
Time Consuming
Dead Wood
Internal Politics
External Recruitment Methods
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Newspaper Adverts
Specialist trade Publications
Internet Advertising
Employment Agencies
Job Centres
Headhunting
University Visits
Direct Contacts
External Recruitment Advantages
• New Blood
• Wider Range of Experiences
• Larger Pool of Applicants
External Recruitment Disadvantages
• Time Consuming
• Expensive
• Greater Degree of Uncertainty
Internal and external recruitment
Internal
Definition
Advantages
Disadvantages
Filling a
vacancy with
a worker who
is already
employed in
the business
•Know strengths and
weaknesses
•Already committed to
business
•Less training required
•Cheaper and quicker
•Motivating for staff to
progress
•May cause resentment
with colleagues
•No new ideas brought
in
•Leaves another
vacancy behind
•New ideas brought in
•Larger pool of applicants
•Avoids resentment among
colleagues
•Expensive and time
consuming
•Training often needed
•Worker may not fit into
business
•Demotivating for staff
External Filling a
vacancy with
a worker who
is not already
employed in
the business
External Recruitment
Direct
Contacts
Recommend
ations
University
Visits
Newspaper
Ads
Specialist
Trade
Magazines
Methods of
Recruitment
Internet
Ads
Employment
Agencies
Headhunting
Job
Centres
Appraisals
• Is a form of assessment
• What does it Assess?
– An employee’s performance
– Usually carried out on an annual bases
Why do we even appraise?!?!
Reasons for Appraisals
Assess
Training
Needs
Aid Professional
Development
Identify Any
Problems
Reasons
For
Appraisals
Assess Cases
For Pay Rise/
Promotion
Set New
Targets
Opportunity
to
Praise Staff
Typical Questions in Appraisal
Meetings
• What has gone well for you this year? What has
not gone so well for you?
• What are your key strengths & weaknesses?
• What can be done to help improve your overall
performance?
• Where do you see yourself in five years’ time?
• What ideas do you have to help you improve or
develop as a team member?
Disadvantages of Appraisals
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Time consuming
Confidential Feedback
Hurt workers’ feelings
Appraisals linked to pay
Methods of Appraisal
• Upward Appraisal – employee appraises
someone more senior
• Essay Appraisal – involves the appraiser
preparing a written statement about the
appraisee
• 360 degree appraisal – involves the
appraiser collecting the opinions about the
appraisee from the people who work with
the appraisee
• Rating System – examines different
components of a job and then rates each
specific part of the job on a scale – good to
bad
Methods of Appraisal
Management By Objectives – involves
assessing extent to which employee
has met targets set by employer
Peer Appraisal – e.g. marketing
manager appraising the finance
manager
Self-Appraisal – involves employees
appraising themselves based on
predetermined criteria
Dismissal and Redundancies
• List as many reasons as you can why an
employee may leave an organisation.
Dismissal and redundancy
As well as being responsible for attracting
and recruiting workers the HRM
department must also ensure the
termination of employment contracts is
carried out as efficiently as possible.
The 4 possible situations are:
Dismissal
Redundancy
Retirement
Resignation
Dismissal
• The termination of the contract due to incompetence or a breach
of contract.
• When dismissing a worker, a manager must have a good case
and be to seen to act fairly.
• Incompetence- The employee may lack ability, qualifications or
effectiveness to carry out the job.
• Misconduct- the employee may exhibit unacceptable behaviour,
such as being constantly or frequently underperforming in the
job.
• Gross misconduct- The employee may commit a major
misdemeanour, such as theft, fraud endangering others or
turning up to work drunk.
• Legal requirements- If the worker does not have the necessary
skills or requirements for the job, perhaps they were dishonest on
their application form.
Unfair dismissal
Unfair dismissal occurs when an employee is
dismissed without a valid reason.
In the event of unfair dismissal the employee
has the right to appeal their case in court.
The two main causes of unfair dismissal are:Discrimination: where an employer may
discriminate on race, gender etc.
Constructive dismissal: where an employer has
made it very difficult for an employee to remain in
their job.
Redundancy
• This occurs when the employer can no
longer afford the keep the worker, or when
the job ceases to exist.
• Voluntary redundancy- why may an
employee ask to be laid off?
• Compulsory redundancy- where the
employer chooses who is laid off. LIFO or
retention by merit.
Task
•
In December 2006, Ford Motor Company announced that it was
to halve its hourly paid staff by making 38000 workers
redundant. The motor giant stated that those workers had either
accepted early retirement deals or redundancy packages, but
would save the company around $5 billion a year. Ford has
been struggling with fierce competition from foreign rivals such
as Toyota. Lower demand for Ford cars and over production
were cited as reasons for the retrenchments.
1.
2.
Distinguish between redundancy and dismissal [4 marks]
Analyse how retrenchment might enable Ford to better achieve
workforce planning targets [6 marks]
Workforce planning at Ford
• Workforce Planning will require Ford to prepare
its human resource needs by looking at the
current and future staffing requirements (C1)
• Since Ford faced reduced demand, yet had
overproduced, there is clearly a need to cut costs
(P1). Retrenching hourly-paid staff means that the
firm lets go of its least skilled staff. They are the
easiest and cheapest to make redundant. If the
situation improves for Ford, it would be easy to
recruit hourly-paid staff to meet its workforce needs
(A1) (C2)
Workforce planning at Ford
• Also, competitors abroad such as Toyota are
reducing Ford’s market share (P2). The
overproduction of cars would further reduce
their market share because this would add to
Ford’s costs, which in turn would lead to Ford
increasing the price of its vehicles to cover the
cost, meaning less sales and less market share
(C2).
• Therefore, with declining sales and stockpiling
it would not be rational for the American
producer to retain its current workforce (A2)
Redeployment
• For larger businesses, rather than
redundancies another option is
redeployment.
• This means transferring staff from the
department or branch that no longer needs
his or her services.
• This method avoids redundancies but still
can cause anxiety and de-motivation,
why?
The mentor
• Often a mentor or
buddy is introduced to
the new recruit.
• This is a person the
new recruit can turn to
for advice.
Induction training
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This is aimed at introducing new employees to the
organisation. The programme may require a recruit
to:
Meet key personnel, such as the employee’s line
manager and departmental team members.
A tour of the premises including the main work area.
Learn about their new job role and other relevant
duties and procedures.
Look at company policies and practices, such as
health and safety policy and fire procedures.
Types of training
Advantages
On-the-job –
carried out at
normal
workstation
•Work is being done
•Experience of actual
business
•Easy to arrange
•Cheap
Off-the-job –
away from
normal
workstation
•Easier to concentrate
•Expert trainer so good
standard
•No impact on
customers
Disadvantages
•Employees may be
nervous
•Mistakes can harm
business
•Lost work time of
trainer
•Expensive
•No work being done
•Don’t get experience
of business
The benefits of Training
• A better skilled and more
flexible workforce leads to
targets being met.
• Less wastage and reworking
resulting in greater efficiency
• Morale improves as workers
progress in the organisation
• Better levels of customer
service
• Prepares workers to adapt for
organisational change.
Drawbacks of Training
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Large financial cost
Loss of output
Time to plan
No guarantee will solve the business’s
problems
Changing Employment
Patterns and Practices
IB Business & Management
Unit 2.1
Introduction
• In modern societies there have been some notable
changes in employment patterns and practices: • Business sectors - Less than 2% of people in UK,
US and France work in agriculture whereas over
75% work in the service sector.
• Ageing population. The net birth rate has been
falling, this mean the size of the future workforce will
fall, however people are living longer, so the age of
workers will rise – older, more experienced
workforce
Flexible work structuresBusinesses
• Greater flexibility in the workplace means businesses will use
fewer core staff. This in turn will mean a larger number of parttime workers and people working from home. More flexible work
structures will mean: • There is less likely to be a traditional organisation structure,
with an increase of part-time staff.
• Flexi-time, staff such as consultants, contractors and part-time
staff will be able to work the hours they choose.
• The recruiting of more flexible workers, in terms of location,
working hours and skills.
• Retaining of core staff- Key employees who have outstanding
skills or experience will be paid a premium salary
• Training, firms will be less likely to invest in training, except for
their core staff.
Flexible work structuresEmployees
• Workers will have to be more flexible, there is no
such thing as a job for life. Examples of flexible
working practices: – Teleworking, this is where workers work away from the
employees or customers, using telephone, fax and email
to communicate.
– E.g. Banks, insurance firms, airlines. These businesses
set up a ‘call centre’ to deal with customer enquiries.
– Home working, this is another example of teleworking
where people work form their own home.
Advantages of Teleworking &
Homeworking
• Geographical distance, customers save time
travelling to and from retail outlets
• The location of the call centre does not need to be
in an expensive city centre
• Reduced absenteeism
• Employees do not need to travel to and from work
• Less formal working practices
• Tax benefits
• Childcare- £7300 per year for a 2 year old
(opportunity cost)
Disadvantages of teleworking and
homeworking
• Employees
• Employers
1) Heavy reliance of use of
ICT
2) Teleworking is not always
possible
3) Teleworkers often exceed
legal limits of working
hours
4) Suffer from social
isolation
1) Requires tight control in
recruitment as not every
one has the right profile
2) Management and control
are made more difficult as
staff are off-site
3) Technological
breakdowns can cause
major disruptions to the
business
Portfolio working
• This is a person who is
employed in a number
of different jobs at the
same time.
• How could this benefit
the business?
• What could be a
drawback for the
worker?
Portfolio Working - DHL
Part-time employment
• This trend has increased because of the
greater number of females and students
who choose to work part-time.
• They benefit the business as they are
often cheaper to employ and easy to
replace.
• Can feel less values, what would the
implications of this be to the business?
Flexitime
The traditional 9-5 job no longer applies to
many businesses.
Staff will have a core period of the day
How would this benefit the employees?
Shift work is another option for businesses
that could not work with flexitime.
Flexitime
• http://www.mcdonalds.com/us/en/careers/
working_here.html
Task
•
McDonald’s successful growth strategy
has been the ability to adopt flexible
working structures. The company uses
the catchphrase ‘your money, your hours,
your way’ as part of its recruitment plan.
Most of the workers at McDonald’s are
part-timer- mainly students and women.
In Australia McDonald’s actively
encourages students to apply for jobs by
using slogans such as ‘learn while you
earn’. Having a flexible workforce has
enabled the fast-food giant to open some
stores on a 24 hour basis.
1.
Analyse the costs and benefits of flexible
work structures to employers such as
McDonald’s, and their employees (6
Marks)
Discuss the likely consequences of
flexible working patterns on a firms
workforce planning, recruitment and
training. (8 Marks)
2.
Analyse the costs and benefits of flexible
work structures to employers such as
McDonald’s, and their employees (6 Marks)
• Flexible work structures generally include
workers who choose the hours they want
to work between a given minimum and
maximum hour requirement (C1)
• A benefit for McD of this is that they can
stay open 24 hours a day (P1) because
workers are willing to work different hours
in the day, which enables McD to give the
best customer service they can (A1)
Analyse the costs and benefits of flexible
work structures to employers such as
McDonald’s, and their employees (6 Marks)
• A disadvantage is that workers may feel
less valued by the company if they do not
have the benefits of a full time employee.
(C2) This will be negative for McDonalds
as their staff are already made up of a lot
of students who do not care too much
about the company (P2), but if they feel
less valued too, this could cause them to
be demotivated and McDonalds to give
poor customer service (A2)
Discuss the likely consequences of flexible
working patterns on McD’s workforce planning,
recruitment and training. (8 Marks)
• Workforce Planning is the process of
anticipating an organisation’s current and
future staffing needs (C1).
• If McD’s hires flexible staff, they will
constantly have to take time out to
interview and hire new staff because
flexible staff (A1), especially students, will
not stay at the business long (P1). This will
be costly and timely for management (A1)
Discuss the likely consequences of flexible
working patterns on McD’s workforce planning,
recruitment and training. (8 Marks)
• If McD’s hires flexible staff, they will be
able to replace staff easily and hire cheap
staff who only want to work certain hours a
week (C2), which fits perfect for
McDonalds who want to hire cheap
students and teenagers (P2), and are such
a profit driven company so they will be
able to keep costs down (A2)
Discuss the likely consequences of flexible
working patterns on McD’s workforce planning,
recruitment and training. (8 Marks)
• Overall, despite the cost and time wasted
on constantly recruiting new and
replacement staff, I think the
consequences are generally positive for
McDonald’s of hiring flexible staff as it
enables them to keep costs low on wages
and provide 24 hour service to customers
(E2)
Charles Handy’s Shamrock
Model 2.1 HL
Charles Handy’s Shamrock
First Group on the Shamrock
• The first group is a core of qualified
professional technicians and managers,
who have detailed knowledge of the
business. They are rewarded with high
salaries and associated benefits, in return
for which they must be prepared to give
commitment, to work hard and to work, if
necessary, long hours.
Second Group on the Shamrock
• The second group consists of contracted
specialists, who may be used, for
example, for advertising, R&D, computing,
and training. They are rewarded with fees
rather than with salaries or wages. Their
contribution to the organisation is
measured in output rather than in hours, in
results rather than in time.
Third Group on the Shamrock
• The third group - the third leaf of Handy's
shamrock - consists of a flexible labour
force (Peripheral), discharging part-time,
temporary and seasonal roles. Handy says
they must be managed in a way which
recognises their worth to the organisation.
Task
•
In December 2006, Ford Motor Company announced that it was
to halve its hourly paid staff by making 38000 workers
redundant. The motor giant stated that those workers had either
accepted early retirement deals or redundancy packages, but
would save the company around $5 billion a year. Ford has
been struggling with fierce competition from foreign rivals such
as Toyota. Lower demand for Ford cars and over production
were cited as reasons for the retrenchments.
1.
2.
Distinguish between redundancy and dismissal [4 marks]
Analyse how retrenchment might enable Ford to better achieve
workforce planning targets [6 marks]
Workforce planning at Ford
• Workforce Planning will require Ford to prepare
its human resource needs by looking at the
current and future staffing requirements (C1)
• Since Ford faced reduced demand, yet had
overproduced, there is clearly a need to cut costs
(P1). Retrenching hourly-paid staff means that the
firm lets go of its least skilled staff. They are the
easiest and cheapest to make redundant. If the
situation improves for Ford, it would be easy to
recruit hourly-paid staff to meet its workforce needs
(A1) (C2)
Workforce planning at Ford
• Also, competitors abroad such as Toyota are
reducing Ford’s market share (P2). The
overproduction of cars would further reduce
their market share because this would add to
Ford’s costs, which in turn would lead to Ford
increasing the price of its vehicles to cover the
cost, meaning less sales and less market share
(C2).
• Therefore, with declining sales and stockpiling
it would not be rational for the American
producer to retain its current workforce (A2)