Human Resource Management
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CHAPTER NINE
UNIT 4:
SECTION 3: PART 2 Q5
OUTCOME:
BY THE END OF THIS CHAPTER YOU SHOULD
BE ABLE TO:
EXPLAIN THE KEY FUNCTIONS OF HUMAN
RESOURCE MANAGEMENT.
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What is HRM?
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 HRM refers to the recruitment, training and retention of
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motivated staff and includes maintaining good industrial
relations.
Functions of the HRM include:
1. Manpower Planning/HR Planning
2. Recruitment and Selection
3. Training and Development
4. Performance Appraisals
5. Rewarding staff performance
6. Maintaining positive industrial relations
7. Fostering teamwork
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1. Manpower/HR Planning
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 HRP/Manpower planning: identifies the future
staffing needs of the business and plans to have the
right number of staff with the right skills at the right
time. It involves doing a human resource audit and
estimating future human resource needs. The HRM
must audit present manpower resources, forecast
manpower needs, and then make a plan to either
increase/decrease manpower.
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Steps in HR Planning
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 1. Forecast Future Demand
 How many employees and what skills will the
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business need in the future?
2. Calculate existing supply
Conduct an audit of the existing employees.
3. Recruit/Redundancies
If demand exceeds supply recruit more staff. If
supply exceeds demand make some redundant.
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HR Planning
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 Importance of Manpower
Planning
 Efficiency: Ensures that
the business always has
enough workers to carry
out the jobs needed to
make the business a
success.
 Cost Saving: Saves the
business money by
ensuring that not too many
workers are employed.
Reduce the wages bill.
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Monitoring labour
turnover is part of
a HRM’s job.
 Causes of High Labour
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Turnover
Poor recruitment: not a
good fit to the company
Poor pay or working
conditions
Discrimination,
harassment, unfair
treatment
Better opportunities
Poor industrial
relations/low morale.
Labour Turnover is the rate
at which employees leave the
business
2. Recruitment
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 Recruitment and selection is concerned with finding
or attracting potential candidates with the
appropriate skills and then picking the most suitable
candidates for employment.
 The Human resource manager must draw up a job
description and person specification and then
advertise the position. The applicants must be
screened (short-listed). Selection is usually by means
of an interview process.
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Steps in Recruitment
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1. Prepare a
Job
Description
2. Prepare a
Person
Specification
5. Selection
Tests if
appropriate
4. Screening/
Short Listing
6. Interview
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3. Advertise
the position
7. Check
References
8. Offer the
job
Recruitment – Steps 1,2,3
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 1. A job description describes the vacancy that
needs to be filled, including the title, conditions,
duties and responsibilities involved, the place of
work and assessment arrangements.
 2. A person specification describes the qualities
required by the person who will fill the job
description. These can include academic
qualifications, work experience, relevant skills.
 3. Using the job description and person specification
advertise the job, e.g. in a newspaper. Recruitment
can be either internal or external.
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Recruitment
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 Internal recruitment:
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involves recruiting or
redeploying staff from
existing staff within the
business.
Sources:
Promotion
Demotion
Transfer/redeploy
 External
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Recruitment: involves
finding someone from
outside the business.
Sources:
Personal contacts/Head
hunting e.g. Institute of
Education
Newspaper/magazines
Internet, e.g. irishjobs.ie
Employment agencies
Solas (Fás)
Recruitment
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 Internal Advantages
 External Advantages
 Employee knows the
 New ideas
business – less time to
settle in
 Employer has seen their
work first hand
 Provides a career path –
motivational for workers.
 Cheaper and quicker
than external
recruitment.
 Less jealousy
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 Best qualified person
Recruitment – Step 4
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 4. Shortlist applicants/Screening: the HRM
will go through the CVs and covering letters and
discard any which make a bad impression or do not
meet requirements.
 Some jobs require a candidate to complete an
application form which will ask specific questions
about their personal details, education, experience
and interests relevant to the job.
 A shortlist of the most promising candidates will be
made. They will either have to take certain selection
tests, if appropriate or will be invited for interview.
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Recruitment – Step 5, 6
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 5. Selection Tests: some jobs require you to take a test
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before you get to the interview stage. These frequently include
IQ tests, aptitude tests and even personality tests.
6. Interview: a face-to-face conversation between the
candidate and the business. Questions will be asked to
determine:
Will the candidate perform the job well?
Will they get along with other staff/fit in with the ethos of the
company?
Contribute to the business?
To avoid interviewer bias there are usually three people on an
interview panel.
They may deliberately put the candidate in a stressful
situation to see how they react, i.e. a stress interview.
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Recruitment – Step 7, 8
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 7. Check References: most used to be written but
more often now they are phone calls.
 8. Offer the job: make contact, if they accept a
contract of employment is drawn up and signed.
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3. Training & development
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 Training and Development
 Training involves supplying the skills, knowledge and attitudes
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needed by employees to do their jobs better. On arrival new staff
receives:
Induction training: orientation, refers to the general introduction
to a business, their rules, regulations and policies.
On-the-job training: training which takes place in the workplace,
e.g. observing a colleague
Off-the-job training: training which takes place outside the
workplace, e.g. lectures
Staff development involves preparing the employees to take on
more responsibility and new challenges in the workforce. They are
taught multiple skills that can be used in many different jobs.
This makes them more flexible and more suitable for promotion.
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Training & Development
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 Benefits of Training and Development:
 Better quality service to customers, resulting in fewer
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complaints and returns.
Improved quality of production.
Staff is better cared for and well motivated. This results
in less industrial relations problems.
Lower labour turnover rates due to high staff morale.
Leads to a good reputation of the firm, attracting quality
staff.
Flexible and adaptable labour force allowing for changes
to take place. This makes it easier to implement change
such as new work methods and technologies.
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4. Performance Appraisal
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 This is the process of evaluating the performances,
progress, contribution and effectiveness of an
employee. An interview/discussion may take place
between the employee and HRM to discuss goal
setting targets, expectations, problems employees
may be encountering or resources needed in order to
achieve targets.
 It ensures high performance standards in the business,
leading to organisational success. It provides for two-way
communication and clarification of objectives. Feedback
is provided for employees on performance to enable
improvements to be made.
 Regular reviews are vital to the performance appraisal
process.
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Performance Appraisal
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 Benefits
Suitable for
“outline” or
OL
 Determines suitable pay levels: e.g. some employees may have
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met targets for a bonus.
Selects suitable candidates for promotion to posts of
responsibility.
Monitors and evaluates the recruitment, selection and
training and development policies and practices of the
organisation.
Feedback is received on how people are doing their work and
weak areas are identified so that performance can be
improved. Training can be provided.
Provides for two-way communication and clarification of
objectives. This helps motivate the employees for the future.
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Performance Appraisals
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Suitable for
“discuss”
“explain”
Benefits for a business.
 Opportunity to review rewards (benefits
structures): It may be used in determining pay
increases or promotion. It can help a business to
review & reduce the costs of reward and benefits
packages such as pension schemes.
 Increased productivity: Performance appraisals
are important for staff motivation, communicating
and fostering a positive relationship between
management and staff. This leads to greater
productivity from employees.
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Performance Appraisal
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 Retain the right staff: Helps a business identify top
talent and ensures that these employees are retained and
guided towards reaching the businesses plans and
objectives.
 Identify poorly performing staff: A business can
identify employees who are not reaching their potential.
Restructuring of the business may occur to remove
surplus layers of management i.e. delayering.
 Industrial relations: conflicts in the workplace may
be highlighted through performance appraisals. This
enables the business to help solve problems between
management & employees and helps improve industrial
relations in the workplace. It may improve loyalty to the
organisation if positive rewards are given.
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5. Rewarding Staff Performance
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 Different methods of reward
 It is the function of the HRM to negotiate the remuneration package employees are
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to receive. Employees may receive both monetary and non- monetary rewards.
Monetary rewards: Wages and salaries: Pay may be calculated by the flat
rate, time rate, piece rate, commission or bonus schemes.
The Time Rate/ Piece Rate: With a time rate, payments are made of a fixed
amount per hour for a fixed number of hours per week. If the employee works more
than the fixed number of hours overtime is paid at different rates above the
minimum e.g. time and a half or double time/ Piece Rate relates the payment for
each unit produced or job completed, the more units produced, the more is earned.
A bonus is a sum of money paid to employees for reaching a certain target, e.g. for
producing units above an agreed limit.
Commission is a type of piece rate where payment is made according to value of
the amount sold, e.g. payments to a sales person (10%) in proportion to the level of
sales achieved. It has the advantage of directly encouraging sales.
Fringe benefits would include ‘benefits in kind’ given to employees in the
form of goods or services rather than money. Monetary examples include profitsharing schemes, sick pay entitlements, subsidised medical insurance, pension
schemes, etc. and non-monetary examples include meal/lunch vouchers, company
cars etc.
Ms. Marshall 5th year business
Rewarding Staff Performance
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 Profit-related pay is an overall scheme where some of
the organisation’s profit is paid to employees. It is paid to
motivate the employees to increase the profit by reducing
costs and/or increasing output and thus their own
earnings.
 Employee Share Ownership Scheme. Shares in the
business may be given to employees instead of cash
bonuses, maintaining employee interest in the job. Share
option schemes give employees an option to buy shares
in a company at a specified price.
 Job promotion: to a more responsible /senior level in
the organisation.
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How is financial remuneration determined?
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 Demand for the skill: if the skill or qualification is in high
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demand then they may be offered attractive packages
including bonuses and perks. E.g. shortage of teachers in
England, Irish graduates are offered a grant to train there.
Supply of the skill/ability: If very few people can perform this
skill to this level that drives up the remuneration. E.g. Premier
League footballers.
Long training periods e.g. seven years to become a doctor.
Salary should reflect these years as it is expensive to train for
so long.
The risk, danger and responsibility involved in the job: e.g.
paying a security guard extra for the overnight hours.
Trade unions may influence the pay e.g. public sector unions
are in talks at the moment to negotiate pay for Croke Park 2,
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Non-Financial Rewards
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 Job satisfaction: the degree to which workers feel
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positive about their job and want to continue working
with the firm. This can be improved by:
Shorter working day, longer holidays
Physical environment is pleasant and safe
Flexible working arrangements e.g. job sharing,
flexitime.
Job enlargement: introduces a variety of tasks into
their job description.
Job enrichment: means providing employees with
work requiring greater responsibilities and more
input into the firm.
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Importance of Pay & Rewards
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 Motivates employees to work harder and produce
better quality products and services. Increases sales
and profits.
 Makes the company more attractive to employees
so they can attract the best possible staff.
 Reduces labour turnover: this saves money as it
costs to recruit and train staff.
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6. Promoting good industrial relations
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 Employer and Employee Relationships
 The quality of the relationship that exists between
employers and employees determines the quality of
industrial relations between the parties.
 The implementation of the various health, safety and
welfare regulations in the workplace together with
interest in, and support for, the social and
recreational needs of employees, e.g. sport and social
clubs, has a very positive effect on employee morale.
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How can HRM maintain positive relations?
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 Regular Open communications: regular meetings,
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encourages feedback, builds trust and keeps employees
informed.
Grievance Procedures: procedures for conflict situations.
Train Managers: taught how to manage conflict and
communicate with employees.
Careful Selection: employees that will fit in and subscribe
to the company’s beliefs and ethos.
Train Employees: so they can do their job to the best of
their ability.
Valuing Employees: treating them as assets, treat with
respect. Provide for job satisfaction.
Implementing Health & Safety Regulations
Teamwork
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Promoting good industrial relations
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 Benefits:
 Employees are motivated to work to the best of their
ability.
 All personnel are working towards the same goal.
 Flexibility is increased.
 Lines of communication are open and clear.
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7. Teamwork
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 Working together to achieve a common goal.
 Forming: initial meetings, staff are usually polite
and discuss the job that has to be done.
 Storming: conflict begins to occur as members of the
team want to establish themselves as a leader. Rows
often occur.
 Norming: members resolve their conflict and the
leader is established. Trust grows and standards are
set for all members to stick to.
 Performing: all cooperate and focus on getting the
job done.
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Teamwork - Advantages
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For the Business
Better decisions: more creativity and
diversity.
Increases motivation: leads to lower
turnover and harder worker employees.
Better quality products: everyone works
to the best of their ability so as not to let the
others down, a team will see more solutions
to problems than one person alone.
Improves relationships in a business:
leads to less industrial conflict, reducing the
chance of strikes and improving the
companies reputation.
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For the Employee
Employees experience greater job
satisfaction as all members’ efforts are
taken into account.
They are better motivated as participation in
teams satisfies the social needs of employees
(Maslow).
Employee’s communications skills and
interpersonal skills improve as they are
working in a group and dealing with different
personalities. This is a good experience for
employees, as effective communication skills
will help prepare employees for leadership
roles within the business.
When working in isolation employees might
find it difficult to take tough decisions.
However, with the mutual support and
protection of a team, these tough decisions
are easier for employees to make e.g. a
decision on making workers redundant.
Successful teams progress through the team
development stages of forming, storming,
norming and performing. A successful team
will mean less industrial relations
problems and less conflict, saving the
employee the stress associated with
industrial action.
Recent Exam Questions
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No need to do
repeat
questions
again
 2010 Section 3 Part 2
 (A) Explain what is meant by performance appraisal.
 (B) Outline the benefits of performance appraisal for a
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business.
(20 marks)
2008 Section 3 Part 2
Q2. (A) Performance Appraisal, Training & Development and
Managing Employer and Employee Relationships are
important functions of a Human Resource Manager.
Explain the functions underlined above and analyse the
benefits of two of the functions for the business organisation.
(25 marks)
(B) Outline the different methods of reward used to motivate
employees in a business. (15 marks).
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Recent Exam Questions
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 2004 Section 3 Part 2 (2011 – 15 marks)
 Outline the benefits of teamwork to the employees of a
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business organisation. (20 marks).
2003 Section 3 Part 2
Q4. (A) Outline the functions of a Human Resource Manager
(25 marks).
2013 Mock Exam
Discuss Performance Appraisal, Training and Development
and Recruitment and Selection (15 marks).
2012 Mock Exam
Explain the term Performance Appraisal. Outline the benefits
of Performance Appraisal for the employees in a business.
(20 marks).
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2005 ABQ Marking Scheme
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 Section 2. Applied Business Question (ABQ)
(80 marks)
 (A) Enterprising Skills /Characteristics (5 at 4
marks) (1 + 1 + 2). Illustration from text of the ABQ.
(Total 20 marks)
 (B) Human Resource Manager 5 points at 6 marks
each (2 + 2 + 2). Must have reference to text of ABQ.
(Total 30 marks)
 (C) Management Activities 3 at 10 marks (2 + 6 (3 +
3) + 2) (Link). Relevant to the text of the ABQ.
(Total 30 marks)
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