Topic 1: Strategic Human Resource Management (MMH230) Summary Notes. What is Human Resource Management: What Motivates People to Work:

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1 Strategic Human Resource Management (MMH230) Summary Notes Topic 1: What is Human Resource Management: Human resource management involves managing people within the employer-employee relationship. It involves the productive use of people in achieving the organisation s business objectives and the satisfaction of individual employee needs. -It is about maximizing peoples potential within organisations What Motivates People to Work: Extrinsic Rewards: Intrinsic Rewards: Belief that we are motivated to perform a behaviour or engage in an activity in order to earn a reward or to avoid a punishment Overall, many employers use extrinsic rewards to evaluate employees. They essentially bribe a worker to work harder to get more money. -Belief that individuals are motivated from the pleasure they get from the task itself or from the satisfaction in completing or even working on a task -Intrinsic rewards were developed, because it was believed that when you try and motivate people through extrinsic rewards they lose Work is a central life activity; ie it seen as an important part of our lives Work is a conscientious endeavor; ie we follow norms and values that are demonstrated by family and the community What expectations do we have of our employers: Fulfilling their legal obligations in relation to the contract of employment Fulfilling our psychological contract of employment that is what the organisation gives and receives from each other Soft vs. Hard Approaches to HRM: Hard approach (Instrumental HRM): Soft approach Stresses the rational, quantitative, and strategic aspects Major focus is on performance improvement and competitive advantage through hitting targets -There is often Job satisfaction, Motivation, and Turnover with this approach Emphasizes the integration of HR policies and practices with strategic business

2 Types of organisational strategies: Growth Retrenchment Stability Combination International HRM Strategies Must: Reflect the strategic objectives and values of the organisation Support culture, climate, and organisation processes to attract and retain good staff Identify the organisation s competencies and match people to these Sustain and build organisational commitment Why is SHRM Important: There are 3 main resources to pursue organisational objectives: 1. Finances 2. Technology 3. People People are the largest, most unpredictable, ongoing cost factor in any organisation The reality of integration between HR and Strategic Management: It is common for strategic decision makers to recognize the importance of integrating HR activities with business strategy in order for the organisation to be successful. However, in reality the level of integration varies from organisation to organisation. -EG The HR function is advised of the strategic plan after it has been formulated -EG There is dynamic and multifaceted continuing interaction between HR and strategic decision makers. HR Managers are seen as an integral member of the senior management team.

3 Topic 2: What is Human Resource Planning (HRP)? HR planning is a HR function concerned with the detailed forecasting of employee demand and employee supply (availability) That is, HR Planning is focused on having the right availability people, in the right numbers, with the right skills, in the right jobs, at the right time, and at the right cost to ensure the strategic objectives of the organisation are achieved HR Planning Model:

4 Purpose and Importance of Human Resource Planning: Purpose of Human Resource Planning: The purpose of HRP is to guarantee the availability of the HR needs of the organisation at specified times in the future -That is, to have available a workforce with the needed competencies (skills, attitudes, and knowledge) to achieve organisational objectives Importance of HRP: HRP is critical to an organisation s success because it matches organisational HR objectives with its people requirements Employees are a valuable source of competitive advantage It has become increasingly important as there is a scarcity of talent available to organisations Effective HRP ensures that: -The labour costs are controlled -Employee numbers are appropriate; ie hiring too many employees has implications for the organisations budget -Talented employees are retained -Productivity is improved by having the right mix of employees HRP: Forecasting HR Demand & Supply Model:

5 2. Forecasting the internal HR Supply: The internal supply of human resources is made up of employees who can be promoted, transferred, demoted or developed Techniques for forecasting the internal HR supply include: Skills inventory: Replacement cards: It is an inventory survey that consolidates basic information on all employees within an organisation to determine which skills are present or lacking. It helps assess the longer term recruitment, selection, training & development requirements Identifies those who are ready for promotion, need more experience or training, or who have doubtful potential Succession planning: Turnover analysis: Markov analysis: Is concerned with filling the management vacancies in the long term -It requires development programs (such as mentoring and knowledge management) -It requires a corporate culture which fosters individual growth (career development) and career advancement opportunities It is an analysis of who and why people leave the organisation -It often includes interviews to find out the reasons for an employee leaving -It often includes turnover rates for each department and job classification Is a quantitative technique that is used to forecast the movement of personnel among job classifications. It can be predicted from past movements.