Some people claim that there no differences between human resource management and personnel management and both the words are used interchangeably. However, some experts still argue that there are a couple of differences between the two.
Personnel management involves planning for a short time period while human resource management is concerned with long term planning.
Personnel management is operational in nature i.e. to manage the day to day activities of personnel in the organization whereas human resource management is strategic in nature. (Human resource management ensures that the organization has the appropriate staff in place to achieve its long term objectives)
Personnel management is reactive whereas human resource management is considered as being proactive in nature.
The traditional approach towards managing people in an organization is known as personnel management whereas the modern approach is known as human resource management.
Under personnel management, employees are motivated via reward and bonus schemes (such as performance related pay) whereas in human resource management employees are motivated by formulating strategies such as team work and creativity.
The HRM function at Tesco is simply miraculous. It has considered all those aspects that would keep the employees motivated, as a consequence they would work in the best interest of the organization. The current reward system which offers a flexible working environment, competitive salaries, company share options etc would stimulate the employees to work efficiently and effectively. Moreover, the HRM function at Tesco has set targets which are realistic and has also provided their employees with an interesting work environment. This would increase the motivation and morale level of employees which would enhance their performance and ultimately benefit the organization. Not only this, the reward system at Tesco is a mixture of financial and non financial factors which would again keep the employees committed to Tesco. It offers financial reward packages to its employees with various non financial benefits which are tailored according to the lifestyle of employee availing the benefit. Lastly, the viewpoint survey gives the right to employees to express their feelings about each and every attribute of their job. This improves the coordination between the employees and the HRM function which would ultimately contribute in achieving the long term strategic objectives of the organization.
The roles and responsibilities of HRM managers at Tesco could include the following:
At the initial stage, HRM managers would be required to predict the workforce that would be required so that the organization can operate successfully. This could be in terms of how many employees are required and what skills they should possess.
Once the employees are hired, HRM managers should make sure that they become familiar with the operations of the organization (known as induction) and providing them the necessary training if there is a gap between actual performance and required level of performance.
HRM managers are also required to appraise the performance of employees on a regular basis. This involves evaluating the actual performance of employees against targets/goals set and giving them appropriate feedback which would enable the employees to overcome their flaws in the future.
HRM managers are also required to design reward packages to ensure that employees are motivated and working in the best interest of the organization. This could involve introducing bonus schemes linked to share price, performance related pay etc.
HRM managers also have a duty to manage complaints made against the employees. This could involve suspending/terminating employees from the organization.
The legal and regulatory requirements with regards to HRM could include the following:
Employees should not be discriminated on any basis (race, ethnicity, religion and gender) and should be given equal opportunity.
Providing employees with a safe, healthy and clean working environment.
Devising an appropriate policy to prevent sexual harassment within the premises of the organization.
Ensuring that both men and women are paid equally (if they are doing the same job).
Compliance with child labor laws (i.e. not hiring under age employees who are not allowed by the government to work)
Protecting the investment of the employees in the form of pension schemes.
Allowing trade unions to operate in the organization and establishing their operating procedures.
Preventing forced retirements.
Ensuring that no employee in the organization is dismissed on unfair grounds.
Ensuring that the privacy of employees is not invaded unless there is a serious suspicion against the employee.
Protecting the jobs of female workers in the organization when they are on maternity leaves.
Human resource planning in an organization is essential for a number of reasons. Firstly, employees are the key drivers of the business; therefore it is vital that appropriate planning is done to have the right number of employees with the required skills and experience. Secondly, good human resource planning can help a business to achieve its operational objectives which ultimately take part in accomplishing the corporate goals of the business. Also, through succession planning, the human resource department identifies key personnel who are competent and have the ability to take key positions in the future. This stabilizes the future of the business. In addition, human resource planning also helps in designing an effective performance management system which ensures that the performances of employees are up to the mark. In the absence of such a system, poor performances cannot be measured and the employer would continue their payroll which could lead to wastage of resources. Lastly, in the modern business environment, businesses want to be known as "employer of choice". Human resource planning can contribute to achieve this milestone by recruiting and retaining the most qualified, suitable and talented employees in an organization.
Human resource planning requires an assessment of short term and long term objectives of the company. Once the company has determined its short and long term objectives, the next step is to identify the requirements in the context of human resource such as how many employees are needed and what skills they should possess. The next step is to prepare a list of existing employees working in the organization on the basis of their ages. This would help the organization in assessing that how many employees will retire before the objectives are achieved.
Once the preliminary process above is carried out, the next step is to identify what the organization will need to achieve its objectives. In the context of human resource, this would involve hiring people and conducting training and development programs to equip the employees with the necessary skills required. Once the plan is implemented, the next step is to continually appraise the performance of employees by conducting performance appraisal programs to ensure that the performance of employees are up to the mark and they are contributing in achieving the short and long term objectives of the organization.
Considering the case study, it has become obvious that Tesco believes in motivating employees and providing them the appropriate training so that they recognize the needs of the customer which ultimately sustain the growth of the business. For this reason, Tesco has provided its employees with a flexible work environment and other benefits such as discount gym membership, share options etc. Such a recruitment and selection process as implemented by Tesco would ensure that the business achieves its long term objectives and sustain in this modern business environment. To survive in this dynamic business environment, it is essential that employees are motivated and provided with a flexible business environment in order to retain them. In contrast, considering a business which does not take into account the needs of the employees, and does not adopt have a proper recruitment process to motivate its employees are likely to be depressed by their performance because they would take dysfunction decisions to improve their performance and which would not be in the long-term best interest of the organization.
The recruitment and selection process at Tesco is effective and takes the interest of its employees as its prime focus. Such a recruitment process would assist Tesco in achieving its long term objectives. Also the recruitment process at Tesco ensures that employees which have different life styles are offered a work/life balance and proper rewards linked to their performance so that they are motivated. Such an effective process would ensure that the employees work hard and hence would achieve a higher output in less time which would decrease the labor costs. Also, such motivated employees would require less supervision and would be more concentrated to work efficiently and effectively. They would be loyal to the company and are less likely to be involved in any kind of conflicts. On the contrary, a business which does not have such an effective system could face serious problems in achieving the long term objective of the organization. Employees are the largest asset of any organization, and if the recruitment and selection process in ineffective the employees would be de-motivated, inefficient and are less likely to work in the best interest of the organization.
Taylor suggested that pay is the greatest motivator which motivates employees to work efficiently and effectively. In general, employees would not enjoy their work if their performance is not linked to monetary factors. For this reason, the managers in an organization break down the tasks delegated to the employees and provide them appropriate training to complete the tasks delegated to them. Consider a piece work system where employees are paid in accordance with the number of units produced by them. Such a reward system would encourage the employees to produce the maximum number of units since they know that this will be rewarded. However care must be taken when implementing such a reward system. This is because such a system would encourage employees to produce a higher number of units by compromising in the quality of units produced by them. Also such a system could also increase the "abnormal losses" in and organization which would ultimately result in wastage of precious resources (i.e. materials).
Reward systems encourage the employees in an organization to work in the long term best interest of the organization. Effective reward systems ensure that employees do not take dysfunctional decisions and also lead to goal congruence. For example, an organization which links the performance of its employees to its share price, the employees working in the organization would strive to contribute to add value to the share price which would ultimately increase the shareholder's wealth. Also, an effective reward system encourages the employees in an organization to achieve a good performance level because they know that they will be rewarded for it. Moreover, an effective reward system also which links the performance of employees to measures such as share price, earnings per share would create and organization focused on continuous improvement. Also, reward systems would result in employees competing with each other. This would enhance the performance of the organization as a whole since everyone would be willing to beat the performance of others and get rewarded (both in monetary and non-monetary terms).
The performance of employees in an organization is monitored in many different ways. The most common way of monitoring the performance of employees is by the implementation of a budgeting system. For example, an organization sets an annual budget for a marketing campaign for a period of 3 months. At the end of the quarter the organization would compare the actual cost incurred with the budgeted cost. This would identify the variances/differences between the actual and budgeted cost. If the actual cost is higher than budgeted then this would be indicative of the fact that the campaign has spent more than it was allowed for it. Investigations would be carried out to find out reasons and corrective measures would be taken to ensure the organization does not over spent in the next quarter. Another way of monitoring the performance of the employees is by the use of variances such as direct material price variance, labor rate variance etc. A favorable variance would indicate that performance was good and an adverse variance indicates that the performance was poor. For example, an adverse material price would indicate that the purchasing department has made expensive measures. Corrective action would be taken in the light of such results to ensure that such problems do not arise in the future again.
There could be many reasons for the cessation of employment in an organization. Some of them are listed below.
Initially, employees are hired on a probation basis. This means that the performance of employees would be closely assessed in the first couple of weeks, months or year so that the organization is satisfied that the employee is fit for the job, meets the needs of the organization and possesses the required skills and knowledge. If the employer concludes at the end of the probation period that the performance of employee is not up to the mark then the employer has the right to terminate the employee which would ultimately result in the cessation of employment.
If the performance of a permanent employee is poor for a very long time and the employer believes that the employee is not fit for the job anymore than he/she has the right to terminate the employee which results in cessation of employment.
If a business gets liquidated or goes bankrupt then the employment of all the employees working in that organization is ceased.
Different organizations would have different exit procedures of employment. For example, Company A has the following exit procedure:
Any employee who wishes to resign should submit his/her resignation two weeks earlier.
The employee would be required to be participated in the final exit interview which is confidential.
Employee should return is badge or other identifications which indicate that he/she is an employee of Company A.
In contrast, Company B may have the following exit procedure:
Type of Termination. This would indicate whether the employee had been terminated or has resigned from his/her post.
A check list would be filled by the employee and the human resource department to ensure that the employee does not have any access to any data relating to the organization.
The employee would be told to collect his salary from the human resource department if he has any owing to the company.
The legal and regulatory framework on cessation arrangements require and ensure that no employee is terminated on unfair grounds. Moreover, such a framework also prohibits organizations from forcing an employee to resign from his/her position. Also, it also requires that if any employee is terminated on fair grounds, any balances or salary owed to him/her shall be paid.