Human resources

Overview

Human Resources (HR) is the functional area of a business responsible for managing its employees. Without the right people, in the right roles, with the right skills and motivation, a business cannot achieve its objectives. Examiners love this topic because it links directly to business performance, costs, and productivity. Candidates are expected to understand the impact of different organisational structures, evaluate the benefits of internal versus external recruitment, and analyse how training and motivation methods improve staff retention and output. A strong understanding of HR will help you tackle high-mark evaluation questions with confidence.

Podcast Revision Session

Listen to our 10-minute deep dive into Human Resources, covering all the core concepts, common mistakes, and a quick-fire recall quiz.

Organisational Structures

An organisational structure shows how a business is arranged, indicating the chain of command and span of control.

Tall Structures

Features: Many layers of management, long chain of command, narrow span of control.
Impact: Communication can be slow due to the many layers. However, managers can closely supervise their small teams. Often more expensive due to higher management salaries.

Flat Structures

Features: Few layers of management, short chain of command, wide span of control.
Impact: Communication is faster. Managers have more subordinates, which can lead to delegation and increased employee responsibility, but managers may become overworked.

Key Concepts

• Chain of Command: The line of authority from the top of the hierarchy to the bottom.
• Span of Control: The number of subordinates directly reporting to a manager.
• Delayering: Removing a layer of management to flatten the structure, cut costs, and improve communication speed.
• Delegation: Passing authority down the hierarchy to give subordinates more responsibility.

Recruitment and Selection

Recruitment is the process of finding and hiring new employees.

The Process

1. Job Analysis: Identifying the vacancy and its requirements.
2. Job Description: A document outlining the duties, responsibilities, and conditions of the role.
3. Person Specification: A document detailing the ideal candidate's skills, qualifications, and experience.
4. Advertising: Promoting the vacancy internally or externally.
5. Shortlisting: Selecting the best candidates from the applications.
6. Selection: Using interviews, tests, or assessment centres to choose the successful candidate.

Internal vs External Recruitment

Internal Recruitment: Hiring someone already working within the business.

• Advantages: Cheaper, faster, motivates staff through promotion, candidate is already familiar with the business.
• Disadvantages: Creates another vacancy elsewhere, limits new ideas entering the business.

External Recruitment: Hiring someone from outside the business.

• Advantages: Brings in fresh ideas and skills, wider pool of candidates.
• Disadvantages: More expensive (advertising/agency fees), takes longer, candidate needs time to settle in.

Contracts of Employment

• Full-time: Typically 35+ hours a week.
• Part-time: Fewer hours than full-time, offering flexibility for both the business and the employee.
• Job Share: Two employees share the duties and hours of one full-time role.
• Zero-hours: The employer does not guarantee a minimum number of hours. Provides high flexibility for the business but income uncertainty for the worker.

Training

Training ensures employees have the skills needed to perform their jobs effectively.

Induction Training

Given to new employees to help them settle in, covering health and safety, company policies, and introductions to colleagues.

On-the-job Training

Learning while performing the actual job, often through shadowing or mentoring.

• Advantages: Cheaper, directly relevant to the role.
• Disadvantages: Bad habits can be passed on, trainer's productivity may drop.

Off-the-job Training

Learning away from the workplace, such as at a college or online course.

• Advantages: Taught by specialists, employee is not distracted by work duties.
• Disadvantages: More expensive, employee is away from the workplace so productivity is lost during training.

Motivation

Motivation is the desire to work hard and perform well. Highly motivated staff lead to higher productivity, better quality work, and lower staff turnover.

Financial Methods

• Salary/Wage: Basic pay.
• Bonus: Extra pay for reaching a target.
• Commission: Percentage of sales revenue paid to the salesperson.
• Profit Sharing: Employees receive a share of the business's profits.

Non-Financial Methods

• Job Enrichment: Giving employees more challenging and interesting tasks.
• Job Rotation: Moving employees between different tasks to reduce boredom.
• Fringe Benefits: Perks such as a company car, health insurance, or gym membership.
• Flexible Working: Allowing employees to choose their hours or work from home.

Legislation

HR decisions must comply with the law:

• Equality Act 2010: Prevents discrimination in recruitment, pay, and promotion based on protected characteristics (e.g., age, gender, race).
• National Minimum Wage / National Living Wage: Sets the legal minimum hourly rate of pay.