Setting human resource objectives — AQA A-Level Business

Human resource objectives are the specific, measurable targets a business sets for its workforce, such as reducing labour turnover, improving productivity, or increasing employee engagement. They provide direction for HR strategy and must align with the overall corporate objectives to ensure the business achieves its aims.

This topic explores how businesses set specific targets for their human resources to align with corporate objectives. It covers key HR objectives such as labour productivity, labour turnover, absenteeism, employee engagement, and talent development, and examines how these are measured and influenced by internal and external factors.

Understanding HR objectives is crucial for analysing how businesses manage their most valuable asset—people—to achieve competitive advantage. It links closely with motivation theories, organisational structure, and strategic decision-making, forming a core part of the A-Level Business syllabus.

• →Human resource objectives are measurable targets for the workforce, derived from corporate objectives.
• →Key HR objectives include reducing labour turnover and absenteeism, improving labour productivity, and increasing employee engagement.
• →HR objectives are influenced by internal factors (e.g., business size, culture) and external factors (e.g., economic conditions, labour market).
• →Effective HR objectives should be SMART: Specific, Measurable, Achievable, Relevant, and Time-bound.
• →There are trade-offs between HR objectives; for example, reducing costs may conflict with improving employee engagement.

• Naming a specific workforce target and tying it to the corporate objective in the extract, for example a retention target that exists because an expansion plan needs experienced staff to open new branches.
• Making the target measurable and time-bound, such as 'to reduce labour turnover from 22% to 15% within two years', because an unquantified aim is difficult to review.
• Identifying the constraint that decides whether the objective is realistic, such as the state of the local labour market, cash availability or the notice periods in existing contracts.
• Showing where two objectives conflict, for instance that a talent development or diversity target costs money at the same time as a finance objective is to hold down employee costs.
• Judging the value of HR objectives in the context of the business, since a labour-intensive service firm is more dependent on them than a highly automated manufacturing plant.
• Defining the approach through what the firm actually does, such as using agency staff at peak and cutting hours in a downturn, rather than repeating the words asset and cost.
• Linking the method to competitive strategy, so cost leadership in Porter's terms pushes towards hard methods and differentiation towards soft ones.
• Supporting a soft method with a theorist used properly, for example Herzberg's argument that responsibility and achievement motivate while pay only removes dissatisfaction.
• Quantifying the trade-off where the case allows it, showing what the recruitment and induction cost of replacing leavers does to the saving made on wages.
• Reaching a judgement about fit, since the approach that works in a call centre may not work in a design studio.
• Explaining how a hybrid mix can serve a single objective, for example paying above the market to cut turnover while still using flexible contracts at peak.

• 💡This topic often appears in higher-tariff 'assess' or 'evaluate' questions, so build two developed chains of argument and a conclusion that says which objective matters most in this specific context and why.
• 💡Use the figures in the case, especially labour turnover and employee costs, to argue that one objective is more urgent than another rather than treating them as a list of equals.
• 💡In your conclusion, name the condition your verdict depends on, such as how tight the local labour market is. This demonstrates judgement rather than just summarising your points.
• 💡Questions here usually give a firm under cost pressure and ask you to assess a change of approach, so decide early which competitive strategy the business follows and argue from that.
• 💡Analyse marks come from a chain: the method, its effect on staff, the effect on productivity or leaving rates, then the effect on the objective named in the question.
• 💡Leave room for the counter argument, because an evaluate answer that gives only one side is unlikely to reach the top levels however well it is written.
• 💡Use specific business examples to illustrate your points. For instance, mention how a company like John Lewis sets employee engagement objectives to differentiate itself through customer service.
• 💡When evaluating, consider the short-term versus long-term impacts of HR objectives. A cost-cutting objective may boost profits now but harm morale and productivity later.
• 💡Always relate HR objectives back to the business's overall strategy. Show how they help achieve competitive advantage or address specific challenges.

• Listing the objectives from memory without applying them to the business in the case study, which limits the answer to knowledge marks.
• Describing a method without linking it to a clear objective. For example, stating 'the business will use training' instead of explaining the objective, such as 'to train 95% of customer service staff in new software by June to reduce call handling times'.
• Treating a rise in engagement survey scores as definitive proof that a new policy worked, without considering other factors like improved trading conditions that may have influenced the result.
• Stating that high-level objectives directly motivate all staff, without explaining the mechanism. Motivation is more likely to come from the specific policies and targets derived from these objectives.
• Presenting the hard approach as simply bad, when a seasonal business with unpredictable demand may have no realistic alternative to flexible contracts. Correction: Judge the approach against the firm's demand pattern and objectives rather than against a moral standard.
• Treating the two as a switch rather than a spectrum, so the answer misses that many firms use soft methods for core staff and hard ones at the margin. Correction: Describe the mix and explain why different groups of staff are treated differently.
• Naming Maslow or Herzberg and then never using the theory. Correction: Apply the theory to the case, for example using Herzberg to explain why added responsibility may motivate more than a small pay rise.
• Assuming training automatically raises productivity, when trained staff are also the easiest for a rival to poach. Correction: Weigh the productivity gain against the risk of losing trained staff and the cost of replacing them.
• Students often think HR objectives are only about reducing costs. In reality, they also focus on improving quality, innovation, and employee well-being, which can drive long-term profitability.
• Many believe that setting HR objectives guarantees success. However, without proper implementation, monitoring, and employee buy-in, objectives may fail or even backfire.
• Some confuse labour turnover with absenteeism. Labour turnover measures the rate at which employees leave and are replaced, while absenteeism measures the rate of unauthorised absence from work.

1. 1Day 1-2: Learn the definitions and formulas for key HR metrics (labour turnover, absenteeism, productivity). Practice calculations.
2. 2Day 3-4: Study the internal and external influences on HR objectives. Create a table of examples.
3. 3Day 5-6: Analyse case studies of businesses with clear HR objectives (e.g., Google, Toyota). Note how objectives link to corporate aims.
4. 4Day 7-8: Practice exam questions, focusing on analysis and evaluation. Use mark schemes to self-assess.
5. 5Day 9-10: Review common misconceptions and create flashcards for active recall. Consolidate learning with a timed essay.

• 📋Calculation questions: Calculate labour turnover or absenteeism rates and interpret the results. Advice: Memorise formulas and show your working.
• 📋Explain questions (4-6 marks): Explain how a business might set HR objectives to support its corporate strategy. Advice: Use connectives and link each point to the context.
• 📋Analyse questions (6-9 marks): Analyse the impact of HR objectives on business performance. Advice: Develop chains of reasoning and consider both positive and negative effects.
• 📋Evaluate questions (9-12 marks): Evaluate the extent to which HR objectives can improve business performance. Advice: Provide a balanced argument and a justified conclusion.