Distinction between human resource management and personnel management

Describe about the Test-Score Banding in Human Resource Selection?

Understanding the various practice and concepts of human resource management focusing on retention, recruitment and employment cessation is the purpose of the assignment.

This assignment deals with different practices and policies of human resource management and drawing a relation between Motivational theory and remuneration. It will help to explore the definitions of human resource management and to explore major concepts of personnel management and human resource management and identify the differences in between them.  It will also help to understand the importance and application of lawful and regulatory matters related to retention, and employment cessation and recruitment.

Distinction between human resource management and personnel management:

It is a common belief that human resource management (HRM) and personnel management are same, but both are entirely different. Personnel management is referred to an element of management focused on workforce and their connection with the entity and on the other hand, human resource management is the most efficient use of manpower of an entity. It was also observed that PM deals with recruitment, selection, staffing, training and development, compensation of workforce and their relation with the organization. HRM deals with a broad range of activities like selection and recruitment, compensation, training and development, industrial relations, grievance management, welfare and appraisal. It is a continuous process of ensuring the availability of putting the perfect man into the right place and at the right time (Dessler 2013).

Human resource management is responsible for recruitment, staffing, employee relation, training and development, pensions, facilities, rewards, security, health and safety. Three primary functions of HRM are recruitment, training, and motivation. In order to assess the functions of HRM in the above-specified supermarket Smiddle DD let us consider the various HRM policies accepted by supermarket chains like ALDI (Aldi.com 2016).

The recruitment policy used by ALDI includes following steps:

Online submission form and situational judgment assessment

Online tests (diagrammatic reasoning, numerical reasoning and verbal reasoning)

Video interview

Review center

Training and development: ALDI places great emphasis on training and development of its employees. Training needs are identified by analyzing the ongoing company performance in critical areas (Aldi.com 2016).  It provides on the job as well as off the job training. On the job training includes coaching, mentoring, sitting next to Nellie- it is working a co-worker for learning the desired skills. On the job training are mostly provided by the managers. Additional training courses offered to the employees of ALDI are Performance reviews, employment law and influential skills.

Assessment of functions of HRM in fulfilling organizational purposes

Motivation:  For the purpose of motivation ALDI does the following-

Provides excellent performers with positive and attractive remuneration

Offer job security

ALDI is the first grocery chain to start maternity leave policy

Employees are allowed flexible working hours and employee rosters are done well in advance to plan holidays (Aldi.com 2016).

Line manager are in charge of carrying out regular HR initiatives. Various responsibilities of line managers in HRM include employee engagement, performance appraisal, maintaining discipline and performance related pay (Lunshof 2015).

Employee engagement: The line managers can increase employee engagement by focusing on the strengths of their employees and encouraging more open communication. This will not only increase employee engagement but also increase the motivational level of the employees.

Performance appraisal: The line managers assess and rate the behaviors and performance of the employees under them. The response is conveyed in a one to one meeting among the manager and the employee.

Maintaining discipline: Line managers guided by the rules and policies of the HR department sets out the expectations with his team. However the line manager himself needs to follow the rules laid by him, or else it would be hard to implement them with his team.

Presentation related pay: It is the performance ratings obtained from the line managers that control the amount of supplement in the salary of the employees (Lunshof 2015).

Main objective of establishing rules regarding lawful framework in an organization is to ensure that the employees are protected from unfair discrimination in their workplace. It deals with certain acts of law to maintain an amicable relationship between employers and employees.  It is created to ensure that employees are receiving fair treatment regarding remuneration, designation, and other factors. The legal and regulatory framework also define the working hours per week, overtime wages, protection of employees investments in their pension funds and provident funds. It lays down the rules of forming trade unions and also defines their rights and duties so that no confusion arises in this respect. Employers’ are obliged to provide employees with certain health and safety benefits; legal and regulatory framework ensures it. Legal rights also provide employees with a tool to fight against harassment in the workplace (Kruppe et al 2013).

The process that aims at providing right manpower in an organization at the right time is called Human resource planning. Proper planning ensures availability of right kind and quantity of people at a right time for uninterrupted flow of the operations of the organization. It also helps to cope up with the current changes in the external environment. If an organization decides to expand, human resource planning gives the information about the availability of manpower in the organization and the manpower required for the expansion. It not only provides information about the availability of the manpower but also helps to identify the skills required to perform a particular task and then it arranges for training programs to impart the required skills to the employees. It minimizes the overall cost of production by optimum utilization of human resources (Khasawneh, 2011).

Roles and responsibilities of line managers

Human resource planning estimates the personnel requirement in the future. It is a continuous process that begins with the identification of HR objectives, analyzes the manpower requirement and finally ends with the evaluation of HR planning. The steps involved are discussed below.

Human resources assessment: Evaluation of human resource starts with the analysis of environmental factors (internal and external). The environmental analysis helps to recognize the strengths and weaknesses, opportunities and threats of the organization.

Demand forecasting: It is the estimation of prospective demands of employees regarding number and quantity. Future needs are estimated by analyzing current human resource position of the organization and the plans for the organization. There are many techniques used to forecast manpower demand namely managerial judgment, work study, ratio trend and Delphi technique.

Supply forecasting: While demand forecasting is associated with estimation of future requirement, supply forecast is associated with the estimation of manpower that are likely to be existing inside and outside the organization. Internal sources include job enlargement, promotion and transfer whereas external sources include hiring new candidates from outside like campus drive.

Matching demand and supply: This process involves bringing internal and external sources to equilibrium so that the issue of shortage and surplus can be met.

Action plan: This is the final step of human resource planning. Demand and supply matching bring to surface the issue of shortage and surplus. On the basis of these actions are executed. If there is an issue of shortage then recruitment, selection needs to be performed, and if there is an issue of surplus retrenchment, redeployment, training needs to be performed (Bates 2013).

ALDI and LIDL are two supermarket chains operating in the UK. These two supermarket chains have different patterns of selection and recruitment. ALDI travels across various universities to find the appropriate candidates (Aldi.com, 2016). Dedication, honesty, skills of a good team, education and diligence, are the qualities that they look for in a candidate. ALDI recruits candidates through trade employment expos, fairs and national careers. Apart from this, they also pay the highest salary in the market. ALDI firstly conducts an online application form and situational test, then online tests, after that video interview and finally assessment centers.

LIDL look for right candidates through talent partnerships like Vlerick (Lidl.co.uk, 2016). Candidates do not need to upload their CVs. Instead, they need to give a brief description as to why they want to join the organization. If the candidates successfully qualify the initial telephonic screening, then they are invited to the boot camp. If they can qualify that round as well, then they are provided with a contract (Lidl.co.uk 2016).

Analysis of the impact of legal and regulatory framework on HRM

Whereas ALDI hires candidates from the universities, they get fresh young blood. Fresh blood is needed in the organization as they provide innovative ideas and lead to organizational development (Aldi.com, 2016). On the other hand, LIDL hires people who are self-motivated to join this organization. They do not need any extra motivation to adapt themselves to the organization. Therefore, they are highly productive since the beginning (Lidl.co.uk 2016).

The procedure by which the behavior of a person is affected by others through their satisfying power of the individual’s needs and goals is known as motivation. Motivation theories are separated into two different viewpoints.

Substance theories

Process theories

Reward is the prize that employees attain in the course of their job. The company paying for their performance it is financial reward or non- financial rewards like promotions, achievement, and praise.

Motivational practices in ALDI which can be implemented

Maternity and other rewards may be introduced.

To reward the staff in a competitive environment, salary above the average salary can be paid, and working conditions could be improved.

Impressive compensation packages and retirement plans should be made.

Flexible working hours should be provided, and Employee Roster may be prepared from beforehand so that employees could plan their personal commitment or holidays around their work schedule (Petri and Govern 2012).

The process of assessing plus analyzing different job analytically in determining their relative importance in an organization is called job evaluation. Several methods like factor comparison, job ranking and job grading are employed in job evaluation. The steps involved in job evaluation process are discussed below:

Job study- The first step is the learning the job of the organization is obtaining information on job content.

Compensating factors- In second step decision for what organization “is paying for” is made. i.e. which factor places a particular job at an elevated level in that job ladder than the other.

Rising the methods- The next step includes the selection of a method for appraising the organization’s job according to the selected factors.

Job Structure- The next step includes comparing jobs for expanding a job structure. This involves setting up the job hierarchy, reaching and recording decisions and choosing and assigning decision makers.

Structure of the wage- The fifth step is job pricing collection to appear at a wage composition. 

Other aspects determining pay are:

Employee Compensation- All form of compensation or rewards that employees accept that arising from their employment.

Analysis of the reasons for human resource planning in the organization

Direct financial expenses- Payment in the form of salary, wage commission, incentive, incentives, and bonus.

Indirect financial expenditure- Financial remuneration such as insurance paid to the employees (Nuttin 2014).

3.3 Assessment of the efficiency of reward systems in diverse contexts:

The organization can have an effective reward system if they look into the following areas:-

The most influencing factor for employee motivation is compensation or reward.

Employee compensation and reward system are the main reason behind industrial disputes.

A proper compensation plan and reward system will reduce industrial dispute and help to maintain industrial harmony and peace.

Reward system plays an important role in employee attrition.

It influences employee retention in the organization.

Job satisfaction of employees also depends on compensation and reward system.

Compensation and reward system helps in establishing employer brand that helps in attracting new talents.

Employees are motivated to put in their best efforts to accomplish organizational objectives.

Effective compensation and reward system helps in building initiative towards works that in turn help in productivity of organization.

Employees have a sense of belongingness with the organization with a proper compensation and reward system (Nuttin 2014).

Assessment of the method organization use to observe employee performance:

The different method of monitoring employee presentation are-

1) Assessment Centre- It is a place where performance appraisal of employees’ potentiality for giving him/her a position in the core useful areas are done is known as assessment centre. In many cases organizations contract out evaluation centers instead of making them their own (Dubois, 2004). The assessment center involves the use of methods like tests and exercises, social event and assignment.

2) Behaviorally Anchored Rating Scales (BARS) – This method combine the graphical rating scale and the critical incident method. It consists of preset critical areas of job performance or a set of behavioral statements describing significant job performance qualities as good or bad (for e.g. the qualities like inter-personnel relationships, adaptability, and reliability, job knowledge, etc.). These statements are developed from critical incidence (Dubois, 2004). An employee’s actual behavior is judged against the desired behavior by recording and comparing the behavior with BARS.

3) Human Resource Accounting- The success of personnel management actions and the utilization of employees is known as HR accounting. HR accounting is the method of conveying, making a budget, making a report of the cost of human resources acquired in an organization which includes wage plus training expense. Human resources are important assets of a business. HR accounting method attempts to find the virtual worth of these assets in monitory terms. (Kromrei 2015).

Stages involved in planning human resources requirement

4) Management by Objective (MBO) – The MBO is a process where superior employers and subordinate managers in the organization determines the organization goals and defines the major areas of each member’s responsibility in the business actions. The result expected from the responsibilities fulfilled by them is used as the methods for guiding business unit’s operations, thereby assessing the contribution each members working in the unit. Thus, MBO is a process of joint goal setting, measure development towards the goal, taking an action to give surety to objective feedback and participation and achievement of employees (Kromrei 2015).

Figure: Management by objective

(Source: Kromrei 2015)

5) Customer Feedback Method- It is utilized particularly for sale staffs dealing with sales activity of an organization. Appraisal method and customer feedback is directly linked with employee presentation. This method of assessment could be impartial and consistent since clientele who is an outsider may give accurate judgment about employee performance than the insiders who are superior (Kromrei 2015).

5) 360 Degree method of Appraisal – 360 degree feedback is the performance appraisal tool that incorporates feedback from all who monitor and are affected by the performance of a candidate. Corresponding to the multiple points on a compass, in the 360 degree method each employee is provided with the opportunity to receive performance feedback from his or her customers, co-workers, supervisors and peers (Kromrei 2015)   

Figure: 360 Degree Appraisal Method

(Source: Kromrei, H 2015)

ALDI uses 360 Degree Feedback, in evaluating the presentation of their staff. It is the appraisal coming from all directions. Employee’s peers, subordinates and supervisors give feedback information about that particular employee which are used to fine tune a particular or group of employees for guidance (Aldi.com 2016).

Identify the reasons for cessation of employment:

Employment may end due to employee initiation, employer instigation or due to the action of regulation. Due to of demise of an employee, the measures existing under Forms and Procedures should be completed shortly as possible (Putzier and Baker 2011). The necessities for advising the deceased person’s superannuation fund and the lawful provisions relating to the compensation of several salary or unused leave entitlements are included in these procedures.

Types of termination-

Voluntary cessation- Resignation, retirement.

Involuntary cessation- Retrenchment, layoff.

Employment at will- Termination of employment due to misconduct.

Mutual termination.

Employment exit procedures used by two organizations:

In ALDI employment termination can be done in a number of ways.

The first type of employment cessation is resignation. In this case an employee voluntarily comes forward and submits a resignation letter which acts as a legal proof of the desire to quit employment. In such a scenario the employee does not get any pension from the organization.

The second method through which one can quit the job is through voluntary retirement. In such a case the employee submits a retirement letter which acts as proof of the termination of job contract. Employee is eligible to get pension.

Another method is through rejection of the employment contract. In this case an employee rejects the employment contract as being legal and refuses to work for the organization. This happens in case of an employee who is not given full scope of responsibilities and duties he is expected to be tackling while on duty.

Another way employment contract can be terminated is is by death of an employee.

End of employment contract is another way of termination of contract.

Retrenchment is another way of ending the employment contract (Aldi.com 2016).

Impact of lawful measures on termination of employment:

On ending employment an employee is allowed to get payment in lieu of long service leave, annual leave, and annual salary allowance.

Leave for long service- An employee ceasing service with working for seven years will be compensated in lieu of his or her accrued long service leave entitlement.

Annual salary allowance- An education bearing class employee ceasing service will be remunerated against his or her annual idle leave and loading allowance. When an employee expires, any payment in lieu of annual leave or loading grant will be given to the employee’s personnel lawful agent (Kaben 2011).

 Conclusion

After the above analysis we can conclude that if Smiddle DD follows all the Human resource policies and procedures it can excel in the supermarket industry in line with the supermarket giants ALDI and LIDL. It has to follow proper rules regarding Human resource planning, recruitment, rewards and bonus, job evaluation, staff monitoring, cessation and exit.

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