1

HR ManagementMark Fielding- Pritchard

2

Management style

Performance evaluation Behavioural aspects

1.) Budget constrained style

Manager evaluated on ability to achieve budget in the short term

Manager will be criticised for poor results. For example, if spending exceeds the limit set

Job related pressure

May result in short-term decision making at the expense of long term gain.

Can result in poor working relations with colleagues

Can result in manipulation of data

2.) Profit conscious style

Manager evaluated on ability to reduce costs and increase profit in the long term.

For example, a manager will be prepared to exceed the budgetary limit in the short term if this will result in an increase in long term profit

Less job related pressure

Better working relations with colleagues

Less manipulation of data

Hopwood, 3 Management Styles

3

Management style

Performance evaluation Behavioural aspects

3.) Non-accounting style

Manager evaluated mainly on non-accounting performance indicators such as quality and customer satisfaction

Similar to profit concern style but there is less concern for accounting information

Requires significant and stringent monitoring of performance against budget

Hopwood, 3 Management Styles

4

Importance of Human Resources

People are fundamental

to the organisation

Strategic Significance

Operational Significance

5

Recruitment Process

Right skills Right Attitude

Individual can assess organisati

on

6

Appraisal Process

Control Judgemental

Set strategic objectives

Measureable targets

Performance against targets

Organisational performance

Development Training and development

needs

Design plan

7

Difficulties in Appraisals

ConfrontationJudgementalChatBureaucracyEventNothing done

8

Target Selecting

Relevant

• Achievable

Controllable

• Prioritised

9

Measurement of Performance

3 Approaches

Inputs Behaviour Results and Outcomes

10

Victor Vroom

Force = valence x expectancy

Valence = strength of desireExpectancy = probability of achieving

11

Purpose of Reward System

Recruitment & Retention

Fair & Consistent Basis of Reward

Motivation

12

Maslow

Self FulfilmentEgo

SocialSafety

Basic/ Physiological

13

Linking Reward to Performance

Advantages

Incentive

Goal Congruence

Attract & Retain

Signalling

Culture

14

Linking Reward to Performance

Disadvantages

‘Misprioritising’

Unmotivated if don’t agree with criteria

Stress

Basis of calculation? Team, individual, company etc

15

Gibson & Chew

Structure structure structureUse the question to guide youWrite a scratch planMonitor time and question relevance

16

Gibson & Chew Appraisal Process a) 1

Functional• Identify and address weaknesses• Identify areas of interest• Discuss problems• Identify training courses & development

Operational• Better plan teams• Better plan work• Discover process weaknesses, minimise risk• Identify experience opportunities

17

Gibson & Chew Appraisal Process a) 2

Potential Benefits• Better motivated staff, efficiency• Better motivated staff, retention• Better motivated staff, easier recruitment

• Improved performance to reaching overall firm strategic goals

18

Gibson & Chew Appraisal Process b) 1

Current System

Clearly isn’t working

Not timetabled

Performance not reflected in bonus

Not taken seriously

No benefits

19

Gibson & Chew Appraisal Process b) 2

Control Set strategic objectives Measureable targets Performance against targets Organisational performance

Development Training and development

needs Design plan

Set Objectives of New Process

20

Gibson & Chew Appraisal Process b) 3 Having set objectives design system to fulfil

objectives Gain support from 2 senior partners Timetable Link results to salary, promotion, rewards Measure results, feedback, improve process

21

Q54 Lincoln & Lincoln a)

Structure structure structure10 marks Pick 3 or 4 ratios and go with thoseProfit, revenue, cash, receivables days,

staff costs

22

Q54 Lincoln & Lincoln a)

North

• Revenue falling

• Smallest region

East

• Revenue/ rising

• High staff costs

West

• Good growth

• Poor WC management

23

Q54 Lincoln & Lincoln b) 1

Good Based on profit Overhead allocation is

(presumably) consistent

Bad Not controllable Depends on overhead

allocation methods Single measure, based

on profit alone

Link performance measures to slide 22

24

Q54 Lincoln & Lincoln b)

North

• Revenue change

• Gross profit margin

• Market share

East

• Revenue change

• Staff costs/ revenue

• Staff utilisation

West

• Revenue growth

• Market share• WC

management, debtors days, current ratio, (inventory if relevant)

25

Q54 Lincoln & Lincoln c)

Senior Management• Very rigid. Change to reflect

differences and new targets

Creative Staff• Again rigid. No note taken of new

skills, improved performance

26

Q54 Lincoln & Lincoln c)

Buying Staff• Looks ok but budget set at HQ.

Perhaps consider localising budget process

Account Managers• You would expect to see some

commission and bonus element

27

Q54 Lincoln & Lincoln c)

Admin Staff• Looks ok but it depends what thye

are doing. Admin, filing clerks ok, but finance department staff? Also some element of bonus based on performance & company performance would be more motivating