AQA A Level Business 3.6 - Decision Making to Improve Human Resource Performance

3.6 – Decision Making to Improve Human Resource Performance


Soft and Hard HRM

Soft management – Identifies workers as most important resource


Common features:
 Democratic
 Flat structures
 High levels of training
 Opportunities for promotion
 Non-financial incentives
 Long-term planning
 High job security


Hard management – Identifies workers as just another resource


Common features:
 Autocratic
 Tall structures
 Minimal training
 Theory X
 Financial incentives
 Short-term planning
 Low job security




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, 3.6 – Decision Making to Improve Human Resource Performance


Human Resource Performance 1

Labour productivity – The output per worker over a period
 Used to make decisions about pricing


t o t a l o ut p u t
nu m b e r o f w or k e r s


 High labour productivity is usually good
 Does not take wages into account
 Does not take machinery / capital into account
 Employee conditions and motivation are not considered




Unit labour costs – The labour costs per unit of output produced
 Takes wages and non-wages costs such as insurance into account so it is accurate


l a bou r c o s t s
o ut pu t


 Low unit labour costs are good
 As labour productivity rises, unit labour costs should decrease (EoS)
 Employee training increases unit labour costs in short-term but is good long-term
 Lower labour unit costs may not outweigh other costs increasing




Absenteeism – The percentage of workers not at work over a given time frame


nu m b e r o f a b s e n t st a f f d a y s
t ot al st af f d a y s


 Can be useful for setting motivation and health and safety targets



Human Resource Performance 2
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