IB Business Management

1. HUMAN RESOURCES
2.1 –The Functions and Evolution of HRM

2. By the end of this lesson you should have
covered:
• Human resource planning • Appraisal
• Labour turnover • Dismissal and redundancy
• Factors that influence HR planning • Work pattern changes
• Recruitment • Outsourcing, offshoring and re-shoring
• Training

3. Human Resource Management
Human Resource (HR) Management or (HRM) is the management function of recruiting
capable, flexible and committed people, managing and rewarding their performance and
developing their key skills to the benefit of a business in order to meet its organizational
objectives. Retention, setting compensation and benefits and specifying job responsibilities.

4. Workforce Planning
Human Resource (Workforce) planning is
analyzing and forecasting both the
current and future number of employees
needed and the skills of those employees
that will be required by an organization to
achieve its objectives.
It is a continuous process.

5. LabourTurnover
Labour turnover is defined as the proportion of a firm's workforce that leaves
during the course of a year.
Labour turnover is all about employee retention - i.e. the ability of a business to
convince its employees to remain with the business.
• Labour turnover is measured by the following formula:
Labour turnover = number of staff leaving
total number of staff x 100
TRY: A school has 46 overseas hire teachers.This year 9 teachers are
leaving. What is the labour turnover rate?

6. Factors that influence HR Planning
Many factors can influence an
organizations HR plan. Even before a
business employs someone, some
external factors can have an effect on
the pool of labour available for potential
employment.
Also the business itself may change and
internal factors influence the HR plan in
place.

7. Internal factors that influence HR Planning
• Changes in business organization - an acquisition or reorganization to better meet business
objectives
• Changes in business strategy – are they changing the direction of the business or has there
been a change in the market
• Changes in business finance – Can a business afford to hire and train new staff? Can they
afford the ones they already have?
• Changes in labour reactions – Labour relations have a strong impact on workforce planning.
If the workforce choose to form a union ,the business has to work according to their
demands.When the power of union is less , the business has more flexibility with workers.
Either way , the long-term labour circumstances will change .

8. External factors that influence HR Planning
• Technological change - improvements in ICT can lead to more
teleworking from home.
• Government regulations - changes in laws or regulations about health
and safety, maximum working hours, equality in the workplace and age
of retirement.
• Demographic change - such as an aging population, reduced fertility
rates, or changes in internal migration pattern.
• Social trends - changes in the role of women, an increase in the number
of single parent families or the importance of the "work-life" balance.

9. • The state of the economy - economic boom vs a recession
• Changes in education - rising or falling education levels and availability of
courses/programmes
• Labour mobility - occupational mobility (changing occupations) or geographical mobility
(changing locations)
• Immigration:A shift in immigration can result in new workers being available or a change in
the skillset of newly arrived workers.

10. Changes in
the work patterns
• Since 1970’s many changes have occurred in
work patterns .practices and preferences.
• These changes have stemmed from external
factors affecting the pool of labour .
• For e.g. social trends have led many employees
to want a better life –balance and many
businesses are trying to respond to fulfill the
desires of these employees.
• Some social trends have come up from internal
factors which can benefit from some of the
new work practices.
• Refer page 84 table 2.1.1 for more details

11. Changes in work practices
• Work practices in decline :
• Full time work: when employees work the maximum hours per week accepted by law ( 35 hours a
week in Europe )
• Permanent contracts – when employees are hired for positions without a predetermined time limit .
• Work practices on the increase :
• Part time work- When employees work less than the full time weekly maximum hours.
• Temporary work: it is on a fixed time contract whereby workers are engaged only for a specific period
of time, includes fixed-term, project- or task-based contracts, as well as seasonal or casual work ( replacement
for maternity leave ) .
• Freelancing: Freelance work is when a self-employed person offers their professional services to a client for an
agreed-upon fee. Although these professionals may sometimes provide their services to only one company over a
prolonged period of time, freelancing work is normally short-term and involves working for multiple companies
simultaneously.

12. Work practices on Increase :
• Teleworking : Teleworking is a model where employees work remotely while communicating with their
colleagues through telephone, email or video conferencing. Working remotely involves employees performing
their daily tasks from a location other than a traditional office, such as a home office or a coffee shop.
• Homeworking :An employee might work from home all the time, or as part of a hybrid working arrangement. For
example. Usually , employees have a core number of hours they have to work at office and the remaining hours
they can work from home.
• Flexi-time : allows the employees to adjust their work hours to fit their own preferences or needs instead of
adhering to a traditional fixed pattern. Flexible working allows employees to start and finish their shifts at various
times, as long as they fulfil their contractual weekly hours.
• Casual Fridays- is a trend where businesses are more relaxed with their dress code on the last day of the week,
so it is easier to go away at the weekend .
• Three-day weekend : instead of working , say, five eight- hour days, the employees works four ten –hours day
and so has a 3 day weekend.

13. THE GIG ECONOMY :
• A gig economy is a labor market that relies heavily on temporary and part-time positions
filled by independent contractors and freelancers rather than full-time permanent employees.
Gig workers gain flexibility and independence but little or no job security. Some people laud
the GIG economy for its flexibility while others criticize it as it typically means workers do not
receive most of the benefits of full time employment , such as sick leave or paid vacation.

14. Changes in work preferences :
• Career breaks : An employee decides to stop working for a time , usually a year or
more , before returning to work in the same career. Sometimes the employer
formalizes this and agrees to take the employee back after the break- this is
known as a “ sabbatical.”
• Job share:Two or more employees decide to share a job in order to free up more
time for other activities .
• Downshifting : change a financially rewarding senior position to a stressful career or
lifestyle for a less pressured and less highly paid but more fulfilling one.
• Study leave : An employee is granted time off to acquire a new qualification , such as an
MBA.

15. The impact of Innovation , ethical considerations
and cultural differences
• Innovation in business is the process of
generating or improving new or existing
products, services, processes, or systems
within an organization. The main purpose of
business innovation is to create positive changes
that can increase revenue, market value, efficiency,
or productivity, or solve problems. Business
innovation can involve pioneering, redesigning, or
developing new technologies, materials, or
methods. A vital part of HR planning –will help the
creative process.
• Ethical considerations : Businesses operate in
global markets and are judged on the contribution
they make to society. Behaving ethically, without
harming the environment regardless of impact on
profits. There is a strong connection between HR
planning and ethical consideration. HR processes
are based on relationships with their employees.
Today most stakeholders insist that Employees
should be treated respectfully and ethically. Social
media and internet are the sources which reflect the
treatment given to employees by businesses.
Therefore , businesses must act ethically.

16. Cultural Differences :
• A key to being successful in business
internationally is to understand the
role of culture in international
business. Whatever sector a business
is operating in, cultural differences
will have a direct impact on
profitability. Improving knowledge of
international cultural difference in
business can aid in building
international competencies as well as
enables to gain a competitive
advantage.
• However, on the one hand where it is
important to be aware of cultural
differences of different countries, on
the other, it is also hard to be aware
of every single aspect of each
country’s organizational culture.

17. • The key factors that have a direct impact on business. These are:
• Communication is the key to success for any business, whether you are operating
nationally or internationally, but when operating internationally it becomes even more
important due to language barriers. Passport to Trade 2.0 project aims to remove this
barrier by providing training materials in the languages of the country a business
operates.
• Being aware of basic customer needs is an important aspect . In simple terms, if the
businesses are aware of the customer’s cultural background, then it will be able to
adopt more suitable advertising methods.
• Body language is another key factor in cultural difference. As different countries have
different ways to convey or share their message, for instance in Germany people tend
to speak loudly when sharing ideas, whereas in Japan people speak softly, it very
important to know what your body language should be doing when interacting with
people whether it’s your business partner or an interviewer.
• Before launching a marketing campaign, always conduct research to become aware of
the target audience since customer demand, decision making, gender views and
ideologies greatly vary in cultures.
• Refer to text book on page 88 and 89 ( fig : 2.1.2 and 2.1.3 )

18. Reasons for resistance
to change in workplace
•Some employees
may resist change,
whereas managers
consider change as
profitable:

19. • Having poor strategy of communication of employee leads to resistance to change. If
employees are not able to communicate on how success may look like and how it can be
measured, then it would be right to expect resistance. If employees don’t get why the change
is needed, they will resist change .
• Lack of control: When managers insist on change , employees feel that they have no control
over their lives.
• Insufficient rewards :Organizational employees are not happy when they don’t receive any
reward. In fact they will resist change when they do not see anything in terms of rewards.
• Social support: An employees who works with a group of people who resist change may
choose to resist for the sake of maintaining social relationships.
• Discomfort: Employees are often happy with the current situation and want to maintain the
status quo.
• Fear: Changes often makes employees afraid simply because simply because they fear about
their future.

20. Reasons for change
• Lack of job skills: Employees lack skills necessary to perform in the changed work
environment.
• Mistrust: Employees sometimes do not trust managers.
• Poor timing : Changes are brought about for success but may happen at a time not
suited personally or professionally.
• Social support:An employee who works with a group of people who resist change
, may resist it for the sake of maintaining social relationship.

21. DEALING WITH CHANGE

23. Change management :
• Ways to Manage Change in the Workplace Effectively
• 1. Have a Plan,, Change is essential for businesses to grow, expand, and thrive. ...
• 2. Set the Goal Employees will work better with concrete goals that are achievable (though they can simultaneously be
aspirational). ...
• 3. Define the Change, resources forecast and allocate the necessary resources to implement the change.
• 4. Celebrate the Old , make the employees realize the importance old practices.
• 5. Articulate Challenges : make the employees realize the challenges they may face.
• 6. Develop a vision for the change process and the desired outcomes.
• 7. Routinely communicate the benefit of changes
• 8. Regularly communicate to all appropriate stakeholders how the change process is going to take place . The
employees should be regularly reported about the success by the mangers to build their confidence.
• ( Refer to textbook page 91)
• ( learn definitions on page 92)