Human resource management (A Level)

7.1 Organisational structure

An organisational structure shows how a business is arranged into levels, roles and reporting lines.

Structures

• Tall (many layers, narrow span of control): close supervision, clear promotion, but slow communication, high cost, less empowerment.
• Flat (few layers, wide span): fast communication, cheaper, more empowerment; managers may be overloaded.
• Matrix: staff report to both a functional and a project manager; flexible but can cause confusion.
• Entrepreneurial: decisions by one person at the centre; common in small firms.

Centralisation and decentralisation

Centralised decision-making keeps decisions at the top: consistent, cheap and tight control, but slow, and local knowledge is lost. Decentralised structures push decisions down: faster, better local response, more motivating, but risk inconsistency and weaker control.

Delegation and empowerment

Delegation is passing work with authority; empowerment goes further by giving staff decision-making power. Benefits: motivation, faster decisions, development of staff. Risks: mistakes, loss of control, staff unwilling to take responsibility. It needs trust, training and clear targets.

Informal organisation

The informal organisation (friendships, networks) works alongside the formal one and can speed work, or spread rumours and resist change.

Purpose of structure, types and change

A structure should be flexible, meet the business's needs, allow for growth and development and encourage intrapreneurship (for example by giving staff freedom to innovate). Structures can be functional (by department: marketing, finance), by product (a division for each product line), by geography (by region) or matrix. Functional structures give specialist skills but can lead to silos; product or geographic structures give focus and local response but may duplicate work.

Structures change because of growth, new markets or technology and delayering (removing layers of management to cut costs and speed communication, at the cost of job losses and wider spans of control). A structure shows levels of hierarchy, chain of command, span of control, responsibility, authority, delegation, accountability, centralisation and decentralisation.

Authority is the power to make decisions and give orders; responsibility is the obligation to carry out a task. Accountability is being answerable for results: when a manager delegates, the authority and responsibility pass down but the manager remains accountable. Delegation frees managers and develops staff, but there is a conflict between control and trust: too much control demotivates; too little risks mistakes. A wide span of control means fewer levels of hierarchy; a narrow span means more.

Line managers have direct authority over production or sales; staff functions (HR, finance, IT) give specialist advice and support. Conflicts arise when staff specialists advise but line managers do not accept it, or when specialists resent line authority.

7.2 Business communication

Communication is the transfer of information so that it is understood. Good communication supports co-ordination, motivation and decision-making.

Methods: written (reports, email), verbal (meetings, calls), digital (video conferencing, intranets, messaging), visual (charts, presentations).

Barriers: jargon, too many layers, information overload, lack of trust, language and cultural differences, poor timing, faulty technology. Remedies: simplify messages, feedback, flatter structures, training, choose the right medium.

Effective communication gives fewer mistakes, better relations and faster decisions; poor communication causes conflict and low morale. Technology speeds communication but cannot replace face-to-face contact for sensitive issues.

Methods, channels and improving communication

One-way communication (an instruction) is quick but gives no feedback; two-way communication allows replies and checks understanding. Problems with channels include delay, distortion as messages pass through many layers and overload. Informal communication (the grapevine) can speed information and build morale, but also spread rumours. Good communication raises efficiency by reducing errors, speeding decisions and improving co-ordination. To improve it: use the right method for the message, flatten the structure, encourage feedback, train managers and use technology appropriately.

7.3 Leadership

Leadership is influencing others to achieve goals. Leadership theories and styles:

Tannenbaum and Schmidt's continuum runs from tell (the leader decides) to join (the group decides), with the right point depending on staff skills, time and the issue.

Leadership also relates to power (reward, legitimate, expert), the culture of the business, and motivation (see Chapter 2). Culture is the shared values and ways of behaving in a firm; leaders shape culture, and a strong, positive culture can raise performance, but a poor fit slows change.

Leadership roles and qualities

Leadership happens at different levels: directors set the strategy and culture; managers plan, organise and control departments; supervisors direct day-to-day work and give feedback; worker representatives (union reps, council members) represent employees' views and can influence morale. A good leader has vision, integrity, communication skills, decisiveness, empathy and the ability to motivate others.

Leadership theories include: trait (born leaders), behavioural (styles such as autocratic and democratic), contingency (depends on the situation), power and influence (reward, coercive, legitimate, expert and referent power) and transformational (inspiring change).

Emotional intelligence

Goleman argued that emotional intelligence (EQ) matters as much as technical skill. It has four competencies:

Leaders with high EQ build trust and motivation, but EQ is hard to measure and not a substitute for technical or strategic ability.

The purpose of leadership is to give direction, motivate people and achieve the objectives of the business.

7.4 Human resource management (HRM) strategy

HRM strategy links people management to corporate strategy. Hard HRM treats staff as a cost to be controlled (flexible contracts, tight control); soft HRM treats staff as assets to be developed (training, involvement).

Workforce planning and flexibility

Workforce planning forecasts demand for labour and supply, to match staff to needs. Tools: recruitment, retraining, flexible contracts, outsourcing, redundancy. Flexible workforce includes part-time, temporary, zero-hours, freelance and home-working; it reduces cost and copes with fluctuating demand, but weakens loyalty and skills. Other flexible contracts include annualised hours (a total number of hours across the year, shared out as demand varies), flexi-time (staff choose start and finish times within limits), shift working, job sharing, compressed hours and the gig economy (short task-based work paid per job). Advantages: lower costs, better match to demand, work-life balance. Disadvantages: less security and loyalty, harder to train and manage, possible lower skills.

Employee performance

• Appraisal and performance management: set objectives, review progress, give feedback.
• Rewards and development: link to performance.
• Poor performance shows in low output, errors, absence and complaints; it can be caused by poor motivation, lack of training, poor management or unsuitable tasks. Strategies include training, coaching, better motivation, redesigning jobs and, as a last resort, discipline.
• Employee engagement and participation: works councils, quality circles, suggestion schemes.

Management by Objectives (MBO)

MBO is a system where managers and employees agree objectives (linked to corporate objectives), work towards them and review results against them. Usefulness: clear targets, motivation from involvement, better communication and a basis for appraisal. Limits: time-consuming, objectives may be set too easily or too narrowly, and changing conditions can make them out of date.

IT and AI in HRM

IT and artificial intelligence (AI) are changing HRM: online recruitment and automated CV screening, chatbots answering staff questions, data analytics for workforce planning and performance, e-learning, remote working tools and automated payroll. Benefits: faster, cheaper, more consistent processes. Risks: bias in algorithms, loss of the personal touch, data privacy and job losses, so decisions still need human judgement.

Employee relations

Collective bargaining between employers and trade unions sets pay and conditions. Conflict can lead to industrial action (strikes, work-to-rule); good relations use consultation, arbitration and single-union agreements.

Managing change

Change (new technology, restructuring, mergers, new markets) meets resistance from fear of the unknown, loss of status or security. Managing change: communicate early, involve staff, give training and support, and introduce gradually where possible. Lewin's idea: unfreeze → change → refreeze; Kotter's steps stress urgency, a coalition, vision and small wins.