Chapter 16 - Human Resources Management Strategy
Learning Objective: To understand additional methods of flexible working; to understand the different measures of employee performance.
As we learned, there are many ways employers are now trying to attract skilled workforce by offering different types of flexible contracts. Part-Time and Contractors is just the beginning. There are many more:
Flextime Arrangements: allows an employee to alter the starting and/or end time of her/his workday (although still fulfilling the same scheduled hours):
Home Working: allows an employee to work from remote location outside of corporate offices:
Annualized Hour Contracts: the employee's working hours are calculated on an annual basis. Employees may negotiate any kind of working schedule with their employer, provided that they meet the basic annual minimum of hours stipulated by the contract:
Job Sharing: a full-time job split between two individuals, each with responsibility for the success of the total job. Job sharing allows two staff members to share the responsibilities of one full-time position, typically with prorated salary and paid time off:
Compressed Hours Contract: means working the total normal full-time hours but in fewer days, that is, by working longer days. This Compressed Hours Employment Contract does not set in stone the hours and days to be worked, it is flexible and allows for the parties to agree these between themselves
Even Shift Work offers some flexibility to employers and employees - although the main objective is to ↑output and ↓unit cost:
Ensures that expensive machinery is always functional (no idling time);
Increases flexibility to meet demand (if demand drops, a shift can be eliminated);
Workers are able to switch shift (flexible);
Equipment maintenance may be overlooked;
May cause shift work disorder, reducing productivity, causing stress, and potentially health issues.
Discussion:
- Activity 16.3
- Activity 16.4
Employee performance is a complicated issue...
How do you say whether a worker is underperforming or outperforming?
What indicators, statistics, and numbers to look at?
Even more important, how do you remediate performance problems if they happen?
And what is the best way to reward high performance?
These are some of the questions Human Resource Managers face routinely when it's time for measuring and monitoring employee performance.
Luckily there are some indicators that can aid HR Managers with such struggle. They are:
Labor Productivity:
It is a simple comparison between output produced and input (labor) needed over a certain period of time.
An industry benchmark can be performed to assess the results;
Results should be recorded and remeasured constantly to track improvements;
If the business employs tactics for improving this metric (e.g. new/better equipment, training, motivation, improved operations) results should automatically improve overtime.
Keep in mind, however, that labor productivity is measured differently industry by industry:
Labor productivity for a bus company, for example, can be measured by kilometers travelled per driver/year;
In a hotel business labor productivity can be looked at from the number of guest nights per employee/month;
In banking, on the other hand, labor productivity can be tracked by the revenue earned on average per employee/year.
It can be difficult to increase labor productivity in service industries. In the case of luxury hotels, for example, top-quality services for guests depend upon having staff permanently on call. This means, for example, that prices in the hotel industry have not fallen as they have for consumer electronics products. One way in which a hotel owner could improve labor productivity would be to use IT as much as possible in the support services of booking, billing and ordering supplies.
A second common indicator for labor productivity is absenteeism rate:
This indicator measures the rate of which the workforce is absent as a proportion of the total employees.
Another way of calculating it is by simply dividing the number of employees absent by the total number of workers multiplied by 100.
Absenteeism is disruptive for any business - specially service - service cannot be stored (inventory) for later use and/or covering an absent worker with overtime or another worker is not easy task.
Absenteeism can be seen as a measure of motivation and caused by lack of hygiene factors (Herzberg) resulting in illness or stress.
Like any other measure, absenteeism is just useful when its causes are clear. Some workers may be absent due to family or health problems (which the business should be supportive of) whereas others due to laziness. The approach for dealing with each case should be different.
There are other less common labor productivity indicators such as:
Wastage level: wasted or damaged output in proportion to total output;
Customer complaints as a total of customers served;
Quality levels and reject rates (proportion of units that are of unacceptable quality);
Comparing an individual’s performance against pre-set targets (MBO).
You should be prepared to comment on the likely causes and consequences of poor employee performance in the context of the business in the case study.
Chapter 16 - Human Resources Management Strategy
To-Do-List: Activity 16.4
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