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Employment relations

Asked by Breathe000 | Jun 21, 2007 | GCSE Level > Economics > Homework
Breathe000 asks:

My question is:
Outline the external factors that affect each stakeholder in the employment relations process.

etutor answers:

I am far from clear what is being asked here. Is it an identification of principal company stakeholders (managers, employees, customers, etc), many of whom are not involved directly in employment relations? The reference to 'external factors' is also unclear - are you talking about, say, the effect of changes in macro-economic policy or in employment law on management or recruitment practices? I am guessing that you are probably trying to focus upon the different types of HRH, which I have nbriefly explained below. If, however, it is something else you are asking, then you'll need to put in another, much more specific question.

Human Resource Management (HRM) is the management of people in the workplace with a view to helping the firm achieve its corporate objectives. Its aim is to make the most efficient use of the firm's employees, and is usually focuses above all else on policies relating to recruitment, pay and appraisal. It replaced 'personnel management' in many firms in the 1980s, and stresses that employees represent a firm's most vital resource. It sees all the activities of workforce planning, recruitment, selection, training, appraisal, monitoring performance, pay and promotion as LINKED, and integrated with all other areas and functions of the business. Hence the benefit is that it is PROACTIVE rather than reactive, STRATEGIC rather than tactical. Hence it leads policies in other areas of the business, and stresses the importance of involving employees in decision-making. There are normally a clear focus upon INDIVIDUAL contracts, and payment and reward systems. It is also characterised by DEVOLUTION of recruitment, selection and training to departmental managers.

A distinction can be made between 'hard' and 'soft' HRM. The hard approach aims to use employees as efficiently as possible, and focuses upon monitoring, controlling and directing them. It is associated with authoritarian styles of management, and is usually highly centralised. By contrast, the soft approach sees employees as valuable assets to be developed - their skills and expertise represent a major potential competitive advantage for the business and are thus vital in achieving its strategic objectives. It is associated with a democratic management style, with an emphasis upon delegration and decentralisation. High levels of employee participation are encouraged - opinions are valued, while employees also have an input into decision-making. The soft approach has found favour in a growing number of firms, not least because increasingly educated and skilled workers increasingly expect to be more involved in decisions.

The benefits of a successful HRM strategy are a more motivated and committed workforce, who contribute more ideas and show greater loyalty. These factors in turn lead to lower labour turnover, less absenteeism and greater productivity.

I hope this helps.

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