3.6 Decision making to improve human resource performance

Students should consider the following throughout this section of the specification:

  • how developments in technology are affecting decision making and activities in relation to human resources (eg changing the nature of work, the skills that are required and ways of working such as tele-working)
  • ethical and environmental influences on human resources decisions
  • market conditions (including the labour market) and competition
  • how human resource decisions help improve the competitiveness of a business
  • the interrelationship between human resource decisions and other functions.

Setting human resource objectives


Additional information

The value of setting human resource objectives

Human resource objectives include:

  • employee engagement and involvement
  • talent development
  • training
  • diversity
  • alignment of values
  • number, skills and location of employees.

Internal and external influences on human resource objectives and decisions

Influences on human resource objectives such as soft and hard Human Resource Management (HRM) approaches.

Analysing human resource performance


Additional information

Calculating and interpreting human resource data

Students should be able to calculate and interpret:

  • labour turnover and retention rates
  • labour productivity
  • employee costs as percentage of turnover
  • labour cost per unit.

The use of data for human resource decision making and planning


Making human resource decisions: improving organisational design and managing the human resource flow


Additional information

Influences on job design

Job design to include Hackman and Oldham’s model.

Influences on organisational design

Decisions relating to organisational design include:

  • authority
  • span
  • hierarchy
  • delegation
  • centralisation and decentralisation.

Influences on delegation, centralisation and decentralisation


The value of changing job and organisational design


How managing the human resource flow helps meet human resource objectives

Human resource flow to include:

  • human resource plan
  • recruitment
  • training
  • redeployment
  • redundancy.

Making human resource decisions: improving motivation and engagement


Additional information

The benefits of motivated and engaged employees

Theories of motivation should include Taylor, Maslow and Herzberg.

How to improve employee engagement and motivation

Financial methods of motivation should include:
  • piece rate
  • commission
  • salary schemes
  • performance-related pay.

The value of theories of motivation


The use of financial methods of motivation


The use of non-financial methods of motivating employees


Influences on the choice and assessment of the effectiveness of financial and non-financial reward systems


Making human resource decisions: improving employer-employee relations


Additional information

Influences on the extent and methods of employee involvement in decision making

Employee representation methods to include trade unions and works councils.

How to manage and improve  employer-employee communications and relations


Value of good employer-employee relations