Setting Human Resource Objectives

The Value of Setting Human Resource Objectives

Setting objectives enables the business to plan and then allocate resources.

With human resource management, many decisions take time to action. For example, an increase in the labour force requires a recruitment and selection process, followed by induction and training.

The key outcomes for good human resource management are:

  1. Reduced costs, through higher productivity, increased efficiency and better quality production.
  2. Greater value added, thus increasing profit margins. This can be the result of better quality products, good customer service and innovation based on the performance and motivation of the workforce.
  3. Better retention of a skilled workforce.

__ Human resource objectives include:__

  1. Employee engagement and involvement: Businesses value the contribution of their workforce engaged in operating and executing the various functions of the business. The more they can engage with their work, the more likely they are to find better ways to work for the benefit of the business.
  2. Talent development: The workforce is a source of innovation, invention and organisation. Some will be particularly able to advance the business, and should be nurtured and encouraged.
  3. Training: Better training can reduce costs, improve productivity, motivate the workforce and retain their services.
  4. Diversity: A diverse workforce recognises that everyone can make a contribution and that no one should be disadvantaged due to their background, beliefs, physical or mental attributes.
  5. Alignment of values: The more that the workforce can understand the underlying purpose of the business, the quicker and more efficiently decisions will be implemented.
  6. Number, skills and location of employees: The workforce needs to match the requirements of the business to operate effectively. The HR department must plan to match those needs.

Internal and External Influences on Human Resource Objectives and Decisions

Internal Influences

  1. __Production planning __– what needs to be produced, when, where and then crucially, by whom.
  2. __Marketing planning __– how it needs to be produced, the quality and who’s needed to market it.
  3. __Finances available __– what cash is available to recruit and train the workforce.
  4. Current workforce numbers, skills and location.

External Influences

  1. Available labour force – for example, the impact of Brexit.
  2. Government legislation – changes in minimum wages or workplace practices.
  3. Changes in technology – new machinery or equipment that can replace some jobs or enhance others.

Soft and Hard Human Resource Management (HRM) Approaches

Most HR managers will adopt an approach ranging from “soft” to “hard” to deal with different situations.

Hard approach

  1. Workers are a resource.
  2. Adjust the workforce to meet the business needs, rather than adjust the business to work with the strengths of the workforce.
  3. Recruit and train workers to fit the business.
  4. Cost first focus.

Soft approach

  1. Workers are the key to the business’s success.
  2. Build the business around the skills of the workers.
  3. Encourage the development of the workforce to create a competitive advantage.
Autocratic leadershipDemocratic leadership
Hard pay bargainingPerformance related pay
High labour turnoverMore delegation, empowerment
Short term workforce planningLong term planning
Tall organisational structureFlat organisational structure

The approach depends on:

  1. Skills of the managers and their confidence to manage.
  2. The nature of the product.
  3. The financial situation of the business (tough times might need a tough approach to cut costs).
  4. A low skilled workforce or highly skilled.


Autocratic leadershipThe leader has control over all the business decisions.
DelegationGiving decision making powers to subordinates (workers).
Democratic leadershipThe leader asks for and respects the decisions from the workforce.
EmpowermentDelegating power to employees so they can make their own decisions.
Flat organisational structureLots of workers, not many levels of management.
Hard human resource managementThe workers are one of many assets in a business, and hired and fired depending on the current needs of the business.
InductionSpecific training at the start of new job.
Labour turnoverHow many workers leave over a time period as a percentage of the whole workforce.
Soft human resource managementWorkers are the key asset in the business and need to be nurtured.
Tall organisational structureLots of levels of management, with only a few workers under each manager.
Value addedIncreasing the value of a product so that someone is prepared to pay more for it.
Recognising that everyone can make a contribution and should be disadvantaged due to their background, beliefs, physical or mental attributes is an example of what?
Alignment of what helps a business make quicker and more efficient decisions, because the workforce understands the underlying purpose of the business.
In a low-cost manufacturing process, with a high staff turnover, what’s the most likely approach to HRM? Hard or soft?
Exam Style QuestionsExplain why a business like Google might benefit from a soft human resource approach. [6 marks]
Your answer should include: added / value / motivation / productivity / quality
Explanation: This is a 6 mark question. You would spend around 6 minutes in the exam on this. You should make two key points and then apply them to this particular business. For these questions, make a point, explain why it's relevant to this question, then explain the business studies behind it. Make sure you define all the terms too. In this question, consider the quality of the product, ideas from the staff and motivation.

Centralisation and Decentralisation

  1. Centralised: An organisational structure where authority rests with senior management at the centre of the business.
  2. Decentralised: An organisational structure where authority is delegated further down the hierarchy, away from the centre.

Advantages - Centralised

  1. The centralisation of power enables quicker decision-making. It also maintains consistency of practice in a business.

Advantages - Decentralised

  1. Delegation enables more managers to gain greater levels of responsibility, therefore, linking into Maslow’s self-esteem needs and Herzberg’s satisfiers.
  2. Decentralisation enables senior managers to concentrate on their part of the business.

The design is influenced by:

  1. Views of management
  2. Communication systems
  3. The industry
  4. Traditions of the workplace
  5. Skills in the workplace