Human Resources: Recruitment, Training & Organisation

The purpose of the human resources function

Every business needs people to get work done. The human resources (HR) function is the part of a business responsible for managing those people, from the moment they are hired to the day they leave.

The main jobs of HR are:

Recruitment and selection — attracting and choosing the right workers for each role.
Training and development — giving employees the skills they need now and in the future.
Workforce planning — making sure the business has the right number of people, with the right skills, at the right time.
Managing performance and pay — appraisals, rewards and motivation.
Reducing the workforce — handling redundancy and dismissal fairly and legally.

Key terms

Human resources (HR): the function of a business that manages its workforce.

Workforce: all the people who work for a business.

Organisational structures

An organisational structure shows how a business arranges its people: who reports to whom, and who is responsible for what. It is usually drawn as an organisational chart.

Key ideas in any structure:

Hierarchy — the layers of management and staff, ranked by authority.
Levels of hierarchy — the number of layers from top to bottom (three in the chart above).
Chain of command — the path along which orders and communication pass down through the organisation.
Span of control — the number of people a manager is directly responsible for. The Sales Manager above has a span of control of 2.

Key terms

Chain of command: the line of authority through which instructions pass from senior managers down to other employees.

Span of control: the number of subordinates directly under the control of one manager.

Tall vs flat structures

A tall structure has many levels of hierarchy and a narrow span of control. A flat structure has few levels and a wide span of control.

Delayering means removing one or more levels of hierarchy, usually middle management. It cuts wage costs and speeds up communication, but it widens spans of control and can overload remaining managers.

Watch out

A wide span of control goes with a flat structure, and a narrow span goes with a tall structure. Mixing these up is a common exam error.

Centralised vs decentralised structures

In a centralised structure, decision-making is kept at the top by senior managers. In a decentralised structure, decision-making is shared out to lower levels or local branches.

Centralised gives consistent decisions and tight control, but is slower and ignores local knowledge.
Decentralised is faster and motivates junior staff, but decisions may be inconsistent across the business.

Recruitment and selection

Recruitment is the process of finding and attracting people to apply for a job. Selection is choosing the best applicant.

A business can recruit internally (from existing employees) or externally (from outside the business).

The recruitment process usually follows these steps:

1. Write a job description — a document listing the title, duties and responsibilities of the role.
2. Write a person specification — the skills, qualifications and qualities the ideal candidate needs.
3. Advertise the vacancy.
4. Applicants send a CV (curriculum vitae) and/or an application form.
5. Shortlist and interview candidates.
6. Make an offer to the best applicant.

Key terms

Job description: a document setting out the title, duties and responsibilities of a job.

Person specification: a document describing the qualifications, skills and qualities needed by the ideal candidate.

Exam tip

Do not confuse the two documents: a job description is about the job; a person specification is about the person. A quick way to remember is "the job describes itself; the person is specified."

Types of training

Training is giving employees the knowledge and skills to do their jobs well. There are three main types you must know.

Worked example

A supermarket hires ten new shelf-stackers for the summer. On their first day they have an induction to learn fire exits and rules. They then learn to use the till by serving real customers alongside a supervisor — this is on-the-job training. One worker is sent to a college course in food-hygiene law, which is off-the-job training.

Types of working and flexible working

Businesses use different working arrangements to match the work available.

Full-time — usually around 35+ hours a week.
Part-time — fewer hours than full-time, useful for covering busy periods.
Temporary — employed for a fixed, short period only, e.g. seasonal work.
Freelance (self-employed) — paid per task or project; not a permanent employee, so cheaper when work is irregular.

Flexible working lets staff vary when or where they work. Examples include flexitime (choosing start and finish times), home/remote working, and job sharing. Flexibility can improve motivation and help retain staff, but can make supervision and teamwork harder.

Real world

Many delivery and ride-hailing apps use freelance drivers rather than full-time employees. The business avoids paying for idle hours, while drivers gain flexible hours but lose job security and paid holidays.

Ways of reducing the workforce

Sometimes a business needs fewer workers. There are two key methods.

Redundancy — a worker loses their job because the job itself is no longer needed, for example after a fall in sales or new machinery replacing them. It is not the worker's fault, and they are usually entitled to redundancy pay.
Dismissal — a worker is sacked because of their own behaviour or performance, for example poor work, lateness or breaking company rules.

Watch out

Redundancy is about the job disappearing; dismissal is about the person's conduct or performance. Examiners expect you to explain why a worker leaves, not just name the term.

Exam tip

When asked to recommend a structure or training method, do not just list points. Apply them to the business in the case study (its size, costs and type of work) and give a justified judgement to reach the top marks.