Unit 2 Key terms - Human Resource Management

It is through the correct use of subject terminology that students show their knowledge and understanding. Human resource management (HRM) is about the personnel of an organization. This topic covers a range of content regarding the people of an organization, such as recruitment, training, motivation and management or leadership. Human resources (employees, managers, executives and entrepreneurs) are vital to the success of an organization, yet human resource management is one of the most difficult and challenging roles for any manager or leader.

The topics in this section of the IB Business Management syllabus can be looked at through the six CUEGIS concepts of change, culture, ethics, globalization, innovation and strategy.

Unit 2.1 Key terms - Functions and evolution of human resource management

360-degree appraisal	A type of appraisal system that provides feedback from a range of people who work with or interact with the appraisee, such as their line manager, co-workers, subordinates and even customers.
Ageing population	A higher average age of the population.
Appraisal	Also known as a performance review, this is the formal procedure of assessing the performance and effectiveness of an employee, in relation to his/her job description.
Behavioural training	Type of training that focuses on developing the interpersonal and intrapersonal skills of workers.
Cognitive training	Method of training that focuses on improving an employee’s thinking skills in order to improve their performance and effectiveness in the workplace.
Demography	The study of population trends.
Dismissal	The employer’s decision to terminate a worker’s employment contract, usually due to the worker’s incompetence and/or a breach of their employment contract.
External factors	The issues or factors that are beyond the control of the organization, e.g. minimum wage legislation.
Flexitime	A form of flexible work practice that enables employees to work a set number of core hours each week, often at the office during peak periods of the day and/or week.
Formative appraisals	Type of appraisal that takes place on a continual basis in order to allow workers to improve their performance and effectiveness.
Geographical mobility	The ability and willingness of employees to relocate to another location or country for work reasons.
Human resource management	HRM is a broad term used to describe the overall management of an organization's workforce, such as attracting, selecting, training, assessing, rewarding and retaining workers.
Induction	Type of training intended for new employees in order to help them acclimatise with the people, policies and processes of the organization.
Internal factors	The issues or features that are within the control of the organization, such as staff remuneration and approaches to training.
Job analysis	The process of examining what a particular job involves, thereby enabling the Human Resources department to determine the roles, tasks, duties, responsibilities and skills required to do the job.
Job description	Document containing the particulars of a job, such as the job title, roles and responsibilities, and other duties.
Job evaluation	An appraisal of the value of a job in relation to other jobs in the organization, so that the remuneration and other rewards can be determined in an objective, transparent and fair manner.
Labour mobility	Measures the extent to which workers have the ability and willingness to move between geographical locations and/or occupations for their employment.
Labour turnover	The amount of people who leave an organization, expressed as a percentage of the workforce, per time period (usually one year).
Mentoring	The training process of pairing, or attaching, an employee (the trainee or mentee) with a more experienced colleague (the mentor) who acts as a coach, trainer or advisor.
Migrant workers	People who move to other countries in search of better job opportunities.
Occupational mobility	The ability and willingness of employees to do another job or pursue a different career.
Off the job training	Type of training led by external specialists and takes place away from the place of work.
Offshoring	This activity happens when an organization relocates some of its operations overseas, usually due to cost advantages.
On the job training	Type of training that takes place within the organization, so employee are performing tasks at the place of work.
Outsourcing	Also known as subcontracting, this is the use of external (third-party) personnel for certain non-core business operations.
Person specification	Document containing details of the attributes and qualities of the ideal person for a particular job, such as preferred qualifications, experiences, knowledge, skills, and personality.
Promotion	The career advancement of an employee in terms of their hierarchical ranking and professional responsibilities.
Recruitment	The process of hiring a suitable worker. This would typically involve a thorough job analysis in order to attract suitable candidates and then to selecting (hiring) the one(s) most suited to the job.
Recruitment process	A major and vital aspect of human resource management, this refers to the procedures involved in the hiring of the right employees, with the right aptitudes and attitudes.
Redundancy	Occurs when an organization no longer has a job for the employer or when the employer can no longer afford to hire the employee, i.e. the job ceases to exist.
Re-shoring	The opposite of offshoring, as it is the process of bringing back business operations, such as manufacturing, that were previously offshored.
Retention	The opposite of labour turnover, this measures the ability of an organization to keep its employees at the firm.
Self-appraisal	A type of appraisal system that involves the individual employee reflecting on and rating his/her own performance against the pre-agreed standards.
Shortlisting	The process of employers selecting the most suitable applicants and inviting them for a job interview.
Summative appraisals	Type of appraisal conducted periodically or at the end of a task or project, so includes an element of making a judgment about whether the appraisee has passed the agreed standards.
Teleworking	Flexible working practice that involves employees being away from the office as they rely on the use of telecommunications technologies, such as internet and mobile technologies.
Training	This is the provision of work-related education, either on-the-job or off-the-job.
Training	The process of instructing and teaching (or mentoring) employees how to perform certain tasks in their job.
Workforce planning	Also known as human resource planning, this refers to the ongoing process through which the current and future human resource needs of a business are identified and anticipated.

text

Unit 2.2 Key terms - Organizational structure

Bureaucracy	The administrative systems within an organization, such as the formal policies and procedures of the business. It includes the formal rules, regulations and procedures of the organization.
Centralization	The situation where decision-making is predominantly made by a very small group of senior managers at the top of the organizational hierarchy.
Chain of command	The formal lines of authority in an organization. It can be seen via an organizational chart, which shows the formal path through which commands and decisions are communicated from senior managers to subordinates.
Communication	The transfer of information from one entity to another. It is vital to how a business operates.
Culture	Concept referring to the norms, attitudes, values, goals, and practices that characterises an organization, a country or a region of the world.
Decentralization	The situation in an organization where decision-making authority is delegated throughout, rather from a central authoritative group.
De-layering	This occurs when an organization removes one or more layers in its hierarchical structure, i.e. the number of layers of management is reduced, or made flatter.
Delegation	The act of line managers entrusting and empowering employees with authority to successfully complete a particular task, project or job role.
Flat organization	Also known as a horizontal structure, this type of organizational structure has only a few layers of management.
Flat structure	Type of organizational structure that has few levels in the organizational hierarchy.
Hierarchical	A type of organizational structure that is tall/vertical, with many levels in terms of ranks.
Innovation	Concept referring to the process of creating a product (good or service) that is new, better and of commercial value.
Invention	Part of the process of innovation that involves creating a product that is completely new to the market.
Iteration	Part of the process of innovation that involves creating a change / improvement in a product that already exists.
Levels of hierarchy	The number of layers of formal authority in an organization. It is represented in an organizational chart.
Managers	People responsible for the day-to-day running of the business or a department within the business.
Organization by function	Structuring a workforce according to business functions, i.e. specialised roles or tasks.
Organization by product	Structuring a workforce according to the goods or services sold. Each department focuses on a different product within the organization’s overall product portfolio.
Organization by region	Structuring a workforce according to different geographical areas based on where the firm’s operations are.
Organizational chart	A diagrammatic representation of an organization’s formal organizational structure.
Organizational structure	The formal interrelationships and hierarchical arrangements within a firm.
Outsourced workers	Also known as outsourced vendors or the contractual fringe, these are the individuals or other organizations hired on a contract basis to carry out a specific but non-core role in Charles Handy’s Shamrock organization.
Peripheral workers	According to Charles Handy, these are the contingent workers, consisting of part-time and temporary staff hired by the organization.
Professional core	According to Charles Handy, these are the core workers consisting of full-time specialists who are vital for the organization’s operations and survival.
Project-based organization	Also known as a matrix structure, this flexible organizational structure is based on the specific needs of a particular short-term or temporary project.
Shamrock organization	Type of flexible organizational structure, coined by Charles Handy, advocating that organizations must adapt to changes in the business environment by having a core workforce, contingent workforce and outsourced vendors.
Span of control	Refers to how many workers are directly accountable to (or under the authority of) a particular line manager.
Tall organization	Also known as a vertical structure, this type of organizational structure has many layers in the organizational hierarchy.
Tall structure	Type of organizational structure that has many levels of hierarchy, so the span of control is likely to be narrow.

text

Unit 2.3 Key terms - Leadership and Management

Autocratic management	Management style that involves centralised and autonomous decision-making, without input from others in the organization.
Democratic management	Management style that actively involves the participation of employees in the decision-making process.
Laissez-faire leadership	A hands-off approach to leadership by devolving decision-making power to the workforce.
Leadership	The art of inspiring and motivating other people towards achieving a common organizational aim or vision.
Leadership style	Refers to the way in which managers and leaders provide direction for others.
Management	The art of getting things done through others by setting clear objectives and organising organizational resources.
Manager	Someone with decision-making authority in an organization and has responsibility for problem-solving in order to achieve specific organizational goals.
Paternalistic management	Management style that involves treating workers as family members, so managers make decisions believed to be in the best interest of the workforce.
Situational leadership	Leadership style that requires leaders to change and adapt their approach in response to different situations and circumstances.
SMART objectives	Peter Drucker’s framework for setting organizational objectives, which must be specific, measureable, achievable, realistic, and timely.

text

Unit 2.4 Key terms - Motivation

Commission	Type of financial payment system that rewards workers a certain percentage of the sales of each good or service that they are responsible for completing.
Differentiated piece rate	Financial payment system advocated by F.W. Taylor to reward workers based on the level of their output or productivity.
Employee share ownership scheme	Type of financial payment system that involves giving workers shares in the company they work for, either free of charge or at a discounted price.
Empowerment	The delegation of decision-making power to workers, granting them the autonomy and authority to be in charge of their own jobs and to execute their own ideas.
Equity theory	John Stacey Adams’ theory of motivation suggests that people make social comparisons of fairness in the workplace (based on the ratio of their input (effort) to output (rewards).
Esteem needs	In A. Maslow’s hierarchy of needs, this refers to the desire of people to feel respected, having value and having self-respect.
Fringe benefits	Also known as perks, these are financial benefits of a job in excess of the basic pay (wage or salary).
Gratuity pay	Financial reward for long-term service or for the completion of a fixed-term contract.
Hierarchy of needs	A. Maslow’s theory of motivation that people are motivated by different levels of needs: physiological, safety, social (love and beginning), esteem and self-actualization.
Hygiene factors	Also known as maintenance factors, these are the factors that F. Herzberg argued cause dissatisfaction in the workplace (rather than motivation), so must be addressed.
Job enlargement	A type of non-financial motivation that takes place when more tasks or activities are added to a worker’s job description.
Job enrichment	Type of non-financial reward, involving enhancing the experiences of workers, giving workers a wide range of challenging tasks and more responsibility at work.
Job rotation	Type of non-financial motivation that involves workers switching between jobs (tasks) for a period of time.
Job security	The assurance given to employees that they will keep their current job for the foreseeable future, usually stated in an employment contract.
Motivation	The intrinsic desire to do something, which exists when workers do something because they actually want to, rather than because they have to.
Motivators	Also referred to as growth factors, these factors address the higher level needs in Herzberg’s motivation theory and are based around the job itself, such as achievement, purpose, and responsibility.
National minimum wage (NMW)	The lowest hourly pay, as stipulated by the law, that employers can remunerate their workers.
Performance-related pay (PRP)	Type of financial payment system used to pay people a bonus for reaching or exceeding a set target.
Physiological needs	Also known as basic needs, these are the requirements for human survival in Maslow’s hierarchy of needs.
Piece rate payment systems	Financial reward that pays workers based on their output or productivity, e.g. $8 per unit of output.
Profit-related pay	Type of financial reward system which remunerates workers a certain percentage of the annual profits that the business earns.
Purpose	An intrinsic, non-financial type of motivation involving people doing genuinely meaningful work, making a difference on a personal, professional or social level.
Remuneration	The overall financial package of a person. Examples include salaries, commission, profit-related pay, performance-related pay, share ownership schemes, and fringe benefits.
Safety needs	Also known as security needs, these are the requirements in Maslow’s hierarchy of needs that make people feel safe, such as job security.
Salary	Type of financial payment that rewards workers a fixed annual amount of money, but paid in monthly instalments.
Scientific Management	F.W. Taylor’s theory of motivation, that people are, above all things, motivated by higher wages. Hence, there is one best way to motivate these employees.
Self-actualisation	This is the highest level of needs in A. Maslow’s hierarchy of needs, which occurs when people become the very best that they can be and fulfil their potential.
Social needs	Also known as love and belonging needs, this refers to the requirements in Maslow’s hierarchy of needs about being accepted by others.
Teamwork	A form of non-financial motivation, involving the combined efforts of a group of workers to achieve of an organizational goal.
Time-based payment systems	Financial reward system that pays workers based on their time input in the production process, e.g. $10 per hour.
Wages	Type of financial reward payment system based on time or output. Wages are paid as time rate (hours) or piece rate (output).

text

Unit 2.5 Key terms - Organizational (corporate) culture (HL Only)

Corporate culture (organizational culture)	Refers to an organization’s set of core values and beliefs, which shape the firm’s attitudes, behaviour and norms.
Culture clash	A situation that exists when two or more cultures exist within the same organization, with wide-ranging differences in the values held by different individuals, thereby causing internal conflict.
Culture gap	The difference between an organization’s desired culture and its actual culture.
Person culture	One of Charles Handy’s types of culture, where people regard themselves or their skills set as being more important than the organization itself.
Power culture	One of Charles Handy’s types of culture, where an individual (such as the founder or a figurehead), or a small group of senior staff, makes decisions for the organization.
Role culture	One of Charles Handy’s types of culture, where operations and organizational norms are underpinned by formal and hierarchical structures, and clear policies and procedures.
Task culture	One of Charles Handy’s types of culture, involving teams of experts who are empowered to complete a project or tackle a problem with their particular skills.
Values	The organization’s beliefs and moral standards, which form an essential part of its organizational culture.
Vision	The overall purpose of an organization’s existence, which forms a major element of its corporate culture.

text

Unit 2.6 Key terms - Industrial / employee relations (HL Only)

Arbitration	This is an extension of conciliation, but involves using an independent arbitrator who decides on the most appropriate outcome after considering the demands of both parties in the conflict situation.
Change management	Refers to processes and techniques used to plan, implement and evaluate changes in business operations.
Closure	This occurs when employers temporarily shuts the business in response to extreme industrial action of its employee (such as strike action).
Collective bargaining	The process of negotiation of working conditions and pay between employer and employees, or their representatives (such as a trade union and a senior management team).
Conciliation	This is the process of using a mediator to help facilitate negotiations during the conflict resolution process.
Conflict	This is a situation of friction or mutually exclusive goals between two or more parties, because the needs and interests of workers are ignored or because the organization cannot meet the needs of all its stakeholders at the same time.
Employee participation	This means that workers are given responsibilities and autonomy to do their jobs.
Employee representatives	The individuals or groups of individuals who are elected to act on behalf of their worker members. For example, trade unions represent their members in the negotiation process with employer representatives.
Employer representatives	Refers to a group of individuals or members of an organization that represent the interests of the business in the collective bargaining process.
Industrial democracy	This refers to the involvement of employees in the decision-making process, as their views are important in considering the strategic direction of the organization.
Lock-out	This occurs when, during an industrial dispute, employers shut out their employees. Locks may be changed and/or added security is used to prevent employees from entering the workplace.
No-strike agreement	This is a promise from the employee representatives that its members will use resort to strike action as a method of industrial action.
Overtime ban	This form of industrial action involves the directive from employee representatives to their members to refuse working beyond their contracted hours.
Redundancies	Also known as layoffs, this form of action taken by employers involved cutting back on its staffing, as certain job roles are no longer required
Self-interest	This occurs when employees place their own interests above those of the organization.
Single-union agreement	The arrangement whereby the employer’s representative conducts negotiations with one main trade union, rather than several subordinate ones.
Slowdown	Also known as a go-slow, this occurs when employees deliberately work at the slowest pace allowable, in order to minimise efficiency and productivity.
Strike action	This extreme form of industrial involves an outright refusal by employees to work, for a certain time period, thereby preventing the organization from continuing to operate. The aim is to pressure the employer to meet the workers’ demands.
Trade union	Also known as a labour union, this form of employee representative is set up to serve and protect the interests of its worker members. Its primary role is to uphold and improve the welfare of its members.
Work-to-rule	The form of industrial action involves all employees being instructed by their representatives to follow all the rules, regulations and policies of the organization, word for word.

text

Click the link here to access resources for the Unit 2 Human resource management homepage.

Click the link here to return to the Key Terms Index page.

IBDP Business Management - Student pages

INTHINKING REVISION SITES

www.StudyIB.net

Unit 2 Key terms - Human Resource Management

Unit 2 Key terms - Human Resource Management

Unit 2.1 Key terms - Functions and evolution of human resource management

Unit 2.2 Key terms - Organizational structure

Unit 2.3 Key terms - Leadership and Management

Unit 2.4 Key terms - Motivation

Unit 2.5 Key terms - Organizational (corporate) culture (HL Only)

Unit 2.6 Key terms - Industrial / employee relations (HL Only)