the role of human resource management (HRM) in meeting organisational objectives

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2.1 HRM – Purpose, Roles and Key Functions

Learning Objective

Explain how Human Resource Management (HRM) helps an organisation meet its objectives and describe the main HRM activities required by the Cambridge 9609 syllabus.

2.1.1 Purpose & Roles of HRM

  • Cambridge definition (exact wording): HRM “helps the business meet its objectives” by ensuring that people are used effectively and efficiently.
  • Role‑map – how HRM supports the five core business functions
    Business FunctionHRM Contribution
    Production / OperationsWorkforce planning, training, health & safety – ensures the right number of skilled staff and safe working conditions.
    Marketing & SalesRecruitment of customer‑facing staff, performance‑linked rewards, morale programmes – drives service quality and brand image.
    FinanceCost‑control through redundancy, fair dismissal, remuneration structures and productivity‑linked bonuses.
    Research & Development / InnovationEmployee development, intrapreneurship programmes, reward for ideas – fosters creativity and new product development.
    Corporate Social Responsibility (CSR)Diversity & equality policies, welfare schemes, health & safety – demonstrates ethical practice and community commitment.

2.1.2 Workforce Planning

Determines the quantity and quality of staff required to achieve organisational objectives.

  1. Analyse organisational objectives (e.g., increase market share, launch a new product).
  2. Forecast demand for labour using production forecasts, sales projections, growth targets, and technology changes.
  3. Forecast supply of labour by reviewing current skill inventories, turnover rates, retirements, promotions and external labour‑market conditions.
  4. Measure labour turnover – Turnover % = (Number of leavers ÷ Average staff number) × 100.
  5. Identify gaps** (shortages or surpluses) and decide on actions: recruitment, training, redeployment, redundancy.
  6. Prepare a workforce‑plan table (example)
    DepartmentRequired staff (next 12 months)Current staffGapAction
    Production120110+10Recruit 8 (external), train 2 (internal)
    Sales4550‑5Redundancy (voluntary)
    R&D3025+5Upskill existing staff (multiskilling)
  7. Document the plan – include timelines, responsible managers and budget implications.

2.1.3 Recruitment & Selection

Ensures the organisation has the right people in the right roles.

StageKey ActivitiesTypical Tools / Examples
Job analysis Identify duties, responsibilities and required skills. Job description, person specification.
Internal vs. external recruitment Decide source of candidates; advertise internally (intranet, notice boards) or externally (job boards, agencies). Internal job posting, external advertising, recruitment agency.
Attracting applicants Design adverts, use social media, attend career fairs. Company website, LinkedIn, university career fairs.
Short‑listing Match CVs against person specification. Application forms, ATS (Applicant Tracking System).
Selection methods Testing, interviews, assessment centres, reference checks. Situational judgement tests, competency‑based interview, work‑sample tasks.
Job offer & employment contract Prepare written offer, agree terms, issue statutory contract (notice period, probation, rights). Standard contract of employment, offer letter.
Induction Introduce new employee to policies, culture and role. Induction handbook, buddy system.

2.1.4 Redundancy & Dismissal

  • Redundancy – job no longer required
    • Voluntary redundancy (incentive packages).
    • Involuntary redundancy (selection criteria, statutory consultation).
    • Legal requirements: minimum notice, redundancy pay, consultation with employees and trade unions.
    • Impact: cost savings vs. morale and employer brand.
  • Dismissal – ending employment of an individual
    • Four statutory grounds for fair dismissal (Cambridge wording):
      1. Performance (failure to meet standards).
      2. Conduct (misbehaviour).
      3. Capability (ill‑health or lack of ability).
      4. Redundancy (role no longer needed).
    • Unfair dismissal – no valid reason or failure to follow proper procedure.
    • Procedural steps: investigation, disciplinary hearing, right to appeal, written statement of reasons.
    • Potential costs: compensation, legal fees, reputational damage.

2.1.5 Morale & Welfare

High morale and good welfare increase productivity, reduce absenteeism and lower turnover.

  • Factors influencing morale
    • Job design – variety, autonomy, significance.
    • Leadership style and communication.
    • Recognition and reward.
    • Work‑life balance – flexible working, remote‑work options.
    • Diversity & equality – inclusive policies, anti‑discrimination training.
  • Welfare programmes (example)
    • Employee Assistance Programme (EAP) – free counselling, legal advice and financial guidance.
    • On‑site health club, childcare facilities, subsidised public‑transport passes.
    • Occupational health services – health screenings and ergonomic assessments.
  • Link to objectives – motivated staff are more likely to meet productivity, quality and customer‑service targets.

2.1.6 Training & Development

  1. Needs analysis – identify gaps via performance appraisals, skills audits, future‑skill forecasts or succession planning.
  2. Design & delivery
    • Induction for new staff.
    • On‑the‑job training, coaching, mentoring.
    • Off‑the‑job courses, e‑learning, workshops.
    • Leadership & management development programmes.
    • Employee development for intrapreneurship & multi‑skilling – encourages staff to generate new ideas and perform several roles.
  3. Evaluation – Kirkpatrick’s four levels (reaction, learning, behaviour, results) to measure impact on productivity, quality or innovation.
  4. Benefits to the organisation
    • Higher efficiency and reduced errors.
    • Capability to adopt new technology.
    • Improved employee satisfaction and retention.

2.1.7 Management & Workforce Relations

  • Trade‑union involvement
    • Collective bargaining – negotiation of pay rates, working hours, grievance procedures.
    • Statutory consultation on redundancies, health & safety changes and major restructures.
  • Co‑operation between management and workforce
    • Joint consultation committees (e.g., health & safety, training).
    • Benefits: reduced industrial action, shared problem‑solving, higher morale.
  • Legal framework
    • Trade Union and Labour Relations (Consolidation) Act 1992 – rights to organise and be consulted.
    • Employment Rights Act 1996 – protection against unfair dismissal, statutory redundancy pay.
  • Link to objectives – harmonious relations protect productivity, safeguard reputation and support strategic goals such as CSR and market stability.

2.1.8 Performance Management

  • Goal setting – SMART objectives (Specific, Measurable, Achievable, Relevant, Time‑bound) linked to corporate targets (e.g., profit growth, cost reduction).
  • Appraisal methods
    • Annual performance review.
    • 360‑degree feedback.
    • Management by Objectives (MBO).
  • Feedback & development – regular coaching, corrective action where needed.
  • Link to organisational objectives – ensures individual activities contribute directly to profit, quality or innovation goals.

2.1.9 Reward & Remuneration

ComponentPurposeTypical FormsLink to Objectives
Base pay Attract and retain staff. Salary scales, hourly rates. Market‑competitive wages reduce turnover and recruitment costs.
Variable pay Motivate performance. Bonuses, commission, profit‑sharing. Directly ties earnings to profit margins or sales targets.
Benefits Enhance overall package. Pensions, health insurance, childcare vouchers. Improves morale and reduces absenteeism.
Non‑monetary rewards Recognition & development. Awards, flexible working, training opportunities. Supports innovation and employee engagement.

2.1.10 Employee Relations

  • Communication channels – staff meetings, newsletters, intranet, suggestion schemes.
  • Grievance handling – informal discussion → written grievance → investigation → resolution.
  • Trade‑union liaison – collective bargaining, consultation on redundancies, health & safety.
  • Impact on objectives – good relations reduce industrial action, protect brand reputation and maintain productivity.

2.1.11 Health, Safety & Well‑being

  1. Legal framework – Health and Safety at Work Act 1974, COSHH, Equality Act 2010.
  2. Risk assessment process
    • Identify hazards, evaluate risk, implement control measures, review.
  3. Well‑being initiatives
    • Ergonomic workstations, stress‑management workshops, mental‑health days.
    • Employee Assistance Programme (EAP) – confidential counselling.
  4. Link to objectives – lower absenteeism, avoid legal penalties, improve productivity and employee satisfaction.

2.1.12 Strategic HR Planning (Linking HR to Business Strategy)

  • Integrates workforce planning, talent management and succession planning with long‑term corporate goals.
  • Tools: SWOT analysis of human capital, balanced scorecard, HR dashboards.
  • Ensures the organisation can respond to market changes, technology shifts and competitive pressures.

Core HRM Functions – Quick Reference Table

HRM FunctionKey ActivitiesContribution to Organisational Objectives
Workforce Planning Forecast demand & supply, turnover measurement, gap analysis, action plan. Provides the right numbers and skills to meet growth, quality and cost targets.
Recruitment & Selection Job analysis, internal/external sourcing, short‑listing, testing, contracts. Ensures staffing levels and competence needed for production, service standards and innovation.
Redundancy & Dismissal Selection for redundancy, statutory consultation, fair dismissal procedures. Controls labour costs while protecting legal compliance and morale.
Training & Development Needs analysis, on/off‑the‑job delivery, intrapreneurship & multi‑skilling, evaluation. Improves productivity, supports new product development and market expansion.
Performance Management SMART objectives, appraisals, feedback, corrective action. Aligns individual effort with profit, quality and customer‑service goals.
Reward & Remuneration Salary structures, bonuses, benefits, non‑monetary rewards. Motivates achievement of financial targets and retains key talent.
Employee Relations Communication, grievance handling, union liaison. Maintains a harmonious workplace, reduces conflict and protects reputation.
Health, Safety & Well‑being Risk assessments, safety training, welfare programmes. Reduces absenteeism, avoids legal penalties and boosts productivity.
Strategic HR Planning Talent management, succession planning, HR metrics. Ensures long‑term capability to achieve growth, innovation and sustainability objectives.

Typical HRM Process Cycle (Link to Objectives)

  1. Analyse organisational objectives.
  2. Carry out workforce planning → identify gaps.
  3. Recruit & select to fill gaps (internal/external).
  4. Induct and train new staff (including development for intrapreneurship).
  5. Set SMART performance targets aligned with objectives.
  6. Monitor performance, give feedback and coach.
  7. Reward achievement and manage under‑performance.
  8. Review HR outcomes against objectives and adjust the HR strategy.
Suggested diagram: A circular flowchart showing the eight steps above, with arrows feeding back to “Analyse organisational objectives”.

Summary Checklist for Students

  • Can you state the exact Cambridge definition of the purpose of HRM?
  • Do you know the twelve required sub‑topics (2.1.1‑2.1.12) and the key points for each?
  • Can you link each HRM function to at least one organisational objective (profitability, growth, quality, innovation, CSR)?
  • Are you able to sketch the HRM process cycle and explain the feedback loops?
  • Can you give a real‑world example (e.g., Google’s talent development, Tesco’s reward scheme) where HRM has driven business success?

Exam Practice Question (12 marks)

Explain how performance management can be used to help a manufacturing firm achieve its objective of increasing profit margins by 5 % over the next financial year.

Include in your answer:

  • How SMART targets are set and linked to profit‑margin goals.
  • The role of regular appraisal and feedback in identifying inefficiencies.
  • How reward systems (e.g., bonus schemes) can motivate cost‑saving behaviours.
  • Examples of corrective actions for under‑performance and how they contribute to margin improvement.

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