Recommend changes the Human Resources Director could make to DLR's human resource strategy. Justify your recommendation.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2018). The mark or mark type is shown in brackets.

1. [Examiner note] If only current problems are explained then limit to L1 AN & EVAL.
2. [Knowledge] Definition of soft/hard HRM; soft HRM is an approach to human resource management that involves employees in decision making and allows employees greater control over their working lives.
3. [Knowledge] Reference to possible elements of a different approach that the HR director might recommend e.g. Increasing pay
4. [Knowledge] More democratic approach to managing employees
5. [Knowledge] MBO
6. [Knowledge] More decentralised organisational structure
7. [Knowledge] Greater delegation
8. [Application] Identification of aspect(s) of current HR strategy can be awarded L1 APP e.g. hard HRM, centralised structure, no employee involvement in decisions, etc.
9. [Application] Taking a hard approach was part of DLR's low cost strategy. Employees are paid $1600 less than the industry average. With 210 staff per holiday park and 5 holiday parks this is a significant saving.
10. [Application] Customer satisfaction ratings were poor in 2016.
11. [Application] As Mercy comments to achieve DLR's objectives 'we must develop their [employee] potential and involve them in the business'
12. [Application] Currently DLR only spends 37.5% of the industry average on training and development.
13. [Application] Currently labour turnover at 31% is above the industry average.
14. [Application] Increase pay to minimum annual full-time salary of $8500 – an increase of 11.8%.
15. [Application] Increasing pay to the industry average would be an increase of 21.1%.
16. [Application] Additional cost of increasing training expenditure to the industry average would be $52 500.
17. [Analysis] A soft approach may encourage a more flexible and adaptable workforce therefore improving customer service.
18. [Analysis] The poor customer satisfaction ratings could be linked to a dissatisfied workforce with little commitment to the brand therefore reducing repeat custom.
19. [Analysis] Reference may be made to theorists such as Maslow and Herzberg as providing support for democratic management
20. [Analysis] Higher investment in training and development of employees will increase their productiveness and effectiveness. However, the
21. [Analysis] The approach may reduce the costs of labour turnover and encourage lower rates of absenteeism. This may impact on customer service.
22. [Analysis] Reducing labour turnover will reduce costs of DLR – this is important as the business competes on price.
23. [Analysis] Increasing pay may increase employee motivation and therefore reduce labour turnover.
24. [Analysis] More permanent full-time contracts – to increase employee loyalty
25. [Analysis] Analysis of current HR issues / policies at DLR
26. [Evaluation] Clear recommendation of a change(s) that is supported through showing benefit to DLR should be awarded L1 EVAL
27. [Evaluation] Modernisation of the holiday parks will be insufficient to win customers long term. The customer experience also depends significantly on the way employees interact with them. Therefore, it is essential to make improvement to employee training and encourage greater commitment to the DLR. A softer HR approach should facilitate this.
28. [Evaluation] However, this approach will not suit all employees and there will be a substantial cost involved. Opposition to culture change will be a major restraining force that Mercy will have to overcome.
29. [Evaluation] HR director may not have the authority to change leadership style / structure and could only recommend changes to the Board of Directors
30. [Evaluation] DLR will have to comply with changes to the minimum wage in 2019. HR have no choice in that decision.
31. [Evaluation] Other valid suggestions should be rewarded