How do businesses set human-resource goals and structure their people?
Human-resource objectives, the design of organisational structure including tall and flat structures, span of control, chain of command, centralisation and decentralisation, and the calculation and interpretation of labour productivity, labour turnover and absenteeism.
A focused answer to the OCR A-Level Business human-resources theme on objectives and structure, covering HR objectives, tall and flat structures, span of control, chain of command, centralisation and decentralisation, and the calculation of labour productivity, turnover and absenteeism.
Reviewed by: AI editorial process; not yet individually human-reviewed
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What this theme is asking
OCR wants you to explain the goals of the human-resource function, how a firm structures its people, and how to measure workforce performance through labour productivity, turnover and absenteeism. These are calculation skills that appear in Components 1 and 2.
HR objectives
HR objectives are shaped by internal factors (the firm's corporate objectives, its finances, its style of management) and external factors (the labour market, employment law, technology). A firm pursuing cost leadership sets HR objectives around productivity and flexibility; a firm competing on service sets them around skills and engagement.
Organisational structure
Two key terms: the span of control is the number of subordinates directly reporting to a manager (wide in a flat structure, narrow in a tall one); the chain of command is the line of authority down which instructions pass. As firms grow they often face the choice of adding layers (more control) or staying flat (more speed).
Centralisation and decentralisation
The right balance depends on the firm: a fast-food chain centralises to keep every outlet consistent, while a creative agency decentralises to let teams respond to clients. Many firms centralise strategy while decentralising day-to-day decisions.
Measuring the workforce
Rising productivity lowers labour cost per unit. High turnover raises recruitment and training costs and disrupts work, signalling possible problems with pay, management or morale (though some turnover is healthy). High absenteeism disrupts output and signals low engagement or poor conditions. All three are read against a benchmark (the firm's past or the industry norm).
Examples in context
Tech start-ups often run flat, decentralised structures to move fast and empower small teams. A supermarket chain runs a taller, more centralised structure to keep thousands of stores consistent. A call centre with high labour turnover and absenteeism faces large recurring recruitment costs, which is why such firms invest in pay, conditions and engagement to bring the rates down.
Try this
Q1. State what is meant by the span of control. [1 mark]
- Cue. The number of subordinates who report directly to a manager.
Q2. Analyse one benefit to a firm of decentralising decision-making. [6 marks]
- Cue. Delegating decisions speeds them up, uses local knowledge and can motivate staff, developed as a chain in context.
Exam-style practice questions
Practice questions written in the style of OCR exam questions on this dot point, with worked answer explainers. The year tag is the paper they imitate, not the source.
OCR H431/01 20204 marksA firm has employees who left during the year out of an average of staff. Calculate the labour turnover rate. (4)Show worked answer →
A Component 1 calculation rewarding the formula, working and units. Labour turnover . Markers reward the correct formula, substitution and percentage. A strong answer comments: a 15% turnover rate means roughly one in seven staff left, which may be normal for the sector or a warning sign of low morale, depending on the benchmark, and high turnover raises recruitment and training costs. The common error is to divide leavers by the year-end headcount rather than the average.
OCR H431/02 202212 marksAssess whether a growing UK business should move from a tall to a flat organisational structure. (12)Show worked answer →
A 12-mark "Assess" on a four-level grid. For a flat structure: fewer layers widen spans of control, speed up communication and decision-making, cut management cost, and can empower and motivate staff through delegation. Chain: removing layers shortens the chain of command, so decisions and information move faster, helping the firm respond to change. Against: wider spans can overstretch managers, weaken control and supervision, and remove promotion rungs that motivate staff. Evaluation: the right structure depends on the firm's size, the nature of the work (routine work may need tighter control) and the capability of staff to work with more autonomy. A judged conclusion, weighing speed and cost against control and supervision, reaches the top band.
Related dot points
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Sources & how we know this
- OCR A-Level Business (H431) specification — OCR (2015)