In teaching finance, statistics and information systems over the past twenty years, we have often discerned a considerable fear among students of these subjects. It is probably not an exaggeration to say that this fear has been the greatest among those studying personnel and human resources. A career path here often attracts those who regard highly the 'people skills' such as communication, problem-solving, mentoring, training and teamworking. Those are the subject areas, together with the practicalities of such areas as recruitment, selection, performance management and employee relations, that they enjoy studying and where they wish to enhance their knowledge and learning. The ability to understand and operate within the fields of finance, statistics and information systems is not likely to be top of their priorities.
In the real world, however, these subjects cannot be avoided. Every day, in every organization, managers and supervisors are faced with a barrage of data from a variety of sources that affects the way they operate. Human resource (HR) professionals are no exception. Statistics on employee turnover and absenteeism and budget information on recruitment and pay are part of the regular routine of key information that can influence decision-making in the HR department. But it goes much deeper than this. Most of the activity that human resource professionals perform arises from decisions taken on the basis of information gathered within and outside the organization. Here are a few examples:
• The monthly key operational data show that the business has expanded to the point where
another manufacturing unit or branch outlet needs to be set up in the next six months.
There will be a key role for the HR department in the staffing and initial operation of this
unit or branch.
• Financial data show that the demand and profitability for a particular product has fallen
off very quickly in recent weeks, so the strong likelihood is that the product will be dis
continued. The HR department will need to prepare for a redundancy situation.
• The logistics performance data indicate that outsourcing parts or all of this department is
a strong possibility. The HR department will be involved in the communication with staff
and the contractual changes that will arise out of Transfer of Undertakings (Protection of
Employment) Regulations (TUPE).
• Data from the organization's new strategic plan will need to be cascaded down the organ
ization to form objectives for teams and individuals as part of the performance manage
ment system. The HR department will need to work with senior managers to carry out the
required revisions and to use this as an opportunity to introduce new performance man
• The retail prices index, published by the government, influence the decision on the level of
pay increases that the organization will implement. The HR department needs to follow the
trends carefully so they are prepared for some of the implications on pay and benefits.
These examples show that it is essential for all HR practitioners to have a good grasp of information and its sources. They need to know how accounts are put together and projects are costed, how statistics are collected and analysed, and some basic principles of the concepts and applications of information systems, including designing systems and processing data. The book is designed in the following way:
Part One Finance: Chapters 1-9
After a general introduction to the subject of finance, Chapters 2-4 deal with the construction of financial information, including profit and loss accounts and balance sheets, and how they can be interpreted. Chapters 5-7 cover budgeting, costing and investment appraisal. A more detailed guide to these chapters is given in Chapter 1. Chapter 8 is a glossary of financial terms while Chapter 9 provides a set of examples of types of examination questions that you may face if you sat the Chartered Institute of Personnel and Development (CIPD) National Examinations.
Part Two Statistics: Chapters 10-19
This set of chapters provides an introduction to the range of statistical tools and techniques. They are geared towards the context of human resources but other wider examples are given throughout to provide deeper understanding of the extent to which organizations are reliant upon interpreted data. The subjects cover the gathering of data, how they are presented and analysed in terms of averages and spread, an outline of probability and an introduction to the concepts of regression, correlation, index numbers and forecasting. Chapter 18 is a glossary of statistical terms while Chapter 19 provides a set of examples of types of examination questions that you may face if you sat the CIPD National Examinations.
Part Three Information systems: Chapters 20-28
The world of information systems is large, and increasing each year both in scope and complexity. In these chapters we can only give you a summary of the main concepts and the way they are applied. Our ambitions are not to make you experts. The pace of technological change is so frenetic that much of what is written in textbooks quickly becomes dated. We will not be going into detail with important subject areas such as programming nor will we introduce you to very much jargon. Following a glossary of some of the terms used in information systems, Chapter 28 provides a set of examples of types of examination questions that you may face if you sat the CIPD National Examinations.
We do not expect you to have a great deal of prior knowledge of any of these subject areas. Nor do we expect you to become an expert by the time you have completed your studies. We do, however, expect you to be able to use the knowledge that you have accumulated to make a better contribution to the management and departmental teams. You should be better able to understand the basis upon which important business decisions are made, assess the quality of the underlying data and deal more confidently with colleagues who work with information systems on a day-to-day basis.