IGCSE Business: Human resource management (HRM) (Cambridge 0264) – Revision Notes

These notes condense section 2.1 (Human resource management (HRM), points 2.1.1 to 2.1.3) of the Cambridge IGCSE Business 0264 syllabus for examination in 2027, 2028 and 2029. For full explanations and worked examples, read the study guide. Then test yourself with the practice questions. Both Paper 1 and Paper 2 are based on all the subject content, so HRM can appear in either. Track your progress on the printable checklist, see the course hub, and use the free diagnostics to find gaps.

Money figures are in dollars. All businesses and people are invented.

Key definitions

Term	Meaning
Recruitment	Attracting suitable people to apply for a vacancy
Selection	Choosing the best applicant from those who applied
Job description	Lists the job title, duties and responsibilities
Person specification	Lists the qualifications, skills, experience and qualities wanted in the post holder
Internal recruitment	Filling the vacancy with someone already employed by the business
External recruitment	Filling the vacancy with someone from outside the business
Employment contract	A legal agreement setting out the terms of the job
Training	Teaching employees the skills and knowledge to do their jobs
Induction training	An introduction for new employees to the business

2.1.1 Recruiting and selecting

The recruitment process in order

1. Job description (what the job is).
2. Person specification (what the person is like).
3. Job advertisement (tells people about the vacancy; may use an employment agency or online recruitment).
4. Selection (the methods below).

Selection methods at a glance

Method	One strength	One weakness
CV or resumé	Quick summary of background	Self-written, may exaggerate
Application form	Same questions for all, easy to compare	Time-consuming to design and read
References	Outside view of reliability	Can be too generous
Testing or assessment centres	Shows real skills	Costly and slow
Interviews	Judge personality and communication	Open to bias and first impressions

Internal against external

	Internal	External
Cost and speed	Cheaper and faster	Dearer and slower
Knowledge	Employer already knows the person; person knows the business	Employer knows less; needs induction
Choice	Small pool	Large pool
Ideas	No new ideas arrive	New skills and ideas
Motivation	Promotion prospects motivate staff	Existing staff may feel overlooked
Side effect	Leaves a gap to fill	Fills the gap fully

Method: recommend and justify who to employ

1. Name your choice clearly.
2. Match the candidate to the person specification, quoting evidence from the case.
3. Compare with the rejected candidate on the same criteria.
4. Weigh one risk of your choice and say how it could be reduced.
5. Finish with one sentence of judgement.

2.1.2 Contracts and legal controls

Contents of an employment contract

• Duties and responsibilities
• Working hours
• Holiday entitlement
• Sick pay

Benefits

Employer	Employee
Clear expectations, fewer disputes	Knows pay, hours and holiday
Evidence if there is a dispute	Evidence if the employer breaks terms

Four legal controls (describe in general terms)

Control	Effect on employer	Effect on employee
Unfair dismissal	Needs a fair reason and proper process	More job security
Discrimination	Must hire, pay and promote fairly	Equal opportunity
Health and safety	Pays for safety measures; fewer accidents	Safer workplace
Legal minimum wage	Raises wage costs	Guaranteed minimum pay

Always give an effect for both sides. A legal control can be a cost for the employer and a benefit for the employee at the same time. It can also bring a benefit to the employer, such as lower absence from fewer accidents.

2.1.3 Training

Why it matters

To the business	To employees
Higher productivity and quality	New skills and confidence
Fewer errors and accidents	Chance of promotion and higher pay
Staff can cover different jobs	Greater satisfaction
Helps keep staff	Meets wish to develop

Three types compared

Type	Where	Advantage	Disadvantage
Induction	At the start, in the business	Settles new starters quickly	Uses existing staff time; not deep job training
On-the-job	At the workplace while working	Cheap and relevant	Trainer less productive; bad habits can spread
Off-the-job	Away from the workplace	Expert teaching, recognised qualifications	Costly; staff away from work

Training has a cost, and trained staff might leave. Say so in evaluation.

Must-know distinctions

Pair	The difference in one line
Recruitment and selection	Recruitment attracts applicants. Selection chooses between them.
Job description and person specification	The first describes the job. The second describes the ideal person.
Employment agency and online recruitment	An agency finds or shortlists candidates for a fee. Online recruitment is advertising directly, at low cost.
Application form and CV	A form asks every applicant the same questions. A CV is written freely by the applicant.
Interview and assessment centre	An interview is a conversation. An assessment centre tests skills through tasks and exercises.
On-the-job and off-the-job training	The first happens at work while doing the job. The second takes place away from the workplace.
Benefit and cost of a legal control	One control can help employees and cost employers at the same time, so say both.

Worked reminder: weighing two applicants

A garage needs a receptionist. The person specification asks for “friendly manner”, “good record keeping” and “two years in a customer-facing job”. Applicant A is an existing mechanic’s assistant who keeps neat records but has not dealt with customers. Applicant B is from outside, has three years in a shop, and impressed at interview.

A short model answer: choose B. B meets all three criteria, while A meets only one. The garage would pay for an advertisement and would need to give B induction, but the post is customer-facing and B has the evidence for it. The risk is that A may feel passed over, so the manager should discuss other opportunities with A.

How a longer answer is built

For an explain or justify question, build a chain: point, because, so. For example: “A written contract helps the employer (point) because the duties and working hours are agreed in advance (because), so there are fewer arguments about what the employee must do (so).” A developed chain is stronger than a list of bare points.

Quick calculations to know

Hourly rate = weekly pay ÷ hours worked. Compare it with the legal minimum wage in the question.

Worked reminder: a worker is paid 300 dollars for 40 hours. The rate is 300 ÷ 40 = 7.50 dollars an hour. If the minimum is 8.00 dollars, the shortfall is 0.50 dollars an hour, or 40 × 0.50 = 20 dollars a week.

Cost of training = cost per person × number of people, plus any lost output while they are away.

Quick self-test

1. Define the term job description.
2. State two things a person specification might list.
3. Identify two ways of advertising a vacancy.
4. State one advantage and one disadvantage of internal recruitment.
5. Identify the four contents of an employment contract named in the syllabus.
6. Outline one benefit of an employment contract to an employee.
7. Identify the four employment issues that legal controls cover in the syllabus.
8. A worker earns 300 dollars for 40 hours. The legal minimum is 8.00 dollars an hour. Calculate the weekly shortfall.
9. Eight staff attend an off-the-job course costing 150 dollars each. Calculate the course cost.
10. Outline one difference between induction training and on-the-job training.
11. Explain one way training helps an employee.
12. A worker is entitled to 25 days of holiday and has taken 5. State how many remain.

Answers

1. A document that lists the job title, the main duties and the responsibilities of a post.
2. Any two from: qualifications, skills, experience, personal qualities.
3. Any two from: employment agency, online recruitment, the business website, a newspaper or notice board, internal notice.
4. Advantage: cheaper and quicker, or the person already knows the business. Disadvantage: a smaller pool of applicants, or no new ideas.
5. Duties and responsibilities, working hours, holiday entitlement, sick pay.
6. For example, they know their pay and hours, or they have written evidence if the employer changes the terms.
7. Unfair dismissal, discrimination, health and safety, legal minimum wage.
8. 300 ÷ 40 = 7.50 dollars an hour, below 8.00, so the shortfall is 0.50 × 40 = 20 dollars a week.
9. 8 × 150 = 1,200 dollars.
10. Induction introduces new employees to the business and its rules. On-the-job training teaches job skills while the person works.
11. For example, better skills improve promotion chances, or give a higher wage, or make the job more satisfying.
12. 25 − 5 = 20 days.

Where marks are usually lost

• Describing a job description and person specification as if they were the same document.
• Listing selection methods without saying why a business would choose one.
• Saying external recruitment is “better” without any drawback, or the reverse for internal recruitment.
• Writing a recommendation with no evidence from the case, or with a list of facts and no decision.
• Giving the effect of a legal control on the employer only, or on the employee only.
• Writing about a named law you are not sure of. Describe the control in general terms.
• Forgetting the costs of training: the fee, and the output lost while staff are away.
• Treating induction as skills training for the job rather than an introduction to the business.
• Doing a wage calculation without comparing the result with the minimum, so the conclusion is missing.

Next steps

Use the study guide for any gap, then try the practice questions.

Frequently asked questions

What are the main contents of an employment contract? An employment contract sets out duties and responsibilities, working hours, holiday entitlement and sick pay.

What are the four legal controls over employment? The syllabus lists unfair dismissal, discrimination, health and safety, and the legal minimum wage. Describe them in general terms and give an effect on both the employer and the employee.

How do you calculate the cost of training? Multiply the cost per person by the number of people trained, then add any output lost while they are away from work.

What is induction training? Induction introduces new employees to the business, its rules, safety and colleagues. It is not skills training for the job itself.

Official syllabus

Cambridge IGCSE Business 0264 syllabus for examination in 2027, 2028 and 2029, published by Cambridge University Press & Assessment (Cambridge International Education), section 2.1.