HUMAN RESOURCE MANAGEMENT Human Resource Management (HRM) refers to the design and application of formal s ystems in an organization

n to ensure the effective and efficient use of human tal ent to accomplish organizational goals. This system includes activities undertak en to attract, develop, and maintain an effective workforce. ENVIRONMENTAL INFLUENCES ON HRM Our strength is the quality of our people. Our people are our most important resource. Human resource managers must find, recruit, train, nurture, and retain t he best people. Without the right people, the brightest idea or management trend or whether virtual teams, e-business, or flexible compensation is destined to f ailure. In addition, when employees dont feel valued, usually they are not willin g to give their best to the company and often leave to find a more supportive wo rk environment. For these reasons, it is important that human resource executive s be involved in competitive strategy. Human resource managers also interpret fe deral legislation and respond to the changing nature of careers and work relatio nships. Competitive Strategy To keep companies competitive, HRM is changing in three primary ways: focusing o n building human capital, developing global HR strategies, and using information technology. 1. Building Human Capital In many, companies, especially those that rely on employee information, creativity, knowledge, and service rather than on production machinery, success depends on the ability to manage human capital. Human capital refers to the econ omic value of the combined knowledge, experience, skills, and capabilities of em ployees. Another concern related to human capital for HRM managers is building so cial capital, which refers to the quality of interactions among employees and wh ether they share a common perspective. In organizations with a high degree of so cial capital, for example, relationships are based on honesty, trust, and respec t and people cooperate smoothly to achieve shared goals and outcomes. 2. Globalization An issue of significant concern for todays organizations is competing on a global basis, which brings tremendous new challenges for human resource manage ment. Most companies are still in the early stages of developing effective HRM p olicies, structures, and services that respond to the current reality of globali zation. In addition, HRM is responsible for recruitment, training, and performan ce management of employees who might have to work across geographical, technical , and cultural boundaries to help the organization achieve its goals. The succes s of global business strategies is closely tied to the effectiveness of the orga nizations global HR strategies. A subfield of globalization is International Human Resource Management (IHRM) which specifically addresses the added complexity that results from coord inating and managing diverse people on a global scale. Research in IHRM has reve aled that, as the world becomes increasingly interconnected, some HR practices a nd trends are converging. However, IHRM managers need a high degree of cultural sensitivity and the ability to tailor and communicate policies and practices for different cultures. What works in one country may not translate well to another . 3. Information Technology Information technology is transforming human resource management and hel ping to meet the challenges of todays global environment. A study of the transiti on from traditional HR to e-HR found that the Internet and information technolog y significantly affects every area of human resource management, from recruiting , to training and career development, to retention strategies. A human resource information system is an integrated computer system designed to provide data and

information used in HR planning and decision making. The most basic use is the automation of administrative duties such as handling pay, benefits, and retireme nt plans, which is convenient for employees and can lead to significant cost sav ings for the organization. Federal Legislation The point of the laws is to stop discriminatory practices that are unfai r to specific groups and to define enforcement agencies for these laws. EEO (Equ al Employment Opportunity) legislation attempts to balance the pay given to men and women; provide employment opportunities without regard race, religion, natio nal origin, and gender; ensure fair treatment for employees of all ages; and avo id discrimination against disabled individuals. The Equal Employment Opportunity Commission (EEOC) created by the Civil Rights Act of 1964 initiates investigations in response to complaints concerning discrimination. It is the major agency involved with employment discrimination. Discrimination occurs when some applicants are hired promoted based on criteria that are not job relevant. For example, refusing to hire a black applicant for a job he is qualified to fill or paying a woman a lower wage than a man for the same work are discriminatory acts. Affirmative action requires that an employer take positive steps to guarantee equal employment opportunities for people withi n protected groups. An affirmative action plan is a formal document that can be reviewed by employees and enforcement agencies. The goal of organizational affir mative action is to reduce or eliminate internal inequities among affected emplo yee groups. Failure to comply with equal employment opportunity legislation can resu lt in substantial fines and penalties for employers. Suits for discriminatory pr actices can cover a broad range of employee complaints. One issue of growing con cern is sexual harassment, which is also a violation of Title VII of the Civil R ights Act. The EEOC guidelines specify that behavior such as unwelcome advances, requests for sexual favors, and other verbal physical conduct of a sexual natur e becomes sexual harassment when submission to the conduct is tied to continued employment or advancement or when the behavior creates an intimidating, hostile, or offensive work environment. THE CHANGING NATURE OF CAREERS Another current issue is the changing nature of careers. HRM can benefit employees and organizations by responding to recent changes in the relationship between employers and employees and new ways of working such as telecommunicati ng, job sharing, outsourcing, and virtual teams. The Changing Social Contract In the old social contract between organization and employee, the employ ee could contribute ability, education, loyalty, and commitment and expect in re turn that the company would provide wages and benefits, work, advancement, and t raining throughout the employees working life. But unstable changes in the enviro nment have disrupted this contract. As many organizations downsized, significant numbers of employees were eliminated. Employees who are left may feel little st ability. In a fast-moving company, a person is hired and assigned to a project. The project changes over time, as do the persons tasks. Then the person is assign ed to another project and then to still another. These new projects require work ing with different groups and leaders and schedules, and people may be working i n a virtual environment, where they rarely see their colleagues face to face. Ca reers no longer progress up a vertical hierarchy but move across jobs horizontal ly. In many of todays companies, everyone is expected to be a self-motivated work er, with excellent interpersonal relationships, who is continuously acquiring ne w skills. The new contract is based on the concept of employability rather than li fetime employment. Individuals manage their own careers; the organization no lon ger takes care of them or guarantees employment. Companies agree to pay somewhat higher wages and invest in creative training and development opportunities so t hat people will be more employable when the company no longer needs their servic

es. Employees take more responsibility and control in their jobs, becoming partn ers in business improvement rather than somebody with minor role in a machine. I n return, the organization provides challenging work assignments as a well as in formation and resources to enable people to continually learn new skills. The ne w contract can provide many opportunities for employees to be more involved and express new aspects of themselves. HR Issues in the New Workplace The rapid and uncontrolled change in todays business environment brings s ignificant new challenges for human resource management. Some important current issues are becoming an employer of choice, responding to the increasing use of t eams and project management, addressing the needs of temporary employees and vir tual workers, acknowledging growing employee demands for work/life balance, and humanely managing downsizing. Becoming an Employer of Choice The old social contract may be broken for good, bit todays best companies recognize the importance of treating people right and thinking for the long ter m rather than looking for quick fixes based on an economic exchange relationship with employees. An employer of choice is a company that is highly attractive to potential employees because of human resources practices that focus not just on a tangible benefits such as pay and profit sharing, but also on intangibles (su ch as work/life balance, a trust based work climate, and a healthy corporate cul ture), and that embraces a long-term view to solving immediate problems. Teams and Projects The advent of teams and project management is a major trend in todays wor kplace. People who used to work alone on the shop floor, in the advertising depa rtment, or in middle management are now thrown into teams and succeed as part of a group. Each member of the team acts like a manager, becoming responsible for quality standards, scheduling, and even hiring and firing other team members. Wi th the emphasis on projects, the distinction between job categories and descript ions are collapsing. Many of todays workers extend functional and department boun daries and handle multiple tasks and responsibilities. Temporary Employees Temporary agencies grew rapidly during the 1990s, and early 200s and mil lions of employees today are in temporary firm placements. People in these tempo rary jobs do everything from data entry, to project management, to becoming the temporary CEO. Although in the past, most temporary workers were in clerical and manufacturing positions, in recent years demand has grown for professionals, pa rticularly financial analysts, temporary managers, information technology specia lists, accounts, product managers, and operations experts. Contingent workers, a re people who work for an organization, but not on a permanent or full-time basi s. These workers include temporary placements, contracted professionals, leased employees, or part-time workers. The use of contingent workers means reduced pay roll and benefit costs, as well as increased flexibility for both employers and employees. Technology Related trends are virtual teams and telecommunicating. Some virtual tea ms are made up entirely who are hired on a project-by-project basis. Team member s are geographically or organizationally scatter and rarely meet face to face, d oing their work instead through advanced information technologies and work with other software. Telecommunicating means using computers and telecommunications e quipment to do work without going to an office. Wireless Internet devices, lapto ps, cell phones, and fax machines make it possible for people to work just about anywhere. A growing aspect of this phenomenon is called extreme telecommunicati ng, which means that people live and work in countries far away from the organiz ations physical location. Work/Life Balance Telecommuting is one way organizations are helping employees lead more ba lanced lives. By working part of the time from home, for example, parents can av oid some of the conflicts they often in coordinating their work and family respo

nsibilities. Flexible scheduling for regular employees is also important in toda ys workplace. In addition, broad work/life balance initiatives play a critical ro le in retention strategy, partly in response to the shift in expectations among young employees. Downsizing Downsizing refers to an intentional, planned reduction in the size of a companys workforce, is a reality for many of todays companies. Managers can smooth the downsizing process by regularly communicating with employees and providing them as much information as possible, providing assistance to workers who will l ose their jobs, and using training and development to help address the emotional needs of remaining employees and enable them to cope with new or additional res ponsibilities. Recruiting Recruiting is defined as activities or practices that define the characte ristics of applicants to whom selection procedures are ultimately applied. Today, recruiting is sometimes referred to as talent acquisition to reflect the import ance of the human factor in the organizations success. Although we frequently thi nk of campus recruiting as a typical recruiting activity, many organizations use internal recruiting, or promote-from-within policies, to fill their high-level positions. Internal recruiting has several advantages: It is less costly than an external search, and it generates higher employee commitment, development, and satisfaction because it offers opportunities for career advancement to employees rather than outsiders. Frequently, however, external recruiting recruiting newcomers from outsi de the organization is advantageous. Applicants are provided by a variety of out side sources including advertising, state employment services, online recruiting services, private employment agencies (headhunters), job fairs, and employee re ferrals. Assessing Organizational Needs An important step in recruiting is to get a clear picture of what kinds of people the organization needs. Basic building blocks of human resource manage ment include job analysis, job descriptions, and job specifications. Job analysi s is a systematic process of gathering and interpreting information about the es sential duties, tasks and responsibilities of a job, as well as about the contex t within which the job is performed. To perform job analysis, managers or specia lists ask about work activities and work flow, the degree of supervision given a nd received in the job, knowledge and skills needed, performance standards, work ing conditions, and so forth. The manager then prepares a written job descriptio n, which is a clear and concise summary of the specific tasks, duties, and respo nsibilities, and job specification, which outlines the knowledge, skills, educat ion, physical abilities, and other characteristics needed to adequately perform the job. Realistic Job Previews Job analysis also helps enhance recruiting effectiveness by enabling the creation of realistic job previews. A realistic job preview (RJP) gives applica nts all relevant and realistic information either positive or negative about the job and the organization. RJPs enhance employee satisfaction and reduce turnove r, because they facilitate matching individuals, jobs, and organizations. Indivi duals have a better basis on which to determine their suitability to the organiz ation and self-select into or out of positions based on full information. Legal Considerations Organizations must ensure that their recruiting practices follow the law . Affirmative action refers to the use of goals, timetables, or other methods in recruiting to promote the hiring, development, and retention of protected group s which persons historically under-represented in the workplace. E-cruiting One of the fastest-growing approaches to recruiting is use of the Intern et for recruiting, or e-cruiting. Recruiting job applicants online dramatically

extends the organizations recruiting reach, offering access to a wider pool of ap plicants and saving time and money. Besides posting job openings on company Web sites, many organizations use commercial recruiting sites such as Monster.com, w here job seekers can post their rsums and companies can search for qualified appli cants. In addition, as competition for high-quality employees heats up, new onli ne companies, such as Jobster and JobsterThread, emerge to help companies for pas sive candidates people who arent looking for jobs be might be the best fit for com panys opening. OTHER RECENT APPORACHES TO RECRUITING Organizations are finding ways to enhance their recruiting success. One highly effective approach is getting referrals from current employees. A companys employees often know of someone who would be qualified for a position and fit i n with the organizations culture. Many organizations offer cash awards to employe eswho submit names of people who subsequently accept employment because referral by current employees is one cheapest and most reliable methods of external recr uiting. Selecting The next step for managers is to select desired employees from the pool of recruited applicants. In the selection process, employers assess applicants ch aracteristics in an attempt to determine the fit between the job and applicant cha racteristics. Several selection devices are used for assessing applicant qualifi cations. The most frequently used are the application form, interview, employmen t test, and assessment center. Human resource professionals may use a combinatio n of devices to obtain a valid prediction of employee job performance. Validity refers to the relationship between ones score on a selection device and ones futur e job performance. Application Form The application form is used to collect information about the applicants education, previous job experience, and other background characteristics. Interview The interview serves as a two-way communication channel that allows both the organization and the applicant to collect information that would otherwise be different to obtain. This selection technique is used in almost every job cat egory in need by every organization. Although widely used, the interview is not generally a valid predictor o f job performance. Studies of interviewing suggest that people tend to make easy judgment of others within the first few seconds of meeting them and only rarely change their opinions based on anything occurs the interview. However, the inte rview is a selection tool has high face validity. That is, it seems valid to emp loyers, and mangers prefer to hire someone only after they have been through som e form of interview, preferably face-to-face. Some organizations also supplement traditional interviewing information with computer-based interviews. This type of interview typically requires a cand idate to answer a series of multiple-choice questions tailored to the specific j ob. The answers are compare to an ideal profile or to a profile developed on the basis of other candidates. Employment Test Employment tests may include intelligence tests, aptitude and ability te sts, and personality inventories, particularly those shown to be valid predictor s. Many companies today are particularly interested in personality inventories t hat measure such characteristics as openness to learning, initiative, responsibi lity, creativity, and emotional stability. Assessment Center Assessment centers present a series of managerial situations to groups o f applicants over on a two or three day period. One technique is the in-basket s imulation, which requires the applicant to play the role of a manager who must d ecide how to respond to 10 memos in his or her in-basket within a two-hour perio d. Panels of two or more trained judges observe the applicants decisions and asse ss the extent to which they reflect interpersonal, communication, and problem-so

lving skills. DEVELOPING AN EFFECTIVE WORKFORCE Training and Development Training and development represent a planned effort by an organization t o facilitate employees learning of job-related skills and behaviors. The most com mon method of training is on-the-job training. In on-the-job training (OJT), an experienced employee is asked to take a new employee under his or her wing and sho w the newcomer how to perform job duties. One type of on-the-job training involv es moving people to various types of jobs within the organizations, where they w ork with experienced employees to learn different tasks. This cross-training may place an employee in a new position for as short a time as a few hours of for a s long as a year, enabling the employee to develop new skills and giving the org anization greater flexibility. Another type of on-the-job training is mentoring, which means a more exp erienced employee is paired with a newcomer or a less-experienced worker to prov ide guidance, support, and learning opportunities. Other frequently used trainin g methods include the following: Orientation training, in which newcomers are introduced to the organizations cult ure, standards, and goals Classroom training, including lectures, films, audiovisual techniques, and simul ations makes up approximately 70 percent of all corporate training. Self-directed, also called programmed instruction, which involves the use of boo ks, manuals, or computers to provide subject matter in highly organized and logi cal sequences that require employees to answer a series of questions about the m aterial. Computer-based training, sometimes called e-training, including computer-assiste d instruction, Web-based training and teletraining. Corporate Universities A corporate university is an in-house training and education facility th at offers broad-based learning opportunities for employees and frequently for cu stomers, suppliers, and strategic partners as well throughout their careers. Promotion From Within Another way to further employee development is through promotion from wi thin, which helps companies retain people. This provides challenging assignments , prescribes new responsibilities, and helps employees grow by expanding and dev eloping their abilities. Workforce Optimization A related is workforce optimization, which can be defined as putting the right person in the right place at the right time. With todays emphasis on manag ing and building human capital; HR professionals are pursuing a range of strateg ies that help organizations make the best use of the talent they have and effect ively develop that talent for the future. Performance Appraisal Performance appraisal comprises the steps of observing and assessing emp loyee performance, recording the assessment, and providing feedback to the emplo yee. During performance appraisal, skillful managers give feedback and praise co ncerning the acceptable elements of the employees performance. They also describe performance areas that need improvement. Employees can use this information to change their job performance. Performance appraisal can also reward high performers with merit pay, re cognition, and other rewards. However, the recent thinking is that linking perfo rmance appraisal to rewards has unintended consequences. The idea is that perfor mance appraisal should be ongoing, not something that is done once a year as par t of a consideration of raises. MAINTAINING AN EFFECTIVE WORKFORCE Maintenance of the current workforce involves compensation, wage and sal

ary systems, benefits, and occasional terminations. Compensation The term compensation refers to (1) all monetary payments and (2) all go ods or commodities used in place of money to reward employees. An organizations c ompensation structure includes wages and/or salaries and benefits such as health insurance, paid vacations, or employee fitness centers. Wage and Salary Systems The most approach to employee compensation is job-based pay, which means linking compensation to the specific tasks an employee performs. For one thing, job-based pay may fail to reward the type of learning behavior needed for the o rganization to adapt and survive in todays environment. In addition, these system s reinforce an emphasis on organizational hierarchy and centralized decision mak ing and control, which are inconsistent with the growing emphasis on employee pa rticipation and increased responsibility. Skill-based pay systems are becoming increasingly popular in both large and small companies. Employees with higher skill levels receive higher pay than those with lower skill levels. Skill-based systems is also called competency-bas ed pay, skill-based pay systems encourage employees to develop their skills and competencies, thus making them more valuable to the organization as well as more employable if they leave their current jobs. Compensation Equity Whether the organization uses job-based pay or skill-based pay, good man agers strive to maintain a sense of fairness and equity within the pay structure and thereby fortify employee morale. Job evaluation refers to the process of de termining the value or worth of jobs within an organization through an examinati on of job content. Job evaluation techniques enable managers to compare similar and dissimilar jobs and to determine internally equitable pay rates that is, pay rates that employees believe are fir compared with those for other jobs in the organization. Pay-for-Performance Many of todays organizations develop compensation plans based on a pay-fo r-performance standard to raise productivity and cut labor costs in a competitiv e global environment. Pay-for-performance also called incentive pay, means tying at least part of compensation to employee effort and performance, whether it be through merit-based pay, bonuses, team incentive, or various gainsharing or pro fit-sharing plans. With pay-for-performance, incentives are aligned with the behaviors need ed to help the organization achieve its strategic goals. Employees have an incen tive to make the company more efficient and profitable because if goals are not met, no bonuses are paid. Benefits The best human resource managers know that a compensation package requir es more than money. Although wage/salary is an important component, it is only a part. Equally important are the benefits offered by the organization. Some bene fits are required by law, such Social Security, unemployment compensation, and w orkers compensation, and workers compensation. In addition, companies with 50 or m ore employees are required by the Family and Medical Leave Act to give up to 12 weeks of unpaid leave for such things as the birth or adoption of a child, the s erious illness of a spouse or family member, or an employees serious illness. Oth er types of benefits, such as health insurance, vacations, and such things as on -site daycare or fitness centers are not allowed by law but are provided by orga nizations to maintain an effective workforce. Todays organizations realize that t he one-size-fits-all benefits package is no longer appropriate, so they frequently offer cafeteria-plan benefits packages that allow employees to select the benef its of greatest value to them. The benefits packages provide by large companies attempt to meet the needs of all employees. Termination The value of termination for maintaining an effective workforce is twofo

ld. First, employees who are poor performers can be dismissed. Productive employ ees often resent disruptive, low-performing employees who are allowed to stay wi th the company and receive and benefits comparable to their. Second, employers c an use exit interviews as a valuable HR tool, regardless of whether the employee leaves voluntarily or is forced out. An exit interview is an interview conducte d with departing employees to determine why they are leaving. The value of the e xit interview is to provide an inexpensive way to learn about pockets of dissati sfaction within the organization and hence reduce future turnover.