Human Resource Management

By:Dr. Kusumawijaya

Fundamentals of Human Resource Management

10/1/13

Management Essentials
Management involves setting goals and allocating scarce resources to achieve them. Management is the process of efficiently achieving the objectives of the organization with and through people.

Management Essentials

Primary Functions of Management

Planning

establishing goals Organizing determining what activities need to be done Leading assuring the right people are on the job and motivated Controlling monitoring activities to be sure goals are met

Why is HRM Important to an Organization?

The role of human resource managers has changed. HRM jobs today require a new level of sophistication.
Employment

legislation has placed new requirements on employers. Jobs have become more technical and skilled. Traditional job boundaries have become blurred with the advent of such things as project teams and telecommuting. Global competition has increased demands for productivity.

Why is HRM Important to an Organization?

The Strategic Nature HRM must be

a

strategic business partner and represent employees. forward-thinking, support the business strategy, and assist the organization in maintaining competitive advantage. concerned with the total cost of its function and for determining value added to the organization.

Why is HRM Important to an Organization?

HRM is the part of the organization concerned with the people dimension. HRM is both a staff, or support function that assists line employees, and a function of every managers job. HRM Certification

Colleges

and universities offer HR programs.

Why is HRM Important to an Organization?

Four basic functions: Staffing Training and Development Motivation Maintenance

How External Influences Affect HRM

Strategic Environment Governmental Legislation Labor Unions Management Thought

How External Influences Affect HRM

HRM Strategic Environment includes:

Globalization Technology Work

force diversity Changing skill requirements Continuous improvement Work process engineering Decentralized work sites Teams Employee involvement Ethics

How External Influences Affect HRM

Governmental Legislation
Laws

supporting employer and employee actions

Labor Unions
Act

on behalf of their members by negotiating contracts with management Exist to assist workers Constrain managers Affect non unionized workforce

How External Influences Affect HRM

Management Thought
Management

principles, such as those from scientific management or based on the Hawthorne studies influence the practice of HRM. recently, continuous improvement programs have had a significant influence on HRM activities.

More

Staffing Function Activities

Employment planning
ensures

that staffing will contribute to the organizations mission and strategy

Job analysis
determining

the specific skills, knowledge and abilities needed to be successful in a particular job defining the essential functions of the job

Staffing Function Activities

Recruitment
the

process of attracting a pool of qualified applicants that is representative of all groups in the labor market

Selection
the

process of assessing who will be successful on the job, and the communication of information to assist job candidates in their decision to accept an offer

Goals of the Training and Development Function

Activities in HRM concerned with assisting employees to develop up-todate skills, knowledge, and abilities Orientation and socialization help employees to adapt Four phases of training and development
Employee

training Employee development Organization development Career development

The Motivation Function

Activities in HRM concerned with helping employees exert at high energy levels. Implications are:
Individual Managerial Organizational

Function of two factors:

Ability Willingness

Respect

The Motivation Function

Managing motivation includes:

Job

design Setting performance standards Establishing effective compensation and benefits programs Understanding motivational theories

The Motivation Function

Classic Motivation Theories

Hierarchy

of Needs Maslow Theory X Theory Y McGregor Motivation Hygiene Herzberg Achievement, Affiliation, and Power Motives McClelland Equity Theory Adams Expectancy Theory - Vroom

How Important is the Maintenance Function?

Activities in HRM concerned with maintaining employees commitment and loyalty to the organization.
Health Safety Communications Employee

assistance programs

Effective communications programs provide for 2way communication to ensure that employees are well informed and that their voices are heard.

Translating HRM Functions into Practice

Four Functions:
Employment Training

and development Compensation/benefits Employee relations

HRM in an Entrepreneurial Enterprise

General managers may perform HRM functions, HRM activities may be outsourced, or a single generalist may handle all the HRM functions. Benefits include

freedom

from many government regulations an absence of bureaucracy an opportunity to share in the success of the business

HRM in a Global Village

HRM functions are more complex when employees are located around the world. Consideration must be given to such things as foreign language training, relocation and orientation processes, etc. HRM also involves considering the needs of employees families when they are sent overseas.

HR and Corporate Ethics

HRM must:
Make

sure employees know about corporate ethics policies Train employees and supervisors on how to act ethically

Human Resource Planning and Job Analysis

By: Dr Kusumawijaya

Introduction

Human resource planning is a process by which an organization ensures that

it

has the right number and kinds of people at the right place at the right time capable of effectively and efficiently completing those tasks that will help the organization achieve its overall strategic objectives.

Introduction

Linked to the organizations overall strategy and planning to compete domestically and globally. Overall plans and objectives must be translated into the number and types of workers needed. Senior HRM staff need to lead top management in planning for HRM issues.

An Organizational Framework

Linking Organizational Strategy to Human Resource Planning

Ensures that people are available to meet the requirements set during strategic planning. Assessing current human resources A human resources inventory report summarizes information on current workers and their skills. Human Resource Information Systems HRIS are increasingly popular computerized databases that contain important information about employees.

Linking Organizational Strategy to Human Resource Planning

Assessing current human resources

Succession
includes portray lists

planning

the development of replacement charts

middle-to-upper level management positions that may become vacant in the near future information about individuals who might qualify to fill the positions

Linking Organizational Strategy to Human Resource Planning

Determining the Demand for Labor

A

human resource inventory can be developed to project year-by-year estimates of future HRM needs for every significant job level and type. Forecasts must be made of the need for specific knowledge, skills and abilities.

Linking Organizational Strategy to Human Resource Planning

Predicting the Future Labor Supply

A units
new

supply of human resources comes from:

hires workers returning from leaves

contingent

transfers-in individuals

Predicting

these can range from simple to complex.

Linking Organizational Strategy to Human Resource Planning

Predicting the Future Labor Supply

Decreases
Retirements Dismissals Transfers-out Lay-offs Voluntary

in internal supply come about through:

quits illnesses

Sabbaticals Prolonged Deaths

Linking Organizational Strategy to Human Resource Planning

Where Will We Find Workers

migration

into a community recent graduates individuals returning from military service increases in the number of unemployed and employed individuals seeking other opportunities, either part-time or full-time

The potential labor supply can be expanded by formal or on-the-job training.

Linking Organizational Strategy to Human Resource Planning

Matching Labor Demand and Supply Employment planning compares forecasts for demand and supply of workers. Special attention should be paid to current and future shortages and overstaffing. Recruitment or downsizing may be used to reduce supply and balance demand. Rightsizing involves linking staffing levels to organizational goals.

Linking Organizational Strategy to Human Resource Planning

Employment Planning and the Strategic Planning Process

Job Analysis
Job Analysis is a systematic exploration of the activities within a job. It defines and documents the duties, responsibilities and accountabilities of a job and the conditions under which a job is performed.

Job Analysis

Job Analysis Methods

Observation

method job analyst watches employees directly or reviews film of workers on the job. Individual interview method a team of job incumbents is selected and extensively interviewed. Group interview method a number of job incumbents are interviewed simultaneously.

Job Analysis

Job Analysis Methods

Structured

questionnaire method workers complete a specifically designed questionnaire. Technical conference method uses supervisors with an extensive knowledge of the job. Diary method job incumbents record their daily activities.

The best results are usually achieved with some combination of methods.

Job Analysis

Structured Job Analysis Techniques

Department

of Labors Job Analysis

Process:
Information

from observations and interviews is used to classify jobs by their involvement with data, people and things. on thousands of titles available on O*Net OnLine which is the Department of Labors replacement for the Dictionary of Occupational Titles.

Information

Job Analysis

Position Analysis Questionnaire (PAQ) (developed at Purdue University)

Jobs

are rated on 194 elements, grouped in six major divisions and 28 sections. The elements represent requirements that are applicable to all types of jobs. This type of quantitative questionnaire allows many different jobs to be compared with each other, however, it appears to be more applicable to higher-level professional jobs.

Job Analysis

Job Descriptions
Written

statement of what jobholder does, how it is done, under what conditions and why. Common format: title; duties; distinguishing characteristics; environmental conditions; authority and responsibilities. Used to describe the job to applicants, to guide new employees, and to evaluate employees.

Job Analysis

Job Specifications
States

minimum acceptable qualifications. Used to select employees who have the essential qualifications.

Job Analysis

Job Evaluations
Specify

relative value of each job in the organization. Used to design equitable compensation program.

Job Analysis

The Multi-faceted Nature of Job Analysis

Almost

all HRM activities are tied to job analysis. Job analysis is the starting point for sound HRM.

Job Analysis

Job Analysis and the Changing World of Work

Globalization,

quality initiatives, telecommuting, and teams require adjustments to the components of a job. Todays jobs often require not only technical skills but interpersonal skills and communication skills as well.

Recruitment and Selection

By: Dr. Kusumawijaya

Introduction

Recruiting
Once

an organization identifies its human resource needs through employment planning, it can begin the process of recruiting potential candidates for actual or anticipated organizational vacancies.

Introduction

Recruiting brings together those with jobs to fill and those seeking jobs.

Recruiting Goals

To provide information that will attract a significant pool of qualified candidates and discourage unqualified ones from applying.

Recruiting Goals

Factors that affect recruiting efforts

Organizational

size Employment conditions in the area Working conditions, salary and benefits offered Organizational growth or decline

Recruiting Goals

Constraints on recruiting efforts include:

Organization

image Job attractiveness Internal organizational policies Recruiting costs

Recruiting: A Global Perspective

For some positions, the whole world is a relevant labor market. Parent (Home) country nationals are recruited when an organization is searching for someone with extensive company experience to launch a very technical product in a country where it has never sold before.

Recruiting: A Global Perspective

Host-country nationals (HCNs) are targeted as recruits when companies want each foreign subsidiary to have its own distinct national identity. HCNs minimize potential problems with language, family adjustment and hostile political environments.

Recruiting Sources
Sources should match the position to be filled. Sources:
Internal

Searches Employee Referrals/ Recommendations

External

Searches Alternatives

Recruiting Sources
The internal search Organizations that promote from within identify current employees for job openings:
by

having individuals bid for jobs by using their HR management system by utilizing employee referrals

Recruiting Sources
The internal search Advantages of promoting from within include
morale

building encouragement of ambitious employees availability of information on existing employee performance cost-savings internal candidates knowledge of the organization

Recruiting Sources
The internal search Disadvantages include:
possible

inferiority of internal candidates infighting and morale problems

Recruiting Sources
Employee referrals/recommendations Current employees can be asked to recommend recruits. Advantages include:
the

employees motivation to make a good recommendation the availability of accurate job information for the recruit Employee referrals tend to be more acceptable applicants, to be more likely to accept an offer and to have a higher survival rate.

Recruiting Sources
Employee referrals/recommendations Disadvantages include:
the

possibility of friendship being confused with job performance

Recruiting Sources
External searches Advertisements: Must decide type and location of ad, depending on job; decide whether to focus on job (job description) or on applicant (job specification). Two factors influence the response rate:
identification

of the organization labor market conditions

Recruiting Sources
External searches Employment agencies:
Public

or state employment services focus on helping unemployed individuals with lower skill levels to find jobs. Private employment agencies provide more comprehensive services and are perceived to offer positions and applicants of a higher caliber.

Recruiting Sources
External searches Schools, colleges, and universities:
May

provide entry-level or experienced workers through their placement services. May also help companies establish cooperative education assignments and internships.

Recruiting Sources
Recruitment alternatives Temporary help services.
Temporary

employees help organizations meet shortterm fluctuations in HRM needs. Older workers can also provide high quality temporary help.

Employee leasing.
Trained

workers are employed by a leasing company, which provides them to employers when needed for a flat fee. Typically remain with an organization for longer periods of time.

Questions???

Selection
By: Dr Kusumawijaya

Selection the process by which an organization chooses from a list of applicants the person or persons who best meet the selection criteria for the position available, considering current environmental conditions

Internal Environmental Factors Influencing Selection

Organization characteristics that can influence the selection process: Size Complexity Technological ability

External Environmental Factors Influencing Selection

Government employment laws and regulations Size, composition, and availability of local labor markets

Selection Criteria

Formal Education

Experience and Past Performance

Physical Characteristics

Personal Characteristics and Personality Type

Reliability of Selection Criteria

Reliability how stable or repeatable a measurement is over a variety of testing conditions.

Validity of Selection Criteria

Validity addresses the questions of:

What

a selection tool measures How well it has measured it

It is not sufficient for a selection tool to be reliable The selection tool must also be valid

Steps in the Selection Process

1. Preliminary Screening

2. Employment Interview

3. Employment Tests

4. Background and Reference Checks

5. Selection Decision

6. Physical Examination

The Selection Process

Initial Screening
Involves

screening of inquiries and screening interviews. Job description information is shared along with a salary range.

The Selection Process

Employment Interview Interviews involve a face-to-face meeting with the candidate to probe areas not addressed by the application form or tests Two strategies for effective use of interviews:
1. Structuring the interview to be reliable and valid 2. Training managers on best interview techniques

The Selection Process

Types of Interviews: Unstructured interview Structured interview Behavioral Interviews
Candidates

are observed not only for what they say, but how they behave. Role playing is often used.

Stress Interviews.

The Selection Process

Realistic Job Preview
RJPs

present unfavorable as well as favorable information about the job to applicants. May include brochures, films, tours, work sampling, or verbal statements that realistically portray the job. RJPs reduce turnover without lowering acceptance rates.

The Selection Process

Employment Tests Mechanism that attempts to measure certain characteristics of individuals, e.g.,
aptitudes intelligence personality

Should be validated before being used to make hiring decisions

The Selection Process

Employment Tests Estimates say 60% of all organizations use some type of employment tests.
Performance

simulation tests: requires the applicant to engage in specific job behaviors necessary for doing the job successfully. Work sampling: Job analysis is used to develop a miniature replica of the job on which an applicant demonstrates his/her skills.

The Selection Process

Employment Tests
Assessment

centers: A series of tests and exercises, including individual and group simulation tests, is used to assess managerial potential or other complex sets of skills. Testing in a global arena: Selection practices must be adapted to cultures and regulations of host country.

The Selection Process

Background Investigation: Verify information from the application form Typical information verified includes:
former

employers previous job performance education legal status to work credit references criminal records

The Selection Process

Background Investigation Do not always provide an organization with meaningful information about applicants Concerns over the legality of asking for and providing confidential information about applicants

The Selection Process

Physical Examinations Should be required only after a conditional offer of employment has been made

Summary

Putting more money into selection can significantly reduce the amount of money it must spend on training

A selection system will make some mistakes

No

guarantee of successful job performance

Questions????

Training and Development

By: Dr.Kusumawijaya

Agenda
The Socialization Process. Employee Orientation. Employee Training Employee Development. Organization Development. Evaluation of Training Program.

Introduction

Socialization, training and development are all used to help new employees adapt to their new organizations and become fully productive. Ideally, employees will understand and accept the behaviors desired by the organization, and will be able to attain their own goals by exhibiting these behaviors.

1. The socialization Process

Socialization
A

process of adaptation to a new work role. Adjustments must be made whenever individuals change jobs The most profound adjustment occurs when an individual first enters an organization.

1. The socialization Process

The assumptions of employee socialization:
Socialization

strongly influences employee performance and organizational stability Provides information on how to do the job and ensuring organizational fit. New members suffer from anxiety, which motivates them to learn the values and norms of the organization.

1. The socialization Process

The assumptions of employee socialization:
Socialization

is influenced by subtle and less subtle statements and behaviors exhibited by colleagues, management, employees, clients and others. Individuals adjust to new situations in remarkably similar ways. All new employees go through a settlingin period.

1. The socialization Process

A Socialization Process

1. The socialization Process

The Socialization Process
Prearrival

stage: Individuals arrive with a set of values, attitudes and expectations which they have developed from previous experience and the selection process.

1. The socialization Process

The Socialization Process

Encounter

stage: Individuals discover how well their expectations match realities within the organization. Where differences exist, socialization occurs to imbue the employee with the organizations standards.

1. The socialization Process

The Socialization Process
Metamorphosis

stage: Individuals have adapted to the organization, feel accepted and know what is expected of them.

2. New-Employee Orientation
Purpose

Orientation may be done by the supervisor, the HRM staff or some combination. Formal or informal, depending on the size of the organization. Covers such things as:
The

organizations objectives History Philosophy Procedures Rules HRM policies and benefits Fellow employees

2. New-Employee Orientation

Learning the Organizations Culture

Culture

includes long-standing, often unwritten rules about what is appropriate behavior. Socialized employees know how things are done, what matters, and which behaviors and perspectives are acceptable.

2. New-Employee Orientation
Roles
The CEOs Role in Orientation Senior management are often visible during the new employee orientation process. CEOs can:

Welcome employees. Provide a vision for the company. Introduce company culture -- what matters. Convey that the company cares about employees. Allay some new employee anxieties and help them to feel good about their job choice.

2. New-Employee Orientation
HRMs Role in Orientation Coordinating Role: HRM instructs new employees when and where to report; provides information about benefits choices. Participant Role: HRM offers its assistance for future employee needs (career guidance, training, etc.).

3. Employee Training
Definitions
training a learning experience designed to achieve a relatively permanent change in an individual that will improve the ability to perform on the job. development future-oriented training, focusing on the personal growth of the employee.
Employee Employee

3. Employee Training
Determining Training Needs

4. Methods of Employee Training

On-the-job training methods

Job

Rotation Understudy Assignments

Off-the-job training methods

Classroom

lectures Films and videos Simulation exercises Vestibule training

5.Employee Development
This future-oriented set of activities is predominantly an educational process. All employees, regardless of level, can benefit from the methods previously used to develop managerial personnel.

5.Employee Development
Employee development methods
Job

rotation involves moving employees to various positions in the organization to expand their skills, knowledge and abilities. Assistant-to positions allow employees with potential to work under and be coached by successful managers.

6. Employee Development Methods

Employee development methods
Committee

assignments provide opportunities for:

by watching others

decision-making learning

becoming more familiar with organizational members and problems

Lecture

courses and seminars benefit from todays technology and are often offered in a distance learning format.

6. Employee Development Methods

Employee development methods
Simulations

include case studies, decision games and role plays and are intended to improve decisionmaking. Outdoor training typically involves challenges which teach trainees the importance of teamwork.

7. Organization Development
What is change? OD efforts support changes that are usually made in four areas:
The

organizations systems Technology Processes People

7. Organization Development

Two metaphors clarify the change process.

The

calm waters metaphor describes unfreezing the status quo, change to a new state, and refreezing to ensure that the change is permanent. The white-water rapids metaphor recognizes todays business environment which is less stable and not as predictable.

8. Evaluating Training and Development Effectiveness

Evaluating Training Programs: Typically, employee and manager opinions are used,
These

opinions or reactions are not necessarily valid measures Influenced by things like difficulty, entertainment value or personality of the instructor.

Performance-based measures (benefits gained) are better indicators of trainings costeffectiveness.

Performance Appraisal and Compensation

By: Dr.Kusumawijaya

Evaluating Employee Performance - Agenda

Purpose of performance management system Difficulties in performance management system Steps of the Appraisal process Appraisal methods

Performance Evaluation

The performance management systems need to include:

decisions about who should evaluate performance what format should be used how the results should be utilized

Purposes of a Performance Management System

Feedback

- let employees know how well they have done and allow for employee input. Development identify areas in which employees have deficiencies or weaknesses.

Difficulties in Performance Management Systems

Focus

on the individual: Discussions of performance may elicit strong emotions and may generate conflicts when subordinates and supervisors do not agree.

Difficulties in Performance Management Systems

Focus

on the process: Company policies and procedures may present barriers to a properly functioning appraisal process. Additionally, appraisers may be poorly trained.

The Appraisal Process

Step 1 and 2

Establishment of performance standards

Derived

from companys strategic

goals. Based on job analysis and job description.

Communication of performance standards to employee.

Step 3 and 4

Measurement of performance using information from:

personal

observation statistical reports oral reports written reports

Comparison of actual performance with standards.

Step 5 and 6
Discussion of appraisal with employee. Identification of corrective action where necessary.
Basic

corrective action deals with causes.

Appraisal Methods
Three approaches: Absolute standards Relative standards Objectives

1. Absolute Standards
Evaluating absolute standards: An employees performance is measured against established standards. Evaluation is independent of any other employee.

1. Absolute Standards
Essay

Appraisal: Appraiser writes narrative describing employee performance & suggestions. Critical Incident Appraisal: Based on key behavior incident illustrating effective or ineffective job performance.

1. Absolute Standards
Checklist

Appraisal: Appraiser checks off behaviors that apply to the employee. Adjective Rating Scale Appraisal: Appraiser rates employee on a number of jobrelated factors.

1. Absolute Standards

Forced-Choice

Appraisal: Appraisers choose from sets of statements which appear to be equally favorable, the statement which best describes the employee.

1. Absolute Standards

Behaviorally Anchored Rating Scales (BARS): Appraiser rates employee on factors which are defined by behavioral descriptions illustrating various dimensions along each rating scale.

2. Relative Method

Employees are evaluated by comparing their performance to the performance of other employees.

2. Relative Method

Group Order Ranking: Employees are placed in a classification reflecting their relative performance, such as top one-fifth.

2. Relative Method
Individual

Ranking: Employees are ranked from highest to lowest. Paired Comparison:

Each

individual is compared to every

other.
Final

ranking is based on number of times the individual is preferred member in a pair.

3. Achieved Outcome Method

Management by Objectives (MBO)
includes

mutual objective setting and evaluation based on the attainment of the specific objectives

3. Achieved Outcome Method

Common
goal

elements in an MBO program are:

decision making feedback

specificity

participative an

explicit time period

performance

Effectively

increases employee performance and organizational productivity.

Creating More Effective Performance Management Systems

Development of Compensation and Pay systems - Agenda

Objectives of compensation Types of rewards Development of a base pay system

Objectives of compensation

Efficiency
Quality Performance Cost

Fairness Compliance

Types of Reward Plans

Intrinsic versus Extrinsic Rewards Intrinsic rewards (personal satisfactions) come from the job itself, such as:
pride

in ones work feelings of accomplishment being part of a work team

Types of Reward Plans

Intrinsic versus Extrinsic Rewards Extrinsic rewards come from a source outside the job
include

rewards offered mainly by management Money Promotions Benefits

Types of Reward Plans

Financial versus Non-financial Rewards Financial rewards include:
wages bonuses profit

sharing pension plans paid leaves purchase discounts

Non-financial rewards emphasize making life on the job more attractive; employees vary greatly on what types they find desirable.

Introduction

Development of a Base Pay System

Job Analysis

Job Evaluation Pay Survey Job Structure

Pay Structure & Grades

Development of a Base Pay System

Job Evaluation Use of job analysis information to determine the relative value of each job in relation to all jobs within the organization.
The

ranking of jobs Labor market conditions Collective bargaining Individual skill differences

Development of a Base Pay System

Job Evaluation Methods Ordering method: A committee places jobs in a simple rank order from highest (worth highest pay) to lowest.

Development of a Base Pay System

Job Evaluation Methods Classification method:
Jobs

are placed in classification grades Compare their descriptions to the classification description and benchmarked jobs Look for a common denominator such as skills, knowledge, or responsibility

Development of a Base Pay System

Job Evaluation Methods Point method:
Jobs

are rated and allocated points on several identifiable criteria, using clearly defined rating scales. Jobs with similar point totals are placed in similar pay grades. Offers the greatest stability.

Development of a Base Pay System

Establishing the Pay Structure Compensation surveys
Used

to gather factual data on pay rates for other organizations Information is often collected on associated employee benefits as well

Any Questions