1-1

1-2

1-3

Objectives
the term human resource management.  Describe the strategic importance of human resource management (HRM) activities.  Explain what career opportunities are available in the HRM field.  Discuss the role that specialists and operating managers play in performing HRM activities.  List the main objectives pursued by HRM units.
 Define

1-4

Introduction
 Human

resource management (HRM) is the effective management of people at work  The goal: make workers more satisfied and productive  When an organization is concerned about people, its total philosophy, culture, and orientation reflect it  Every manager must be concerned with people, whether or not there is a human resources department

1-5

Introduction
 HRM

consists of numerous activities:  Equal employment opportunity (EEO) compliance  Job analysis  Human resource planning  Recruitment, selection, motivation, and orientation  Performance evaluation and compensation  Training and development  Labor relations  Safety, health, and wellness

1-6

Introduction
 The

HRM unit is oriented toward:  Action  People  Global enterprise  The future

1-7

A Brief History of HRM

 HRM

can be traced to England, where craftspeople organized guilds  They used unity to improve working conditions  The Industrial Revolution in the 18th century laid the basis for a new, complex industrial society  Changing work conditions, social patterns, and labor created a gap between workers and owners  During the world wars era, scientific management, welfare work, and industrial psychology merged

1-8

A Brief History of HRM

 Frederick W.

Taylor, the father of scientific management, summarized scientific management as:  Science  Harmony  Cooperation  Maximum output  Industrial psychology, initiated in 1913, focused on:  The worker  Individual differences  The maximum well being of the worker

1-9

A Brief History of HRM

 Personnel departments

were created to deal with:  Drastic changes in technology  Organizational growth  The rise of unions  Government intervention concerning working people  Around the 1920s, more organizations noticed and acted on employee-management conflict

1-10

A Brief History of HRM

 The

Hawthorne studies (1924 to 1933):  Were to determine the effects of illumination on workers and their output  Rather, it pointed out the importance of social interaction on output and satisfaction

 Until

the 1960s, the personnel function was concerned only with blue-collar employees  File clerk, house-keeper, social worker, firefighter, and union trouble defuser

1-11

Strategic Importance of HRM

 Today, HRM

plays a major role in:  Clarifying the firms human resource problems  Developing solutions for them is oriented toward:  Action  The individual  Worldwide interdependence  The future

 It

1-12

Strategic Importance of HRM

 Strategic HRM

differs significantly from traditional

HRM  In traditional arrangements, responsibility for managing human resources lies with different specialists in each department or division  In a strategic approach, people management rests with an individual who is in direct contact with workers or line managers

1-13

1-14

Strategic Importance of HRM

 For

years, the HRM function was not linked to corporate profit  Organizations focused only on current performance  HR managers did not have a strategic perspective  Executives categorized HRM in a traditional manner  It was difficult to develop metrics for HRM activities

 Recognition of

the importance of people made HRM a major player in developing strategic plans  HRM strategies must reflect the organizations strategy regarding people, profit, and effectiveness

1-15

Strategic Importance of HRM

 Key concepts

that must be applied:  Analyze and solve problems from a profit-oriented point of view  Assess and interpret costs and benefits of HRM issues  Planning models must include realistic, challenging, specific, and meaningful goals  Prepare reports on HRM solutions to problems encountered by the firm

1-16

Strategic Importance of HRM

 Key concepts

that must be applied (continued):  Train the human resources staff  Emphasize the strategic importance of HRM  Show managers that they contribute to the goals/mission of the firm

 The

actions, language, and performance of the HRM function must be:  Measured  Precisely communicated  Evaluated

1-17

Strategic Importance of HRM

 The

era of HRM accountability resulted from:  Concerns about productivity  Organizational downsizing and redesign  An increasingly diverse workforce  The need to effectively use all organizational resources to compete in an increasingly complex and competitive world

1-18

Strategic Importance of HRM

 For

the HRM function to be successful, managers in other functions must be knowledgeable and involved  Managers play a major role in setting the direction, tone, and effectiveness of the relationship between:
 The employees  The firm  The work

performed

 Without managerial participation,

there are likely to be major human resource problems

1-19

HRM and Organizational Effectiveness

 For

a firm to survive and prosper, reasonable goals must be achieved in:  Performance  Legal compliance  Employee satisfaction  Absenteeism  Turnover  Training effectiveness and ROI  Grievance rates  Accident rates

1-20

HRM and Organizational Effectiveness

 Effectiveness is

measured by the balance of such complimentary characteristics as:  Reaching goals  Employing the skills/abilities of employees efficiently  Ensuring the influx and retention of well-trained, motivated employees  Three elements needed for firms to be effective:  Mission and strategy  Organizational structure  HRM

1-21

HRM and Organizational Effectiveness

It is important to remember that the people who do the work and create the ideas allow the organization to survive

1-22

HRM and Organizational Effectiveness

 Changes experienced by

organizations:  Growing global competition  Rapidly expanding technologies  Increased demand for individual, team, and organizational competencies  Faster cycle times  Increasing legal and compliance scrutiny  Higher customer expectations

 The

mechanized, routine-oriented workforce is giving way to a knowledge-based workforce

1-23

HRM and Organizational Effectiveness

 Top

management has trouble making strategic planning decisions regarding people  All other resources are evaluated in terms of money high performance management practices results in:  Profitability gains  Stock price increases  Higher company survival rates

 Implementing

1-24

Objectives of the HRM Function

 HRM

contributions to organizational effectiveness:  Helping the organization reach its goals  Employing workforce skills and abilities efficiently  Increasing job satisfaction, self-actualization, and quality of work life

1-25

Objectives of the HRM Function

 HRM

contributions to organizational effectiveness (continued):  Communicating HRM policies to all employees  Maintaining ethical policies and socially responsible behavior  Managing change to the mutual advantage of individuals, groups, the enterprise, and the public

1-26

Objectives of the HRM Function

 Increasing employees

job satisfaction and self-

actualization  Employees must feel that the job is right for their abilities and that they are being treated equitably  Satisfied employees are not automatically more productive
 However,

unsatisfied employees tend to be absent and quit more often and produce lower-quality work

 Both

satisfied and dissatisfied employees can perform equally in quantitative terms

1-27

Objectives of the HRM Function

 Quality of

work life (QWL) is a general concept that refers to several aspects of the job, including:  Management and supervisory style  Freedom and autonomy to make decisions on the job  Satisfactory physical surroundings  Job safety  Satisfactory working hours  Meaningful tasks  The job and work environment should be structured to meet as many workers needs as possible

1-28

Objectives of the HRM Function

 Communicating

HRM policies to

all employees:  HRM policies, programs, and procedures must be communicated fully and effectively  They must be represented to outsiders  Top-level managers must understand what HRM can offer

1-29

Objectives of the HRM Function

 Maintaining

ethical policies and socially responsible

behavior:  HRM managers must show by example that HRM activities are fair, truthful, and honorable  People must not be discriminated against  Their basic rights must be protected
 These principles

should apply to all activities in the

HRM area

1-30

Objectives of the HRM Function

 Trends

that strain employer-employee relationships:  Telecommuting  Outsourcing HRM  Family medical leave  Child care  Spouse-relocation assistance  Pay for skills  Benefit cost-sharing  Union-management negotiation

 These changes

are due to the emergence of new lifestyles and an aging population

1-31

Objectives of the HRM Function

 Managing increased urgency

and faster cycle

times:  Firms are placing a growing emphasis on:  Increasing customer service  Developing new products and services  Training and educating technicians, managers, and decision makers

1-32

Objectives of the HRM Function

 Shorter cycle times

mean less time to:  Train, educate, and assign managers  Solve sexual harassment complaints  Recruit and select talented people  Improve the firms image framework for decreasing

 Learning provides a

cycle time

1-33

Objectives of the HRM Function

 Faster, more

urgent management behaviors have been caused by:  Foreign and domestic competition  Technological changes  The emergence of new opportunities

 Pressure to

increase learning and reduce cycle time, while also reducing cost, is a competitive reality  HRM activities must be in sync with the firms environment

1-34

Who Performs HRM Activities

 Two groups

normally perform HRM activities:  HR manager-specialists  Operating managers

 The

effectiveness of the human resource declines more quickly than all other resources  An investment in people effects organizational effectiveness more than money, materials, or equipment

1-35

Who Performs HRM Activities

A

large part of an operating managers day is spent:  In scheduled and unscheduled meetings  In telephone conversations  Solving problems that have a direct impact on people

 In

smaller organizations, the operating manager has such HRM responsibilities as:  Scheduling work  Recruitment and selection  Compensating people

1-36

Who Performs HRM Activities

 As

the organization grows, the operating managers HR work may be shifted to HRM specialists  HR specialists are found in organizations with 100 to 150 employees  A HR department is typically created when the number of employees reaches 200 to 500

1-37

Outsourcing
 Outsourcing HRM

activities is growing in popularity

because of:  Downsizing  Rapid growth or decline of business  Globalization  Increased competition  Restructuring

1-38

Outsourcing
 Some

executives assume that outsourcing can:  Reduce costs  Improve flexibility  Permit the hiring of specialized expertise

 The

choice to outsource HRM activities is being made with little empirical support

1-39

Interaction of Operating & HR Managers

 With

both operating managers and HR specialists making HRM decisions, there can be conflict  They have different orientations and objectives is worse if joint decisions must be made on:  Discipline  Physical working conditions  Termination  Transfer  Promotion  Employment planning

 Conflict

1-40

Interaction of Operating & HR Managers

 Operating managers

and HR specialists can also

differ on:  How much authority employees have over job design  Labor relations  Organizational planning  Rewards, such as bonuses and promotions

1-41

Interaction of Operating & HR Managers

 The

roles of HRM and operating managers have been impacted by:  Sweeping changes in business  Globalization  Technology  Demography  People dont leave companies, they leave managers  HRM can help managers do a better job

1-42

Interaction of Operating & HR Managers

 HRM

is often seen as a company policeman  It is also seen as inflexible and over-attentive to detail specialists are encouraged to:  Analyze every activity and prove its added value  Understand the business  Become a strategic partner with line managers  Seek out operating managers  Help managers avoid problems  Be flexible and open to the ideas of others

 HRM

1-43

1-44

HRMs Place in Management

 The

HR department must be a proactive, integral part of management and strategic planning

specific organizational needs for the use of its competence Evaluate the use and satisfaction among other departments Educate management and employees about the availability and use of HRM services
Ascertain
 HRM

strategic plans must build on the firm's strengths

1-45

HRMs Place in Management

 To

develop a competitive advantage over other firms:  Organizations must create value in a way that is rare and difficult for competitors to imitate

 These things

must become so important and effective that every unit in the firm knows they are needed for success:  The compensation system  Training opportunities  Diversity management programs

1-46

HRMs Place in Management

 HR

executives must educate other departments about the human resource implications of decisions  This requires being familiar with other aspects of the organization, including:
 Investments  Advertising  Marketing  Production

control  Computer utilization  Research and development

1-47

HR Department Operations
 Most

organizations keep HR units small  About 150 people maximum

 The

number of HR specialists to operating employees (personnel ratio) varies by industry:  The national average is 1 specialist to 100 employees
 Construction, agriculture, retail, wholesale,

and services have fewer specialists than average  Public utilities, durable goods manufacturing, banking, insurance, and government have an above-average ratio

1-48

HRM Strategy
A

firm's HRM strategy integrates major objectives, policies, and procedures into a cohesive whole  A well-formulated HRM strategy aggregates and allocates a firm's resources on the basis of:  The organizations internal strengths and weaknesses  Changes in the environment  The anticipated actions of competitors

1-49

Clarifying Meaningful HRM Objectives

 The

objectives of an organization or department are the goals it seeks to achieve  Most objectives are stated in very general terms, from which more specific statements are developed  These plans are called policies and procedures or rules

1-50

Clarifying Meaningful HRM Objectives

Strategy: The plan that integrates major objectives
More specific

Objectives: Goals that are specific and measurable

More specific

Policies: Guides to decision making

More specific

Procedures/Rules: Specific directions for decision making

1-51

HRM Policy
A

policy is a general guide that expresses limits within which action should occur  Policies arise from past or potential problems  They free managers from making certain decisions  They ensure some consistency in behavior  They allow managers to concentrate on decisions in which they have the most experience and knowledge some organizations, the next step is to develop procedures and rules

 For

1-52

HRM Procedures
 Procedures (rules)

are a specific direction to action  In large organizations, procedures are collected and put into manuals called standard operating procedures (SOPs)  Organizations must ensure that consistent decision making flows from a well-developed, but not excessive, set of policies and procedures  Procedures should be developed for only the most vital areas

1-53

Organization of an HR Department
 In

most organizations, the chief HR executive reports to the top manager  In medium- and small-sized organizations, HRM and another function may be in a single department  In nonprofit organizations, HRM is typically a unit in the business office  HR specialists are usually located at the headquarters of an organization

1-54

Plan of the Book

 This

book is divided into these sections:  Part 1: Introduction to HRM and the Environment
 Part  Part  Part  Part  Part

II: Acquiring Human Resources III: Rewarding Human Resources IV: Developing Human Resources V: Labor Management Relations VI: Protecting Human Resources