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BDS 204 : Human Resource Management

CHAPTER 1

Intro to Human Resource Management

2010 Cosmopoint

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Topic Outlines

1.1 Definition of Human Resource Management (HRM)

1.2 Why Study HRM

1.3 Core Competencies

1.4 Functions of a HR Manager

1.5 Management

1.6 Functions of Management1.7 Is HRM Part of Management?

1.8 Authority

1.9 Factors Influencing the Changing HRM

2.0 Measuring HRs Contribution

2.1 An Emphasis on Performance

2.2 HR Metrics2.3 HR Scorecard

2.4 The High Performance Work System (HPWS)

2.5 The NEW HR Manager

2.6 Need to know Employment Law

2.7 Equal Employment Opportunity (EEO)

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Topic Outlines

2.8 Diversity Management

2.9 Affirmative Action

3.0 Diversity Management versus Affirmative Action

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This chapter aims to:

Chapter Aims

1. Define human resources management

2. Understand the importance of human resources as a competitiveadvantage

3. Illustrate the HR management responsibilities of line and staff (HR)

managers4. Provide good examples that illustrate HRs role in formulating and

executing company strategy

5. Understand the importance of metrics and measurement to HR managers

6. Explain what is Equal Employment Opportunities, Diversity Managementand Affirmative Action Programs

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1.1 Definition of Human Resource Management (HRM)

Process of acquiring, training, appraising

and compensating employees, andattending to their labor relations, health

and safety and fairness concerns.

Topics

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1.2 Why Study HRM

People are the key tobuilding anorganizationscompetitive advantage

The knowledge, skills

and abilities of itsemployees are theingredients of theorganizations corecompetencies.

Knowledge

SkillsAbilities

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1.3 Core Competencies

Core competencies are the integrated knowledge in an organization that

distinguish it from its competitors and deliver value to customers

Organizations can achieve sustained competitive advantage through

people if they are able to meet the following criteria:

Resources must be of value

Resources must be rare

Resources must be difficult to imitate

Resources must be organized

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1.4 Functions of a HR Manager

HR

Research

Employee &

Labor Relations

Safety &

Health

Compensation

& Benefit

HR

Development

Staffing

Strategic

Partner

Functions

Topics

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Staffing

A process where an organization ensures that its existing workforceis sufficient and has the necessary skills to achieve its organizations

objectives. Staffing involves job analysis, human resource

planning, recruitment and selection.

It is vital for an organization to have a workforce that is person-

organization fit.

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Human Resource Development

Purpose of the activities under HRD are: developing and motivating employees

improving employees productivity and job satisfaction

achieve the organizations mission and vision

Activities under HRD are: 1. training and development, 2.individual career planning and development activities, 3.

organization development and 4. performance appraisal

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Compensation and Benefits

A comprehensive compensation system that provides employees with

sufficient and fair rewards

Rewards such as pay and benefits

Pay Benefits - Car Benefits Medical Insurance

Topics

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Safety and Health

Develop a safe and healthy working environment for employees

Protect employee from injuries caused by work-related

accidents and diseases

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Employee and Labor Relations

When a labor union represents a firms employees,this human resource activity is known as industrialrelations.

Collective bargaining will be conducted between theTrade Union and employer on issues such as wages,employees benefits and grievance handling.

That is

impossible but

we are willing

to offer a 4%

pay rise

Trade Union RepEmployers Rep.

Topics

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Human Resource Research

Major source in revising new HRM policies.

For instance, research on job safety may

identify the causes of certain work-related

accidents in the industry. Therefore, HR cantake steps to avoid such accidents in the

organization.

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Strategic Partner

Participate in formulating strategies bysupplying information on the companys

external and internal environment.

Identify HR practices that would ensure the

success of the strategy via selecting and

utilizing the right people and leveraging other

resource

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1.5 Management

Process of getting things done, efficiently and

effectively, through and with other people.

Efficiency means doing things right at the

minimum cost Effectiveness means doing the right thing.

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1.6 Functions of Management

Planning: Define goals, establish strategies anddevelop plans to implement the strategies andachieve the goals

Organizing: Determine the tasks, who does them,how they are done, and responsibilities for decisionsand follow-up

Leading: Motivate employees, direct the activities ofothers, select the most effective communicationchannels, or resolve conflicts among group members

Controlling: Monitor and compare performance withgoals and address performance shortfalls.

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1.7 Is HRM Part of Management?

Management HRM FunctionsPlanning Human Resource Research;

Strategic Partner; HR

Development

Organizing Organization structure; HRrelated manuals, job analysis

Leading Employee and labor relations,

line manager, compensation &

benefitsControlling Monitor HR strategies, policies

and practices on a regular

basis

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1.8 Authority

Authority is the right to decide, give orders and direct thework of others

Two types of authority i.e.

Line authority is given to line managers who direct thework of the subordinates in order to achieve the

organizations basic goals Staff authority refers to the authority given to staff

managers to assist and advise line managers inaccomplishing the organizations basic goals

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Are All Managers Also HR Managers?

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Answer: Yes

The HRM responsibilities of line managers are as

follows: Placing the right person on the right job

Starting new employees in the organization(orientation)

Training employees for jobs that are new to them

Improving the job performance of each person

Gaining creative cooperation and developing smoothworking relationships

Interpreting the companys policies and procedures

Controlling labor costs Developing the abilities of each person

Creating and maintaining department morale

Protecting employees health and physical condition

Topics

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1.9 Factors Influencing the Changing HRM

Globalization Technological Advances

Outsourcing Jobs

Nature of Work Workplace Demographics

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Globalization

Definition: Firms expanding their sakes,ownership or

operations to new markets in other countries

Effect on HR: Employees need to increase their

productivity and efficiency. As such, organizationswould need to provide training and development

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Technological Advances

The rapid technology advancement has reduced thedemand of unskilled jobs and increased the demand

for jobs that require considerable skill.

Effect on HR : Employees require retraining in order to

handle their new responsibilities and role.

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Outsourcing Jobs

Intense competition and the pursuit of lower costs andhigher efficiency have prompted more employers tooutsource their jobs abroad.

Effect on HR: The HR Department needs tounderstand the culture of other countries and developcompensation, staffing and selection and trainingpolicies to meet the requirements of each country.

Topics

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Nature of Work

Among the changes to the nature of work due to theever-changing technology are as follows:

An increase in knowledge-intensive high techmanufacturing industries

An increase shift of manufacturing jobs to low-wagecountries

An increase in integrated supply chains

An increase demand in skilled workers inmanufacturing jobs

A shift towards part-time workers, independentcontractors, flexi hours working arrangements andjob sharing arrangements

Topics

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Effect on HR :

There is a high need for knowledge workers and human

capital. Human capital refers to the knowledge, education,

training, skills and expertise of a firms workers. This means

continuous training and development as well as careerplanning for employees.

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WorkforceDemographics

The workforce demographics in Malaysia isbecoming more diverse today as more womenand foreign workers enter the workforce.

Effect on HR: The HR Department needs to be

aware of the different needs of their differentemployees. They need to be aware of the latestpolicy in recruiting foreign workers and providesome family-friendly benefits

Topics

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2.0 Measuring HRs Contribution

Strategy The companys

long-term plan forhow it will balanceits internal strengths

and weakness withits externalopportunities andthreats to maintain acompetitiveadvantage

Perf

or

ma

nce Strateg

y

Peo

ple

Point APoint B

Topics

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HR mangers today are more involved inpartnering with their top managers in both

designing and implementing their

companies strategies Top management wants to see, precisely,

how the HR managers plans will make

the company more valuable

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2.1 An Emphasis on Performance

Need to increase productivity HR manager needs to adapt their HR

systems to:

suit the organizations strategic needs manage these changes effectively

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2.2 HR Metrics

A set of quantitative HR performancemeasures

Examples include: Workerscompensation cost per employee,

turnover rate, turnover costs, etc. Top management expects moreforward-looking information such as

How will the new incentive

compensation plan assist theorganization in improving the profitabilityof the organization?.

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2.3 HR Scorecard

The HR Scorecard measures the HRfunctions effectiveness and efficiency in

producing employee behaviors needed

to achieve the organizations strategicgoals.

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The HR Scorecards answers two

questions:

Do HR policies and practices create

value to an organization?

Does it help the organization in achieving

its objectives?

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Service levels and process measures such as

cost per recruit, number of learning plans

implemented and number of projects completed

are used to measure employees performance. These measures will be used to gauge and

measure their employees more effectively.

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2.4 The High Performance Work System (HPWS)

Its main purpose is to maximize the competenciesand abilities of all employees in the organization,thus, achieving the following:

Generate more job applicants

Employee screening is more effective Better training

Linking pay more explicitly to performance

Safer and healthier working environment

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2.5 The NEW HR Manager

The HR manager today needs to be proficient inthe following areas:

Leadership Proficiencies

Learning Proficiencies

HR Proficiencies

Business Proficiencies

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2.6 Need to know Employment Law

Types of HR-related Law in Malaysia are asfollows:

Employment Act 1955

Industrial Relations Act 1967

Trade Unions Act 1959Occupational Health and Safety Act 1994

Immigration Act

Employees Provident Fund Act 1991

Human Resources Development Act 1992Ethics Law such as Sarbanes-Oxley Act 2003

Topics

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2.7 Equal Employment Opportunity (EEO)

Equal employment opportunity (EEO) refersto the fair and nonbiased treatment ofindividuals in all aspect of employmentregardless of age, gender, colour, national

origin and race. This means practicing workplace rules,

policies, practices and behaviors that do notdiscriminate people.

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2.8 Diversity Management

Diversity management focuses on managingthe difference within an organizations

workforce, capitalizing on the benefits of

diversity and minimizing on workplace

challenges.

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Provide Strong Leadership Assess the Situation

Provide Diversity Training andEducation to Employees

Change Culture and ManagementSystems.

Evaluate the Diversity Management

Program

Organizational activities that would ensure the success of these programs:

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2.9 AffirmativeAction

Affirmative action aims at eliminating thecurrent effects of past discrimination byhiring and promoting the minority group

Steps taken by employers are: Issue a written EEO policy and astatement indicating the employerscommitment to affirmative action

Appoint a top official to direct andimplement the program

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Publicize the policy and affirmative action commitment

Conduct a survey on the present minority and female employees todetermine their suitability for promotion

Establish goals and timetables to improve the utilization of minorities,males and females in each identified area

Develop and implement specific programs to achieve these goals

Develop an internal audit and reporting system for monitoring andevaluating the progress of the programs

Build support for the program both internally and externally

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3.0 Diversity Management versus Affirmative Action

DiversityManagement Affirmative ActionVoluntary Mandatory

Focuses onproductivity,

efficiency and

quality

Focuses on legal,social and moral

justifications

Includes allelements of

diversity

Includes only race,gender and

ethnicity

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Diversity Management versus Affirmative Action

Diversity Management Affirmative

Action

Emphasizes changing

systems and operation

Emphasizes changing the

mix of people

Offers a perception of equity Offers a perception of

preference

Long-term and ongoing Short-term and limited

Is grounded in individuality Is grounded in assimilation