Chap 1 Mandy

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Copyright 2010 Pearson Education, Inc.publishing as Prentice Hall 1-1

Human Resource Management

Chapter 1

STRATEGIC HUMAN

RESOURCE MANAGEMENT:

AN OVERVIEW


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Employer Branding

Firms corporate image or culture

Embodies values and standards that guidepeoples behavior

People know what company stands for,people it hires, fit between jobs andpeople, and results it recognizes and

rewards Important in getting highest quality

applicants to join firm


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Employers Culture Is Known for

Such Things As

Its fun to work at this company

We have a passionate and intelligentculture

There is a strong team feeling here

Its a great place to work

Hopefully it will NOT be: We hate it here


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External Evidence of a Great Brand

Fortunemagazine - 100 Best Companies to Work For

Working Motherlist of 100 best companies

Fortunemagazine list of 100 fastest-growing companiesin the United States

Moneymagazine list of 100 best places to live

Business Ethicsmagazine list of 100 Best CorporateCitizens

BusinessWeeklist of 100 best small companies

Computerworldlist of Best Places to Work Black Enterpriselist of Best Companies for Diversity


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Human Resource Management

Utilization of individuals to

achieve organizational objectives

All managers at every level mustconcern themselves with human

resource management

Five functions


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1

HumanResource

Management

Safety andHealth

Human Resource Management Functions


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Staffing

Job Analysis

Human Resource Planning Recruitment

Selection


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Staffing (Cont.)

Staffing - Process through whichorganization ensures it always has propernumber of employees with appropriate

skills in right jobs at right time to achieveorganizational objectives

Job analysis - Systematic process ofdetermining skills, duties, and knowledgerequired for performing jobs inorganization


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Staffing (Cont.)

Human resource planning - Systematicprocess of matching internal and externalsupply of people with job openings anticipated

in the organization over specified period oftime

Recruitment - Process of attracting individualson a timely basis, in sufficient numbers, and

with appropriate qualifications, to apply forjobs with an organization


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Staffing (Cont.)

Selection - Process of choosing from agroup of applicants the individual bestsuited for a particular position and the

organization


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Measuring Quality of Hire inTodays Environment

How do you measure quality of hire and setstandards for new-hire performance?

Quality of hire is stressed these days

Developers of automatic tracking systems areactively involved in trying to come up with theanswer to the question of quality of hires

In a few years, some standards will emerge onhow you measure and represent your talentmanagement


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Human Resource Development

Training

Development

Career Planning

Career Development

Organizational Development

Performance Management

Performance Appraisal


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Human Resource Development(Cont.)

Training - Designed to provide learnerswith knowledge and skills needed for theirpresent jobs

Development - Involves learning that goesbeyond today's job; more long-term focus

Career planning - Ongoing processwhereby individual sets career goals andidentifies means to achieve them


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Career development - Formal approachused by organization to ensure that peoplewith proper qualifications and experiences

are available when needed

Organization development - Planned andsystematic attempts to change the

organization, typically to a more behavioralenvironment


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Performance management - Goal-orientedprocess directed toward ensuringorganizational processes are in place tomaximize productivity of employees, teams,and ultimately, the organization

Performance appraisal - Formal system of

review and evaluation of individual or teamtask performance


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Compensation

Compensation-All rewards that

individuals receiveas a result of theiremployment


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Compensation

Direct Financial Compensation -Pay thatperson receives in form of wages, salaries,bonuses, and commissions

Indirect Financial Compensation (Benefits) -Allfinancial rewards not included in directcompensation such as paid vacations, sickleave, holidays, and medical insurance

Nonfinancial Compensation - Satisfaction thatperson receives from job itself or frompsychological and/or physical environment inwhich person works


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Safety and Health

Employees who workin safe environment

and enjoy good healthare more likely to beproductive and yield

long-term benefits toorganization.


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Safety and Health

Safety - Involves protecting employeesfrom injuries caused by work-relatedaccidents

Health - Refers to employees' freedomfrom illness and their general physical andmental well being


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Employee and Labor Relations

In 2007:

Number of workers belonging to a

union rose by 311,000 to 15.7 million Union membership rate for public

sector workers was 35.9 percent

Union membership rate for privateworkforce was 7.5 percent


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Employee and Labor Relations(Cont.)

Business is required by law torecognize union and bargain with it

in good faith if firms employeeswant union to represent them

Human resource activity is often

referred to as industrial relations Most firms today would rather have

union-free environment


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Human Resource Research

Human resourceresearch is not

separate function.

It pervadesall HRfunctional areas.


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Interrelationships of HRMFunctions

All HRM functions

are interrelated Each function affects

other areas


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Dynamic HumanResource

Management

Environment

E i t f H R M t


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Environment of Human Resource Management

EXTERNAL ENVIRONMENT

INTERNAL ENVIRONMENT

1

HumanResource

Management

OtherFunctional

Areas

OperationsMarketing

Finance

LegalConsidera

tions

Economy

Technol

ogy

Society

Shareholder

s

Unions

Customers Competition Labor Market

Safety andHealth

Unanticipated

Events


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Labor Market

Potential employeeslocated within

geographic areafrom whichemployees are

recruited Always changing


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Legal Considerations

Federal, stateand local

legislation

Court decisions

Presidentialexecutive orders


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Society

No longer content to accept, withoutquestion, the actions of business

Ethics - Discipline dealing with what is

good and bad, or right and wrong, orwith moral duty and obligation

Corporate social responsibility -

Implied, enforced or felt obligation ofmanagers to serve or protect interestsof groups other than themselves


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Unions

Group of employeeswho have joined

together for purpose ofdealing collectively withtheir employer

Becomes a third party

when dealing with thecompany


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Shareholders

Owners of corporation

Because they have invested

money in firm, they may at timeschallenge programs considered

by management to be beneficialto organization


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Competition

Firms may faceintense competition inboth their product orservice and labor

markets Must maintain a

supply of competentemployees

Bidding war oftenresults


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Customers

People who actually usefirms goods and services

Management has task of

ensuring its employmentpractices do not antagonizemembers of market it serves

Workforce should becapable of providing top-quality goods and services


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Cyberwork

Possibility of never-endingworkday

BlackBerrys, cell phones,

text messaging, and e-mailcreate endless possibilitiesfor communication

Some workers believe theiremployer wants themavailable 24/7


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Economy

In general, wheneconomy is booming, it isoften more difficult torecruit qualified workers.

When a downturn isexperienced, moreapplicants are typicallyavailable.


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Unanticipated Events

Occurrences in externalenvironment that couldnot be foreseen

Every disaster, whethermanmade or by nature,requires a tremendousamount of adjustmentwith regard to humanresource management


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HRs Changing Role: Questions

That Are Being Asked

Can some HR tasks be performed moreefficiently by line managers or outside vendors?

Can some HR tasks be centralized or eliminatedaltogether?

Can technology perform tasks that werepreviously done by HR personnel?

Many HR departments continue to get smaller.


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HRs Changing Role:

Who Performs Human

Resource Management Tasks?

Human Resource Managers

HR Outsourcing HR Shared Service Centers

Professional Employer Organization

(Employee Leasing)

Line Managers


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Human Resource Manager

Historically, the human resourcemanager was responsible for each ofthe five HR functions

Acts in advisory or staff capacity Works with other managers to help

them deal with human resource matters

Today HR departments continue to getsmaller because others areaccomplishing certain functions


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HR Outsourcing

Transfersresponsibility to an

external provider Market for HR

outsourcing is

growingdramatically


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Ways HR Outsourcing is Done

Discrete services

Multi-processservices

Total HR outsourcing


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Discrete Services

One element of business process or

single set of high-volume repetitive

functions is outsourced to a third-party

Large majority of companies

outsource transactional HR activities,such as 401(k) administration


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Copyright 2010 Pearson Education, Inc.

publishing as Prentice Hall1-43

Multi-Process Services

Complete outsourcing

of one or more human

resource processes

Example: Procter &Gamble outsources

entire trainingoperations


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Total HR Outsourcing

Transfer majority of HR services tothird party

Example: Whirlpool Corporationsigned 10-year deal to outsource HRbusiness processes for 68,000employees to Convergys Corporation

Total outsourcing is difficult toaccomplish


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HR Shared Service Centers

(SSCS)

Takes routine,

transaction-basedactivities that aredispersed and

consolidates them inone location


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P f i l E l


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Professional EmployerOrganization (Cont.)

Company releases its employeeswho are then hired by PEO

PEO pays the employees PEO is employees legal employer

and has rights to hire, fire, discipline,

and reassign an employee Charges a fee of from 2-7% of the

customers gross wages


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Advantages of PEOs

Often enjoy economies of scale that permitthem to offer wider selection of benefits atconsiderably lower costs

Workers frequently have greateropportunities for job mobility

If client organization suffers a downturn,the leasing company offers job security

PEO can handle compliance requirementsof programs such as 401(k) programs


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Line Managers PerformingHR Tasks

Involved with human resourcesby nature of their jobs

Line managers are nowperforming some duties typically

done by HR


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HR as a Strategic Partner

HR executives mustunderstand complexorganizational design

Sharp deviation fromwhat has traditionallybeen an

administrative-typerole for HR

St t i A ti iti CEO W t


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Strategic Activities CEOs Wantfrom HR

Make workforce strategies integral tocompany strategies and goals

Leverage HRs role in major change

initiatives

Earn the right to a seat at the corporatetable

Understand finance and profits

Help line managers achieve their goals

St t i A ti iti CEO W t


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Strategic Activities CEOs Wantfrom HR (Cont.)

HR professionals must integrate goals ofHR with goals of the organization

Must focus on expanding its strategic andhigh-level corporate participation with anemphasis on adding value

HR must demonstrate that it can producea return on investment for its programs


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Questions to Be Answered to Determine ifHR Is Involved Strategically

Is HR present at mergers and acquisitionsplanning meetings, strategy reviews, andrestructuring discussions?

Does HR provide an annual report on itsROI?

Does HR lead the people strategy?

Has it developed performance indicatorsfor the success of that strategy?


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Questions to Be Answered to Determine ifHR Is Involved Strategically (Cont.)

Is HR rated by its customers?

Does the organization conduct strategicversus entitlement employee surveys?

Are employee and other survey initiativeslinked to customer and financial metrics?

Is there an ROI process to evaluate HRinitiatives connected to the businessstrategy?


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Strategic HR Audit

If HR professionals are to achievethe level of respect they desire,they must be subjected to theaudit process

Auditors should document if HRactivities are being accomplishedin an optimum manner


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Human Capital Metrics

Measures of HRperformance


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Examples of HR Metrics

Time to fill open positions

HR headcount ratios

Administrative cost per employee

Turnover cost

Training return on investment

Quality of hire


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HR Scorecard

Report card of

effectiveness of

specific person

Metrics that will bestsuit each company

depend on variety offactors


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Human Resource

Designations

Human Resource Executives


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Human Resource Executives,

Generalists, and Specialists

Vice President,Human

Resources

Vice President,IndustrialRelations

Manager,Compensation

Manager,Staffing

Manager,Training andDevelopment

Benefits Analyst

Executive:Generalist:Specialist:


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Characteristics of an HR

Executive

Performs one or more HR functions

A top-level manager

Reports directly to CEO or head ofmajor division


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Generalist

Often an executive

Performs tasks in various HR-related areas

Involved in several, or all, ofthe five HRM functions


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Specialist

May be an HR executive,

manager, or non-manager

Typically concerned with only one

of the five functional areas


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Evolution Of HumanResource Management

Traditional Human Resource


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publishing as Prentice Hall

1-65

Traditional Human ResourceFunction in Large Firm

Separate sections were often created

Placed under an HR Manager

Each HR function may have asupervisor & staff

HR Manager works closely with top

management in formulating policy

Traditional Human Resource Functions


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Traditional Human Resource Functionsin a Large Firm

Presidentand CEO

Vice President,Marketing

Vice President,Operations

Vice President,Finance

Vice President,Human

Resources

Manager,Training andDevelopment

Manager,Compensation

Manager,Staffing

Manager,Safety and

Health

Manager,Labor

Relations


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Evolution of Human Resource

Management

First edition text was titledPersonnel: The Management of

Human Resources, and focus wasmore on personnel as staff oradvisory function

Title has changed to HumanResource Managementwith moregeneral management focus


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Other Name Changes

Personnel Administratorchangedits name to HR Magazine

PersonneltoHR Focus

Personnel Journalto WorkforceManagement

Today, the people who perform HRtasks are certainly different thanthey were even a decade ago


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The Evolving HR Organization

HR Outsourcing

HR Shared ServiceCenters

Professional EmployerOrganization

Line Manager

Evolve to make HR morestrategic

A Possible Evolving HR


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A Possible Evolving HROrganization Example

Presidentand CEO

VicePresident,Operations

VicePresident,StrategicHuman

Resources

VicePresident,Finance

Directorof Safety

andHealth

Training &Development(Outsourced)

Compensation(Shared Service

Centers)

Staffing (LineManagers, Use ofApplicant Tracking

Systems)

VicePresident,Marketing

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A Global Perspective: Cultural


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A Global Perspective: Cultural

Differences in Global HR

Countrys culture is the set of values,symbols, beliefs, languages, and norms thatguide human behavior within the country

Learned behavior develops as individualsgrow from childhood to adulthood

Companies operating in the globalenvironment recognize that national culturesdiffer and that such differences cannot beignored

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