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Human Resource Management 12th Edition

Chapter 1 STRATEGIC HUMAN RESOURCE

MANAGEMENT: AN OVERVIEW

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 4-14-1

Human Resource Management (HRM)

• Utilization of individuals to achieve organizational objectives

• Concern of all managers at every level


HRM Functions


1

Human Resource

Management

Human Resource

Development

Com

pens

atio

n

Staffing

Em

ployee and

Labor Relations

Safety and Health


Staffing

Process of ensuring the organization always has:•Proper number of employees

•Employees with appropriate skills

•Employees in the right jobs at the right time

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 1-5

Job Analysis

• Systematic process of determining skills, duties, and knowledge required for performing jobs in organization

• Impacts virtually every aspect of HRM


Human Resource Planning

• Matching internal and external supply of people with anticipated job openings over specified period of time

• Sets the stage for recruitment or other HR actions

Recruitment and Selection

Recruitment: Attracting individuals to apply for jobs

•Must be timely

•Applicants need appropriate qualifications

•Need sufficient number of applicants

Selection: Choosing individual best suited for a particular position and the organization


Human Resource Development

Major HRM function; includes:– Training

– Development

– Career planning

– Career development

– Organization development

– Performance management

– Performance appraisal


Training and Development

Training: Providing learners with knowledge and skills needed for their present jobs

Development: Offering learning that goes beyond present job•Long-term focus


Career Planning and Development

Planning is an ongoing process. • Individual sets career goals

• Identifies means to achieve them

Development is a formal approach used by the organization. • Ensures a pipeline of people with proper

qualifications and experiences



Organization Development

Planned and systematic attempt to:

– Make the organization more effective

– Create positive behavioral environment

Performance Management

Goal-oriented process to ensure organizational processes are in place to maximize productivity•Applies to employees, teams, and ultimately, the organization



Performance Appraisal

Formal system of review and evaluation– Individual

– Team


Compensation

All rewards that individuals receive as a result of their employment


Financial Compensation

Direct: Pay employee receives in form of wages, salaries, bonuses, or commissions

Indirect: Benefits employee receives•Paid vacations, sick leave, holidays, medical insurance


Nonfinancial Compensation

Satisfaction that person receives from:

–Job itself

–Psychological and/or physical environment


Safety and Health

Safety: Protecting employees from injuries caused by work-related accidents

Health: Employees' freedom from illness and their general physical and mental well-being

Labor Unions and Collective Bargaining

• Businesses are required by law to recognize a union and bargain with it in good faith if the firm’s employees want the union to represent them.

• Human resource activity with a union is often referred to as industrial relations.



Internal Employee Relations

HRM activities associated with the movement of employees within the organization

– Promotions

– Demotions

– Terminations

– Resignations


Interrelationships of HRM Functions

• All HRM functions are interrelated

• Each function affects the others

DYNAMIC HUMAN RESOURCE MANAGEMENT ENVIRONMENT



Environment of Human Resource Management


Legal Considerations

• Federal, state, and local legislation

• Court decisions

• Presidential executive orders

Labor Market

• Potential employees located within certain geographic area

• Always changing


Society

Ethics: Deals with what is good and bad, or right and wrong, and with moral duty and obligation

Corporate social responsibility: Implied, enforced, or felt obligation of managers to serve or protect interests of groups other than themselves



Unions

• Group of employees who have joined together to collectively bargain with their employer

• Become a third party when dealing with the company

Shareholders

• Owners of corporation

• Have invested money in firm

• May at times challenge programs considered by management to be beneficial to organization



Competition

• In product or service and labor markets

• Firms must maintain a supply of competent employees

• Bidding war often results


Customers

• People who actually use firm’s goods and services.

• Employment practices should not antagonize members of the market the firm serves.

• Workforce should be capable of providing top-quality goods and services.

Trends and Innovations: The Many Uses of Social Networking

• Virtual community of people using the Internet to communicate

• Encompasses wikis, blogs, LinkedIn, Facebook, and Twitter

• Facilitates interactions among people who cannot easily meet in person



HR Technology

Rapid technological changes provide:

•Increased sophistication

•Ability to design more useful human resource information systems (HRIS)


HRIS

• An organized approach for obtaining information on which to base HR decisions

• An umbrella for merging the various subsystems

• Mainstay HR responsibilities need an HRIS

Economy

• When economy is booming, it is often more difficult to recruit qualified workers.

• In economic downturn, more applicants are typically available.



Unanticipated Events

• Unforeseen occurrences in external environment

• Require a tremendous amount of adjustment with regard to HRM

HR’S CHANGING STRATEGIC ROLE


HR’s Changing Role: Questions

• Can some HR tasks be performed more efficiently by line managers or outside vendors?

• Can some HR tasks be centralized or eliminated?

• Can technology perform tasks that were previously done by HR personnel?


Who Performs Human Resource Management Tasks?

• Human resource managers

• HR outsourcing

• HR shared service centers

• Professional employer organization (employee leasing)

• Line managers


Human Resource Manager

• Historically, the HR manager was responsible for each of the 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 get smaller.


HR Outsourcing

• Transfers responsibility to an external provider– Discrete services

– Multi-process services

– Business process outsourcing (BPO)



Discrete Services

• Single set of high-volume repetitive functions is outsourced to a third party

• Typically transactional HR activities

• Example: 401(k) administration


Multi-Process Services

• Complete outsourcing of one or more human resource processes.

• Example: Procter & Gamble outsourced training operations.

Business Process Outsourcing (BPO)

• Majority of HR services are transferred to third party.

• Example: Whirlpool Corporation signed 10-year deal to outsource HR business.

• Kraft Foods Inc. and IBM signed a multi-year BPO agreement.


HR Shared Service Centers (SSCs)

Takes routine, transaction-based activities that are dispersed and consolidates them in one location


Professional Employer Organization (Employee Leasing)

Company that leases employees to other businesses

Advantages:– Economies of scale– Greater job mobility for workers– Job security through leasing

company – PEO can handle compliance

requirements of programs



Line Managers Performing HR Tasks

• Involved with human resources by nature of their jobs

• Now performing some duties typically done by HR

EVOLUTION OF HUMAN RESOURCE MANAGEMENT



Human Resource Executives, Generalists, and Specialists

Traditional Human Resource Function in Large Firm

• Included separate sections.

• Sections are placed under an HR manager.

• Each HR function may have a supervisor and staff.

• HR manager works closely with top management in formulating policy.


The Evolving HR Organization

• HR outsourcing

• HR shared service centers

• Professional employer organization

• Line manager

• HR becoming more strategic



A Possible Evolving HR Organization Example

President and CEO

Vice President, Operations

Vice President, Strategic Human

Resources

Vice President, Finance

Director of Safety

and Health

Training & Development (Outsourced)

Compensation (Shared Service

Centers)

Staffing (Line Managers, use of Applicant Tracking Systems)

Vice President, Marketing

Managing Human Capital in a Borderless World

• Throughout this text, cultural differences among countries will be identified as a major factor influencing global business.

• Borderless world adds dramatically to the difficulty of managing human capital.

• A country’s culture is the set of values, symbols, beliefs, languages, and norms that guide human behavior within the country.



All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.

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