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Human Resource Management 12th Edition
Chapter 1 STRATEGIC HUMAN RESOURCE
MANAGEMENT: AN OVERVIEW
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Human Resource Management (HRM)
• Utilization of individuals to achieve organizational objectives
• Concern of all managers at every level
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HRM Functions
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1
Human Resource
Management
Human Resource
Development
Com
pens
atio
n
Staffing
Em
ployee and
Labor Relations
Safety and Health
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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
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Job Analysis
• Systematic process of determining skills, duties, and knowledge required for performing jobs in organization
• Impacts virtually every aspect of HRM
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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
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Human Resource Development
Major HRM function; includes:– Training
– Development
– Career planning
– Career development
– Organization development
– Performance management
– Performance appraisal
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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
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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
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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
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Performance Appraisal
Formal system of review and evaluation– Individual
– Team
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Compensation
All rewards that individuals receive as a result of their employment
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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
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Nonfinancial Compensation
Satisfaction that person receives from:
–Job itself
–Psychological and/or physical environment
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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.
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Internal Employee Relations
HRM activities associated with the movement of employees within the organization
– Promotions
– Demotions
– Terminations
– Resignations
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Interrelationships of HRM Functions
• All HRM functions are interrelated
• Each function affects the others
DYNAMIC HUMAN RESOURCE MANAGEMENT ENVIRONMENT
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Environment of Human Resource Management
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Legal Considerations
• Federal, state, and local legislation
• Court decisions
• Presidential executive orders
Labor Market
• Potential employees located within certain geographic area
• Always changing
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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
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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
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Competition
• In product or service and labor markets
• Firms must maintain a supply of competent employees
• Bidding war often results
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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
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HR Technology
Rapid technological changes provide:
•Increased sophistication
•Ability to design more useful human resource information systems (HRIS)
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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.
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Unanticipated Events
• Unforeseen occurrences in external environment
• Require a tremendous amount of adjustment with regard to HRM
HR’S CHANGING STRATEGIC ROLE
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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?
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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 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.
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HR Outsourcing
• Transfers responsibility to an external provider– Discrete services
– Multi-process services
– Business process outsourcing (BPO)
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Discrete Services
• Single set of high-volume repetitive functions is outsourced to a third party
• Typically transactional HR activities
• Example: 401(k) administration
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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.
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HR Shared Service Centers (SSCs)
Takes routine, transaction-based activities that are dispersed and consolidates them in one location
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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
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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
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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.
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The Evolving HR Organization
• HR outsourcing
• HR shared service centers
• Professional employer organization
• Line manager
• HR becoming more strategic
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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.
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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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