INTRODUCTION TO HUMAN RESOURCES

Tomislav Bandic, Psychologist and HR Consultant, Serbia

A Quick Quiz on HR

1. Can you legally fire someone for their astrological symbol?

2. When hiring employees, is it better to hire people who you judge to be hard working, organized, and dedicated during a traditional interview, or is an IQ test a better way to pick people?

3. Is it better to hire people based on the fit of their values with the company’s values, or is an IQ test better?

4. True or false--Asking applicants about stealing or other negative behavior at work during an interview doesn’t help you find better employees, because most people who are going to do bad things at work just lie.

5. True or false--If employees participate in decision making they will be more motivated than if top management sets performance goals?

6. True or false—Managers may think their employees are really concerned about compensation, but when it comes down to it, money doesn’t really matter that much to most people.

What Can We Learn?

� Don’t feel bad if you didn’t get them all right

� A majority of HR managers get most of them wrong!

� Major problem—most HR managers learn through following other people’s leads without a system

A Basic Mental Map for HRWhat HR Do You Need to Make a Company Work?

� Tell me a few things that are typically the responsibility of the HR department

� Consider how HR would be involved in the following corporate actions:

� Plans to change strategic focus from being a cost leader to a quality leader

� Plans to expand into a new market

� Preparing to implement a new software or hardware computer system

A Basic Mental Map for HRWhat HR Do You Need to Make a Company Work?

Develop an Overarching Strategy

•What does the company do, with whom are they competing, what makes this company unique?

Acquire Staff

•Who makes a good employee?

•How do we get these people to apply?

•How are people screened?

•How are people selected?

Train and Develop

•Can we help new hires feel like part of the company?

•How do we teach employees the skills they need?

•How do we encourage civility?

•How do we measure performance?

Compensation

and Benefits

•How can we match our pay offers to the market?

•How do we pay people who are working in different job levels?

•What types of non-cash benefits can we offer to employees?

Performance

management

•What are the things that motivate employees at work?

•What prevents employees from performing effectively?

•Are there incentives that we should be offering?

How Does HR Work?

� Old view—cost center

� Keep track of forms

� Policy and procedure enforcement

� Payroll and insurance

� Cost reduction oriented

� Example: new employees go through orientation with a videotape and a package of forms

� New view—strategic partner� Employee development

� Integration with the core operations of the organization

� Change management

� Results oriented

� Example: developing a program to select employees for a dynamic work environment

Mental Maps and HRM

� Where am I?

� What resources do I have?

� What are the things that might hurt me?

� Who am I competing with?

� Where do I want to be?

� What can I do that will give me the ability to be happy and healthy?

� What can I do that will minimize the degree to which I am vulnerable to threats?

Mental Maps and HRM

� How am I going to get to my goals?

� Describe a testable theory of what you think will solve the problem

� Describe the specific things you will do

� How can I tell if I’m on the right track?

� Develop objective measures to demonstrate whether your planned method is actually working

HR Metrics

� There has been a growing push to quantify HR

� If HR cannot answer questions about the costs and benefits of their programs, they lack credibility

� If companies cannot assess returns on investments on HR programs, they will not choose optimal solutions

� HRIS makes quantifying HR much easier

� Major types of HR metrics

� Costs

� Services

� Performance

� Attitudes

HR Outcomes: Service

� What services are provided by HR

� Employee screening and selection

� Training classes offered

� Compensation levels

� Healthcare benefits

� The speed and utility of these services

� Time to hire new employees

� Time to deliver training to employees

� Time-to-performance for new hires

� Response to information requests

� Employee satisfaction with HR

HR Outcomes: Costs

� Human resources staff per FTE

� Program administration costs

� Advertising for recruiting

� Travel time for interviews

� Test costs

� Training materials

� Compensation and benefits outlays

� Managerial time performing HR administration

� Litigation and settlement expenses

HR Outcomes: Attitudes

� Job satisfaction

� A pleasant feeling from doing work that fulfills one’s goals

� Organizational commitment

� A desire to work towards your organization’s goals and objectives

� Stress

� A feeling of psychological arousal that comes from pressure, deadlines, expectations, etc.

� Absenteeism

� Failing to report for work as scheduled

� Turnover

� Voluntary and permanent departure from an organization

HR Outcomes: Performance

� Productivity/task performance

� Effectiveness

� Achieving assigned goals consistently

� Efficiency

� Minimizing resource use

� Creativity

� Finding new ways to do work, or defining new goals for work

� Organizational citizenship behavior (OCB)

� Behavior that enhances the social and psychological environment

� Firm performance

� Increased productivity

� Decreased costs

� Increased agility

A Structural Model of HR and Firm Performance

Staffing methods•Recruiting the right people

•Selecting the right people

Employee development•Learning new skills

•Improving performance

Performance management•Improving well-being

•Rewarding performance

Work outcomes•Improved coordination

•Reduced turnover

•Higher productivity

Organization outcomes•Stock prices

•Lower admin. costs

•Revenues

•Customer service

All links in this model have been validated

Compensation & benefits•Matching the market

•Meeting employee needs

HR is Associated with Real Results

� Human capital focused HR is associated with product quality and employee productivity

� Selection sophistication and profit

� Use of cognitive ability tests, structured interviews, and validation studies is significantly correlated with organizational profit and profit growth

HR is Associated with Real Results

� Companies that initiate commitment-oriented human resources systems have lower turnover rates

� Companies that engage in information sharing, internal staffing, and other participation methods have lower turnover rates

� Where is the company?

� Where do they want to be?

� How are they going to get there?

� How do they know if they’re getting there?

� What are some of the metrics you would propose for assessing the efficacy of this organization’s HR system?

*If you require any further information please do not hesitate to contact me at tomislav.bandic@gmail.com