HUMAN RESOURCE MANAGEMENT / MANAGING PEOPLE CHAPTER 1 STRATEGIC HUMAN RESOURCE MANAGEMENT: AN OVERVIEW

HUMAN RESOURCE MANAGEMENT /

MANAGING PEOPLE

CHAPTER 1STRATEGIC HUMAN RESOURCE MANAGEMENT:

AN OVERVIEW

HR Branding

• Firm’s corporate image or culture • Embodies values and standards that guide

peoples’ behavior • People know what company stands for,

people it hires, fit between jobs and people, and results it recognizes and rewards

• Important in getting highest quality applicants to join firm

© 2008 by Prentice Hall 1-2

Human Resource Management

• Utilization of individuals to achieve organizational objectives• All managers at every level must

concern themselves with human resource management• Five functions



1

Human Resource Managem

ent

Human Resource

Development

Com

pens

atio

n

Staffin

g

Em

ployee and

Labor R

elations

Safety and Health

Human Resource Management Functions

Staffing

• Job Analysis• Human Resource Planning• Recruitment

• Selection


Staffing (Cont.)

• Staffing - Process through which organization ensures it always has proper number of employees with appropriate skills in right jobs at right time to achieve organizational objectives

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


Staffing (Cont.)

• Human resource planning - Systematic process of matching the internal and external supply of people with job openings anticipated in the organization over a specified period of time .

• Recruitment - Process of attracting individuals on a timely basis, in sufficient numbers, and with appropriate qualifications, to apply for jobs with an organization


Staffing (Cont.)

• Selection - Process of choosing from a group of applicants the individual best suited for a particular position and the organization


Human Resource Development

• Training• Development• Career Planning

• Career Development• Organizational Development• Performance Management• Performance Appraisal


Human Resource Development (Cont.)

• Training - Designed to provide learners with knowledge and skills needed for their present jobs

• Development - Involves learning that goes beyond today's job; it has more long-term focus

• Career planning - Ongoing process whereby individual sets career goals and identifies means to achieve them



• Career development - Formal approach used by organization to ensure that people with proper qualifications and experiences are available when needed

• Organization development - Planned process of improving organization by developing its structures, systems, and processes to improve effectiveness and achieving desired goals



• Performance management - Goal-oriented process directed toward ensuring organizational processes are in place to maximize productivity of employees, teams, and ultimately, the organization

• Performance appraisal - Formal system of review and evaluation of individual or team task performance


Compensation

Compensation - All rewards that individuals receive as a result of their employment


Compensation

• Direct Financial Compensation - Pay that person receives in form of wages, salaries, bonuses, and commissions.

• Indirect Financial Compensation (Benefits) - All financial rewards not included in direct compensation such as paid vacations, sick leave, holidays, and medical insurance.

• Nonfinancial Compensation - Satisfaction that person receives from job itself or from psychological and/or physical environment in which person works.


Safety and Health

Employees who work in safe environment and enjoy good health are more likely to be productive and yield long-term benefits to organization.


Safety and Health

• Safety - Involves protecting employees from injuries caused by work-related accidents

• Health - Refers to employees' freedom from illness and their general physical and mental well being


Employee and Labor Relations• Private-sector union membership has fallen from 39

percent in 1958 to 7.8 percent in 2005.• Business is 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 is often referred to as industrial relations

• Most firms today would rather have a union-free environment


Human Resource Research

• Human resource research is not separate function.

• It pervades all HR functional areas.


Interrelationships of HRM Functions

• All HRM functions are interrelated

• Each function affects other areas


Dynamic Human Resource Management

Environment



Environment of Human Resource Management

EXTERNAL ENVIRONMENTINTERNAL ENVIRONMENT

1

Human Resource Managem

entOther

Functional Areas

Operations

Marketing

Finance

Leg

al C

onsi

dera

tion

s E

cono

my

Technology

SocietyS

hareholders

Unions

Customers Competition

Labor Market

Human Resource

Development

Com

pens

atio

n

Staffin

g

Em

ployee and

Labor R

elations

Safety and Health

Unanticipated

Events

Labor Market

• Potential employees located within geographic area from which employees are recruited

• Always changing


Legal Considerations

• Federal, state and local legislation

• Court decisions• Presidential

executive orders


Society• No longer content to accept, without

question, the actions of business • Ethics - Discipline dealing with what is

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

• 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 for purpose of dealing collectively with their employer

• Become a third party when dealing with the company


Shareholders

• Owners of corporation• Because they have invested money in

firm, they may at times challenge programs considered by management to be beneficial to organization


Competition

• Firms may face intense competition in both their product or service and labor markets

• Must maintain a supply of competent employees

• Bidding war often results


Customers

• People who actually use firm’s goods and services

• Management has task of ensuring its employment practices do not antagonize members of market it serves

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


Technology

• The world has never before seen technological changes occur as rapidly as they are today.

• Created new roles for HR professionals

• Additional pressures on them to keep abreast of technology


Economy

• In general, when economy is booming, it is often more difficult to recruit qualified workers.

• When a downturn is experienced, more applicants are typically available.


Unanticipated Events

• Occurrences in the external environment that could not be foreseen

• Every disaster, whether manmade or by nature, requires a tremendous amount of adjustment with regard to human resource management


Cyberwork • Possibility of never-ending workday • BlackBerrys, cell phones, text

messaging, and e-mail create endless possibilities for communication

• Some workers believe their employer wants them available 24/7


HR’s Changing Role: Questions That Are Being Asked

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

• Can some HR tasks be centralized or eliminated altogether?

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

• Many HR departments continue to get smaller


HR’s Changing Role: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

• 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 because others are accomplishing certain functions


HR Outsourcing

• Transfers responsibility to an external provider

• Market for HR outsourcing is growing dramatically


Ways HR Outsourcing is Done

• Discrete services • Multi-process services • Total HR outsourcing


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


Multi-process Services

• Complete outsourcing of one or more human resource processes

• Example: Procter & Gamble outsourced entire training operations


Total HR Outsourcing

• Transfer majority of HR services to third party

• Example: Whirlpool Corporation signed 10-year deal to outsource HR business processes for 68,000 employees to Convergys Corporation


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.


Professional Employer Organization (Cont.)

• Company releases its employees who are then hired by PEO

• PEO pays the employees • PEO is the employees’ legal employer and has

the rights to hire, fire, discipline, and reassign an employee

• Charges a fee of from 1 to 4 percent of the customer’s gross wages


Line Managers Performing HR Tasks

• Involved with human resources by nature of their jobs

• Line managers are now performing some duties typically done by HR


•Involved with human resourcesby nature of their jobs

•Line managers are now performing some duties typically done by HR

HR as a Strategic Partner

• HR executives must understand complex organizational design

• Sharp deviation from what has traditionally been an administrative type role for HR


Strategic Activities CEOs Want from HR

• Make workforce strategies integral to company strategies and goals

• Leverage HR’s role in major change initiatives • Earn the right to a seat at the corporate table • Understand finance and profits • Help line managers achieve their goals


Human Capital Metrics

Measures of HR performance


Examples of HR Metrics

• Time to fill open positions• HR headcount ratios• Administrative cost per employee• Turnover cost • Training return on investment • Cost per employee for HR administration

ranges from $1,200 - $1,600


HR Scorecard

• Report card of effectiveness of specific person

• Metrics that will best suit each company depends on variety of factors


Human Resource Designations


Human Resource Executives, Generalists, and Specialists


Vice President, Human Resources

Vice President, Industrial Relations

Manager, Compensation

Manager, Staffing

Manager, Training and Development

Benefits Analyst

Executive: Generalist: Specialist:

Characteristics of an HR Executive

• Performs one or more HR functions

• A top-level manager

• Reports directly to CEO or head of major

division


Characteristics of an HR Generalist

• Often an executive

• Performs tasks in various HR related areas

• Involved in several, or all, of the five HRM functions


Characteristics of an HR Specialist

• May be an HR executive, manager, or

non-manager

• Typically concerned with only one of the

five functional areas


Evolution Of Human Resource Management


Traditional Human Resource Function in Large Firm

• Separate sections were often created • Placed under an HR Manager

• Each HR function may have a supervisor & staff

• HR Manager works closely with top management in formulating policy


Traditional Human Resource Functions in a Large Firm


President and CEO

Vice President, Marketing

Vice President, Operations

Vice President, Finance

Vice President, Human

Resources

Manager, Training and Development

Manager, Compensation

Manager, Staffing

Manager, Safety and

Health

Manager, Labor

Relations

The Evolving HR Organization

HR Outsourcing HR Shared Service

Centers Professional Employer

Organization

Line Manager

Evolve to make HR 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

Documents

HUMAN RESOURCE MANAGEMENT / MANAGING PEOPLE CHAPTER 1 STRATEGIC HUMAN RESOURCE MANAGEMENT: AN OVERVIEW