Human Resource Management. Fundamentals of Human Resource Management.
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Transcript of Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 1-1 Human Resource Management...
Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 1-1
Human Resource Management
11th Edition
Chapter 1
STRATEGIC HUMAN RESOURCE
MANAGEMENT:
AN OVERVIEW
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Employer Branding
• Firm’s corporate image or culture • Embodies values and standards that guide
people’s 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
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Employer’s Culture Is Known for Such Things As
• It’s fun to work at this company
• We have a passionate and intelligent culture
• There is a strong team feeling here
• It’s a great place to work
• Hopefully it will NOT be: We hate it here
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External Evidence of a Great Brand
• Fortune magazine - 100 Best Companies to Work For • Working Mother list of 100 best companies• Fortune magazine list of 100 fastest-growing companies
in the United States• Money magazine list of 100 best places to live• Business Ethics magazine list of 100 Best Corporate
Citizens• BusinessWeek list of 100 best small companies• Computerworld list of Best Places to Work• Black Enterprise list of Best Companies for Diversity
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Human Resource Management
• Utilization of individuals to achieve organizational objectives
• All managers at every level must concern themselves with human resource management
• Five 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
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 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
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Staffing (Cont.)
• Human resource planning - Systematic process of matching internal and external supply of people with job openings anticipated in the organization over 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
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Staffing (Cont.)
• Selection - Process of choosing from a group of applicants the individual best suited for a particular position and the organization
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Measuring Quality of Hire in Today’s Environment
• How do you measure quality of hire and set standards for new-hire performance?
• Quality of hire is stressed these days • Developers of automatic tracking systems are
actively involved in trying to come up with the answer to the question of “quality of hires”
• In a few years, some standards will emerge on how you measure and represent your talent management
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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 learners with knowledge and skills needed for their present jobs
• Development - Involves learning that goes beyond today's job; more long-term focus
• Career planning - Ongoing process whereby individual sets career goals and identifies means to achieve them
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Human Resource Development (Cont.)
• Career development - Formal approach used by organization to ensure that people with proper qualifications and experiences are available when needed
• Organization development - Planned and systematic attempts to change the organization, typically to a more behavioral environment
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Human Resource Development (Cont.)
• 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
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Compensation
Compensation - All rewards that individuals receive as a result of their employment
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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
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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.
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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
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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 private workforce was 7.5 percent
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Employee and Labor Relations (Cont.)
• Business is required by law to recognize union and bargain with it in good faith if firm’s employees want 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 resource research is not separate function.
• It pervades all HR functional areas.
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Interrelationships of HRM Functions
• All HRM functions are interrelated
• Each function affects other areas
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Dynamic Human Resource
Management Environment
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Environment of Human Resource Management
EXTERNAL ENVIRONMENTINTERNAL ENVIRONMENT
1
Human Resource
Management
Other Functional
Areas
OperationsMarketing
Finance
Lega
l Con
side
ratio
ns E
cono
my
Technology
Society
Shareholders
Unions
Customers Competition Labor Market
Human Resource
Development
Com
pens
atio
n
Staffing
Em
ployee and
Labor Relations
Safety and Health
Unanticipated E
vents
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Labor Market
• Potential employees located within geographic area from which employees are recruited
• Always changing
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Legal Considerations
• Federal, state and local legislation
• Court decisions
• Presidential executive orders
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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
• 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 for purpose of dealing collectively with their employer
• Becomes a third party when dealing with the company
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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
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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
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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
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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• In 2008 survey of CEOs worldwide,
83% ranked change as most important issue confronting their organization
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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
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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.
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Unanticipated Events
• Occurrences in 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
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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.
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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
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Human Resource Manager
• Historically, the human resource 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 because others are accomplishing certain functions
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HR Outsourcing
• Transfers responsibility to an external provider
• Market for HR outsourcing is growing dramatically
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Ways HR Outsourcing is Done
• Discrete services
• Multi-process services
• 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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Multi-Process Services
• Complete outsourcing of one or more human resource processes
• Example: Procter & Gamble outsources entire training operations
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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
• Total outsourcing is difficult to accomplish
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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
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Professional Employer Organization (Cont.)
• Company releases its employees who 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 customer’s gross wages
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Advantages of PEO’s
• Often enjoy economies of scale that permit them to offer wider selection of benefits at considerably lower costs
• Workers frequently have greater opportunities for job mobility
• If client organization suffers a downturn, the leasing company offers job security
• PEO can handle compliance requirements of programs such as 401(k) programs
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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
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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
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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
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Strategic Activities CEOs Want from HR (Cont.)
• HR professionals must integrate goals of HR with goals of the organization
• Must focus on expanding its strategic and high-level corporate participation with an emphasis on adding value
• HR must demonstrate that it can produce a return on investment for its programs
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Questions to Be Answered to Determine if HR Is Involved Strategically
• Is HR present at mergers and acquisitions planning meetings, strategy reviews, and restructuring discussions?
• Does HR provide an annual report on its ROI?
• Does HR lead the people strategy?
• Has it developed performance indicators for the success of that strategy?
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Questions to Be Answered to Determine if HR Is Involved Strategically (Cont.)
• Is HR rated by its customers?
• Does the organization conduct strategic versus entitlement employee surveys?
• Are employee and other survey initiatives linked to customer and financial metrics?
• Is there an ROI process to evaluate HR initiatives connected to the business strategy?
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Strategic HR Audit
• If HR professionals are to achieve the level of respect they desire, they must be subjected to the audit process
• Auditors should document if HR activities are being accomplished in an optimum manner
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Human Capital Metrics
Measures of HR performance
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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 best suit each company depend on variety of factors
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Human Resource Designations
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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:
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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 of
major division
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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
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Characteristics of an HR 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 Human Resource Management
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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
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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
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Evolution of Human Resource Management
• First edition text was titled Personnel: The Management of Human Resources, and focus was more on personnel as staff or advisory function
• Title has changed to Human Resource Management with more general management focus
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Other Name Changes
• Personnel Administrator changed its name to HR Magazine
• Personnel to HR Focus
• Personnel Journal to Workforce Management
• Today, the people who perform HR tasks are certainly different than they were even a decade ago
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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
1-70
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A Global Perspective: Cultural Differences in Global HR
• Country’s culture is the set of values, symbols, beliefs, languages, and norms that guide human behavior within the country
• Learned behavior develops as individuals grow from childhood to adulthood
• Companies operating in the global environment recognize that national cultures differ and that such differences cannot be ignored
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Organization ofHuman Resource Management
11th Edition
PART I. INTRODUCTION• Chapter 1: Strategic Human Resource
Management: An OverviewPART II. HR ETHICAL, LEGAL, AND SOCIAL
CONSIDERATIONS• Chapter 2: Business Ethics and Corporate
Social Responsibility • Chapter 3: Workforce Diversity, Equal
Employment Opportunity, and Affirmative Action
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Organization ofHuman Resource Management
11th Edition (Cont.)
PART III. STAFFING
• Chapter 4: Job Analysis, Strategic Planning, and Human Resource Planning
• Chapter 5: Recruitment
• Chapter 6: Selection
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Organization ofHuman Resource Management
11th Edition (Cont.)
PART IV. HUMAN RESOURCE DEVELOPMENT
• Chapter 7: Training and Development
• Appendix Chapter 7: Career Planning and Development
• Chapter 8: Performance Management and Appraisal
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Organization ofHuman Resource Management
11th Edition (Cont.)
PART V. COMPENSATION AND BENEFITS• Chapter 9: Compensation • Chapter 10: Benefits, Nonfinancial
Compensation, and Other Compensation Issues
PART VI. SAFETY AND HEALTH• Chapter 11: A Safe and Healthy Work
Environment
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Organization ofHuman Resource Management
11th Edition (Cont.)
PART VII. EMPLOYEE AND LABOR RELATIONS• Chapter 12: Labor Union and Collective
Bargaining• Appendix Chapter 12: History of Unions in the
United States• Chapter 13: Internal Employee RelationsPART VIII. OPERATING IN A GLOBAL
ENVIRONMENT• Chapter 14: Global Human Resource
Management
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