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Human ResourceManagement

and the Environment

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Objectives

Define the term human resource management.

Describe the strategic importance of human resource

management (HRM) activities.

Explain what career opportunities are available in the

HRM field.

Discuss the role that specialists and operating managers

play in performing HRM activities.

List the main objectives pursued by HRM units!

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Introduction

Human resource management (HRM) is the effective

management of people at work

The goal: make workers more satisfied and

productive

When an organization is concerned about people, itstotal philosophy, culture, and orientation reflect it

Every manager must be concerned with people,

whether or not there is a human resources department

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Introduction

HRM consists of numerous activities:

Equal employment opportunity (EEO) compliance

Job analysis

Human resource planning

Recruitment, selection, motivation, and orientation

Performance evaluation and compensation

Training and development

Labor relations

Safety, health, and wellness

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Introduction

The HRM unit is oriented toward:

Action

People

Global enterprise

The future !

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A Brief History of HRM

HRM can be traced to England, where craftspeople

organized guilds/ associations

They used unity to improve working conditions

The Industrial Revolution in the 18th century laid

the basis for a new, complex industrial society

Changing work conditions, social patterns, and labor

created a gap between workers and owners

During the world wars era, scientific management,welfare work, and industrial psychology merged

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Frederick W. Taylor, the father of scientific

management, summarizedscientific management as:

Science

Harmony

Cooperation

Maximum output

Industrial psychology, initiated in 1913, focused on:

The worker

Individual differences

The maximum well being of the worker

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Personnel departments were created to deal with:

Drastic changes in technology

Organizational growth

The rise of unions

Government intervention concerning working people

Around the 1920s, more organizations noticed and

acted on employee-management conflict

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The Hawthorne studies (1924 to 1933):

Were to determine the effects of illumination on

workers and their output

Rather, it pointed out the importance of social

interaction on output and satisfaction

Until the 1960s, the personnel function was

concerned only with blue-collar employees

File clerk, house-keeper, social worker, fire-fighter,and union trouble defuser !!

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Strategic Importance of HRM

Today, HRM plays a major role in:

Clarifying the firms human resource problems

Developing solutions for them

It is oriented toward:Action

The individual

Worldwide interdependenceThe future

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Strategic HRM differs significantly from traditional

HRM

In traditional arrangements, responsibility for

managing human resources lies with different

specialists in each department or divisionIn a strategic approach, people management rests

with an individual who is in direct contact with

workers or line managers

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Investment in human

assets

Cost centersAccountability

Developing peopleFollowing the rulesMajor emphasis

Open, participative,empowerment

Bureaucratic, top-down,centralization

Culture

Flexible, based on human

resources

Rules, policies, position

power

Control

Short, intermediate, long

term

Short-term resultsTime focus

Lead, inspire, understandRespond to needsRole of HRM area

Improved understanding

and use of human assets

Better performanceObjective

Line managersSpecialistsResponsibility forhuman resources

Strategic HRMTraditional HRMItem

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For years, the HRM function was not linked to

corporate profit

Organizations focused only on current performance

HR managers did not have a strategic perspective

Executives categorized HRM in a traditional manner

It was difficult to develop metrics for HRM activities

Recognition of the importance of people made HRM

a major player in developing strategic plans

HRM strategies must reflect the organizations

strategy regarding people, profit, and effectiveness

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Key concepts that must be applied:

Analyze and solve problems from a profit-oriented

point of view

Assess and interpret costs and benefits of HRM issues

Planning models must include realistic, challenging,

specific, and meaningful goals

Prepare reports on HRM solutions to problems

encountered by the firm

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Key concepts that must be applied (continued):

Train the human resources staff

Emphasize the strategic importance of HRM

Show managers that they contribute to the

goals/mission of the firm

The actions, language, and performance of the

HRM function must be:

Measured

Precisely communicated

Evaluated

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The era of HRM accountability resulted from:

Concerns about productivity

Organizational downsizing and redesign

An increasingly diverse workforce

The need to effectively use all organizational

resources to compete in an increasingly complex

and competitive world

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For the HRM function to be successful, managers in

other functions must be knowledgeable and involved

Managers play a major role in setting the direction,

tone, and effectiveness of the relationship between:

The employees

The firm

The work performed

Without managerial participation, there are likely tobe major human resource problems !!!

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HRM and Organizational Effectiveness

For a firm to survive and prosper, reasonable goals

must be achieved in:

Performance

Legal compliance

Employee satisfaction

Absenteeism

Turnover

Training effectiveness and ROI

Grievance rates

Accident rates

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Effectiveness is measured by the balance of such

complimentary characteristics as:

Reaching goals

Employing the skills/abilities of employees efficiently

Ensuring the influx/ entry and retention of well-

trained, motivated employees

Three elements needed for firms to be effective:

Mission and strategyOrganizational structure

HRM

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It is important to remember that

the people who do the work andcreate the ideas allow the

organization to survive

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Changes experienced by organizations:

Growing global competition

Rapidly expanding technologies

Increased demand for individual, team, and

organizational competencies

Faster cycle times

Increasing legal and compliance scrutiny

Higher customer expectations

The mechanized, routine-oriented workforce is

giving way to a knowledge-based workforce

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Top management has trouble making strategic

planning decisions regarding people

All other resources are evaluated in terms of money

Implementing high performance management

practices results in:

Profitability gains

Stock price increases

Higher company survival rates !!!

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Objectives of the HRM Function

HRM contributions to organizational effectiveness:

Helping the organization reach its goals

Employing workforce skills and abilities efficiently

Increasing job satisfaction, self-actualization, and

quality of work life

Communicating HRM policies to all employees

Maintaining ethical policies and socially responsible

behaviorManaging change to the mutual advantage of

individuals, groups, the enterprise, and the public

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Increasing employees job satisfaction and self-

actualization

Employees must feel that the job is right for their

abilities and that they are being treated equitably

Satisfied employees are not automatically moreproductive

However, unsatisfied employees tend to be absent and

quit more often and produce lower-quality work

Both satisfied and dissatisfied employees can perform

equally in quantitative terms

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Quality of work life (QWL) is a general concept that

refers to several aspects of the job, including:

Management and supervisory style

Freedom and autonomy to make decisions on the job

Satisfactory physical surroundings

Job safety

Satisfactory working hours

Meaningful tasks

The job and work environment should be structured

to meet as many workers needs as possible

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Communicating HRM policies to allemployees:

HRM policies, programs, and procedures must

be communicated fully and effectivelyThey must be represented to outsiders

Top-level managers must understand what

HRM can offer

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Maintaining ethical policies and socially responsible

behavior:

HRM managers must show by example that HRM

activities are fair, truthful, and honorable

People must not be discriminated against

Their basic rights must be protected

These principles should apply to all activities in the

HRM area

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Trends that strain employer-employee relationships:

Telecommuting

Outsourcing HRM

Family medical leave

Child careSpouse-relocation assistance

Pay for skills

Benefit cost-sharing

Union-management negotiation

These changes are due to the emergence of new

lifestyles and an aging population

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Managing increased urgency and fastercycle times:

Firms are placing a growing emphasis on:

Increasing customer serviceDeveloping new products and services

Training and educating technicians,

managers, and decision makers

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Faster, more urgent management behaviors have

been caused by:

Foreign and domestic competition

Technological changes

The emergence of new opportunities

Pressure to increase learning and reduce cycle time,

while also reducing cost, is a competitive reality

HRM activities must be in sync with the firms

environment !!!

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Who Performs HRM Activities

Two groups normally perform HRM activities:

HR manager-specialists

Operating managers

The effectiveness of the human resource declinesmore quickly than all other resources

An investment in people effects organizational

effectiveness more than money, materials, or

equipment

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A large part of an operating managers day is spent:

In scheduled and unscheduled meetings

In telephone conversations

Solving problems that have a direct impact on people

In smaller organizations, the operating manager has

such HRM responsibilities as:

Scheduling work

Recruitment and selection

Compensating people

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As the organization grows, the operatingmanagers HR work may be shifted to HRM

specialists

HR specialists are found in organizations with100 to 150 employees

A HR department is typically created when the

number of employees reaches 200 to 500

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Outsourcing

Outsourcing HRM activities is growing in popularity

because of:

Downsizing

Rapid growth or decline of business

Globalization

Increased competition

Restructuring

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Outsourcing

Some executives assume that outsourcing can:

Reduce costs

Improve flexibility

Permit the hiring of specialized expertise

The choice to outsource HRM activities is being

made with little empirical support !!

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Interaction of Operating & HR Managers

With both operating managers and HR specialists

making HRM decisions, there can be conflict

They have different orientations and objectives

Conflict is worse if joint decisions must be made on:

Discipline

Physical working conditions

Termination

Transfer

Promotion

Employment planning

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Operating managers and HR specialists can also

differ on:

How much authority employees have over job design

Labor relations

Organizational planning

Rewards, such as bonuses and promotions

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I i f O i & HR M

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The roles of HRM and operating managers have

been impacted by:

Sweeping changes in business

Globalization

Technology

Demography

People dont leave companies, they leave managers

HRM can help managers do a better job

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I t ti f O ti & HR M

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HRM is often seen as a company policeman

It is also seen as inflexible and over-attentive to detail

HRM specialists are encouraged to:

Analyze every activity and prove its added valueUnderstand the business

Become a strategic partner with line managers

Seek out operating managers

Help managers avoid problems

Be flexible and open to the ideas of others !!

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N HRM C t i

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Necessary HRM Competencies

Record keeping...Training/development

Accounting/financeEmployment law

Benefit designRecruiting/staffing

Compensation designLeadership

ForecastingProblem solving

TechnologyCommunication

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HRM Pl i M t

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HRMs Place in Management

The HR department must be a proactive, integral

part of management and strategic planning

Ascertain specific organizational needs for the

use of its competence

Evaluate the use and satisfaction among other

departments

Educate management and employees about the

availability and use of HRM services

HRM strategic plans must build on the firm's

strengths

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HRM Pl i M t

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To develop a competitive advantage over other

firms:

Organizations must create value in a way that is rare

and difficult for competitors to imitate

These things must become so important and effective

that every unit in the firm knows they are needed for

success:

The compensation systemTraining opportunities

Diversity management programs

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HRM Pl i M t

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HR executives must educate other departments

about the human resource implications of decisions

This requires being familiar with other aspects of the

organization, including:

InvestmentsAdvertising

Marketing

Production controlComputer utilization

Research and development !!!

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HRM St t

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HRM Strategy

A firm's HRM strategy integrates major objectives,

policies, and procedures into a cohesive whole

A well-formulated HRM strategy aggregates and

allocates a firm's resources on the basis of:

The organizations internal strengths andweaknesses

Changes in the environment

The anticipated actions of competitors ..

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Cl if i M i f l HRM Obj ti

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Clarifying Meaningful HRM Objectives

Theobjectivesof an organization or department are

the goals it seeks to achieve

Most objectives are stated in very general terms, from

which more specific statements are developed

These plans are calledpolicies and procedures orrules

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Cl if i M i f l HRM Obj ti

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Clarifying Meaningful HRM Objectives

More specific

Strategy: The plan thatintegrates major objectives

Objectives: Goals that are

specific and measurable

Policies: Guides to decisionmaking

Procedures/Rules: Specificdirections for decision making

More specific

More specific

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HRM P li

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HRM Policy

Apolicy is a general guide that expresses limits

within which action should occur

Policies arise from past or potential problems

They free managers from making certain decisions

They ensure some consistency in behavior

They allow managers to concentrate on decisions in

which they have the most experience and knowledge

For some organizations, the next step is to developprocedures and rules

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HRM Proced res

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HRM Procedures

Procedures (rules) are a specific direction to action

In large organizations, procedures are collected and

put into manuals called standard operating

procedures (SOPs)

Organizations must ensure that consistent decisionmaking flows from a well-developed, but not

excessive, set of policies and procedures

Procedures should be developed for only the most

vital areas ...

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Organization of an HR Department

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Organization of an HR Department

In most organizations, the chief HR executive

reports to the top manager

In medium- and small-sized organizations, HRM and

another function may be in a single department

In nonprofit organizations, HRM is typically a unit inthe business office

HR specialists are usually located at the headquarters

of an organization ..!!!

1.HRM Envt

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