Human Resource Management Basics

Human Resource Management (HRM) Basics

• HRM is a planned and controlled activity of an organization to build and maintain the relationship between the organization and its employees. This relationship aims to fulfill business objectives and employee expectations.
• HRM encompasses all processes, from defining a strategy to operational implementation and control.
• HRM often involves key aspects like legal, psychological, sociological, and educational considerations related to the people being managed.

Assessment Scheme

• The total assessment score is 100 points.
• Case studies (group work) contribute 60 points, drawn from 6 topics taught in the lecture.
• A final multiple-choice online test (Moodle Quiz) contributes 40 points, scheduled on January 13th, 2025.
• Case study evaluation criteria: no copying from presentation slides, relevant answers, realistic proposals/ideas, and correct grammar/spelling are important.

HRM Landscape

• HRM involves strategy & planning, talent management & development, competency management, change management, diversity, compensation & benefits, retention, and HR organization & controlling, and HR-IT.
• HRM functions are interconnected.

Content for Lecture

• The lecture covers introduction to HRM, defining HR, and HRM strategy, HR organization, workforce planning, talent acquisition, employer branding, candidate selection, diversity management, talent management, talent development & retention.

Warming Up

• The session started with prompting students about their initial understanding and expectations related to Human Resources (HR).

Definition of HRM

• HRM is a set of planned and controlled activities that an organisation undertakes to establish and maintain a suitable connection between employees and the organization so as to meet both business objectives and employee expectations.
• HRM involves processes from developing a strategy to the operational roll-out and control.
• Important aspects of HRM include legal, psychological, sociological, and educational considerations

Targets of HRM

• HRM targets economic and social goals, but these can sometimes be conflicting.
• The goal is to optimize the intersection between both areas.

Economic Targets of HRM

• Reducing people costs.
• Reducing absence and turnover.
• Incorporating improvement processes.
• Increasing employee flexibility.
• Optimizing production factors.

Social Targets of HRM

• High income.
• Social security
• Development and self-actualization at the workplace.
• Good employment conditions.
• Agreeable working atmosphere
• Learning opportunities
• Career opportunities
• Social contacts
• Participative leadership
• Social status
• Work-life balance
• Unity of family and work life
• Employee participation
• Flexible working times
• Social benefits
• Company pension schemes

Operational vs. Strategic HRM

• Operational HRM is focused on employees/jobs, individual personnel, mainly short-term oriented, and has a high degree of detail.
• Strategic HRM is an abstraction from singular employees and jobs. Its focus is on the company's overall targets and is part of the company strategy; it involves integration of partial operational HR functions (cross-functional), and usually includes a longer planning horizon

Sub-Functions of Operational HRM

• HR policies (strategy based).
• Personnel planning.
• Personnel recruitment.
• Personnel deployment.
• Personnel management (off-the-job activities).
• Personnel support.
• Personnel administration.
• Personnel controlling

Employee Life Cycle

• Employer Branding, Recruitment, Engagement & Retention, performance management, Talent and Deployment (development and onboarding of employees within an organization), Organizational Culture, and People Strategy are part of the employee life cycle.

The HR Journey at a Glance

• HR's evolution over time, highlighting key milestones (e.g., 2nd Industrial Revolution, World Wars, and Globalization) and corresponding shifts in focus/structures
• Evolution of HR functions over time; early HR was centered around welfare, evolved to managing labor, personnel, and human resources effectively, finally to a strategic partner role focused on adding value to the business.

Development of HRM

• The role of HR has changed over time. This can be from the ‘Welfare officer’ of the earlier days, developing to the ‘Personnel Management’, and evolving even further to becoming a key part of the ‘Strategic functions’ now. HR’s role in collective bargaining, policy formation, and management

From Traditional to Future HRM

• Traditional HR was heavily focused on administration, with strategy, consulting, and support as minor components. Future HR prioritizes all these components.

Context for HRM

• The context of HR involves understanding disruption, digital transformation, and securing future success, emphasizing change, and highlighting the need for business and societal relevance in HR methodologies

Discussion in Small Groups

• Discussions should center around key changes, challenges for HR today, requirements of future employees, and implications on the HR function.

Megatrends Determining Future HRM Challenges

• Innovation (acquiring and rewarding right talent).
• Demography (leveraging employee potential, supporting diversity, and building successors).
• Globalization (knowledge retention and attraction, and attractive working conditions).
• Web 2.0 (managing changes and using latest technologies).
• Value change (using suitable HR technologies and policies).

Generational Changes in Values, Expectations and Goals

Megatrends in HRM, Demographic Consequences

• Generation development: organizational knowledge transfer between senior and junior employees.
• Qualification: focusing on workforce and life long learning.
• Retention: securing employability throughout life cycles.
• Extension: integration of varied career models despite age.
• Integration/Talent Management: integration of immigrants and appropriate talent management techniques.
• Adaptation: adaptability of working conditions in various life phases/health

HRM Landscape - Updated

• The diagram shows Talent Acquisition, Change Management, Candidate Selection, HR Organization, Strategy, and Planning, Talent Development, and Compensation and Benefits.
• All of these aspects are interconnected and contribute to the overall HRM Landscape.

Key Questions

• Relation between company strategy and HR strategy.
• Key company functions which are of the highest priority in the HR strategy.

Definition of HR Strategy

• A company's HR strategy encompasses all people-related approaches that address strategic business challenges and purpose. It aims to enhance the company's competitive advantage.
• Moreover, the HR strategy outlines how various critical approaches synchronize with the organisation's structural and cultural context.

Company Development Within Two Hemispheres

• The diagram depicts a balance between hierarchical stability and agility in organizational development.
• Hierarchy and stability involve centralized responsibilities at top management levels.
• Agility and networks imply decentralized responsibilities, with shared responsibilities.

Types of HR within HR Triangle

• The visualization illustrates the diverse roles of HR professionals within an organization.
• The roles are categorized into central planning & control, hiring & compensation, attitude & structure, and strategic management aspects, respectively.

Group Discussion

Building a HR Strategy

• This is about identifying the people-related challenges/opportunities and connecting them to strategic HR topics and approaches. Key building blocks of an HR strategy include linking company strategy, people-related functions, and the strategic approach to HR.

Critical Business Challenges

• These are the key issues that frequently occupy a CEO's attention. Topics covered include decreasing purchasing power, changing customer preferences, technologies, shifting consumer behavior, emerging aggressive players, globalization, political uncertainty, and new business models.

Competitive Advantage

• Companies achieve competitive advantage by offering innovative products, high-quality services, advanced technology, better products, broader market access, and strategic communication.

Potential Key People-Related Challenges

• Difficulties in filling key/expert positions.
• Bottlenecks in filling positions, leading to disruptions.
• Difficulty in leveraging employee potential.
• Ensuring broad-based employability.
• Keeping high levels of engagement.
• Managing differences between generations in the workforce.

Potential HR Topics and Approaches

• Talent acquisition and selection
• Building Employer Branding
• Candidate sourcing and relation.
• Performance management and appraisal.
• Setting objectives.
• Talent Identification
• Developing learning and knowledge.
• Employee engagement & loyalty.
• Employee Retention
• Employee Compensation
• Reward strategy

Strategic Priorities

• Strategic priorities often cover Innovation, Branding, Price, Design, and Quality (identifying company examples in specific industries)

Function Importance

• Core and supportive functions are distinguished to identify the most crucial business areas, including product management, research and development, design, production planning, marketing, sales accounts management, services/support, quality management, IT control/accounting, human resources, facilities/security, and public relations/communications.

Company Strategy and HR Strategy

• HR strategy is closely related to and depends on the company's overall strategy.
• HR strategy considers employee competencies, motivation, values, priorities (e.g., competitive advantage) and business vision, for successful recruitment, employee development, communication, and exit processes (layoffs).

Critical Key and Bottleneck Functions

Bottleneck Functions

• Bottleneck functions are those in high demand that are difficult to fill due to current economic conditions or inadequate talent pools.
  • There are fewer active job seekers than jobs available.
  • Bottlenecks are often linked to a common pain (and/or need) across departments, locations, and subsidiaries within a company.
  • For bottleneck functions, homogeneous target groups (e.g., engineers) are frequently used for selection purposes.

Key Functions

• A key function directly affects a company's competitiveness in the marketplace and is frequently a focus for the CEO. High performance in a key function generates significant/dramatic differences in the firm's success.

Example: Adidas

• Adidas' mission statement and guiding principles.
• Adidas's group strategy and strategic choices.
• Adidas's 3-pillar Human Resource strategy.

Dave Ulrich HR Model

• Components include strategic partners (defining strategies), change agents (renewing organizations), administrative experts (efficient infrastructure building), and employee champions (increasing employee commitment/capabilities).

Dave Ulrich HR Roles

• Strategic partner (Strategic HR Planning, HR as Business Partner, Culture & Image).
• Change agent (Staffing, Organizational Design, Performance Management, Training & Development).
• Administrative expert (Compensation, HR Information Systems, Compliance).
• Employee relations expert (Employee relations, Labor Relations, Compensation, diversity/EEO).

Three-Pillar Model of Modern HR Organization

• Includes a central coordination (HR business partner near to business), center of expertise (company-wide), and shared services center (delivery of standardized services) .

This quiz covers the fundamental concepts of Human Resource Management (HRM), focusing on the relationship between organizations and employees. It includes the strategic planning, legal considerations, and psychological aspects involved in HRM practices. Prepare to assess your understanding of how HRM meets both business objectives and employee expectations.