Chapter 1: Changing Perspective of Human Resource Management PDF

# Chapter 1: Changing Perspective of Human Resource Management ## Objectives: At the end of the discussion, the students are expected to: - learn on the Evolution of Human Resource Management - know the connection between the Information Technology and Human Resource Management and what are the Ap...

# Chapter 1: Changing Perspective of Human Resource Management ## Objectives: At the end of the discussion, the students are expected to: - learn on the Evolution of Human Resource Management - know the connection between the Information Technology and Human Resource Management and what are the Applications of Information Technology in HR - learn about the Human Resource Information System(HRIS) - know about Labor Relations and Increase in Social Contribution - know about the HR Department's Organization Charts and Structures ## Evolution of Human Resource Management (Atty. Arnulfo Rayos) ### During the 1930s and the 1940s: - These units gradually began to be called personnel departments (the word personnel is from an old French word that means "person"). - Such departments were usually set up as special self-contained departments charged with the responsibility of hiring new workers and administering basic HR activities like determining the appropriate pay and benefits. - The recognition that HR needed to be managed separately and the creation of personnel departments also gave rise to a new type of management function - personnel management. - The manager who headed the personnel department was called personnel manager. ### During the 1990s: - Personnel management was not seen as a particularly important critical function in most business organizations. Although many other managers appreciated personnel management as a necessary vehicle for hiring new employees, it was also seen primarily as a routine clerical and bookkeeping function - placing newspaper ads to recruit new employees, filling out paperwork on those employees after they were hired, and seeing that everyone got paid on time. - Over the years, however, the role of HRM changed dramatically and became much more important in most organizations. - Human resource management emerged in the late 70s as a reaction against the more functional approach embodied in personnel management. The change was also accompanied by a fundamental shift in management's view of its employees. ## Some Changes Involves The Following: - Employees were no longer viewed as a group of individuals who needed to be closely supervised and managed, but rather, as a collection of human resource to be valued as a distinctive source of competitive advantage. - Rapid advances in technology and communication also dictated that managers carefully assess every facet of their operation to ensure that employees were being as efficient and as productive as possible. - Managers were becoming increasingly concerned with ways to improve productivity and competitiveness, they also began to realize that workers needed to feel that their jobs were sources of personal satisfaction and growth. - Given the shift in competitiveness, top executives in most firms began to see that HRM practices and policies significantly affected their ability to formulate and implement strategy in any area and that other strategic decisions significantly affected the firms' HR as well. Top HR executives in most companies today have: - Vice presidential or executive vice presidential status and are fully contributing members of the firms' executive committee - a group composed of key managers who make major policy decisions and set corporate strategy. - Today, most employee handbooks or declarations of philosophy and principle of companies specifically state that "human resources are the greatest assets of the Company". - An important by-product of this change is management behavior that no longer treats employees as mere costs but assets. To achieve success, organizations must maximize competencies - those underlying attributes or characteristics that can predict superior performance. These competencies range from tangible attributes, such as skills and knowledge, technical know-how, to intangible attitudes and values such as teamwork and flexibility. ## Thomas Davenport - A management expert that led the assailing of Human Resources as assets in his 1999 book *Human Capital*. - Davenport bristles that "assets are passive - bought, sold and replaced at the whim of their owners, workers in contrast take increasingly active control over their lives. - Human capital in reference to workers now takes the place of human resources - Human capital refers to the attributes gained by a worker through education and experience. - Human capital can help the worker develop: 1. Competencies 2. Knowledge 3. Personality attributes that in turn could help him/her perform and produce economic value for his/her employer. - With all these changes, HRM becomes even more complex because of the need to go beyond the borders which have become "borderless" because of technological innovations. All of these have raised the issues of global competition, communication, outsourcing, and downsizing which present a number of challenges and opportunities for human resource management. # Main Trend in the HR Profession ## Human Resource and Information Technology (IT) - The advent of the "computer age" has greatly altered not only the availability of information but also the manner in which it is identified and acquired. - **Information Technology** Deals with how information is accessed, gathered, analyzed, and communicated. ## Evolution of Using Information Technology in HR - The use of information technology in HR started four decades ago. - In the sixties, HR information systems were in place and payroll administration was computerized as well. - The seventies introduced the use of more powerful databases. - In the eighties, we saw a greater integration of HR applications, which has increased the popularity and number of organizations using information technology in the HR functions especially as the cost of computerization dropped dramatically. - The advent of the Internet and the Web generated an explosion of HR systems and applications. - The increase in the use of information technology can be seen as not only driven by the need to automate HR processes and services, but actually influenced by a realization that improved delivery of HR services can become a competitive advantage of the enterprise. - Organizations over the past years, as reflected in the study conducted by Fortune Magazine, show that competitive advantage will no longer be defined by better business processes but will be determined by the quality of the workforce. This has increased and intensified the war for talent. ## Application of Information Technology (IT) in HR 1. Use of job boards and other similar web-based recruitment(e-recruitment) - provides accessibility to a wider range of applicants for the job and usually communicates job vacancies and application procedures. Web recruitments include resume submission, quick interactive screenings methodologies, and in some cases, online testing and experience profiling. - **Advantages:** Improvement in recruiting efficiency, reduction of costs, increase quality and quantity of applicants, establish, communicate and expand brand identity and more convenient on the part of the applicants. - **Disadvantages:** An increase in application quantity, but not necessarily the quality of the applicants, and losing personal relationship with the applicants. 2. E-selection uses technology to help organizations more efficiently manage the process of identifying the best job candidates - those who have the right knowledge, skills, and abilities for each job and who may best fit the organization. 3. Employment kiosk provides updates on employee status and other pertinent information initiated and made by the employees themselves. 4. E-learning facilitates the learning process by providing just-in-time learning opportunities. - **Advantages:** An increase in employee flexibility, control over learning reduction of training costs, and better tracking and management of employee training. - **Disadvantages:** Isolating the training that can reduce career enhancement through networking and linkages. 5. Electronic Performance Support System (EPSS) provides online Coaching and mentoring services. Managers and employees can access Organizational information through an EPSS application. Online Performance management systems also provide managers a very effective tool to communicate and establish key result areas (KRAs), objectives, and required competencies for employees. 6. Salary and payroll administration, for most companies, is now linked to performance management systems, time and attendance, and other employee benefits, and pay systems. An example of this is the use of time sheets. 7. Growth of social networking sites like Facebook and Twitter. One of the next challenges for HR executives is learning to integrate information from social networking sites. Potential benefits must be balanced with issues of privacy and data accuracy. E-HR - stands for Electronic Human Resource. The term e-HR refers to deal Human Resource Management transactions using an internet. 8. Use of email or electronic mail has emerged as the heart and soul of corporate communication. 9. Use of IT to foster customer involvement. Because of the popularity of social media, companies started using different social networking sites where they can post company updates, service offerings, or just to let the users of the account know their company exists. 10. Telecommuting/Teleworking is any form of substituting ions and/or computers) to establish remote or virtual office - the act of moving the work to the workers instead of moving the workers to work. # Benefits of Teleworking/Telecommuting ## 1. Employer Benefits a. Increased productivity, stimulated by lower absenteeism, higher employees' concentration on work, and fewer distractions. b. Less travel time and better use of employees' peak efficiency time c. Decreased turnover because employee morale is higher and more work options such as job or office sharing become possible once long commutes are eliminated. d. Hiring incentive to new employees e. An opportunity to tap new labor pools such as parents with young children, persons with disabilities, and the like. ## 2. Employee Benefits a. They save money on fuel, car maintenance, and insurance. b. A large reduction of stress c. More time for their families; more participation in their communities d. Fewer distractions on the job, greater work autonomy, and more relaxed work environment. e. Closer to their workplaces and thus can save hours each day on their commute to work. # Human Resource Information System (HRIS) - HRIS is a database system that keeps important information about employees in a central and accessible location. It merges HRM as a discipline and, in particular, its basic HR activities and processes with the IT field. It is an integrated system designed to provide information used in HR decision making. It is a system for gathering and maintaining data that describe the HR; transforming data into information; and reporting the information to users. ## Purposes of HRIS a. To improve the efficiency with which data on employees and HR activities are complied b. To provide HR information more rapidly and more easily to be used in management's decision making # HRIS Application 1. **IBM** - IBM Europe utilized HRIS in order to connect their 340,000 global employees through revolutionary and engaging new company-oriented social media. - HRIS has saved IBM $1.2 millon per year simply by mitigating the company's printing and mailing costs through the implementation of an online enrollment system. The online system has been tremendously well-received by employees who can now research program information and access decision support tools from their own homes. 2. **Toshiba America Medical System Inc. (TAMS)** - By manipulating a streamlined and functional HRIS, Toshiba America Medical Systems Inc. moved all of their benefit information online. - TAMS has created a library of documents and forms on its Human Resources portal, including the benefits guide, which earned a 2004 APEX Award for Publication Excellence. TAMS also received the 2004 Electronic Benefit Communication award given by Business Insurance Magazine for outstanding achievement in communicating employee benefits programs over the Web. ## Some of the Benefits of HRIS Solutions 1. **Salary and Payroll of Administration** - Salary and Payroll Administration Payroll management is often a tedious process that requires a high level of accuracy, timeliness, and effective financial controls. Aligned with local statutory standards and regulatory specifications, HRIS can help keep work flow costs in check and ensure that all employees are paid on time in any circumstances. 2. **HR Training** - It provides control of internal organizational training from delegating participants to projecting training budget, course scheduling and enrollment, to training assessments and individual performance appraisals. There is an HRIS software that can match the right individuals to specific training programs that will enhance their knowledge and skills set to add value to the company. 3. **Self-Service Benefits Transactions** - Employees can gain online access to their benefits package at their own leisure so they can focus on more demanding tasks at hand during office hours. They can easily understand entitlements because all back pay and auto-prorated amount concerning overtime, salary, and other financial matters are clearly stated for easy reference. # Example of HR Data Accessed By Various Stakeholders Using HRIS | Position | Online Self-Service | |---|---| | Applicants | ✓ Job Openings <br> ✓ Application Blanks<br> ✓ Data on the Company | | Employees| ✓ Benefits Enrollment and Claims<br> ✓ Print Pay Slips for Past and Current Months<br> ✓ Enroll for Training and Check Training Schedule<br> ✓ Dependant Data <br> ✓ Download Forms and Templates for HR Administration.<br> ✓ Retirement Planning Scenarios<br> ✓ Provide Feedback and View Latest Company News and Announcements. | | Managers | ✓ Training Investment Factor<br> ✓ Cost Per Hire<br> ✓ Turnover Costs | | Executives | ✓ Data for HR Forecasting and Costing <br> ✓ Succession Plans | | External Groups | ✓ Time and Attendance Data<br> ✓ Dependent Health Insurance Status<br> ✓ Payroll Information | ## Example of Software - **Jeansoft Payroll Suite 2006** - is a client-server-based integrated personnel and payroll system specifically designed for Philippine use. - it is composed of three major modules, namely: time attendance system, payroll system, and HRIS system all rolled into one complete system. - the system automates payroll computation while making recording and retrieval of employee records fast and easy. - Many Management theorists suggest that for a firm to be successful in the 21st century, changes will be required. - HR as a strategic partner of every CEO, must become at pace, if not ahead, so that all HR systems and subsystems, hardware and software, plans and interventions, tools and techniques add compatible with the speed and the intensity of customer needs. According to Johnson and Gueutal, HR is evolving into a more technology-based profession because organizations need to: - Streamline HR processes and reduce administrative burdens - Reduce HR administration and compliance costs - Compete more effectively for global talent - Improve service and access to data for employees and managers - Provide real-time metrics to allow decision-makers to spot trends and manage the workforce more effectively and - Enable HR to transform so it can play a more strategic role in the business. # Labor Relations - According to the Bureau of Labor and Employment Statistics, one of the department bureau of the Department of Labor and Employment or DOLE. If one will look at the percentage of labour union members to total wage and salary workers, there is a notable decline from 30.7% in 1982 to 29.5% in 1993 down to 10.6% in 2009. # Increase in Social Contribution - Employees pay mandatory contributions in proportion to their salary, the first one is Social Security System(SSS) which takes contributions of 10.4% of monthly salary. This is less than half of the rate in the public sector under the Government Service Insurance System (GSIS) which is 21% of the monthly salary. - The increase would allow a P500 one time grant to pensioners, a 10% across the board increase in pension, and higher computed benefits for active members. - There is a National Health Insurance Program to make sure that employees are adequately covered by a health insurance. - According to PhilHealth, is sure way to lessen the impact of medical costs that can affect a company's finances. - Another mandatory contribution with the insurance of R.A 9679 is the PAG-IBIG(Pagtulungan sa Kinabukasan, Ikaw, Bangko, Industriya at Gobyerno) Fund. - The fund offers its members various benefits such as savings, short-term loans, and access to housing programs. - Another mandatory contribution with the issuance of R.A. 9679 is the PAG-IBIG (Pagtutulungan sa Kinabukasan, Ikaw, Bangko, Industriya at Gobyeno) Fund. - The contribution rates for all mandatory-covered members including OFW; are stated as follows: for those with monthly compensation of P1,500 and below, the employee share is 1% of their salary and 2% from their employer; while for those with over P1,500 monthly compensation, the share is 2% for both the employees and the employers. The fund offers its members various benefits such as savings, short-term loans, and access to housing programs. - Application, inquiries and processing of benefits and claims for the mentioned insurance and funds are all under the jurisdiction of HR. The Human Resource information system should include storage and sorting of data pertinent to their membership and contribution to these different government agencies. # HR Departments Organization Charts And Structures - Organizations historically divided their managers into two which are the following: 1. Line management - line managers were directly responsible for the production of goods and service. 2. Staff management - staff managers were responsible for an indirect or support function that would have costs but whose bottom line was less direct. - However, many organizations have blurred this distinction. Existing firms and companies have different organizational design and - No two HR departments have exactly the same roles and responsibilities. As many as 30 or 40 separate functions may be performed by HR departments staff, depending on the size and location of the organization, the make up of the workforce, the type of industry, and the value system of top management. - For some functions, the HR department may have full responsibility; for others, it may share responsibility with supervisors of other departments. ## Centralization - Some organizations centralize HR. A centralized strategy locates the design and administration responsibility in a single organizational unit. Administration generally will fall to those working in various units who are often HR generalist. Generalists handle all HR activities rather than specializing in a single ## Decentralization - Decentralization gives each unit the responsibility to design and administer its own personnel system. ## Organization Chart - Organizations can use charts for a number of purposes. For example, HR administrations, as well as chief executive officers, corporate planners, marketing representatives, and others, can use such organization charts to: 1. Design their department or division; 2. Monitor reporting relationship; 3. Gain access to information about newly created 4. Find out how leading agencies organize their management teams and workforces; 5. Assess industry patterns; 6. Examine the competition; and; 7. Use in business presentations and to facilitate placement decision # Thank You