Human Resource Management PDF

Human Resource Management Sixteenth Edition, Global Edition Chapter 1 Introduction to Human Resource Management Copy...

Human Resource Management Sixteenth Edition, Global Edition Chapter 1 Introduction to Human Resource Management Copyright © 2020 Pearson Education Ltd. All Rights Reserved Learning Objectives (1 of 2) 1.1 Explain what human resource management is and how it relates to the management process. 1.2 Briefly discuss and illustrate the important trends influencing human resource management. Copyright © 2020 Pearson Education Ltd. All Rights Reserved Learning Objectives (2 of 2) 1.3 Briefly describe six important components or pillars of human management today. 1.4 List at least four important human resource manager competencies. 1.5 Outline the plan of this book. Copyright © 2020 Pearson Education Ltd. All Rights Reserved PURPOSE OF CHAPTER 1 The purpose of this chapter explains what Human Resource Management is and why it’s important to all managers. We’ll see that human resource management activities such as hiring, training, appraising, compensating, and developing employees are part of every manager’s job. We’ll see that human resource management is also a separate function. The main topics we’ll cover will include: what human resource management is the trends shaping human resource management human resource management today, the new human resource manager Copyright © 2020 Pearson Education Ltd. All Rights Reserved PURPOSE OF CHAPTER 1 More importantly, the human resource management concepts and techniques you’ll learn in this course can help ensure that you get results—through people. Remember that you can do everything else right as a manager—lay brilliant plans, draw clear organization charts, set up world-class assembly lines, and use sophisticated accounting controls—but still fail, by hiring the wrong people or by not motivating subordinates. On the other hand, many managers—presidents, generals, governors, supervisors—have been successful even with inadequate plans, organization, or controls. They were successful because they had the knack of hiring the right people for the right jobs and motivating, appraising, and developing them. Remember, as you study this course getting results is the bottom line of managing, and that, as a manager, you will have to get those results through people. Copyright © 2020 Pearson Education Ltd. All Rights Reserved Learning Objective 1.1: Explain What Human Resource Management Is and How It Relates to the Management Process Copyright © 2020 Pearson Education Ltd. All Rights Reserved Working for any organization means that you and those around you share common goals, which include an interest in the growth and continuing development of the organization. Some of those common goals include how work is accomplished within the organization. We now begin our study of the elements of the management process and how they relate to human resource management. Note that such individuals generally work together to achieve the common goals of an organization. Copyright © 2020 Pearson Education Ltd. All Rights Reserved What Is Human Resource Management? The Management Process – Planning – Organizing – Staffing – Leading – Controlling Copyright © 2020 Pearson Education Ltd. All Rights Reserved What Is Human Resource Management? – To understand what human resource management is, it’s useful to start with what managers do. Most writers agree that managing involves performing five basic functions: planning, organizing, staffing, leading, and controlling. These functions in total represent the management process. Planning – involves establishing goals and standards; developing rules and procedures; developing plans and forecasts. Organizing – involves giving each subordinate a specific task; establishing departments; delegating authority to subordinates; establishing channels of authority and communication; coordinating the work of subordinates. Staffing – involves determining what type of people should be hired; recruiting prospective employees; selecting employees; setting performance standards; compensating employees; evaluating performance; counseling employees; training and developing employees. Leading – involves getting others to get the job done; maintaining morale, motivating subordinates. Controlling – involves setting standards such as sales quotas, quality standards, or production levels; checking to see how actual performance compares with these standards; taking corrective action as needed. Copyright © 2020 Pearson Education Ltd. All Rights Reserved These concepts and techniques include the following: 1. Conducting job analyses (determining the nature of each employee’s job). 2. Planning labor needs and recruiting job candidates. 3. Selecting job candidates. 4. Orienting and training new employees. 5. Managing wages and salaries (compensating employees). 6. Providing incentives and benefits. 7. Appraising performance. 8. Communicating (interviewing, counseling, disciplining). 9. Training employees, and developing managers. 10. Building employee relations and engagement. In addition, what a manager should know about: 1. Equal opportunity and affirmative action. 2. Employee health and safety. 3. Handling grievances and labor relations Copyright © 2020 Pearson Education Ltd. All Rights Reserved Why Is Human Resource Management Important to All Managers? To avoid personnel mistakes To improve profits and performance You may spend some time as an HR manager You may end up as your own human resource manager Copyright © 2020 Pearson Education Ltd. All Rights Reserved HR management is important to all managers because of the following: 1.To Avoid Personnel Mistakes – managers don’t want to make personnel mistakes, such as not having employees doing their best, hiring the wrong person for the job, experiencing high turnover, having to be in court due to discriminatory actions, being cited for unsafe practices, letting a lack of training undermined department effectiveness, or committing any unfair labor practices. 2. To Improve Profits and Performance – to help ensure that you get results—through people. 3.You May Spend Some Time as an HR Manager – about a third of large U.S. businesses surveyed has appointed non-HR managers to be their top human resource executives. 4. HR for Small Business – you may well end up as your own human resource manager. More than half of the people working in the United States work for small firms. Small businesses as a group also account for most of the 600,000 or so new businesses created every year. Copyright © 2020 Pearson Education Ltd. All Rights Reserved Line and Staff Aspects of Human Resource Management Authority is the right to make decisions, to direct the work of others, and to give orders. Managers usually distinguish between line authority and staff authority. – Line authority gives you the right to issue orders – Staff authority gives you the right to advise others in the organization Copyright © 2020 Pearson Education Ltd. All Rights Reserved Line and staff managers focus their energies in different yet related and complementary ways. When the vice president of sales tells her sales director to “get the sales presentation ready by Tuesday,” she is exercising her line authority. Staff authority gives a manager the right to advise other managers or employees. It creates an advisory relationship. When the human resource manager suggests that the plant manager use a particular selection test, he or she is exercising staff authority. In popular usage, people tend to associate line managers with managing departments (like sales or production) that are crucial for the company’s survival. Staff managers generally run departments that are advisory or supportive, like purchasing and human resource management. Human resource managers are usually staff managers. They assist and advise line managers in areas like recruiting, hiring, and compensation. Copyright © 2020 Pearson Education Ltd. All Rights Reserved Line Manager’s HR Management Responsibilities (1 of 2) Line managers do have many human resource duties. This is because the direct handling of people has always been part of every line manager’s duties, from president down to first-line supervisors. Some line supervisors’ responsibilities for effective human resource management fall under these general headings: Placing the right person in the right job Starting new employees in the organization (orientation) Training employees for jobs that are new to them Improving the job performance of each person Copyright © 2020 Pearson Education Ltd. All Rights Reserved Line Manager’s HR Management Responsibilities (2 of 2) Gaining creative cooperation and developing smooth working relationships Interpreting the company policies and procedures Controlling labor cost Developing the abilities of each person Creating and maintaining departmental morale Protecting employees’ health and physical conditions Social media tools like LinkedIn hiring are explaining these responsibilities. Copyright © 2020 Pearson Education Ltd. All Rights Reserved  In small organizations, line managers may carry out all these personnel duties shown in Figure 1-1 unassisted. But as the organization grows, line managers usually need the assistance, specialized knowledge, and advice of a separate human resource staff. In larger firms, the human resource department provides such specialized assistance. Figure 1-1 shows HRM jobs in one organization. Examples of typical jobs include: Recruiters. Search for qualified job applicants. Equal employment opportunity (EEO) coordinators. Investigate and resolve EEO grievances, examine organizational practices for potential violations, and compile and submit EEO reports. Job analysts. Collect and examine information about jobs to prepare job descriptions. Compensation managers. Develop compensation plans and handle the employee benefits program. Training specialists. Plan, organize, and direct training activities. Labor relations specialists. Advise management on all aspects of union-management relations. Copyright © 2020 Pearson Education Ltd. All Rights Reserved The Human Resource Department Figure 1-1 Human Resource Department Organization Chart Showing Typical HR Job Titles Source: “Human Resource Development Organization Chart Showing Typical HR Job Titles,” www.co.pinellas.fl.us/persnl/pdf/orgchart.pdf. Courtesy of Pinellas County Human Resources. Reprinted with permission. Copyright © 2020 Pearson Education Ltd. All Rights Reserved New Approaches To Organizing HR Reorganizing the HR function of how it is organized and delivers HR services – Shared Services (Transactional) HR teams – Corporate HR teams – Embedded HR teams – Centers of expertise Copyright © 2020 Pearson Education Ltd. All Rights Reserved  Many employers are changing how they organize their human resource functions. For example, one survey found that 55% of the large firms surveyed were actively reengineering their HRM processes. Most are actively seeking to transform how they deliver HR services, largely by adopting new HR technology tools. Many are using technology to institute more “shared services” (or “transactional”) arrangements. These establish centralized HR units whose employees are shared by all the companies’ departments to obtain advice on matters such as discipline problems. You may also find specialized corporate HR teams within a company. These assist top management in top-level issues such as developing the personnel aspects of the company’s long-term strategic plan. Embedded HR teams is another approach that has HR generalists (also known as “relationship managers” or “HR business partners”) assigned to functional departments like sales and production. They provide the selection and other assistance the departments need. In addition, Centers of expertise are basically specialized HR consulting firms within the company. Copyright © 2020 Pearson Education Ltd. All Rights Reserved Learning Objective 1.2: Briefly Discuss and Illustrate the Important Trends Influencing Human Resource Management In the continuing development of human resource management, there exist various trends that will help shape its practice and evolution in the coming years. Copyright © 2020 Pearson Education Ltd. All Rights Reserved Trends in Human Resource Management Workforce Demographics and Diversity Trends Trends in Jobs People Do Globalization Trends Economic Trends Technology Trends Copyright © 2020 Pearson Education Ltd. All Rights Reserved  Trends are occurring in the environment of human resource management that are changing how employers get their human resource management tasks done. These trends include workforce demographic trends, trends in jobs people do, technological trends, and globalization and economic trends: Workforce Demographics and Diversity Trends. The composition of the workforce will continue to change over the next few years; specifically, it will continue to become more diverse with more women, minority group members, and older workers in the workforce. Trends in Jobs People Do. First, work has shifted from manufacturing jobs to service jobs. Today over two-thirds of the U.S. workforce is employed in producing and delivering services, not products. Second, in companies like Uber and Upwork, most workers are freelancers and independent contractor-gig workers. Finally, more jobs are becoming “high tech.” For managers, the challenge is that they have to manage such workers differently. Copyright © 2020 Pearson Education Ltd. All Rights Reserved  Globalization Trends. These refer to companies extending their sales, ownership, and/or manufacturing to new markets abroad. For example, Toyota builds Camrys in Kentucky, while Apple assembles iPhones in China. Free- trade areas—agreements that reduce tariffs and barriers among trading partners—further encourage international trade. NAFTA (the North American Free Trade Agreement) and the EU (European Union) are examples. Economic Trends. Although globalization supported a growing global economy, the past 10 or so years were difficult economically. Look at Figure 1- 2. Gross National Product (GNP)—a measure of the United States of America’s total output—boomed between 2001 and 2007. During this period, home prices (see Figure 1-3) leaped as much as 20% per year. Unemployment remained docile at about 4.7%. Then, around 2007–2008, all these measures fell off a cliff. GNP fell. Home prices dropped by 10% or more (depending on the city). Unemployment nationwide soon rose to more than 10%. Complicating this is the fact that the labor force in America is growing more slowly. Talent management ranks as a top concern for most global companies’ senior HR officers. Furthermore, demand for workers is unbalanced. Technology Trends. It may be technology that most characterizes the trends shaping human resource management today. Let’s take a look at the five main types of digital technologies that are driving this transfer of functionality from HR professionals to automation. Copyright © 2020 Pearson Education Ltd. All Rights Reserved More on HR Technology Trends There are six main types of digital technologies driving HR professionals to automation: – Social Media – Mobile Applications – Cloud Computing – Data Analytics – Artificial Intelligence – Augmented Reality Copyright © 2020 Pearson Education Ltd. All Rights Reserved  Employers increasingly use social media—tools such as Twitter, Facebook, and LinkedIn (rather than, say, as many employment agencies) —to recruit new employees. Employers use new mobile applications, for instance, to monitor employee location and to provide digital photos at the facility clock-in location to identify workers. Employers use cloud computing which enable employers to monitor and report on things like a team’s goal attainment and to provide real- time evaluative feedback. Employers also use data analytics, which use statistical techniques, algorithms, and problem-solving to identify relationships among data for the purpose of solving particular problems (such as what the ideal candidate’s traits are, or how can I tell in advance which of my best employees is likely to quit?) Artificial intelligence (AI) basically means using computers to do tasks in human-like ways. Augmented reality (AR) transforms huge amounts of data and superimposes digital summaries and images on the physical world. Copyright © 2020 Pearson Education Ltd. All Rights Reserved Learning Objective 1.3: Briefly Describe Six Important Components or Pillars of Human Resource Management Today Copyright © 2020 Pearson Education Ltd. All Rights Reserved Today’s New Human Resource Management A Brief History of Personnel/Human Resource Management Distributed HR and the New Human Resource Management Copyright © 2020 Pearson Education Ltd. All Rights Reserved  A Brief History of Personnel/Human Resource Management “Personnel management” is not new – it dates back to the 1800’s. By 1900, employers set up the first “hiring offices,” training programs, and factory schools. Personnel management had begun. In these early firms, personnel managers took over hiring and firing from supervisors, ran the payroll departments, and administered benefits plans. New union laws were added in the 1930s, equal employment laws came along in the 1960s that made employers more reliant on personnel management to avoid discrimination claims. Now today, a new human resource management is emerging – one built on six main components or pillars. We’ll look at this next. Distributed HR and the New Human Resource Management More and more human resource management tasks are now being redistributed from a central HR department to the company’s employees and line managers, thanks to digital technologies like mobile phones and social media. Some experts say that if current trends continue, many aspects of HR and talent management will become “fully embedded in how work gets done throughout an organization [distributed], thereby becoming an everyday part of doing business.” Copyright © 2020 Pearson Education Ltd. All Rights Reserved A Quick Summary Figure 1-4 What Trends Mean for Human Resource Management Copyright © 2020 Pearson Education Ltd. All Rights Reserved Strategic Human Resource Management Strategic human resource management – means formulating and executing human resource policies and practices that produce the employee competencies and behaviors that the company needs to achieve its strategic aims. Copyright © 2020 Pearson Education Ltd. All Rights Reserved Improving Performance: The Strategic Context Building L.L.Bean Let’s take a look at the heart of their strategy. Copyright © 2020 Pearson Education Ltd. All Rights Reserved HR and Performance Measurement The Human Resource Manager is expected to spearhead employee performance. Three levers can be applied to do so: 1. Department Lever 2. Employee Cost Lever 3. Strategic Results Lever Copyright © 2020 Pearson Education Ltd. All Rights Reserved 1. The HR department lever. The HR manager ensures that the human resource management function is delivering services efficiently. For example, this might include outsourcing certain HR activities such as benefits management, and using technology to deliver its services more cost-effectively. 2. The Employee costs lever. For example, the human resource manager takes a prominent role in advising top management about the company’s staffing levels, and in setting and controlling the firm’s compensation, incentives, and benefits policies. 3. The strategic results lever. Here the HR manager puts in place the policies and practices that produce the employee competencies and skills the company needs to achieve its strategic goals. That’s what was done at L.L.Bean, for instance. Copyright © 2020 Pearson Education Ltd. All Rights Reserved HR and Evidence-Based Management Evidence-based human resource management – is the use of data, facts, analytics, scientific rigor, critical evaluation, and critically evaluated research/case studies to support human resource management proposals, decisions, practices, and conclusions. – Actual measurements – Existing data – Research studies Copyright © 2020 Pearson Education Ltd. All Rights Reserved  Put simply, evidence-based human resource management means using the best-available evidence in making decisions about the human resource management practices you are focusing on. The evidence may come from the following: Actual measurements (such as, how did the trainees like this program?) Existing data (such as, what happened to company profits after we installed this training program?) Research studies (such as, what does the research literature conclude about the best way to ensure that trainees remember what they learn?) Copyright © 2020 Pearson Education Ltd. All Rights Reserved HR and Adding Value Adding value – means helping the firm and its employees improve in a measurable way as a result of the human resources manager’s actions. The bottom line is that today’s employers want their human resource managers to add value by boosting profits and performance. Adding value does not just mean cutting costs. It also entails improving the company’s processes, aligning HR’s activities with the company’s strategy, and fostering employee engagement. Copyright © 2020 Pearson Education Ltd. All Rights Reserved Sustainability and HRM It is about measuring companies in terms of maximizing profits but also on their environmental and social performance as well. As one example, PepsiCo has a goal to deliver “Performance with Purpose”—in other words, to deliver financial performance while also achieving human sustainability, environmental sustainability, and talent sustainability. PepsiCo wants to achieve business and financial success while leaving a positive imprint on society (click www.pepsico.com, then click What We Believe, and then Performance with Purpose). Copyright © 2020 Pearson Education Ltd. All Rights Reserved Employee Engagement and HRM Employee engagement refers to being psychologically involved in, connected to, and committed to getting one’s job done. Engaged employees “experience a high level of connectivity with their work tasks,” and therefore work hard to accomplish their task-related goals. Employee engagement is important because it drives performance. Copyright © 2020 Pearson Education Ltd. All Rights Reserved Ethics and HRM Ethics means the standards someone uses to decide what his or her conduct should be. Many ethical issues are HR-related and HR plays a big role in cultivating organizational ethics today. Copyright © 2020 Pearson Education Ltd. All Rights Reserved Learning Objective 1.4: List at Least Four Important Human Resource Manager Competencies Copyright © 2020 Pearson Education Ltd. All Rights Reserved The Skills of the New HR Manager HR managers can’t just be good at traditional personnel tasks like hiring and training, but must “speak the CFO’s language” by defending human resource plans in measurable terms. Copyright © 2020 Pearson Education Ltd. All Rights Reserved The New Human Resource Manager The Society of Human Resource Management (SHRM) has a new “competency model” called the SHRM Body of Competency and Knowledge that itemizes what a new HR Manager needs What should they be able to exhibit? Of what basic functional areas of HR should they have command? Copyright © 2020 Pearson Education Ltd. All Rights Reserved  What does it take to be a New Human Resource Manager today? Recently, the SHRM Body of Competency and Knowledge itemized the competencies, skills, and knowledge and expertise human resource managers need. The HR Manager should be able to exhibit: Leadership & Navigation – the ability to direct and contribute to initiatives and processes within the organization. Ethical Practice – the ability to integrate core values, integrity, and accountability throughout all organizational and business practices. Business Acumen – the ability to understand and apply information with which to contribute to the organization’s strategic plan. Relationship Management – the ability to manage interactions to provide service and to support the organization. Consultation – the ability to provide guidance to organizational stakeholders. Critical Evaluation – the ability to interpret information with which to make business decisions and recommendations. Global & Cultural Effectiveness – the ability to value and consider the perspectives and backgrounds of all parties. Communication – the ability to effectively exchange information with stakeholders. Copyright © 2020 Pearson Education Ltd. All Rights Reserved  SHRM also says HR managers must have command of the basic functional areas of HR as follows: Functional Area #1: Talent Acquisition & Retention Functional Area #2: Employee Engagement Functional Area #3: Learning & Development Functional Area #4: Total Rewards Functional Area #5: Structure of the HR Function Functional Area #6: Organizational Effectiveness & Development Functional Area #7: Workforce Management Functional Area #8: Employee Relations Functional Area #9: Technology & Data Functional Area #10: HR in the Global Context Functional Area #11: Diversity & Inclusion Functional Area #12: Risk Management Functional Area #13: Corporate Social Responsibility Functional Area #14: U.S. Employment Law & Regulations Functional Area #15: Business & HR Strategy Copyright © 2020 Pearson Education Ltd. All Rights Reserved HR and the Manager’s HR Philosophy An initial philosophy based on experiences, education, values, assumptions, and background. Technical expertise is important, but at the end of the day, people’s actions are always based in part on the basic assumptions they make. There’s no doubt that you will bring to your job an initial philosophy based on your experiences, education, values, assumptions, and background. In any case, no manager should manage others without first understanding the personnel philosophy that is driving his or her actions. One of the things molding your own philosophy is that of your organization’s top management. Copyright © 2020 Pearson Education Ltd. All Rights Reserved