Human Resource Management Textbook PDF

Where Are We Now….. We begin with Chapter 1 Introduction to Human Resource Management 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...

Where Are We Now….. We begin with Chapter 1 Introduction to Human Resource Management 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, and the plan of the book. More importantly, the human resource management concepts and techniques you’ll learn in this book 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 read this book getting results is the bottom line of managing, and that, as a manager, you will have to get those results through people. 1 1 After studying this chapter, you will be able to: 1-1. Explain what human resource management is and how it relates to the management process. 1-2. Briefly discuss and illustrate each of the important trends influencing human resource management. 2 After studying this chapter, you will also be able to: 1-3. List and briefly describe “distributed HR” and other important aspects of human management today. 1-4. List at least four important human resource manager competencies. 1-5. Outline the plan of this book. 3 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. 4 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. 5 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. 6 Why Is HR Management 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 commiting any unfair labor practices. 2. To Improving 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 7 Carefully studying this book will help you in these areas. 7 Line and staff managers focus their energies in different yet related and complementary ways. Let’s talk about the two types of managers and what each does for the firm. 8 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. 9 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: 1. Placing the right person in the right job. 2. Starting new employees in the organization (orientation). 10 3. Training employees for jobs that are new to them. 4. Improving the job performance of each person. 5. Gaining creative cooperation and developing smooth working relationships. 6. Interpreting the company’s policies and procedures. 11 In small organizations, line managers may carry out all these personnel duties 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. This 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. 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 12 benefits program. Training specialists. Plan, organize, and direct training activities. Labor relations specialists. Advise management on all aspects of union-management relations. At the other extreme, the human resource team for a small manufacturer may contain just five or six (or fewer) staff, and have an organization similar to that in Figure 1-1. There is generally about one human resource employee per 100 company employees. 12 Many employers are changing how they organize their human resource functions. For example, one survey found that 44% of the large firms surveyed planned to change how they organize and deliver HR services Most plan to use 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. 13 In the continuing development of human resource management, there exist various trends that will help shape its practice and evolution in the coming years. 14 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 trends, trends in how people work, technological trends, and globalization and economic trends: Demographic and Workforce 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 How People Work. At the same time, work has shifted from manufacturing jobs to service jobs in North America and Western Europe. Today over two-thirds of the U.S. workforce is employed in producing and delivering services, not products. Example of this is on demand workers like Uber. Improving Performance At Work: HR as a Profit Center Boosting Customer Service. A bank installed special software that made it easier for its customer service representatives to handle customers’ inquiries. However, the bank did not otherwise change the service reps’ jobs in any way. Here, the new software system did help the service reps handle more calls. But otherwise, this bank saw no big performance gains. A second bank installed the same software. But, seeking to 15  capitalize on how the new software freed up customer reps’ time, this bank also had its human resource team upgrade the customer service representatives’ jobs. This bank taught them how to sell more of the bank’s services, gave them more authority to make decisions, and raised their wages. Here, the new computer system dramatically improved product sales and profitability, thanks to the newly trained and empowered customer service reps. Value-added Human resource practices like these improve employee performance and company profitability. Talk About it (Discussion): Discuss three more specific examples of what you believe this second bank’s HR department could have done to improve the reps’ performance Globalization. Refers 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—it 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 city). Unemployment nationwide soon rose to more than 10%. Technology. 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. 15  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 gaming, new training applications, and websites such as Knack, Gild, and True Office enable employers to inject gaming features into training, performance appraisal, and recruiting. 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, also called talent 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?) 16 As the challenges continue for today – so does important aspects of Human Resource Management. Let take a look at today’s Human Resource Management. 17 Today’s human resource managers are more involved in longer term, strategic “big picture” issues. We’ll see in Chapter 3 (Strategy) that strategic human resource management means formulating and executing human resource policies and practices that produce the employee competencies and behaviors the company needs to achieve its strategic aims. We illustrate this throughout this book with Strategic Context features such as on the next slide. 18 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?) Sometimes, companies translate their findings into what management gurus call high- performance work systems, which are “sets of human resource management practices that together produce superior employee performance.” 19 The bottom line is that today’s employers want their human resource managers to add value by boosting profits and performance. 20 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). 21 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. 22 As the challenges continue for today – so does important aspects of Human Resource Management. Let take a look at the New Human Resource Manager 23 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. SHRM also says HR managers must have command of the basic functional areas of HR 24 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 24 HR and the Manager’s Skills The aim of this book is to help every manager develop the skills he or she needs to carry out the human resource management-related aspects of his or her job, such as recruiting, selecting, training, appraising, and incentivizing employees, and providing them with a safe and fulfilling work environment. HR and Ethics Ethics refer to the standards someone uses to decide what his or her conduct should be. HR Manager Certification Many human resource managers use certification to demonstrate their mastery of contemporary human resource management knowledge and competencies. Appendices A and B cover this information more in-depth. HR and the Manager’s Human Resource Philosophy 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 25 management. 25 Many human resource managers use certification to demonstrate their mastery of contemporary human resource management knowledge and competencies. Managers currently have, at this writing, at least two testing processes to achieve certification. The oldest is administered by the HR Certification Institute (HRCI), an independent certifying organization for human resource professionals (see www.hrci.org). Through testing, HRCI awards several credentials, including Professional in Human Resources (PHR), and Senior Professional in Human Resources (SPHR). Managers can review HRCI’s Knowledge Base and take an online HRCI practice quiz by going to www.hrci.org and clicking on Exam Preparation, and then on Sample Questions. Starting in 2015, SHRM began offering its own competency and knowledge based testing and certifications for SHRM Certified Professionals and SHRM Senior Certified Professionals, based on its own certification exams. The exam is built around the SHRM Body of Competency and Knowledge model which includes functional knowledge and skills as well as competencies. The SHRM and the HRCI knowledge bases certification information is summarized separately in Appendices A and B of this book. 26