Human Resource Management (HRM) 16th Edition - Chapter 1 PDF

Chapter-1 (Introduction to Human Resource Management) HRM-501 Human Resource Management (16th edition) Gary Dessler  What Is Human Resource Management? To understand what human resource management is, it’s useful to start with what managers do. Google is an...

Chapter-1 (Introduction to Human Resource Management) HRM-501 Human Resource Management (16th edition) Gary Dessler  What Is Human Resource Management? To understand what human resource management is, it’s useful to start with what managers do. Google is an organization. An organization consists of people (in this case, people like Elance’s own in-house sales managers and Web designers)with formally assigned roles who work together to achieve the organization’s goals. A manager is someone who is responsible for accomplishing the organization's goal. The Management Process includes Planning, Organizing, Staffing, Leading & Controlling. Copyright © 2017 Pearson Education, Ltd. 1-2  The Management Process Planning. Establishing goals and standards; developing rules and procedures; developing plans and forecasts Organizing. Giving each subordinate a specific task; establishing departments; delegating authority to subordinates; establishing channels of authority and communication; coordinating the work of subordinates Staffing. 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. Getting others to get the job done; maintaining morale; motivating subordinates Controlling. 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 What Is Human Resource Management? HRM is a subset of the study of management that focuses on how to attract, hire, train, motivate, and maintain employees. Strong employees become a source of competitive advantage in a global environment facing complex and rapid changes. Human resource management (HRM) is the process of acquiring, training, appraising, and compensating employees, and of attending to their labor relations, health and safety, and fairness concerns. Human Resource Management (HRM) The policies, practices, and systems that influence employees’ behavior, attitudes, and performance. 1–4  FUNCTION RESPONSIBILITIES Analysis and design of Work analysis; job design; job descriptions Recruitment and selection Recruiting; job postings; interviewing; testing; coordinating use of temporary labor Training and development Orientation; skills training; career development programs Performance management Performance measures; preparation and administration of performance appraisals; discipline Compensation and benefits Wage and salary administration; incentive pay; insurance; vacation leave administration; retirement plans; profit sharing; stock plans Employee relations Attitude surveys; labor relations; employee handbooks; company publications; labor law compliance; relocation and outplacement services Personnel policies Policy creation; policy communication Employee data and information systemsRecord keeping; HR information systems; workforce analytics Compliance with laws Policies to ensure lawful behavior; reporting; posting information; safety inspections; accessibility accommodations Support for strategy Human resource planning and forecasting; talent management; change management HRM includes…  Conducting job analysis(determining the nature of each employee s job)  Planning labor need and recruiting job candidates  Selecting job candidates  Orienting and Training new employees  Managing wages and salaries(compensating employees)  Providing incentives and benefits  Appraising performance  Communicating (interviewing, counseling, disciplining)  Training and developing managers  Building employee commitment. 6  An HR manager should know about: * Equal opportunity and affirmative action * Employee health and safety * Handling grievances and labor relations 7 Job AnalysisThe process of getting detailed information about jobs. human resource planning, identifying the numbers and types of employees the organization will require in order to meet its objectives Recruitment is the process through which the organization seeks applicants for potential employment. Selection refers to the process by which the organization attempts to identify applicants with the necessary knowledge, skills, abilities, and other characteristics that will help the organization achieve its goals. Training is a planned effort to enable employees to learn job-related knowledge, skills, and behavior. For example, many organizations offer safety training to teach employees safe work habits. Development involves acquiring knowledge, skills, and behaviors that improve employees’ ability to meet the challenges of a variety of new or existing jobs, including the client and customer demands of those jobs The process of ensuring that employees’ activities and outputs match the organization’s goals is called performance management. Why Is HRM Important to All Managers? Avoid Personnel (HR) Mistakes First, having a command of this knowledge will help you avoid the personnel mistakes you don’t want to make while managing. For example, you don’t want To have your employees not doing their best. To hire the wrong person for the job. To experience high turnover. To have your company in court due to your discriminatory actions. To have your company cited for unsafe practices. To let a lack of training undermine your department’s effectiveness. To commit any unfair labor practices. 1–10  Why Is HRM Important to All Managers? At one Ball Corp. packaging plant, managers trained supervisors to set and communicate daily performance goals. Management tracked daily goal attainment with team scorecards. Employees received special training to improve their skills. Within 12 months production was up 84 million cans, customer complaints dropped by 50%, and the plant’s return on investment rose by $3,090,000. A call center averaged 18.6 vacancies per year (about a 60% turnover rate). The researchers estimated the cost of a call-center operator leaving at about $21,500. They estimated the total annual cost of agent turnover for the call center at $400,853. Cutting that rate in half would save this firm about $200,000 per year.  Line and Staff Aspects of Human Resource Management Authority: 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. Managers with line authority is line managers.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 you the right to advise others in the organization. Managers with staff authority is staff managers.When the human resource manager suggests that the plant manager use a particular selection test, he or she is 1-12 exercising staff authority.  Line and Staff Aspects of Human Resource Management On the organization chart, managers with line authority are line managers (Finance manager, marketing manager, production manager). Those with staff (advisory) authority are staff managers. (HR manager) 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. Line Manager’s HR Management Responsibilities 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 Gaining creative cooperation and developing smooth working relationships Interpreting the company policies and procedures 1-15 Line Manager’s HR Management Responsibilities (Cont’d) Controlling labor cost Developing the abilities of each person Creating and maintaining departmental morale Protecting employees’ health and physical conditions 1-16 Human Resource Manager’s Duties Functions of HR Managers Line Function Coordinative Staff Functions Line Authority Function Staff Authority Implied Authority Functional Authority Innovator/Advocacy 17  Human Resource Manager’s Duties A line function – The HR manager directs the activities of the people in his or her own department and in related service areas (like the plant cafeteria). A coordinative function – HR managers also coordinate personnel activities, a duty often referred to as functional control. Here he or she ensures that line managers are implementing the firms human resource policies and practices 18  Human Resource Manager’s Duties Staff (assist and advise) functions – Assisting and advising line managers is the heart of the HR manager’s job. – HR assists in hiring, training, evaluating, rewarding, counseling, promoting and firing employees. – It administers the various benefit programs (health and accident insurance, retirement, vacation, and so on). – It helps line managers comply with equal employment and occupational safety laws, and plays an important role in handling grievances and labor relations. Implied authority: – The authority exerted (utilized) by an HR manager by virtue of others’ knowledge that he or she has access to top management. 19  Examples of Human Resource Specialties Recruiter Labor relations specialist EEO coordinator Human Resource Specialties Training Job analyst specialist Compensation manager 20  Examples of Human Resource Specialties Recruiters: Maintain contacts within the community and perhaps travel extensively to search for qualified job applicants. Equal employment opportunity (EEO) representatives or affirmative action coordinators: Investigate and resolve EEO grievances, examine organizational practices for potential violations, and compile and submit EEO reports. Job analysts: Collect and examine detailed information about job duties 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.  New Approaches To Organizing HR Reorganizing the HR function of how it is organized and delivers HR services 1. Shared Services (Transactional ) HR teams 2. Corporate HR teams 3. Embedded HR teams 4. Centers of expertise 1-22  New Approaches to Organizing HR 1. The transactional HR/Shared Services group focuses on using centralized call centers and outsourcing arrangements with vendors (such as benefits advisor) to provide specialized support in day-to-day transactional HR activities (such as changing benefit plan and providing updated appraisal forms) to the company’s employees. 2. The corporate HR group focus on assisting top management in “top level” big picture issues such as developing the company’s long-term strategic plan. 23  New Approaches to Organizing HR (Cont’d) 3. The embedded HR unit assign HR generalists (also known as relationship managers or HR business partners”) directly to departments like sales and production, to provide the localized human resource management assistance the departments need. 4. The centers of expertise are like specialized HR consulting firms within the company- for instance, providing specialized assistance in areas such as organizational change.(Organizational Development (OD) Intervention (change) Consultant) 24  The new human recourse manager Recently, the Society for Human Resource Management (SHRM) introduced a new “competency Model” it itemizes the competencies, skills, and knowledge and expertise human resource managers need. Here are the behaviors or competencies (with definitions) SHRM says today’s HR manager should be able to exhibit: Leadership & Navigation: The ability to direct and contribute to initiatives and process 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 the organization’s strategic plan. Relationship Management: The ability to manage interactions to provide service and support the organization. 25  The new human recourse manager (Cont’d) 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 perspective and backgrounds of all parties. Communication: The ability to effectively exchange information with stakeholders. 26  The new human recourse manager (examples) Relationship management involves handling the personal interactions necessary for providing services and supporting the organization’s goals. Behaviors include treating employees respectfully, building trust, and providing great customer service to those served by HR functions. Consultation refers to the ways HR employees guide others in the organization. They do this through behaviors such as coaching, gathering data to support business decisions, and especially at a senior level, designing solutions in support of business strategy. Leadership and navigation refer to directing the organization’s processes and programs. Depending on one’s level in the organization, the necessary behaviors would include behaving consistently with the organization’s culture, encouraging people to collabo_x0002_rate, or setting a vision for the HR function or entire organization.  The new human recourse manager (examples) Communication involves the skills needed to exchange information with others inside and outside the organization. Behavior examples include expressing information clearly, providing constructive feedback, and listening effectively. Global and cultural effectiveness means valuing and considering various people’s perspectives. Behaviors include acquiring knowledge of other cultures, resolving conflicts, and supporting inclusiveness so that all can contribute to their fullest. Ethical practice involves applying integrity, accountability, and other core values. Examples include maintaining confidentiality, rewarding ethical behavior, and responding to reports of unethical conduct. Critical evaluation refers to the interpretation of information needed for making busi_x0002_ness decisions. Behaviors include gathering relevant data, applying statistical knowledge to understand the data, and finding root causes of problems. Business acumen involves understanding how information can be used to support the organization’s strategy. Behaviors include gaining and applying knowledge of business principles and how HR functions relate to business success.  the trends Shaping Human Resource Management 1. 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. The percentages of younger workers will fall, while those over 55 years of age will leap from 11.8% of the workforce in 1992 to 25.6% in 2022.13 Many employers call “the aging workforce” a big problem More women today than in the past are in the paid labor force. Between 2014 and 2024, women’s share of the labor force is expected to remain steady, at around 47%.7 2. 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. By 2020, service- providing industries are expected to account for 131 million out of 150 million (87%) of wage and salary jobs overall. So in the next few years, almost all the new jobs added in the United States will be in services, not in goods-producing industries.  A Diverse Workforce The greater diversity of the U.S. labor force challenges employers to create HRM practices that ensure that they fully utilize the talents, skills, and values of all employees. As a result, organizations cannot afford to ignore or discount the potential contributions of women and minorities. Employers will have to ensure that employees and HRM systems are free of bias and value the perspectives and experience that women and minorities can contribute to organizational goals such as product quality and customer service. managing cultural diversity involves many different activities. These include creating an organizational culture that values diversity, ensuring that HRM systems are bias-free, encouraging career development for women and minorities, promoting knowledge and acceptance of cultural differences, ensuring involvement in education both within and outside the organization, and dealing with employees’ resistance to diversity.  the trends Shaping Human Resource Management On demand workers Anyone who has registered on Uber already knows something about on-demand workers. At last count, Uber was signing up almost 40,000 new independent contractor drivers per month, a rate that was doubling every few months. Human Capital One big consequence of such demographic and workforce trends is employers’ growing emphasis on their workers’ knowledge, education, training, skills, and expertise—in other words on their “human capital.”  the trends Shaping Human Resource Management Globalization refers to companies extending their sales, ownership, and/or manufacturing to new markets abroad. Thus 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. The North American Free Trade Agreement (NAFTA) and the European Union (EU) are examples. Globalization has boomed for the past 50 or so years. For example, the total sum of U.S. imports and exports rose from $47 billion in 1960, to $562 billion in 1980, to about $5.1 trillion recently  the trends Shaping Human Resource Management Technology Trends However, it may be technology that most characterizes the trends shaping human resource management today. For example, the consulting firm Accenture estimates that social media connections via tools like LinkedIn will soon produce as many as of new recruits—often letting line managers bypass the human resource management unit. Economic Trends Although globalization supported a growing global economy, the past 10 or so years were difficult economically. 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 leaped as much as 20% per year. Unemployment remained docile at about 4.7%