Defining HRM - Management PowerPoint PDF

Defining HRM David K. Palmer First, the basics of “management” (broadly defined) http://en.wikipedia.org/wiki/Henri_Fayol, accessed 2/6/2014.  “The Société de Commentry, Fourchambault et Decazeville was formed in...

Defining HRM David K. Palmer First, the basics of “management” (broadly defined) http://en.wikipedia.org/wiki/Henri_Fayol, accessed 2/6/2014.  “The Société de Commentry, Fourchambault et Decazeville was formed in 1853 through a merger of the Fourchambault foundry, Imphy (Nièvre) steelworks, Montluçon (Allier) foundry and Commentry (Allier) colliery. The Imphy steelworks was detached from the company and combined with the Saint-Seurin steelworks. In 1869 the two steelworks were reunited with the company. Henri Fayol (1841–1925) was a mining engineer who graduated in 1860. Henri Fayol was engineer at the Commentry coal mines from 1860 to 1866 and director of these mines from 1866 to 1872. He was director of the Commentry, Montvicq and Berry mines from 1872 to 1888. In 1888 Henri Fayol became director-general of the company, holding office until 1918.” https://en.wikipedia.org/wiki/Soci%C3%A9t%C3%A9_de_Commentry,_Fourchambault_et_Decazeville , https://www.geneanet.org/cartes-postales/view/5974338#0, https://industrie.lu/comambault.html, accessed January 13, 2021. Books, translated 1930. Industrial and General Administration. Translated by J.A. Coubrough, London: Sir Isaac Pitman & Sons. 1949. General and Industrial Management. Translated by C. Storrs, Sir Isaac Pitman & Sons, London. Books in French Fayol, Henri (1900), Bassins houillers de Commentry et de Decazeville, excursion sous la conducite de M. H. Fayol (in French), Paris. Fayol, Henri (1916), Administration industrielle et générale; prévoyance, organisation, commandement, coordination, controle (in French), Paris, H. Dunod et E. Pinat. Fayol, Henri (1918), Notice sur les travaux scientifiques et techniques (in French), Gauthier. Fayol, Henri (1921), L'Incapacité industrielle de l'État: Les P. T. T (in French), Paris Dunod. Fayol, Henri 1923. La réforme administrative des PTT, tiré à part, Dunod, 1923. de Calan, Pierre; Fayol, Henri (1963), Renaissance des libertés économiques et sociales (in French), Plon. http://en.wikipedia.org/wiki/Henri_Fayol, accessed 2/6/2014  * *prévoyance, organisation, commandem ent, coordination, Dumler, M. P., & Skinner S. J. (2008). A primer for management (2 nd edition). Mason, OH: Thomson, p. 26. controle Management is … … solving novel problems … allocating scarce resources efficiently and effectively (delight your customer) … decision making in the face of uncertainty … getting work done through others Now, what is HRM? Where does HRM fit within the broader context of 1.the organization? 2.management?  “Fayol’s second element of management, organizing, included provisions for the structuring of activities and relationships as well as the procurement, evaluation, and training of personnel. Later writers split Fayol’s organizing element into two elements: organizing and staffing (personnel or human resource management). For Fayol, to organize a business meant ‘to provide it with everything useful to its functioning: raw materials, tools, capital, personnel,’ and it was the duty of management to ‘see that the human and material organization is consistent with the objectives, resources, and requirements of the concern…. Of two organizations similar in appearance, one may be excellent, the other bad, depending on the Sources: Image: Henri Fayol: www.biz.colostate, accessed 1/22/2008; D. A. Wren, 2005. The history of management thought (5 th edition). Hoboken, NJ: John Wiley & Sons, pp. 220-221 (quoting H. Fayol, General and industrial management (Storrs), pp. 53, 57), emphasis added. https://en.wikipedia.org/wiki/Henri_Fayol, accessed January 13, 2021. personal qualities of those who compose them.’ HRM’s perspective on Henri Fayol’s elements/principles O of management: “Later writers split Fayol’s organizing element into two elements: organizing and staffing (personnel or human resource management)” (D. Wren, 2005, p. 220). Dessler, G. (1978). Personnel management: Modern concepts and techniques. Reston, VA: Reston Publishing, p. 3. Human Resource Management (HRM) The policies, practices, and systems that influence employees’ behavior attitudes performance This definition is too broad!  Organizational behavior (OB) is the "study of human behavior in organizational sett ings, the interface between human behavior and the organization, and the organization itself". https://en.wikipedia.org/wiki/Organizational_behavior, https://eccceg.com/what-is-organizational-behavior/, accessed January 13, 2021. Summary 1 of 4 HRM consists of an organization’s “people practices”  policies, practices, and systems that influence employees’ behavior, attitudes, and performance.  influences who works for the organization and how those people work.  responsible for a variety of functions related to acquiring and managing employees. The focus of HRM is people (human resources) Human Capital Talent(s) KSAs (Knowledge, Skills, Abilities) Human Resources and Company Performance 1 of 3 Human capital – an organization’s employees described in terms of their: The concept of HRM training implies that experience employees are judgment resources of the intelligence employer. relationships insight http://www.nber.org/papers/w11899, accessed September 6, 2011.  Henri Matisse (1869- 1954) https://learnodo-newtonic.com/henri-matisse-famous-paintings, https://en.wikipedia.org/wiki/Henri_Matisse, accessed January 13, 2021.  Jackson Pollock (1912-1956) Hans Namuth Convergence, 1952 Wikipedia; https://blog.artsper.com/en/a-clos er-look/10-things-know-jackson-p ollock/ ; https://www.theguardian.com/art anddesign/jonathanjonesblog/20 11/jan/27/jackson-pollock-equal-t o-grand-masters No. 11, 1952 ; https://www.theartist.me/art/15-f amous-jackson-pollock-paintings/ , accessed January 13, 2020 Andy Warhol (1928-1987) 1962 https://www.theartist.me/art-inspirati on/famous-andy-warhol-paintings/ , https://artandcrafter.com/artists/pop- art-artist/andy-warhol-paintings-top-1 0-famous-paintings-which-ruled-the- pop-art/ , https://www.atxfinearts.com/blogs/ne ws/famous-paintings-by-andy-Warhol , https:// en.wikipedia.org/wiki/Andy_Warhol , https://gagosian.com/exhibitions/201 1/andy-warhol-liz/ , accessed January 13, 2021. 1963 1962 Reclining Figure on Pedestal by Henry Moore https://www.waymarking.com/gallery/image.aspx?f=1&guid=412b59e2-6b0b-4f0a-b556-a894245bfda3 , accessed January 15, 2021.  Henry Moore (1898- 1986) https://en.wikipedia.org/wiki/Henry_ Moore , https://www.mutualart.com/Artwork/I NTERIOR-FORM/4A48965DD6E11BE8 , accessed January 17, 2024.  “Café in Royan is a sketch with Indian ink on Pablo Picasso en cafe de flore, Paris paper by Pablo Picasso (1881 - 1973). It was drawn in 1940 as a study influencing Picasso's later full-colour painting Café à Royan.” http://www.pablopicasso.net/cafe-in-royan/, https://www.pinterest.com/pin/563301865887203531/, accessed November 28, 2020.  What is Human Capital? It’s said that a tourist once spotted Pablo Picasso sketching in a Paris café and asked if he would sketch her, offering to pay him a fair value. In a matter of minutes, Picasso was finished. When she asked what she owed him, Picasso told her 5,000 francs. “But it only took you a few minutes,” the tourist said. “No,” said Picasso, “it took me all of my life.” Our knowledge-based economy is a world of Picassos. What goes into a business decision or the creation of new software is not just the time immediately absorbed. It’s the years of education and experience accrued by the manager or programmer.  Increasingly, advanced economies are knowledge (service based) economies requiring the acquisition, manipulation, creation of knowledge. http://www.aarome.org/about/place/library, http://www.nwlink.com/~donclark/knowledge/knowledge.html, http://taxdollars.ocregister.com/2009/05/26/maddening-dmv-glitch-fixed-state-says-but-its-too-late-for-some/20867/computer-code/ , accessed January 17, 2013; Scott McLeod, posted at both Dangerously Irrelevant: Research and Evaluation, and Leader Talk, retrieved 9/27/2009.  The Creative Class Richard Florida (1957- ) http://alloveralbany.com/archive/2009/09/04/richard-florida-at-the-palace, accessed September 6, 2011; Scott McLeod, posted at both Dangerously Irrelevant: Research and Evaluation, and Leader Talk, retrieved 9/27/2009.  A Look at the Future: The Creative Class Is management considered a creative occupation? “Based on the research of Richard Florida, the ‘creative class’ is a group of occupations involved in ‘knowledge work.’ “The creative class is a class of workers whose job is to create meaningful new forms. The creative class is composed of scientists and engineers, university professors, poets and architects, to name a few. Their designs are widely transferable and useful on a broad scale, as with products that are sold and used on a wide scale. Another sector of the creative class includes those positions which are knowledge intensive. These careers usually require a high degree of formal education. Examples of this sector are health professionals and business management. Their main job is to think and to create new standard approaches for fixing the problem at hand. Creativity is becoming more valued in today’s global society. Employers look at creativity as a channel for self expression and job satisfaction in their employees. 38.3 million Americans and 30% of the workforce in America identify themselves with the creative class. This number has increased more than 10% in the past twenty years. In short they are shaping a new culture for the America of the 21st century. “He breaks the Class into two broad sections: “Creative Professionals: ‘Knowledge workers’ and expanding to include lawyers and physicians. “Super-Creative Core: This comprises about twelve percent of all U.S. jobs. This group is Noe et al.,education, deemed to contain a huge range of occupations (e.g. architecture, 2022, see computer pages 37-38, 276-277 programming) with arts, design, and media workers making a small subset.”  Generally, the more people value something, the more willing they are to pay a higher price to acquire it. http://www.titaniumteddybear.net/2011/07/04/the-battle-of-business-vs-the-public-can-be-a-zero-sum-game/supply-demand-curve/ , accessed 1/11/18 http://mattbruenig.com/2012/10/10/new-college-wage-premium-numbers-from-census/, accessed December 7, 2020. Chaitra Anand, 28 October 2021, https://au.finance.yahoo.com/news/worlds-richest-people-dropouts-of-the-same-university-231112034 , accessed January 17, 2023.. Dispersion: Variability about a mean http://onlinestatbook.com/2/summarizing_distributions/spread_sim.html, accessed January 26, 2021. https://www.researchgate.net/figure/Graphical-representation-of-the-rationale-behind-the-analysis-of-variance-ANOVA-A_fig2_329788831. accessed January 17, 2024. 5 ft. 4 5 ft. 8.5 in. in. https://www.bioblast.at/im ages/a/a7/Height-women- men_2016.png , accessed January 6, 2024. Fundamentally, https://www.thebalance.com/factors-of-production-the-4-types-and-who-owns-them-4045262, accessed December 7, 2020. Organizations as systems People as a critical input http://www.rnceus.com/fall3/fallrisk_16.html, accessed November 28, 2020.  Human Resource Management (HRM) We can define Human Resource Management as managing the organizational resource (input) represented by people as opposed to managing people per se*. This definition defines HRM by what it seeks to accomplish and less so by the details of how it accomplishes it. * Again, that’s organizational behavior (OB) What is a Venn Diagram? John Venn (1834- 1923) https://en.wikipedia.org/wiki/John_Venn, https://online.visual-paradigm.com/diagrams/templates/venn-diagram/whales-and-fish/ , accessed January 13, 2021. Disjoint (non-overlapping) sets Some sets are Set of all superheroes completely subsets of e.g., Captain America larger sets Spider-Man Iron Man Set of DC Comics Hellboy superheroes The Spirit Superman The Phantom Batman 8 Man Wonder Woman Pureheart Green Arrow Doctor Solar Flash … …  “Organizational” resource! Not all entities operating in the economy are “businesses.” Businesses are concerned with profit. Other entities (e.g., “not-for-profit”) may not be concerned with profit per se, but still need to be concerned with the “bottom line” and the interplay of expenses/costs and revenue. Good management practices are critical for all organizations, both for-profit (e.g., businesses, companies) and not-for-profit (government, NGO [nongovernmental organizations - e.g., Red Cross]). https://www.cityofbrookings.org/ArchiveCenter/ViewFile/Item/7541, page 149, accessed January 13, 2021. People as organizational “resources:” Create value Generate income Incur costs http://richdigirolamo.com/2012/01/valuable-assets-sits-63/, accessed December 7, 2020. Defining “assets” “Things that are resources owned by a company [organization] and which have future economic value that can be measured and can be expressed in dollars. Examples include cash, investments, accounts receivable, inventory, supplies, land, buildings, equipment, and vehicles. “Assets are reported on the balance sheet usually at cost or lower. Assets are also part of the accounting equation: Assets = Liabilities + Owner's (Stockholders') Equity. “Some valuable items that cannot be measured and expressed in dollars include the company's outstanding reputation, its customer base, the value of successful consumer brands, and its management team. As a result these items are not reported among the assets appearing on the balance sheet.” http://www.accountingcoach.com/terms/A/assets, accessed August 31, 2015. Accounting Coach “SAS Institute is an American multinational developer of analytics software based in Cary, North Carolina. SAS develops and markets a suite of analytics software, which helps access, manage, analyze and report on data to aid in decision-making. The company is the world's largest privately held software business and its software is used by most of the Fortune 500. “SAS Institute started as a project at North Carolina State University to create a statistical analysis system (hence the proper name, Statistical Analysis System) that was originally used primarily by agricultural departments at universities in the late 1960s. It became an independent, private business led by current CEO James Goodnight [1943- ] and three other project leaders from the university in 1976.” https://en.wikipedia.org/wiki/SAS_Institute, accessed January 13, 2021. http://www.sas.com/en_us/company-information/executive-bios/jim-goodnight.html, accessed August 31, 2015. Human Resources Do Differ From Other Organizational Inputs/Resources People … think … learn … have rights … are “renewable” … can leave … change (improve!) Remember “assets” are “things that are resources owned by a company [organization].” Human Resources are not “owned” by an organization. Yes, accounting considers “people” a cost. Marie Loughran, Intermediate Accounting for Dummies, https://www.dummies.com/business/accounting/how-to-record-accrued-payroll-and-taxes/, accessed December 7, 2020. Who would an accountant recommend that the Minnesota Vikings hire as their 2025-2026 quarterback? Sam Darnold: David Palmer: $41,000,000?? $2,000,000 Age: 27 Age: Senior Citizen 6 ft. 3 inches 5 ft. 7 inches U. So. California 2017 SUNY-Binghamton* salary = $10,000,000 1982 2024-2025 https://www.si.com/nfl/vikings/news/new-intel-on-vikings-qb-situation-after-insider-spends-time-with-team-01j536mncq6w , https://www.conquestchronicles.com/2017/10/5/16417292/has-sam-darnold-fallen-out-of-the-race-for-the-heisman-trophy , accessed August 27, 2024. * Binghamton doesn’t play https://nflspinzone.com/5-nfl-teams-most-likely-to-throw-sam-darnold-a-100m-contract-in-2025-01jgc0bgtbrk , accessed January 6, 2025.  Per ESPN’s Jeremy Fowler, a "slight majority" of league executives who were polled believe the Vikings will keep Darnold either by using the franchise tag or signing him to a long- term contract. The franchise tag would seem to be the most-likely scenario for Darnold and the Vikings. It's currently estimated the tag value for quarterbacks in 2025 will be $41.3 million. https://bleacherreport.com/articles/10149306-sam-darnold-rumors-slight-majority-of-nfl-execs-believe-qb-will-return-to-Vikings , accessed January 6, 2025. Do bear in mind that David Palmer has played for the Minnesota Vikings (1994-2000) https://www.ebay.com/itm/334450852154; https://www.amazon.com/Football-Minnesota-Vikings-Official-Fleer/dp/B088F5W12Y; https://www.ebay.com/itm/360551054626, accessed August 28, 2023.  Who would HR recommend that the Minnesota Vikings hire as their 2025- 2026 quarterback? Sam Darnold #14 Projected 2025-2026 season* Att. Comp. % Yds. TDs Int. Sacked 517 316 61.1 3593 21 * Career average over a full season: “All 15 43 the past is the best predictor of else equal, the future.” David Palmer #½ Projected 2025-2026 season Att. Comp.* % Yds. TDs* Int. Sacked 68 7 10.3 21 1 * Remember “a stopped clock is correct 41 a day.” twice 342 Card from eBay accessed August 27, 2024. On the other hand… January 15, 2025, Wall Street Journal Barely a week ago, quarterback Sam Darnold was set to cash in on a jackpot. [This season] he made his first Pro Bowl and led the Vikings to a 14-2 record. Heading into the final week of the regular season, they were one win away from earning the No. 1 seed in the NFC—and Darnold was a key reason why. With Darnold set to become a free agent at the end of the season, his financial upside was enormous. Then, he proceeded to finish the year with two absolute trainwrecks. The second of those ended the Vikings season on Monday night [January 13] , when they lost 27-9 to the Los Angeles Rams in a wild card game that was even more of a disaster than the final score indicates. For Minnesota, the disappointing end to the campaign figures to send the team back to the drawing board at the game’s most important position. The Vikings drafted former Michigan quarterback J.J. McCarthy in the first round last April to be their long-term answer under center, before Darnold muddied that picture with his stellar play through the first three months of the season. For Darnold, the poor finish will likely cost him tens of millions of dollars after he appeared poised to strike it rich this offseason—either by re-signing with the Vikings or inking a free-agent deal with one of the many quarterback-hungry teams across the league. Andrew Beaton Consider these different scenarios. Which is the most plausible? vs. $799 $799 vs. $799 $24,999 vs. $799 $24,999 https://www.autotrader.com/cars-for-sale/vehicledetails..., https://www.hotcars.com/cash-for-clunkers-brief-history/, accessed August 28, 2023.  What does “price” tell us? Vaia “Communication is important in every aspect of life. We communicate in a variety of ways, such as through verbal speech, text messages, and sign language. Even honking a car horn can be an effective form of communication. Communication within an economy is also very important.” Federal Reserve Bank of St. Louis https://www.stlouisfed.org/education/economic-lowdown-podcast-series/episode-12-price-signals ; https://www.hellovaia.com/explanations/microeconomics/supply-and-demand/price-signal/; https://flexbooks.ck12.org/user:zxbpc2rzcziwmthaz21hawwuy29t/cbook/episd-2019-2020-economics-with-emphasis-on-the-free-enterprise-system/section/2.4/primary/lesson/prices-as-signals/ , accessed August 28, 2023.  Human Resource Management Human resource management is a basic management function. It seeks to acquire and make available to the organization the requisite human resources (people – “human capital” [KSAs]) needed to accomplish the organization’s goals (as specified in the “planning” phase of management). https://www.redcort.com/its-about-time/history-of-time-and-attendance-systems, accessed December 7, 2020. Human Resource Management HRM can be conceived of as a management function and in (larger) organizations also as a stand-alone department that is (in partnership with other managers) responsible for the HRM function. These departments may go by a number of different names (“Human Resources,” “Personnel,” “Employee Relations”). Larger organizations have enough “critical mass” of HRM “work” to justify the hiring of individuals solely responsible for the HRM activities. A generally accepted rule of thumb is 100:1 – for every one hundred workers there is one HRM worker; however, https://www.abington.k12.pa.us/departments/human-resources/, accessed December 7, this does vary widely in practice. 2020. Relative to the rest of the organization, HR is in a staff (advisory) role. https://www.pinterest.com/pin/464011567854157618/, accessed December 7, 2020. Staff authority example from https://www.accountingtools.com/articles/2017/5/16/staff-authority, accessed September 18, 2018. Figure 1.1 HRM Practices HRM was once seen as simply a collection of administrative and bureaucratic tasks.  Core HRM functions (as opposed to tasks) “Business Management & Strategy Working with other parts of the organization to establish goals and provide high- quality goods and services “Workforce Planning and Employment Identifying jobs that capture employee tasks; recruiting and selecting desirable employees “Human Resource Development Measuring employee performance; teaching employees new knowledge, skills, and abilities “Compensation and Benefits Paying employees fairly [‘equitably’]; administering benefits such as insurance “Employee & Labor Relations Establishing and managing relationships between the company[organization] and employees; working with labor unions “Risk Management Establishing procedures to provide a safe and secure working environment” The fulfillment of these functions can be outsourced, although ultimately the responsibility resides with an organization’s management Stewart & Brown, 2014, 3rd edition, pp. 13-16, Table 1.1 https://www.paychex.com/, https://www.ddiworld.com/about, https://www.bambee.com/, https://enovaadvantage.com/services/hr-solutions/, accessed November 28, 2020. Whether done in- house (by HR managers or other managers,) or outsourced these tasks need to be addressed and accomplished Human Resources and Company Performance 2 of 3 HRM and Sustainable Competitive Advantage An organization can succeed if it has sustainable competitive advantage. HR give organizations advantages because human resources are valuable, cannot be imitated, have no good substitutes and with needed skills and knowledge are sometimes rare. HRM is an important aspect of successful and effective strategic management. Figure 1.1 HRM Practices HRM is an important aspect of successful and effective strategic management. Competenci es for successful HR Managers Realistically, aren’t these necessary competencies for any successful manager, once we substitute specific “functional area https://www.shrm.org/learningandcareer/career/pages/shrm-competency-model.aspx, accessed January 16, 2020. expertise” for “HR expertise”? Summary 3 of 4  Non-HR managers must be familiar with the basics of HRM and their own role with regard to managing HR.  Everyone is an HR manager; HRM is too important to leave wholly in the hands of the HR Department  Supervisors typically have responsibilities related to all HR functions such as analyzing work, interviewing, training and performance appraisals.  HR Departments are in a staff role; they advise other managers as to “best HRM” practices  HR professionals should make decisions consistent with sound ethical principles. All effective managers need Companies With Effective HRM Employees and customers tend to be more satisfied when… The companies [organizations] tend to  be more innovative  have greater productivity  develop a more favorable reputation in the community Figure 1.2 Impact of HRM Jump to Appendix 1 long i mage description Preview of performance management: An additional consideration regarding performance: Performanc Person e/Behavior What can Situation you as a manager influence? Another consideration, the workforce is not static, it is always evolving People exhibit consistent general tendencies that help facilitate the process of predicting and, thus, managing human behavior within organizations. An understanding of these tendencies is critical for managerial success. However, at the same time that these behavioral consistencies exist, managers must also contend with the dynamic nature of people and social systems. People’s perceptions, expectations, aspirations, knowledge, and skills, talents, human capital, and the social systems that people create are always evolving and changing. Our study of the principles of management and their application in the area of human resource For exampl e, https://trends.collegeboard.org/education-pays/figures-tables/educational-attainment-over-time-1940-2009 , accessed September7, 2018. HRM is … … solving novel personnel problems … allocating scarce resources (e.g., people, KSAs, human capital, talent) efficiently and effectively (delight your customer [e.g., internal line managers, employees, applicants, retirees]) … decision making in the face of uncertainty (e.g., who to hire, how much to pay in compensation) … getting work done through others (i.e., There exist HRM techniques with proven records of organizational success (e.g., HPWS [High Performance Work Practices]). Human capital is increasingly critical for success in advanced knowledge-based economies. Good HRM can be the source of a sustainable competitive advantage. HRM is every manager’s responsibility (it is too important to leave solely in the hands of HR managers). https://www.dreamstime.com/illustration/human-resources-word-cloud.html, accessed January 13, 2021.