Human Resource Management Textbook PDF

Because learning changes everything. ® Chapter 1 Human Resource Management: Gaining a Competitive Advantage Human Resource Management Gaining A Comp...

Because learning changes everything. ® Chapter 1 Human Resource Management: Gaining a Competitive Advantage Human Resource Management Gaining A Competitive Advantage THIRTEENTH EDITION Raymond Noe, John Hollenbeck, Barry Gerhart, Patrick Wright © 2023 McGraw Hill, LLC. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill, LLC.  Learning Objectives 1 1-1 Discuss the roles and activities of a company’s human resource management function. 1-2 Discuss the implications of the economy, the makeup of the labor force, and ethics for company sustainability. 1-3 Discuss how human resource management affects a company’s balanced scorecard. 1-4 Discuss what companies should do to compete in the global marketplace. © McGraw Hill, LLC 2  Learning Objectives 2 1-5 Identify how social networking, artificial intelligence, and robotics are influencing human resource management. 1-6 Describe how automation using artificial intelligence and robotics has the potential to change jobs. 1-7 Discuss human resource management practices that support high-performance work systems. 1-8 Provide a brief description of human resource management practices. © McGraw Hill, LLC 3  Introduction Human Resource Management (HRM): Plays a role in company’s survival, effectiveness, and competitiveness. Refers to the policies, practices, and systems that influence employees’ behavior, attitudes, and performance. © McGraw Hill, LLC 4  Figure 1.1 Human Resource Management Practices Access the text alternative for slide images. © McGraw Hill, LLC 5  What Responsibilities and Roles Do HR Departments Perform? 1 High-Impact HR Functions: More integrated with the business. Skilled at attracting and retaining employees. Can adapt quickly. Identify and promote talent from within. Identify what motivates employees. Continuously building talent and skills. LO 1-1 © McGraw Hill, LLC 6  What Responsibilities and Roles Do HR Departments Perform? 2 HR Department Responsibilities. Outplacement. Labor law compliance. Record keeping. Testing. Unemployment compensation. Some aspects of benefits administration. © McGraw Hill, LLC 7  Table 1.1 Responsibilities of HR Departments 1 FUNCTION RESPONSIBILITIES Analysis and design Job analysis, work analysis, job descriptions. of work. Recruitment and Recruiting, posting job descriptions, interviewing, testing, selection. coordinating use of temporary employees. Training and Orientation, skills training, development programs, career development. development. Performance Performance measures, preparation and administration of management. performance appraisals, feedback and coaching, discipline. Compensation and Wage and salary administration, incentive pay, insurance, benefits. vacation, retirement plans, profit sharing, health and wellness, stock plans. © McGraw Hill, LLC 8  Table 1.1 Responsibilities of HR Departments 2 FUNCTION RESPONSIBILITIES Employee Attitude surveys, employee handbooks, labor law relations/labor relations. compliance, relocation and outplacement services. Personnel policies. Policy creation, policy communications. Employee data and Record keeping, HR information systems, workforce information systems. analytics, social media, intranet and Internet access. Legal compliance. Policies to ensure lawful behavior; safety inspections, accessibility accommodations, privacy policies, ethics. Support for business Human resource planning and forecasting, talent strategy. management, change management, organization development. SOURCES: Bureau of Labor Statistics. 2019. U.S. Department of Labor, Occupational Outlook Handbook, Human Resources Specialists; S HRM-BNA Survey No. 66. 2001. “Policy and Practice Forum: Human Resource Activities, Budgets, and Staffs, 2000–2001.” Bulletin to Management, Bureau of National Affairs Policy and Practice Series. Washington: Bureau of National Affairs. © McGraw Hill, LLC 9  Figure 1.2 HR as a Business with Three Product Lines SOURCE: Adapted from Figure 1, “HR Product Lines” in E. E. Lawler, “From Human Resource Management to Organizational Effectiveness,” Human Resource Management 44 (2005), pp. 165–69. Access the text alternative for slide images. © McGraw Hill, LLC 10  Strategic Role of the HRM Function 1 HRM Role: Time spent on administrative tasks is decreasing. Roles as a strategic business partner, change agent, and employee advocate are increasing. Shared service model: Central place for administrative and transactional tasks. Includes centers of expertise or excellence, service centers, and business partners. © McGraw Hill, LLC 11  Strategic Role of the HRM Function 2 Role of Technology: Reducing HRM role in administrative tasks, maintaining records, and providing self-service to employees. Shift to self-service gives employees access to many H R functions. HR managers have more time to work with managers on employee issues. © McGraw Hill, LLC 12  Strategic Role of the HRM Function 3 Outsourcing: Most commonly outsourced activities: Benefits administration. Relocation. Payroll. Most common reasons for outsourcing: Cost savings. Increased ability to recruit and manage talent. Improved HR service quality. Protection of the company from potential lawsuits by standardizing processes such as selection and recruitment. © McGraw Hill, LLC 13  Strategic Role of the HRM Function 4 Strategic Role: Lead efforts focused on talent management and performance management. Use and analyze data to make a business case for ideas and problem solutions. Use people management skills across the business. Structure and responsibilities changing to ensure strategic role. © McGraw Hill, LLC 14  Table 1.2 Questions to Ask: Is HRM Playing a Strategic Role in the Business? Questions to ask: 1. What is HRM doing to provide value-added services to internal clients? 2. Do the actions of HRM support and align with business priorities? 3. How are you measuring the effectiveness of HRM? 4. How can we reinvest in employees? 5. What HRM strategy will we use to get business from point A to B? 6. From an HRM perspective, what should we be doing to improve our marketplace position? 7. What’s the best change we can make to prepare for the future? 8. Do we react to business problems or anticipate them in advance? SOURCES: Based on S. Milligan, "HR 2025: Reach New Heights By Becoming A Trusted Advisor", H R Magazine, November/December 2018, pp. 30-38; D. Ulrich, D. Kryscynski, M. Ulrich, and W. Brockbank, Victory Through Organization (New York: McGraw-Hill Education, 2017); P. Wright, Human Resource Strategy: Adapting to the Age of Globalization (Alexandria, V A: Society for Human Resource Management Foundation, 2008). © McGraw Hill, LLC 15  Strategic Role of the HRM Function 5 Demonstrating the Strategic Value of HRM: HR Analytics and Evidenced-Based HR. HR can engage in evidence-based HR. Requires use of HR or workforce analytics. Big data: Information merged from HR databases, corporate financial statements, employee surveys, and other data sources. Results in evidence-based HR decisions. Show that HR practices influence the organization’s bottom line, including profits and costs. © McGraw Hill, LLC 16  Strategic Role of the HRM Function 6 The HRM Profession: Positions and Jobs. Primary activities involve performing the HR generalist role. Fewer HR professionals involved in HR functions at the executive level, training and development, HR consulting, and administrative activities. Overall employment in HR-related positions expected to grow by 7 percent between 2019 and 2029. © McGraw Hill, LLC 17  Table 1.3 Median Salaries for HRM Positions POSITION SALARY Chief human resource officer (CHRO) $251,000 Global HR manager 133,000 Management development manager 129,300 Health and safety manager 112,328 Employee benefits manager 104,760 HR manager 105,554 Mid-level labor relations specialist 87,700 Campus recruiter 71,161 Entry-level HRIS specialist 59,300 HR generalist 58,495 Entry-level compensation analyst 61,764 Entry-level employee training specialist 53,100 © McGraw Hill, LLC 18  Strategic Role of the HRM Function 7 Education and Experience. Four-year college or graduate HR degree. Senior HR role: Developing and supporting the company culture. Employee recruitment, retention, and engagement. Succession planning. Designing company’s overall HR strategy. © McGraw Hill, LLC 19  Strategic Role of the HRM Function 8 Education and Experience. Junior HR role: Handle transactions related to paperwork, benefits, and payroll administration. Answer employee questions. Data management. Professional certification. © McGraw Hill, LLC 20  Strategic Role of the HRM Function 9 Competencies and Behaviors. Most HRM professionals are generalists. Lack business acumen. Need nine competencies developed by SHRM. Primary professional organization for HRM with more than 300,000 members. © McGraw Hill, LLC 21  Strategic Role of the HRM Function 10 Nine Competencies: 1. HR Technical Expertise and Practice. Apply principles of HRM to contribute to success of the business. 2. Business Acumen. Understand business functions and metrics within the organization and industry. 3. Critical Evaluation. Interpret information to determine return on investment and organizational impact in making recommendations and business decisions. © McGraw Hill, LLC 22  Strategic Role of the HRM Function 11 Nine Competencies. 4. Ethical Practice. Integrate core values, integrity, and accountability throughout all organizational and business practices. 5. Global and Cultural Effectiveness. Manage HR both within and across boundaries. 6. Communications. Effectively exchange and create free flow of information with and among various stakeholders at all levels of the organization to produce meaningful outcomes. © McGraw Hill, LLC 23  Strategic Role of the HRM Function 12 Nine Competencies. 7. Organizational Leadership and Navigation. Direct initiatives and processes within the organization and gain buy-in from stakeholders. 8. Consultation. Provide guidance to stakeholders such as employees and leaders seeking expert advice on a variety of circumstances and situations. 9. Relationship Management. Manage interactions with and between others with specific goal of providing service and organizational success. © McGraw Hill, LLC 24  Competitive Challenges Influencing Human Resource Management 1 Competing Through Environment, Social, and Governance (E SG) Practices. Sustainability: Company’s ability to meet its needs without sacrificing the ability of future generations to meet their needs. Company must meet stakeholders’ needs. ESG practices must be part of company’s business model to gain competitive advantage and reduce legal risks. LO 1-2 © McGraw Hill, LLC 25  Figure 1.4 Competitive Challenges Influencing U.S. Companies Access the text alternative for slide images. © McGraw Hill, LLC 26  Competitive Challenges Influencing Human Resource Management 2 Deal with the Workforce and Employment Implications of the Economy: Skill demands for jobs have changed. Remaining competitive in global economy requires demanding work hours and changes in traditional employment patterns. Companies give more attention to HR practices that influence their ability to attract and retain employees. The U.S. economy in 2020 shrank for the first time since 2008. © McGraw Hill, LLC 27  Table 1.4 Highlights of Employment Projections to 2029 HIGHLIGHTS An increase of 6 million jobs is expected between 2019 and 2029. This results from employment growing from 162.8 million to 168.8 million by 2029. The labor force is expected to increase by 8.0 million (from 163.5 million in 2019 to 171.5 million in 2029). Today, 93% of U.S. jobs are nonagricultural wage and salary jobs: 13% are in goods- producing industries (mining, construction, manufacturing); 80% are in service-providing industries; and 1.4% in agriculture, forestry, fishing, and hunting. The distribution of jobs across industries is projected to be similar in 2029. 46.5 million job openings are expected, with more than three-fourths resulting from the need to replace workers who retire or leave an occupation. Most new jobs added between 2019 and 2029 will be in service-providing occupations. Of the 30 fastest-growing occupations, almost half are related to health care and related occupations (such as home health-care aid, personal care aids, physicians assistants, and nurse practitioners). Other occupations are energy-related or in computer and information technology. SOURCES: Bureau of Labor Statistics, U.S. Department of Labor, “Table 2.1, Employment by Major Industry Sector," https://www.bls.gov/emp/tables/employment-by-major-industry-sector.htm, accessed March 18, 2021; Bureau of Labor Statistics, U.S. Department of Labor, “Employment Projections: 2019-2029,” September 20, 2020, www.bls.gov/emp, accessed March 18, 2021. © McGraw Hill, LLC 28  Competitive Challenges Influencing Human Resource Management 3 Understand and Enhance the Value Placed on Intangible Assets and Human Capital. Three types of assets: 1. Financial assets (cash and securities). 2. Physical assets (property, plant, equipment). 3. Intangible assets (human capital, customer capital, social capital, intellectual capital). © McGraw Hill, LLC 29  Table 1.6 Examples of Intangible Assets Human capital. Social capital. Tacit knowledge. Corporate culture. Education. Management philosophy. Work-related know-how. Management practices. Work-related competence. Informal networking systems. Coaching/mentoring Customer capital. relationships. Customer relationships. Intellectual capital. Brands. Patents. Customer loyalty. Copyrights. Distribution channels. Trade secrets. Intellectual property. © McGraw Hill, LLC 30  Competitive Challenges Influencing Human Resource Management 4 Understand and Enhance the Value Placed on Intangible Assets and Human Capital. Knowledge workers. Contribute specialized knowledge. Training Options: Upskilling or reskilling current employees. Hire and train employees who lack the complete skill set. Partner with local, federal and state sponsored and funded organizations. Train hard-to-employ individuals. © McGraw Hill, LLC 31  Competitive Challenges Influencing Human Resource Management 5 Emphasize Empowerment and Continuous Learning: Give employees responsibility and authority. Hold them accountable. Employees share in the rewards and losses. Learning organization. © McGraw Hill, LLC 32  Competitive Challenges Influencing Human Resource Management 6 Adapt to Change: Inevitable. Employees expected to take more responsibility for own careers. Challenge is how to build a committed, productive workforce. Employees manage change through agility. Changes in the employment relationship. © McGraw Hill, LLC 33  Competitive Challenges Influencing Human Resource Management 7 Maximize Employee Engagement: Passionate about their work. Committed to the company and its mission. Work hard to contribute. Measured with attitude or opinion surveys. Focus on employee experience. Employee value proposition (EVP). © McGraw Hill, LLC 34  Table 1.7 Common Themes of Employee Engagement COMMON THEMES OF EMPLOYEE ENGAGEMENT 1. Pride in employer. 2. Satisfaction with employer. 3. Satisfaction with the job. 4. Opportunity to perform challenging work. 5. Recognition and positive feedback. 6. Personal support from manager. 7. Effort above and beyond the minimum. 8. Understand link between one’s job and company’s mission. 9. Prospects for future growth with the company. 10. Intention to stay with the company. SOURCES: Based on R. Vance, Employee Engagement and Commitment (Alexandria, V A: Society for Human Resource Management, 2006); T. Lytle, “The Engagement Challenge,” H R Magazine, October 2016, pp. 52–58. © McGraw Hill, LLC 35  Competitive Challenges Influencing Human Resource Management 8 Manage Talent: Acquiring and assessing employees. Learning and development. Performance management. Compensation. © McGraw Hill, LLC 36  Competitive Challenges Influencing Human Resource Management 9 Consider Nontraditional Employment and the Gig Economy: Between 20 and 35% of total U.S. workforce. Workers set own schedule and do not work for a company. Offers flexibility. © McGraw Hill, LLC 37  Competitive Challenges Influencing Human Resource Management 10 Provide Flexibility to Help Employees Meet Work and Life Demands. 46% of employees work more than 45 hours per week. Both the company and employees can benefit. Desire to continue working remotely post-pandemic. Companies’ policies on remote work vary. © McGraw Hill, LLC 38  Competitive Challenges Influencing Human Resource Management 11 Meet the Needs of Stakeholders, Shareholders, Customers, Employees, and Community. Demonstrate performance to stakeholders: the balanced scorecard. Being customer-focused. Improving quality. Emphasizing teamwork. Reducing new product and service development times. Managing for the long term. LO 1-3 © McGraw Hill, LLC 39  Table 1.8 The Balanced Scorecard QUESTIONS EXAMPLES OF CRITICAL PERSPECTIVE ANSWERED BUSINESS INDICATORS CRITICAL HR INDICATORS Customer How do customers Time, quality, performance, Employee satisfaction with HR see us? service, cost department services; Employee perceptions of the company as an employer Internal What must we Processes that influence Training costs per employee, excel at? customer satisfaction, turnover rates, time to fill open availability of information on positions service, and/or manufacturing processes Innovation and Can we continue to Improve operating efficiency, Employee/skills competency learning improve and create launch new products, levels, engagement survey value? continuous improvement, results, change management empowering of workforce, capability employee satisfaction Financial How do we look to Profitability, growth, Compensation and benefits per shareholders? shareholder value employee, turnover costs, profit per employee, revenue per employee SOURCES: Based on K. Thompson and N. Mathys, “The Aligned Balanced Scorecard,” Organizational Dynamics 37 (2008), pp. 378–93; B. Becker, M. Huselid, and D. Ulrich, The HR Scorecard: Linking People, Strategy, and Performance (Boston: Harvard Business School Press, 2001). © McGraw Hill, LLC 40  Competitive Challenges Influencing Human Resource Management 12 Demonstrate Social Responsibility. Helps boost company’s image with customers. Helps gain access to new markets. Helps attract and retain talented employees. © McGraw Hill, LLC 41  Competitive Challenges Influencing Human Resource Management 13 Emphasize Customer Service and Quality. Total quality management (TQM) five core values: 1. Methods and processes are designed to meet internal and external customers’ needs. 2. Every employee receives training in quality. 3. Managers measure progress with feedback based on data. 4. Promote cooperation with vendors, suppliers and customers. 5. Quality is designed into a product or service so that errors are prevented rather than being detected and corrected. © McGraw Hill, LLC 42  Competitive Challenges Influencing Human Resource Management 14 Malcolm Baldrige National Quality Award. Competition that promotes quality. ISO (International Organization for Standardization) 9000 Standards. International standards of quality. © McGraw Hill, LLC 43  Competitive Challenges Influencing Human Resource Management 15 Six Sigma: Process of measuring, analyzing, improving, and controlling processes. Lean Thinking and Process Improvement. Do more with less effort, equipment space, and time. Improve quality of employees’ work experiences. © McGraw Hill, LLC 44  Competitive Challenges Influencing Human Resource Management 16 Recognize and Capitalize on the Demographics and Diversity of the Workforce. Internal labor force. External labor market. Average age of workforce will increase. Increased workforce diversity. Immigration will affect size and diversity. © McGraw Hill, LLC 45  Competitive Challenges Influencing Human Resource Management 17 Aging of the Workforce: Labor force participation of those 55 years and older expected to grow. HRM issues such as career plateauing, retirement planning, and retraining older workers. The Multigenerational Workforce: Five generations. © McGraw Hill, LLC 46  Figure 1.5 Comparison of the Age Distribution of the 2019 and 2029 Labor Forces SOURCE: U.S. Bureau of Labor Statistics, “Employment Projections, Civilian Labor Force, by Age, Sex, Race, and Ethnicity,” https://www.bls.gov/emp/tables/civilian-labor-force-summary.htm, accessed February 13, 2021. Access the text alternative for slide images. © McGraw Hill, LLC 47  Table 1.10 Generations in the Workforce YEAR BORN GENERATION AGES Traditionalists 1925 to 45 Silent Generation >76 1946 to 64 Baby Boomers 57 to 75 1965 to 80 Generation X 41 to 56 Millennials 1981 to 95 Generation Y 26 to 40 Echo Boomers 1996 Generation Z