HRM Chapter 1 PDF

Chapter 1 - Introduction to Human Resource Management and Strategic Alignment  AGENDA FOR TODAY 1. Management Theories and HRM History 2. Role of HRM in Organizational Objectives 3. Strategic Alignment in HRM 4. Importance of Strategic Alignment 5. HRM Practices for Strategic Alignment 6. Case S...

Chapter 1 - Introduction to Human Resource Management and Strategic Alignment  AGENDA FOR TODAY 1. Management Theories and HRM History 2. Role of HRM in Organizational Objectives 3. Strategic Alignment in HRM 4. Importance of Strategic Alignment 5. HRM Practices for Strategic Alignment 6. Case Study: Successful Alignment 7. Challenges in Strategic Alignment 8. HRM Trends and Future INTRODUCTION TO HRM Historical evolution of HRM: It typically highlights how HRM has evolved from traditional personnel management to a more strategic and integrated approach.  Evolution of Management Scientific Management O Fredrick Winslow Taylor, an engineer, proposed and developed the Scientific Management Theory. He is also known as the Father of Scientific Management and his school of thought came to be known as Taylorism. O Taylor is focused on maximizing efficiency through scientific means. O Focused on time and motion studies O Finding scientific means to increase efficiency O Performance-based incentives  Evolution of Management Administrative Management O Henry Fayol, a French mining engineer, laid down five functions and 14 principles of management under the theory of Fayolism. This gave way to the school of administrative management. O Focused on unity of command and direction O Focused on Division of Work O Hierarchy: Authority and Responsibility O Centralization  Evolution of Management Human Relations Management O Developed by Elton Mayo, an Australian psychologist, the Human Relations Theory of Management. O This theory emerged as a response to the criticism faced by the classical management theories, where social factors such as human behavior and attitudes weren’t considered important.  Evolution of Management Behavioral Management O Behavioral approaches to management set the pace for how modern workplaces build an employee- friendly culture. O Abraham Maslow, an American psychologist, proposed the hierarchy of need, where employee need and expectations were prioritized. ADDITIONAL THINGS TO KNOW O Origin of HRM: HRM as we know it today can be traced back to the 18th century when factories and industries began to emerge during the Industrial Revolution. O It evolved from a need to manage a growing workforce efficiently. ADDITIONAL THINGS TO KNOW O First HR Department: The first HR department in the United States was established by The National Cash Register Company in 1901. O This marked the beginning of formal HR practices. ADDITIONAL THINGS TO KNOW Strategic Partner: HR has evolved from a purely administrative function to a strategic partner in organizations. HR professionals are now involved in strategic decision-making, helping businesses align their human capital with overall goals. INTRODUCTION TO HRM Key functions of HRM: Common functions include: Recruitment and Selection: Attracting and hiring the right talent for the organization. Training and Development: Enhancing employees' skills and knowledge to improve performance. Performance Management: Evaluating and managing employee performance, including appraisals and feedback. INTRODUCTION TO HRM Definition of Human Resource Management (HRM): HRM refers to the strategic and systematic management of an organization's workforce or human resources to achieve its goals and objectives.  Usual Activities of the HR Dept It encompasses activities such as the following: O Recruitment O Selection O Training O Performance appraisal O Employee relations. More Complex HR Activities Compensation and Benefits: Designing and administering fair and competitive reward systems. Employee Relations: Handling workplace issues, conflicts, and fostering a positive work environment. Compliance and Legalities: Ensuring HR practices adhere to labor laws and regulations. Strategic HR Planning: Aligning HR activities with the organization's strategic goals.  HRM PRINCIPLES Principles of HRM: These are fundamental guidelines and values that underpin Human Resource Management (HRM) practices in organizations.  SIMPLE PRINCIPLES Fairness and Equity: Treat all employees fairly and equitably, regardless of their background, race, gender, or other characteristics. Transparency: Transparency builds trust within the organization. Legal Compliance: Comply with labor laws, regulations, and employment standards in your region or industry.  SIMPLE PRINCIPLES Communication: Encourage open dialogue and feedback. Employee Well-being: Offer health and wellness programs, work-life balance initiatives, and a safe working environment.  HRM PRINCIPLES HRM vs. Personnel Management: HRM is a more strategic and holistic approach to managing people, focusing on aligning HR practices with organizational goals Personnel Management is often seen as administrative and reactive, primarily concerned with day-to-day employee relations and compliance.  THINGS TO KNOW O Employee Engagement: Engaged employees are 87% less likely to leave their organizations than disengaged ones. O Diversity and Inclusion: HRM promotes diversity and inclusion in the workplace, which has been shown to enhance creativity and problem-solving in teams. O Diverse teams are also more adaptable to change..  THINGS TO KNOW O Talent Acquisition Challenges: Globally, 45% of employers report difficulties in filling job vacancies due to a shortage of skilled workers. O Cost of Employee Turnover: The cost of replacing an employee can range from 50% to 200% of their annual salary. HR plays a crucial role in retention strategies to reduce turnover costs.  THINGS TO KNOW O Remote Work Trends: The COVID-19 pandemic accelerated the adoption of remote work. O HR had to quickly adapt to manage remote teams, balance work-life issues, and ensure productivity. O Generational Workforce: The workforce now spans multiple generations, from Baby Boomers to Generation Z  THINGS TO KNOW O Data-Driven HR: HR analytics and big data are becoming essential for decision-making. O HR professionals use data to identify trends, predict turnover, and optimize recruitment efforts. O Mental Health Support: HR has become a key advocate for employee mental health, offering programs and resources to address stress, burnout, and other mental health issues.  THINGS TO KNOW O Global Workforce: In today's interconnected world, businesses often have a global workforce. O HR must navigate complex international labor laws, cultural differences, and time zones. O Legal Compliance: HR plays a critical role in ensuring organizations comply with labor laws and regulations. O Non-compliance can lead to costly lawsuits and reputational damage.  THINGS TO KNOW O Leadership Development: HR is responsible for identifying and nurturing leadership talent within the organization. O Effective leadership is crucial for driving business success. O Remote Onboarding: With the rise of remote work, HR has adapted by developing virtual onboarding processes to welcome and integrate new employees effectively. HRM ROLE IN ACHIEVING OBJECTIVES Linking HRM and organizational objectives: It highlights how HRM aligns its strategies and activities with the strategic direction of the organization, ensuring that HR practices support and contribute to the achievement of business objectives. Metrics for measuring HRM impact in Helping the Hierarchy Metrics for measuring HRM impact: Common HR metrics include: O Employee Turnover Rate: Calculated as the percentage of employees who leave the organization within a specified period. O Employee Engagement Score: A measure of employee satisfaction, motivation, and commitment. O Cost per Hire: The cost incurred by the organization to recruit and onboard a new employee. Metrics for measuring HRM impact in Helping the Hierarchy : Common HR metrics include: O Training ROI (Return on Investment): Evaluates the financial benefits derived from training and development programs. O Performance Appraisal Ratings: Assessments of employee performance, often expressed through ratings or scores. O Time-to-Fill (TTF): The average time it takes to fill a vacant position from the initiation of the recruitment process.  Strategic Management O Strategic Management involves setting objectives, analyzing the competitive environment, analyzing the internal organization, evaluating strategies, and ensuring that management rolls out the strategies across the organization.  Strategic Management O Internal and External Analysis O Making Decisions Backed by a Methodology O Allocation of Resources and Efforts O Materializing and Taking Actions to Achieve the Goals It is essentially the art and science of planning, executing and monitoring the company’s strategy  Key Terms in Setting Objectives O Mission – Purpose O Strategy – Management’s Plans O Competitive Advantage – Successful Strategies that cannot be duplicated STRATEGIC ALIGNMENT IN HRM Definition of Strategic Alignment: It involves the process of ensuring that the human resource management practices are harmonized with the overall strategic objectives and goals of the organization. It involves aligning HR activities with the broader business strategy.  ALIGNMENT MODELS Models for HRM-Organizational alignment: These are frameworks or theoretical models that organizations use to ensure that their Human Resource Management (HRM) practices are closely synchronized with their overall organizational goals and strategies.  ALIGNMENT MODELS O Ulrich Model: This model is like a HR Swiss Army knife. It suggests that HR should have different roles, like the strategic partner (thinking about the big picture), employee champion (taking care of people), administrative expert (handling paperwork), and change agent (driving improvements). O Harvard Model: Imagine HR as the bridge builder. This model emphasizes that HR should create a positive relationship between management and employees by focusing on human needs, situational factors, and stakeholder interests. O HR Value Chain Model: Picture HR as a chain of activities, like a production line. This model looks at HR processes as steps in a chain that adds value to the organization, from recruiting to training to performance management.  ALIGNMENT MODELS O HR Business Partner Model: Think of HR as a business consultant. HR professionals work closely with managers to understand and address people-related issues that impact the company's success. O Balanced Scorecard: Imagine HR as a scoreboard in a game. It measures not just financial results but also how well HR practices (like training and hiring) contribute to achieving overall company goals. O HR Capability Maturity Model: This model is like climbing a ladder. It helps HR departments assess their maturity and improve over time, moving from basic HR functions to more advanced and strategic ones.  ALIGNMENT MODELS High-Performance Work System: Imagine HR as a coach. This model focuses on creating an environment where employees are motivated, trained, and equipped to excel in their roles, leading to high performance across the organization. HR Strategic Model: Think of HR as a navigator. This model emphasizes aligning HR practices with the company's strategic goals, ensuring that everything HR does supports the business's success. LINK BETWEEN STRATEGIC ALIGNMENT AND EMPLOYEE ENGAGEMENT O Imagine a soccer team. Each player represents an employee, and the team's goal is to win the game (like an organization's goal is to succeed). When the players are excited, motivated, and work well together (engaged), they have a better chance of winning the game (achieving the organization's goals). EFFECTIVE WAYS TO LINK THEM Clear Communication: Just like the coach tells the players the game plan, leaders should communicate the organization's goals and how each employee's role contributes to those goals. Employee Involvement: When they feel like they have a say in the game strategy, they're more likely to be engaged in executing it. Recognition and Rewards: It's like giving the soccer players a pat on the back when they score a goal. This boosts their morale and keeps them engaged. EFFECTIVE WAYS TO LINK THEM Regular Feedback: Just as a coach corrects a player's technique, feedback helps employees stay on track and engaged. Work-Life Balance: If they're always on the field, they'll get tired and lose motivation.  ACTIVITY 1 O Each group must deal with an existing business. O Communicate with your group and discuss to come up with the strategic goals that you should set for that particular business for this year. O Each group should present their goals to the class and explain why they are important for their organization. O In your presentation, you should also discuss with the class how HR can help achieve these strategic goals. Emphasize the importance of aligning HR practices with the goals. O Come up with HR practices and strategies that you would implement to support the strategic goals discussed earlier.