Lecture

Introduction to Human Resource

Management
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 After studying this chapter, you should be
:able to
1. Explain what human resource management is
and how it relates to the management process.
2. Illustrate the human resources responsibilities of
line and staff (HR) managers.
3. Provide a good example that illustrates HR’s
role in formulating and executing company
strategy.

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 Introduction
• This lecture explains what Human Resource
Management is,
– how it relates to the management process,
– how it is changing in response to trends in the workplace.
• It illustrates how
– all managers can use HR concepts and techniques,
– HR’s role in strategic planning and improved
organizational performance,
– the competencies required of HR managers and the plan of
the course.

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 The Importance Of HRM
• Human Resources play a key role in helping
companies meet the challenges of global competition.
• Strategic objectives to
– lower costs,
– improve productivity
– and increase organizational effectiveness
• are changing the way every part of the organization,
including the HR department.

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 Human Resource Management at Work

• The Management process involves the

following functions:
– planning,
– organizing,
– staffing,
– leading, and controlling.

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• The “people” or personnel aspects of
management jobs involve:
– conducting job analyses;
– planning labor needs
– recruiting job candidates;
– selecting job candidates;

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 – managing wages and salaries;
– appraising performance;
– providing incentives and benefits;
– training and developing managers;
– building employee commitment;
– being knowledgeable about equal opportunity,
– employee health and safety;
– and handling labor relations.

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 The Management Process
Planning

Controlling Organizing

Leading Staffing

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 Human Resource Management at Work

Acquisition

Fairness Training

Human
Resource
Management
Health and
(HRM) Appraisal
Safety

Labor Relations Compensating

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 Personnel Mistakes
• Hire the wrong person for the job
• Experience high turnover
• Have your people not doing their best
• Waste time with useless interviews
• Have your company in court because of discriminatory actions
• Have some employees think their salaries are unfair and
inequitable relative to others in the organization
• Allow a lack of training to undermine your department’s
effectiveness

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 Basic HR Concepts
• The bottom line of managing:
• HR creates value by engaging in activities that
produce the employee behaviors that the company
needs to achieve its strategic goals.

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 Line Versus Staff Authority
• Authority is the right to make decisions,
– to direct the work of others, and to give orders.
• Line managers are authorized to direct the work of
subordinates.
– Their subordinates are generally involved in work
that directly produces or sells the company’s
product or service, like Sales or Manufacturing.

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• Staff managers are authorized to assist and
advise line managers in accomplishing their
basic goals.
– The subordinates of staff managers are generally
involved in work that supports the products or
services, in departments like Purchasing, or Quality
Control.
• HR managers are generally staff managers.

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 Line Managers’ HRM Responsibilities

1. Placing the right person on the right job

2. Starting new employees in the organization
(orientation)
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

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6. Interpreting the firm’s policies and procedures
7. Controlling labor costs
8. Developing the abilities of each person
9. Creating and maintaining department morale
10. Protecting employees’ health and physical condition

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 Human Resource Specialties

Recruiters

Labor Relations EEO

Specialists Coordinators
Human
Resource
Specialties
Training
Job Analysts
Specialists

Compensation
Managers

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 (HR Organizational Chart (Small Company

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 The Changing Environment of HR
• Human Resource responsibilities have become broader and
more strategic over time in response to a number of trends.
• The role of HR has evolved from primarily being responsible
for
– hiring,
– firing, payroll,
– and benefits administration
• to a more strategic role in employee selection, training and
promotion,
• as well as playing an advisory role to the organization in areas
of labor relations.

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 The Changing Environment of
Human Resource Management

Globalization Trends

Technological Trends
Changes and Trends
in Human Resource
Management Trends in the Nature of Work

Workforce Demographic Trends

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 The Changing Role of
Human Resource Management
Strategic Human
Resource
Management

Managing with the New Creating High-

HR Scorecard Responsibilities Performance Work
Process for HR Managers Systems

Measuring the HRM

Team’s Performance

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 Globalization Trends

• Globalization refers to the tendency of firms to

extend their
– sales,
– ownership,
– manufacturing to new markets abroad.
• Globalization of the world economy and other trends
has a big changes in how companies organize,
manage and use their HR departments.

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• The rate of globalization continues to be high, and
has several strategic implications for firms.
• More globalization means more
– competition, and more competition means more
– pressure to lower costs,
– make employees more productive,
– and do things better and less expensively.

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 Technological Applications for HR

Technological Trends such as

•virtual online communities,
•virtual design environments
•and Internet-based distribution systems
•All have enabled firms to become more
competitive.
• HR faces the challenge of quickly applying
technology to the task of improving its own
operations.
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 High-Performance Work System
Practices
• Employment security
• Selective hiring
• Extensive training
• Self-managed teams/decentralized decision making
• Reduced status distinctions
• Information sharing
• Contingent (pay-for-performance) rewards
• Transformational leadership
• Measurement of management practices
• Emphasis on high-quality work

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 Benefits of a High-
Performance
•
)Work System
Generate more job applicants
(HPWS
• Screen candidates more effectively
• Provide more and better training
• Link pay more explicitly to performance
• Provide a safer work environment
• Produce more qualified applicants per position
• Hiring based on validated selection tests
• Provide more hours of training for new employees
• Conduct more performance appraisals
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 Average # of employees during month ×
# of workdays
Five Sample HR MetricsFIGURE 1–5
Cost per Advertising + agency fees + employee referrals +
hire travel cost of
applicants and staff + relocation costs + recruiter
pay and benefits
Number of hires

HR expense HR expense
factor Total operating expense

Time to fill Total days elapsed to fill job

requisitions
Number hired

Turnover Number of separations during month 100 ×

rate
Average number of employees during
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month
Measuring HR’s Contribution
• The HR Scorecard
– Shows the quantitative standards,
or “metrics” the firm uses to
measure HR activities.
– Measures the employee behaviors
resulting from these activities.
– Measures the strategically
relevant organizational outcomes
of those employee behaviors.

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 The Human Resource
Manager’s Proficiencies
• New Proficiencies
– HR proficiencies
– Business proficiencies
– Leadership proficiencies
– Learning proficiencies

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 Effects CFOs Believe HumanFIGURE 1–6
Capital Has on Business Outcomes

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 HR Certification
• HR is becoming more professionalized.
• Society for Human Resource Management
(SHRM)
– SHRM’s Human Resource Certification
Institute (HRCI)
• SPHR (senior professional in HR)
certificate
• PHR (professional in HR)
certificate

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 FIGURE
1–7
2004
SHRM®
Learnin
g
System
Module
Descrip
tions

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 The Human Resource
Manager’s Proficiencies
)(cont’d
• Managing within the Law
– Equal employment laws
– Occupational safety and health laws
– Labor laws

• Managing Ethics
– Ethical lapses
– Sarbanes-Oxley in 2003
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 The Plan of This Book: Basic
Themes
• HRM is the responsibility of every manager.
• HR managers must defend their plans and
contributions in measurable terms.
• All personnel actions and decisions have
strategic implications.
• All managers rely on information technology.
• Virtually every personnel decision has legal
implications.

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 Strategy and the Basic HumanFIGURE 1–8
Resource Management Process

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 KEY TERMS
management process globalization
human resource human capital
management strategy
) (HRM strategic plan
authority metrics
line manager HR Scorecard
outsourcing
staff manager
ethics
line authority
strategic human resource
staff authority management
implied authority high-performance work
functional control system
employee advocacy
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