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1
Human Resource Management and the Environment

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Objectives
Define

the term human resource management. Describe the strategic importance of human resource management (HRM) activities. Explain what career opportunities are available in the HRM field. Discuss the role that specialists and operating managers play in performing HRM activities. List the main objectives pursued by HRM units!

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Introduction
Human

resource management (HRM) is the effective management of people at work The goal: make workers more satisfied and productive When an organization is concerned about people, its total philosophy, culture, and orientation reflect it Every manager must be concerned with people, whether or not there is a human resources department

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Introduction
HRM

consists of numerous activities: Equal employment opportunity (EEO) compliance Job analysis Human resource planning Recruitment, selection, motivation, and orientation Performance evaluation and compensation Training and development Labor relations Safety, health, and wellness

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Introduction
The

HRM unit is oriented toward: Action People Global enterprise The future !

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A Brief History of HRM

HRM

can be traced to England, where craftspeople organized guilds/ associations They used unity to improve working conditions The Industrial Revolution in the 18th century laid the basis for a new, complex industrial society Changing work conditions, social patterns, and labor created a gap between workers and owners During the world wars era, scientific management, welfare work, and industrial psychology merged

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A Brief History of HRM

Frederick

W. Taylor, the father of scientific management, summarized scientific management as: Science Harmony Cooperation Maximum output Industrial psychology, initiated in 1913, focused on: The worker Individual differences The maximum well being of the worker

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A Brief History of HRM

Personnel

departments were created to deal with: Drastic changes in technology Organizational growth The rise of unions Government intervention concerning working people Around the 1920s, more organizations noticed and acted on employee-management conflict

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A Brief History of HRM

The

Hawthorne studies (1924 to 1933): Were to determine the effects of illumination on workers and their output Rather, it pointed out the importance of social interaction on output and satisfaction

Until

the 1960s, the personnel function was concerned only with blue-collar employees File clerk, house-keeper, social worker, fire-fighter, and union trouble defuser !!

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Strategic Importance of HRM

Today,

HRM plays a major role in: Clarifying the firms human resource problems Developing solutions for them is oriented toward: Action The individual Worldwide interdependence The future

It

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Strategic Importance of HRM

Strategic

HRM differs significantly from traditional

HRM In traditional arrangements, responsibility for managing human resources lies with different specialists in each department or division In a strategic approach, people management rests with an individual who is in direct contact with workers or line managers

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Strategic Importance of HRM

Item Traditional HRM Strategic HRM

Responsibility for human resources

Objective Role of HRM area Time focus

Specialists
Better performance Respond to needs Short-term results

Line managers
Improved understanding and use of human assets Lead, inspire, understand Short, intermediate, long term

Control
Culture Major emphasis Accountability

Rules, policies, position power

Bureaucratic, top-down, centralization Following the rules Cost centers

Flexible, based on human resources

Open, participative, empowerment Developing people Investment in human assets

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Strategic Importance of HRM

For

years, the HRM function was not linked to corporate profit Organizations focused only on current performance HR managers did not have a strategic perspective Executives categorized HRM in a traditional manner It was difficult to develop metrics for HRM activities of the importance of people made HRM a major player in developing strategic plans HRM strategies must reflect the organizations strategy regarding people, profit, and effectiveness

Recognition

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Strategic Importance of HRM

Key

concepts that must be applied: Analyze and solve problems from a profit-oriented point of view Assess and interpret costs and benefits of HRM issues Planning models must include realistic, challenging, specific, and meaningful goals Prepare reports on HRM solutions to problems encountered by the firm

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Strategic Importance of HRM

Key

concepts that must be applied (continued): Train the human resources staff Emphasize the strategic importance of HRM Show managers that they contribute to the goals/mission of the firm

The

actions, language, and performance of the HRM function must be: Measured Precisely communicated Evaluated

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Strategic Importance of HRM

The

era of HRM accountability resulted from: Concerns about productivity Organizational downsizing and redesign An increasingly diverse workforce The need to effectively use all organizational resources to compete in an increasingly complex and competitive world

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Strategic Importance of HRM

For

the HRM function to be successful, managers in other functions must be knowledgeable and involved Managers play a major role in setting the direction, tone, and effectiveness of the relationship between:
The

employees The firm The work performed

Without

managerial participation, there are likely to be major human resource problems !!!

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HRM and Organizational Effectiveness

For

a firm to survive and prosper, reasonable goals must be achieved in: Performance Legal compliance Employee satisfaction Absenteeism Turnover Training effectiveness and ROI Grievance rates Accident rates

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HRM and Organizational Effectiveness

Effectiveness

is measured by the balance of such complimentary characteristics as: Reaching goals Employing the skills/abilities of employees efficiently Ensuring the influx/ entry and retention of welltrained, motivated employees Three elements needed for firms to be effective: Mission and strategy Organizational structure HRM

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HRM and Organizational Effectiveness

It is important to remember that the people who do the work and create the ideas allow the organization to survive

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HRM and Organizational Effectiveness

Changes

experienced by organizations: Growing global competition Rapidly expanding technologies Increased demand for individual, team, and organizational competencies Faster cycle times Increasing legal and compliance scrutiny Higher customer expectations

The

mechanized, routine-oriented workforce is giving way to a knowledge-based workforce

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HRM and Organizational Effectiveness

Top

management has trouble making strategic planning decisions regarding people All other resources are evaluated in terms of money high performance management practices results in: Profitability gains Stock price increases Higher company survival rates !!!

Implementing

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Objectives of the HRM Function

HRM

contributions to organizational effectiveness: Helping the organization reach its goals Employing workforce skills and abilities efficiently Increasing job satisfaction, self-actualization, and quality of work life Communicating HRM policies to all employees Maintaining ethical policies and socially responsible behavior Managing change to the mutual advantage of individuals, groups, the enterprise, and the public

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Objectives of the HRM Function

Increasing

employees job satisfaction and selfactualization Employees must feel that the job is right for their abilities and that they are being treated equitably Satisfied employees are not automatically more productive
However,

unsatisfied employees tend to be absent and quit more often and produce lower-quality work

Both

satisfied and dissatisfied employees can perform equally in quantitative terms

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Objectives of the HRM Function

Quality

of work life (QWL) is a general concept that refers to several aspects of the job, including: Management and supervisory style Freedom and autonomy to make decisions on the job Satisfactory physical surroundings Job safety Satisfactory working hours Meaningful tasks The job and work environment should be structured to meet as many workers needs as possible

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Objectives of the HRM Function

Communicating

HRM policies to all

employees: HRM policies, programs, and procedures must be communicated fully and effectively They must be represented to outsiders Top-level managers must understand what HRM can offer

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Objectives of the HRM Function

Maintaining

ethical policies and socially responsible

behavior: HRM managers must show by example that HRM activities are fair, truthful, and honorable People must not be discriminated against Their basic rights must be protected
These

principles should apply to all activities in the HRM area

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Objectives of the HRM Function

Trends

that strain employer-employee relationships: Telecommuting Outsourcing HRM Family medical leave Child care Spouse-relocation assistance Pay for skills Benefit cost-sharing Union-management negotiation

These

changes are due to the emergence of new lifestyles and an aging population

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Objectives of the HRM Function

Managing

increased urgency and faster cycle times: Firms are placing a growing emphasis on: Increasing customer service Developing new products and services Training and educating technicians, managers, and decision makers

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Objectives of the HRM Function

Faster,

more urgent management behaviors have been caused by: Foreign and domestic competition Technological changes The emergence of new opportunities
to increase learning and reduce cycle time, while also reducing cost, is a competitive reality HRM activities must be in sync with the firms environment !!!

Pressure

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Who Performs HRM Activities

Two

groups normally perform HRM activities: HR manager-specialists Operating managers

The

effectiveness of the human resource declines more quickly than all other resources An investment in people effects organizational effectiveness more than money, materials, or equipment

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Who Performs HRM Activities

A

large part of an operating managers day is spent: In scheduled and unscheduled meetings In telephone conversations Solving problems that have a direct impact on people

In

smaller organizations, the operating manager has such HRM responsibilities as: Scheduling work Recruitment and selection Compensating people

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Who Performs HRM Activities

As

the organization grows, the operating managers HR work may be shifted to HRM specialists HR specialists are found in organizations with 100 to 150 employees A HR department is typically created when the number of employees reaches 200 to 500

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Outsourcing
Outsourcing

HRM activities is growing in popularity

because of: Downsizing Rapid growth or decline of business Globalization Increased competition Restructuring

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Outsourcing
Some

executives assume that outsourcing can: Reduce costs Improve flexibility Permit the hiring of specialized expertise

The

choice to outsource HRM activities is being made with little empirical support !!

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Interaction of Operating & HR Managers

With

both operating managers and HR specialists making HRM decisions, there can be conflict They have different orientations and objectives is worse if joint decisions must be made on: Discipline Physical working conditions Termination Transfer Promotion Employment planning

Conflict

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Interaction of Operating & HR Managers

Operating

managers and HR specialists can also

differ on: How much authority employees have over job design Labor relations Organizational planning Rewards, such as bonuses and promotions

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Interaction of Operating & HR Managers

The

roles of HRM and operating managers have been impacted by: Sweeping changes in business Globalization Technology Demography People dont leave companies, they leave managers HRM can help managers do a better job

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Interaction of Operating & HR Managers

HRM

is often seen as a company policeman It is also seen as inflexible and over-attentive to detail
specialists are encouraged to: Analyze every activity and prove its added value Understand the business Become a strategic partner with line managers Seek out operating managers Help managers avoid problems Be flexible and open to the ideas of others !!

HRM

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Necessary HRM Competencies

Communication Problem Technology Forecasting Compensation

solving

Leadership

design

Recruiting/staffing
Employment

Benefit

design

law

Accounting/finance

Training/development Record

keeping...

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HRMs Place in Management

The

HR department must be a proactive, integral part of management and strategic planning

Ascertain

specific organizational needs for the use of its competence Evaluate the use and satisfaction among other departments Educate management and employees about the availability and use of HRM services
HRM

strategic plans must build on the firm's strengths

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HRMs Place in Management

To

develop a competitive advantage over other firms: Organizations must create value in a way that is rare and difficult for competitors to imitate
things must become so important and effective that every unit in the firm knows they are needed for success: The compensation system Training opportunities Diversity management programs

These

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HRMs Place in Management

HR

executives must educate other departments about the human resource implications of decisions This requires being familiar with other aspects of the organization, including:
Investments Advertising Marketing Production

control Computer utilization Research and development !!!

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HRM Strategy
A

firm's HRM strategy integrates major objectives, policies, and procedures into a cohesive whole A well-formulated HRM strategy aggregates and allocates a firm's resources on the basis of: The organizations internal strengths and weaknesses Changes in the environment The anticipated actions of competitors ..

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Clarifying Meaningful HRM Objectives

The

objectives of an organization or department are the goals it seeks to achieve Most objectives are stated in very general terms, from which more specific statements are developed These plans are called policies and procedures or rules

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Clarifying Meaningful HRM Objectives

Strategy: The plan that integrates major objectives
More specific

Objectives: Goals that are specific and measurable

More specific

Policies: Guides to decision making

More specific

Procedures/Rules: Specific directions for decision making

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HRM Policy
A

policy is a general guide that expresses limits within which action should occur Policies arise from past or potential problems They free managers from making certain decisions They ensure some consistency in behavior They allow managers to concentrate on decisions in which they have the most experience and knowledge
some organizations, the next step is to develop procedures and rules

For

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HRM Procedures
Procedures

(rules) are a specific direction to action In large organizations, procedures are collected and put into manuals called standard operating procedures (SOPs) Organizations must ensure that consistent decision making flows from a well-developed, but not excessive, set of policies and procedures Procedures should be developed for only the most vital areas ...

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Organization of an HR Department
In

most organizations, the chief HR executive reports to the top manager In medium- and small-sized organizations, HRM and another function may be in a single department In nonprofit organizations, HRM is typically a unit in the business office HR specialists are usually located at the headquarters of an organization ..!!!