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Human Resource Management 11th Edition Chapter 1 STRATEGIC HUMAN RESOURCE MANAGEMENT: AN OVERVIEW
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Employer Branding
Firm’s corporate image or culture
Embodies values and standards that guide people’s behavior
People know what company stands for, people it hires, fit between jobs and people, and results it recognizes and rewards
Important in getting highest quality applicants to join firm
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3. Employer’s Culture Is Known for Such Things As
It’s fun to work at this company
We have a passionate and intelligent culture
There is a strong team feeling here
It’s a great place to work
Hopefully it will NOT be: We hate it here
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4. External Evidence of a Great Brand
Fortune magazine Best Companies to Work For
Working Mother list of 100 best companies
Fortune magazine list of 100 fastest-growing companies in the United States
Money magazine list of 100 best places to live
Business Ethics magazine list of 100 Best Corporate Citizens
BusinessWeek list of 100 best small companies
Computerworld list of Best Places to Work
Black Enterprise list of Best Companies for Diversity
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5. Human Resource Management
Utilization of individuals to achieve organizational objectives
All managers at every level must concern themselves with human resource management
Five functions
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6. Human Resource Management Functions1
Staffing
Human Resource Management
Human Resource Development
Employee and Labor Relations
Compensation
Safety and Health
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Staffing
Job Analysis
Human Resource Planning
Recruitment
Selection
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Staffing (Cont.)
Staffing - Process through which organization ensures it always has proper number of employees with appropriate skills in right jobs at right time to achieve organizational objectives
Job analysis - Systematic process of determining skills, duties, and knowledge required for performing jobs in organization
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Staffing (Cont.)
Human resource planning - Systematic process of matching internal and external supply of people with job openings anticipated in the organization over specified period of time
Recruitment - Process of attracting individuals on a timely basis, in sufficient numbers, and with appropriate qualifications, to apply for jobs with an organization
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Staffing (Cont.)
Selection - Process of choosing from a group of applicants the individual best suited for a particular position and the organization
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11. Measuring Quality of Hire in Today’s Environment
How do you measure quality of hire and set standards for new-hire performance?
Quality of hire is stressed these days
Developers of automatic tracking systems are actively involved in trying to come up with the answer to the question of “quality of hires”
In a few years, some standards will emerge on how you measure and represent your talent management
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12. Human Resource Development
Training
Development
Career Planning
Career Development
Organizational Development
Performance Management
Performance Appraisal
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13. Human Resource Development (Cont.)
Training - Designed to provide learners with knowledge and skills needed for their present jobs
Development - Involves learning that goes beyond today's job; more long-term focus
Career planning - Ongoing process whereby individual sets career goals and identifies means to achieve them
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14. Human Resource Development (Cont.)
Career development - Formal approach used by organization to ensure that people with proper qualifications and experiences are available when needed
Organization development - Planned and systematic attempts to change the organization, typically to a more behavioral environment
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15. Human Resource Development (Cont.)
Performance management - Goal-oriented process directed toward ensuring organizational processes are in place to maximize productivity of employees, teams, and ultimately, the organization
Performance appraisal - Formal system of review and evaluation of individual or team task performance
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Compensation
Compensation - All rewards that individuals receive as a result of their employment
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Compensation
Direct Financial Compensation - Pay that person receives in form of wages, salaries, bonuses, and commissions
Indirect Financial Compensation (Benefits) - All financial rewards not included in direct compensation such as paid vacations, sick leave, holidays, and medical insurance
Nonfinancial Compensation - Satisfaction that person receives from job itself or from psychological and/or physical environment in which person works
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Safety and Health
Employees who work in safe environment and enjoy good health are more likely to be productive and yield long-term benefits to organization.
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Safety and Health
Safety - Involves protecting employees from injuries caused by work-related accidents
Health - Refers to employees' freedom from illness and their general physical and mental well being
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20. Employee and Labor Relations
In 2007:
Number of workers belonging to a union rose by 311,000 to 15.7 million
Union membership rate for public sector workers was 35.9 percent
Union membership rate for private workforce was 7.5 percent
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21. Employee and Labor Relations (Cont.)
Business is required by law to recognize union and bargain with it in good faith if firm’s employees want union to represent them
Human resource activity is often referred to as industrial relations
Most firms today would rather have union-free environment
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22. Human Resource Research
Human resource research is not separate function.
It pervades all HR functional areas.
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23. Interrelationships of HRM Functions
All HRM functions are interrelated
Each function affects other areas
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24. Dynamic Human Resource Management Environment
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25. Environment of Human Resource Management
EXTERNAL ENVIRONMENT
INTERNAL ENVIRONMENT
Unions
Society
Technology 1
Marketing
Operations
Legal Considerations
Staffing
Human Resource Management
Human Resource Development
Unanticipated Events
Employee and Labor Relations
Finance
Compensation
Other Functional Areas
Economy
Safety and Health
Shareholders
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Customers
Competition
Labor Market

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Labor Market
Potential employees located within geographic area from which employees are recruited
Always changing
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Legal Considerations
Federal, state and local legislation
Court decisions
Presidential executive orders
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Society
No longer content to accept, without question, the actions of business
Ethics - Discipline dealing with what is good and bad, or right and wrong, or with moral duty and obligation
Corporate social responsibility - Implied, enforced or felt obligation of managers to serve or protect interests of groups other than themselves
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Unions
Group of employees who have joined together for purpose of dealing collectively with their employer
Becomes a third party when dealing with the company
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Shareholders
Owners of corporation
Because they have invested money in firm, they may at times challenge programs considered by management to be beneficial to organization
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Competition
Firms may face intense competition in both their product or service and labor markets
Must maintain a supply of competent employees
Bidding war often results
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Customers
People who actually use firm’s goods and services
Management has task of ensuring its employment practices do not antagonize members of market it serves
Workforce should be capable of providing top-quality goods and services
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Technology
The world has never before seen technological changes occur as rapidly as they are today.
Created new roles for HR professionals
Additional pressures on them to keep abreast of technology
In 2008 survey of CEOs worldwide, 83% ranked change as most important issue confronting their organization
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Cyberwork
Possibility of never-ending workday
BlackBerrys, cell phones, text messaging, and create endless possibilities for communication
Some workers believe their employer wants them available 24/7
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Economy
In general, when economy is booming, it is often more difficult to recruit qualified workers.
When a downturn is experienced, more applicants are typically available.
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Unanticipated Events
Occurrences in external environment that could not be foreseen
Every disaster, whether manmade or by nature, requires a tremendous amount of adjustment with regard to human resource management
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37. HR’s Changing Role: Questions That Are Being Asked
Can some HR tasks be performed more efficiently by line managers or outside vendors?
Can some HR tasks be centralized or eliminated altogether?
Can technology perform tasks that were previously done by HR personnel?
Many HR departments continue to get smaller.
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38. HR’s Changing Role: Who Performs Human Resource Management Tasks?
Human Resource Managers
HR Outsourcing
HR Shared Service Centers
Professional Employer Organization (Employee Leasing)
Line Managers
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39. Human Resource Manager
Historically, the human resource manager was responsible for each of the five HR functions
Acts in advisory or staff capacity
Works with other managers to help them deal with human resource matters
Today HR departments continue to get smaller because others are accomplishing certain functions
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HR Outsourcing
Transfers responsibility to an external provider
Market for HR outsourcing is growing dramatically
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41. Ways HR Outsourcing is Done
Discrete services
Multi-process services
Total HR outsourcing
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Discrete Services
One element of business process or single set of high-volume repetitive functions is outsourced to a third-party
Large majority of companies outsource transactional HR activities, such as 401(k) administration
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43. Multi-Process Services
Complete outsourcing of one or more human resource processes
Example: Procter & Gamble outsources entire training operations
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Total HR Outsourcing
Transfer majority of HR services to third party
Example: Whirlpool Corporation signed 10-year deal to outsource HR business processes for 68,000 employees to Convergys Corporation
Total outsourcing is difficult to accomplish
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45. HR Shared Service Centers (SSCS)
Takes routine, transaction-based activities that are dispersed and consolidates them in one location
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46. Professional Employer Organization (Employee Leasing)
Company that leases employees to other businesses
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47. Professional Employer Organization (Cont.)
Company releases its employees who are then hired by PEO
PEO pays the employees
PEO is employees’ legal employer and has rights to hire, fire, discipline, and reassign an employee
Charges a fee of from 2-7% of the customer’s gross wages
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Advantages of PEO’s
Often enjoy economies of scale that permit them to offer wider selection of benefits at considerably lower costs
Workers frequently have greater opportunities for job mobility
If client organization suffers a downturn, the leasing company offers job security
PEO can handle compliance requirements of programs such as 401(k) programs
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49. Line Managers Performing HR Tasks
Involved with human resources by nature of their jobs
Line managers are now performing some duties typically done by HR
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50. HR as a Strategic Partner
HR executives must understand complex organizational design
Sharp deviation from what has traditionally been an administrative-type role for HR
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51. Strategic Activities CEOs Want from HR
Make workforce strategies integral to company strategies and goals
Leverage HR’s role in major change initiatives
Earn the right to a seat at the corporate table
Understand finance and profits
Help line managers achieve their goals
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52. Strategic Activities CEOs Want from HR (Cont.)
HR professionals must integrate goals of HR with goals of the organization
Must focus on expanding its strategic and high-level corporate participation with an emphasis on adding value
HR must demonstrate that it can produce a return on investment for its programs
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53. Questions to Be Answered to Determine if HR Is Involved Strategically
Is HR present at mergers and acquisitions planning meetings, strategy reviews, and restructuring discussions?
Does HR provide an annual report on its ROI?
Does HR lead the people strategy?
Has it developed performance indicators for the success of that strategy?
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Questions to Be Answered to Determine if HR Is Involved Strategically (Cont.)
Is HR rated by its customers?
Does the organization conduct strategic versus entitlement employee surveys?
Are employee and other survey initiatives linked to customer and financial metrics?
Is there an ROI process to evaluate HR initiatives connected to the business strategy?
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Strategic HR Audit
If HR professionals are to achieve the level of respect they desire, they must be subjected to the audit process
Auditors should document if HR activities are being accomplished in an optimum manner
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Human Capital Metrics
Measures of HR performance
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Examples of HR Metrics
Time to fill open positions
HR headcount ratios
Administrative cost per employee
Turnover cost
Training return on investment
Quality of hire
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HR Scorecard
Report card of effectiveness of specific person
Metrics that will best suit each company depend on variety of factors
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59. Human Resource Designations
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60. Human Resource Executives, Generalists, and Specialists
Vice President, Human Resources
Vice President, Industrial Relations
Manager, Training and Development
Manager, Compensation
Manager, Staffing
Executive: Generalist: Specialist:
Benefits Analyst
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61. Characteristics of an HR Executive
Performs one or more HR functions
A top-level manager
Reports directly to CEO or head of major division
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62. Characteristics of an HR Generalist
Often an executive
Performs tasks in various HR-related areas
Involved in several, or all, of the five HRM functions
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63. Characteristics of an HR Specialist
May be an HR executive, manager, or non-manager
Typically concerned with only one of the five functional areas
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64. Evolution Of Human Resource Management
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65. Traditional Human Resource Function in Large Firm
Separate sections were often created
Placed under an HR Manager
Each HR function may have a supervisor & staff
HR Manager works closely with top management in formulating policy
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66. Traditional Human Resource Functions in a Large Firm
President and CEO
Vice President, Marketing
Vice President, Operations
Vice President, Finance
Vice President, Human Resources
Manager, Training and Development
Manager, Compensation
Manager, Staffing
Manager, Safety and Health
Manager, Labor Relations
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67. Evolution of Human Resource Management
First edition text was titled Personnel: The Management of Human Resources, and focus was more on personnel as staff or advisory function
Title has changed to Human Resource Management with more general management focus
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Other Name Changes
Personnel Administrator changed its name to HR Magazine
Personnel to HR Focus
Personnel Journal to Workforce Management
Today, the people who perform HR tasks are certainly different than they were even a decade ago
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69. The Evolving HR Organization
HR Outsourcing
HR Shared Service Centers
Professional Employer Organization
Line Manager
Evolve to make HR more strategic
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70. A Possible Evolving HR Organization Example
President and CEO
Vice President, Operations
Vice President, Strategic Human Resources
Vice President, Finance
Vice President, Marketing
Director of Safety and Health
Training & Development (Outsourced)
Compensation (Shared Service Centers)
Staffing (Line Managers, Use of Applicant Tracking Systems)
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71. A Global Perspective: Cultural Differences in Global HR
Country’s culture is the set of values, symbols, beliefs, languages, and norms that guide human behavior within the country
Learned behavior develops as individuals grow from childhood to adulthood
Companies operating in the global environment recognize that national cultures differ and that such differences cannot be ignored
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72. Organization of Human Resource Management 11th Edition
PART I. INTRODUCTION
Chapter 1: Strategic Human Resource Management: An Overview
PART II. HR ETHICAL, LEGAL, AND SOCIAL CONSIDERATIONS
Chapter 2: Business Ethics and Corporate Social Responsibility
Chapter 3: Workforce Diversity, Equal Employment Opportunity, and Affirmative Action
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73. Organization of Human Resource Management 11th Edition (Cont.)
PART III. STAFFING
Chapter 4: Job Analysis, Strategic Planning, and Human Resource Planning
Chapter 5: Recruitment
Chapter 6: Selection
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74. Organization of Human Resource Management 11th Edition (Cont.)
PART IV. HUMAN RESOURCE DEVELOPMENT
Chapter 7: Training and Development
Appendix Chapter 7: Career Planning and Development
Chapter 8: Performance Management and Appraisal
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75. Organization of Human Resource Management 11th Edition (Cont.)
PART V. COMPENSATION AND BENEFITS
Chapter 9: Compensation
Chapter 10: Benefits, Nonfinancial Compensation, and Other Compensation Issues
PART VI. SAFETY AND HEALTH
Chapter 11: A Safe and Healthy Work Environment
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76. Organization of Human Resource Management 11th Edition (Cont.)
PART VII. EMPLOYEE AND LABOR RELATIONS
Chapter 12: Labor Union and Collective Bargaining
Appendix Chapter 12: History of Unions in the United States
Chapter 13: Internal Employee Relations
PART VIII. OPERATING IN A GLOBAL ENVIRONMENT
Chapter 14: Global Human Resource Management
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