HUMAN RESOURCE MANAGEMENT / MANAGING PEOPLE CHAPTER 1 STRATEGIC HUMAN RESOURCE MANAGEMENT: AN OVERVIEW

HR Branding Firm’s corporate image or culture Embodies values and standards that guide peoples’ 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 © 2008 by Prentice Hall

Human Resource Management Utilization of individuals to achieve organizational objectives All managers at every level must concern themselves with human resource management Five functions © 2008 by Prentice Hall

Human Resource Management Functions 1 Staffing Human Resource Management Human Resource Development Employee and Labor Relations Compensation Safety and Health © 2008 by Prentice Hall

Staffing Job Analysis Human Resource Planning Recruitment Selection © 2008 by Prentice Hall

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 © 2008 by Prentice Hall

Staffing (Cont.) Human resource planning - Systematic process of matching the internal and external supply of people with job openings anticipated in the organization over a 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 © 2008 by Prentice Hall

Staffing (Cont.) Selection - Process of choosing from a group of applicants the individual best suited for a particular position and the organization © 2008 by Prentice Hall

Human Resource Development Training Development Career Planning Career Development Organizational Development Performance Management Performance Appraisal © 2008 by Prentice Hall

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; it has more long-term focus Career planning - Ongoing process whereby individual sets career goals and identifies means to achieve them © 2008 by Prentice Hall

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 process of improving organization by developing its structures, systems, and processes to improve effectiveness and achieving desired goals © 2008 by Prentice Hall

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 © 2008 by Prentice Hall

Compensation Compensation - All rewards that individuals receive as a result of their employment © 2008 by Prentice Hall

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. © 2008 by Prentice Hall

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. © 2008 by Prentice Hall

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 © 2008 by Prentice Hall

Employee and Labor Relations Private-sector union membership has fallen from 39 percent in 1958 to 7.8 percent in 2005. Business is required by law to recognize a union and bargain with it in good faith if the firm’s employees want the union to represent them Human resource activity is often referred to as industrial relations Most firms today would rather have a union-free environment © 2008 by Prentice Hall

Human Resource Research Human resource research is not separate function. It pervades all HR functional areas. © 2008 by Prentice Hall

Interrelationships of HRM Functions All HRM functions are interrelated Each function affects other areas © 2008 by Prentice Hall

Dynamic Human Resource Management Environment © 2008 by Prentice Hall

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 Customers © 2008 by Prentice Hall Competition Labor Market

Labor Market Potential employees located within geographic area from which employees are recruited Always changing © 2008 by Prentice Hall

Legal Considerations Federal, state and local legislation Court decisions Presidential executive orders © 2008 by Prentice Hall

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 Social responsibility - Implied, enforced or felt obligation of managers to serve or protect interests of groups other than themselves © 2008 by Prentice Hall

Unions Group of employees who have joined together for purpose of dealing collectively with their employer Become a third party when dealing with the company © 2008 by Prentice Hall

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 © 2008 by Prentice Hall

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 © 2008 by Prentice Hall

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 © 2008 by Prentice Hall

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 © 2008 by Prentice Hall

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. © 2008 by Prentice Hall

Unanticipated Events Occurrences in the 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 © 2008 by Prentice Hall

Cyberwork Possibility of never-ending workday BlackBerrys, cell phones, text messaging, and e-mail create endless possibilities for communication Some workers believe their employer wants them available 24/7 © 2008 by Prentice Hall

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 © 2008 by Prentice Hall

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 © 2008 by Prentice Hall

Human Resource Manager 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 © 2008 by Prentice Hall

HR Outsourcing Transfers responsibility to an external provider Market for HR outsourcing is growing dramatically © 2008 by Prentice Hall

Ways HR Outsourcing is Done Discrete services Multi-process services Total HR outsourcing © 2008 by Prentice Hall

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 © 2008 by Prentice Hall

Multi-process Services Complete outsourcing of one or more human resource processes Example: Procter & Gamble outsourced entire training operations © 2008 by Prentice Hall

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 © 2008 by Prentice Hall

HR Shared Service Centers (SSCS) Takes routine, transaction-based activities that are dispersed and consolidates them in one location © 2008 by Prentice Hall

Professional Employer Organization (Employee Leasing) Company that leases employees to other businesses. © 2008 by Prentice Hall

Professional Employer Organization (Cont.) Company releases its employees who are then hired by PEO PEO pays the employees PEO is the employees’ legal employer and has the rights to hire, fire, discipline, and reassign an employee Charges a fee of from 1 to 4 percent of the customer’s gross wages © 2008 by Prentice Hall

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 Involved with human resources by nature of their jobs Line managers are now performing some duties typically done by HR © 2008 by Prentice Hall

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 © 2008 by Prentice Hall

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 © 2008 by Prentice Hall

Measures of HR performance Human Capital Metrics Measures of HR performance © 2008 by Prentice Hall

Examples of HR Metrics Time to fill open positions HR headcount ratios Administrative cost per employee Turnover cost Training return on investment Cost per employee for HR administration ranges from $1,200 - $1,600 © 2008 by Prentice Hall

HR Scorecard Report card of effectiveness of specific person Metrics that will best suit each company depends on variety of factors © 2008 by Prentice Hall

Human Resource Designations © 2008 by Prentice Hall

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 © 2008 by Prentice Hall

Characteristics of an HR Executive Performs one or more HR functions A top-level manager Reports directly to CEO or head of major division © 2008 by Prentice Hall

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 © 2008 by Prentice Hall

Characteristics of an HR Specialist May be an HR executive, manager, or non-manager Typically concerned with only one of the five functional areas © 2008 by Prentice Hall

Evolution Of Human Resource Management © 2008 by Prentice Hall

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 © 2008 by Prentice Hall

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 © 2008 by Prentice Hall

The Evolving HR Organization HR Outsourcing HR Shared Service Centers Professional Employer Organization Line Manager Evolve to make HR more strategic © 2008 by Prentice Hall

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) © 2008 by Prentice Hall