© 2003 Prentice Hall, Inc. 1-1 Course Outline Managing Human Resources

© 2003 Prentice Hall, Inc. 1-2 Course Outline References  Dessler, Gary. Human Resource Management, 10 th ed. Pearson Prentice Hall: 2005

© 2003 Prentice Hall, Inc. 1-3 Outline of Introduction I.Introduction II.What is Management? III.What is Human Capital and Human Resource Management? IV.How does HRM relate to the functions of management? V.What is the HRM process?

© 2003 Prentice Hall, Inc. 1-4 I.The Manager’s Human Resource Management Jobs Why is HR Management Important to All Managers? Line and Staff Aspects of HRM Cooperative Line and Staff HR Management: An Example

© 2003 Prentice Hall, Inc. 1-5 Outline of Chapter 1 II.Strategic Planning and Strategic Trends III.HR’s Strategic Role HR’s Evolving Role Strategic Human Resource Management HR’s Role as a Strategic Partner

© 2003 Prentice Hall, Inc. 1-6 Management  Management the process of coordinating work activities so that they are completed efficiently and effectively with and through other people elements of definition Process - represents ongoing functions or primary activities engaged in by managers Coordinating - distinguishes a managerial position from a non-managerial one

© 2003 Prentice Hall, Inc. 1-7 Organization and Manager  An organization consists of people with formally assigned roles who work together to achieve the organization’s goals.  Manager is a person responsible for accomplishing the organization’s goals and who does so by managing the efforts of the organization’s people.

© 2003 Prentice Hall, Inc. 1-8 Management Management Strives For: Low resource waste (high efficiency) High goal attainment (high effectiveness) Resource Usage Efficiency (Means) Goal Attainment Effectiveness (Ends) Low WasteHigh Attainment

© 2003 Prentice Hall, Inc. 1-9 The Management Process  Planning  Organizing  Staffing  Leading  Controlling

© 2003 Prentice Hall, Inc Management Process  Planning Establishing Goals and standards Developing Rules and procedures Developing Plans and forecasting.  Organizing Giving each subordinate a specific Tasks Establishing Departments Delegating authority to subordinates Establishing channels of Authority and communication Coordinating the work of subordinates

© 2003 Prentice Hall, Inc Management Process  Staffing Determining what type of people should be Hiring Recruiting employees Selecting employees Setting Performance standards Compensating employees Evaluating performance Counseling employees Training and developing employees

© 2003 Prentice Hall, Inc Management Process  Leading Getting the job done Maintaining Morale Motivating subordinates  Controlling Setting standards such as quotas,quality standards Comparing actual performance to standards Taking Corrective action

© 2003 Prentice Hall, Inc Management Functions Planning - defining goals, establishing strategies for achieving those goals, and developing plans to integrate and coordinate activities Organizing - determining what tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom, and where decisions are made Staffing - HRM Leading - directing and motivating all involved parties and dealing with employee behavior issues Controlling - monitoring activities to ensure that they are going as planned

© 2003 Prentice Hall, Inc Human Resource Management Planning - defining goals, establishing strategies for achieving those goals, and developing plans to integrate and coordinate activities Organizing - determining what tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom,, where decisions are made and who is decision taker Staffing - HRM Leading - directing and motivating all involved parties and dealing with employee behavior issues Controlling - monitoring activities to ensure that they are going as planned

© 2003 Prentice Hall, Inc HRM Function Human Resource Management is the process of acquiring, training, appraising, and compensating employees and attending to their labor relations, health and safety, and fairness concerns. Definition

© 2003 Prentice Hall, Inc HRM People Functions Include:  Conducting Job analyses  Planning Labor needs  Recruiting candidates  Select candidates  Orient and training new employees  Wages and salaries  Incentives and benefits  Appraising Performance  Communicating  Train and develop managers  Employee commitment  Equal opportunity  Health and safety  Grievances/labor relations  Knowing employment law

© 2003 Prentice Hall, Inc HRM is Important to all Managers. Don’t Let These Happen to You!  The wrong person  High turnover  Poor results  Useless interviews  Company taken to Court for discriminatory actions  Safety citations  Salaries appear unfair  Poor training  Unfair labor practices

© 2003 Prentice Hall, Inc HRM – It’s All About Results “For many years it has been said that capital is the bottleneck for a developing industry. I don’t think this any longer holds true. I think it’s the work force and a company’s inability to recruit and maintain a good work force that does constitute the bottleneck….” F. K. Foulkes

© 2003 Prentice Hall, Inc Human Resource Management Process

© 2003 Prentice Hall, Inc Line and Staff Aspects of HRM  Authority Right to Make decisions Directing work Giving orders  Line Managers Accomplishing goals by issuing orders  Staff Managers Assisting and advising line managers Definition

© 2003 Prentice Hall, Inc Line Manager’s HRM Jobs  The right person  Orientation  Training  Performance  Creativity  Working relationships  Policies and procedures  Labor costs  Development  Morale  Protecting

© 2003 Prentice Hall, Inc HR Department Organizational Chart

© 2003 Prentice Hall, Inc Line & Staff HR Example Exactly which HR management activities are carried out by line managers & by staff managers?  There is no single division of responsibility applied to all organizations  Example in the recruiting & hiring of employees: Usually the line manager specifies the qualifications needed to fill specific positions. Then the HR manager develops sources of qualified candidates, conduct initial screening (tests) and send those filtered to line manager Line manager conducts the final technical screening tests and selects the one to hire or requests new applicants

© 2003 Prentice Hall, Inc Changing Environment of HR Management  Globalization  Technological Advances  Exporting Jobs  The Nature of Work  Workforce Diversity

© 2003 Prentice Hall, Inc Globalization

© 2003 Prentice Hall, Inc Globalization  Globalization is the tendency of firms to extend their sales,ownership and manufacturing to new markets abroad.  Eg : Toyota manufactures camry in kentucky and Dell produces PC s in china  Companies expand abroad for several reasons – sales expansion,seek new foreign products and services to sell.  Infosys,tcs,tata steel,mittal steel,ge,american exp,dell,google,indian firms affected by recession.

© 2003 Prentice Hall, Inc Companies Expansion - Sales Expansion  Google expanded its china presence by initiating its Google china instant messaging service.  Walmart is opening stores in south America.  Dell is aggressively building plants in china and selling there knowing the future market

© 2003 Prentice Hall, Inc New foreign products and services  Apparel manufacturers design and cut fabrics in Miami and then have actual products assembled in Central America where the labour cost is low.  Prospects of finding new partners abroad – IBM sold its PC division to Chinese firm Lenovo

© 2003 Prentice Hall, Inc Globalization  More globalization means more competition and more competition means more pressure to be world class - to lower costs to make employees more productive and to do things better and less expensively.  The bottom line is that the growing integration of the world class economy into a single huge market place is increasing the intensity of competition in a wide range of manufacturing and service industries.

© 2003 Prentice Hall, Inc Advantages and Disadvantages of Globalization  For consumers it is having more variety of products at a cheaper prices  For business owners it is having many new customers and more competitors.  For employees it poses a threat of job offshoring.  US Imports and exports :  47 billion $ 1960 * 562billion $  4.3 trillion $ 2008

© 2003 Prentice Hall, Inc Technological Advances and the Nature of Work  Technology mandates and enables companies to be more competitive  High Tech Jobs - Knowledge intensive jobs in industries such as aerospace, computers, telecommunications, and biotechnology are replacing factory jobs in steel, auto, rubber and textiles  Eg : zaara,lockheed,indian railways Carrier

© 2003 Prentice Hall, Inc Service Jobs  Two thirds of US force is employed in producing and delivering services not products.  Reason for service oriented industry – more manufacturing jobs are shifting to low wage countries.  Service jobs have also shifted to countries like India and Philippines where skilled labour are available at low cost.

© 2003 Prentice Hall, Inc Exporting Jobs  Competitive pressures and the search for greater efficiencies are prompting more employers to export jobs abroad.  Technology has facilitated the move of jobs offshore.  Call centers in India allow for: 24 hours, cheaper labor, standardized, efficient service

© 2003 Prentice Hall, Inc Knowledge Work and Human Capital  Human Capital refers to knowledge education, training,skills and expertise of a firm’s workers.  “ the center of gravity in employment is moving fast from manual and clerical workers to knowledge workers”  HR managers listed “critical thinking/problem solving” and “info tech application” as the two applied skills in importance over next few years.  HRM skills – recruiting,screening,training and paying employees – more important to employers  Bank example

© 2003 Prentice Hall, Inc Demographic Trends  In spite of the recession and job losses workforce demographic trends are making finding and hiring good employees more of a challenge around the world.  Skill shortage is identified as a main hurdle in achieving demographic dividend from its young growing population.

© 2003 Prentice Hall, Inc The Workforce Itself is Diverse US Department of Labor website

© 2003 Prentice Hall, Inc The Workforce Itself is Diverse  More women, minorities, and older employees are joining the workforce  Workforce diversification offers increasing opportunities including: a wide range of skills and talents (languages), different points of view, different life experiences  Old perspective was melting pot approach. Now, there is a celebration of differences  The challenge lies in the widening range of employee needs (benefits range is much wider so may be flexi-time would be adopted)

© 2003 Prentice Hall, Inc Generation Y  Young workers are more family oriented or dual balanced.  Old workers are work centric.  Todays “millennial” or “generation Y” employees will bring challenges and strength.  The most high maintenance workforce in the history of world.  Refer to them as “most praised generation”.  As the first generation to cope up with IT.

© 2003 Prentice Hall, Inc Economic challenges and Trends  In 2001 – 2007 – Gross National Product boomed.Home prices leaped upto 20% and unemployment remained docile (4.7%)  – all these measures seemingly fell off the cliff.Home prices dropped to 20% and unemployment rose to 8%

© 2003 Prentice Hall, Inc Consequences of these basic trends Technology Global expansion Strengths and Weaknesses Uncertainty, Turbulence, Rapid Change, Changing power bases Companies must be Fast, Responsive, and Cost- effective Improved competition

© 2003 Prentice Hall, Inc Important Trends In human Resource Management  The New Human Resource Managers  Strategic Human Resource Management  Evidence Based Human Resource Management  Managing ethics.

© 2003 Prentice Hall, Inc New Human Resource Managers  They are more involved in big picture issue.  Example : Wiscosin based Signicast corp’s president Terry Lutz and his board decided to build a new computerized plant.New automation of plant demanded new employees.HRM dept evolved to select train and organize tech friendly employees

© 2003 Prentice Hall, Inc New HRM  New ways to provide transactional services  They outsource more of their services to outside vendors.  They use latest technologies (internet based websites) to enable employees to self administer benefit plans.  Employees of Dell set up call centers to solve HR related enquiries

© 2003 Prentice Hall, Inc New HRM  They have new proficiencies.  They require broader business knowledge  HR managers need to be familiar with strategic planning,marketing,finance and production.

© 2003 Prentice Hall, Inc HR’s evolving role Protector and Screener Strategic Partner Change Agent

© 2003 Prentice Hall, Inc HR’s evolving role as strategic partner HR operations Corporate strategy HR programs Corporate strategy HR programs FedEx

© 2003 Prentice Hall, Inc The New HR Manager  New Proficiencies  HR proficiencies  Business proficiencies  Leadership proficiencies  Learning proficiencies  The need to know the employment laws  HR and technology  Technology improves HR functioning in 4 main ways: self-service, call centers, productivity improvement, and outsourcing.

© 2003 Prentice Hall, Inc Strategic Management  The set of managerial decisions and actions that determines the long-run performance of an organization.

© 2003 Prentice Hall, Inc Instructor presentation questions: Strategic Human Resource Management  HR strategies refers to the specific human resource management courses of action the company pursues to achieve its aims.  Strategic Human Resource Management means formulating and executing HR systems (HR policies & activities) that produce the employee competencies and behaviors the company needs to achieve its strategic aims

© 2003 Prentice Hall, Inc Instructor presentation questions: HR’s Strategic Roles  Today’s HR managers fulfill two basic strategic planning roles: strategy execution and strategy formulation  Strategy execution (traditional role): top management formulates the company’s corporate strategies and HR develops systems that support or align with the corporate strategy.  Strategy formulation (today’s role): a partner in the setting of the corporate strategy and its execution.

© 2003 Prentice Hall, Inc Instructor presentation questions: HR Scorecard Approach HR Scorecard: Measures the HR function’s effectiveness and efficiency in producing employee behaviors needed to achieve the company’s strategic goals.

© 2003 Prentice Hall, Inc Steps in the HR Scorecard Approach Step 3: Identify the Strategically Required Organizational Outcome Step 4: Identify the Required Workforce Competencies & Behaviors Step 5: Identify Relevant HR System Policies & Activities Step 1: Define the Business Strategy Step 2: Outline the company’s value chain Step 6: Design the HR Scorecard Measurement System Step 7: Periodically Evaluate the Measurement System

© 2003 Prentice Hall, Inc The Value Chain Approach

© 2003 Prentice Hall, Inc Instructor presentation questions: HR Scorecard Approach Example (Paris Hotel) 1.The Strategy: “The Hotel will use superior guest services to differentiate its properties, and to thereby increase the length of stays and the return rate of guests, and thus boost revenues and profitability” 2.The Value Chain: Service industry, where the product is a satisfied customer. Value chain activities: inbound logistics, operational activities, outbound activities, service activities, support activities.

© 2003 Prentice Hall, Inc Instructor presentation questions: HR Scorecard Approach Example (Paris Hotel) 3. Strategically Required Organizational Outcomes: Each step in the chain presents opportunities for improving guest services. Produce fewer complaints, more written complaints, more guest returns, longer stays, higher expenditure per visit. 4. Relevant Workforce Competencies: motivated, high moral employees 5. Strategic HR System Policies and Activities: Fair and strict HR practices will produce higher moral and thus better service

© 2003 Prentice Hall, Inc Instructor presentation questions: HR Scorecard Approach Example (Paris Hotel) 6. The HR Scorecard (cause and effect relation): Improved disciplinary procedures – how many grievances per month -  means Improved moral – seminar attitude surveys -  leads to High quality service – customer complaints per month

© 2003 Prentice Hall, Inc Thank You