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Managing Strategic Human Resources Today
The main purpose of this chapter is to explain what human resource management is and why it is important to all managers. We will see that human resource management—activities like recruiting, hiring, training, appraising, and compensating employees—is both a separate management function and part of every manager’s job. The main topics we cover here are as follows: What Is Human Resource Management?, Trends Influencing Human Resource Management, The New Human Resource Managers, Strategic Human Resource Management, and The Plan of This Book.
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2. Learning Objectives (1)
When you finish studying, you should be able to:
Answer the question, “What is human resource management?”
Discuss the trends affecting human resource management.
Describe important competencies human resource managers need today.
When you finish studying, you should be able to:
Answer the question, “What is human resource management?”
Discuss the trends affecting human resource management.
Describe important competencies human resource managers need today.
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3. Learning Objectives (2)
Explain and give examples of strategic human resource management.
Discuss three strategic management tools managers use.
When you finish studying, you should be able to:
Explain and give examples of strategic human resource management.
Discuss three strategic management tools managers use.
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4. What is Human Resource Management?
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5. What is Human Resource Management?
Job analyses
Planning labor needs/recruiting
Selecting
Orienting and training
Performance appraisal
Compensation
Incentives and benefits
Employee relations
Human resource management refers to the practices and policies you need to carry out the personnel aspects of your management job, specifically, acquiring, training, appraising, rewarding, and providing a safe, ethical, and fair environment for your company’s employees.
In addition to the list shown on the slide, managers need to know about equal opportunity, ethics, and affirmative action; employee health, and safety; and, grievances and labor relations.
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6. Why is HR Management Important to All Managers?
Avoid personnel mistakes such as:
Employees not performing
Wrong person
High turnover
Not doing their best
Legal issues
Lack of training undermining effectiveness
Unfair labor practices
Perhaps the best way to answer that is to start by listing the sorts of personnel mistakes you don’t want to make while managing. For example, no manager wants to:
• Have your employees not performing at peak capacity
• Hire the wrong person for the job
• Experience high turnover
• Find employees not doing their best
• Have your company taken to court because of your discriminatory actions
• Have your company cited under federal occupational safety laws for unsafe practices
• Allow a lack of training to undermine your department’s effectiveness
• Commit any unfair labor practices
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7. Why is HR Management Important to All Managers?
Improve Profits and Performance
You May Spend Some Time as an HR Manager
HR for Entrepreneurs
Improve profits and performance – Every employee can help improve profits and performance. Managers, especially, can make a difference by hiring, training, and creating an environment in which employees feel motivated to perform.
You may spend some time as an HR manager within the department. Many forward-thinking, profitable companies rotate managers, directors, and executives into and through different departments, especially HR. This gives the individual a chance to bring a significantly different perspective to the regular processes of a given department. And, if you think you will never become a manager, think again.
HR for Entrepreneurs — Even if you plan on starting or working in a start-up, most people graduating in the next few years will either work for a small business or create a small business of their own.
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8. Line Versus Staff Authority
The right to make decisions
To direct the work of others
To give orders
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 and issue orders. Their subordinates are generally involved in work that directly produces or sells the company’s product or service, like sales or manufacturing. 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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9. Line and Staff Aspects of HRM
Line managers involved in:
Recruiting
Interviewing
Selecting
Training
Line and Staff Aspects of HRM — Although most firms have a human resource department with its own manager, all managers tend to get involved in activities like recruiting, interviewing, selecting, and training.
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10. Line-Staff HR Cooperation
Line-Staff HR Cooperation — HR and line managers share responsibility for most human resource activity.
Shared Responsibility
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11. Line Managers’ HR Management Responsibilities
Placement
Orientation
Training
Job performance
Cooperation
Policies and procedures
Controlling labor costs
Employee development
Morale
Health and safety
Line Manager’s Human Resource Responsibilities — All supervisors are responsible for aspects of HR/personnel tasks such as placement, training, controlling labor costs, protecting health and safety, and development of employees.
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12. Organizing the HR Department’s Responsibilities
Recruiters
Equal Employment Opportunity
Job analysts
Compensation managers
Training specialists
Organizing the HR Department’s Responsibilities — The HR department provides specialized assistance such as acting as a recruiter, EEO representative, job analyst, compensation manager, training specialist, or labor relations specialist.
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13. New Ways to Organize the HR Function
New types of HR groups:
Transactional
Corporate
Embedded
Centers of expertise
The transactional HR group uses call centers and outsourced vendors for day-to-day HR support on matters such as changing benefits plans and employee assistance programs to all the company’s employees.
The corporate HR group focuses on giving top management advice on “top level” matters, such as explaining the personnel aspects of the company’s long-term strategic plan.
The embedded HR group places HR professionals in departments, such as sales and production, to provide the HR assistance these departments need.
Centers of expertise groups are like specialized HR consulting firms within the company. For example, they offer specialized assistance in areas such as organizational change.
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14. Trends Influencing HR Management
What human resource managers do and how they do it is changing. Some of the reasons for these changes are obvious, such as is technology. For example, employers now use their intranets to let employees modify their own benefits plans, something they obviously couldn’t do years ago. Other trends shaping human resource management include globalization of competition, deregulation, changes in demographics and the nature of work, and economic challenges.
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15. Trends Influencing HR Management (1)
Globalization
Technological advances
The nature of work
Service jobs
Human capital
Offshoring
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 and legal compliance. Employers now rely on their employees’ motivation and performance to provide them with a competitive advantage.
Globalization — Globalization refers to the tendency of firms to extend their sales, ownership, and/or manufacturing to new markets abroad. Globalization of the world economy and other trends has triggered changes in how companies organize, manage, and use their HR departments.
Technological Advances — Technology is changing everything and changes in technology itself is increasing. Facebookrecruiting is one example.
The Nature of Work — Jobs are changing due to new technological demands. Dramatic increases in productivity have allowed manufacturers to produce more with fewer employees.
Service Jobs — Most newly created jobs in the U.S. are, and will continue to be, in the service sector.
Human Capital — Refers to the knowledge, education, training, skills, and expertise of a firm’s workers.
Offshoring — The search for greater efficiencies; developing countries and economics are prompting employers to export more jobs abroad.
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16. Trends Influencing HR Management (2)
Demographic Trends
“Generation Y”
Retirees
Nontraditional Workers
Workers from Abroad
“Generation Y” — As younger workers enter the workforce they are bringing with them a different set of work-related values than those of their predecessors. For example, they tend to be more family-centric or dual-centric, high-performance and high-maintenance.
Retirees — The “aging workforce” is the biggest trend impacting employers. There aren’t enough younger workers to replace those retiring and as older workers leave, they also take with them significant knowledge.
Nontraditional Workers — These workers hold multiple jobs or have alternative work arrangements (like job sharing). Almost 10% of American workers (13 million) fit this description.
Workers from Abroad — U.S. employers bring about 181,000 foreign workers using the H-1B visa program.
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17. Economic Challenges and Trends
Economic turmoil
Deregulation
Leveraging
Economic globalization
All these trends are happening within a context of economic upheaval. U.S. consumers actually spend more than they earn. The United States itself has become a debtor nation. Thus, the U.S. had to borrow money to keep buying more from abroad than it sold. The context for recovery includes deregulation, leveraging, and economic globalization.
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The New HR Managers
Trends, such as economic trends, mean changes in human resource management practices, and what employers expect from their human resource managers. We’ll look at some specifics.
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The New HR Managers
HR management yesterday and today
Strategic, big picture issues
New ways to provide transactional services
Integrated, talent management approach
Trends of globalization, technology, nature of work, and workforce demographics have implications for how companies now organize, manage, and rely on their HR operations.
Human Resource Management Yesterday and Today — Daily, transactional types of work were the norm for much of the 20th century “personnel” functions. As specialists (e.g., testing) and the labor movement gained ground in the U.S., the Personnel Department changed. Legal compliance issues emerged beginning in the 1930s and 1940s and grew exponentially in the 1960s and 1970s. Globalization and competition continue to reshape the roles of HR today.
They Focus More on Big Picture Issues — HR management has evolved over the years and is now much more involved in strategic planning.
They Use New Ways to Provide Transactional Services — They must offer day-to-day transactions (recruiting, testing, benefits, etc.), but in new ways such as outsourcing benefits administration or using computer-based technology “portals” for employee self-help services.
They take an Integrated, “Talent Management” Approach to Managing Human Resources — HR is now practicing attracting, retaining and motivating the best employees available.
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20. What is Talent Management? (1)
Employee engagement
Measure HR performance and results
Add value
Build high-performance work systems
They Manage Employee Engagement — The HR function must ensure they understand the difference between involvement and commitment. Employees cannot be “checked out” mentally yet still perform at the top of their game.
They Can Measure HR Performance — HR managers are expected to measure their effectiveness. They use performance measures, or metrics, including benchmarking.
They Add Value — The human resource function goes far beyond the transactional activities in the past to include boosting performance and profitability in measurable ways.
They Build High-Performance Work Systems — Managers must focus on productivity and performance improvement. HR practices are invaluable in that effort. A high-performance work system is a set of human resource management policies and practices that together produce superior employee performance.
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21. What is Talent Management? (2)
Evidence-based HR management
Manage ethics
New proficiencies
HR certification
They Understand Evidence-Based HR Management — HR uses data, facts, analytics, scientific rigor, and critical evaluation to support human resource management proposals, decisions, practices, and conclusions.
They Manage Ethics—One survey found that six of the ten most serious ethical issues were human resource related (safety, employee privacy, affirmative action, theft, security of employee records, etc.)
They Have New Proficiencies — Because of their strategic roles, HR professionals must have broader business knowledge and competencies that cover all functional, operational, and strategic issues in the organization.
Talent managers and organization designers
Culture and change stewards
Strategy architects
Operational executors
Business allies
Credible activists
HR Certification — HR managers are turning to certification to illustrate their mastery of modern practices. The Society of Human Resource Management (SHRM) is a primary provider of such certifications.
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22. Strategic HR Management
We’ve seen that exercising strategic judgment is an important human resource manager proficiency. Human resource managers, therefore, need a command of strategic planning methods.
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23. Strategic HR Management
Strengths
Weaknesses
Opportunities
Threats
Strategic Management — A strategic plan is designed to use a firm’s internal strengths and weaknesses to address its external weaknesses and threats. This is often referred to as a SWOT analysis.
HR and Competitive Advantage — HR must be involved in creating competitive advantage – factors that allow an organization to differentiate its products or services from those of its competitors to increase market share. Connecting to and being involved in developing the firm’s strategic plan will help in creating competitive advantage.
(SWOT)
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24. Strategic Planning Basics
Strategic Planning Basics — Managers engage in three levels of strategic planning.
Corporate Strategy — The company-wide level is at the top. This strategy identifies the portfolio of business that comprise the company.
Competitive Strategy — At the business level, the competitive strategy identifies how to build and strengthen the business’s long-term competitive position in the market place.
Functional Strategy — The department level strategy identifies the basic course of action for each department.
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25. What is Strategic HR Management?
Strategic HRM refers to formulating and executing HR policies and practices that produce the employee competencies and behaviors the company needs to achieve its strategic aims.
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HR as a Profit Center
HR Profit Center: Albertson’s Example: Albertson’s Market is used to exemplify the strength of strategic HR. Working as a partner in Albertson’s strategy design and implementation process, the HR team helps Albertson’s achieve its strategic goals and improve performance.
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27. Strategic Human Resource Management Tools
Strategy map
HR scorecard
Digital dashboards
Three important tools are used to translate strategic goals into human resource management policies and activities.
A strategy map provides a departmental performance overview indicating how the department helps achieve the firm’s strategic plan.
An HR scorecard is a process for assigning both financial and non-financial goals or metrics to the HR chain of activities necessary to achieve strategic goals.
Digital dashboards provide a computerized picture of where the firm stands on all metrics related to the HR scorecard.
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The Plan of the Book
Next, we’ll take a quick overview of the remaining sections of this book.
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The Plan of the Book (1)
Ch. 2: Managing equal opportunity and diversity
Ch. 3: Personnel planning, recruiting and talent management
Ch. 4: Testing and selecting employees
Ch. 5: Training and developing employees
Ch. 6: Performance management, appraisals, and careers
This section presents a brief overview of the remaining chapters. However, do not think of
these topics as independent. Instead, each interacts with and affects the others, and all
should fit with the employer’s strategic plan. Since we have covered Chapter 1, we begin with Chapter 2.
Part I: Introduction
Chapter 2: Managing Equal Opportunity and Diversity - What you need to know about equal opportunity laws as they relate to human resource management activities such as interviewing and selecting employees and managing diversity.
Part II: Recruiting and Placing Employees
Chapter 3: Personnel Planning, Recruiting, and Talent Management - How to analyze a job to determine the job’s specific duties and responsibilities and what sorts of people to hire.
Chapter 4: Testing and Selecting Employees – Techniques, such as testing, that you can use to ensure that you’re hiring the right people.
Chapter 5: Training and Developing Employees - Providing the training and development necessary to ensure that your employees have the knowledge and skills required to accomplish their tasks.
Part III: Appraising and Compensating Employees
Chapter 6: Performance Management, Appraisals, and Careers - Techniques for managing and appraising performance and managing careers.
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The Plan of the Book (1)
Ch. 7: Compensating employees Ch. 8: Managing employee ethics, engagement, retention, and fair treatment Ch. 9: Managing labor relations and collective bargaining Ch. 10: Protecting safety and health Appendix: Practical HR tools for managers
Chapter 7: Compensating Employees - How to develop equitable pay plans, including incentives and benefits.
Part IV: Employee Rights and Safety
Chapter 8: Managing Employee Ethics, Engagement, Retention, and Fair Treatment - Ensuring ethical and fair treatment through discipline and grievance management; tools for improving employee engagement and retention.
Chapter 9: Managing Labor Relations and Collective Bargaining – Concepts and techniques concerning the relations between unions and management, including the union-organizing campaign, and negotiating a collective bargaining agreement.
Chapter 10: Protecting Safety and Health - The causes of accidents, how to make the workplace safe, and laws governing your responsibilities in regard to employee safety and health.
Appendix: Practical HR Tools for Managers - Practical human resource management interview questions and other tools for first-line supervisors, managers, and small business owners.
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All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
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