Chapter-01 Introduction to Human Resource Management

The main purpose of this chapter is to provide you with an introductory overview of what human resource management is, and of why it is important to all managers. We’ll see that human resource management activities such as hiring, training, compensating, appraising, and developing employees are part of every manager’s job. And we’ll see that human resource management is also a separate business function, usually with its own human resource or “HR” manager. The main topics we’ll cover include the manager’s human resource management jobs, global and competitive trends effecting human resource management, and how managers use modern human resource management methods to create high-performance companies and work systems.

HUMAN RESOURCE MANAGEMENT AT WORK

What is human resource management?

Management process include five basic functions: planning, organizing, staffing, leading, and controlling.

Planning : Establishing goals and standards; developing rules and procedures; developing plans and forecasting.

Organizing : Giving each subordinate a specific task; establishing departments; delegating authority to subordinates; establishing channels of authority and communication; coordinating the work of subordinates.

Staffing : Determining what type of people should be hired; recruiting prospective employees; selecting employees; setting performance standards; compensating employees; evaluating performance; counseling employees; training and developing employees.

Leading : Getting others to get the job done; maintaining morale; motivating subordinates.

Controlling : Setting standards such as sales quotas, quality standards, or production levels; checking to see how actual performance compares with these standards; taking corrective action as needed.

Human resource management is the process of acquiring, training, appraising, and compensating employees, and of attending to their labor relations, health and safety, and fairness concerns.

• Conducting job analyses (determining the nature of each employee’s job)
• Planning labor needs and recruiting job candidates
• Selecting job candidates
• Orienting and training new employees
• Managing wages and salaries (compensating employees)
• Providing incentives and benefits
• Appraising performance
• Communicating (interviewing, counseling, disciplining)
• Training and developing managers
• Building employee commitment

And what a manager should know about:

• Equal opportunity and affirmative action
• Employee health and safety
• Handling grievances and labor relations

Why is human resource management important to all managers?

The personnel mistakes you don’t want to:

• Hire the wrong person for the job
• Experience high turnover
• Have your people not doing their best
• Waste time with useless interviews
• Have your company taken to court because of discriminatory actions
• Have your company cited under federal occupational safety laws for unsafe practices
• Have some employees think their salaries are unfair and inequitable relative to others in the organization
• Allow a lack of training to undermine your department’s effectiveness
• Commit any unfair labor practices

Line and staff aspects of human resource management

Authority is the right to make decisions, to direct the work of others, and to give orders.

Line authority gives managers the right(or authority) to issue orders to other managers or employees.
It creates a superior-subordinate relationship.
Line managers have line authority.

Staff authority gives the manager the right(authority) to advise other managers or employees.
It creates an advisory relationship.
Staff managers have staff authority.

Line manager’s human resource duties

1. Placing the right person on the right job
2. Starting new employees in the organization(orientation)
3. Training employees for jobs that are new to them
4. Improving the job performance of each person
5. Gaining creative cooperation and developing smooth working relationships
6. Interpreting the company’s policies and procedures
7. Controlling labor costs
8. Developing the abilities of each person
9. Creating and maintaining department morale
10. Protecting employees’ health and physical condition

Human resource manager’s duties

1. A line function. The human resource manager directs the activities of the people in his or her own department and in related service areas(like the pant cafeteria).
2. A coordinative function. Human resource managers also coordinate pernonnel activities, a duty often referred to as functional authority (or functional control).
3. Staff(assist and advise) functions. Assisting and advising line managers is the heart of the human resource manager’s job.

Human resource management specialties include:

• Recruiters. Search for qualified job applicants.
• Equal employment opportunity (EEO) coordinators. Investigate and resolve EEO grievances, examine organizational practices for potential violations, and compile and submit EEO reports.
• Job analysts. Collect and examine information about jobs to prpare job descriptions.
• Compensation managers. Develop compensation plans and handle the employee benefits program.
• Training specialists. Plan, organize, and direct training activities.
• Labor relations specialists. Advise management on all aspects of union-management relations.

HR organization chart for a large organization

• Administrative operations - Andrea Dickson - Executive Vice President
• Clifford A. Brown - Interim Associate Vice President Human Resources
• Calandra E.Jackson - Secretary III
• Functions
  1. Cooperative Initiative
  - Academic Personnel
  - Equal Opportunity
  - Labor Relations
  - Payroll
  - Risk Management
  2. Human Resource policy
  3. Human Resources Division Standards & Strategic Planning
• Jobs
  1. Jacqueline Foster - Manager - Policy Development and Analysis & Administrative Support
  - HR Communications
  - Research, Policy Development and Coordination
  - Collective Bargaining Support
  - Budget and Administrative Services
  2. Brett Green - Director - Total Compensation & Wellness
  - Medical, Dental & Life Plan Administration
  - Retirement Plan Administration
  - Compensation Administration
  - Classification Administration
  - Disability Management
  3. Mark Hansknecht - IT Manager - Systems Support and Data Integrity
  - Desk Top Support
  - HR Reports
  - Technical Support
  - Website Management
  - Project Management of IT Project
  - HR Data Integrity Initiatives
  4. Queen F. McMiller - Director - Employment Service Center
  - Human Resource Consulting
  - Personnel Transaction Audit/Processing
  - Data Entry
  - Call/Self Service Center
  - Clerical Testing
  - On-Line Hiring
  - Process Improvement/Work Flow
  5. Mildred S. Jett - Organization and Employee Development
  - Leadership Development
  - Career and Professional Development
  - Progression and Succession Planning
  - Organizational Development Consulting
  - Technical Training and Development
  - Self-Service Tools/Employee Development

(Read more: http://wayne.edu/hr/about/org-chart.php)

HR Organizational Chart (Small Company)

• Manager Human Resources
  - Human Resources Coordinator
  - Office Generalist

Cooperative Line and Staff HR Management

In summary, human resource management is part of every manager’s job.

From Line Manager to HR Manager

THE CHANGING ENVIRONMENT OF HUMAN RESOURCE MANAGEMENT

Changes are occuring today that are requiring human resource managers to play an increasingly central role in managing companies. These changes or trends include globalization, changes in the nature of work, and technology.

Globalization Trends

Globalization is the tendency of firms to extend their sales, ownership, and/or manufacturing to new markets abroad.

Companies expand abroad for several reasons.

• Sales expansion is one.
• Some manufacturers seek new foreign products and services to sell, and to cut labor costs.

Globalization’s Implications

• For business people, globalization’s essential characteristic is this: 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.
• For consumers it means lower prices and higher quality on practically everything from computers to car to air travel, but also the prospect of working harder, and perhaps having less secure jobs.
• For business owners globalizing means benefits like reaching millions of new consumers, but also the considerable threat of facing new and powerful global competitors at home.

Technological Trends

The Spanish retailer Zara operates its own Internet-based worldwide distribution network, linked to the checkout registers at its stores around the world.

Trends in the Nature of Work

One implication is that technology has also had a huge impact on how people work, and on the skills and training today’s workers need.

• High-Tech Jobs: For example, skilled machinist
• Service Jobs: global competition, just-in-time manufacturing techniques.
• Knowledge Work and Human Capital: require more education and more skills. Human capital refers to the knowledge, education, training, skills, and expertise of a firm’s workers.

Nature of Work: Implications for HR. effective human resource management.

Workforce Demographic Trends

At the same time, workforce demographic trends are making finding and hiring good employees more of a challenge. In the next few years, employers will face labor shortage.

THE CHANGING ROLE OF HUMAN RESOURCE MANAGEMENT

With these trends, the human resource manager’s job has grown broader and more strategic over time.

Strategic Human Resource Management

What Is Strategic Planning?

A strategic plan is the company’s plan for how it will match its internal strengths and weaknesses with external opportunities and threats in order to maintain a competitive advantage. The essence of strategic planning is to ask, “Where are we now as a business, where do we want to be, and how should we get there?”

What Is Strategic Human Resource Management?

Strategic human resource management means formulating and executing human resource policies and pratices that produce the employee competencies and behaviors the company needs to achieve its strategic aims.

Creating High-Performance Work Systems

Top five business issues: competition for market share, price competition/price control, governmental regulations, need for sales growth, and need to increase productivity.

Effective human resource management practices can improve performance in three main ways, in particular through the use of technology, through effective human resource practices (such as testing and training), and by instituting high-performance work systems.

Managing with Technology

Technological applications improve HR’s performance in four main ways: self-service, call centers, productivity improvement, and outsourcing.

Effective HR Practices

For example, personality testing, well-trained employees.

High-Performance Work Systems

A high-performance work system is an integrated set of human resource management policies and practices that together produce superior employee performance.

High-performance work systems include these practices:

• employment security
• selective hiring
• extensive training
• self-managed teams and decentralized decision making
• reduced status distinctions between managers and workers
• information sharing
• contingent (pay-for-performance) rewards
• transformational leadership (for instance, in terms of inspirational motivation)
• measurement of management practices
• emphasis on high-quality work

Measuring the Human Resource Management Team’s Performance

The fundamental requirement for such measurability is that the human resource manager needs the numbers. Specifically, he or she needs quantitative performance measures (metrics).

Five Sample HR Metrics

Absence rate = [(#Days absent in month)/(Average # of employees during mo.)*(# of workdays)]*100
# Analyze why and how to address isue.

Cost per hire = (Advertising+agency fees+employee referrals+travel cost of applications and staff+relocation costs+recruiter pay and benefits)/number of hires
# Determine what your recruiting function can do to increase savings/reduce costs, and so on.

HR expense factor = HR expense/total operating expense
# Determine if expenditures exceeded, met, or fell below budget.

Time to fill = Total days elapsed to fill requisitions/number hired
# How efficient/productive is recruiting function?

Turnover rate = [# of separations during mo./average # of employees during mo.]*100
# Determine what organization can do to improve retention efforts.

Managing with the HR Scorecard Process

The HR Scorecard is a concise measurement system.

THE HUMAN RESOURCE MANAGER’S PROFICIENCIES

Four Proficiencies

• HR proficiencies represent traditional knowledge and skills in areas such as employee selection, training, and compensation.
• Business proficiencies reflect human resource professionals’ new strategic role.
• HR managers also require leadership proficiencies.
• Finally, the HR manager needs learning proficiencies.

HR Certification

The Society for Human Resource Management’s (SHRM) HR professional certification exams.

• SPHR(Senior Professional in HR) certificate
• PHR(Professional in HR) certificate

Managing Ethics

Ethics refers to the standards someone uses to decide what his or her conduct should be.

SUMMARY

1. All managers perform certain basic functions–planning, organizing, staffing, leading, and controlling. These represent the management process.
2. Staffing, personnel management, or human resource management includes activities like recruiting, selecting, training, compensating, appraising, and developing employees.
3. HR management is a part of every manager’s responsibilities. These responsibilities include placing the right person in the right job, and then orienting, training, and compensating to improve his or her job performance.
4. The HR department carries out three main functions. The HR manager exerts line authority in his or her unit and implied authority elseshere in the organization. He or she ensures that the organization’s HR objectives and policies are coordinated and implemented. And he or she provides various staff services to line management, such as partnering with the CEO in designing the company’s strategy, and assisting in the hiring, training, evaluating, rewarding, promoting, and disciplining of employees at all levels.
5. Trends such as globalization, technological advances, and deregulation mean that companies must be more competitive today. Other important trends include growing workforce diversity and changes in the nature of work, such as the movement toward a service society and a growing emphasis on human capital.
6. For the HR manager, the focus on competitiveness and productivity demands measurability. Management expects HR to provide measurable, benchmark-based evidence regarding HR’s current efficiency and effectiveness, and regarding the expected efficiency and effectiveness of its new or proposed programs.
7. HR managers often use HR Scorecards to facilitate the measurement process. The HR Scorecard is a visual and/or computerized model that enables managers to demonstrate how HR contributes to the company’s financial success. It shows the measurable, cause-and-effect links between three things:(1) HR activities (such as improving the firm’s incentive plan),(2)intermediate employee results (such as improved morale), and (3) end-result company metrics(such as improved customer service and higher profits).
8. In this book, several themes and features emphasize particularly important issues, and provide continuity from chapter to chapter. For example, HR management is the responsibility of every manager–not just those in the HR department. HR is a strategic partner in the strategy development process. HR works with other top managers to formulate the company’s trategy as well as to execute it.