Chapter One Human Resource Management.ppt

Editor's Notes

• #1: Where Are We Now….. We begin with Chapter 1 Introduction to Human Resource Management The purpose of this chapter explains what Human Resource Management is and why it’s important to all managers. We’ll see that human resource management activities such as hiring, training, appraising, compensating, and developing employees are part of every manager’s job. We’ll see that human resource management is also a separate function. The main topics we’ll cover will include what human resource management is, the trends shaping human resource management, human resource management today, the new human resource manager, and the plan of the book. More importantly, the human resource management concepts and techniques you’ll learn in this book can help ensure that you get results—through people. Remember that you can do everything else right as a manager—lay brilliant plans, draw clear organization charts, set up world-class assembly lines, and use sophisticated accounting controls—but still fail, by hiring the wrong people or by not motivating subordinates. On the other hand, many managers—presidents, generals, governors, supervisors—have been successful even with inadequate plans, organization, or controls. They were successful because they had the knack of hiring the right people for the right jobs and motivating, appraising, and developing them. Remember, as you read this book getting results is the bottom line of managing, and that, as a manager, you will have to get those results through people.  
• #12: After studying this chapter, you will be able to: 1-1. Explain what human resource management is and how it relates to the management process. 1-2. Briefly discuss and illustrate each of the important trends influencing human resource management.
• #13: After studying this chapter, you will also be able to: 1-3. List and briefly describe “distributed HR” and other important aspects of human management today. 1-4. List at least four important human resource manager competencies. 1-5. Outline the plan of this book.
• #14: Working for any organization means that you and those around you share common goals, which include an interest in the growth and continuing development of the organization. Some of those common goals include how work is accomplished within the organization. We now begin our study of the elements of the management process and how they relate to human resource management. Note that such individuals generally work together to achieve the common goals of an organization.
• #16: What Is Human Resource Management? – To understand what human resource management is, it’s useful to start with what managers do. Most writers agree that managing involves performing five basic functions: planning, organizing, staffing, leading, and controlling. These functions in total represent the management process. Planning – involves establishing goals and standards; developing rules and procedures; developing plans and forecasts. Organizing – involves giving each subordinate a specific task; establishing departments; delegating authority to subordinates; establishing channels of authority and communication; coordinating the work of subordinates. Staffing – involves 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 – involves getting others to get the job done; maintaining morale, motivating subordinates. Controlling – involves 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.
• #17: These concepts and techniques include the following: 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 employees, and developing managers. Building employee relations and engagement. In addition, what a manager should know about: Equal opportunity and affirmative action. Employee health and safety. Handling grievances and labor relations.
• #23: Why Is HR Management Important to All Managers? Because of the following: To Avoid Personnel Mistakes – managers don’t want to make personnel mistakes, such as not having employees doing their best, hiring the wrong person for the job, experiencing high turnover, having to be in court due to discriminatory actions, being cited for unsafe practices, letting a lack of training undermined department effectiveness, or committing any unfair labor practices. 2. To Improving Profits and Performance – to help ensure that you get results—through people. You May Spend Some Time as an HR Manager – about a third of large U.S. businesses surveyed has appointed non-HR managers to be their top human resource executives. 4. HR for Small Business – you may well end up as your own human resource manager. More than half of the people working in the United States work for small firms. Small businesses as a group also account for most of the 600,000 or so new businesses created every year Carefully studying this book will help you in these areas.
• #24: Line and staff managers focus their energies in different yet related and complementary ways. Let’s talk about the two types of managers and what each does for the firm.
• #25: When the vice president of sales tells her sales director to “get the sales presentation ready by Tuesday,” she is exercising her line authority. Staff authority gives a manager the right to advise other managers or employees. It creates an advisory relationship. When the human resource manager suggests that the plant manager use a particular selection test, he or she is exercising staff authority. In popular usage, people tend to associate line managers with managing departments (like sales or production) that are crucial for the company’s survival. Staff managers generally run departments that are advisory or supportive, like purchasing and human resource management. Human resource managers are usually staff managers. They assist and advise line managers in areas like recruiting, hiring, and compensation.
• #26: Line managers do have many human resource duties. This is because the direct handling of people has always been part of every line manager’s duties, from president down to first-line supervisors. Some line supervisors’ responsibilities for effective human resource management fall under these general headings: 1. Placing the right person in the right job. 2. Starting new employees in the organization (orientation).
• #27: 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.
• #28: 7. Controlling labor costs. 8. Developing the abilities of each person. 9. Creating and maintaining departmental morale. 10. Protecting employees’ health and physical conditions.
• #29: In small organizations, line managers may carry out all these personnel duties unassisted. But as the organization grows, line managers usually need the assistance, specialized knowledge, and advice of a separate human resource staff. In larger firms, the human resource department provides such specialized assistance. This FIGURE 1-1 Human Resource Department Organization Chart Showing Typical HR Job Titles Source: “Human Resource Development Organization Chart Showing Typical HR Job Titles,” www.co.pinellas.fl.us/persnl/pdf/ orgchart.pdf. Courtesy of Pinellas County Human Resources. Reprinted with permission. Examples of typical jobs 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 prepare 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. At the other extreme, the human resource team for a small manufacturer may contain just five or six (or fewer) staff, and have an organization similar to that in Figure 1-1. There is generally about one human resource employee per 100 company employees.
• #30: Many employers are changing how they organize their human resource functions. For example, one survey found that 44% of the large firms surveyed planned to change how they organize and deliver HR services Most plan to use technology to institute more “shared services” (or “transactional”) arrangements. These establish centralized HR units whose employees are shared by all the companies’ departments to obtain advice on matters such as discipline problems. You may also find specialized corporate HR teams within a company. These assist top management in top-level issues such as developing the personnel aspects of the company’s long-term strategic plan. Embedded HR teams is another approach that has HR generalists (also known as “relationship managers” or “HR business partners”) assigned to functional departments like sales and production. They provide the selection and other assistance the departments need. In addition, Centers of expertise are basically specialized HR consulting firms within the company.
• #31: In the continuing development of human resource management, there exist various trends that will help shape its practice and evolution in the coming years.
• #32: Trends are occurring in the environment of human resource management that are changing how employers get their human resource management tasks done. These trends include workforce trends, trends in how people work, technological trends, and globalization and economic trends: Demographic and Workforce Trends. The composition of the workforce will continue to change over the next few years; specifically, it will continue to become more diverse with more women, minority group members, and older workers in the workforce. Trends in How People Work. At the same time, work has shifted from manufacturing jobs to service jobs in North America and Western Europe. Today over two-thirds of the U.S. workforce is employed in producing and delivering services, not products. Example of this is on demand workers like Uber. Improving Performance At Work: HR as a Profit Center Boosting Customer Service. A bank installed special software that made it easier for its customer service representatives to handle customers’ inquiries. However, the bank did not otherwise change the service reps’ jobs in any way. Here, the new software system did help the service reps handle more calls. But otherwise, this bank saw no big performance gains. A second bank installed the same software. But, seeking to capitalize on how the new software freed up customer reps’ time, this bank also had its human resource team upgrade the customer service representatives’ jobs. This bank taught them how to sell more of the bank’s services, gave them more authority to make decisions, and raised their wages. Here, the new computer system dramatically improved product sales and profitability, thanks to the newly trained and empowered customer service reps. Value-added Human resource practices like these improve employee performance and company profitability. Talk About it (Discussion): Discuss three more specific examples of what you believe this second bank’s HR department could have done to improve the reps’ performance Globalization. Refers to companies extending their sales, ownership, and/or manufacturing to new markets abroad. For example, Toyota builds Camrys in Kentucky, while Apple assembles iPhones in China. Free-trade areas—agreements that reduce tariffs and barriers among trading partners—further encourage international trade. NAFTA (the North American Free Trade Agreement) and the EU (European Union) are examples. Economic Trends. Although globalization supported a growing global economy, the past 10 or so years were difficult economically. Look at Figure 1-2, Gross National Product (GNP)—a measure of the United States of America’s total output—it boomed between 2001 and 2007. During this period, home prices (see Figure 1-3) leaped as much as 20% per year. Unemployment remained docile at about 4.7%. Then, around 2007–2008, all these measures fell off a cliff. GNP fell. Home prices dropped by 10% or more (depending on city). Unemployment nationwide soon rose to more than 10%. Technology. It may be technology that most characterizes the trends shaping human resource management today. Let’s take a look at the five main types of digital technologies that are driving this transfer of functionality from HR professionals to automation.
• #33: Employers increasingly use social media—tools such as Twitter, Facebook, and LinkedIn (rather than, say, as many employment agencies) —to recruit new employees. Employers use new mobile applications, for instance, to monitor employee location and to provide digital photos at the facility clock-in location to identify workers. Employers use gaming, new training applications, and websites such as Knack, Gild, and True Office enable employers to inject gaming features into training, performance appraisal, and recruiting. Employers use cloud computing which enable employers to monitor and report on things like a team’s goal attainment and to provide real-time evaluative feedback. Employers also use data analytics, also called talent analytics, which use statistical techniques, algorithms, and problem-solving to identify relationships among data for the purpose of solving particular problems (such as what the ideal candidate’s traits are, or how can I tell in advance which of my best employees is likely to quit?)
• #36: As the challenges continue for today – so does important aspects of Human Resource Management. Let take a look at today’s Human Resource Management.
• #37: A Brief History of Personnel/Human Resource Management “Personnel management” is not new. It dates back to the 1800’s, By 1900, employers set up the first “hiring offices,” training programs, and factory schools. Personnel management had begun. In these early firms, personnel managers took over hiring and firing from supervisors, ran the payroll departments, and administered benefits plans. New union laws were added in the 1930s, equal employment laws came along in the 1960s that made employers more reliant on personnel management to avoid discrimination claims. Now today, a new human resource management is emerging. We’ll look at this next. Distributed HR and the New Human Resource Management More and more human resource management tasks are now being redistributed from a central HR department to the company’s employees and line managers, thanks to digital technologies like mobile phones and social media. Some experts say that if current trends continue, many aspects of HR and talent management will become “fully embedded in how work gets done throughout an organization [distributed], thereby becoming an everyday part of doing business.” Trends Shaping HR: Digital and social media tools Digital and social media tools are changing how people look for jobs, and how companies recruit, retain, pay, and train employees. In doing so, they’ve transformed the practice of human resource management, and created, in a sense, a new human resource management.
• #38: A Quick Summary We can summarize to this point as follows: ● One big consequence of globalized competition, economic, and demographic trends, and the shift to high-tech and service jobs is the growing emphasis by employers on getting the best from their “human capital,” in other words, from their workers’ knowledge, education, training, skills, and expertise. This means, among other things, using human resource methods to improve employee performance and engagement. ● Thanks to digital devices and social media, employers are shifting (distributing) more HR tasks from central human resource departments to employees and line managers. ● This gives many line managers more human resource management responsibilities. ● And it means that many human resource managers can refocus their efforts from day-to-day activities like interviewing candidates to broader, strategic efforts, such as formulating plans for boosting employee performance and engagement. Figure 1-4 illustrates this.
• #39: Today’s human resource managers are more involved in longer term, strategic “big picture” issues. We’ll see in Chapter 3 (Strategy) that strategic human resource management means formulating and executing human resource policies and practices that produce the employee competencies and behaviors the company needs to achieve its strategic aims. We illustrate this throughout this book with Strategic Context features such as on the next slide.
• #40: L.L.Bean illustrates how companies do this. The heart of L.L.Bean’s strategy has always been offering great outdoor equipment with outstanding service and expert advice. As its company history said, “L.L.Bean, Inc., quickly established itself as a trusted source for reliable outdoor equipment and expert advice. The small company grew. Customers spread the word of L.L.Bean’s quality and service.” To provide such service, L.L.Bean needs special people as employees, ones whose love of the outdoors helps them deal knowledgably and supportively with the company’s customers. To paraphrase its Website, L.L.Bean is looking for a special type of employee, one (like its customers) who loves the outdoors, and the company therefore treats its employees just as well as it famously treat its customers. L.L.Bean’s HR policies and practices attract and develop just such employees. For one thing, the company knows just who to recruit for. It wants sociable, friendly, experienced, outdoors-oriented applicants and employees. To attract and cultivate these sorts of employee competencies and behaviors, the company uses multiple interviews to screen out applicants who might not fit in. And L.L.Bean offers an outdoor-oriented work environment and competitive pay and benefits. It was a Fortune “100 Best Companies to Work For” employer in 2015. To help encourage great employee service, L.L.Bean also provides a supportive environment. For example, when its Web sales recently for the first time exceeded phone sales, L.L.Bean closed four local call centers, but arranged for the 220 employees to work from their homes. And instead of sending jobs abroad, the company keeps its jobs close to the town where Leon Leonwood Bean started his company almost 100 years ago. L.L.Bean’s managers built the firm’s strategy and success around courteous, expert service. They know that having the right employees is the key to its success, and that it takes the right blend of human resource practices to attract and nurture such employees. Talk About it (Discussion) : What would you say are (1) L.L.Bean’s strategic aims, (2) its required employee behaviors and skills to achieve these aims, and (3) HR policies and practices it needs to produce these necessary employee behaviors and skills?
• #41: Employers also expect their human resource manager/“people experts” to spearhead employee performance-improvement efforts. Here they can apply three levers. 1. The HR department lever. The HR manager ensures that the human resource management function is delivering services efficiently. For example, this might include outsourcing certain HR activities such as benefits management, and using technology to deliver its services more cost-effectively. 2. The Employee costs lever. For example, the human resource manager takes a prominent role in advising top management about the company’s staffing levels, and in setting and controlling the firm’s compensation, incentives, and benefits policies. 3. The strategic results lever. Here the HR manager puts in place the policies and practices that produce the employee competencies and skills the company needs to achieve its strategic goals. That’s what was done at L.L.Bean, for instance.
• #45: Put simply, evidence-based human resource management means using the best-available evidence in making decisions about the human resource management practices you are focusing on. The evidence may come from the following: actual measurements (such as, how did the trainees like this program?) existing data (such as, what happened to company profits after we installed this training program?) research studies (such as, what does the research literature conclude about the best way to ensure that trainees remember what they learn?) Sometimes, companies translate their findings into what management gurus call high-performance work systems, which are “sets of human resource management practices that together produce superior employee performance.”
• #46: The bottom line is that today’s employers want their human resource managers to add value by boosting profits and performance.
• #47: As one example, PepsiCo has a goal to deliver “Performance with Purpose”—in other words, to deliver financial performance while also achieving human sustainability, environmental sustainability, and talent sustainability. PepsiCo wants to achieve business and financial success while leaving a positive imprint on society (click www.pepsico.com, then click What We Believe, and then Performance with Purpose).
• #48: Engaged employees “experience a high level of connectivity with their work tasks,” and therefore work hard to accomplish their task-related goals. Employee engagement is important because it drives performance.
• #49: In this new edition, you will find features that are titled: IMPROVING PERFORMANCE: HR TOOLS FOR LINE MANAGERS AND ENTREPRENURS. These features highlight actual tools and practices any manager can use to improve performance at work. IMPROVING PERFORMANCE: HR AS A PROFIT CENTER. We’ve seen that employers need human resource management practices that add value. These show actual examples of how human resource management practices add measurable value—by reducing costs or boosting revenues. IMPROVING PERFORMANCE: HR PRACTICES AROUND THE GLOBE. These features highlight how actual companies around the globe use effective HR practices to improve their teams’ and companies’ performance. IMPROVING PERFORMANCE THROUGH HRIS. These features highlight how managers use human resource technology to improve performance. DIVERSITY COUNTS. These features provide insights and guidelines for managing a diverse workforce. SOCIAL MEDIA AND HR. These features explain how managers use social media to improve human resource performance. Translating Strategy into HR Policies and Practices Case: Improving Performance at The Hotel Paris. These features in Chapters 3-18 explain how HR Director Lisa Cruz aligns HR practices with the hotel’s strategy for superior guest services. There is a strategy map starting in Chapter 3 located in MyManagementLab at the end of the chapter, and the overall map is on the inside back cover of this text and outlines the relationships involved.
• #50: Chapter Contents Overview Following is a brief overview of the chapters and their content for Part 1. Part 1: Introduction Chapter 1: Introduction to Human Resource Management. The manager’s human resource management jobs; crucial global and competitive trends; how managers use technology and modern HR measurement systems to create high performance work systems. Chapter 2: Equal Opportunity and the Law. What you should know about equal opportunity laws; how these laws affect activities such as interviewing, selecting employees, and evaluating performance; Know Your Employment Law features highlight important laws in each chapter. Chapter 3: Human Resource Management Strategy and Analysis. What strategic planning is; strategic human resource management; building high-performance HR practices; tools for evidence-based HR.
• #51: Chapter Contents Overview The following is a brief overview of the chapters and their content for Part 2. Part 2: Recruitment, Placement, and Talent Management Chapter 4: Job Analysis and the Talent Management Process. How to analyze a job; how to determine the human resource requirements of the job, as well as its specific duties; and what talent management is. Chapter 5: Personnel Planning and Recruiting. Human resource planning; determining what sorts of people need to be hired; recruiting them. Chapter 6: Employee Testing and Selection. Techniques you can use to ensure that you’re hiring the right people. Chapter 7: Interviewing Candidates. How to interview candidates effectively.
• #52: Chapter Contents Overview Following is a brief overview of the chapters and their content for Part 3. Part 3: Training and Development Chapter 8: Training and Developing Employees. Providing the training and development to ensure that your employees have the knowledge and skills needed to accomplish their tasks. Chapter 9: Performance Management and Appraisal. Techniques you can use for appraising employee performance. Chapter 10: Managing Careers and Retention. Causes of and solutions for employee turnover, and how to help employees manage their careers.
• #53: Chapter Contents Overview Following is a brief overview of the chapters and their content for Part 4. Part 4: Compensation Chapter 11: Establishing Strategic Pay Plans. How to develop equitable pay plans for your employees. Chapter 12: Pay for Performance and Financial Incentives. Pay-for-performance plans such as financial incentives, merit pay, and incentives that help tie performance to pay. Chapter 13: Benefits and Services. Providing benefits that make it clear the firm views its employees as long-term investments and is concerned with their welfare.
• #54: Chapter Contents Overview Following is a brief overview of the chapters and their content for Part 5. Part 5: Enrichment Topics in Human Resource Management Chapter 14: Building Positive Employee Relations. Developing employee relations programs and employee involvement strategies; ensuring ethical and fair treatment through discipline and grievance processes. Chapter 15: Labor Relations and Collective Bargaining. How to deal with unions, including the union organizing campaign; negotiating and agreeing upon a collective bargaining agreement between unions and management; and managing the agreement via the grievance process. Chapter 16: Safety, Health, and Risk Management. How to make the workplace safe, including the causes of accidents; laws governing your responsibilities for employee safety and health. Chapter 17: Managing Global Human Resources. Special topics in managing the HR side of multinational operations. Chapter 18: Managing Human Resources in Small and Entrepreneurial Firms. Special topics for managing human resources in smaller firms.
• #55: In practice, do not think of each of this book’s topics as being unrelated to the others. Each topic interacts with and affects the others, and all should align with the employer’s strategic plan.
• #56: In review of Chapter 1, you should now be able to: Explain what human resource management is and how it is related to the management process. Briefly discuss and illustrate each of the important trends influencing human resources management. List and briefly describe “distributed HR” and other important aspects of human management today. List at least four important human resources manager competencies. Outline the plan of this book.