Introduction to Human Resource Management 1 Introduction to Human Resource Management The purpose of this chapter is to explain 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. And we’ll see that human resource management is also a separate function, usually wit its own human resource or “HR” manager. The main topics we’ll cover include the meaning of human resource management; why human resource management is important to all managers, global and competitive trends, human resource management trends, and the plan of this book. The framework above (which introduces each chapter) makes this point: That to formulate and apply HR practices like testing and training you should understand the strategic and legal context in which you’re managing. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Learning Objectives Explain what human resource management is and how it relates to the management process. Show with examples why human resource management is important to all managers. Illustrate the human resources responsibilities of line and staff (HR) managers. LEARNING OBJECTIVES After studying this chapter, you will be able to: Explain what human resource management is and how it relates to the management process. Show with examples why human resource management is important to all managers. Illustrate the human resources responsibilities of line and staff managers. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Learning Objectives Briefly discuss and illustrate each of the important trends influencing human resource management. List and briefly describe important traits of today’s human resource managers. LEARNING OBJECTIVES After studying this chapter, you will be able to: Briefly discuss and illustrate each of the important trends influencing human resource management. List and briefly describe important traits of today’s human resource managers. Define and give an example of evidence-based human resource management. Outline the plan of this book. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

What is human resource (HR) management and why is it important? Organizations have been described in various ways. We will focus our early efforts on understanding an organization as groups of individuals with formally assigned roles. Note that such individuals generally work together to achieve the common goals of an organization. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

The Management Process Planning Organizing (Staffing) Leading Controlling Understanding the five elements of what managers do (planning, organizing, staffing, leading, and controlling) will assist you in your career. For example, no matter what your job, planning involves establishing goals, rules and procedures and attempting to forecast the future. Planning will enhance your ability to manage people and functions. For our purposes, we will focus our efforts on basic staffing functions. These include: Acquiring talented employees Training new hires and existing managers and employees Creating and administering effective performance appraisals Properly compensating employees, and, Attending to concerns about labor relations, health, safety, and fairness Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

HRM Conducting job analysis Planning labor needs Acquiring talented employees Orienting and training new hires and existing managers and employees Creating and administering effective performance appraisals Managing wages (compensating employees) Attending to concerns about labor relations, health, safety, and fairness Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Human Resource (HR) Responsibilities of Line and Staff Managers 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. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

All managers are HR managers because they all get involved in activities like recruiting, interviewing, selecting and training. The HR function is primarily concerned with the “staffing” component of the five management processes, namely, planning, organizing, staffing, leading, and controlling. The key elements of staffing include: Job analysis Planning labor needs Recruiting Orienting and training new employees Compensation Incentives and benefits Performance appraisal Communicating Training and development, and Employee commitment In addition, HR is responsible for compliance with federal, state and local laws, safety, and handling grievances and labor relations. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

You can do everything else right as a manager; Make brilliant plans Draw clear organization charts Set-up world class assembly lines But still fail!!! By hiring the wrong people or by not motivating your subordinates… On the other hand, many managers have been successful even with inadequate plans, organizations or controls. They were successful because they had the right people for the right jobs and motivating, appraising and developing them. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Line and Staff Managers Line authority gives you the right to issue orders Staff authority gives you the right to advise others in the organization If you are a line manager, you will hold responsibilities to issue orders, provide directions and establish rules and procedures. For example, as a sales manager, you will be responsible for requiring adherence to your rules relative to sales quotas and goals. On the other hand, an HR manager is a staff manager and, like all staff managers, is responsible for influencing and advising others. Within the HR department you may be responsible for establishing goals and giving orders to those in your department thus serving as a line manager within HR. Your principal duty to the organization as a whole, however, is that of a staff function, much the same as a purchasing department. Staff departments may include finance, accounting, and logistics. Sales, production, and operations departments generally are considered line functions. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Line and Staff Managers If you are a line manager, you will hold responsibilities to issue orders, provide directions and establish rules and procedures. Staff authority gives the manager the right to advise other managers or employees. HR manager is a staff manager and like all staff managers, is responsible for influencing and advising others. Within the HR department you may be responsible for establishing goals and giving orders to those in your department thus serving as a line manager within HR. If you are a line manager, you will hold responsibilities to issue orders, provide directions and establish rules and procedures. For example, as a sales manager, you will be responsible for requiring adherence to your rules relative to sales quotas and goals. On the other hand, an HR manager is a staff manager and, like all staff managers, is responsible for influencing and advising others. Within the HR department you may be responsible for establishing goals and giving orders to those in your department thus serving as a line manager within HR. Your principal duty to the organization as a whole, however, is that of a staff function, much the same as a purchasing department. Staff departments may include finance, accounting, and logistics. Sales, production, and operations departments generally are considered line functions. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

HR Managers HR managers are usually staff managers. They assist and advise line managers in areas like recruiting, hiring and compensation. However, line managers still have human resource duties. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

HR Managers A line function: HR managers directs the activities of people in his or her department or in the related areas. A coordinative function: HR manager also coordinates personnel activities with his functional authority. He ensures that line managers are implementing the firm’s HR policies and practices. Staff function: Assisting and advising line managers. He advises the CEO so the CEO can better understand the HR aspects of the company’s strategic options. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Human Resource Duties Line Managers Job placement Orientation & Training Performance Cooperation Labor costs Development If you are a line manager, your duties and responsibilities concern how well you can successfully orient and integrate new hires into your unit, maintain their health and safety, supervise and motivate them, and effectively manage department costs. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Sample HR organizational chart for a small company Human Resource Duties Staff Managers Line function inside of HR department Coordination Assist and advise Line managers require support to perform their jobs properly. If you are a line manager, you will have the help of the people in your HR department. HR professionals ensure adherence to company policies, provide training, advice on motivating your employees, and other support as needed. Sample HR organizational chart for a small company Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Line and Staff HR Management The line manager describes the qualifications of employees need to fill specific positions. The the HR team takes over: they develop sources of qualified applicants, then conduct initial screening interviews, administer the appropriate tests, refer the best applicants to the line manager. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Evolution of HRM Period before industrial revolution The society was primarily an agriculture economy with limited production. Number of specialized crafts was limited and was usually carried out within a village or community with apprentices assisting the master craftsmen. Communication channel were limited. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Evolution of HRM Period of industrial revolution (1750 to 1850) Industrial revolution marked the conversion of economy from agriculture based to industry based. Modernization and increased means if communication gave way to industrial setup. A department  was set up to look into workers wages, welfare and other related issues. This led to emergence of personnel management with the major task as Worker’s wages and salaries Worker’s record maintenance Worker’s  housing facilities and health care Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Evolution of HRM An important event in industrial revolution was growth of Labour Union (1790)  The works working in the industries or factories were subjected to long working hours and very less wages. With growing unrest, workers across  the world started protest and this led to the establishment of labour unions. To deal with labour issues at one end and management at the other Personnel Management department had to be  capable of politics and diplomacy, thus the industrial relation department emerged. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Evolution of HRM Post Industrial revolution The term Human resource Management saw a major evolution after 1850. Various studies were released and many experiments were conducted during this period which gave HRM altogether a new meaning and importance. A brief overview of major theories release during this period is presented below: Frederick W. Taylor gave principles of scientific management (1857 - 1911) led to the evolution of scientific human resource management approach which was involved in Worker’s training Maintaining wage uniformity Focus on attaining better productivity Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Evolution of HRM Hawthorne studies, conducted by Elton Mayo & Fritz Roethlisberger (1927 to 1940). Observations and findings of Hawthorne experiment shifted the focus of human resource from increasing worker’s productivity to increasing worker’s efficiency through greater work satisfaction. Douglas McGregor Theory X and Theory Y (1960) and Abraham Maslow’s Hierarchy of needs ( 1954) These studies and observations led to the transition from the administrative and passive Personnel Management approach to a more dynamic Human Resource Management approach which considered workers as a valuable resource. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Evolution of HRM As a result of these principles and studies, Human resource management became increasingly line management function, linked to core business operations. Some of the major activities of HR department are listed as; Recruitment and selection of skilled workforce. Motivation and employee benefits Training and development of workforce Performance related salaries and appraisals. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Evolution of HRM Strategic Human Resource Management Approach With increase in technology and knowledge base industries and as a result of global competition, Human Resource Management is assuming more critical role today. Its major accomplishment is aligning individual goals and objectives with corporate goals and objectives. Strategic HRM focuses on actions that differentiate the organization from its competitors and aims to make long term impact on the success of organization. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Important Trends in Human Resource Management In the continuing development of human resource management, there exist various trends that will help shape its practice and evolution in the coming years. 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 one that is more strategic. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Trends in Human Resource Management Globalization Competition Technological innovation More high-tech & service jobs More knowledge work Many trends are emerging and will continue to change the shape, size, and function of HR management. Some of these trends we will discuss shortly include: Globalization Competition Deregulation Increased indebtedness Technological innovation More high-tech & service jobs Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Globalization Globalization refers to the tendency of firms to extend their sales, ownership and manufacturing to new markets abroad. Sales expansion Lower labor costs Forming partnerships Becoming more competitive Globalization refers to the tendency of firms to extend their sales, ownership, and/or manufacturing to new markets abroad. Dell, for example, is planning to supply PCs to China. China is expected to become the largest market for computers in the world. Companies such as Toyota, BMW, and Honda build and sell some of their vehicles here in the U.S. and even ship them to other countries from the U.S. The reasons for going global are many including: reaching new markets, selling more products or services, lower labor costs, forming partnerships, and becoming more competitive. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Globalization Dell, for example, is planning to supply PCs to China. China is expected to become the largest market for computers in the world. Companies such as Toyota, Ford, Hyundai build and sell some of their vehicles here in different countries and even ship them to other countries. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Globalization Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Globalization Companies expand for several reasons; Sales expansion Cut labor costs New foreign products Forming partnerships Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Technological Trends Smart phones Tablet computers Facebook Job seeking The impact and growth in the use of smart phones and tablet computers, such as the iPad, have opened doors to people and the workplace in a way that previously has never occurred. The speed of information exchange has contributed to the growth of social networking sites such as Facebook and LinkedIn. Facebook, for example, offers Facebookrecruiting which provides a rapid conduit between employers and job-seekers. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Technological Trends The impact and growth in the use of smart phones and tablet computers, such as the iPad, have opened doors to people and the workplace in a way that previously has never occurred. The speed of information exchange has contributed to the growth of social networking sites such as Facebook and LinkedIn. Facebook, for example, offers Facebookrecruiting which provides a rapid conduit between employers and job-seekers. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Technological Trends Dell and thousands of other employees established call-center jobs to India. Zara does not need expensive inventories. Zara operates its own internet based worldwide distribution network The impact and growth in the use of smart phones and tablet computers, such as the iPad, have opened doors to people and the workplace in a way that previously has never occurred. The speed of information exchange has contributed to the growth of social networking sites such as Facebook and LinkedIn. Facebook, for example, offers Facebookrecruiting which provides a rapid conduit between employers and job-seekers. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Trends in the Nature of Work Technology has also had a huge impact on how people work and on the skills and training today’s workers need. High-tech jobs Service jobs Knowledge work and human capital As you enter the workforce or continue in your jobs, you are more likely to enter commands into a computer than perform dangerous physical labor. The “brawn to brains” changes have been fueled by moving manufacturing jobs to low-wage countries. Just-in-time (JIT) manufacturing processes have connected the customer with the manufacturer and the distributor in real time resulting in more precise scheduling, production and delivery. Another trend, human capital, refers to the knowledge, education, training, skills, and expertise of a firm’s workers. Today’s (and tomorrow’s) best jobs will go to the individuals with the best reading, math, and communication skills. In other words, the best knowledge workers will be hired first. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Trends in the Nature of Work Another trend, human capital, refers to the knowledge, education, training, skills, and expertise of a firm’s workers. Today’s (and tomorrow’s) best jobs will go to the individuals with the best reading, math, and communication skills. In other words, the best knowledge workers will be hired first Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Workforce and Demographic Trends Although you are in college now – perhaps some or many of you work as well – throughout your careers you will need to understand the people around you. One aspect of the changing nature of the workplace has to do with the age of the people with whom you work. Other factors include whether those around you come from other countries and the cultural qualities they represent. Conversely, if you are a nontraditional or older worker or come from abroad, understanding the nature of those around you will enable you to be more productive and make greater contributions. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Demographic Trends According to the Bureau of Labor Statistics, during the twenty-year period between 1998 and 2018, the number of white, non-Hispanic workers will decrease in the United States. The black and Asian workforce will increase. In fact, those members of the workforce of Hispanic origin will increase more than 7% while the percentage of younger workers will decrease. Most telling, perhaps, is that workers over the age of 55 will almost double from 12.4% to 23.9%! Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

“Generation Y” Workers Many younger workers may have different work values than their parents. Older employees were more work-centric but younger workers tend to be more family-centric or dual-centric. Considered to be high-performance and high-maintenance Fair and direct supervisors Creative challenges Faster and better workers “Generation Y” workers (those born from 1977-2002, also called “Millenials”) have, according to one expert, “…been pampered, nurtured, and programmed with a slew of activities….” Consequently, this generation: Is considered to be both high-performance and high-maintenance Wants fair and direct supervisors who are highly engaged in their professional development Seeks out creative challenges and view colleagues as vast resources from whom to gain knowledge Wants to make an important impact on Day 1 Wants small goals with tight deadlines so they can build up ownership of tasks, and Aims to work faster and better than other workers Consider to what extent you identify with any or all of these elements and what they might mean to those around you who are not of your generation. Keep in mind these descriptions are in comparison to baby-boomers and Generation X workers who have different characteristics. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

Economic Challenges and Trends Inflation rates Interest rates Gross National Income Economic crisis Recessions An important measure of U.S. total economic output, the Gross National Product (GNP), boomed between 2001 and 2008. Home prices soared and unemployment was low. Economically speaking, somewhere between 2007 and 2008, however, everything fell off a cliff. Today, unemployment remains at a high and sustained 9.1% while home prices may have dropped 20% or more. Financial institutions held enormous amounts of worthless debt on their books while lending dried up. In effect, the economy tanked. While this situation will improve, global economic impacts have been felt and will continue to be felt for some time. The human resource management profession must continually evolve and change keeping pace with the changes in the global economy. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

The New Human Resource Managers Transactional Services Talent Management Competencies Big picture Ethics Employee Engagement Performance, results, evidence-based practice If you had been working as an HR professional after World War II, your duties would have been significantly different than they are today. Early in the HR profession, most work was transactional in nature and involved such things as payroll and benefits administration and hiring and firing. Today, however, the scope of responsibilities is vastly different. New responsibilities include finding new ways to get the job done. Getting the job done may include outsourcing routine functions including payroll and benefits or installing the company’s own internal social networking sites. In addition, the new HR managers take an integrated “talent management” approach to managing HR. Managing talent now includes managing ethics, employee engagement, adding value, having more and varied core competencies, and measuring HR performance and results. You may wish to consider what ethics are. Are ethical considerations different for different people? In what ways should HR be involved in managing ethics? Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall