1. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

2. Managing Human Resources Today
Chapter 1
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

3. When you finish studying this chapter, you should be able to:
Answer the question, “What is human resource management?”
Discuss the components of the changing environment of human resource management
Describe the nature of strategic planning
Give examples of human resource management’s role as a strategic partner
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

4. What is human resource management?
Human Resource (HR) Management
Refers to the practices and policies you need to carry out the personnel aspects of your management job
Human resource (HR) 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
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

5. Human Resource Management Practices and Policies
Conducting job analyses
Planning labor needs and recruiting job candidates
Selecting job candidates
Orienting and training new employees
Appraising performance
Managing wages and salaries
Providing incentives and benefits
Communicating
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

6. What a Manager Should Know About
Equal opportunity, ethics, and affirmative action
Employee health and safety, and ethical treatment
Grievance and labor relations
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

7. Why is hr management important to all managers?
Personnel mistakes you don’t want to make:
Having your employees not performing at peak capacity
Hiring the wrong person for the job
Experiencing high turnover
Finding employees not doing their best
Having your company taken to court because of your discriminatory actions
Personnel mistakes you don’t want to make
Hiring the wrong person for the job
Experiencing high turnover
Finding employees not doing their best
Having your company taken to court because of your discriminatory actions
Having your company cited under federal occupational safety laws for unsafe practices
Allowing a lack of training to undermine your department’s effectiveness
Committing any unfair labor practices
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

8. Why is HR management important to all managers? (cont.)
Personnel mistakes you don’t want to make:
Having your company cited under federal occupational safety laws for unsafe practices
Allowing a lack of training to undermine your department’s effectiveness
Committing any unfair labor practices
Personnel mistakes you don’t want to make
Hiring the wrong person for the job
Experiencing high turnover
Finding employees not doing their best
Having your company taken to court because of your discriminatory actions
Having your company cited under federal occupational safety laws for unsafe practices
Allowing a lack of training to undermine your department’s effectiveness
Committing any unfair labor practices
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

9. Why study this book?
Can help ensure that you get results—through people
If you are managing your own small business, you’ll have to be skilled at human resource management
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

10. Line Versus Staff Authority
The right to make decisions
To direct the work of others
To give orders
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

11. Line Versus Staff Authority
Line managers
Authorized to give orders
Line managers are associated with managing functions (like sales or production) that the company needs to exist
Line Versus Staff Authority
Line managers are authorized to give orders
In charge of accomplishing the organization’s basic goals
Staff managers assist and advise line managers in accomplishing these goals
HR managers are generally staff managers
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

12. Line Versus Staff Authority
Staff managers
Assist and advise line managers in accomplishing these goals
Staff managers generally run departments that are advisory or supportive, like purchasing, human resource management, and quality control
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

13. Line Managers’ HR Responsibilities
Placing the right person in the right job
Starting new employees in the organization
Training employees for jobs that are new to them
Improving the job performance of each person
Gaining creative cooperation and developing smooth working relationships
Line Managers’ HR Responsibilities
Placing the right person in the right job
Starting new employees in the organization
Training employees for jobs that are new to them
Interpreting the company’s policies and procedures
Controlling labor costs
Protecting employees’ health and physical conditions
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

14. Line Managers’ HR Responsibilities (cont.)
Interpreting the company’s policies and procedures
Controlling labor costs
Developing the abilities of each person
Creating and maintaining departmental morale
Protecting employees’ health and physical conditions
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

15. Typical Job Duties Recruiters
Equal employment opportunity (EEO) representatives or affirmative action coordinators
Job analysts
Compensation managers
Training specialists
Human Resource Department’s Management Responsibilities
Compensation and benefits
Recruiting
Training & development
Employee relations
Occupational safety and health
Job analysis
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

16. Human Resource Department Organizational Chart
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

17. HR in Small Business
Small firms (say, with less than 100 employees) generally can’t afford a full-time human resource manager
Their human resource management tends to be ad hoc and informal
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

18. The New Human Resources Organization
Transactional HR group
Focuses on using centralized call centers and vendors to provide specialized support in day-to-day transactional HR activities
Corporate HR group
Focuses on assisting top management in “top-level” issues
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

19. The New Human Resources Organization (cont.)
Embedded HR group
Assigns HR generalists to departments like sales and production to provide the assistance the departments need
Centers of expertise groups
Provide specialized assistance in areas such as organizational change
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

20. Trends Influencing Human Resource Management
Globalization
Refers to firms’ tendency to extend their sales, ownership, and/or manufacturing to new markets abroad
HR’s Changing Environment
Globalization refers to firms’ tendency to extend their sales, ownership, and/or manufacturing to new markets abroad
Formulating selection, training, and compensation policies for expatriate employees
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

21. Trends Influencing Human Resource Management
Technological advances
Nature of work
Critical thinking/problem solving
Information technology application
Service jobs
Technological Advances
Challenge of quickly applying technology to the task of improving operations
Nature of Work
Knowledge-intensive high tech jobs are replacing traditional factory jobs
Two-thirds of workforce employed in producing services
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

22. Employment Exodus: Projected Loss of Jobs and Wages
Figure 1.2
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

23. Trends Influencing Human Resource Management
Growing emphasis on “knowledge workers” and human capital
Human capital
Refers to the knowledge, education, training, skills, and expertise of a firm’s workers
Human capital refers to the knowledge, education, training, skills, and expertise of a firm’s workers
Managers need new world-class HR management systems and skills to get employees to work more like committed partners
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

24. Demographic and Workforce Trends
Nontraditional workers include those who hold multiple jobs, or who are “contingent” or part-time workers, or people working in alternative work arrangements (such as a mother– daughter team sharing one flight attendant job at JetBlue airlines). Today, almost 10% of American workers—13 million people—fit this nontraditional workforce category. Of these, about 8 million are independent contractors who work on specific projects and move on once the projects are done.
Demographic Groups as a Percent of the Workforce, 1986–2016
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

25. Demographic Trends Generation Y Retirees Nontraditional workers
Workers from abroad
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

26. Gen Y
May be “the most high-maintenance workforce in the history of the world”
Their capacity for using information technology will also make them the most high-performing
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

27. Economic Challenges and Trends
All these trends are occurring within the context of economic upheaval
Challenging times mean that employers will have to be more frugal and creative in managing their human resources
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

28. The Human Resource Manager Today
Focuses more on big picture issues
Finds new ways to provide transactional services
Manages ethics
Builds high-performance work systems
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

29. High-Performance Work System
An integrated set of human resource management policies and practices that together produce superior employee performance
The basic aim here is to install human resource systems—in recruiting, screening, training, appraisal, and compensation, for instance—so that the company generates more job applicants, screens candidates more effectively, provides more and better training, links pay more explicitly to performance, and provides a safer work environment. In this way the human resource team can make a measurable contribution to the company’s bottom line.
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

30. Sample Metrics—IBM
Human resource managers need access to the performance measures (or “metrics”), as well as to comparable, benchmark-able figures from similar firms.
For example, median HR expenses as a proportion of companies’ total operating costs average about 0.8%
There tends to be between 0.9 and 1.0 human resource staff persons per 100 employees
IBM’s Randall MacDonald needed $100 million from IBM to reorganize its HR
operations, and he emphasized human resource metrics in requesting those funds. He told
top management, “I’m going to deliver talent to you that’s skilled and on time and ready
to be deployed. I will be able to measure the skills, tell you what skills we have, what
[skills] we don’t have [and] then show you how to fill the gaps or enhance our training.”33
Human resource managers such as MacDonald need access
to the performance measures (or “metrics”), as well as to comparable, benchmark-able
figures from similar firms. For example, median HR expenses as a proportion of companies’
total operating costs average about 0.8%. There tends to be between 0.9 and
1.0 human resource staff persons per 100 employees (the ratio tends to be lower in
retailing and distribution firms, and higher in public, state organizations).34 Employers
can request customized benchmark comparisons (for training hours, and tests administered,
for instance) from services such as the Society for Human Resource
Management’s Human Capital Benchmarking Service, and its database of over 1,500
organizations.35
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

31. The HR Scorecard HR scorecard
Shows the quantitative standards, or “metrics,” the firm uses to measure HR activities, to measure the employee behaviors resulting from these activities, and to measure the strategically relevant organizational outcomes of those employee behaviors
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

32. The Human Resource Manager Today
Understands evidence-based human resource management
Can measure HR performance
Has new proficiencies
Has HR certification
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

33. Strategic Planning and Strategic Human Resource Management
Main responsibility facing human resource managers is to institute policies and practices that produce the employee competencies and behaviors the company needs to achieve its strategic goals
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

34. Strategic Planning and Strategic Human Resource Management
Strategy
The company’s plan for how it will balance its internal strengths and weaknesses with external opportunities and threats in order to maintain a competitive advantage
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

35. Strategy and HR—Albertson’s
Albertson’s human resource management team chose a computer system from Unicru of Portland, Oregon, that collects and analyzes the information entered by applicants online
It ranks applicants based on the extent to which they exhibit the customer-focused traits that predict success in retail jobs and helps track candidates throughout the screening process
Strategy and HR Example
As in many firms today, Albertson’s Markets faced competitive pressures from firms
like Wal-Mart and from food stores from abroad. Albertson’s top management therefore
relied on the firm’s human resource managers to be partners in helping the firm
achieve its strategic goals.
Among other things, reducing personnel-related costs and improving Albertson’s
performance meant hiring employees who had a customer-focused approach, as well as
reducing turnover, improving retention, and eliminating time-consuming manual
processes and procedures for store managers.
Working with its information technology department, Albertson’s human resource
management team chose a computer system from Unicru of Portland, Oregon
( The system collects and analyzes the information entered by applicants
online and at kiosks. It ranks applicants based on the extent to which they exhibit
the customer-focused traits that predict success in retail jobs, helps track candidates
throughout the screening process, and does other things, such as track reasons for
departure once applicants are hired. Human resource managers were able to present
a compelling business case to illustrate the new system’s return on investment.
Working as a partner in Albertson’s strategy design and implementation process, the
HR team thus contributed in a significant way to achieving Albertson’s strategic
goals.25
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

36. Strategies in Multiple-Business Firms
Figure 1.4
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

37. Basics of Strategic Planning
Corporate-level strategy
Identifies the portfolio of businesses that comprise the company and the ways in which these businesses relate to each other
Diversification, vertical integration, consolidation, geographic expansion
For example, a diversification strategy implies that the firm will expand by adding new product lines. A vertical integration strategy means the firm expands by, perhaps, producing its own raw materials, or selling its products direct. Consolidation— reducing the company’s size—and geographic expansion—for instance, taking the business abroad—are some other corporate strategy possibilities.
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

38. Basics of Strategic Planning
Business-level/competitive strategy
Identifies how to build and strengthen the business’s long-term competitive position in the marketplace
Cost leadership, differentiation, focusers
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

39. Basics of Strategic Planning
Functional strategies
Identify the basic courses of action that each of the business’s departments will pursue in order to help the business attain its competitive goals
Functional strategies
Identify the basic courses of action that each of the business’s departments will pursue in order to help the business attain its competitive goals
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

40. HR and Competitive Advantage
Factors that allow an organization to differentiate its product or service from those of its competitors to increase market share
Managers use several competitive strategies to achieve competitive advantage. One, cost leadership, means the enterprise aims to become the low-cost leader in an industry. Wal-Mart is a typical industry cost leader: It maintains its competitive advantage in part through its satellite-based distribution system. In a differentiation competitive strategy, a firm seeks to be unique in its industry along dimensions that are widely valued by buyers
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

41. Strategic Human Resource Management
Formulating and executing HR systems that produce the employee competencies and behaviors the company needs to achieve its strategic aim
Strategic Human Resource Management
The linking of HRM with strategic goals and objectives in order to improve business performance and develop organizational cultures that foster innovation and flexibility
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

42. Strategic Human Resource Management
HR strategies
Refers to the specific human resource function courses of action the company pursues to achieve its aims
Strategic Human Resource Management
The linking of HRM with strategic goals and objectives in order to improve business performance and develop organizational cultures that foster innovation and flexibility
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

43. HR’s Role in Formulating Strategy
A firm’s HR team is in a good position to supply competitive intelligence, such as details regarding competitors’ incentive plans and information about pending labor laws
It is also in the best position to give advice about the company’s internal human strengths and weaknesses
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

44. Linking Corporate and HR Strategies
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Figure 1.5

45. Strategy and the Basic HR Process
Figure 1.6
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

46. Copyright
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.
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall