The importance of human resource

management (HRM)
Chapter 11
z Necessary part of the organising function of
Human Resource Management management
 Selecting, training, and evaluating the work force
z As an important strategic tool
 HRM helps establish an organisation’s sustainable
competitive advantage.
z Adds value to the firm
 High performance work practices lead to both high
individual and high organisational performance.

Robbins, Bergman, Stagg, Coulter: Management 4e © 2006 Pearson Education Australia

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High-performance work practices The human resource management process

ƒ Self-directed work teams ƒ Implementation of

ƒ Job rotation employee suggestions
ƒ High levels of skills ƒ Contingent pay based on
training performance
ƒ Problem-solving groups ƒ Coaching and mentoring
ƒ Total quality management ƒ Significant amounts of
procedures and processes information sharing
ƒ Encouragement of ƒ Use of employee attitude
innovative and creative surveys
behavior ƒ Cross-functional
ƒ Extensive employee integration
involvement and training ƒ Comprehensive employee
recruitment and selection
Sources: Based on M. Huselid, “The Impact of Human Resource
Management Practices on Turnover, Productivity, and Corporate procedures
Financial Performance,” Academy of Management Journal, June 1995,
p. 635; and B. Becker and B. Gerhart, “The Impact of Human Resource
Management on organisational Performance: Progress and Prospects,”
Academy of Management Journal, August 1996, p. 785.

Figure 11.2
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 Environmental factors affecting HRM
Environmental factors affecting HRM (cont’d)

z Labour union z Affirmative action

 An organisation that represents workers and seeks to
protect their interests through collective bargaining.
z Collective bargaining agreement
 A contractual agreement between a firm and a union
elected to represent a bargaining unit of employees of
the firm in bargaining for:
„ Wage, hours, and working conditions.
 The requirement that organisations take proactive steps
to ensure the full participation of protected groups in its
workforce.
z Laws and regulations
 Limit managerial discretion in hiring, promoting, and
discharging employees.

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Managing human resources Current assessment

z Human resource (HR) planning z Human resource inventory

 The process by which managers ensure that they have  A review of the current make-up of the organisation’s
the right number and kinds of people in the right places, current resource status
and at the right times, who are capable of effectively and  Job Analysis
efficiently performing their tasks.
„ An assessment that defines a job and the behaviors
 Helps avoid sudden talent shortages and surpluses. necessary to perform the job
 Steps in HR planning: † Knowledge, skills, and abilities (KSAs)

„ Assessing current human resources „ Requires conducting interviews, engaging in direct

observation, and collecting the self-reports of employees
„ Assessing future needs for human resources
and their managers.
„ Developing a program to meet those future needs

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Current assessment (cont’d) Meeting future human resource needs

z Job description Supply of Employees Demand for Employees

 A written statement of what the job holder does, how it is
done, and why it is done.
z Job specification
 A written statement of the minimum qualifications that a
person must possess to perform a given job successfully.
Factors Affecting Staffing
•Strategic Goals
•Forecast demand for products and services
•Availability of knowledge, skills, and abilities

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Recruitment and decruitment Major sources of potential job candidates

z Recruitment
 The process of locating, identifying, and attracting
capable applicants to an organisation
z Decruitment
 The process of reducing a surplus of employees in the
workforce of an organisation
z E-recruiting
 Recruitment of employees through the Internet
„ organisational web sites
„ Online recruiters

Table 11.1
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Selection Selection decision outcomes

z Selection process
 The process of screening job applicants to ensure that
the most appropriate candidates are hired.
z Selection
 An exercise in predicting which applicants, if hired, will
be (or will not be) successful in performing well on the
criteria the organisation uses to evaluate performance.
 Selection errors:
„ Reject errors for potentially successful applicants
„ Accept errors for ultimately poor performers

Figure 11.4
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Validity and reliability Types of selection devices

z Validity (of prediction) z Application forms

 A proven relationship between the selection device used z Written tests
and some relevant criterion for successful performance
in an organisation. z Performance simulations
„ High tests scores equate to high job performance; low
scores to poor performance. z Interviews
z Reliability (of prediction) z Background investigations
 The degree of consistency with which a selection device z Physical examinations
measures the same thing.
„ Individual test scores obtained with a selection device are
consistent over multiple testing instances.

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Written tests Performance simulation tests

z Types of tests z Testing an applicant’s ability to perform actual

 Intelligence: how smart are you? job behaviors, use required skills, and
 Aptitude: can you learn to do it? demonstrate specific knowledge of the job.
 Attitude: how do you feel about it?  Work sampling
 Ability: can you do it? „ Requiring applicants to actually perform a task or set of
 Interest: do you want to do it? tasks that are central to successful job performance.
 Assessment centers
z Legal challenges to tests
„ Dedicated facilities in which job candidates undergo a
 Lack of job-relatedness of test to job requirements series of performance simulation tests to evaluate their
 Discrimination in equal employment opportunity against managerial potential.
members of protected classes

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Other selection approaches Suggestions for interviewing

z Situational interviews 1. Structure a fixed set of questions for all applicants.

 Interviews in which candidates are evaluated on how 2. Have detailed information about the job for which
well they handle role play in mock scenarios. applicants are interviewing.

z Background investigations 3. Minimise any prior knowledge of applicants’

background, experience, interests, test scores, or other
 Verification of application data
characteristics.
 Reference checks:
„ Lack validity because self-selection of references ensures 4. Ask behavioural questions that require applicants to
only positive outcomes. give detailed accounts of actual job behaviors.

z Physical examinations 5. Use a standardised evaluation form.

 Useful for physical requirements and for insurance 6. Take notes during the interview.
purposes related to pre-existing conditions.
7. Avoid short interviews that encourage premature
decision making.
Source: Based on D.A. DeCenzo and S.P. Robbins, Human
Resource Management, 7th ed. (New York Wiley: 2002, p. 200)
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 Examples of “can’t ask and can ask” interview
questions for managers* Other selection approaches (cont’d)

z Can’t Ask z Can Ask z Realistic job preview (RJP)

 What’s your birth date?  Are you over 18?  The process of relating to an applicant both the positive
or How old are you?  Would you relocate? and the negative aspects of the job.
 What’s your marital  Are you authorised to „ Encourages mismatched applicants to withdraw.
status? or Do you plan work in Australia
„ Aligns successful applicants’ expectations with actual job
to have a family?  Have you ever been conditions; reducing turnover.
 What’s your native convicted of [fill in the
language? blank]?—The crime
 Have you ever been must be reasonably
arrested? related to the
performance of the job.

* Managers should be aware that there are

numerous other “can and can’t ask”
questions. Be sure to always check with
your HR department for specific guidance.

Robbins, Bergman, Stagg, Coulter: Management 4e © 2006 Pearson Education Australia Figure 11.7 21 Robbins, Bergman, Stagg, Coulter: Management 4e © 2006 Pearson Education Australia 22

Selection decision outcomes Quality of selection devices as predictors

Selection Decision
Accept Reject
Successful
Later Job Performance

Correct Reject
Decision Error
Unsuccessful

Accept Correct
Error Decision

Table 11.3

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Decruitment options Orientation

The introduction of a new employee into his

or her job and the organisation.

Orientation
Orientation objectives
objectives

Reduce
Reduce Learn Introduce Get
Introduce Get to
to know
know Transition
Learn job
job Transition
anxiety
anxiety work unit company
work unit company

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Orientation Types of training

z Transitioning a new employee into the z Interpersonal skills

organisation. z Technical
 Work-unit orientation
„ Familiarises new employee with work-unit goals
z Business
„ Clarifies how his or her job contributes to unit goals z Mandatory
„ Introduces he or she to his or her coworkers
 Organisation orientation z Performance management
„ Informs new employee about the organisation’s objectives, z Problem solving/Decision making
history, philosophy, procedures, and rules.
„ Includes a tour of the entire facility z Personal

Table 11.4

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Employee training methods Training

z Traditional z Technology-Based skill

skill categories
categories
Training Methods Training Methods
 On-the-job  CD-
 Job rotation
ROM/DVD/Videotapes/ Problem
Problem
Audiotapes Technical
Technical Interpersonal
Interpersonal
 Mentoring and
 Videoconferencing/
solving
solving
coaching
teleconferencing/
 Experiential exercises Satellite TV
 Workbooks/manuals  E-learning or other training
training methods
methods
interactive modules.
 Classroom lectures

On-the-job
On-the-job Off-the-job
Off-the-job
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Employee performance management Performance appraisal methods

z Performance management system z Written essays

z Critical incidents
 A process establishing performance standards z Graphic rating scales
and appraising employee performance in order
to arrive at objective HR decisions and to z Behaviorally anchored rating scales
provide documentation in support of those (BARS)
decisions. z Multiperson comparisons
z Management By Objectives (MBO)
z 360 Degree feedback

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 Factors that influence compensation and
Compensation and benefits benefits

z Benefits of a fair, effective, and

appropriate compensation system
 Helps attract and retain high-performance employees
 Impacts on the strategic performance of the firm
z Types of compensation
 Base wage or salary
 Wage and salary add-ons
 Incentive payments
 Skill-based pay

Figure 11.8
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Career development Top 10 job factors for university graduates

1. Enjoying what they do

z Career defined 2. Opportunity to use skills and abilities
 The sequence of positions held by a person during his or
her lifetime. 3. Opportunity for personal development
z Career development 4. Feeling what they do matters
 Provides for information, assessment, and training 5. Benefits
 Helps attract and retain highly talented people 6. Recognition for good performance
z Boundaryless career 7. Friendly co-workers
 A career in which individuals, not organisations, define 8. Job location
career progression and organisational loyalty 9. Lots of money
Source: Based on V. Frazee.
10. Working on teams “What’s Important to College Grads
in Their First Jobs?” Personnel

(ranked in order of importance) Journal, July 1996, p. 21.

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Contemporary HRM issues Contemporary HRM issues (cont’d)

z Downsizing z Sexual harassment

 The planned elimination of jobs in an organisation  An unwanted activity of a sexual nature that affects an
„ Provide open and honest communication. individual’s employment.
„ Reassure survivors. „ Unwanted sexual advances, requests for sexual favors,
and other verbal or physical conduct of a sexual nature
z Managing work force diversity when submission or rejection of this conduct explicitly or
 Recruitment for diversity implicitly affects an individual’s employment.
 Selection without discrimination  An offensive or hostile environment
 Orientation and training that is effective „ An environment in which a person is affected by elements
of a sexual nature.

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Contemporary HRM issues (cont’d) Compensation and benefits packages

z Work-life balance Factors that Influence Compensation

 Employees have personal lives that they don’t leave and Benefits Packages
behind when they come to work.
 organisations have become more attuned to their Size of Tenure and Type
employees by offering family-friendly benefits: Company Performance of Job
„ On-site child care
„ Summer day camps
Kind of Labor or
„ Flextime
Unionisation Capital
„ Job sharing Business
„ Leave for personal matters
Intensive
„ Flexible job hours
Management Geographic Company
Philosophy Location Profitability

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 Industrial relations
Career development

Career Development Why

Why employees
employees join
join unions
unions

Wage and
In the
the Past
Past Today Influence
Influence rules
rules
In Today outcomes

Organisations
Organisations Individuals
Individuals Political
Security
Security Political power
power
Developed
Developed Develop
Develop
Careers
Careers Careers
Careers

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Some suggestions for a successful

Current issues in HRM management career
Managing
Managing work
work
force diversity
force diversity
Orientation
Orientation and
and
Recruitment
Recruitment Selection
Selection training
training

Work-Life
Work-Life balance
balance

Sexual
Sexual harassment
harassment

Occupational
Occupational health
health and
and safety
safety
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