EVOLUTION OF HR MGMT

• SCIENTIFIC MANAGEMENT
– Frederick Taylor, Henry Gantt, Frank & Lillian Gilbreth

• INDUSTRIAL/ORGL PSYCHOLOGY
– Munsterberg, Scott, Cattell

• HUMAN RELATIONS MOVEMENT

– Hawthorne Studies, Mayo, Follett, Lewin

• GROWTH OF GOVERNMENTAL REGULATIONS

– Wages (1930s), Unionization (1940s), Employment (1960s)

• PROFESSIONALIZATION OF HR MANAGEMENT
– Professional HR Societies & HRCI (Certification Institute)
 HUMAN CAPITAL MANAGEMENT
MANAGING & MEASURING WORKER PRODUCTIVITY

What is the effect of HR on the bottom line of the firm?

Is there a significant relationship between compensation and worker

turnover in our organization?

Does worker training and development enhance retention? …

customer satisfaction? …repeat sales levels?

What value would you attribute to each worker? How much is each
employee “worth?”

Are all employees alike and thus should be managed similarly, or

should each employee be developed and managed uniquely?

What brings out the “best” in each worker? What makes them
maximally productive and valuable to the organization?
 Human Resource Management

• Utilization of individuals to
achieve organizational objectives
• All managers at every level must
concern themselves with human
resource management
• Five functions
Human Resource Management Functions

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 FUNCTIONAL AREAS WITHIN HR
• EMPLOYMENT / STAFFING
– RECRUITMENT
– SELECTION
• TRAINING AND DEVELOPMENT
– APPRAISAL
– EDUCATION AND DEVELOPMENT
• COMPENSATION
– SALARIES, WAGES AND BENEFITS
– INCENTIVE PLANS
• EMPLOYEE RELATIONS
– GRIEVANCE RESOLUTION
– UNION RELATIONS
• HR PLANNING AND RESEARCH
– FORECASTING
– JOB ANALYSIS
– ATTITUDE SURVEYS
– VALIDATION STUDIES
 Employment / Staffing
• Staffing - Process through which organization ensures it always
has proper number of employees with appropriate skills in right
jobs at right time to achieve organizational objectives
• Job analysis - Systematic process of determining skills, duties,
and knowledge required for performing jobs in organization
• Human resource planning - Systematic process of matching the
internal and external supply of people with job openings
anticipated in the organization over a specified period of time .
• Recruitment - Process of attracting individuals on a timely
basis, in sufficient numbers, and with appropriate qualifications,
to apply for jobs with an organization
• Selection - Process of choosing from a group of applicants the
individual best suited for a particular position and the
organization
 Training and Development
• Training - Designed to provide learners with knowledge and skills
needed for their present jobs
• Development - Involves learning that goes beyond today's job; it has
more long-term focus
• Career development - Formal approach used by organization to ensure
that people with proper qualifications and experiences are available
when needed
• Organization development - Planned process of improving
organization by developing its structures, systems, and processes to
improve effectiveness and achieving desired goals
• Performance management - Goal-oriented process directed toward
ensuring organizational processes are in place to maximize
productivity of employees, teams, and ultimately, the organization
• Performance appraisal - Formal system of review and evaluation of
individual or team task performance
 Compensation
• Direct Financial Compensation - Pay that person
receives in form of wages, salaries, bonuses, and
commissions.
• Indirect Financial Compensation (Benefits) - All
financial rewards not included in direct
compensation such as paid vacations, sick leave,
holidays, and medical insurance.
• Nonfinancial Compensation - Satisfaction that
person receives from job itself or from
psychological and/or physical environment in which
person works.
 Safety and Health
• Employees who work in safe environment and
enjoy good health are more likely to be productive
and yield long-term benefits to organization.

• Safety - Involves protecting employees from

injuries caused by work-related accidents
• Health - Refers to employees' freedom from
illness and their general physical and mental well
being
 Employee and Labor Relations

• Private-sector union membership has fallen from 39

percent in 1958 to 7.8 percent in 2005.
• Business is required by law to recognize a union and
bargain with it in good faith if the firm’s employees
want the union to represent them
• Is the function of HR to control workers, or to help
them and act as their advocate?
• Resolving personnel grievances and disagreements
fairly in both union and union-free environments
Human Resource Research

• Human resource research

pervades all HR functional
areas.

• Forecasting and Planning

• Job Analysis
• Attitude Surveys
• Validation Studies
• Compensation Surveys
 HR’s Changing Role: Questions
That Are Being Asked
• Can some HR tasks be performed more
efficiently by line managers or outside
vendors?
• Can some HR tasks be centralized or
eliminated altogether?
• Can technology perform tasks that were
previously done by HR personnel?
• Many HR departments continue to get smaller
 Who Performs Human
Resource Management Tasks?

• Human Resource Managers

• Line Managers and Supervisors
• HR Shared Service Centers
• Outsourcing
• Professional Employer Organizations
(Employee Leasing)
 Human Resource Executives,
Generalists, and Specialists

Vice President, Vice President,

Human Industrial
Resources Relations

Manager,
Manager, Manager,
Training and
Compensation Staffing
Development
Executive:
Benefits Generalist:
Analyst Specialist:
 Traditional Human Resource Functions
in a Large Firm

President
and CEO

Vice President,
Vice President, Vice President, Vice President,
Human
Marketing Operations Finance
Resources

Manager, Manager, Manager,

Manager, Manager,
Training and Safety and Labor
Compensation Staffing
Development Health Relations
 A Possible Evolving HR
Organization Example

President
and CEO

Vice
Director
Vice President, Vice Vice
of Safety
President, Strategic President, President,
and
Operations Human Finance Marketing
Health
Resources

Training & Compensation Staffing (more

Development (Shared Service involvement of Line
(Outsourced) Centers) Managers, etc)
 AMA SARATOGA STUDY
How are HR Departments Changing?

• ONLY 30% STILL DO ALL STANDARD IN-HOUSE HR FUNCTIONS

• 32% HAVE ESTABLISHED AN IN-HOUSE “UNIVERSITY”

• ONLY 27% HAVE RETAINED THE TRAINING AREA “AS IS”

• BENEFITS HAVE BEEN OUTSOURCED OR MOVED TO SHARED

SERVICE CENTERS

• STAFFING IS BEING DELEGATED BACK TO LINE MANAGERS

• RATIO OF EMPLOYEES SERVED PER HR EMPLOYEE HAS

INCREASED
 A RECENT SURVEY OF
TOP HRM CONCERNS (Helman)
• 84% COMPENSATION
• 80% SUCCESSION PLANNING
• 68% MANAGEMENT STAFFING
• 40% HR STRATEGIC PLANNING
• 40% EMPLOYEE COMMUNICATIONS
• 34% WORKFORCE MANAGEMENT
• 28% BENEFITS
• 26% PERFORMANCE EVALUATION
• 24% EMPLOYEE RELATIONS
• 20% PERSONNEL POLICIES
• 18% LABOR RELATIONS
• 16% TRAINING AND DEVELOPMENT
• 4% EEO/AFFIRMATIVE ACTION
• 9% OTHER
 CURRENT TRENDS IN HR
• EMPHASIS ON STRATEGIC PLANNING & SUCCESSION
– VP of HR is a Strategic Manager, Management Succession Planning

• EMPHASIS ON COST-RELATED ISSUES / COST CONTROL

– Global Competition, Outsourcing and Downsizing

• NEW SPECIALTIES EMERGING IN HR

– HR Planning, International HR, Employee Assistance Programs

• GROWTH OF GOVERNMENTAL REGULATIONS

– Wages (1930s), Unionization (1940s), Employment (1960s)

• PROFESSIONALIZATION OF HR MANAGEMENT
– Professional HR Societies & HRCI (Certification Institute)

• THE INTERNET REVOLUTION

– Electronic Recruiting, Records Management, and HRIS
 PROFESSIONAL HR ORGANIZATIONS
• SOCIETY FOR HUMAN RESOURCE MANAGEMENT
– (SHRM) 185,000+ members
– JNLS: HR Magazine, HR News
• AMERICAN SOCIETY FOR TRAINING & DEVELOPMENT
– (ASTD) 60,000+ members
– JNL: Training & Development Journal
• WORLD-AT-WORK (formerly the American Compensation Association)
– (WAW) 23,000+ members
– JNL: WAW/ACA Journal (formerly Compensation Review)
• INTERNATIONAL PERSONNEL MANAGEMENT ASSOCIATION
– (IPMA) 6500+ members
– JNL: Public Personnel Management
• NATIONAL HUMAN RESOURCE ASSOCIATION (formerly the Intl Assn for
Personnel Women)
– (NHRA) 1500+ members
– JNL: Human Resources: Jnl of the International Assn for Personnel Women
 HUMAN RESOURCE CERTIFICATION
INSTITUTE (HRCI)
• PROFESSIONAL IN HUMAN RESOURCES (PHR)
– Need 4+ yrs HR experience (full-time, exempt position) or
– 2+ yrs HR experience w/ appropriate bachelor’s degree or
– 1+ yr HR experience w/ appropriate master’s degree
– Students may sit for PHR exam; and have 5 years to get experience
– Must pass comprehensive PHR examination (need a score of 500+)
– Certified for 3 years / Re-certification required every 3 years

• SENIOR PROFESSIONAL IN HUMAN RESOURCES (SPHR)

– Need 8+ yrs HR experience (full-time, exempt position) or
– 6+ yrs HR experience w/ appropriate bachelor’s degree or
– 5+ yrs HR experience w/ appropriate master’s degree
– SPHR candidates also need 3+ yrs experience at policy-making level
– Must pass comprehensive SPHR examination (need a score of 500+)
– Certified for 3 years/ Re-certification required every 3 years
 HR CERTIFICATION EXAM
For Professional and Senior Professional HR Designation

• TOPICS PHR SPHR

– Strategic Management 12% 26%
– Workforce Planning & Employment 26% 16%
– HR Development 15% 13%
– Compensation & Benefits 20% 16%
– Employee & Labor Relations 21% 24%
– Health, Safety and Security 6% 5%
100% 100%

Must correctly answer at least 75% of the questions in each of the six
areas to earn a 500 score (the minimum passing score).
 HR CERTIFICATION EXAM
For Global Professional in Human Resources Designation

• TOPICS GPHR
– Strategic HR Management 22%
– Organizational Effectiveness & Employee Development 14%
– Global Staffing 10%
– International Assignment Management 28%
– Global Compensation & Benefits 16%
– International Employee Relations & Regulations 10%
100%

Must correctly answer at least 75% of the questions in each of the six
areas to earn a 500 score (the minimum passing score).
 EXTERNAL ENVIRONMENTAL FACTORS THAT
IMPACT HRM
• GOVERNMENT REGULATIONS
– Federal, State and Local
• LABOR FORCE DEMOGRAPHICS
– Women with Children
– Workforce Diversity and Immigrants
– Older Workers
– People with Disabilities
– Young Persons with Limited Skills
• TECHNOLOGICAL ADVANCEMENT
– Automation, Obsolescence and Renewal
• GLOBAL COMPETITION AND CUSTOMER EXPECTATIONS
• ECONOMIC CONDITIONS AND CYCLES
• OTHER PUBLICS
– Unions, Communities, Shareholders, etc.
 Cyberwork

• Possibility of never-ending workday

• BlackBerrys, cell phones, text messaging,
and e-mail create endless possibilities for
communication
• Some workers believe their employer wants
them available 24/7
 THE IMPACT OF THE ORGANIZATIONAL
ENVIRONMENT ON HRM
• CORPORATE MISSION, PHILOSOPHY & CULTURE
– Who are we and what are we trying to accomplish?

• CORPORATE STRATEGIES AND OBJECTIVES

– Grand and Competitive Strategies

• ORGANIZATION POLICIES AND PROCEDURES

– Bureaucratic vs Organic? Is Discretion Encouraged?

• TASKS, POSITIONS & WORK GROUPS

– The Organizational “Chart”

• LEADERSHIP STYLES
 POWER & INFLUENCE MODEL
(French & Raven)

• LEGITIMATE POWER
– Authority to Command, based on the Position Held

• REWARD POWER
– Positive, based on Desired Outcomes

• COERCIVE POWER
– Threats. Punishment

• EXPERT POWER
– Advice, Knowledge, Information

• REFERENT POWER
– Charisma, Social Liking, Identification
 DISCOVERIES ON POWER-BASED
LEADERSHIP (YUKL 89)

• COERCIVE POWER
– Generates Resistance (Minimal Cooperation)

• LEGITIMATE & REWARD POWER

– Generates Compliance (You Get Satisfactory Behaviors)

• EXPERT & REFERENT POWER

– Generates Commitment (Workers Go the 2nd Mile)
 LIFE-CYCLE (MATURITY) THEORY
(HERSEY & BLANCHARD 77)

• LEADER BEHAVIORS NEED TO VARY, DEPENDING ON

THE MATURITY OF THE INDIVIDUAL.

• DIRECTIVE
– Gives clear direction and instruction to immature employees
• COACHING
– Expands two-way communication; helps build confidence/motivation
• SUPPORTING
– Employee now feels confident; active two-way communication still
needed for shared decisions
• DELEGATING
– Responsibility for planning and decision making given to highly
mature employees
 PATH-GOAL THEORY OF LEADERSHIP
(House & Mitchell 74)

• SITUATIONAL FACTORS
– CHARACTERISTICS OF EMPLOYEES
• Perceived Ability, N ACH, Locus of Control, etc.

– CHARACTERISTICS OF THE ENVIRONMENT

• Task Structure, Organizational Controls, Work Group, etc.

• LEADERSHIP STYLES
– DIRECTIVE
– SUPPORTIVE
– ACHIEVMENT ORIENTED
– PARTICIPATIVE
IMPACT OF PERSONAL DIFFERENCES ON
HRM

INDIVIDUAL SKILLS & ABILITIES

PERSONALITY

EXPECTATIONS AND ASPIRATIONS

MOTIVATION
Equity Theory
Expectancy Theory
Reinforcement Theory
 EQUITY THEORY (ADAMS 65)

• I compare my work outcomes (Om) with my perception

of what others’ outcomes are (Oo). I also compare my
work inputs (Im) with what I think others are
contributing to their jobs (Io).

• If the relative ratio of my outcomes/inputs (Om/Im) is

similar to the perceived outcomes/inputs (Oo/Io) of
others at work, EQUITY exists and the organization is
perceived to be “fair.”

(Om/Im) = (Oo/Io) I feel fairly treated (content)

 POSITIVE & NEGATIVE INEQUITY
• If I believe my outcomes/inputs ratio is more generous than the
outcome/input ratio of others, I feel guilty and over-rewarded.
This is POSITIVE INEQUITY, and this perception may or may
not motivate one to action.

(Om/Im) > (Oo/Io) I feel over-rewarded (guilty)

• If I think my outcomes/inputs ratio is less than the

outcome/input ratio of others, I feel frustrated and under-
rewarded. This is NEGATIVE INEQUITY, and this perception
usually motivates one to act to resolve this “unfair” situation.

(Om/Im) < (Oo/Io) I feel under-rewarded (frustrated)

 LIKELY RESPONSES WHEN INEQUITY IS
PERCEIVED

• CHANGE MY OUTCOMES

• CHANGE MY INPUTS

• RECONSIDER THE PERCEIVED RATIOS

• CHANGE “OTHER’S” INPUTS OR OUTCOMES

• CHANGE COMPARISON “OTHER”

• LEAVE THE ORGANIZATION OR WITHDRAW

 EXPECTANCY-VALENCE THEORY
THREE PERCEPTIONS

EXPECTANCY (E P)
If I put forth effort (E), what’s the probability that I can achieve
the performance objective (P)?

INSTRUMENTALITY (P  O)
If I achieve the performance objective (P), what’s the probability
that a specific outcome (O) or reward will be given to me?

VALENCE (V)
How much value (positive or negative) do I attach to receiving this
outcome?

MOTIVATION (EFFORT) = (E  P) x sum of [(P  O)i(V)i]

 REINFORCEMENT THEORY
(SKINNER 72)

ASSUMPTIONS:
The consequences of past actions will influence our future actions
We repeat behaviors which lead to rewards and are satisfying
We reduce behaviors which go unrewarded or lead to punishment
Thus, tie valued rewards to desired behaviors in the workplace

TYPES OF REINFORCEMENT
POSITIVE
AVOIDANCE (NEGATIVE)
EXTINCTION
PUNISHMENT
 SCHEDULES OF REINFORCEMENT

CONTINUOUS (every time)

INTERMITTENT (not every time)

Fixed-Ratio
Fixed-Interval
Variable-Ratio
Variable-Interval