Chapter 1

MANAGING HUMAN
RESOURCES
 What Do I Need To Know?
LO 1-1 Define human resource management, and explain how
HRM contributes to an organization’s performance.
LO 1-2 Identify the responsibilities of human resource
departments.
LO 1-3 Summarize the types of competencies needed for human
resource management.
LO 1-4 Explain the role of supervisors in human resource
management.
LO 1-5 Discuss ethical issues in human resource management.
LO 1-6 Describe typical careers in human resource
management.
 Human Resource Management (HRM)

The policies, practices, and

systems that influence
employees’
• behavior
• attitudes
• performance
 Companies With Effective HRM

Employees and customers tend to be more

satisfied when…
The companies tend to
▪ be more innovative
▪ have greater productivity
▪ develop a more favorable reputation in the community
Figure 1.1 HRM Practices
Human Resources and Company Performance 1 of 3

Human capital – an
organization’s employees
described in terms of
The concept of HRM
their:
• training implies that employees
• experience are resources of the
• judgment employer.
• intelligence
• relationships
• insight
Figure 1.2 Impact of HRM

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Human Resources and Company Performance 2 of 3

HRM and Sustainable Competitive Advantage

• An organization can succeed if it has sustainable
competitive advantage.
• HR give organizations advantages because human
resources are valuable, cannot be imitated, have no
good substitutes and with needed skills and
knowledge are sometimes rare.
Human Resources and Company Performance 3 of 3

High-Performance Work System

An organization in which technology, organizational
structure, people, and processes all work together to give
an organization a competitive advantage.
Responsibilities of Human Resource Departments 1 of 13

HR Product Lines

• Administrative services and transactions

• Business partner services

• Strategic partner
 Table 1.1 Responsibilities of HR Departments
Function Responsibilities
Analysis and design of work Work analysis; job design; job descriptions
Recruitment and selection Recruiting; job postings; interviewing; testing; coordinating use of temporary
labor
Training and development Orientation; skills training; career development programs
Performance management Performance measures; preparation and administration of performance
appraisals; discipline
Compensation and benefits Wage and salary administration; incentive pay; insurance; vacation leave
administration; retirement plans; profit sharing; stock plans
Employee relations Attitude surveys; labor relations; employee handbooks; company publications;
labor law compliance; relocation and outplacement services
Personnel policies Policy creation; policy communication
Employee data and Record keeping; HR information systems; workforce analytics
information systems
Compliance with laws Policies to ensure lawful behavior; reporting; posting information; safety
inspections; accessibility accommodations
Support for strategy Human resource planning and forecasting; talent management; change
management
Sources: Bureau of Labor Statistics, “Human Resources Managers,” Occupational Outlook Handbook, 2014–2015, January 8, 2014, http://www.bls.gov/ooh; SHRM-BNA
Survey No. 66, “Policy and Practice Forum: Human Resource Activities, Budgets, and Staffs, 2000–2001,” Bulletin to Management, Bureau of National Affairs Policy and
Practice Series (Washington, DC: Bureau of National Affairs, June 28, 2001).
Responsibilities of Human Resource Departments 2 of 13

Job Analysis
Process of getting
detailed information
about jobs.

Job Design
Process of defining the
way work will be © Lars A. Niki RF

performed and the tasks

that a given job requires.
Responsibilities of Human Resource Departments 3 of 13

Recruitment Selection
The process through The process by which the
which the organization organization attempts to
seeks applicants for identify applicants with
potential employment. the necessary knowledge,
skills, abilities, and other
characteristics that will
help the organization
achieve its goals.
Responsibilities of Human Resource Departments 4 of 13

Which of the following are top qualities employers

look for in employees?
1. Teamwork skills
2. Decision making, problem solving
3. Planning, prioritizing tasks
4. Verbal communication skills
5. Gathering/processing information
6. All the above
Responsibilities of Human Resource Departments 5 of 13

Training Employees Development

A planned effort to Acquisition of
enable employees to knowledge, skills, and
learn job-related behaviors that improve
knowledge, skills, and an employee’s ability to
meet changes in job
behavior. requirements and in
customer demands.
Responsibilities of Human Resource Departments 6 of 13

Performance Management – The process of

ensuring that employees’ activities and outputs
match the organization’s goals.
– HR may be responsible for developing or obtaining
questionnaires and other devices for measuring
performance.
Responsibilities of Human Resource Departments 7 of 13

Planning Pay & Administering Pay &

Benefits Benefits
▪ How much salary, wages ▪ Systems for keeping track
bonuses, commissions, of employees’ earnings
and other performance- and benefits are needed.
related pay to offer ▪ Employees need
▪ Which benefits to offer information about their
and how much of the cost benefits plan.
will be shared by ▪ Extensive record keeping
employees and reporting is needed.
Responsibilities of Human Resource Departments 8 of 13

Maintaining Positive Employee Relations

• Preparing and distributing employee handbooks and
company publications
• Dealing with and responding to communications from
employees’ questions
• Negotiating union contracts and maintaining
communication with union representatives
Responsibilities of Human Resource Departments 9 of 13

Establishing and Administering Personnel Policies

• hiring
• discipline
• promotions
• benefits
HR personnel communicate through a variety of
channels.
Responsibilities of Human Resource Departments 10 of 13

Managing and Using Human Resource Data

– Workforce Analytics - use of quantitative tools and
scientific methods to analyze data from human
resource databases and other sources to make
evidence-based decisions that support business
goals.
Responsibilities of Human Resource Departments 11 of 13

Ensuring Compliance with Labor Laws

– Government requirements include:
▪ filing reports and displaying posters
▪ avoiding unlawful behavior
– Managers depend on HR professionals to help them
keep track of these requirements.
– Lawsuits will continue to influence HRM practices
concerning job security.
• Employment at will, age discrimination, etc.
Responsibilities of Human Resource Departments 12 of 13

Supporting the Organization’s Strategy

HR planning – identifying the numbers and types of
employees the organization will require to meet its
objectives.
Talent Management- a systematic, planned effort to
attract, retain, develop, and motivate highly skilled
employees and managers.
Evidence-based HR– Collecting and using data to
show that human resource practices have a positive
influence on the company’s bottom line or key
stakeholders.
Responsibilities of Human Resource Departments 13 of 13

Supporting the Organization’s Strategy

Corporate Social Responsibility
A company’s commitment to meeting the needs of its
stakeholders.
Corporate Social Responsibility
The parties with an interest in the company’s
success (typically, shareholders, the community,
customers, and employees.)
Sustainability
An organization’s ability to profit without depleting its
resources, incl. employees, natural resources, and
support of surrounding community.
 Skills of HRM Professionals 1 of 2

SHRM Success Categories

• Define knowledge and skills associated with
success in HRM
• Four clusters of categories
– technical
– interpersonal
– business
– leadership
Figure 1.3
Competencies
for HR
Professionals

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 Skills of HRM Professionals 2 of 2

In an organization, who should be

concerned with HRM?
A. Only HR
B. Only managers
C. Managers, supervisors and HR
 HR Responsibilities of Supervisors

• Company’s founders
– First supervisors
• Supervisors have many HR responsibilities
Figure 1.4 Supervisors’ Involvement In HRM

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Ethics In Human Resource Management 1 of 3

Ethics – fundamental principles of right and

wrong.
Ethical behavior – behavior that is consistent with
those principles.
– Many ethical issues in the workplace involve HRM.
Ethics In Human Resource Management 2 of 3

Employee Rights

Free consent

Privacy

Freedom of conscience

Freedom of speech

Due process
Ethics In Human Resource Management 3 of 3

Ethical companies act according to four principles:

1. In their relationships with customers, vendors, and
clients, ethical companies emphasize mutual benefits.
2. Employees assume responsibility for the actions of
the company.
3. The company has a sense of purpose or vision that
employees value and use in their day-to-day work.
4. They emphasize fairness.
Figure 1.5 Standards for Identifying Ethical Practices
Careers in Human Resource Management

• Salaries vary depending on education and

experience.
• Some positions are generalists, some are
specialized.
• Most positions require a college degree.
Figure 1.6 Median Salaries for HRM Positions

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 Test Your Knowledge
Which HR functions are primarily concerned with
1. ensuring employees are capable of doing their
current job and
2. ensuring that employees are satisfied with their
rewards?
A. 1) Development 2) Employee Relations
B. 1) Training 2) Legal Compliance
C. 1) Selection 2) Pay & Benefits
D. 1) Training 2) Pay & Benefits
 Summary 1 of 4
HRM consists of an organization’s “people
practices”
▪ policies, practices, and systems that influence
employees’ behavior, attitudes, and
performance.
▪ influences who works for the organization and
how those people work.
▪ responsible for a variety of functions related to
acquiring and managing employees.
 Summary 2 of 4

HRM requires human relations skills, including:

▪communicating
▪negotiating
▪team development
HR professionals also need to:
▪understand the language of business
▪be a credible with line managers and executives
▪be strategic partners
 Summary 3 of 4

▪ Non-HR managers must be familiar with the

basics of HRM and their own role with regard to
managing HR.
▪ Supervisors typically have responsibilities
related to all HR functions such as analyzing
work, interviewing, training and performance
appraisals.
▪ HR professionals should make decisions
consistent with sound ethical principles.
 Summary 4 of 4

Decisions of HR professionals should:

▪result in the greatest good for the largest number
of people.
▪respect basic rights of privacy, due process,
consent, and free speech.
▪treat employees and customers equitably and
fairly.
Careers in HRM may involve specialized work in
fields such as recruiting, training, or
compensation
 Chapter 2
TRENDS IN HR MANAGEMENT
 What Do I Need To Know?
LO 2-1 Describe trends in the labor force composition and how they affect human
resource management.
LO 2-2 Summarize areas in which human resource management can support the
goal of creating a high-performance work system.
LO 2-3 Define employee empowerment, and explain its role in the modern
organization.
LO 2-4 Identify ways HR professionals can support organizational strategies for
growth, quality, and efficiency.
LO 2-5 Summarize ways in which human resource management can support
organizations expanding internationally.
LO 2-6 Discuss how technological developments are affecting human resource
management.
LO 2-7 Explain how the nature of the employment relationship is changing.
LO 2-8 Discuss how the need for flexibility affects human resource management.
 Change in the Labor Force 1 of 7

Internal Labor Force External Labor Market

• An organization’s workers
includes its employees and
people who have contracts
to work at the organization
• Internal labor force has been
drawn from the external
labor market.
• Individuals who are actively
seeking employment.
• Number and kinds of people
in external labor market
determine kinds of human
resources available to an
organization.
Change in the Labor Force 2 of 7

Aging Workforce

Diverse Workforce

Skill Deficiencies
 Change in the Labor Force 3 of 7

Today’s Workforce
– Baby Boomers (born between 1946 and 1964))
– Generation X (born between 1965–1980)
– Millennials (born from 1981 to 1995)
Figure 2.1 Age Distribution of U.S Labor Force

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 Change in the Labor Force 4 of 7

HR Implications of an Aging Workforce

• HRM spends much time on retirement planning,
retraining and motivating workers.
• Organizations struggle to control rising costs of health
care and benefits
• Managers will supervise older employees.
• Organizations must find ways to prepare youth labor
force.
 Change in the Labor Force 5 of 7

As more of the
workforce reaches
retirement age, some
companies have set up
mentoring programs
between older and
younger workers so
that knowledge is not
lost but passed on.
© HeroImages/Getty Images
Figure 2.3 HRM Practices That Support Diversity Management

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 Change in the Labor Force 7 of 7

Skill Deficiencies of the Workforce

Employers are looking • Gap between needed
for skills: and available skills
▪ mathematical has decreased
▪ verbal companies ability to
▪ Interpersonal compete.
▪ computer • Companies may lack
capacity to upgrade
technology, reorganize
work, and empower
employees.
 High-Performance Work Systems 1 of 4

Organizations have the best fit between their

– Social system (people and how they interact) and
– Technical system (equipment and processes)
Three trends in high-performance work systems
1. Reliance on knowledge workers
2. Empowerment of employees to make decisions
3. Use of teamwork
 Table 2.1Top 10 Occupations for Job Growth
MOST NEW JOBS FASTEST RATE OF GROWTH
Personal care aides Wind turbine service technicians
Registered nurses Occupational therapy assistants
Home health aides Physical therapy assistants
Combined food prep and serving Physical therapy aids
workersa
Retail salespersons Home health aids

Nursing assistants Commercial divers

Customer service representatives Nurse practitioners
Cooks, restaurant Physical therapists
General and operations managers Statisticians
Construction laborers Ambulance drivers and attendantsb
a. Includes fast food
b. Except emergency medical technicians
 High-Performance Work Systems 2 of 4

Knowledge Workers
Employees whose Some feel all workers
contribution to the are knowledge
organization is workers.
specialized knowledge
of:
• customers
• processes
• profession
 Test Your Knowledge 1 of 2

Ensuring that knowledge workers will share

information and store it so that it is easily retrieved
by others is the concern of which of the following
HR activities?
A. Turnover
B. Employee Empowerment
C. Knowledge Management
D. Employee Selection
 High-Performance Work Systems 3 of 4
Employee
Empowerment
Giving employees
responsibility and authority
to make decisions regarding
all aspects of product
development or customer
service.
Employee
Engagement
Full involvement in one’s
work and commitment to
one’s job and company.
This is associated with:
▪ higher productivity
▪ better customer
service
▪ lower employee
turnover
 High-Performance Work Systems 4 of 4
Teamwork
The assignment of work to Work teams often assume
groups of employees with many of the activities
various skills who interact to traditionally reserved for
assemble a product or managers:
provide a service.
• selecting new team
members
• scheduling work
• coordinating work with
customers and other units
of the organization
 Test Your Knowledge 2 of 2

Sharon is a very smart and conscientious worker.

Lately, she has felt that her ideas were
disregarded and she was denied autonomy in
completing her work. This situation is probably
caused by a lack of
A. Employee Empowerment
B. Knowledge Management
C. Turnover
D. Teamwork
 Focus on Strategy 1 of 8
HRM must support company’s strategy
– Align HRM policies and practices
– Support decisions about quality improvement programs, mergers
and acquisitions, restructuring
 Focus on Strategy 2 of 8
Mergers and Acquisitions
Mergers – two companies become one
Acquisitions – one company buys another
– HR involved in conflict resolution, differences in companies’
practices
Figure 2.4 Business Strategy: Issues Affecting HRM
 Focus on Strategy 3 of 8
Total Quality Management (TQM)

TQM is a companywide effort to

continuously improve the ways people,
machines, and systems accomplish work

TQM approach provides guidelines for all

the organization’s activities, including HRM
 Focus on Strategy 4 of 8
TQM Core Values
1. Methods and processes are designed to meet
the needs of internal and external customers.
2. Every employee receives training in quality.
3. Quality is designed into a product or service so
that errors are prevented from occurring.
4. Organization promotes cooperation with
vendors, suppliers, and customers to improve
quality and hold down costs.
5. Managers measure progress with feedback
based on data.
 Focus on Strategy 5 of 8

Cost Control

Downsizing

Reengineering

Outsourcing
Figure 2.5 Number of Job Cuts Announced by
Employers during the Past Decade
 Focus on Strategy 6 of 8

Reengineering
• A complete review of the organization’s major work
processes to make them more efficient and able to
deliver higher quality
• Reengineering affects HRM in two ways:
⁻ How HR accomplishes its goals may change.
⁻ Change requires HR to help design and implement change
so that all employees will be committed to the
reengineered organization’s success.
 Focus on Strategy 7 of 8

Outsourcing
– The practice of having another company, such as a vendor, third-
party provider, or consultant, provide services.
– Outsourcing gives the company access to in-depth
expertise and is often more economical as well.
– HR helps with the transition to outsourcing.
 Focus on Strategy 8 of 8

Expanding into Global Markets

Offshoring International Labor
• Moving operations from Pool
the country where a
company is • Hiring at home may
headquartered to a may involve selection
country where pay rates
are lower but the of employees from
necessary skills are other countries.
available.
Reshoring
• Immigration
• Reestablishing • Expatriates
operations in North
America
 Technological Change in HRM 1 of 3

HR Information System (HRIS)

A computer system used to acquire, store,
manipulate, analyze, retrieve, and distribute
information related to an organization’s human
resources. HRIS can:
• support strategic decision making
• help the organization avoid lawsuits
• provide data for evaluating programs or policies
• support day-to-day HR decisions
Table 2.2 Technologies Influencing HRM
Internet portal

Shared service centers

Cloud computing, such as application service providers

Business intelligence

Data mining
 Technological Change in HRM 2 of 3

e-HRM
– Processing and transmission of digitized HR information
–Has potential to change all traditional HRM functions

Cloud computing
– Remote server computers do the user’s computing tasks
 Technological Change in HRM 3 of 3

Self-Service
–System in which employees have online access to information
about HR issues and go online to enroll themselves in programs
and provide feedback through surveys
–Especially useful with mobile computing devices
HR dashboards
–Display HR metrics
Change In the Employment Relationship 1 of 3

A Psychological Contract

Declining Union Membership

Flexibility
Change In the Employment Relationship 2 of 3

A Psychological Contract
– Employer and employee both contribute to the relationship
– Employees expected to take more responsibility in their training,
etc., but expect the company to offer them more flexibility, better
training

Declining Union Membership

–Has been declining since the 1980s
Change In the Employment Relationship 3 of 3

Flexibility
Organizations seek flexibility in staffing levels
through alternatives to traditional employment
relationship:
• outsourcing, temporary and contract workers
• flexible work schedules – including shortened work
weeks
• moving employees to different jobs to meet
changes in demand
 Summary 1 of 3

• An organization’s internal labor force comes

from its external labor market
• Labor market in developed counties is aging
and becoming more racially and ethnically
diverse.
• Organizations must recruit from a diverse
population, establish bias-free HR systems, and
help employees understand and appreciate
cultural differences.
• HRM can help organizations find and keep the
best possible fit between their social and
technical systems.
 Summary 2 of 3

• Job design and appropriate systems for

assessment and rewards have a central role in
supporting employee empowerment and
teamwork.
• Employee empowerment means giving
employees responsibility and authority to make
decisions regarding all aspects of product
development or customer service.
• HRM must design jobs to give employees
latitude for decision-making and interpersonal
skills.
 Summary 3 of 3

▪ HR professionals should be familiar with the

organization’s strategy and may play a role in
developing the strategy.
▪ Specific HR practices vary according to type of
strategy.
▪ Organizations with international operations hire
employees in foreign countries where they
operate, so they need knowledge of differences
in culture and business practices.