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Human Resource Management

Module 1

A Definition of Human Resource Management


Human Resource Management(HRM) involves all management decisions and practices that directly affect or influence the people Who work for the organization

Specific Earmarks of World Class HRM Include


Having an HR vision oriented to the strategic needs of the organization Having a philosophy and values consistent with those of the organization

Being seen as a business unit within the firm and operating in


the same way as other units Being organized in a way that brings maximum service to the customer and maximum motivation to the HR staff Having the best HR products available for the customers

Championing HR programs that fulfill the agendas of the HR group and customer Having an HR vision that is actively shared by the entire group Being proactive, not reactive, group Being involved in the key business issue discussions Being seen as successfully creating a great place to work

The history of HRM can be characterized as moving through four broad phases, The craft system Scientific management The human relations approach The current organizational science-human resource approach

The Craft System


In Egypt and Babylon, training in craft skills was organized to maintain an adequate supply of craft workers The craft system was best suited to domestic industry Scientific Management The Industrial Revolution and mass production emerged in the nineteenth and early twentieth centuries and led to the deterioration of the craft guilds First, tasks were subdivided Second, manufacturing grew to such an extent that a large hierarchy of supervisors and managers became necessary Frederick W. Taylor (1856-1915)

Human Relations Elton Mayo and Fritz Roethlisberger between 1924 and 1932 Western Electrics Hawthorne plant in Chicago Mayo saw that the significant variable was not physical but psychological The reason for the increase in productivity was the workers attributes towards their jobs Human relations movement Organizational Science The organizational science approach focuses more on the total organization and less on just the individual HRM as we currently know it, grew out of the organizational science trend

Human Resource Management Functions


Planning for Organizations, Jobs and People The Strategic Management of Human Resources The Strategic Management of Human Resources Associated with the increased attention HRM is receiving is top managements realization that HR needs to be closely integrated with managerial planning and decision making Human Resource Planning Organizations depend on what if scenarios that look at future needs in the context of work force demographics, economic projections, anticipated technological changes, recruitment success, retention goals, and shifts in organizational strategy

Building Individual and Organizational Performance Human resources are unique in their potential to grow and develop to meet new challenges Employee training and development may be implemented by formal or informal procedures Formal training can be coordinated and taught by HR or technical professionals at the organization Informal training occurs on the job and is administered by superiors and peers HR department may provide train-the trainer courses and coordinate on- the-job-training(OJT) opportunities Still other successful organizations are allowing autonomous teams of workers to manage themselves

Acquiring Human Resources Staffing activities include recruiting applicants, screening and selecting the most qualified candidates, and filling some positions through transfer or promotion More recently, organizational restructuring has become an additional staffing activity Rewarding Employees Performance appraisals are a crucial link in the HRM process The HRM role in performance appraisal is one of working with line managers to establish the appraisal process

Maintaining Human Resource The process of collective bargaining Importance to HR managers is selection out Helping those terminated with outplacement or assistance Case of employment-at-will Multinational Human Resource Management - HR programs should be closely linked to the needs and strategies of the organization HR systems both enable and motivate employees to carry out the organizations strategy Shifting to a strategic approach requires many kinds of change developing management skills, building linkages with top management

Module 2

What is Human Resource Planning


Human resource planning is concerned with the flow of people into, through, and out of an organization. HR planning involves forecasting the need for labor and the supply of labor and the supply of labor, then planning the

programs necessary to ensure that the organization will have


the right mix of employees and skills when and where they are needed.

Strategic Human Planning


Manpower planning Strategic human resource planning emphasize a proactive role for the HR function Marriott Corporations Goal Career paths, job responsibilities, work teams, and reward systems Colgate-Palmolive, a global HR team was formed As a result, strategic initiatives were adopted in recruitment, selection, development, individual performance management, team performance management, career planning, diversity, employee attitude surveys and employee communication

A model for Human Resource Planning


The first step in HR planning is to collect information. HR planning requires two types of information Data from the external environment Data from inside the organization

Planners must be aware of labor market conditions such as


unemployment rates, skill availabilities, and the age, race, and sex distributions of the labor force

Who Plans?
Line managers must be involved in the HR planning process

Some planning methods requiring more manager involvement


than others Strategic HR planning involves top management as well as HR experts

When Is Planning Done?


Planning process can focus on one of several time horizons. HR planning function typically plan for short term Just one year in advance and with particular emphasis on recruiting or downsizing needs HR planning and more complex needs might also plan for the intermediate term

HR planning-more than three years into the future

Forecasting the Demand for Labor


These forecasts are grounded in information about the past and present and in assumptions about the future Demand forecasting methods can be divided into two categories: judgmental and mathematical

Judgmental Methods Make use of knowledgeable people to forecast the future Quantitative data but allow for intuition and expertise to be factored in as well Bottom-up, or unit, forecasting: estimated changes in workload and productivity in each of the next five years Top-down forecasting by experienced top managers and executives Simple Mathematical Methods The productivity ratio Direct-to indirect-labor staffing ratios Productivity and staffing ratios based on historical data may be modified judgmentally An elaboration of forecasting based on productivity ratio involves the use of learning curves

The Internal Supply of Labor


To keep track of the current internal supply and to predict the future supply, planners need some sort of supply information system Skills inventories and human resource information systems

Skills Inventories A skill inventory is to keep track of employees experience, education, and special abilities.

The inventory can be used to assess the current supply of


employees of various sorts Human Resource Information System

A true human resource information system(HRIS) combines


one system all the information that organizations typically keep on employees and on positions. Produce regular reports on equal employment opportunity Staffing levels and turnover statistics, monthly compensation

cost predictions

Predicting the Internal Supply of Labor


Markov analysis is a transaction probability matrix Specify a mutually exclusive and exhaustive set of states that include all jobs between which people can move Gather data from each of the last several years on what transition rates actually occurred between each state Attempt to develop stable, reliable estimates of expected future

transition rates

For instance, job A began the year with sixty-two incumbents. Fifteen percent of those incumbents(0.15*62=9) left the

organization; 10 percent(0.10*62=6) moved to job B; and 5


percent(0.05*62=3) moved to job C. That leaves forty-four of the original incumbents in job A. However, 15 percent of the seventy-five people( 0.15*75=11) in job B transferred to job A; so the total number of employees in job A at the year is fifty-five (44+11) The more sophisticated approach to predicting internal movement and supply

Renewal, or replacement, analysis


This method is driven by destination demand

Choosing Forecasting Methods


Stability and Certainty: It is not feasible to use methods that rely heavily on past data Availability of Data: How accurate and complete are past data on employee numbers, skills, and flows Number of Employee: Some statistical techniques, like Markov analysis and regression, are reliable only for large numbers of employees Resources Available: How much time, computing power, and statistical expertise Credibility to Management: Will key managers accept the process and believe its predictions Time Horizon: Judgmental methods may be superior

Implications of Internal Supply and Distribution


Whatever methods are chosen to make HR forecasts, the real benefit come from the way the forecasts are used.

The External Supply Labor


The unemployment rate

When the unemployment rate is high and many people are out of
work, the labor market is described as loose, Conversely, a tight labor market occurs when unemployment is very low and employers have great difficulty in finding new workers

Labor Markets A labor market is the area from which an employer typically recruits to fill a position

There is a great deal of available data on current labor markets


Demographic Trends in the Labor Supply Baby boom Baby bust Generation X Work Force Diversity Industry and Occupational Trends

Planning Human Resource Programs


Planning for a new start-up, planning for labor shortages and surpluses, and managerial succession planning

Planning for a New Establishment


Some experienced employees would come from the companys

Employees who referred a friend for the job


Finally, he had each supervisor conduct training for his or her work group Expensive training, excellent employment conditions Treat employees like valued customers

Planning for Shortages Go to the external labor market for new employees Employers may have to create qualified workers where none existed before Increasing the pension formula Reward extra years of service more heavily Rehire retired employees Hiring new permanent employees would be unwise Employers could pay for overtime rather than hire additional employees Alternatively, employers may choose to subcontract some work Business process re-engineering

Planning for Surpluses When forecasts show that internal supply will exceed demand, employers must make plans to reduce supply Incentives for early retirement Medical or job performance problem Depending on the nature of the surplus Transfer or reassign employees to jobs in parts of the organization that are still experiencing demand Use the slack time to provide cross-training in related jobs Permit workers on partial layoff to collect unemployment compensation for the days they o not work Last resort is to lay off excess employees Responsible companies provide outplacement services to employees Reduction in force(RIF) Marginal performers or unskilled, easily replaceable employee should be released first

Managerial Succession Planning Regardless of expansion or contraction of the total work force in a organization, the need for good managers is critical and continuous Most successful programs, however, seem to include top managements involvement and commitment Formal assessment of the performance and potential of candidates, and written development plans for individual candidates Plans should center on especially important jobs and should identify correctly the skill requirements of those jobs Most managerial succession planning systems rely on committees of higher-level managers Development plans include formal training programs Replacement Chart

Top management candidates are not the only employees in need of career planning attention from the organization. Lower-level managers, professional, and nonexempt employees Career planning involves several steps The first is self-assessment by the employee The second step is gathering information about different job opportunities The third step is formulating career goals

Conclusion
They run the risk of having (1) Employees of insufficient skill or number to meet the organizations needs or (2) An excess of costly employees whose pay and benefits eat into profits Strategic human resource planning involves HR experts in

formulating and implementing the organizations strategy in


the light of HR opportunities and constraints

Job Analysis Defined


Job analysis can be defined as obtaining information about jobs (1) Collecting and recording job information (2) Checking the job information for accuracy (3) Writing job descriptions based on the information (4) Using the information to determine what skills, abilities, and

knowledge are required on the job


(5) Updating the information from time to time

A task is a meaningful unit of work activity generally performed on the job

A duty is a loosely defined area of work that contains several


distinct tasks A position is the set of tasks and duties performed A job is a group of positions An occupation refers to a general class of jobs A career is the sequence of jobs

Two other job analysis terms are important: A job description is a written narrative describing the activities performed on a job A job specification outlines the specific skills, knowledge, abilities, and other physical and personal characteristics that are necessary to perform job

A Job Analysis Process

Phase 1:The Scope Of The Job Analysis


First, the organization must decide what it hopes to accomplish
with the job analysis data Second, it must identify the jobs that it wants to include in the analysis program Uses of Job Analysis

Setting up personnel selection procedures


Training employees

Developing performance appraisal instruments


Establishing pay systems Knowing what duties a job requires

What skills are needed to perform these duties


Appropriate selection system Essential functions of a job Reasonable accommodation to their needs Job analysis data can be used to determine the similarity of

jobs and thus the feasibility of transfer


Develop equitable compensation Determining Which Jobs to Analyze Likely targets of job analysis are jobs that are critical to the success of an organization

Phase 2:The Methods Of Job Analysis


Types of Job Data Behavioral descriptions Ability requirements Job characteristics Information about the equipment Sources of Job Data most direct source of information about a job is the job incumbent A job analyst should look for information about a job is in job analyst data Job incumbents who are interviewed should be representative of the types of people who do the job Another approach is to collect information from all employees on the job

Job Analysis Procedures Narrative Job Description Engineering Approaches Structures Job Analysis Procedures Managerial Job Analysis Procedures Narrative Job Description Narrative descriptions are useful for recruiting and orientation, for creating realistic job previews, and for career planning Engineering Approaches Time and motion study This study analysis of time and motions, is often used to describe this category of job analysis procedures

Structures Job Analysis Procedures Critical Incidents Technique(CIT) for assembling lists of behaviors Functional Job Analysis(FJA) trained job analysts review written materials, observe workers performing the job Job analysts identify and describe the tasks performed on the job in a standardized written format Job analysts analyze each task using seven scales Worker-instruction scale Three scale concerning general educational development in reasoning, mathematics and language Job analysts write performance standards Job analysts identify the training needed by the employee to perform the job

Managerial Job Analysis Procedures Analysis of managerial and professional jobs Management Position Description Questionnaire(MPDQ) is to describe managers jobs Supervisory Task Description Questionnaire(STDQ) used to analyze the jobs of first-line supervisors Five-point importance scale Grouped into seven major categories 1)Working with subordinates 2)Organizing work 3)Work planning and scheduling 4)Maintaining efficient/quality production 5) Maintaining safe/clean work areas 6)Maintaining equipment and machinery 7) Compiling records and reports

Phase 3:Data Collection And Analysis


Collecting Job Data The first important aspect of collecting job data is to get the organization ready. Second, the job analyst must be aware of the sources of bias that my influence the accuracy Finally, the job analyst must be sure that interviews are conducted in a skillful manner Getting the Organization Ready 1) Involve top management from the very start of the project 2) Coordinate all activities associated with the project through the organizations HRM function 3) Before talking to any employee, notify the immediate supervisor 4) Provide all persons involved in the data collection phase with information about the objectives

Sources of Bias
The primary concern in collecting data about a job is that these data provide an accurate, up-to-date, and representative picture of work activities Sampling bias occurs because jobs are dynamic

Time-determined changes
Employee-determined changes Situation-determined changes

Job Analysis Interviews: Guidelines for Job Analysis Interviewing

Analyzing Job Data Inter-rater reliability Should check to determine how well these sources agree on

the characteristics of the job


Reporting and Rechecking Job Data This report should include the purpose and scope of the project

What information they provided


How the information gained from the project can be used in the future Final part of the job analysis process is to recheck the results Data must be updated periodically to incorporate job changes

Phase 4: Accessing Job Analysis Methods


A job analysis should include a listing of all tasks performed on job Job analysis data should be checked regularly for reliability and validity The New Strategic View of Job Analysis Roles and tasks described represent the functional borders within which the employee must work The ability of employees to be multiskilled and to work in an environment of borderless Strategic Job Analysis: Main objectives of strategic job analysis is to identify the tasks, skills, abilities, and knowledge William George reported a case Job description amended to include tasks, skills, knowledge and abilities related to customer contact

Generic Job Analysis: Process on identifying generic personal characteristics such as flexibility, innovativeness and adaptability Definition of traditional job analysis is simply that if it is a process of containing information about jobs How jobs will change to meet the demands of a dynamic organizational competitive environment Job analysis methods should be used and developed so as to collect the type of information that will help organizations to hire more productive worker, effectively train those employees already in the organization, and define the parameters around which performance appraisal and remuneration will take place

Overview Of The Recruitment Process


A firm can generate candidates internally, from among its present employees who desire promotion or transfer, or externally.

Strategic Issues in Recruiting


Recruitment Goals A commonly mentioned goals is to attract a large pool of applicants, but applicant pools can be too large and thus very costly to process. Recruiting must also attract a high proportion of well-qualified candidates As a part of this process of prioritizing goals, the organization may develop a recruitment philosophy Recruitment Philosophy One of thee key issues in recruitment philosophy is whether to promote largely from within the organization or to hire from the outside A second aspect of recruitment philosophy concerns where the emphasis is: on merely filling vacancies or on hiring for long-term careers

A third aspect of recruitment philosophy concerns depth of commitment to seeking and hiring a diverse range of employees A fourth aspect of recruitment philosophy is whether applicants are viewed as commodities to be purchased or as customers to be wooed A fifth aspect of recruitment philosophy has ethical overtones, in terms of fairness and honesty in the recruitment process

Internal or External Sources


Advantages of Internal Recruiting Filled by a person of known ability

There is less guesswork


Motivates current employees Ambitious employees are less likely to quit Training and socialization time is reduced Maximize job security for present employees

Disadvantages of Internal Recruiting


Insufficient internal supply of qualified individuals Peoples being promoted before they are ready

When one vacancy is filled internally, a second vacancy is


created Ripple effect 195 initial vacancies eventually resulted in 545 job movements Internal recruiting procedures are extremely cumbersome

Bureaucratic nightmare
Waiting times, eligibility lists, candidates current superior

Advantages of External Recruiting External sources can bring in new ideas and viewpoints Avoid ripple effect Cope with the demands of rapid growth Savings in training costs Hiring experienced workers Enunciate a new vision for the organization Disadvantages of External Recruiting External labor market is much larger and harder to reach Recruiting externally usually takes longer and costs more Too much external recruitment is discouraging to current employees

Countercyclical Hiring Attempt to hire many people in a boom year On a down cycle They also are firms that can afford to hire in downturns Alternatives to Traditional Recruiting Attract applicants by improving or changing the nature of inducements Focus of recruiting to labor pools Recruit from retirees, people with disabilities, disadvantaged urban residents, mothers with young children Temporary or contract workers Training costs are low

Historically, temporaries have been used primarily in jobs such as assembler, laborer, secretary, clerk, or truck driver. In todays work environment, however, they are available for a variety of other professions There is even a trend toward interim executives A nursing services firm employs many nurses and provides them to hospitals on a contract basis Yet another alternative to recruiting and hiring to staff a function within the organization is to hire an outside firm to perform the entire function By hiring out such functions as maintenance, security, and office service, the organization can achieve greater efficiency by having these activities performed by specialists. All of these options-temporaries, employee leasing, subcontracting- greatly reduce an organizations employment levels and thus its recruiting needs.

Internal Recruiting
Lower level jobs such as manual and clerical jobs are often

called nonexempt jobs because their incumbents are not


exempt from the minimum wage and overtime provisions

External Recruiting
A successful external recruiting effort requires careful planning and coordination

HRM professionals do most of the recruiting


In order to find the right kind of candidates, recruiters must work closely with hiring managers throughout the recruitment process Recruiters first step Must work out specifications in terms of what education, skills , and experience are needed and desired Throughout the recruiting process, the hiring manager should stay in close touch with the recruiter

Recruitment Information Systems


Before beginning to recruit candidates, the HR professional

must have a system for tracking applicants as they move


through the recruitment and selection process An applicant who is deemed unsuitable should receive a polite to that effect as soon as possible after the decision Good candidates who are pending should receive encouraging

letters to keep them interested in the organization

Informal Methods External recruiting methods are often grouped into two classes: informal and formal Informal recruiting methods tap a narrower labor market than formal methods. Informal methods include rehiring former employees or former cooperative education students and hiring from among those who apply without being solicited (such applicants are called walk-ins or gate hires). Another informal method is having present employees refer others or encourage their friends to apply (word-of mouth recruiting). Formal recruiting methods search the labor market more widely for candidates with no previous connection to the company

Formal Methods
Formal methods of external recruiting entail searching the labor market for candidates who have no previous connection to the firm The most common formal recruiting method is advertising

Recruitment ads, however, reach a much wider audience

Innovative Recruiting Methods Include job fairs, TV or radio ads, direct mail, print-of-sale recruitment advertising

Employment hotlines
Common method is telerecruiting Companies claim that an electronic search of a good resume database is as effective as- and much less expensive Recruiting Targeted Groups We will further discuss directing recruiting methods to specific segments of the labor market, such as executives, new collage graduates, the disadvantaged, minorities, and older workers.

Telecruiting Phone calls to potential candidates, with names obtained


from mailing lists of professional associations, schools, and mailing list companies. Direct Mail Using lists from above sources. Point-of-Sale Recruiting Messages (posters, literature, messages on the back of cash register tapes) Useful if customers are potentially qualified

applicants.
Talent Scout Cards One organization in need of customer-oriented service staff gave its managers "talent scout" cards inviting, prospective

candidates to apply for jobs. Managers were asked to distribute the cards
to exceptionally friendly, helpful customer service, personnel they encountered while doing their own shopping.

Posters Displayed on community bulletin boards, parks, laundromats, banks, etc. Door Hangers Useful for recruiting in a specified geographical area. Radio Alone or to refer candidates to open houses or large newspaper ads. Billboards Fixed highway displays or electronic billboards with

varying messages.
Hotlines and 800 Numbers Telephone lines with either recorded job vacancy messages or live interviewers. Live lines are increasingly being made available on Sundays, when most newspaper ads appear and candidates have the time to follow up on openings.

Information Seminars On job hunting skills, or on topics specific to one's industry, such as new developments in artificial intelligence. The latter may attract qualified professionals who would be reluctant to attend an open house or job fair, where the recruiting purpose was more explicit. Welcome Wagon, Relocation Consultants, Realtors These organizations are aware of newcomers to the community. Increasingly, spouses of individuals transferred into the community are seeking work, and can be located through these sources. Referral Programs Employee referral systems are common, but now some firms are encouraging their customers and suppliers to refer candidates as well. Outplacement Firms and Local Layoffs Skilled employees who have lost their jobs through no fault of their own may be found by contacting outplacement firms and by monitoring the local paper for layoffs at other establishments in the community.

Campus Recruiting Short period of time and at a single location Both space and administrative support Disadvantages lack of experience Inflated expectations Difficulty of evaluating candidates who do not possess much relevant work history Campus recruiting university relations program Some wanting full-time employment, others seeking part-time work Ability to mentor younger workers

Recruiting Disabled Workers

Recruiting Disadvantaged Workers


For instance, when Pizza Hut in New Jersey couldnt find enough local people to staff its suburban stores United Parcel Service installations in northern New Jersey successfully hired 1,500 employees

Evaluation of Recruitment
Evaluation measures on past recruiting efforts can help an organization to predict the time and budget needed to fill future openings Measures Used to Evaluate Recruiters Difficulty of the search assignment Number of positions the recruiters filled Number of applications the recruiter proceed Hires the applications produced Eventual job successes Measures Used to Evaluate Recruiting Sources Variety of sources or methods of recruiting have been used Number of applicants generated, yield ratios Performance of hires Differences in the Quality of Recruiting Sources

Creating Effective Recruitment Ads


1. Write a recruitment ad for a job you have held. 2. Explain where you would run this ad . 3. In groups, consider each ad and try to rewrite it to improve its appeal and likelihood of generating a qualified response. Consider layout and artwork as well as text. 4. Pick one ad and rewrite it to appeal especially to older workers. 5. Could some disabled people perform this job? Rewrite the ad to appeal to this audience, and discuss how you could go about finding disabled candidates.

Developing Recruiting Plans


Design a recruiting campaign for each of the five situations

described below. Include an explicit definition of the labor


market you intend to reach; then select the method(s) you will use to reach this target audience. How will you attract qualified candidates to apply? Justify why your recruiting plan is appropriate and cost-effective for the particular job you are trying to fill. Explain why your five recruiting plans differ from one another.

1. Toy World is opening a new super store in Seattle in six months. The store manager and half the supervisors will come from other Toy World stores in the northwestern region. All other employees will be new hires. A large number of stockroom workers and clerks are needed. 2. A major automobile manufacturer needs to hire 200 newly graduated engineers for entry-level positions. 3. A U.S.-based manufacturer of agricultural chemicals needs to appoint a regional manager to spearhead their entry into the Southeast Asian market. 4. A seventy-outlet women's clothing store chain needs to fill two middle management positions at its headquarters. The HR director realizes that all the current middle managers are white males. 5. The local 7-11 store needs two part-time clerks.