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Human Resource Management 10th Edition Chapter 1 STRATEGIC HUMAN RESOURCE MANAGEMENT: AN OVERVIEW

2008 by Prentice Hall


HR Branding
Firms corporate image or culture Embodies values and standards that guide peoples behavior People know what company stands for, people it hires, fit between jobs and people, and results it recognizes and rewards Important in getting highest quality applicants to join firm
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Human Resource Management

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

Human Resource 1 Management

Safety and Health

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Job Analysis Human Resource Planning Recruitment Selection

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Staffing (Cont.)
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
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Staffing (Cont.)
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

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Staffing (Cont.)
Selection - Process of choosing from a group of applicants the individual best suited for a particular position and the organization

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Human Resource Development

Training Development Career Planning Career Development Organizational Development Performance Management Performance Appraisal
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Human Resource Development (Cont.)

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 planning - Ongoing process whereby individual sets career goals and identifies means to achieve them
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Human Resource Development (Cont.)

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
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Human Resource Development (Cont.)

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
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Compensation All rewards that individuals receive as a result of their employment

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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.
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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.
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Safety and Health

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

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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 firms employees want the union to represent them Human resource activity is often referred to as industrial relations Most firms today would rather have a union-free environment
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Human Resource Research

Human resource research is not separate function. It pervades all HR functional areas.

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Interrelationships of HRM Functions

All HRM functions are interrelated Each function affects other areas

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Dynamic Human Resource Management Environment

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Environment of Human Resource Management

Legal Considerations





Operations Unanticipated Events

Human Resource 1 Management



Safety and Health

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Other Functional Areas



Labor Market



Labor Market
Potential employees located within geographic area from which employees are recruited Always changing
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Legal Considerations
Federal, state and local legislation Court decisions Presidential executive orders
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No longer content to accept, without question, the actions of business Ethics - Discipline dealing with what is good and bad, or right and wrong, or with moral duty and obligation Social responsibility - Implied, enforced or felt obligation of managers to serve or protect interests of groups other than themselves
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Group of employees who have joined together for purpose of dealing collectively with their employer Become a third party when dealing with the company
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Owners of corporation Because they have invested money in firm, they may at times challenge programs considered by management to be beneficial to organization

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Firms may face intense competition in both their product or service and labor markets Must maintain a supply of competent employees Bidding war often results
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People who actually use firms goods and services Management has task of ensuring its employment practices do not antagonize members of market it serves Workforce should be capable of providing top-quality goods and services
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The world has never before seen technological changes occur as rapidly as they are today. Created new roles for HR professionals Additional pressures on them to keep abreast of technology

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In general, when economy is booming, it is often more difficult to recruit qualified workers. When a downturn is experienced, more applicants are typically available.
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Unanticipated Events
Occurrences in the external environment that could not be foreseen Every disaster, whether manmade or by nature, requires a tremendous amount of adjustment with regard to human resource management
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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
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HRs 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
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HRs Changing Role: Who Performs Human Resource Management Tasks?

Human Resource Managers HR Outsourcing HR Shared Service Centers Professional Employer Organization (Employee Leasing) Line Managers
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Human Resource Manager

Acts in advisory or staff capacity Works with other managers to help them deal with human resource matters Today HR departments continue to get smaller because others are accomplishing certain functions
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HR Outsourcing
Transfers responsibility to an external provider Market for HR outsourcing is growing dramatically
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Ways HR Outsourcing is Done

Discrete services Multi-process services Total HR outsourcing

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Discrete Services
One element of business process or single set of high-volume repetitive functions is outsourced to a thirdparty Large majority of companies outsource transactional HR activities, such as 401(k) administration
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Multi-process Services
Complete outsourcing of one or more human resource processes Example: Procter & Gamble outsourced entire training operations
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Total HR Outsourcing
Transfer majority of HR services to third party Example: Whirlpool Corporation signed 10-year deal to outsource HR business processes for 68,000 employees to Convergys Corporation

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HR Shared Service Centers (SSCS)

Takes routine, transaction-based activities that are dispersed and consolidates them in one location
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Professional Employer Organization (Employee Leasing)

Company that leases employees to other businesses.

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Professional Employer Organization (Cont.)

Company releases its employees who are then hired by PEO PEO pays the employees PEO is the employees legal employer and has the rights to hire, fire, discipline, and reassign an employee Charges a fee of from 1 to 4 percent of the customers gross wages
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Line Managers Performing HR Tasks

Involved with human resources by nature of their jobs Line managers are now performing some duties typically done by HR

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HR as a Strategic Partner
HR executives must understand complex organizational design Sharp deviation from what has traditionally been an administrative type role for HR

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Strategic Activities CEOs Want from HR

Make workforce strategies integral to company strategies and goals Leverage HRs role in major change initiatives Earn the right to a seat at the corporate table Understand finance and profits Help line managers achieve their goals
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Human Capital Metrics

Measures of HR performance

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Examples of HR Metrics
Time to fill open positions HR headcount ratios Administrative cost per employee Turnover cost Training return on investment Cost per employee for HR administration ranges from $1,200 - $1,600
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HR Scorecard
Report card of effectiveness of specific person Metrics that will best suit each company depends on variety of factors
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Human Resource Designations

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Human Resource Executives, Generalists, and Specialists

Vice President, Human Resources Vice President, Industrial Relations

Manager, Compensation

Manager, Training and Development

Manager, Staffing

Benefits Analyst

Executive: Generalist: Specialist:

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Characteristics of an HR Executive
Performs one or more HR functions

A top-level manager
Reports directly to CEO or head of major division
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Characteristics of an HR Generalist
Often an executive Performs tasks in various HR related areas Involved in several, or all, of the five HRM functions
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Characteristics of an HR Specialist
May be an HR executive, manager, or

Typically concerned with only one of

the five functional areas
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Evolution Of Human Resource Management

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Traditional Human Resource Function in Large Firm

Separate sections were often created Placed under an HR Manager Each HR function may have a supervisor & staff HR Manager works closely with top management in formulating policy

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Traditional Human Resource Functions in a Large Firm

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

Manager, Training and Development

Manager, Compensation

Manager, Staffing

Manager, Safety and Health

Manager, Labor Relations


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The Evolving HR Organization

HR Outsourcing HR Shared Service Centers Professional Employer Organization Line Manager

Evolve to make HR more strategic

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A Possible Evolving HR Organization Example

President and CEO
Vice President, Strategic Human Resources Director of Safety and Health

Vice President, Operations

Vice President, Finance

Vice President, Marketing

Training & Development (Outsourced)

Compensation (Shared Service Centers)

Staffing (Line Managers, Use of Applicant Tracking 2008 by Prentice Hall Systems)


A Global Perspective: British and American Culture Are Different

United Kingdom might seem to require less adjustment for Americans than countries such as China Assumption can set up Americans for difficulty, disappointment and underachievement Sports metaphors may confuse Britons Example: step up to the plate, cover all the bases, Ill touch base with you, ballpark figure, off the wall and out in left field.
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Organization of Human Resource Management 10th Edition

PART I. INTRODUCTION Chapter 1: Strategic Human Resource Management: An Overview PART II. HR ETHICAL, LEGAL, AND SOCIAL CONSIDERATIONS Chapter 2: Business Ethics and Corporate Social Responsibility Chapter 3: Workforce Diversity, Equal Employment Opportunity, and Affirmative Action
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Organization of Human Resource Management 10th Edition (Cont.)

PART III. STAFFING Chapter 4: Job Analysis, Strategic Planning, and Human Resource Planning Chapter 5: Recruitment Chapter 6: Selection

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Organization of Human Resource Management 10th Edition (Cont.)

PART IV. HUMAN RESOURCE DEVELOPMENT Chapter 7: Training and Development Appendix Chapter 7: Career Planning and Development Chapter 8: Performance Management and Appraisal
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Organization of Human Resource Management 10th Edition (Cont.)

PART V. COMPENSATION AND BENEFITS Chapter 9: Compensation Chapter 10: Benefits, Nonfinancial Rewards, and Other Compensation I ssues PART VI. SAFETY AND HEALTH Chapter 11: A Safe and Healthy Work Environment
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Organization of Human Resource Management 10th Edition (Cont.)

PART VII. EMPLOYEE AND LABOR RELATIONS Chapter 12: Labor Union and Collective Bargaining Appendix Chapter 12: History of Unions in the United States Chapter 13: Internal Employee Relations PART VIII. OPERATING IN A GLOBAL ENVIRONMENT Chapter 14: Global Human Resource Management
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