Philippine Christian University

Dasmariñas Campus
Graduate School of Business and Management
Online Education and Professional Advancement

CHAPTER 13:
HUMAN RESOURCE
MANAGEMENT
 LEARNING OBJECTIVES
• Explain the importance of human resource management and the human
resource management process.
• Describe the external influences that affect the human resource management
process.
• Discuss the tasks associated with identifying and selecting competent
employees.
• Know how to write effective job descriptions.
• Develop your skill at being a good interviewer.
• Explain how companies provide employees with skills and knowledge.
• Describe strategies for retaining competent, high-performing employees.
• Discuss contemporary issues in managing human resources.
A KEY TO SUCCESS IN MANAGEMENT AND IN
YOUR CAREER IS KNOWING HOW TO
NEGOTIATE PAY
Take the opportunity to think about questions that have come up since receiving your offer.

Also, think about whether your salary represents your worth. After doing some homework on the subject, you may decide to
negotiate for a higher salary. Here are some suggestions for your preparation:

1. Do you want the job?

2. Research what similar companies pay new hires
3. Make sense of the data
4. Prepare for the pay discussion
5. Have the discussion
6. Communicate your decision

With the organization’s structure in place, managers have to find people to fill the jobs that have been created or to
remove people from jobs if business circumstances require.

That’s where human resource management (HRM) comes in.

WHY HUMAN RESOURCE MANAGEMENT IS
IMPORTANT AND THE HUMAN RESOURCE
MANAGEMENT PROCESS
HRM is important for three reasons.
1. As various studies have concluded, it can be a significant source of competitive advantage.
2. HRM is an important part of organizational strategies.
3. The way organizations treat their people has been found to significantly impact organizational
performance
HIGH-PERFORMANCE WORK PRACTICES
-are work practices that lead to both high individual and high
organizational performance

SOME EXAMPLES:
• Self-managed teams
• Decentralized decision making
• Training programs to develop knowledge, skills, and abilities
• Flexible job assignments
• Open communication
• Performance-based compensation
• Staffing based on person-job and person-organization fit
• Extensive employee involvement
• Giving employees more control over decision making
• Increasing employee access to information
EIGHT ACTIVITIES IN THE HRM
PROCESS
EXTERNAL FACTORS THAT AFFECT THE
HUMAN RESOURCE MANAGEMENT PROCESS

 The Economy
 Labor Unions
 Laws and Rulings
 Demography
IDENTIFYING AND SELECTING
COMPETENT EMPLOYEES

 Human Resource Planning is the process by which managers ensure that they have the right number and
kinds of capable people in the right places and at the right times. Through planning, organizations avoid
sudden people shortages and surpluses.38 HR planning entails two steps: (1) assessing current human
CURRENT ASSESSMENT MEETING FUTURE HR NEEDS
resources and (2) meeting future HR needs.
• job analysis-An assessment that defines Future HR needs are determined by the organization’s
jobs and the behaviors necessary to perform mission, goals, and strategies. Demand for employees
them results from demand for the organization’s products
• job description (position description) A or services.
written statement that describes a job
• job specification A written statement of the INCREASED SCRUTINY IN THE SELECTION
minimum qualifications a person must PROCESS
possess to perform a given job successfully Companies that do not carefully scrutinize the
qualifications or backgrounds of employees surely
pose risks of increased liability, poor reputation, and
lower performance.
IF EMPLOYEE VACANCIES EXIST, MANAGERS SHOULD USE THE
INFORMATION GATHERED THROUGH JOB ANALYSIS TO GUIDE THEM
IN
 recruitment—that is, locating, identifying, and attracting capable
applicants.
 On the other hand, if HR planning shows a surplus of employees,
managers may want to reduce the organization’s workforce through
decruitment.
Different recruitment sources managers can use to find
potential job candidates
Decruitment Options
 • Screening job applicants to ensure that the most appropriate candidates are hired
Selection
• involves predicting which applicants will be successful if hired. For example, in hiring
for a sales position, the selection process should predict which applicants will generate a
high volume of sales.

Selection Decision Outcomes

 Selection Tools
Application Forms
• Almost universally used
• Most useful for gathering information
• Can predict job performance but not easy to create one that does
Written Tests
• Must be job-related
• Include intelligence, aptitude, ability, personality, and interest tests
• Are popular (e.g., personality tests; aptitude tests)
• Relatively good predictor for supervisory positions
Performance-Simulation Tests
• Use actual job behaviors
• Work sampling—test applicants on tasks associated with that job; appropriate for routine or standardized work
• Assessment center—simulate jobs; appropriate for evaluating managerial potential Interviews
• Almost universally used
• Must know what can and cannot be asked
• Can be useful for managerial positions
Background Investigations
• Used for verifying application data—valuable source of information
• Used for verifying reference checks—not a valuable source of information
Physical Examinations
• Are for jobs that have certain physical requirements
• Mostly used for insurance purposes
Orientation Introducing a new employee to his or her job and the organization
There are two types of orientation. Work unit orientation familiarizes the employee with the goals of the
work unit, clarifies how his or her job contributes to the unit’s goals, and includes an introduction to his or her
new coworkers. Organization orientation informs the new employee about the company’s goals, history,
philosophy, procedures, and rules. It should also include relevant HR policies and maybe even a tour of the
facilities.

Employee Training provide workers with education and specific skills training directly related
to their role
Types of Training
Although employee training can be done in traditional ways, many organizations are relying more on technology-based
training methods because of their accessibility, cost, and ability to deliver information.
TRAINING METHODS
 RETAINING competent, high-performing employees

Once an organization has invested significant dollars in recruiting, selecting, orienting, and training employees, it
wants to keep them, especially the competent, high performing ones!

Two HRM activities that play a role in this area are managing employee performance and developing an
appropriate compensation and benefits program.

performance management system establishes performance standards used to evaluate employee performance

What is Performance Appraisal?

A performance appraisal is a regular and structured method of assessing an employee's job performance with
predetermined job expectations.

It involves a subjective analysis of the individual's strengths and areas for improvement, their value to the
organization, and their potential for future growth and development.
Performance Appraisal Methods
 Compensation and Benefits
Compensation is a financial form of remuneration, while benefits are non-financial

Compensation comprises
monetary compensation such as
bonuses, profit sharing, overtime
pay, recognition rewards, and sales
commission, among other things,
as well as non­monetary
advantages such as a company-
paid automobile, company-paid
housing, and stock options.

Benefits, on the other hand, are non-

monetary rewards offered to
employees as a show of appreciation
for their efforts. Employees like
amenities such as flexible work hours,
the ability to work remotely, access to
gym memberships and catered meals,
and a casual dress code.
How do managers determine who gets paid what? Several factors influence the compensation and benefit packages
that different employees receive

What Determines Pay and Benefits?

Skill-based pay -A pay system
that rewards employees for
the job skills they can
demonstrate

Variable pay -A pay system in

which an individual’s
compensation is contingent on
performance
We’ll conclude this chapter by looking at some contemporary HR issues facing today’s managers. These concerns
include managing downsizing, sexual harassment, and controlling HR costs.

Downsizing (or layoffs) is the planned elimination of jobs in an organization. When an organization has too many
employees—which can happen when it’s faced with an economic recession, declining market share, overly aggressive
growth, or poorly managed operations—one option for improving profits is to eliminate some of those excess workers

Tips for Managing Downsizing

 Managing Sexual Harassment
Sexual harassment is defined as any unwanted
action or activity of a sexual nature that explicitly or
implicitly affects an individual’s employment,
performance, or work environment. In practice, it can
occur between members of the opposite sex or the
same sex, even though the laws in some countries
apply more narrowly.
Under RA 7877, work, education, or training
related sexual harassment is “committed by an
employer, employee, manager, supervisor, agent
of the employer, teacher, instructor, professor,
coach, Trainor, or any person who,
having authority, influence or moral ascendancy o
ver another in a work or training or education
environment, demands, requests or otherwise
requires any sexual favor from the other,
regardless of whether the demand, request or
requirement for submission is accepted or not by
the object of said act.”
What can an organization do to prevent sexual
harassment and protect itself against claims that
harassment has occurred?

Experts advise having a clearly written, detailed policy

with specifics about what is not allowed and how to
report any incidents.

Be sure the policy is widely publicized within the

organization

Provide training to help employees and managers

understand and deal with the issue, and demonstrate that
sexual harassment, as well as retaliation against anyone
who reports it, will not be tolerated.

An effective sexual harassment policy can limit harm and reduce liability. It also promotes the
equity and diversity goals of organizations and institutions and makes good business sense.
Controlling HR Costs
HR costs are skyrocketing, especially employee health care and employee pensions.

Ways Employers Can Control

EMPLOYEE HEALTH CARE COSTS
• Encourage healthy lifestyles
• Focus On Preventive Healthcare
• Offer Holistic Wellness Programs
• Adopt Corporate Health Checkup Policy
EMPLOYEE PENSION PLAN COSTS
• Provide a defined contribution plan where
employees contribute a portion of their salary,
which is then invested for retirement
• Outsource them to third-party administrators who
specialize in pension plan management.
• Regularly monitor the performance and financial
health of the pension plan to ensure its
sustainability.