Chapter 1

Managing Human Resources

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 What Do I Need to Know?
LO 1-1 Define human resource management, and explain how H R M 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.

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 1
POLLING QUESTION In an organization, who should be concerned with HRM?
A. Only the HR department.
B. Only managers.
C. Only top-level managers.
D. All of these.

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 Human Resource Management (HRM)

The policies, practices, and systems that influence employees’:

• Behavior.
• Attitudes.
• Performance.

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 Figure 1.1 HRM Practices

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 Human Resources and Company Performance 1

Human capital: an organization’s employees described in terms of their:

• Training.
• Experience.
• Judgment.
• Intelligence.
• Relationships.
• Insight.

The concept of HRM implies that employees are resources of the employer.

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 Figure 1.2 Impact of Human Resource Management

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 Human Resources and Company Performance 2

Sustainable Competitive Advantage

An organization is better than competitors at something and can hold that
advantage over a sustained period of time.
Human resources give organizations advantages because human resources:
• Are valuable.
• Are rare.
• Cannot be imitated.
• Have no good substitutes.

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 Employee Satisfaction
At Google, the company’s focus is
on making employees feel valued,
trained, and well compensated. In
turn, there is a low turnover rate
and a high degree of satisfaction.

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 Human Resources and Company Performance 3

High-Performance Work System

Technology, organizational structure, people, and processes all work together to
give an organization a competitive advantage.
May include:
• Development of training programs.
• Recruitment of people with new skill sets.
• Establishment of rewards for such behaviors as teamwork, flexibility, and learning.

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 Responsibilities of Human Resource Departments 1

HR Product Lines
• Administrative services and transactions.
• Business partner services.
• Strategic partner.

Responsibilities
• Establishing and administering personnel policies.
• Ensuring compliance with labor laws.

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 Table 1.1 Responsibilities of HR Departments 1

Function Responsibilities
Analysis and design of Work analysis; job design; job descriptions
work
Recruitment and Recruiting; job postings; interviewing; testing; coordinating use of
selection temporary labor
Training and Orientation; skills training; career development programs
development
Performance Performance measures; preparation and administration of performance
management appraisals; discipline
Compensation and Wage and salary administration; incentive pay; insurance; vacation leave
benefits administration; retirement plans; profit sharing; stock plans

Sources: “Human Resources Managers,” O*NET OnLine, https://www.onetonline.org, updated April 7, 2020; Society for Human Resource Management, “SHRM Essentials of Human Resources,”
https://www.shrm.org, accessed April 7, 2020; SHRM-BNA Survey No. 66, “Policy and Practice Forum Human Resource Activities, Budgets, and Staffs, 2000–2001,” Bulletin to Management, Bureau of
© McGraw Hill National Affairs Policy and Practice Series (Washington, DC: Bureau of National Affairs, June 28, 2001). 13
 Table 1.1 Responsibilities of HR Departments 2

Function Responsibilities
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

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 Responsibilities of Human Resource Departments 2

Job Analysis
• Process of getting detailed information
about jobs.

Job Design
• Process of defining the way work will
be performed and the tasks that a
given job requires.

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 Boosting Morale
REI is one of only five companies to
make Fortune’s list of “100 Best
Companies to Work For” every year
since the rankings began in 1998. The
retailer of outdoor gear and apparel
provides health care benefits to all
employees working at least 10 hours
per week, plus extra time off with pay
for getting outside to enjoy nature.
How do you think this boosts morale?

© McGraw Hill ©Matt Peyton/AP Images for REI 16

 Responsibilities of Human Resource Departments 3

Recruitment
• Process through which the organization seeks applicants for potential employment.

Selection
• Process by which the organization identifies applicants with the necessary
knowledge, skills, abilities, and other characteristics that will help the organization
achieve its goals.

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 Table 1.2 Top Qualities Employers Look For in Employees

1. Problem-solving skills.
2. Teamwork skills.
3. Written communication skills.
4. Leadership skills.
5. Strong work ethic.

Source: Based on National Association of Colleges and Employers, “Key Attributes Employers Want to See on Students’ Resumes,” January 13, 2020, https://www.naceweb.org
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 Responsibilities of Human Resource Departments 4

Training
• A planned effort to enable employees to learn job-related knowledge, skills, and
behavior.

Development
• Acquisition of knowledge, skills, and behaviors that improve an employee’s ability to
meet changes in job requirements and in customer demands.

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 Responsibilities of Human Resource Departments 5

Performance Management
• Process of ensuring employees’ activities and outputs match the organization’s goals.
• HR may be responsible for developing or obtaining questionnaires and other devices
for measuring performance.

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 Responsibilities of Human Resource Departments 6

Planning and Administering Pay and Benefits

Determine salary, wages, bonuses, commissions, and other performance-related
pay.
Determine which benefits to offer and how much of the cost is shared by
employees.
• Need systems for keeping track of employees’ earnings and benefits.
• Employees need information about benefits plans.
• Requires extensive record keeping and reporting.

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 Responsibilities of Human Resource Departments 7

Maintaining Positive Employee Relations

• Preparing and distributing employee handbooks and company publications.
• Dealing with and responding to communications from employees.
• Negotiating union contracts and maintaining communication with union
representatives.

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 Responsibilities of Human Resource Departments 8

Establishing and Administering Personnel Policies

• Hiring.
• Discipline.
• Promotions.
• Benefits.

HR personnel communicate through a variety of channels:

• Presentations at meetings, posting documents online, e-mail, social media, etc.

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 Responsibilities of Human Resource Departments 9

Managing and Using Human Resource Data

Handling records while protecting privacy.
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.

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 Responsibilities of Human Resource Departments 10

Ensuring Compliance with Labor Laws

Includes equal employment opportunity, employee safety and health, employee
pay and benefits, employee privacy, and job security.
Government requirements include:
• Filing reports and displaying posters.
• Avoiding unlawful behavior.
• Managers depend on HR to help them track these requirements.

Lawsuits continue to influence HRM practices concerning job security.

• Employment at will, age discrimination, etc.

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 Responsibilities of Human Resource Departments 11

Supporting the Organization’s Strategy

• Human resource planning: identifying the numbers and types of employees the
organization requires to meet objectives.
• Talent management: systematic, planned effort to attract, retain, develop, and
motivate highly skilled employees and managers.
• Evidence-based HR: collecting and using data to show human resource practices
have a positive influence on company’s bottom line or key stakeholders.

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 Responsibilities of Human Resource Departments 12

Supporting the Organization’s Strategy continued

Managing change by applying knowledge of human behavior, along with performance
management tools, to help the organization manage change constructively.
Sustainability: ability to profit without depleting resources, including employees,
natural resources, and support of surrounding community.
Stakeholders: parties with an interest in the company’s success.
• Typically includes shareholders, community, customers, and employees.

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 is the HR function that is primarily concerned with
ensuring employees are capable of doing their current jobs, while
2
POLLING QUESTION
is the HR function that ensures employees are satisfied
with their rewards.

A. Development; employee relations.

B. Training; pay and benefits.
C. Selection; pay and benefits.
D. Training; legal compliance.

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 Skills of HRM Professionals

Skills of HRM Professionals

The Society for Human Resource Management (SHRM) HR Success
Competencies.
• Defines knowledge and skills associated with success in HRM.
• Four clusters of competencies:
• Technical (HR expertise).
• Interpersonal (relationship management, communications, and global and cultural
effectiveness).
• Business (consultation, critical evaluation, and business acumen).
• Leadership (;eadership and navigation, and ethical practice).

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 Figure 1.3 Competencies for HR Professionals

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© McGraw Hill Source: Based on Society for Human Resource Management, SHRM Competency Model, www.shrm.org, accessed April 7, 2020. 30
 HR Responsibilities of Supervisors

Supervisors
The company’s founders are the first supervisors.
Supervisors have many HR responsibilities.
• Must consider the ways that decisions and policies will affect their employees.

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 Figure 1.4 Supervisors’ Involvement in HRM: Common Areas of Involvement

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 Ethics in Human Resource Management 1

Ethics
• Fundamental principles of right and wrong.
• Treatment of employees is a top concern, such as the treatment of women in the
workplace.

Ethical behavior
• Behavior that is consistent with those principles.

Many ethical issues in the workplace involve H RM.

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 Ethics in Human Resource Management 2

Employee Rights
• Free consent.
• Privacy.
• Freedom of conscience.
• Freedom of speech.
• Due process.

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 Ethics in Human Resource Management 3

Standards for Ethical Behavior

Ethical companies act according to four principles:
• Emphasize mutual benefits in relationships with customers, vendors, and clients.
• Employees assume responsibility for the actions of the company.
• Have a sense of purpose or vision that employees value and use in their day-to-day
work.
• Emphasize fairness.

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 Figure 1.5 Standards for Identifying Ethical Practices

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 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.

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 Figure 1.6 Median Salaries for HRM Positions

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© McGraw Hill Source: Data from O*NET OnLine, https://www.onetonline.org, accessed April 8, 2020.
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 End of Chapter 1

© 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. 39