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Introduction to Human Resource Management

M. Khasro MIAH Ph.D.

04/08/23MBA Summer 2011 Section 1 1–1

Personnel Mistakes

Hire the wrong person for the jobExperience high turnoverHave your people not doing their bestWaste time with useless interviewsHave your company in court because of

discriminatory actionsHave some employees think their salaries are

unfair and inequitable relative to others in the organization

Allow a lack of training to undermine your department’s effectiveness

Commit any unfair labor practices04/08/23MBA Summer 2011 Section 1 1–2

Human Resource Management

Human Resource Management is the organizational function that deals with issues related to people such as hiring, training, promotion, performance management, compensation, organization development, safety, wellness, benefits, employee motivation, communication, administration and Industrial relations.


Therefore, human resource management can be defined as a specific combination of HR practices, work structures, and processes that maximizes employee knowledge, skill, commitment, and flexibility.

It composed of many interrelated parts that complement one another to reach the goals of an organization, large or small.

Set of activities directed at attracting, developing, and maintaining an effective workforce capable of achieving the firm’s objective.


”Soft” and ”Hard” HRM Soft HRM emphasizes the importance of highcommitment, learning, enlightened leadership;human resources are valuable assets, notvariable costs. Models and theories focus ontapping the human potential, based onorganizational behavior theories (e.g. Maslow,1954; Herzberg, 1966; McGregor, 1960)• Hard HRM emphasizes the calculative,quantitative and strategic management aspects( Strategy, Structure) and of managing the

workforce in a rational way (Storey, 1989).


Evolution of HRM

Human resource management has changed in name various times throughout history.

Industrial welfare was the first form of human resource management (HRM).


Evolution of HRM

• In 1833 the factories act stated that there should be male factory inspectors.

• In 1878 legislation was passed to regulate the hours of work for children and women by having a 60 hour week. During this time trade unions started to be formed.

• In 1868 the 1st trade union conference was held.

• This was the start of collective bargaining.


Evolution of HRM(cont’s)

In 1916 it became compulsory to have a welfare worker in explosive factories and was encouraged in arms factories.

The armed forces focused on how to test abilities and IQ along with other research in human factors at work.


Evolution of HRM(cont’s)

1917-18: 1st formal personnel department created to deal with tight labor market, high turnover, waste and

inefficiency, widespread strikes, union growth,government intervention, takeovers

1920’s: HR used to “win” worker cooperation, through ensuring job security, benefits, etc.

1930’-50’s: “Human Relations” recognizes that there are psychological and social influences to worker

satisfaction, cooperation, performance; first focus ongroups (not teams).


Evolution of HRM

1960’s: Work design, rather than communication and cooperation in groups, is the key to increasing worker motivation. Small work group design leads to greater employee effort, group work provides opportunities for “self-actualization”; work is more interesting and fulfilling.

1970’s: Quality of Work Life (QWL): emphasis on the value

of human resources. PM becomes HR.

1990’s-Present: TQM, reengineering, globalization, strategic HR, new technologies, diversity, contingency models, holistic approaches to HR. HRM models include “high involvement”, “high commitment”, “high performance work system”, “innovative work practices”. HR becomes HRM.

04/08/23MBA Summer 2011 Section 11–10

The Management Process


Planning

Organizing

Leading Staffing

Controlling

Human Resource Management at Work


Acquisition

Training

Appraisal

CompensatingLabor Relations

Health and Safety

Fairness

Human Resource

Management(HRM)

Personnel Aspects of a Manager’s Job

Conducting job analyses

Planning labor needs and recruiting job candidates

Selecting job candidates

Orienting and training new employees

Managing wages and salaries

Providing incentives and benefits

Appraising performance

Communicating

Training and developing managers

Building employee commitment


DIFFERENCES BETWEEN TRADITIONAL AND NEW HRM

FactorsFactors Traditional HRTraditional HR New HRM ConceptNew HRM Concept

Responsibility Responsibility of HRof HR

Staff specialists Line managersLine managers

FocusFocus Employee relations Partnership with internal and Partnership with internal and external customers and external customers and stakeholdersstakeholders

Role of HRRole of HR Transactional, change follower and respondents

Transformational, change Transformational, change leader and initiatorleader and initiator

InitiativesInitiatives Slow reactive, fragmented Fast, proactive, integratedFast, proactive, integrated

Time HorizonsTime Horizons Short term Short, median and long as Short, median and long as necessary necessary

ControlControl Bureaucratic- rules, policies, procedures

Organic- flexible, whatever is Organic- flexible, whatever is needed to succeedneeded to succeed

Job DesignJob Design Tight division of labor, independence, specialization

Broad, flexible, cross-training Broad, flexible, cross-training

Key Key InvestmentInvestment

Capital, Products People, knowledge People, knowledge

AccountabilityAccountability Cost centre Investment centre Investment centre 1–14MBA Summer 2011 Section 1

Basic HR Concepts

The bottom line of managing: Getting results

HR creates value by engaging in activities that produce the employee behaviors that the company needs to achieve its strategic goals.


Line and Staff Aspects of HRM

Line manager A manager who is authorized to direct

the work of subordinates and is responsible for accomplishing the organization’s tasks.

Staff manager A manager who assists and advises line

managers.


Line Managers’ HRM Responsibilities

1. Placing the right person on the right job

2. Starting new employees in the organization (orientation)

3. Training employees for jobs that are new to them

4. Improving the job performance of each person

5. Gaining creative cooperation and developing smooth working relationships

6. Interpreting the firm’s policies and procedures

7. Controlling labor costs

8. Developing the abilities of each person

9. Creating and maintaining department morale

10.Protecting employees’ health and physical condition


Human Resource Managers’ Duties


Functions ofHR Managers

Line FunctionLine Authority

Implied Authority

Staff FunctionsStaff Authority

InnovatorEmployee Advocacy

Coordinative Function

Functional Authority

Human Resource Specialties


Recruiters

EEO Coordinators

Labor Relations Specialists

Training Specialists

Job Analysts

Compensation Managers

Human Resource

Specialties

A Systems View of Human Resource Management

04/08/23MBA Summer 2011 Section 11 - 20

Goals of Human Resource Management

04/08/23MBA Summer 2011 Section 1 1 - 21

Human Resource Management as a Center of Expertise

04/08/23MBA Summer 2011 Section 1 1 - 22

FIGURE 1–1 HR Organization Chart for a Large Organization


Source: www.hr.wayne.edu/orgcharts.php. Accessed May 6, 2007.

FIGURE 1–2 HR Organizational Chart (Small Company)


FIGURE 1–3 Employment and Recruiting—Who Handles It? (Percentage of All Employers)


Source: HR MAGAZINE, BNA/Society for Human Resource Management, 2002. Reproduced with permission via Copyright Clearance Center.

Note: Length of bars represents prevalence of activity among all surveyed employers.

The Changing Environment of Human Resource

Management


Globalization Trends

Technological Trends

Trends in the Nature of Work

Workforce Demographic Trends

Changes and Trends in Human Resource

Management

FIGURE 1–4 Employment migration: Projected Loss of Jobs and Wages


Source: Michael Schroeder, “States Fight Exodus of Jobs,” Wall Street Journal, June 3, 2003, p. 84. Reproduced with permission of Dow Jones & Co. Inc. via Copyright Clearance Center.

The Changing Role of Human Resource Management


New Responsibilities for HR Managers

Measuring the HRM Team’s Performance

Managing with the HR Scorecard

Process

Creating High- Performance Work

Systems

Strategic Human Resource

Management

TABLE 1–1 Technological Applications for HR


Application Service Providers (ASPs) and technology outsourcing

Web portals

PCs and high-speed access

Streaming desktop video

The mobile Web and wireless net access

E-procurement

Internet- and network-monitoring software

Bluetooth

Electronic signatures

Electronic bill presentment and payment

Data warehouses and computerized analytical programs

High-Performance Work System Practices

Employment securitySelective hiringExtensive trainingSelf-managed teams/decentralized decision

makingReduced status distinctionsInformation sharingContingent (pay-for-performance) rewardsTransformational leadershipMeasurement of management practicesEmphasis on high-quality work


Benefits of a High-Performance

Work System (HPWS) Generate more job applicants

Screen candidates more effectively

Provide more and better training

Link pay more explicitly to performance

Provide a safer work environment

Produce more qualified applicants per position

Hiring based on validated selection tests

Provide more hours of training for new employees

Conduct more performance appraisals


FIGURE 1–5 Five Sample HR Metrics


HR Metric* How to Calculate It

Absence rate # of days absent in month× 100

Average # of employees during month × # of workdays

Cost per hire Advertising + agency fees + employee referrals + travel cost ofapplicants and staff + relocation costs + recruiter pay and benefits

Number of hires

HR expense factor

HR expense

Total operating expense

Time to fill Total days elapsed to fill job requisitions

Number hired

Turnover rate Number of separations during month× 100

Average number of employees during month

Sources: Robert Grossman, “Measuring Up,” HR Magazine, January 2000, pp. 29–35; Peter V. Le Blanc, Paul Mulvey, and Jude T. Rich, “Improving the Return on Human Capital: New Metrics,” Compensation and Benefits Review, January/February 2000, pp. 13–20; Thomas E. Murphy and Sourushe Zandvakili, “Data and Metrics-Driven Approach to Human Resource Practices: Using Customers, Employees, and Financial Metrics,” Human Resource Management 39, no. 1 (Spring 2000), pp. 93–105; [HR Planning, Commerce Clearing House Incorporated, July 17, 1996;] SHRM/BNA 2000 Cost Per Hire and Staffing Metrics Survey; www.shrm.org. See also, SHRM Research “2006 Strategic HR Management Survey Report,” Society for Human Resource Management..

Measuring HR’s Contribution The HR Scorecard

Shows the quantitative standards, or “metrics” the firm uses to measure HR activities.

Measures the employee behaviors resulting from these activities.

Measures the strategically relevant organizational outcomes of those employee behaviors.


The Human Resource Manager’s Proficiencies

New Proficiencies HR proficiencies

Business proficiencies

Leadership proficiencies

Learning proficiencies


FIGURE 1–6 Effects CFOs Believe Human Capital Has on Business Outcomes


Source: Steven H. Bates, “Business Partners,” HR Magazine, September 2003, p. 49. Reproduced with permission of the Society for Human Resource Management via Copyright Clearance Center.

HR Certification

HR is becoming more professionalized.

Society for Human Resource Management (SHRM) SHRM’s Human Resource Certification

Institute (HRCI)

SPHR (senior professional in HR) certificate

PHR (professional in HR) certificate


FIGURE 1–72004 SHRM®

Learning SystemModuleDescriptions


The Human Resource Manager’s Proficiencies (cont’d) Managing within the Law

Equal employment laws

Occupational safety and health laws

Labor laws

Managing Ethics Ethical lapses

Sarbanes-Oxley in 2003



An integrated approach to people resourcing


HR strategy: the integration of HR activities to manage performance


HRM in the twenty-first century?

K E Y T E R M SK E Y T E R M S

management process

human resource management(HRM)

authority

line manager

staff manager

line authority

staff authority

implied authority

functional control

employee advocacy

globalization

human capital

strategy

strategic plan

metrics

HR Scorecard

outsourcing

ethics

strategic human resource management

high-performance work system


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Documents

y training

organization y

salaries y

human relations

performance management

department s effectiveness

work design

hrm models