The purpose of this chapter is toexplain what human resourcemanagement is, and why

itsimportant to all managers. Well seethat human resource managementactivities

such as hiring, training,appraising, compensating, anddeveloping employees are part
ofevery managers job. And well seethat human resource management is also a
separate function, usually witits own human resource or HRmanager. The main topics
wellcover include the meaning ofhuman resource management; whyhuman resource
management is important to all managers, globaland competitive trends,
humanresource management trends, andthe plan of this book. The frameworkabove
(which introduces eachchapter) makes this point: That toformulate and apply HR
practiceslike testing and training you shouldunderstand the strategic and legalcontext in
which youre managing.

LEARNING OBJECTIVES
After studying this chapter, you will be able to:
1. Explain what human resource management is and how it relates to the
management process.
2. Show with examples why human resource management is important to all
managers.
3. Illustrate the human resources responsibilities of line and staff managers.

LEARNING OBJECTIVES
After studying this chapter, you will be able to:
4. Briefly discuss and illustrate each of the important trends influencing human
resource management.
5. List and briefly describe important traits of todays human resource managers.
6. Define and give an example of evidence-based human resource management.
7. Outline the plan of this book.

Organizations have been described in various ways. We will focus our early efforts on
understanding an organization as groups of individuals with formally assigned roles.
Note that such individuals generally work together to achieve the common goals of an
organization.

Understanding the five elements of what managers do (planning, organizing, staffing,

leading, and controlling) will assist you in your career. For example, no matter what
your job, planning involves establishing goals, rules and procedures and attempting to
forecast the future.Planning will enhance your ability to manage people and functions.
For our purposes, we will focus our efforts on basic staffing functions. These include:
Acquiring talented employees
Training new hires and existing managers and employees
Creating and administering effective performance appraisals
Properly compensating employees, and,
Attending to concerns about labor relations, health, safety, and fairness

The HR function is primarily concerned with the staffing component of the five
management processes, namely, planning, organizing, staffing, leading, and controlling.
The key elements of staffing include:
Job analysis
Planning labor needs
Recruiting
Orienting and training new employees
Compensation
Incentives and benefits
Performance appraisal
Communicating
Training and development, and
Employee commitment
In addition, HR is responsible for compliance with federal, state and local laws, safety,
and handling grievances and labor relations.

Line and staff managers focus their energies in different yet related and complementary
ways. Lets talk about the two types of managers and what each does for the firm.

If you are a line manager, you will hold responsibilities to issue orders, provide
directions and establish rules and procedures. For example, as a sales manager, you will
be responsible for requiring adherence to your rules relative to sales quotas and goals.
On the other hand, an HR manager is a staff manager and, like all staff managers, is
responsible for influencing and advising others. Within the HR department you may be
responsible for establishing goals and giving orders to those in your department thus
serving as a line manager within HR. Your principal duty to the organization as a whole,
however, is that of a staff function, much the same as a purchasing department.
Staff departments may include finance, accounting, and logistics. Sales, production, and
operations departments generally are considered line functions.

If you are a line manager, your duties and responsibilities concern how well you can
successfully orient and integrate new hires into your unit, maintain their health and
safety, supervise and motivate them, and effectively manage department costs.

10

Line managers require support to perform their jobs properly. If you are a line manager,
you will have the help of the people in your HR department. HR professionals ensure
adherence to company policies, provide training, advice on motivating your employees,
and other support as needed.

11

In the continuing development of human resource management, there exist various

trends that will help shape its practice and evolution in the coming years. Human
Resource responsibilities have become broader and more strategic over time in
response to a number of trends. The role of HR has evolved from primarily being
responsible for hiring, firing, payroll, and benefits administration to one that is more
strategic.

13

Many trends are emerging and will continue to change the shape, size, and function of
HR management. Some of these trends we will discuss shortly include:
Globalization
Competition
Deregulation
Increased indebtedness
Technological innovation
More high-tech & service jobs

14

In addition, we will discuss other trends such as:

More knowledge work
Aging workforce
Economic downturn
De-leveraging
Deregulation slowdown
Slower economic growth

15

Globalization refers to the tendency of firms to extend their sales, ownership, and/or
manufacturing to new markets abroad. Dell, for example, is planning to supply PCs to
China. China is expected to become the largest market for computers in the world.
Companies such as Toyota, BMW, and Honda build and sell some of their vehicles here
in the U.S. and even ship them to other countries from the U.S.
The reasons for going global are many including: reaching new markets, selling more
products or services, lower labor costs, forming partnerships, and becoming more
competitive.

16

Due to the softening of U.S. banking regulations, many banks were able to offer stocks
and other financial instruments in addition to traditional banking services. Such actions
contributed to increased risks for the average banking customer. Questionable lending
practices led to easy credit for developers and homebuyers alike. Perhaps you have
experienced some of these practices or know of people who have. Like many
Americans, credit practices have allowed, even encouraged, you and me to buy what
we want when we want it. Such practices encourage spending in excess of what we
may earn.
The U.S. and other countries have imported more than theyve created and exported.
Such practices are referred to as the balance of payments. Rating firms such as
Standard and Poors have threatened to and even lowered the ratings of some debtor
nations. Such steps and other actions have contributed to economic volatility and
changes in the way firms conduct business and employee people.

17

The impact and growth in the use of smart phones and tablet computers, such as the
iPad, have opened doors to people and the workplace in a way that previously has
never occurred. The speed of information exchange has contributed to the growth of
social networking sites such as Facebook and LinkedIn. Facebook, for example, offers
Facebookrecruiting which provides a rapid conduit between employers and job-seekers.

18

As you enter the workforce or continue in your jobs, you are more likely to enter
commands into a computer than perform dangerous physical labor. The brawn to
brains changes have been fueled by moving manufacturing jobs to low-wage
countries. Just-in-time (JIT) manufacturing processes have connected the customer
with the manufacturer and the distributor in real time resulting in more precise
scheduling, production and delivery. Another trend, human capital, refers to the
knowledge, education, training, skills, and expertise of a firms workers. Todays (and
tomorrows) best jobs will go to the individuals with the best reading, math, and
communication skills. In other words, the best knowledge workers will be hired first.

19

Although you are in college now perhaps some or many of you work as well
throughout your careers you will need to understand the people around you. One
aspect of the changing nature of the workplace has to do with the age of the people
with whom you work. Other factors include whether those around you come from
other countries and the cultural qualities they represent. Conversely, if you are a
nontraditional or older worker or come from abroad, understanding the nature of those
around you will enable you to be more productive and make greater contributions.

20

According to the Bureau of Labor Statistics, during the twenty-year period between
1998 and 2018, the number of white, non-Hispanic workers will decrease in the United
States. The black and Asian workforce will increase. In fact, those members of the
workforce of Hispanic origin will increase more than 7% while the percentage of
younger workers will decrease. Most telling, perhaps, is that workers over the age of 55
will almost double from 12.4% to 23.9%!

21

Generation Y workers (those born from 1977-2002, also called Millenials) have,
according to one expert, been pampered, nurtured, and programmed with a slew of
activities. Consequently, this generation:
Is considered to be both high-performance and high-maintenance
Wants fair and direct supervisors who are highly engaged in their professional
development
Seeks out creative challenges and view colleagues as vast resources from whom to
gain knowledge
Wants to make an important impact on Day 1
Wants small goals with tight deadlines so they can build up ownership of tasks, and
Aims to work faster and better than other workers
Consider to what extent you identify with any or all of these elements and what they
might mean to those around you who are not of your generation.Keep in mind these
descriptions are in comparison to baby-boomers and Generation X workers who have
different characteristics.

22

According to one survey, 41% of employers are bringing retirees back into the
workplace. Thirty-one percent of employers are offering employment options to attract
semi-retired workers. Many workers hold multiple jobs or work in contingent
arrangements such as two people sharing one job.
Technology enables employees to work from home. Technology also has helped create
co-working sites where people may be working at a shared site for the same or
different companies or even independently.
One controversial trend involves the granting of H1-B visas for skilled foreign workers
when enough U.S. workers with the proper skills are not available in a given location.
Have you experienced or do you know of family members or friends who have had
experiences with such workers or workplaces? What do such experiences suggest to
you with respect to the role of HR?

23

An important measure of U.S. total economic output, the Gross National Product
(GNP), boomed between 2001 and 2008. Home prices soared and unemployment was
low. Economically speaking, somewhere between 2007 and 2008, however, everything
fell off a cliff. Today, unemployment remains at a high and sustained 9.1% while home
prices may have dropped 20% or more.
Financial institutions held enormous amounts of worthless debt on their books while
lending dried up. In effect, the economy tanked. While this situation will improve,
global economic impacts have been felt and will continue to be felt for some time. The
human resource management profession must continually evolve and change keeping
pace with the changes in the global economy.

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Evidence-based human resource management involves the use of the best available
evidence with respect to human resource practices. For example, tracking median HR
expense as a percentage of a companys total operating costs may average less than
1%. The use of this and similar metrics will help control expenses and contribute to
profits.

25

 The shifting role of workers worldwide is connected to the ways in which countries operate, produce,
and distribute the goods and services they provide. The world economy is becoming more
interdependent and interrelated.
After World War II, the U.S. manufactured and sold almost all durable goods (automobiles, washers,
dryers, etc.) but has now become an information and service-based society. U.S. citizens are now
becoming knowledge workers. Meanwhile, countries such as Japan, China, and others have assumed
global manufacturing roles.
The recent and continuing economic troubles in the U.S. also have impacted the ways in which
workers are hired and employed by companies. Fewer available jobs may mean broader
responsibilities for the workers within a given firm.
The deregulation of banks and other financial institutions have contributed to individuals spending
more than they make. Lending and borrowing practices have helped move the U.S. into a debtor
nation status.
Technology has contributed to widespread and rapid distribution of information between employees
and employers. Sites such as Facebook and LinkedIn contribute to the new ways potential employees
get jobs and share information about companies.
There are more high-tech and service jobs available, and more focus on the knowledge, skills and
experience people bring to the workplace.
Trends in demographics indicate a growing proportion of Hispanic, Asian, African-American, and nontraditional workers in the workforce. A large jump in older workers is expected by 2018. The
differences in style and values of such a changing workforce will challenge the role of HR.
Finally, while the economy is currently in the tank, undoubtedly it will improve. HR management
must remain effective during times of economic upheaval yet plan for its future when the economy
turns around.

26

Trends such as the ones just discussed will have an impact on employees and how they
are managed. The New Human Resource Managers require the new knowledge and
skills and must demonstrate expected results for the future.

27

If you had been working as an HR professional after World War II, your duties would
have been significantly different than they are today. Early in the HR profession, most
work was transactional in nature and involved such things as payroll and benefits
administration and hiring and firing. Today, however, the scope of responsibilities is
vastly different. New responsibilities include finding new ways to get the job done.
Getting the job done may include outsourcing routine functions including payroll and
benefits or installing the companys own internal social networking sites. In addition,
the new HR managers take an integrated talent management approach to managing
HR. Managing talent now includes managing ethics, employee engagement, adding
value, having more and varied core competencies, and measuring HR performance and
results.
You may wish to consider what ethics are. Are ethical considerations different for
different people? In what ways should HR be involved in managing ethics?

28

Talent management is both a goal-oriented and integrated process of planning,

recruiting, developing, managing, and compensating employees. HR managers also
manage ethics, the standards by which individuals judge their own behaviors.
Engagement is the extent to which employees are emotionally and mentally invested in
their work.
Measurement of the impact of human resource practices on the profitability and
growth of an organization can make a significant difference in productivity. For
example, knowing that a company is able to recruit and hire productive employees 50%
faster than its competition can make a significant difference in efficiency. Using
evidence-based HR practices in addition to actual measurements such as existing data
or outside research will help keep HR an effective strategic planning partner.
In both the long and the short run, HR managers must function as business partners,
stewards of an effective organizational culture, a business ally and strategic partner. As
the profession of HR continues to change, new competencies will be added to the list.

29

As a preview of whats to come, lets look at the overall plan of the book.

30

While not all of you desire or plan on becoming an HR professional, it is the

responsibility of every manager to be proficient in basic HR knowledge and skills. To
enable you to do this, we will emphasize practical material to help you conduct your
day-to-day management duties.
Domestic and international companies today require that HR contributes to the
profitability of the firm, thus we will provide examples of how HR practices add
measurable value.
Companies require HR to create policies and practices that produce employees who
can contribute to the firms strategic aims. We provide strategic context features that
demonstrate how this can be accomplished.
Finally, we provide Evidence-based HR features in each chapter that will help HR
defend its practices and results in measurable, understandable, and relevant ways.

31

In review, you should now be able to:

1. Explain what human resource management is and how it relates to the
management process.
2. Show with examples why human resource management is important to all
managers.
3. Illustrate the human resources responsibilities of line and staff (HR) managers.
4. Briefly discuss and illustrate each of the important trends influencing human
resource management.
5. List and briefly describe important traits of todays human resource managers.
6. Define and give an example of evidence-based human resource management.

32

33