Alfatira Gema-195020419111001

Sukma Tri Kusuma Wardhani-195020407111010

Introduction To Management

Economic, Finance and Banking IUP

SUMMARY

CHAPTER 12

MANAGING HUMAN RESOURCES

The Human Resource Management Process

HRM is important for three reasons. First, it can be a significant source of

competitive advantage as various studies have concluded. Second, HRM is an
important part of organizational strategies. And Third, HRM is important because
its the way organizations treat their people and makes an impact to organizational
performance

External Factors That Affect the HRM Process

- Self-managed teams

- Decentralized decision making

- Training programs to develop knowledge, skills and abilities

- Flexible job assignments

- Open communicationzx

- 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

The entire HRM process is influenced by the external environment. The factors most
directly influencing include economy, employee, labor unions, governmental laws and
regulations and demographic trends.

 The Economy’s Effect On HRM

The global economic downturn has left what many expert believe to be an
enduring mark on HRM practices worldwide. For instance, in Japan, workers
used to count on two things, a job for life and a decent pension. Now, life-time
employment is long gone and corporate pension plans are crumbling. A Global
Workforce Study survey by global professional services company Towers
Watson confirmed that recession has fundamentally altered the way U.S
employees view their work and leaders. US workers have dramatically lowered
their career and retirement expectation for the foreseeable future. These findings
have pro-found implications for how an organization manages its human
resource.

 Employee Labor Union

A labor union is an organization that represents workers and seeks to protect

their interest through collective bargaining. In union zed organizations, many
HRM decisions are dictated by collective bargaining agreements, which usually
define things such as recruitment sources, criteria for hiring, promotions and lay
off, training eligibility and disciplinary practices.

Although labor unions can affect an organization’s HRM practices, the most
significant environment constraint is governmental laws, especially in North
America.

 Legal Environment Of HRM

An organization’s HRM practices are governed by a country laws. A number

of important laws and regulations affect what you can and cannot do legally as a
manager. Because workplace lawsuits are increasingly targeting super visors, as
well as their organizations, managers must know what they can and cannot do by
 law. Trying to balance the “should and should nots” of many laws often falls
within the realm of affirmative action.

 Demographic Trends

Demographic trends are impacting to the HRM practices. Back in 2007, the
head of BMW’s 2,500 employee power train plant in Dingolfing, Lower Bavaria,
was worried about the potential inevitable future decline in productivity due an
aging workforce.

Workforce trends in the first half of the twenty-first century will be notable
for three reasons: (1) changes in racial and ethnic composition, (2) an aging baby
room generation and, (3) an expanding cohort of Gen Y workers.

With Gen Y now in the workplace, analysts point to the four generations that are

Working side by side in the workplace:

1. The oldest, most experienced workers (those born before 1946) make up 6
percent of the workforce.

2. The baby boomer's (those born between 1946 and 1964) make up 41.5 percent
of the workforce

3. Gen Xers (those born 1965 to 1977) make up almost 29 percent of the
workforce.

4. Gen Yers (those born 1978 and 1994) make up almost 24 percent of the
workforce.

These and other demographic trends are important and because of the impact they are
having on current and future HRM practices.

Identifying and Selecting Competent Employees

HRM process involves three tasks:

1. Human resource planning

2. Recruitment and decruitment

3. Selection

 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 . HR
planning entails two steps. (1) assessing current human resources and, (2)
meeting future HR needs.

An important part of a current assessment is job analysis, an assessment that

defines a job and the behaviours necessary to perform it. Using the information
from the job analysis, managers develop or revise job description and job
specifications. A job description is a written statement that describe a job and A
job specification is a written statement of the minimum qualifications that a
person must possess to perform a given job successfully.

 Recruitment and Decruitment

Recruitment is locating, identifying and attracting capable applicants. And

Decruitment is reducing an organization’s workforce.

 Selection

Selection is screening job applicants to determine who is best qualified fot

the job.

Tools for Selection

1. Application Forms

2. Written Tests

3. Performance-Simulation Tests

4. Interviews

5. Background Investigations
 6. Physical Examinations

To increase employee job satisfaction and reduce turnover, managers should

consider a realistic job preview (RJP), which is one that includes both positive
and negative information about the job and the company.

Providing Employees with Needed Skills and Knowledge

To improve or update the employee’s skills, HRM uses orientation and training.

 Orientation

A person starting a new job needs the same type of introduction to his or her
job and the organization. This introduction is called orientation.

There are two types of orientation:

1. Work Unit Orientation

Familiarizes the employee with the goals of the work unit, clarifies how
or her job contributes to the units goals and includes an introduction to his or
her new co-workers.

2. Organization Orientation

Inform 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

Employee training is an important HRM activity. As job demands change,

employee skills have to change. Managers are responsible for deciding what type
of training employee needs, when they need it and what form that training should
take.

Types of training includes profession/industry specific training,

management/supervisory skills, mandatory/compliance information and customer
service training.
 Training Methods

1. Traditional Training Methods

- On the job

- Job Rotation

- Mentoring and Coaching

- Experiential Exercises

- Workbooks/Manuals

- Classroom Lectures

2. Technology-Based Training Methods

- CD-ROM/DVD/videotapes/audiotapes/pod casts.

- Video-conferencing/teleconferencing/satellite TV

- E-learning

Retaining Competent, High-Performing Employees

When an organization has invested significant dollars in recruiting, selecting,

orienting, and training employees, it wants to keep them, especially the competent,
high-performing ones. There are two HRM activities that play a role in this area
which is managing employee performance and developing an appropriate
compensation and benefits program.

 Employee Performance Management

Managers need to know whether their employees are performing their jobs
efficiently and effectively. That’s what a performance management system does-
establishes performance standards that are used to evaluate employee
performance.

Performance Appraisal Methods:

1. Written Essay
 2. Critical Incident

3. Graphic Rating Scale

4. BARS (Behaviourally Anchored Rating Scale)

5. Multi person Comparison

6. MBO

7. 360-Degree Appraisal

 Compensation and Benefits

Several factors influence the compensation and benefit packages that

different employees receive. Many organizations, however, are using alternative
approaches to determining compensation: skill based pay and variable pay.

1. Skill based pay

Is a pay system that rewards employees for the job skills they can
demonstrate.

2. Variable Pay

Is a pay system in which an individual’s compensation is contingent on

performance.

Level Of Compensation And Benefits

1. Employee’s Tenure and performance

2. Kind of job performed

3. Kind of business

4. Unionization

5. Labor or capital intensive

6. Management philosophy

7. Geographical location
 8. Company profitability

9. Size of company

Contemporary Issues in Managing Human Resources

Some contemporary HR issues facing today’s managers include managing

downsizing, sexual harassment, work-life balance, and controlling HR costs.

 Managing Downsizing

Downsizing is the planned elimination of jobs in an organization.

Tips for managing downsizing:

1. Communicate openly and honestly

2. Follow any laws regulating severance pay or benefits

3. Provide support for surviving employees

4. Re-assign roles according to individuals talents and backgrounds

5. Focus on boosting morale

6. Have a plan for the empty office spaces/cubicles

 Managing Sexual Harassment

Sexual harassment is any unwanted action or activity of a sexual nature that

explicitly or implicitly affects an individual’s employment, performance or work
environment.

People spend so much time at the office that co-workers romances are almost
inevitable. However, its important to educate employees about the potential for
sexual harassment. And because the potential liability is more serious when it
comes to supervisors -subordinate relationships, a more proactive approach is
needed in term of discouraging such relationship and perhaps even requiring
supervisors to report any such relationships to the HR department. At same point,
the organization may even want to consider banning such relationship, although
an outright ban may be difficult to put into practices.
 Managing Work-Life Balance

Smart managers recognize that employees don’t leave their families and
personal lives behind when they come to work. In response, many organizations
are offering family friendly benefits, which accommodate employee’s needs for
work-family life balance.

Research on work-family life balance has shown positive outcomes when

individuals are able to combine work and family roles.

 Controlling HR Costs

Organizations are controlling HR costs by controlling employee health care

costs through employee health initiative (encouraging healthy behaviour and
penalizing unhealthy behaviours) and controlling employee pension plans by
eliminating or severely limiting them.