2008 by Prentice Hall 1-1

Human Resource Management

10
th
Edition
Chapter 1
STRATEGIC HUMAN RESOURCE
MANAGEMENT:
AN OVERVIEW

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HR Branding
Firms corporate image or culture
Embodies values and standards that guide
peoples behavior
People know what company stands for,
people it hires, fit between jobs and
people, and results it recognizes and
rewards
Important in getting highest quality
applicants to join firm
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Human Resource Management
Utilization of individuals to
achieve organizational objectives
All managers at every level must
concern themselves with human
resource management
Five functions

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1
Human
Resource
Management
Safety and
Health
Human Resource Management Functions
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Staffing
Job Analysis
Human Resource Planning
Recruitment
Selection
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Staffing (Cont.)
Staffing - Process through which
organization ensures it always has proper
number of employees with appropriate
skills in right jobs at right time to achieve
organizational objectives
Job analysis - Systematic process of
determining skills, duties, and knowledge
required for performing jobs in
organization

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Staffing (Cont.)
Human resource planning - Systematic process
of matching the internal and external supply of
people with job openings anticipated in the
organization over a specified period of time .
Recruitment - Process of attracting individuals
on a timely basis, in sufficient numbers, and with
appropriate qualifications, to apply for jobs with
an organization

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Staffing (Cont.)
Selection - Process of choosing from a
group of applicants the individual best
suited for a particular position and the
organization
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Human Resource Development
Training
Development
Career Planning
Career Development
Organizational Development
Performance Management
Performance Appraisal
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Human Resource Development
(Cont.)
Training - Designed to provide learners
with knowledge and skills needed for their
present jobs
Development - Involves learning that goes
beyond today's job; it has more long-term
focus
Career planning - Ongoing process
whereby individual sets career goals and
identifies means to achieve them
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Human Resource Development
(Cont.)
Career development - Formal approach
used by organization to ensure that people
with proper qualifications and experiences
are available when needed
Organization development - Planned
process of improving organization by
developing its structures, systems, and
processes to improve effectiveness and
achieving desired goals

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Human Resource Development
(Cont.)
Performance management - Goal-oriented
process directed toward ensuring
organizational processes are in place to
maximize productivity of employees, teams,
and ultimately, the organization
Performance appraisal - Formal system of
review and evaluation of individual or team
task performance
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Compensation
Compensation - All
rewards that
individuals receive
as a result of their
employment
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Compensation
Direct Financial Compensation - Pay that
person receives in form of wages, salaries,
bonuses, and commissions.
Indirect Financial Compensation (Benefits) - All
financial rewards not included in direct
compensation such as paid vacations, sick
leave, holidays, and medical insurance.
Nonfinancial Compensation - Satisfaction that
person receives from job itself or from
psychological and/or physical environment in
which person works.
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Safety and Health
Employees who work
in safe environment
and enjoy good health
are more likely to be
productive and yield
long-term benefits to
organization.
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Safety and Health
Safety - Involves protecting employees
from injuries caused by work-related
accidents
Health - Refers to employees' freedom
from illness and their general physical and
mental well being
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Employee and Labor Relations
Private-sector union membership has fallen from
39 percent in 1958 to 7.8 percent in 2005.
Business is required by law to recognize a union
and bargain with it in good faith if the firms
employees want the union to represent them
Human resource activity is often referred to as
industrial relations
Most firms today would rather have a union-free
environment
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Human Resource Research
Human resource
research is not
separate function.
It pervades all HR
functional areas.
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Interrelationships of HRM
Functions
All HRM functions
are interrelated
Each function affects
other areas
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Dynamic Human
Resource
Management
Environment
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Environment of Human Resource Management
EXTERNAL ENVIRONMENT
INTERNAL ENVIRONMENT
1
Human
Resource
Management
Other
Functional
Areas
Operations Marketing
Finance
L
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a
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C
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T
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Society
S
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a
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h
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d
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r
s

Unions
Customers Competition Labor Market
Safety and
Health
U
n
a
n
t
i
c
i
p
a
t
e
d

E
v
e
n
t
s

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Labor Market
Potential employees
located within
geographic area
from which
employees are
recruited
Always changing
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Legal Considerations
Federal, state
and local
legislation
Court decisions
Presidential
executive orders
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Society
No longer content to accept, without
question, the actions of business
Ethics - Discipline dealing with what is
good and bad, or right and wrong, or
with moral duty and obligation
Social responsibility - Implied,
enforced or felt obligation of
managers to serve or protect interests
of groups other than themselves
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Unions
Group of employees
who have joined
together for purpose of
dealing collectively with
their employer
Become a third party
when dealing with the
company
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Shareholders
Owners of corporation
Because they have invested money
in firm, they may at times challenge
programs considered by
management to be beneficial to
organization
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Competition
Firms may face
intense competition in
both their product or
service and labor
markets
Must maintain a
supply of competent
employees
Bidding war often
results
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Customers
People who actually use firms
goods and services
Management has task of
ensuring its employment
practices do not antagonize
members of market it serves
Workforce should be capable of
providing top-quality goods and
services
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Technology
The world has never before seen
technological changes occur as
rapidly as they are today.
Created new roles for HR
professionals
Additional pressures on them to
keep abreast of technology
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Economy
In general, when
economy is booming, it is
often more difficult to
recruit qualified workers.
When a downturn is
experienced, more
applicants are typically
available.
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Unanticipated Events
Occurrences in the external
environment that could not be
foreseen
Every disaster, whether manmade or
by nature, requires a tremendous
amount of adjustment with regard to
human resource management
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Cyberwork
Possibility of never-ending
workday
BlackBerrys, cell phones, text
messaging, and e-mail create
endless possibilities for
communication
Some workers believe their
employer wants them available
24/7
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HRs Changing Role: Questions
That Are Being Asked
Can some HR tasks be performed more
efficiently by line managers or outside
vendors?
Can some HR tasks be centralized or
eliminated altogether?
Can technology perform tasks that were
previously done by HR personnel?
Many HR departments continue to get
smaller
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HRs Changing Role:
Who Performs Human
Resource Management Tasks?
Human Resource Managers
HR Outsourcing
HR Shared Service Centers
Professional Employer Organization
(Employee Leasing)
Line Managers
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Human Resource Manager
Acts in advisory or staff capacity
Works with other managers to
help them deal with human
resource matters
Today HR departments continue to
get smaller because others are
accomplishing certain functions
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HR Outsourcing
Transfers
responsibility to an
external provider
Market for HR
outsourcing is
growing dramatically
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Ways HR Outsourcing is Done
Discrete services
Multi-process
services
Total HR outsourcing
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Discrete Services
One element of business process or
single set of high-volume repetitive
functions is outsourced to a third-
party
Large majority of companies
outsource transactional HR activities,
such as 401(k) administration
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Multi-process Services
Complete outsourcing of
one or more human
resource processes
Example: Procter &
Gamble outsourced
entire training
operations
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Total HR Outsourcing
Transfer majority of HR services to
third party
Example: Whirlpool Corporation
signed 10-year deal to outsource HR
business processes for 68,000
employees to Convergys Corporation
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HR Shared Service Centers
(SSCS)
Takes routine,
transaction-based
activities that are
dispersed and
consolidates them in
one location
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Professional Employer
Organization (Employee Leasing)
Company that
leases employees
to other
businesses.

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Professional Employer
Organization (Cont.)
Company releases its employees who are
then hired by PEO
PEO pays the employees
PEO is the employees legal employer and
has the rights to hire, fire, discipline, and
reassign an employee
Charges a fee of from 1 to 4 percent of the
customers gross wages
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Line Managers Performing
HR Tasks
Involved with human resources
by nature of their jobs
Line managers are now
performing some duties typically
done by HR

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HR as a Strategic Partner
HR executives must
understand complex
organizational design
Sharp deviation from
what has traditionally
been an administrative
type role for HR
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Strategic Activities CEOs Want
from HR
Make workforce strategies integral to
company strategies and goals
Leverage HRs role in major change
initiatives
Earn the right to a seat at the corporate
table
Understand finance and profits
Help line managers achieve their goals
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Human Capital Metrics
Measures of HR
performance
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Examples of HR Metrics
Time to fill open positions
HR headcount ratios
Administrative cost per employee
Turnover cost
Training return on investment
Cost per employee for HR administration
ranges from $1,200 - $1,600
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HR Scorecard
Report card of
effectiveness of
specific person
Metrics that will best
suit each company
depends on variety
of factors
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Human Resource
Designations
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Human Resource Executives,
Generalists, and Specialists
Vice President,
Human
Resources
Vice President,
Industrial
Relations
Manager,
Compensation
Manager,
Staffing
Manager,
Training and
Development
Benefits Analyst
Executive:
Generalist:
Specialist:
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Characteristics of an HR
Executive
Performs one or more HR functions
A top-level manager
Reports directly to CEO or head of
major division
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Characteristics of an HR
Generalist
Often an executive
Performs tasks in various HR
related areas
Involved in several, or all, of the five
HRM functions
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Characteristics of an HR
Specialist
May be an HR executive, manager, or
non-manager
Typically concerned with only one of
the five functional areas

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Evolution Of Human
Resource Management
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Traditional Human Resource
Function in Large Firm
Separate sections were often created
Placed under an HR Manager
Each HR function may have a supervisor
& staff
HR Manager works closely with top
management in formulating policy

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Traditional Human Resource Functions
in a Large Firm
President
and CEO
Vice President,
Marketing
Vice President,
Operations
Vice President,
Finance
Vice President,
Human
Resources
Manager,
Training and
Development
Manager,
Compensation
Manager,
Staffing
Manager,
Safety and
Health
Manager,
Labor
Relations
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The Evolving HR Organization
HR Outsourcing
HR Shared Service
Centers
Professional Employer
Organization
Line Manager

Evolve to make HR
more strategic
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A Possible Evolving HR
Organization Example
President
and CEO
Vice
President,
Operations
Vice
President,
Strategic
Human
Resources
Vice
President,
Finance
Director
of Safety
and
Health
Training &
Development
(Outsourced)
Compensation
(Shared Service
Centers)
Staffing (Line
Managers, Use of
Applicant Tracking
Systems)
Vice
President,
Marketing
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A Global Perspective: British and
American Culture Are Different
United Kingdom might seem to require less
adjustment for Americans than countries such as
China
Assumption can set up Americans for difficulty,
disappointment and underachievement
Sports metaphors may confuse Britons
Example: step up to the plate, cover all the
bases, Ill touch base with you, ballpark
figure, off the wall and out in left field.
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Organization of
Human Resource Management
10th Edition
PART I. INTRODUCTION
Chapter 1: Strategic Human Resource
Management: An Overview
PART II. HR ETHICAL, LEGAL, AND SOCIAL
CONSIDERATIONS
Chapter 2: Business Ethics and Corporate
Social Responsibility
Chapter 3: Workforce Diversity, Equal
Employment Opportunity, and Affirmative
Action
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Organization of
Human Resource Management
10th Edition (Cont.)
PART III. STAFFING
Chapter 4: Job Analysis, Strategic
Planning, and Human Resource
Planning
Chapter 5: Recruitment
Chapter 6: Selection
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Organization of
Human Resource Management
10th Edition (Cont.)
PART IV. HUMAN RESOURCE
DEVELOPMENT
Chapter 7: Training and Development
Appendix Chapter 7: Career Planning and
Development
Chapter 8: Performance Management and
Appraisal
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Organization of
Human Resource Management
10th Edition (Cont.)
PART V. COMPENSATION AND BENEFITS
Chapter 9: Compensation
Chapter 10: Benefits, Nonfinancial
Rewards, and Other Compensation I
ssues
PART VI. SAFETY AND HEALTH
Chapter 11: A Safe and Healthy Work
Environment
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Organization of
Human Resource Management
10th Edition (Cont.)
PART VII. EMPLOYEE AND LABOR RELATIONS
Chapter 12: Labor Union and Collective
Bargaining
Appendix Chapter 12: History of Unions in the
United States
Chapter 13: Internal Employee Relations
PART VIII. OPERATING IN A GLOBAL
ENVIRONMENT
Chapter 14: Global Human Resource
Management
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