Human Resource Management

2007 Prentice Hall, Inc. All rights reserved. 121

 Human Resources Management (HRM)
The management function that is concerned with
getting, training, motivating, and keeping
competent employees.
Balancing the supply of employees with the demand
for employees.
Matching the talents and skills of employees with
those required by the organization.
Creating a working environment that fosters high
employee performance.
Meeting the pay and benefits needs of employees.

2008 Prentice Hall, Inc. All rights reserved. 62

 The Importance of Human Resource
Management (HRM)
As a necessary part of the organizing function of
management
Selecting, training, and evaluating the work force
As an important strategic tool
HRM helps establish an organizations sustainable
competitive advantage.
Adds value to the firm
High performance work practices lead to both high
individual and high organizational performance.

2007 Prentice Hall, Inc. All rights reserved. 123

 The HRM Process
Functions of the HRM Process
Ensuring that competent employees are identified and
selected.
Providing employees with up-to-date knowledge and
skills to do their jobs.
Ensuring that the organization retains competent and
high-performing employees who are capable of high
performance.

2007 Prentice Hall, Inc. All rights reserved. 124

 Human Resource Management Process

2007 Prentice Hall, Inc. All rights reserved. 125

 Environmental Factors Affecting HRM
Employee Labor Unions
Organizations that represent workers and seek to
protect their interests through collective bargaining.
Collective bargaining agreement
A contractual agreement between a firm and a union
elected to represent a bargaining unit of employees of the
firm in bargaining for wage, hours, and working conditions.
Governmental Laws and Regulations
Limit managerial discretion in hiring, promoting, and
discharging employees.
Affirmative Action: the requirement that organizations take
proactive steps to ensure the full participation of protected
groups in its workforce.

2007 Prentice Hall, Inc. All rights reserved. 126

 Managing Human Resources
Human Resource (HR) Planning
The process by which managers ensure that they
have the right number and kinds of people in the right
places, and at the right times, who are capable of
effectively and efficiently performing their tasks.
Helps avoid sudden talent shortages and surpluses.
Steps in HR planning:
Assessing current human resources
Assessing future needs for human resources
Developing a program to meet those future needs

2007 Prentice Hall, Inc. All rights reserved. 127

 Current Assessment
Human Resource Inventory
A review of the current make-up of the organizations
current resource status
Job Analysis
An assessment that defines a job and the behaviors
necessary to perform the job
Knowledge, skills, and abilities (KSAs)
Requires conducting interviews, engaging in direct
observation, and collecting the self-reports of employees and
their managers.

2007 Prentice Hall, Inc. All rights reserved. 128

 Current Assessment (contd)
Job Description
A written statement of what the job holder does, how
it is done, and why it is done.
Job Specification
A written statement of the minimum qualifications that
a person must possess to perform a given job
successfully.

2007 Prentice Hall, Inc. All rights reserved. 129

 Meeting Future Human Resource Needs

Supply of Employees Demand for Employees

Factors Affecting Staffing

Strategic Goals
Forecast demand for products and services
Availability of knowledge, skills, and abilities

2007 Prentice Hall, Inc. All rights reserved. 1210

 Recruitment and Decruitment
Recruitment
The process of locating, identifying, and attracting
capable applicants to an organization
Decruitment
The process of reducing a surplus of employees in
the workforce of an organization
E-recruiting
Recruitment of employees through the Internet
Organizational web sites
Online recruiters

2007 Prentice Hall, Inc. All rights reserved. 1211

 Major Sources of Potential Job Candidates

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 Exhibit 125 Decruitment Options

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 Selection
Selection Process
The process of screening job applicants to ensure
that the most appropriate candidates are hired.
What is Selection?
An exercise in predicting which applicants, if hired,
will be (or will not be) successful in performing well on
the criteria the organization uses to evaluate
performance.
Selection errors:
Reject errors for potentially successful applicants
Accept errors for ultimately poor performers

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 Exhibit 126 Selection Decision Outcomes

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 Validity and Reliability
Validity (of Prediction)
A proven relationship between the selection device
used and some relevant criterion for successful
performance in an organization.
High tests scores equate to high job performance; low scores
to poor performance.
Reliability (of Prediction)
The degree of consistency with which a selection
device measures the same thing.
Individual test scores obtained with a selection device are
consistent over multiple testing instances.

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 Exhibit 127 Selection Devices

Application Forms
Written Tests
Performance Simulations
Interviews
Background Investigations
Physical examinations

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 Written Tests
Types of Tests
Intelligence: how smart are you?
Aptitude: can you learn to do it?
Attitude: how do you feel about it?
Ability: can you do it now?
Interest: do you want to do it?
Legal Challenges to Tests
Lack of job-relatedness of test items or interview
questions to job requirements
Discrimination in equal employment opportunity
against members of protected classes

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 Performance Simulation Tests
Testing an applicants ability to perform actual
job behaviors, use required skills, and
demonstrate specific knowledge of the job.
Work sampling
Requiring applicants to actually perform a task or set of tasks
that are central to successful job performance.
Assessment centers
Dedicated facilities in which job candidates undergo a series
of performance simulation tests to evaluate their managerial
potential.

2007 Prentice Hall, Inc. All rights reserved. 1219

 Other Selection Approaches
Interviews
Although used almost universally, managers need to
approach interviews carefully.
Background Investigations
Verification of application data
Reference checks:
Lack validity because self-selection of references ensures
only positive outcomes.
Physical Examinations
Useful for physical requirements and for insurance
purposes related to pre-existing conditions.

2007 Prentice Hall, Inc. All rights reserved. 1220

 Suggestions for Interviewing

1. Have detailed information about the job for which applicants

are interviewing.
2. Minimize any prior knowledge of applicants background,
experience, interests, test scores, or other characteristics.
3. Ask behavioral questions that require applicants to give
detailed accounts of actual job behaviors.
4. Use a standardized evaluation form.
5. Take notes during the interview.
6. Avoid short interviews that encourage premature decision
making.

Source: Based on D.A. DeCenzo and S.P. Robbins, Human

Resource Management, 7th ed. (New York Wiley: 2002, p. 200)
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 Examples of Cant Ask and Can Ask Interview Questions for
Managers*

Cant Ask Can Ask

Whats your birth date? Are you over 18?
or How old are you? Would you relocate?
Whats your marital Are you authorized to
status? or Do you plan work in the United
to have a family? States?
Whats your native Have you ever been
language? convicted of [fill in the
Have you ever been blank]?The crime must
arrested? be reasonably related to
the performance of the
job.
* Note: Managers should be aware that there are numerous
other can and cant ask questions. Be sure to always
check with your HR department for specific guidance.
2007 Prentice Hall, Inc. All rights reserved. 1222
 Other Selection Approaches (contd)
Realistic Job Preview (RJP)
The process of relating to an applicant both the
positive and the negative aspects of the job.
Encourages mismatched applicants to withdraw.
Aligns successful applicants expectations with actual job
conditions; reducing turnover.

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 Orientation
Transitioning a new employee into the
organization.
Work-unit orientation
Familiarizes new employee with work-unit goals
Clarifies how his or her job contributes to unit goals
Introduces he or she to his or her coworkers
Organization orientation
Informs new employee about the organizations objectives,
history, philosophy, procedures, and rules.
Includes a tour of the entire facility

2007 Prentice Hall, Inc. All rights reserved. 1224

 Types of Training

Type Includes
General Communication skills, computer systems application and
programming, customer service, executive development,
management skills and development, personal growth,
sales, supervisory skills, and technological skills and
knowledge
Specific Basic life/work skills, creativity, customer education,
diversity/cultural awareness, remedial writing, managing
change, leadership, product knowledge, public
speaking/presentation skills, safety, ethics, sexual
harassment, team building, wellness, and others

Source: Based on 2005 Industry ReportTypes of Training, Training, December 2005, p. 22.
2007 Prentice Hall, Inc. All rights reserved. 1225
 Employee Training Methods

Traditional Technology-Based
Training Methods Training Methods
On-the-job CD-ROM/DVD/videotapes/
audiotapes
Job rotation
Videoconferencing/
Mentoring and coaching
teleconferencing/
Workbooks/manuals satellite TV
Classroom lectures E-learning

2007 Prentice Hall, Inc. All rights reserved. 1226

 Employee Performance Management
Performance Management System
A process of establishing performance standards and
appraising employee performance in order to arrive at
objective HR decisions and to provide documentation
in support of those decisions.

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28

The Appraisal Process

 Advantages and Disadvantages of Performance Appraisal Methods

Method Advantage Disadvantage

Written Simple to use More a measure of evaluators writing
essays ability than of employees actual
performance
Critical Rich examples; behaviorally Time-consuming; lack quantification
incidents based
Graphic Provide quantitative data; Do not provide depth of job behavior
rating scales less time-consuming than assessed
others

Multiperson Compares employees with Unwieldy with large number of

comparisons one another employees; legal concerns
MBO Focuses on end goals; Time-consuming
results oriented
360-degree Thorough Time-consuming
appraisals

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 Compensation and Benefits
Benefits of a Fair, Effective, and Appropriate
Compensation System
Helps attract and retain high-performance employees
Impacts on the strategic performance of the firm
Types of Compensation
Base wage or salary
Wage and salary add-ons
Incentive payments
Skill-based pay
Variable pay

2007 Prentice Hall, Inc. All rights reserved. 1230

 Factors That Influence Compensation and Benefits

Sources: Based on R.I. Henderson, Compensation Management, 6th ed. (Upper Saddle River, NJ: Prentice Hall, 1994),
pp. 324; and A. Murray, Mom, Apple Pie, and Small Business, Wall Street Journal, August 15, 1994, p. A1
2007 Prentice Hall, Inc. All rights reserved. 1231
Why Do Organizations Offer Employee
Benefits?
Employee Benefits
Are nonfinancial rewards designed to enrich
employees lives.
Types of Benefits
Social Security
Workers and unemployment compensations
Paid time off from work
Life and disability insurance
Retirement programs
Health insurance
2008 Prentice Hall, Inc. All rights reserved. 632
 Career Development
Career Defined
The sequence of positions held by a person during
his or her lifetime.
The Way It Was
Career Development
Helped attract and retain highly talented people
Now
Individualsnot the organizationare responsible for
designing, guiding, and developing their own careers.
Boundaryless Career
A career in which individuals, not organizations, define career
progression and organizational loyalty

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 Current Issues in HRM
Managing Downsizing
The planned elimination of jobs in an organization
Provide open and honest communication.
Provide assistance to employees being downsized.
Reassure and counseling to surviving employees.

Managing Work Force Diversity

Widen the recruitment net for diversity
Ensure selection without discrimination
Provide orientation and training that is effective

2007 Prentice Hall, Inc. All rights reserved. 1234

 Current Issues in HRM (contd)
Sexual Harassment
An unwanted activity of a sexual nature that affects
an individuals employment.
Unwanted sexual advances, and other verbal or physical
conduct of a sexual nature when submission or rejection of
this conduct explicitly or implicitly affects an individuals
employment.
An offensive or hostile environment
An environment in which a person is affected by elements of
a sexual nature.

2007 Prentice Hall, Inc. All rights reserved. 1235

 Current Issues in HRM (contd)
Work-Life Balance
Employees have personal lives that they dont leave
behind when they come to work.
Organizations have become more attuned to their
employees by offering family-friendly benefits:
On-site child care
Summer day camps
Flextime
Job sharing
Leave for personal matters

2007 Prentice Hall, Inc. All rights reserved. 1236

 Current Issues in HRM (contd)
Controlling HR Costs
Employee health-care
Encouraging healthy lifestyles
Financial incentives
Wellness programs
Charging employees with poor health habits more for
benefits
Employee pension plans
Reducing pension benefits
No longer providing pension plans

2007 Prentice Hall, Inc. All rights reserved. 1237

Current Issues in HRM:
Labor Relations and Unions
LaborManagement Cooperation
Involves mutual efforts on the part of a labor union
and the management of an organization.
Successful efforts to increase productivity, improve quality,
and lower costs require employee involvement and
commitment.
Labor unions now recognize that they can help their
members more by cooperating with management
than fighting it.

2008 Prentice Hall, Inc. All rights reserved. 638

Directing
Directing

Direction is a function of management performed by

top level management in order to achieve
organizational goals. It is very important and
necessary function of management.
Management has to undertake various activities like,
guide people, inspire and lead them as well as
supervision of their activity is required in order to
achieve desired results.
Definition

Direction consists of the process and techniques

utilized in issuing instructions and making

certain the operations are carried as originally

planned.
Functions of Directing
It guides and helps the subordinates to complete the given task
properly and as per schedule.

It provides the necessary motivation to subordinates to complete

the work satisfactorily and strive to do them best.

It helps in maintaining discipline and rewarding those who do well.

Directing involves supervision, which is essential to make sure that

work is performed according to the orders and instructions.
Directing involves

Telling people what is to be done and explaining how

to do it.
Issuing instructions and orders to subordinates.
Inspiring them to contribute towards the achievement
of objectives.
Supervising their activities; and
Providing leadership and motivation.
Elements of Directing
Supervision- implies overseeing the work of subordinates by their

superiors. It is the act of watching & directing work & workers.

Motivation- means inspiring, stimulating or encouraging the sub-

ordinates with passion to work. Positive, negative, monetary, non-

monetary incentives may be used for this purpose.

Leadership- may be defined as a process by which manager

guides and influences the work of subordinates in desired

direction.

Communications- is the process of passing information,

experience, opinion etc from one person to another.

Supervision
Refers to day to day relationship between manager / Superior
and his Subordinate.
It should NOT AIM primarily at fault finding but at education
and guidance.
Definition:
Its a management activity which is carried out by
SUPERVISORS to oversee the productivity and
progress of employees who report directly to the
supervisors.
Supervisors are the key people among managers
at different levels. They are the link between the
top and middle management and the workers
46

Supervisors:
Translate the policies and objectives of the
agency into specific work duties and timelines;
Select the jobs to be completed;
Assign workers who will complete the jobs;
Determine when the jobs will be completed;
Review whether or not the work is being
completed and up to agency standards;
Evaluate employees;
47

Educate workers on the goals and objectives

of the agency;
Assure that employees behave in a manner as
though they accept them;
Resolve conflict:
between workers;
Between the agency and workers;
Between units within the agency;

The supervisor is the bridge between higher

levels of administration and the worker.
Differences between Direction / Supervising
Directing (Wide) Supervising (Narrow)

It include motivation, communication, supervision,

training & leadership. It is only one of the elements of direction.

Direction is generally at top level. It is restricted to the lower level management.

Generally, direction is related to supervision He has to deal, guide and lead workers directly
which is the intermediate link between the workers under his commands.
and management

Direction being at the top level, formulates Supervision at lower level only for
polices and takes important decision. implementation.

Financial & non financial incentives. It cannot provide incentives but if can only
recommend rewards in special case.

Leads the efforts of medium and lower Level Efforts of employee under his commands.
executives.
Quality supervision requires:
Clear and specific worker objectives.
Awareness of workers needs.
Willingness to facilitate the step-by-step
progression of workers.
A willingness to accept the diversity of workers
including differences in viewing the role of
working, differences in motivation, differences in
interest and differences in cultural perspectives.

49
Motivation
with proper motivation there can be maximum utilization of the
factors of production like men, money, material etc.

if employees are motivated it will reduce employee turnover and

absenteeism.

motivation fosters a sense of belongingness among the employees

towards the organization and also improves their morale.

motivation helps in reducing the number of complaints and

grievances.
51

Leadership
The ability to influence the behavior of
individuals or groups.
There are two types of overall leadership: formal
and informal.
52

Formal Leaders
Individuals who occupy organizational offices or
positions which have power as part of the
position.
53

Informal Leaders
Individuals who have power with an organization
because other personal charisma or other
characteristics but do not hold an official position
of power.