M

Environmental pressures

SA

Uncorrected sample pages Cambridge University Press Somers, Cain, Jeffery 2011 978-1-107-63549-4 Ph 03 8671 1400

PL
Role of HR Manager HR Manager Relationship to business objectives and strategies Measuring HR effectiveness

Whats ahead

Human resource management

PL

Key Knowledge

Students will learn about the factors involved in managing human resources, including the relationship of the human resource function to business objectives and strategy.

SA

Human resource management is the ongoing management of people within the employeremployee relationship. It involves the use of people to achieve organisational strategic business objectives, while also satisfying the individual employee needs. It is commonly referred to as having the right people in the right place at the right time.

Uncorrected sample pages Cambridge University Press Somers, Cain, Jeffery 2011 978-1-107-63549-4 Ph 03 8671 1400 173

area of study

the human resource management function

The importance of human resource management to business success

Creating effective relationships, either between an organisation and its customers or management and employees, is a very important aim if an organisation is to gain a competitive advantage in its business environment. To achieve this aim in relation to its human resource, the organisation needs to ensure that its human resource management (HRM) policies and practices are firmly linked to its strategic orientation, objectives, planning and decision making. The importance of the HRM function must never be overlooked, as it is responsible for managing the businesss most valuable asset: the employee. To fully appreciate the current role of HRM, it is worthwhile reflecting upon its development. Until the mid-1970s, the role of looking after an organisations personnel was seen more as administrative. It involved keeping accurate records relating to staffing, such as salary administration, leave entitlements, superannuation and workers compensation. Line managers, supervisors or clerical (generalist) staff usually performed the functions of staff recruitment, selection and

SA
Marketing Legal services Employment services Talent management Recruitment and selection

M
Figure 8.2

Organisational chart showing HRM as a divisional unit, part of a functional structure layout

Uncorrected sample pages Cambridge University Press Somers, Cain, Jeffery 2011 978-1-107-63549-4 Ph 03 8671 1400 174 unit 4 managing people and change

PL
Chief Executive Officer Human resources Operations Health, safety & environment Remuneration and benefits

human resource management (Hrm) the management of a wide range of responsibilities relating to the human (employees) function within a business, in order to increase both the employees and organisational efficiency

E
Figure 8.1 Effective relationships between management and employees is one key to business success.

training. Gradually, specialised personnel were employed (HR specialists) and the area began to gain a more professional approach. From the mid-1990s, HRM has moved towards a strategic approach. HRM now plays a strategic role and has senior management representation. Its role has become more important with the increased pressure on organisations to globalise their operations.

Finance and administration

Training and development

The role of a human resource manager

In the current dynamic operating environment, the need for organisations to be flexible, competitive and customer-oriented has become evident. It is important that human resource managers develop a strategic, client-centred, market-driven approach. This new direction requires them to integrate the role of managing personnel and employee relations into a coordinated and strategic approach. They must ensure that human resources issues are seen as part of the way to gain a competitive business advantage and be willing to be measured by bottom-line (profit) results. Their role requires them to be:

SA

able to translate business strategy into action by being a member of the business team able to develop and implement human resource strategies consistent with overall corporate strategies able to assist in creating policies that link corporate-level strategic planning and operational (day-to-day) planning involved in the long-term planning of decisions relating to employees (e.g. forecasting demand and supply of labour, succession planning) involved in overall management of the employment cycle, which relates to the establishment, maintenance and termination of the employment relationship

PL
involved in innovative strategies such as group-based performance appraisal, skill development, equity in remuneration and flexible work practices an advocate of employees in their negotiations with management involved in designing and implementing strategies to increase employee motivation, job satisfaction and productivity involved in achieving improved customer service through recruitment, selection, employee training and development, motivation and rewards able to act as a change agent in either the human resources area or other business areas. Their understanding of the importance of adopting a change management process and the necessity of effective communication should assist in overcoming barriers or resistance to change that may arise able to achieve organisational effectiveness through focusing on organisational structure, job design, employee motivation and employee relations able to support and educate supervisors, team leaders or line managers responsible for implementing human resource policies and practices.
business strategy the long-term plan of action adopted by an organisation to achieve its goals and objectives change agent the individual leading or guiding the process of change in an organisational situation

Uncorrected sample pages Cambridge University Press Somers, Cain, Jeffery 2011 978-1-107-63549-4 Ph 03 8671 1400 c h a p t er 8 human resource management 175

Australias largest telecommunications business, Telstra, bases its organisational structure around its 13 business units, with Human Resources being one of these. The Human Resources business unit at Telstra (see www. telstra.com.au) is responsible for all its human resources matters, including organisational design, implementation of people and culture initiatives, leadership development, talent management, health, safety and the environment, professional development, and all employment and remuneration policies.

Human resource management is now recognised as: assuming equal importance with business units that provide an income/revenue stream for the business receiving equal status to that of other non-revenue generating departments, such as finance, marketing, legal services, information technology, and research and development assuming a greater role in ensuring the right people are recruited, inducted, trained, compensated, motivated and appraised.

Human Resource Manager

Special People is a not-for-profit community services organisation that assists disadvantaged people within our community. We are seeking a motivated and enthusiastic HR Executive to join our Human Resources Department to manage and oversee the functions of the Human Resources Department and report to the Executive Manager. Your duties will include, but not be limited to: Providing professional advice and guidance on a range of complex and sensitive HR related issues, including employee relations, performance management issues, OH&S compliance, and recruitment and selection Developing and maintaining key relationships with senior management Contributing to the development and effective implementation of HR strategies, policies, reports, projects and procedures. We are looking for a person who can demonstrate the following: Experience in managing a HR team and function Significant internal HR consulting experience and business acumen Excellent interpersonal and communication skills Proven ability to problem-solve, evaluate and analyse issues Understanding or experience in professional services, partnership or a multistakeholder environment will be highly regarded Leadership of the Human Resources Department and managing of conflicting procedures Experience in Industrial Relations Law investigation. This is a very rewarding role with a good work life balance, attractive salary and supportive working environment. To apply for this role, please send your rsum to mashton@sp.com.au or call Melissa Ashton on 61 38625 5888 for further information.

Figure 8.3 The human resource manager can support and educate those in management and leadership roles within an organisation.

staff manager a manager who provides specialist advice or assistance to functional managers functional manager a manager responsible for just one organisational activity, e.g. finance, human resource management line management management responsible for and having direct authority over subordinates within their area of authority

Human resource managers are referred to as staff managers when they offer advice and make decisions about policies, practices and procedures. They may also assist employees, other managers, such as functional managers, and the organisation as a whole. They do not, however, have authority to make decisions as to what work is to be done in other departments or to manage these departments. Human resource managers have staff authority to advise, but not to direct other managers. They hold a line management position within their own department as they are directly responsible and accountable for the department working towards its objectives. Human resource management, as a functional area of an organisation, must consider its external and internal environmental influences. This will assist in determining whether a proactive or reactive strategy needs to be adopted to achieve the organisations objectives. Table 8.1 (on page 178) outlines a range of environmental pressures that can impact on human resource management. The following are two examples of advertisements for an HR manager.

SA

Uncorrected sample pages Cambridge University Press Somers, Cain, Jeffery 2011 978-1-107-63549-4 Ph 03 8671 1400 176 unit 4 managing people and change

PL

HR Manager Global IT Group

Are you looking for a new and exciting challenge within a global group?
Global IT Group is a printing solutions and hardware company looking for an HR Manager to provide a range of Human Resource services to attract, retain and motivate employees to support a high performance culture. This is a fantastic opportunity to grow within an expanding and established printing solutions and hardware company that services large commercial and government contracts. Reporting to the Human Resources Group Manager (Australia and New Zealand), your main responsibilities will include: Managing the recruitment process at all levels, including developing role descriptions, interviewing, testing and reference checking Providing value-adding consulting services to managers on all HR matters, including recruitment, induction, learning and development, performance management, OH&S, payroll services, compensation and benefits and employee motivation programs Implementing Induction and Learning & Development programs Acting as consultant to managers in the performance management process through assisting with the development of high performers as well as managing poor performers Providing advocacy/advisory services for employees Providing general assistance to the Human Resources Group Manager as required. You will have: Knowledge of current Human Resource related practices, trends and protocols Knowledge of Payroll Knowledge of Compensation and Benefits 35 years experience in HR. You will receive: $90K base + super + bonus (c. $9K) = $107K package The support of a global brand and back office A great opportunity within a well known and national brand. This exciting opportunity could open the doors to a challenging yet highly rewarding career path that will potentially give you exposure to key areas in an ever-growing industry. If this position interests you, please apply today. If you have the ability and experience, then please submit your confidential application online at our website (www.globalitgroup.com.au). If you any further queries regarding this role, please contact Michael Davis on 03 9666 4433.

SA
Activity 8.1
1 Examine the two job advertisements.

a Identify the strategic areas of responsibility specified in each advertisement. b Identify the hands-on areas of responsibility specified in each advertisement. c What personal qualities, competencies and experience must the applicants possess?

2 Collect two other advertisements for human resource management positions from either the Saturday Age or online sites, such as www.seek.com.au or www.mycareer.com.au and complete questions 1a to 1c for each of these positions. Make a comparison between the four positions.

Uncorrected sample pages Cambridge University Press Somers, Cain, Jeffery 2011 978-1-107-63549-4 Ph 03 8671 1400 c h a p t er 8 human resource management 177

PL

table 8.1

Environmental pressures impacting on human resource management issues Influence on human resource management Interventionist or minimalist approach? This impacts on the relationships established by employers with unions and the level to which an industry is regulated Impacts on laws and regulations relating to work hours, equal employment, leave entitlements, discrimination, workers compensation, health and safety, fringe benefits and termination Creates new employment areas, such as environmental pollution, workplace beautification and energy conservation. Entails new job descriptions, employee orientation, training and development, health and safety

environment: external Political

Legal

Environment

Technology

Demographic Social/cultural

SA
environment: internal Corporate culture Organisational structure Employees

Uncorrected sample pages Cambridge University Press Somers, Cain, Jeffery 2011 978-1-107-63549-4 Ph 03 8671 1400 178 unit 4 managing people and change

M
Economic Industrial relations/employee relations

Competition

PL
Influence on human resource management

Advancement and rapid rate of change has impacted on job design, recruitment, selection, training, compensation, motivation, occupational health and safety, and industrial relations. It has created more flexibility in the working environment Changes in geographic distribution, ethnic origin, age distribution, gender and education levels

Changing values and attitudes have led to changes in job titles, language, our way of life (more open and relaxed), dress code, style of work, recognition and treatment of minority groups, membership and influence of unions, social mobility, status, smoking, job security and qualify of life Reduction/increase in industry size, takeovers and mergers, customers and suppliers. All can influence the way businesses acquire, develop, reward, motivate, maintain and terminate employees Downturn in economic activity, level of investment and the change from public to private ownership can impact on employee numbers Level of union membership, employee attitudes, quality of work life. Can affect job design, absenteeism, staff turnover, industrial disputes and pay rates

Importance of values, beliefs, assumptions and symbols to the way an organisation operates Can impact directly on an employees productivity and behaviour. A narrow span of control (hierarchical) tends to be authoritarian, rigid, formal, highly specialised and bureaucratic. A wide span of control (flatter structure) tends to be more flexible, adaptable, informal, less specialised and more entrepreneurial. Structure influences job design, decision making, work practices, and skills and abilities of employees Greater demand for balance between work and family life. Impacts on need for workplace flexibility, family-friendly work practices, and use of collective bargaining agreements

Activity 8.2
Copy and complete the following table by identifying the environmental pressure or pressures that have led to the following change in human resource management.

Human resource change Flexible workplace

Pressure Employees Unions Government

Level of environment Internal Operating Macro

Paid parental leave Redundancy payments Equal employment opportunities Outsourcing and contractors Multiskilling Training and development Smoke-free workplace Collective bargaining agreements Job share

M
External environmental pressures HR outcomes
Figure 8.4 Relationship of organisational and HR objectives

Relationship of HR function to business objectives and strategies

It is the role of the human resources department to set objectives that will fit with the overall business direction and corporate objectives. To achieve these objectives, strategies need to be determined and activities need to be undertaken. Such activities will relate to the acquisition, training, reward and motivation, maintenance, development and termination of employees.

SA

PL
Mission statement Organisational objectives HRM objectives Internal environmental pressures HR strategies HR activities

Uncorrected sample pages Cambridge University Press Somers, Cain, Jeffery 2011 978-1-107-63549-4 Ph 03 8671 1400 c h a p t er 8 human resource management 179

table 8.2

Examples of relationship between specific organisational objectives and HRM objectives

and strategies organisational objective To reduce overall costs of operating the business Hrm objective To reduce overall costs of human resources Hrm strategies Reducing employee numbers, improving expense control, improving productivity, reducing absenteeism and staff turnover Recruitment and selection, employee training and development, rewards and motivation

To be judged as a socially responsible organisation

To adopt a socially responsible approach to all HR activities

To optimise organisational efficiency

Measuring HRM effectiveness

All strategic HRM objectives, strategies and activities undertaken and the ultimate outcomes must be evaluated against their contribution to achievement of an organisations strategic business objectives. Organisations have found that a good way to monitor the effectiveness of their human resource strategies and practices is by using performance indicators such as employee turnover, absenteeism rates, pay levels, revenue and expenses per employee, male to female staffing ratios, remuneration costs as a ratio of operating costs and profitability, and health and safety statistics. The following considerations should be applied, however, to the outcomes when judging their level of effectiveness: Commitment to what extent did the HRM policies enhance employee identification with and attachment to their job and the organisation? A high level of commitment

SA

Uncorrected sample pages Cambridge University Press Somers, Cain, Jeffery 2011 978-1-107-63549-4 Ph 03 8671 1400 180 unit 4 managing people and change

PL
To ensure HR proactively contributes to the efficiency of the organisation

E
Ensuring legal compliance and improvements in areas such as equal opportunity and diversity, OH&S, minority training and development programs Job design, employee motivation, training and development, performance management, flexible work practices, reward systems and employee relations
results in greater loyalty, increased teamwork, reduced labour turnover, increased employee self-worth and dignity, psychological involvement, and feelings of being integral to the organisation. Competence to what extent did the HRM policies attract, retain, motivate and develop employees with the abilities, skills, knowledge and competencies to achieve the organisations strategic business objectives? Cost effectiveness how have personnelrelated costs been reduced? Has HRM assisted in correctly sizing the organisation, eliminating all unnecessary work, reducing compensation and benefit costs, reducing staff turnover and absenteeism, improving employee health and safety, improving employee productivity, and avoiding or reducing costs from litigation?

To provide excellent customer service

To improve level of customer service

Activity 8.3

Performance indicators of HRM

Copy and complete the following table by listing two additional performance indicators (PIs) that could be used to ascertain whether this objective has been achieved.

objective

To develop the skill base of employees within the organisation

To ensure that the organisation is an equal opportunity employer

SA
To create a harmonious workplace

To ensure that the organisation is regarded as best practice in the area of employee health and safety

Uncorrected sample pages Cambridge University Press Somers, Cain, Jeffery 2011 978-1-107-63549-4 Ph 03 8671 1400 c h a p t er 8 human resource management 181

M
3 2 3 2 3 2 3

PL
Performance indicator 1 Number of employees who have gained an additional work-related qualification 2 1 Number of women and other minority groups in the workplace (diversity) 1 Number of lost days due to injury or accident compared to industry standard (average) 1 Number of hours/days lost through industrial disputes

Congruence has HRM assisted in generating agreement between management and employees, different employee groups, organisation and community, employees and their families? Adaptability with the assistance of HRM, is the organisation in a state of readiness for change? Is innovation welcomed and encouraged? Performance has HRM contributed to employees increased performance and productivity levels? Is the organisation more successful and profitable?

Job satisfaction as a result of HRM actions, do employees now have more positive attitudes and feelings about their work? Common job satisfiers are pay, promotion opportunities, fringe benefits, supervision, co-workers, job conditions, nature of the work, communication and job security. Employee motivation are employees now stimulated to achieve designated goals? Highly motivated employees work hard, work long hours and contribute to achieving the corporate objectives.

CHaPTeR suMMaRy

Human resource management (HRM) is the ongoing management of people within the employeremployee relationship. It involves getting the right people in the right place at the right time. The HRM function must manage the organisations most costly and valuable asset: its employees. HRM has progressed from an administrative role to its current strategic role with representation at senior management levels. The role of an HR manager is to translate business strategy into action. Initially, HRM objectives must be established. Pressures from the organisations external and internal environments influence these objectives. Strategies are then developed from related HRM activities created. Performance indicators (PIs) are used to measure the outcomes to assess how effectively the objectives have been achieved. In addition, HR managers are involved in:

maintenance and termination

innovative strategies relating to appraisal, skill development, remuneration and flexible work practices acting as an advocate for employees when negotiating with management designing and implementing strategies to increase employee motivation, job satisfaction, productivity, employee relations and customer service acting as a change agent and providing support and education for supervisors, team leaders and line managers responsible for implementing HR policies and practices.

SA
CHaPTeR suMMaRy quesTions
a Line manager b Objectives c

1 Define the following terms. Demonstrate your

strategic planning, relating to forecasting demand and supply of labour and succession planning

management of the employment cycle, which covers the three phases of establishment,

understanding by incorporating each term in a sentence.

Strategies.

2 Identify the main functions of a human resource

manager.

3 Explain why a human resource manager is said

to have staff authority.

Uncorrected sample pages Cambridge University Press Somers, Cain, Jeffery 2011 978-1-107-63549-4 Ph 03 8671 1400 182 unit 4 managing people and change

PL

4 Describe changes that have occurred in the area

5 Explain why the function of HRM should never

6 Identify the eight common outcome areas for

7 Outline measures used to determine whether

HR managers are referred to as staff managers, providing specialist advice or assistance to line or functional managers. Effectiveness of HRM outcomes can be evaluated against the following: commitment and competence of employees, level of cost effectiveness, congruence (harmony), adaptability to change, performance related to productivity, and level of job satisfaction and employee motivation.

of HRM over the past 40 years. Why do you believe these changes have occurred? be overlooked. determining effectiveness of HRM strategies and policies. an HR manager has been competent in their role.

8 Identify management skills that would be

required to perform the role of HR manager.

9 Do you see any potential conflicts for an HR

administrative expert, employee champion and change agent? Discuss.

10 All managers are HR managers. Explain

manager in their roles as a strategic planner,

whether you agree or disagree with this statement.

question 1
Define the following two terms and provide an example to demonstrate your understanding.
a Strategic human resource management b Staff manager.

to measure whether each of the objectives has been successfully achieved.

a To increase the level of employee satisfaction b To create a flexible working environment c

question 2

Identify and explain three skills that a human resource manager would need in order to play a strategic role within an organisation.

question 3

For each of the HR objectives outlined below, provide a performance indicator that could be used

SA
Uncorrected sample pages Cambridge University Press Somers, Cain, Jeffery 2011 978-1-107-63549-4 Ph 03 8671 1400 c h a p t er 8 human resource management 183

PL
To ensure a safe and healthy workplace environment. 4 marks
d To create a harmonious employee relations

question 4

6 marks

Explain how the objectives set by the human resource management department, the role of human resource managers and the strategies and activities they undertake relate to the achievement of an organisations strategic (corporate) objectives. 6 marks

E
4 marks

exaMinaTion PRePaRaTion