STRATEGIC HUMAN RESOURCE MANAGMENT

Salmaan Rahman MBA, Spring 2012 Lecture 1

What is a Business?
The state of being busy either as an individual, or as part of an organization, doing commercially viable and profitable work.
Profits are usually financial, or may be even-trade

Most commonly, a business is a legally recognized organization designed to provide goods, services, or both to consumers. The main objective is to generate and receive financial return in exchange for work, and risk. Businesses can be non-profit, or state-owned.

Business categories
Single owners Sole Proprietorship may operate on his own or employ others.
Personal liability for debts.

Partnership owned by two or more people

Limited or shared personal liability May also be known as a company

Corporation: - separate legal personality from its owners

Can be privately or publically (state) owned Privately owned corporations might have multiple shareholders, and overseen by a board of directors who hire the managerial staff Can be for profit or non-profit.

Business ownership:
Most Businesses are owned by private individuals
Capitalist Society

Some are owned by the Government

Postal services, transportation etc. Nationalized businesses

In some societies, all businesses are owned by the government. Private ownership is discouraged. State provides both goods and services, and keeps profits
Socialism, communism.

What do businesses do?

Businesses either provide goods, or services to consumers Classifications:
Raw Material production: agriculture, mining Utility electricity, gas etc. Capital generation: Banking, investment, management of money Manufacturing: production of physical goods from raw materials Retailers and distributors middlemen, sell goods manufactured by others Service Businesses offer intangible goods,
Profit generated from labor. Customers: consumers, govt, other buisnessess

Information businesses - resell intellectual property

Software, movies etc.

Others real estate, transportation

The business world

What is a market? What is a market sector? What is an industry?

Markets
Market the world of commercial activity where goods, services, or information are bought and sold
Any arrangement that allows buyers and sellers to exchange goods Is there a difference between market and trade? What are the different types of markets?
What is a free market? A virtual market? Black market? Prediction market?

In marketing a group of consumers that is interested in one product, has the resources, and is permitted to acquire the product

Market Sector - a set of businesses that are buying and selling such similar goods and services
share similar characteristics In direct competition with each other. can be treated similarly

Industry
A basic category of business activity.
Involves all the people or companies engaged in a particular kind of commercial enterprise Banking industry, telecom industry, music industry

Compound form: all activity by the community (suppliers, manufacturers, etc)

Agribusiness, Mining, etc.

Commercial law
Most commercial transactions are governed by a very detailed and wellestablished body of rules Laws govern:
treatment of labor safety and protection issues, anti-discrimination laws (age, gender, disabilities, race, and in some jurisdictions, sexual orientation), minimum wage laws workers compensation laws, annual vacation or working hours time.

License and trademark laws. Minimum qualification laws Some businesses are subject to ongoing special regulation
investment securities, banking, insurance, health care providers. Broadcast

The changing face of business:

The business world has changed very dramatically in the past two decades
Globalization
BPO

Multinationals Supply chain management Integration & Diversification Info-technology.

 Companies are under increased pressure

Intense competition Production, supplies (resources), sales Keeping costs low Increase production Focus on core competencies and maintain competitive edge

Organizations
Every business - from sole proprietorship to immense multinational corporations with multiple SBUs - can be seen as a collection of jobs Each job needs to be filled (staffed) Jobs are usually organized according to
Function (job description, departmentalizing) Process Authority Teams

Human Resource Management is the functional area that deals with every process connected to the staffing function.

Human Resource Management:

HRM deals with the staffing function:
Personnel management

HRM is the process of acquiring, training, appraising, and compensating employees, and attending to their labor relations, health and safety, and other concerns.

Human Resource Management

Is a key player in helping companies survive and thrive in todays marketplace
Every large company has a HR department The HR function helps companies meet the changing challenges they face HR management has the key function of recruiting, hiring, training, compensating, appraising, and developing the employees required to fill the function of the organization The HR department becomes the backbone of the organization

HR management
In keeping with the fast changing trends in the business world, HR functions have been changing rapidly as well.
E.g: Info-technology now plays a huge role in HR
Computerized HR activities are used to test, select, train and track employees The internet has now become the dominant tool used to recruit and hire employees

Management:
The management process has certain basic functions
Planning
Developing plans, forecasting, establishing goals, standards, rules, procedures,

Leading
Motivating, maintaining morale, getting the job done

Organizing
Defining jobs, departments, establishing channels of authority, communication, coordinating work of others.

Controlling
Setting standards, checking to see how actual performance compares with expected performance, taking corrective action

Staffing
Ensuring the right person is hired to do the right job in order to ensure that the above functions are fulfilled.

Aspects of HRM include

Conducting job analysis Planning labor needs and recruiting candidates Selecting candidates Orientation and training of new hires Managing wages and salaries (compensation) Providing incentives and benefits Appraising performance Communicating (interviewing, counseling, disciplining) Training and developing managers Building employee commitment.

Why is HRM important?

Well conducted HRM helps avoid things like:
Hiring the wrong person for the job High turnover in employees Poor performance Wastage of time and resources Legal issues (e.g. discrimination, safety issues) Feelings of unfair treatment among employees Poor training of employees Avoidance of labor shortages

So who does HRM?

All managers are HR managers, since they are responsible for supervising employees, and get involved in activities such as recruiting, interviewing, selecting and training. Yet most large corporations also have HR departments dedicated solely to deal with HR functions, with its own top manager. Management functions can thus be divided into two aspects:
Line Function
Based on authority, the power to issue orders, ensure that the main functions of the organization are being carried out.

Staff Function
Duties relating to HRM functions in order to ensure that staffing needs are met

Companies that have an HR department will distinguish between Line managers and Staff managers.

Line Managers HR functions

(carried out in addition to their main duties)

Line managers are authorized to direct the work of subordinates. Their HR functions are authority based, and include:
Placing the right person on the right job Starting new employees in their department (orientation) Training employees Improving job performance Interpreting & implementing company policies and procedures Controlling costs Ensuring health and safety procedures are followed Specifying qualifications required for each job on their line

Staff Managers:
Staff managers are those managers whose primary function deals exclusively with Human Resource Activities. Having separate staff managers frees line managers from a lot of non-functional activities. Non-functional activities are defined as those that are not derived from their area of expertise and training. However, both line and staff managers carry out HRM functions. Staff managers have no line authority in the organization, except within the HR department. They have Staff authority, and are hired to assist and advise line managers in accomplishing basic goals. Three main Staff manager functions:
Line Function
Staff managers exert line authority within their own department (HR department) Maintain communication upwards and downwards in the chain of authority (have the ear of the top management) Ensure that line managers fully implement top managements policies, procedures, objectives and goals Strategy design e.g helping top management analyze labor needs Hiring, firing, promotion etc.

Coordinative function:

Assist and advise functions

Staff Management functions:

Recruitment finding the pool of prospective employees from which hiring is to be done Job analysis collect and examine information about jobs to prepare job descriptions HR Policy developers and implementation ensure uniform coordination across departments e.g. drug policies, nondiscrimination policies etc. Compensation managers develop compensation plans and handle benefits Training specialists ensure ongoing training activities, planning, organizing and implementing. Labor relations advising top management on unionmanagement

HR Department, Large Corporation

Vice President Human Resources

Administrator, Employee Health Services

Wage Salary Administrator

Recruitment and Placement

Training and Education

Employee Relations Services

Administrative Director, Benefit Services

Manager, Labor Relationship

Workers Comp STD/LTD

Appraisal and Performance Management

Manager Search Coordinator

Orientation

Employee Counseling

Befit Payroll Processing

Wellness Programs

Employee Retention Programs

Training

Employee Recognition Programs

Employee Benefits

Safety Manager

Personnel Records, Payroll processing

Management Development

Special Events

HR Department, Small company

Manager, Labor relations

Human Resource Administrative Coordinator Senior Human Resources Coordinator Human Resources Coordinator

Office Generalist.