Explain

the importance of human resource

management.
Describe how recruitment and selection
contribute to placing the right person in a job.
Explain how training programs and
performance appraisals help employees grow
and develop.
Discuss employee separation and the impact
of downsizing and outsourcing.
Explain how Maslows hierarchy-of-needs
theory, goal setting, job design, and
managers attitudes relate to employee
motivation.

Vital to All Organizations

Human resource management - function of
attracting, developing, and retaining enough
qualified employees to perform the activities
necessary to accomplish organizational
objectives. Three main objectives:
1)

Providing qualified, well-trained

employees for the organization.

2)

Maximizing employee effectiveness in

the organization.

3)

Satisfying individual employee needs

through monetary compensation,
benefits, opportunities to advance, and
job satisfaction.

What Is Human Resource Management

(HRM)?

The process of acquiring, training, appraising, and

compensating employees, and of attending to their
labor relations, health and safety, and fairness
concerns.

Organization

People with formally assigned roles who work

together to achieve the organizations goals.

Manager

The person responsible for accomplishing the

organizations goals, and who does so by managing
the efforts of the organizations people.

Planning

Controlling

Leading

Organizing

Staffing

The policies,
practices, and
systems that
influence
employees:
behavior
attitudes
performance

Acquisition

Training

Fairness

Health and
Safety

Labor Relations

Human Resource
Management
(HRM)

Appraisal

Compensation

Conducting job analyses

Planning labor needs and recruiting job candidates

Selecting job candidates

Orienting and training new employees

Managing wages and salaries

Providing incentives and benefits

Appraising performance

Communicating

Training and developing managers

Building employee commitment

Hire the wrong person for the job

Experience high turnover
Have your people not doing their best
Waste time with useless interviews
Have your firm in court because of discriminatory
actions
Have your firm cited for unsafe practices
Have some employees think their salaries are unfair
and inequitable relative to others in the
organization
Allow a lack of training to undermine your
departments effectiveness
Commit any unfair labor practices

FIGURE 14

Trends Shaping Human Resource Management

(1)
(2)

(3)

(4)

People is the key factor of production.

Productivity is the key to measure a nations
economic growth potential, and labor
quality is the key to improving productivity.
Competition today is the competition for
talents.
Since man is the most uncontrollable and
unpredictable variable of all production
variables, organizational success depends
on the management of people.

(1)

Organization needs: Profits, productivity

and markets.

(2)

Individual needs: Maslows Need

Hierarchy
Physiological needs, security, belonging,
self-respect and self-actualization.

(3) Coordinating organization and individual

needs: goal of HRM.

1.

2.
3.
4.
5.
6.

Human resource planning, recruitment,

and selection
Human resource development
Compensation and benefits
Safety and health
Employee and labor relations
Human resource research

113

Diversity in the workforce

Result of changes in government
requirements
Organizational structures
Technology
Management approaches

Cultural differences
Compliance with data-privacy regulations
Varying economic conditions across
countries
Time zone differences
Legal environment
International compliance

Human resource managers must be

integrally involved in organizations
strategic and policy-making activities
Human resource managers need to:

Overcome negative impressions and biases

sometimes associated with this field
Become well-rounded businesspeople
Understand business complexities and strategies

Becoming more familiar with the business:

Know the company strategy and business
plan
Know the industry
Support business needs
Spend more time with the line people
Keep your hand on the pulse of the
organization
Learn to calculate costs and solutions in
hard numbers

1.

2.

3.

Reducing unnecessary overtime expenses

by increasing productivity during a normal
day
Staying on top of absenteeism and
instituting programs designed to reduce
money spent for time not worked
Eliminating wasted time by employees with
sound job design

4.

5.

Minimizing employee turnover and

unemployment benefit costs by practicing
sound human relations and creating a
work atmosphere that promotes job
satisfaction
Installing and monitoring effective safety
and health programs to reduce lost-time
accidents and keep medical and workers
compensation costs low

6.

7.

8.

Properly training and developing all

employees to improve their value to
company and do a better job producing
and selling high-quality products and
services at lowest possible cost
Decreasing costly material waste by
eliminating bad work habits, attitudes
and poor working conditions that lead to
carelessness and mistakes
Hiring the best people available at every
level and avoiding overstaffing

9.

10.

11.

Maintaining competitive pay practices

and benefit programs to foster a
motivational climate for employees
Encouraging employees to submit ideas
for increasing productivity and reducing
costs
Installing human resource information
systems to streamline and automate
many human resource functions

Employees and customers tend to be more

satisfied.
The companies tend to:

be more innovative
have greater productivity
develop a more favorable reputation in the
community

An organization can succeed if it has

sustainable competitive advantage.
Human resources have the necessary
qualities to help give organizations this
advantage:

Human resources are valuable.

Human resources with needed skills and and
knowledge are sometimes rare.
Human resources cannot be imitated.
Human resources have no good substitutes.

At Southwest
Airlines, the
companys focus is
on keeping
employees loyal,
motivated, trained,
and compensated.
In turn, there is a
low turnover rate
and a high rate of
customer
satisfaction.

Human Capital
an organizations
employees
described in terms
of their:

training
experience
judgment
intelligence
relationships
insight

The concept of
human resource
management
implies that
employees are
resources of the
employer.

 An

organization in which
technology, organizational
structure, people, and processes
all work together to give an
organization an advantage in
the competitive environment.

 Human

resource planning identifying the

numbers and types of employees the organization
will require to meet its objectives.
The organization may turn to its HR department for
help in managing the change process.
Skilled HR professionals can apply knowledge of
human behavior, along with performance
management tools, to help the organization manage
change constructively.

Job Analysis

The process of
getting detailed
information about
jobs.

Job Design

The process of
defining the way
work will be
performed and the
tasks that a given
job requires.

Recruitment

The process
through which the
organization seeks
applicants for
potential
employment.

Selection

The process by which

the organization
attempts to identify
applicants with the
necessary knowledge,
skills, abilities, and
other characteristics
that will help the
organization achieve
its goals.

Which of the following qualities were in the

top 5 as reported by employers?
A.
B.
C.
D.

Technical skills
Intelligence
Interpersonal skills
Computer skills

Crucial aspects
of employment
legislation:
Race
Gender
Disability

Disability is no longer an issue for employers

to ignore, they must take reasonable steps
to accommodate and recruit disabled workers.
Copyright: Mela, http://www.sxc.hu

The process by which a job vacancy

is identified and potential employees are
notified.
The nature of the recruitment process
is regulated and subject
to employment law.
Main forms of recruitment through
advertising in newspapers, magazines,
trade papers and internal vacancy lists.

Job description outline of the role

of the job holder
Person specification outline
of the skills and qualities required
of the post holder
Applicants may demonstrate their
suitability through application form, letter
or curriculum vitae (CV)

The process of assessing candidates and

appointing a post holder
Applicants short listed
most suitable candidates selected
Selection process
varies according to organisation:

Interview most common method

Psychometric testing assessing the personality
of the applicants will they fit in?
Aptitude testing assessing the skills
of applicants
In-tray exercise activity based around what the
applicant will be doing, e.g. writing a letter to a
disgruntled customer
Presentation looking for different skills
as well as the ideas of the candidate

Selecting and Hiring

Employees

Must follow legal requirements.

Equal Employment Opportunity Commis

sion
programs

Failure to follow these exposes

company to risk of litigation.

Hiring is a costly process for employers.

Some employers require employment

tests.

Must follow law of the land

Increasingly
important aspect
of the HRM role
Wide range
of areas for
attention
Adds to the cost
of the business

Even in a small business, the legislation

relating to employees is important
chemicals used in a hairdressing salon for
example have to be carefully stored and
handled to protect employees.

Orientation and Training

Newly hired employee often completes an

orientation program

Inform employees about company policies

Employee manuals
Describe benefits/programs
Training

Training Programs
On-the-job Training
Classroom and Computer-based Training
Management Development

Training

A planned effort to
enable employees
to learn job-related
knowledge, skills,
and behavior.

Development

The acquisition of
knowledge, skills,
and behaviors that
improve an
employees ability
to meet changes in
job requirements
and in customer
demands.

Similar to development:
Provides new skills for the employee
Keeps the employee up to date
with changes in the field
Aims to improve efficiency
Can be external or in-house

Developing the employee

can be regarded as investing
in a valuable asset
A source of motivation
A source of helping the employee fulfil potential

Performance Appraisals

Performance appraisal - evaluation of an

employees job performance

Some firms conduct peer reviews while other firms

allow employees to review their supervisors and
managers.

May conduct a 360-degree performance review, a

process that gathers feedback from a review panel
that includes co-workers, supervisors, team
members, subordinates, and sometimes customers.

The system of pay and benefits used by the

firm to reward workers
Money not the only method
Fringe benefits
Flexibility at work
Holidays, etc.

Administering Pay &

Benefits

Planning Pay & Benefits

How much to offer in

salary and wages.
How much to offer in
bonuses,
commissions, and
other performancerelated pay.
Which benefits to offer
and how much of the
cost will be shared by
employees.

Systems for keeping

track of employees
earnings and benefits
are needed.
Employees need
information about
their benefits plan.
Extensive record
keeping and reporting
is needed.

Wages - compensation based on an hourly pay rate or the

amount of output produced.

Salary - compensation calculated on a periodic basis, such

as weekly or monthly.

Most firms base compensation decisions on five factors:

1) Salaries and wages paid by other companies that
compete for the same people
2) Government legislation, including the federal, state, or
local minimum wage
3) The cost of living
4) The firms ability to pay
5) Worker productivity

Employee Benefits - Rewards such as retirement plans,

health insurance, vacation, and tuition reimbursement
provided for employees either entirely or in part at the
companys expense

30% of total employee compensation.

Some benefits required by law:

Social Security and Medicare contributions

State unemployment insurance and workers
compensation programs

Costs of health care are increasingly being shifted to

workers.

Retirement plans have become a big area of concern for businesses.

Employees are provided a range of options from

which they can choose.
Medical, dental, vision, life and disability insurance

Many companies also offer flexible time off policies

instead of establishing a set number of holidays,
vacations days and sick days.

56% of companies surveyed use paid time off (PTO)

programs.
More than claim they have reduced unscheduled
absences

Allow employees to adjust their working hours and places of work to

accommodate their personal needs.

Flextime allows employees to set their own work hours within

constraints specified by the firm.

A compressed workweek allows employees to work the regular

number of weekly hours in fewer than the typical five days.

A job sharing program allows two or more employees to divide the

tasks of one job.

A home-based work program allows employees, or

telecommuters, to perform their jobs from home instead of at the
workplace.
Nearly 75% of the U.S. workforce will soon have the ability to
telecommute from homeor almost anywhere else.

Voluntary turnover: employees leave firms to start their own

businesses, take jobs with other firms, move to another city, or retire.

Some firms ask employees who leave voluntarily to

participate in exit interviews to find out why they decided
to leave.
Successful companies are clearly focused on retaining
their best workers.

Involuntary turnover: employers terminate employees because of poor

job performance, negative attitudes toward work and co-workers, or
misconduct such as dishonesty or sexual harassment.
Necessary because poor performers lower productivity and employee
morale.
Employers must carefully document reasons when terminating employees.

Downsizing - process of
reducing the number of
employees within a firm by
eliminating jobs

Downsizing doesnt guarantee

improvements or cost savings.

Outsourcing - contracting with

another business to perform
tasks or functions previously
handled by internal staff
members

Devastating impact on employee

morale

Focus on business
competitiveness and flexibility

Get best price among

competing bidders while
avoiding long-term costs of inhouse operations

Encourages employees to put

individual career success ahead
of company loyalty

Motivation starts with good employee morale, the mental

attitude of employees toward their employer and jobs.

High morale = sign of a well-managed organization

Poor morale shows up through absenteeism,

employee turnover, strikes, falling productivity, and
rising employee grievances

Maslows hierarchy of needs: people have five levels of needs that they
seek to satisfy.

A satisfied need is not a motivator; only needs that remain unsatisfied can
influence behavior.

Peoples needs are arranged in a hierarchy of importance; once they satisfy

one need, at least partially, another emerges and demands satisfaction.
Physiological needs
Safety needs
Social (belongingness) needs
Esteem needs
Self-actualization needs

Hygiene Factors
Job Environment
Salary
Job Security
Personal Life
Working Conditions
Status
Interpersonal
Relations
Supervision
Company Policies

Motivator Factors
Achievement
Recognition
Advancement
The job itself
Growth Opportunities
Responsibility

Expectancy Theory
the process people use
to evaluate the
likelihood their effort will
yield the desired
outcome and how much
they want the outcome.

Equity Theory
individuals perception
of fair and equitable
treatment.

Goal: target, objective, or

result that someone tries to
accomplish.

Goal-setting theory - people

will be motivated to the extent
to which they accept specific,
challenging goals and receive
feedback that indicates their
progress toward goal
achievement.

Systematic and organized approach that allows

managers to focus on attainable goals and
achieve the best results.
MBO helps motivate individuals by aligning
their objectives with the goals of the
organization.
MBO Principals:

A series of related organizations, goals, and objectives

Specific objectives for each individual
Participative decision making
Set time period to accomplish goals
Performance evaluation and feedback

Measuring performance:

How to value the workers contribution

Difficulty in measuring some types of output
especially in the service industry
Appraisal

Meant to be non-judgmental
Involves the worker and a nominated appraiser
Agreeing strengths, weaknesses and ways forward
to help both employee and organisation

TABLE 12

Some Technological Applications to Support HR

Technology

How Used by HR

Application service providers

(ASPs) and technology
outsourcing

ASPs provide software application, for instance, for processing

employment applications. The ASPs host and manage the services
for the employer from their own remote computers

Web portals

Employers use these, for instance, to enable employees to sign up

for and manage their own benefits packages and to update their
personal information

Streaming desktop video

Used, for instance, to facilitate distance learning and training or to

provide corporate information to employees quickly and
inexpensively

Internet- and networkmonitoring software

Used to track employees Internet and e-mail activities or to monitor

their performance

Electronic signatures

Legally valid e-signatures that employers use to more expeditiously

obtain signatures for applications and record keeping

Electronic bill presentment

and payment

Used, for instance, to eliminate paper checks and to facilitate

payments to employees and suppliers

Data warehouses and

computerized analytical
programs

Help HR managers monitor their HR systems. For example, they

make it easier to assess things like cost per hire, and to compare
current employees skills with the firms projected strategic needs

Effects CFOs Believe Human Capital Has on Business Outcomes

Performance Management The

process of ensuring that employees
activities and outputs match the
organizations goals.
The human resource department may be
responsible for developing or obtaining
questionnaires and other devices for
measuring performance.

Preparing and distributing:

employee handbooks and policies
company publications and newsletters

Dealing with and responding to

communications from employees:
questions about benefits and company policy
questions regarding possible discrimination,
safety hazards, possible harassment

Collective bargaining and contract

administration.

Organizations depend on their HR

department to help establish and
communicate policies related to:

hiring
discipline
promotions
benefits

All aspects of HRM require careful and

discreet record keeping.

Government requirements include:

filing reports and displaying posters
avoiding unlawful behavior

Managers depend on HR professionals to

help them keep track of these requirements.
Lawsuits that will continue to influence HRM
practices concern job security.

One reason W.L. Gore

& Associates is
repeatedly named one
of the 100 Best
Companies to Work for
in America is their
unusual corporate
culture where all
employees are known
as associates and
bosses are not found.

In an organization, who should be

concerned with human resource
management?
A. Only HR departments
B. Only Managers
C. Managers and HR departments

Ethics the fundamental principles of right

and wrong.
Ethical behavior is behavior that is
consistent with those principles.
Many ethical issues in the workplace involve
human resource management.

1.

2.
3.

4.

In their relationships with customers, vendors,

and clients, ethical companies emphasize
mutual benefits.
Employees assume responsibility for the
actions of the company.
The company has a sense of purpose or vision
that employees value and use in their day-today work.
They emphasize fairness.

1.
2.

3.

HRM practices must result in the greatest good for the

largest number of people.
Employment practices must respect basic human
rights of privacy, due process, consent, and free
speech.
Managers must treat employees and customers
equitably and fairly.

Human resource management (HRM) consists of an

organizations people practices
the policies, practices, and systems that influence employees
behavior, attitudes, and performance.

HRM influences who works for the organization and

how those people work.

HR departments have responsibility for a variety of

functions related to acquiring and managing employees.

HR management requires substantial human relations skills,

including skill in:
communicating
negotiating
team development

HR professionals also need:

To understand the language of business
To be a credible with line managers and executives
To be strategic partners

Non-HR managers must be familiar with the basics of HRM

and their own role with regard to managing human resources.
Supervisors typically have responsibilities related to all the
HR functions.

HR professionals should make decisions consistent with sound

ethical principles.

The decisions of HR professionals should:

Result in the greatest good for the largest number of people.
Respect basic rights of privacy, due process, consent, and
free speech.
Treat employees and customers equitably and fairly.

Careers in HR management may involve specialized work in

fields such as recruiting, training, or compensation