You are on page 1of 48

William Werther & Keith Davis

Fifth Edition
Chapter 1

The Human Resource Frameworks


&
Environmental Challenges
Human Resource Management
Management of the organization’s employees;
consists of all the activities required to enhance
the effectiveness of an organization’s workforce
in achieving organizational goals and objectives.
Human Element is clearly the most critical factor
that contribute to organization performance

Managers at all levels aware that a critical source of


competitive advantage often comes not from having
the most ingenious product design/service, the
best marketing strategy, state-of-the-art
technology, or the most savvy financial
management but from having the appropriate
systems for Attracting, motivating & managing the
Organizations Human Resource
Why is HRM Important to an
Organization?
Four basic functions:
Staffing
Training and
Development
Motivation
Maintenance
Strategic Goals of HRM

•HR Planning
•HRM Forecasting Tech
Attract •Recruitment
•Selecting

•T&D
Develop •Performance Appraisal

•Wage & Salary


•Benefits
Maintain an Effective Workforce •Labor Relation
•Termination
Importance of HRM
Survival of country in global economy depends on the
performance of its Organizations- private & public
Comes from

Society’s wealth organizations


Well being

Jobs, products, services – sustain


as industrial nation

Sell more goods & services in global market--- nations are able to earn
more wealth for societies- increase standard of living of their CITIZEN
Name the greatest accomplishment of the 20th Century

The Moon
Biogenetic Computers
Shares a common Landing

shares one common Feature


The Term “Human resource” refers to the people in
an organization

Importance of HR efforts comes from the realization


that people are the common element in every
organization: they create strategies & innovations for
which ORG are noted

Assets make things possible, people makes things


happen

Example: CEO; Balance sheet doesn’t list Human


“assets”, those assets are the backbone of the company
Society faces demands to compete globally-feed the hungry-
cure diseases-lower unemployment  how to respond:
through most creative invention: organization

Central
Challenge

Better
Organization
Better our ORG works, the more easily our society can
meet these challenges & opportunities
Therefore, Central challenge facing society is the
continued improvement of our ORG both private &
public
If organizations improve society prospers & meet the
challenges

BUT HOW DO THEY IMPROVE ?


The Importance of HRM
Organizations improve through more effective and
efficient use of their resources
Effective means: provide right goods/services
Efficiency means: use minimum resources to
produce goods
Productivity is the ratio of an Organization’s
output (goods & services) to its inputs (people,
capital, materials and energy
Productivity = outputs/inputs
= Goods & Services/People, capital, material & energy
Productivity increase results in higher profits which
allow an organization provide better Pay, Benefits &
Working Conditions

Result in higher quality work life for employees


The Service Role of HRM
The HR department exists to assist the organization, its
managers and employees.
HR is a service department.
HR department : staff authority, which is the authority to
advise, not direct other managers.
Line authority is the right to direct the operations of the
department that produce or distribute products or services.
When HR advises a manager about an HR issue it is up to
that manger to accept or reject the advice. If the manger
rejects the advice of HR the consequences of that decision
fall on that manager.
To avoid negative consequences the managers usually
consider the HR department advice and follow it.
Example if in each department managers exercise
their line authority regarding the rewards of
employees the result would be excessive costs and
inequality.

However, the functional authority is subject to review


by the top management
The Purpose of HRM
The purpose of HRM is to improve productivity of the
organization in ways that are strategically, ethically &
socially responsible

Simple the HR dept exists to support managers &


employees as they pursue the Org strategies

For this purpose HR dept must have Objectives


The Objectives of HRM
Managers & HR dept achieve their purpose by
meeting objectives.

Objectives are benchmarks/targets against which


actions are evaluated

Failure to do so can harm the firm’s performance,


profits & even survival
(a) Organizational Objective
HR department exists to contribute and enhance
organizational objectives by addressing HR issues.

The HR system serves the rest of the organization


Functional Objective
It must maintain the departments contribution at the level
appropriate to the Organization’s needs
Resources are wasted when HR management is more or
less sophisticated then the Org demands
To maintain balance b/w HR contribution & Organization
need
How to maximize the capacity of HR to meet organizations
objectives
Example: How to balance the teaching staff in IMS.
How to level the workload of staff members
HP changed its ratio of HR staff members to
employees from 1 per 53 down to 1 per 75 without
violating the CO. long standing “no-layoffs” policy
Societal Objective
To be ethically and socially responsive to the needs and
challenges of society while minimizing the negative
impact of such demands on the Organization

HR decisions should reflect and respect the issues of


discrimination at work place, environment, safety and
other areas of social concern
Personal Objectives
To assist employees in achieving their personal
goals & those personal goals should also contribute
positively to the Org goals
The personal objectives must be met if workers are
to be maintained, retained and motivated
Otherwise, employee performance & satisfaction
may decline & employees may leave the Org
Example: HR dept help technical staff and
furthers their careers by organizing conference
PhD programs of IM/Sciences.
A Dilemma
Failure to invest in employees causes
Inefficiency
Weakening of organization’s competitive
position
Human assets are risky investment
Require extra effort to ensure that they
are not lost
Unlike physical assets, human assets are
not OWNED by the Organizations
HRM Activities
To achieve their purpose & objectives, HR department
help managers obtain, develop, utilize, evaluate,
maintain and retain the right numbers & types of
employees

This requires certain activities to be performed by the


HR department

 HR activities are the actions taken to provide &


maintain an appropriate workforce for the Org
HR Activities Continue

When Org becomes large estimate its future HR needs

HR Planning: Forecasting future HR needs for the Org


Eyes on future needs
Recruitment: seek to secure job applicants to fill those needs

Selection: result is a pool of applicants are screened through this


process: this process selects those people who meet the needs
uncovered through HR planning

 New workers seldom meet the Org needs exactly, and so they must be
oriented & trained to perform effectively

As demands change placement activities transfer, promote, demote


and even terminate workers
HR plans reveal new staffing needs

These openings are filled through the recruitment of


additional workers and the development of present
employees

Development teaches employees new skills, knowledge


and abilities
Then individual performance is appraised

How well HR activities


Evaluate performance have been done
HR Activities Continue

Poor performance means that selection, training or


development activities should be revised or their may
be a problem with the employee relations
HR Activities Continue

Employees also must receive compensation in the


form of wages, salaries, or incentives along with
employee benefits such as insurance and vacations

Some rewards are required service dictated by law,


such as social security, workers compensation, safe
working conditions and overtime pay
HR Activities Continue
HR dept’s also plays an important role in
employee relations, usually by establishing
policies & assisting managers
When employees are dissatisfied they may bond
together and take collective action
Then management is confronted with a new
situation: Union-management relations
To respond to collective demands by employees,
HR specialists may have to negotiate & administer
a labor agreement
The Organization of HR Department
A separate department usually emerges when the
benefits of a department exceeds its costs

Until then managers must deal with HR activities


themselves or delegate it to their subordinates
HR Department in a small Organization

Such
departments
usually limited
to maintaining
employee
records &
helping
managers find
new recruits
The Hierarchy of Jobs within Large HR Department
Demographics
Technological
and Diversity
Advancement

Strategic
HRM

Labor Unions
Government Legislations
(A) Technology Challenges for HRM

New areas of concern for HR & ORG


 Telecommuting
 Employee surveillance & monitoring
 E-HR
 Ethical behavior

1–35
Telecommuting
Issues affecting success of
Dramatic growth in number of
telecommuting programs:
Americans working from home
 Deciding which
 19.6 million by beginning of
employees will be
2000 offered participation
 Clean air act- less  Equipment expense
commuting on roadways
 Some managers
 5% Los Angeles- once a week
uncomfortable having
per day save 9.5 M gallons direct reports away from
94M few pollution office
 More flexible work  Needs time management
environment-balance skills & self motivation
multiple roles
 Clear MBO’s-
 Save real estate costs-urban
telecommuting
areas agreement
1–36
E-HR
Opportunity to deliver E-GM : deliver e-HR
transactional types of services .ESC- enroll in
services online classes online- job
 Payroll postings, manage
 Employee benefits benefits
 Scheduling
 Recruiting
 Training
 Career development
Employee Surveillance and
Monitoring
More than 80% of large employers utilize monitoring
technology
Internet usage
E-mails
Computer files
Voice-mail
Telephone usage
Under Electronic Communications Privacy Act
(ECPA) employees have only limited privacy rights

Copyright © 2005 South-Western. All rights


reserved. 1–38
Ethical Behavior
Scandals, bankruptcies,
Movement toward greater
scandals & business
protection for employees
in regard to off-duty meltdowns – energy to
behavior discuss EB in ORG’s
Ownership of work-
Intellectual property rights Org reputation is
Trade secret-theft?
paramount concern –
Tech made it easy to
transmit confidential
accepting an offer
information
Fairness of non-compete
clauses-work for competitor
or start own business
Technology
I
Refer to any equipment, tools or operating methods
that are designed to make work more efficient
Modern Civilization evolved over three waves

Agriculture Age Industrialization Age Info/Digital Age


•90% people were • Developed countries •1970’s new age based
moved from agrarian to on info
employed in machines based • Technology
agriculture based societies advancements
jobs • Mass production, eliminated many low-
specialized jobs skilled, blue collar jobs
• Own bosses & •Info wave transformed
• Blue collar workers,
nowadays only 30% in USA & expected society from
5% WF produce to drop by half in manufacturing to
our food coming years service one
Technology Affect HRM Practices
E-Recruitment
 Posting jobs on Co. website (nhsjobs.com) give
managers to reach to larger pool of potential job
applicants
 Org asking applicants for submission of an
Electronic resume than a paper resume
 Job application filling on internet
Training & Development
 Technology has dramatically changed HR managers
orient, train, and develop employees
- Learning through internets.
- Lectures on T.V
- Lectures through video, internet etc.
- Use of Audio- visuals Aids.
An issue for HR managers

Violation for their rights to privacy

Depends how an organization monitor the behavior


of their employees without encroachment of their
rights to privacy

Example: Xerox fired 40 employees because they were


caught in the act of surfing to forbidden site
Workforce Diversity
Decades ago Recruitment was done mainly from the
organizations own locality
Workers shared the same interests and needs therefore
looking after their needs was relatively simple for the HR
managers
Recently Org took a “melting-pot” approach to differences
in Org
Workforce is more heterogeneous because of government
legislation prohibiting discrimination at work place and
providing opportunities to all sections of the society
(Different cultures, societies, females and aged employees)
 Such employees at work place with their own specific
needs expect from the Org the fulfillment of their specific
needs:
Diversity also brings creativity to the Org
How ?
• Women Seeking employment

•Demands for parental leave & child care facilities


•Sick days becoming – personal leave days
•Dual career families

• Diversity through Immigration


•Germany & Saudi – Guest worker visa & no citizenship
• Japan – homogeneous workers & growing shortages
Labor Unions
Unions exist to represent workers in the ORG
Employee & labor sign a Labor agreement

Compensation, hours, WC

Unions can be a positive force, negative force ? HOW

•Resist changes in an Org


•Corrupt leaders
Government Legislation
Enforcement of laws, government has a direct &
immediate impact on HR functions

OSHA
EEOC laws affecting
HRM
•Equal Pay Act
•Disability Act

You might also like