SHRM Organization

Structure of the HR Function

Encompasses the people, processes, and activities involved in the delivery of HR-related services that create and drive organizational effectiveness.

How can HR add the most value in the strategic planning process?

By identifying the HR implications of the company’s strategy

An HR manager observes a staff member spending considerable time following up on compliance questions from line managers and supervisors. How should the manager respond?

Provide positive feedback to motivate this type of behavior

How should HR best ensure operational activities are accomplishing the organization's strategic objectives?

Evaluating the organization's talent management strategy for alignment with its strategic goals

Which best describes HR’s involvement in the strategic planning process of their organization?

Acting as a consultant to leadership and other functions on HR issues

In a sales and marketing environment, what are the 4 Ps of marketing?

Price, product, promotion, & place

Why is HR well-positioned to serve as a cross-functional bridge?

HR can affect the ability of each function to produce value

Which part of the organization is responsible for assembling products?

Operations

Which organizational change would be most effective in aligning the talent selection process with HR's strategic mission to provide service to internal customers?

Reviewing and revising the organizational structure

Why is it important for an HR director to establish internal partnerships with the managers of each business unit?

Demonstrate how HR can provide business unit value

Which is the chief information officer likely most concerned about?

Database security

The chief financial office is primarily responsible for which two functions?

Accounting and Finance

Which task should HR consider for outsourcing?

Benefits management and administration

Third-party contractors are best used for which types of activities?

Activities that are not strategic

Which role should be hired for an HR department?

HR generalist

HR management creates a shared services center for career development counseling. Several months later, management noted high turnover in HR offices throughout the organization. Which is the most likely reason for this outcome?

Poor management of the extended effects of an organizational change

Which tasks should an HR department outsource to focus on strategic activities?

Benefits and payroll administration

A global company with a dedicated HR structure has locations on several continents. A new labor law in one of these locations impacts the company's overtime rules. What should HR in that location do first to address this change?

Inform corporate HR of the new law.

An organization's HR department receives pressure from multiple areas in the organization. Which HR structural alternative would work best for this organization?

Matrix

In addition to cost, what is the most important factor to consider when reviewing the proposals of outsourced companies?

Ability to meet specifications

HR generalists, who may be located within divisions or other locales, implement policies, adapt them as needed, and interact with employees. Which type of HR structure is this?

Functional

Which type of model establishes units with specialized expertise that develop policies and resources for all units to utilize?

Shared Services

Which is the best first step in preparing for an HR audit?

Determine the type of audit

Which is the most desired outcome of an HR audit?

Identification of areas of the function where performance could be improved

How can a balanced scorecard assessment help an organization with a clear strategic plan to meet its objectives?

By identifying key performance areas where the strategy may be ineffective

Which HR metric would best inform HR leadership as to whether the rest of the organization feels that HR does an adequate job supporting hiring processes throughout other departments? 

Customer Satisfaction

Customer Satisfaction

a measure of various different customer opinions across services offered by HR

Success ratio

the proportion of selected applicants who are later judged to be successful on the job, promotion pattern refers to the percentage of internal promotions, and human capital ROI refers to the ratio of employment-related expenses to revenue minus nonemployment expenses.

A manager has lost several staff members to a competitor in the last quarter; however, continues to meet team targets. Which type of report can HR share to ease this manager's dismay over losing staff members?

Human capital value added

What is the primary reason for conducting an HR audit?

To enhance or eliminate HR programs

Which metric would most accurately show the effect of the investment in an HR change initiative to increase employee productivity?

Human Capital value added

In the balanced scorecard approach to strategic management, which action does the customer value most?

Providing quality goods and services

What core business function is best suited in identifying competitive threats and revenue-producing opportunities for a SWOT analysis? (Strengths, Weaknesses, Opportunities, & Threats)

Marketing & Sales

How has the HR professional role evolved?

From operational to strategic

HR Audit

Systematic and comprehensive evaluation of an organization’s HR policies, practices, procedures, and strategies.

Dedicated HR

An HR structural alternative that allows organizations with different strategies in multiple units to apply HR expertise to each unit’s specific strategic needs.

Outsourcing

A process by which an organization contracts with third-party vendors to provide selected services/activities instead of hiring new employees

Center of excellence (COE)

An organizational structure that leverages staff expertise in certain areas to improve the entire organization’s strategic performance. 

Functional HR

HR structural alternative in which headquarters HR specialists craft policies and HR generalists located within divisions or other locales implement the policies, adapt them as needed, and interact with employees.

Cosourcing

Arrangement in which an enterprise and a vendor share different tasks within a larger complex, often strategic responsibility 

Shared services HR model

HR structural alternative in which centers with specific areas of expertise develop HR policies in those areas; each unit can then select what it needs from a menu of these services

What is HR’s focus?

The people: acquiring, developing, and retaining talent

What does the HR’s strategic role include

Participation in creating the organization’s strategy, aligning the HR strategy with the organization’s strategy, and supporting other functions in their strategic roles.

Administrative Role of HR

HR in this role manages compliance issues and record-keeping.

Operational Role of HR

In this role, HR is called upon to interact with line managers, consulting on specific issues and providing advice on improving performance, productivity, and job satisfaction.

Executive management

Responsible for all of the core business functions and their effect on the organization’s performance. HR contributes to the development of organizational strategy, advising on the human capital implications of strategic decisions. 

Finance and accounting functions

Reflect an interest in an organization’s financial performance. One focuses on how the organization uses its financial assets to operate in the short and long term, and the other focuses on tracking financial transactions and reporting financial information to finance. HR helps to plan and monitor annual functional and special project budgets and to manage relationships with suppliers.

Marketing and Sales functions

Responsible for positioning and selling products and services to customers (4 Ps - price, product, promotion, & place). HR can ensure that its activities align with the identity marketing is creating and use this brand identity to attract future employees and create teams/team cultures that embody brand characteristics.

Push Strategy

Focuses on getting products/services in front of customers

Pull Strategy

Attracts customers to the product.

Research and development function

New product design and development is responsible for future revenue. HR is a partner in sourcing good job candidates and creating attractive compensation packages.

Operations function

Develops, produces, and delivers products and services to customers. HR’s ability to analyze historical data and predict and creatively manage gaps in resources.

Information Technology Function

Manages the storage, access, exchange, and analysis of information across the enterprise through hardware and software systems. HR can assist by providing a pipeline of qualified employees and can develop and communicate policies for this department

Leaders

typically part of the organization’s senior leadership team and report directly to the CEO or COO. Bring information about SWOT to the organization’s strategy to other leaders and participate in the development of the overall strategy.

Managers

Responsible for units within the HR function, such as employee relations, talent acquisitions, and organizational development. They plan, direct, and coordinate the activities for their unit and provide input to the leader for HR strategy.

Specialists

known as functional experts - have expertise in specific areas

Generalists

known as HR practitioners - are familiar with all of HR’s varied services. Have expertise in one or more specialty areas of HR, but are generally proficient enough in each area to provide sound advice and direction to employees and managers. 

HR Business partners

More experienced generalists who are assigned to represent HR services directly to other business functions.

Centralized

All HR personnel are located within the HR department; they deliver services to the entire organization. (headquarters) (More control/consistency)

Decentralized

HR staff within each function, business unit, or location carry out the required activities. (Better communications and responsiveness)

Functional

Headquarters HR is staffed with specialists who craft policies. HR generalists, who may be located within divisions or other locales, implement these policies, adapt them as needed, and interact with employees. 

Dedicated

Allows organizations with different strategies in multiple units to apply HR expertise to each unit’s specific strategic needs

Shared Services

Each business unit can supplement its resources by selecting what it needs from a menu of shared HR services (usually transactional) that the units agree to share.

Center of excellence (COE)

Leverages strategic expertise to foster growth and continuous improvement.

Business partners

Generalists who usually report to managers outside of the HR structure but indirectly report to HR and work to consult and help link their business area to the proper areas of the HR department.

Matrix

HR staff report directly to HR senior management, but also report to other departments through the senior management positions. (Flexibility)

Global resources

Refers to the ability to attain support and resources from around the world, often via outsourcing

Outsourcing Process

1. Analyze needs and define goals.

2. Define the budget.

3. Create a request for proposal (RFP).

   1. Written request asking contractors to propose solutions and prices that fit the customer’s requirements. (Executive summary, company information, project team/resources, deliverables, references, outlined development process, & cost)

4. Send RFPs to the chosen contractors.

5. Evaluate contractor proposals.

6. Choose a contractor.

7. Negotiate a contract.

8. Implement the project and monitor the schedule. 

9. Evaluate the project.

Balanced scorecard

Provides a concise yet overall picture of an organization’s performance. Can serve as a way of focusing human resource staff on activities that will support the company’s goals

HR Metrics

• Absence Rate - ratio of lost days to the number of employees

• Accruals - Comparison of budget to actual assignee cost

• Applicant yield ratio - Percentage of applicants who proceed to the next step of the selection process

• Cost per hire - Total costs of hiring divided by the number hired

• Customer Satisfaction - A measure of various different customer opinions across services offered by HR

• HR staff per full-time employee  - Ratio of the number of HR Staff Retained to the number of overall full-time staff retained.

• Human Capital return on investment - Ratio of employment-related expenses to revenue minus nonemployment expenses. 

• Human Capital Value Added - Revenue minus nonemployment expenses divided by the number of full-time employees.

• Key Talent Retention - Percentage of key talent retained

• Promotion Pattern - Percentage of internal promotions 

• Success ratio - Proportion of selected applicants who are later judged to be successful on the job.

• Transfer - number or percentage of employees moving across divisions to new jobs

• Turnover costs - costs associated with separation, vacancy, replacement, and training.

• Turnover rate - proportion of exiting employees to all employees

• Vacancy costs - Costs of substitute labor (temps, contractors, outsourcing) minus wages and benefits not paid because vacant.

Training return on investment

Economic benefit of enhanced performance minus costs of developing, producing, and delivering training

Types of HR Audits

• Compliance - Focuses on how well the organization is complying with current employment law and regulations 

• Best practices - help the organization maintain or improve a competitive advantage by comparing its practices to those of employers identified as having exceptional HR practices

• Strategic - Focuses on the strengths and weaknesses of systems and processes to determine whether they align with the HR departmental and/or the organizational strategic plan

• Function-specific - Focuses on a specific area in the HR function (such as payroll, performance, records, etc.)

The steps of the Audit process

1. Determine the scope and type of audit

2. Develop the audit questionnaire 

3. Collect the date (road map)

4. Benchmark the findings 

5. Provide feedback about results (written report/discussion)

6. Develop action plans

7. Foster a climate of continuous improvement

Organizational Effectiveness & Development (OED)

Concerns that the overall structure and functionality of the organization involves measurement of long-term and short-term effectiveness and growth of people and processes, and the implementation of necessary organizational change initiatives.

Organizational Development (OD)

refers to an organizational management discipline used to maintain and grow organizational effectiveness and efficiency through planned interventions.

Organizational theories

help to explain how the organization functions, including its parts and how they interact.

The major organizational elements that must be aligned with strategy include:

• Structure - The way the organization separates and connects its pieces.

• Systems - The policies that guide behavior and work, the processes that define how tasks will be performed, and the technology or tools used to support that work. 

• Culture - the set of beliefs, attitudes, values, and behaviors shared by members of the organization and passed on to new members.

• Values - Principles that the organization and its leaders have explicitly selected as a guide for decisions and actions.

• Leadership - The model of behavior that leaders set for the rest of the organization.

OED Interventions

• can be seen as stepping in to interrupt the status quo or the current state in order to examine a situation more closely and make changes that could improve outcomes. 

  • Described as “structured activities” as they may involve multiple actions that are each focused on the same objective, organizational performance improvement.

  • The actual OED intervention includes both the tools used to examine the issue and the change or solution that will be implemented. 

Proactive Interventions

identify and correct potential problems before they begin affecting performance

Remedial Interventions

make changes that bring an organization back on course toward its strategic goals. They are typically intended/designed to resolve a problem or issue that is current or newly discovered and to bring about a long-term positive impact on the organization and its function.

Characteristics of Effective OED Interventions

• Strategically aligned - Helps ensure that plans reinforce, complement, and build on each other and support overall organizational goals and strategies. 

• Collaborative - Facilitates discovery of causes and development of solutions with critical input from those most closely involved (managers, supervisors, and employees) in the intervention area. 

• Supported by top management - Helps reduce resistance to eventual change.

• Producing sustainable results - Changes that can continue to deliver long-term results, perhaps because of management preparation or group involvement and acceptance of new processes and success criteria. 

• Supporting continuous improvement - Aims at strengthening the organization in an ongoing manner by identifying weaknesses and opportunities and engaging employees in performance improvement. 

• Using common tools allows for easy comparisons and collation of data.

• Using common language - Avoids confusion and misunderstanding

• Explicit assumptions - Allow the validity of underlying assumptions to be challenged.

• Fact-based - Clarifies the difference between what is known and what is supposed.

• Evidence-based - Uses current best evidence to identify problems/issues specific to the organization through a commitment to continuous, up-to-date information and knowledge gathering and analysis.

• Oriented toward systems - uses systems theory to analyze problems.

• Flexibility - Recognizes and accepts that assumptions are likely to change.

• Multiple perspectives - Provides access to diverse perspectives.

Analysis Paralysis

Where an organization collects data, they analyze it, they discuss possible actions, but in the end, they fail to act. 

Which is the best way to demonstrate the impact of an employee training and development initiative?

Measuring change over the course of the initiative

What is the best approach HR can take to align organizational effectiveness and development (OED) with the goals of the organization?

Connecting the organization’s strategy and the intervention activities

HR acts to develop a team to improve customer service, efficiency, and processes. What activity does this illustrate?

Organizational development 

 A company identifies a training need on workplace harassment for all supervisors. Which best describes the organizational impact of this activity?

Risk will be mitigated because supervisors will be equipped to recognize and report potential workplace harassment.

When considering major changes in the performance appraisal process, which approach would be most helpful in obtaining commitment from managers?

Involving managers in determining what changes should be made

Which would be the most effective quantitative measurement of customer service?

Numerical ratings on a customer satisfaction survey

HR has been tasked with examining structures and processes to make the organization more agile and quick to respond to threats and opportunities. What type of intervention is this?

Proactive

Work Specialization

refers to the degree to which tasks are performed as separate jobs

Decision-making Authority

How decisions are made within the organization and who is empowered to make those decisions. 

Layers of Hierarchy

Range from the CEO to the employee in a function.

Span of control

refers to the number of individuals who report to a supervisor

Chain of command

refers to the line of authority in an organization. 

Formalization

refers to the extent to which rules, policies, and procedures govern the behavior of employees in the organization

Departmentalization

refers to the way an organization groups its jobs and aligns effort.

Functional Structure

departments are defined by services they contribute to the organization’s overall mission, such as marketing/sales, operations, and HR.

Line units

work groups that conduct the major business of the organization, such as the production or marketing functions

Staff units

assist the line units by performing specialized services for the organization, such as accounting or HR

Product Structure

functional departments are grouped under major product divisions. Each division will have its own marketing, sales, manufacturing, and finance functions.