7. Human Resource Management

Human Resource Management (HRM)

Process of obtaining, developing, maintaining and compensating employees to achieve organizational goals

Human Resource Inventory

Information about an organization's current employees and their skills

Job Analysis

Study of what employees do in different jobs

Job Description

Written summary of duties, responsibilities and working conditions of a job

Job Specification

Written summary of the qualifications needed for a job

Human Resource Planning

Process of determining current and future employee needs

Human Resource Planning Steps

1. Prepare Human Resource Inventory

2. Conduct Job Analysis

3. Assess Future Human Resource Demand

4. Assess Future Human Resource Supply

5. Establish Strategic HR Plan

Recruitment

Activities used to obtain enough qualified people at the right time

Internal Recruitment

Hiring employees from within the organization

External Recruitment

Hiring employees from outside the organization

Advantages of Internal Recruitment

1. Lower Cost

2. Faster Hiring

3. Improves Employee Morale

Selection

Process of gathering information and deciding who should be hired

Selection Process

1. Obtain Applicant Information

2. Conduct Interviews

3. Administer Employment Tests

4. Conduct Background Checks

5. Obtain Medical Results

6. Establish Trial Period

Employment Test

Assessment used to evaluate applicants' skills and abilities

Background Investigation

Review of an applicant's records, references and work history

Trial Period

Conditional employment period used to evaluate a new employee

Contingent Worker

Employee without the expectation of regular full-time employment

Types of Contingent Workers

1. Part-Time Workers

2. Temporary Workers

3. Seasonal Workers

4. Interns

Reasons for Using Contingent Workers

1. Replace Employees on Leave

2. Meet Peak Demand

3. Reduce Labor Costs

Training and Development

Activities aimed at improving employee performance and abilities

Training

Improving short-term job skills

Development

Improving long-term abilities and career growth

Training and Development Process

1. Assess Training Needs

2. Design Training Activities

3. Evaluate Training Effectiveness

Employee Orientation

Introduction of new employees to the organization, coworkers and policies

On-the-Job Training

Learning by performing tasks at the workplace

Off-the-Job Training

Training that takes place away from the workplace

Job Simulation

Training using equipment or situations that imitate the real job

Performance Appraisal

Evaluation of employee performance against established standards

Performance Appraisal Process

1. Establish Performance Standards

2. Communicate Standards

3. Evaluate Performance

4. Discuss Results

5. Take Corrective Action

6. Use Results for Decisions

360 Review

Performance appraisal using feedback from supervisors, coworkers and subordinates

Compensation

Pay and rewards provided to employees for their work

Objectives of Compensation Programs

1. Attract Qualified Employees

2. Encourage Productivity

3. Retain Valuable Employees

4. Maintain Competitive Position

5. Provide Financial Security

Fringe Benefits

Additional compensation beyond wages such as health insurance and paid leave

Examples of Fringe Benefits

1. Sick Leave Pay

2. Vacation Pay

3. Pension Plans

4. Health Plans

Cafeteria-Style Fringe Benefits

Benefit system allowing employees to choose benefits they prefer

Outsourcing

Hiring an external company to perform certain functions

Promotion

Moving an employee to a position with greater responsibility

Reassignment

Transfer of an employee to a different position

Termination

Ending an employee's employment

Retirement

Employee leaving the workforce permanently

Early Retirement

Retirement offered before normal retirement age, often with incentives

Exit Interview

Meeting with an employee who is leaving an organization to gather feedback

Downsizing

Reducing the number of employees to lower costs and improve efficiency

Employee Morale

Overall attitude, satisfaction and motivation of employees

HRM Challenges

1. Shortage of Skilled Workers

2. Aging Workforce

3. Complex Laws and Regulations

4. Continued Downsizing