Human Resource Management Notes
Chapter 1: What Is Human Resource Management?
Why Study Human Resource Management (HRM)?
- Management of dynamic and complex environments significantly impacts performance.
- Human resources are the people within an organization.
- Employee engagement comes from job satisfaction, ability, and willingness to perform.
HRM Past and Present
Two types of organizations:
- Revenue center: Brings in revenue.
- Cost center: Brings in no revenue.
HRM in the Past:
- Considered an easy management job.
- Considered a cost center.
Present View of HRM:
- Productivity Centers: Revenue center that enhances profitability.
- Productivity: Amount of output per unit of input.
- Effectiveness: Getting the job done whenever and however it must be done.
- Efficiency: How many resources are used.
- Using people in the correct manner makes them more efficient and productive.
Technology’s Effect on Efficiency:
- Innovation and customer expectations demand technology to gather, analyze, and manage data.
The Changing World of HRM
New HRM Challenges (CEOs’ and CHROs’ Top Concerns):
- Upskilling the workforce.
- Shortage of skilled talent.
- Building critical skills and competencies.
- Strengthening current/future leadership.
Labor Demographics:
- Number and quality of skilled applicants decreasing.
- Gender, ethnic, and age diversity increasing.
Knowledge Workers:
- Use their head more than their hands.
- Example: Deloitte views "humans as the fundamental unit of value."
Understanding HR’s Critical Factors
Critical Dependent Variables:
- Dependent variables: Must be controlled but cannot be directly manipulated.
- Independent variables: Can be controlled to affect dependent variables.
- Most important issues: productivity, employee engagement.
- Turnover: Permanent loss of workers.
- Absenteeism: Failure to report to the workplace.
Importance of Strategic HRM:
- HR management must be proactive.
- Sustainable competitive advantage: Capability that creates value for customers.
- Basis of strategic HRM.
- Difficult to secure lasting technical advantage.
Influence of Social Media: Recruiting and Selection
- Recruiters/Chatbots scan social media.
- Candidates check out potential employers.
- Skype interviewing reduces cost.
- Candidates’ profiles reviewed (where legal).
The Onboarding Process
- Teach organizational culture.
- FAQ areas to answer questions.
- Source mentors/work buddies.
- Point of access for required information.
Training and development
Social learning venues on social media
Formal mentoring and development communities
Performance management
- Platforms for continuous feedback to or from employees.
Permanent records of each employee’s work.
HRM Skills
Technical Skills: Ability to Use Methods to Perform a Task
- Comprehensive knowledge of laws, rules, and regulations.
- Computer skills.
- Interviewing skills.
- Training knowledge and skills.
- Understanding of performance appraisal.
- Cultural knowledge.
- And many more!
Interpersonal Skills
- Ability to understand, communicate, and work well with people.
- Empathy: Ability to put yourself in another’s place.
- Some skills include: teamwork, meditation.
Conceptual and Design Skills
- Conceptual: Ability to understand what is going on.
- Design: Skill set for novel solutions to problems.
Business Skills
- Analytical skills.
- Quantitative skills.
Line Managers’ HRM Responsibilities
Line Versus Staff Management
- First point of contact for most employees.
- Differences between line and staff managers.
- Line managers: Individuals who create, manage, and maintain the people and organizational processes that create whatever it is that the business sells. May have direct control over staff employees.
- Staff managers: Individuals who advise line managers in some field of expertise. Generally don’t have direct control over line employees. Internal consultants for a company.
Six Major HR Responsibilities of Line Management
- Legal considerations
- Labor cost controls
- Leadership and motivation
- Training and development
- Appraisal and promotion
- Safety and security of employees
HR Managers’ Responsibilities: Disciplines within HRM
Different job types
- Generalist jobs: HR employee works in many different areas.
- Specialist jobs: HR employee focuses on a specific discipline of HR.
Specialist Disciplines:
- Legal environment, EEO, and diversity management
- Specialists ensure compliance with equal opportunity laws and regulations as well as organizational affirmative action plans as needed. Some subspecialties: intergroup conflict management, creating cohesiveness, combating prejudice.
- The most changeable specialty of HR: Every court case has the potential to affect the involved organization’s policies or even policies for all businesses (in the case of new laws or regulations).
- Staffing: recruiting, candidate selection, and new employees
- Training and development
- Employees who participate in more training and development are less likely to leave or engage in neglectful behavior.
- These specialists develop curricula and lesson plans for training processes within the organization, coordinating the delivery of training courses to develop employee skills.
- Employee and labor relations
- A broad discipline: coaching, conflict resolution, counseling, employee evaluation, disciplining employees, leadership, and team-building.
- In union organizations, HR managers in this area might be involved in union votes, negotiations, contract collective bargaining, handling grievances, or anything else that impacts the union/management relationship.
- Requires working knowledge of all federal labor laws.
- Compensation and benefits
- Some subspecialties: compensation planning, salary surveys, benefits management, incentive programs.
- Helps decide the optimal total compensation package for an organization
- Special topics in this area: pay secrecy, comparable worth, wage compression.
- Safety and security
- Occupational safety or health for workplace hazards and on-the-job injuries.
- Stress management and employee assistance programs (EAPs) help employees cope with the demands of their jobs.
- Safety from physical harm (inflicted by other workers, outsiders, or acts of nature).
- Also, maintaining the privacy of employees’ confidential HR files falls in this discipline.
- Ethics and sustainability
- Sustainability: Meeting the needs of today without sacrificing future generations’ ability to meet their needs.
- Develop and enforce codes of ethics for employees, often by facilitating other employees’ reports of ethical violations (whistle-blowing).
- People analytics
- Most recent addition to HRM’s role in an organization.
- Using computers and large databases to analyze patterns in the work environment.
- Goal of predicting detrimental employee actions so they can be prevented or mitigated.
- Legal environment, EEO, and diversity management
Resources for HRM Careers
Society for Human Resource Management (SHRM)
- Largest and most recognized HRM advocacy organizations
- Two major roles
- Advocate for national HR laws and policies for organizations.
- Train and certify HR professionals in specialty areas.
Other Major HR Organizations
- Association for Talent Development (ATD)
- Focuses on supporting those who develop employee knowledge, skills, and abilities.
- Human Resource Certification Institute (HRCI)
- Certification programs: Professional in Human Resources (PHR), including Senior PHR (SPHR) and Global PHR (GPHR).
- WorldatWork
- Certification programs: Certified Compensation Professional (CCP), Advanced CCP (ACCP), Certified Benefits Professional (CBP), Global Remuneration Professional (GRP), Work-Life Certified Professional (WLCP), Certified Sales Compensation Professional (CSCP), and Certified Executive Compensation Professional (CECP).
- Association for Talent Development (ATD)
Professional Liability
- HR managers can be held personally liable for some actions, especially with regards to the Fair Labor Standards Act and the Family and Medical Leave Act.
- May require professional liability insurance
Practitioner’s Model for HRM
- HRM must happen in a specific order to be successful
- Sections of the Model
- Section I: HRM, strategic planning, and legal issues
- Section II: staffing
- Section III: developing and managing
- Section IV: compensating
- Section V: protecting and expanding stakeholder reach
Trends and Issues in HRM
Employee Experience—The Latest HR Imperative
- Employee experience: employee engagement and workplace interactions
- Strengthening employee experience
Continuing Worldwide Problems with Managerial Training
- Workers flee managers who create “caustic” (bitter, pungent, unpleasant) environments
- More than 1/2 of employees looking for new jobs
- Eight managerial issues that make employees consider quitting
- Most “bad” managers were poorly trained
- Lack of respect for subordinates
- Broken promises
- Unrealistic expectations
- Playing favorites among subordinates
- Gossiping about other employees
- Being overly critical
- Micromanaging
- Not listening to subordinates’ opinions
Chapter 2: Strategy-Driven Human Resource Management
Learning Objectives
- Identify and explain the major components of the external environment.
- Identify the factors impacting how an organization makes strategic decisions and give an example of the impact of HR may have on crafting a vision and mission, strategic analysis and design organizational strategy, and high-performance work systems.
- Describe the major components of organizational structure and why it is important to understand them.
- Discuss how organizational culture affects the members of the organization.
- Identify areas of HRM where data analytics and other HR technologies can have an effect on organizational success.
- Describe human resource management systems (HRMS) and identify how they can help HR make decisions.
- Identify the common measurement tools for strategic HRM.
- Discuss the role of culture, technology, and globalization in HRM.
An Introduction to Strategic Planning: The Organization and Its Environment
Environment has two parts: internal and external
Strategic planning is about planning for the long-term future.
Success depends on goals and measurable standards.
HR management’s role in strategic planning
- More than half of HRM top executives report directly to the CEO.
- Organizations that hire and retain motivated and productive people gain a long-lasting competitive advantage.
- However, CEOs generally lack trust in HR’s abilities in strategic planning, linking HR planning to organizational strategies, or utilizing HR analytics to make decisions.
Organizational Strategy
What Is Strategy?
- HRM is an important strategic business function.
- Strategy: Plan of action designed to achieve a particular set of objectives.
- Strategic advantage occurs when you analyze the environment better and react to it quicker than your competitors do.
Three major strategic questions:
- What is our present situation?
- Where do we want to go?
- How do we plan to get there?
Visions and Missions
The vision
- What we expect to become as an organization at a particular point in time in the future.
- Visions are fuzzy and nonspecific by definition.
- Powerful as a focus point for the future and rallying point for an organization
The mission
- Mission statement: A statement laying out our expectation of what we’re going to do in order to become the organization we have envisioned.
- What organizational units will do and what they hope to accomplish, in alignment with the organizational vision.
- Generally more specific (and therefore longer) than the vision.
- Accounts for target customers, products, and how customers are served.
Putting the vision and mission together
- Mission tells an individual how the organization expects to achieve the vision stated by the mission.
- Gives employees a more complete picture of the direction they are headed in.
Strategy Types
- Cost leadership
- Differentiation
- Focus or niche
How Strategy Affects HRM?
- HRM and cost leadership
- HRM and differentiation
- Cost leadership
- Cost leaders do everything they can to lower the organizational costs required to produce their products or services.
- May either sell for a lower price with the same margin as competitors or sell for the same price as competitors, but increase the profit margin above that of competitors.
- Differentiation
- Attempts to stress the difference between a company’s product or service and that of competitors.
- Not necessarily based on real difference; it often depends on strong branding.
- Focus or niche
- Focus on a specific portion of a larger market, such as a regional market, a product line, or a group of buyers.
- Buyer groups may be differentiated by diverse factors including economic class, cultural or ethnic groups, or gender.
- Cost leadership
Strategic Analysis
- Considerations that should be made in strategic decision-making
- Five-forces analysis
- SWOT analysis
- Considerations that should be made in strategic decision-making
Designing a Strategy
- Setting objectives
- Create a strategy
- Implementing, monitoring, and evaluating strategies
- Setting objectives
- Objectives: Statements of what is to be accomplished in singular, specific, and measurable terms, with a target date.
- Organization must write at least one objective for every major goal set forth in a strategy.
- Each function also requires at least one objective.
- Max Weber’s model for writing effective objectives: .
- Create a strategy
- Weave objectives into a cohesive organizational plan.
- How will the organization achieve the objectives set?
- No two organizations are identical, so no strategies should ever be quite the same.
- Implementing, Monitoring, and Evaluating Strategies
- Execution of the plan is key to success.
- Goal: to ensure the mission and objectives of the organization are achieved.
- Strategies often fail at the implementation stage.
- Successful implementation of strategies requires effective and efficient support systems throughout the organization and dedication to the plan at all levels of the organization.
- Controlling is the process of establishing and implementing mechanisms to ensure that objectives are achieved.
- Controlling mechanisms include corrective action, budgeting, and quality management.
- Setting objectives
How HR Promotes Organizational Strategy
- Must be tailored to unique profile of an organization
- Evaluate organizational characteristics to determine what kinds of people to bring in
High-Performance Work Systems and Practices
- Effects of employee engagement
- High-performance work practices: improve organization’s capacity to attract personnel
- HR practices with positive effects
Structure
Company organizational structure must be designed to achieve strategic objectives
Organizational structure: Way in which an organization groups its resources to accomplish its mission
Basic Organizational Structure
- Complexity
- Formalization
- Centralization
- Complexity: Degree to which three types of differentiation exist within the organization
- Vertical differentiation: layers in the organization from top to bottom
- Horizontal differentiation: Typically done with departments, whether separated by function, customer type, geographic divisions
- Spatial differentiation: Physical separation of different parts of the organization, like headquarters and production plants
- Increasing differentiation also increases the difficulty of management and intercommunication as well as decision making
- Duplication of processes is a common consequence of high organizational complexity.
- Formalization:
- Degree to which jobs are standardized within an organization,
- The degree to which we have created policies, procedures, and rules that “program” the jobs of the employees.
- Increases efficiency and effectiveness of people within the organization, resulting in lower costs and higher productivity.
- If the organization does unique and nonroutine things regularly, formalization is unlikely.
- Centralization: Degree to which decision making is concentrated within the organization
- Dispersion of authority for decision making and delegating authority
- High centralization = high control
- Complexity: Degree to which three types of differentiation exist within the organization
Organizational Culture
What Is Organizational Culture?
- Organizational culture: Assumptions about behavior organization members share
- Artifacts of organizational culture Heroes / Stories / Slogans / Symbols / Ceremonies.
How culture controls employee behavior?
- The existence of a strong culture controls how people act within its boundaries.
- In a culture that values hard work and productivity, other team members are likely to pressure an individual who is not conforming to organizational culture to either change their behaviors or leave the organization (!).
- Social media and culture management
- Can be used to monitor and exert control over control organizational environments from the inside or outside of the organization.
- Allows management of internal and external environments.
- Social media continues to grow in importance as a way for organizations and even governments to get through to age groups who are more responsive to social media than traditional forms of address.
An Introduction to HR Technology
Data Analytics and HR Technology
- Data analytics: Accessing large amounts of data to analyze and gain insight into trends or patterns
- Big data: Collection and analysis of extremely large data sets
AI and Intelligent Apps
- HR uses technologies to reach and inform workers
- Just about every aspect of employment is managed with devices
- Selection and onboarding.
- Training.
- Compensation and benefits.
- Performance reviews.
- Mobile workforce management.
- Intelligent apps and devices
What are the desired outcomes?
- The use of HR technologies can allow companies to obtain results like this more easily.
- Managers in HR who use analytics may gain a seat at the table during organizational strategy discussions.
Human Resource Management Systems (HRMS)
Human resource management systems (HRMS):
- Interacting database systems that aim at generating and delivering HR information and allow us to automate some human resource management functions.
How Do HRMS Assist in Making Decisions?
- Can search HRMS database for who has what skills and training
- Main power: Allow rapid access to large quantities of organizational details
Measurement Tools for Strategic HRM
Economic value added (EVA): Profits remaining after cost of capital deducted.
- .
- For a company to grow, it must generate average returns higher than its capital costs.
Return on investment (ROI): Financial return we receive because of something that we do
- In HR, can be used in areas such as training, outsourcing, benefits, diversity, and more.
- .
Trends and Issues in HRM
People Analytics Is Overpowering Classic HRM
- Much of management has been based on gut feelings in the past
- Paucity of skilled HR managers with analytics training
Strategic HRM in an Analytics World
- Change management skills increasingly important
- Five steps for earning “a seat at the table”
- Become the talent management expert.
- Sharpen business acumen and align your visions with the company’s.
- Turn your department from a cost center to a profit center.
- Communicate clearly and concisely.
- Build trust; become a valued advisor.
Chapter 3: The Legal Environment
Aims and Objectives
- Describe the OUCH test and its four components, and provide an example of when it is useful in an organizational setting.
- Identify the major equal employment opportunity (EEO) laws and the groups of people that each law protects.
- Briefly describe the EEOC’s functions, employee rights, and employer responsibilities in conjunction with EEO laws.
- Identify the two primary types of sexual harassment and how to reduce company risk from harassment lawsuits.
- Discuss the employer accommodations that are required to avoid unnecessary religious discrimination.
- Discuss two areas of legislation still evolving that may impact future HR employment regulations.
Protecting Your Organization
One of the primary jobs of an HR is to assist in avoiding any discriminatory employment situations that can create legal, ethical, or social problems with employees, former employees, the community, or other stakeholders.
Discrimination: The act of making distinctions or choosing one thing over another; in HR, it is making distinctions among people.
Discrimination is part of management, but some types of discrimination are illegal and unfair to employees in a protected class.
Illegal discrimination: The act of making distinctions that harm people and that are based on those people’s membership in a protected class.
Employees include:
- People who work full-time, part-time, seasonally or on a temporary basis;
- Individuals assigned to your business under a work program (for example, a program that provides placements for welfare recipients);
- Volunteers, in some cases; and
- Individuals who are not citizens (including individuals who are undocumented).
Applicants, employees, and former employees are protected from employment discrimination based on race, color, religion, sex (including pregnancy, sexual orientation, or gender identity), national origin, age (40 or older), disability, and genetic information (including family medical history).
The OUCH Test Guide
Rule of thumb used to maintain fairness and equity for all
- Objective
- Uniform in application
- Consistent in effect
- Has job relatedness
Objective
- Based on quantifiable evidence
- Not subjective, or based on feelings
- Employment actions should be objective
Uniform in Application
- Respond identically to identical situations
- Applicants must be evaluated the same
- Example: if one applicant takes a written test, the other applicants must take the same test in the same conditions.
Consistent in Effect
- Actions may have different effects on protected groups than on the majority group. For example, a written test for a position that disproportionately rules out the African American portion of applicants is inconsistent in effect.
- Reverse discrimination: Discrimination against the majority employee group based on a legally protected factor, such as race or religion.
Four-Fifths Rule
- A test used by various federal courts, the Department of Labor, and the EEOC to determine whether disparate impact exists in an employment test.
- If the employer hires a protected group (e.g., an ethnic minority, women) at a rate that is less than four-fifths the rate at which the majority group (i.e., White males) is hired, the company must justify its hiring procedures by showing that they are job-related or of business necessity. If justification cannot be provided, the employer may be open to a charge of violating civil rights laws.
Has Job Relatedness
- Action must be a primary aspect of position
- Example: Making coffee for the office
- If it’s not part of your job, you can’t be hired/fired for it
Major Employment Laws
Equal Pay Act of 1963 (EPA)
- First modern equal employment opportunity (EEO) law
- Same position, same organization, same pay
- Some pay differences are legal
- Gender Wage Gap.
- Women make 0.81 for every $1.00 men make
- Black women: just 0.70 for every $1.00
- Less opportunity for advancement
- Less representation at executive levels
Title VII of the Civil Rights Act of 1964 (CRA)
- Most significant EEO legislation in US history
- Prohibits employers from discriminating
- Disparate (Adverse) Treatment: When individuals in similar situations are intentionally treated differently, and the different treatment is based on an individual’s membership in a protected class.
- Requirements for proving disparate treatment
- To prove disparate treatment, plaintiffs must prove there was a discriminatory motive and employers must not have been discriminating based on a “bona fide occupational qualification (BFOQ).”
- Disparate treatment occurs frequently in access to mentoring and leadership development, where women and minorities are “substantially underrepresented.”
- Disparate impact: Occurs when an officially neutral employment practice disproportionately excludes the members of a protected group; it is generally considered to be unintentional, but intent is irrelevant.
- Bona fide occupational qualification (BFOQ) definition
- A qualification that is absolutely required in order for an individual to be able to successfully do a particular job.
- Requirements for proving disparate treatment
Business necessity: When a particular practice is necessary for the safe and efficient operation of the business and when there is a specific business purpose for applying a particular standard that may, in fact, be discriminatory.
Business necessity defenses must be combined with a test for job relatedness.
Job relatedness: When a test for employment is a legitimate measure of an individual’s ability to do the essential functions of a job.
Pattern or Practice discrimination
- When a person or group engages in a sequence of actions over a significant period of time that is intended to deny the rights provided by Title VII of the 1964 CRA to a member of a protected class.
Age Discrimination in Employment Act of 1967 (ADEA)
- For organizations with 20+ employees
- Prohibits discrimination against those 40 years and older
Vietnam Era Veterans Readjustment Assistance Act of 1974 (VEVRAA)
- Vietnam vets entitled to same protections as CRA
- Applies to federal contractors/subcontractors
Pregnancy Discrimination Act of 1978 (PDA)
- Pregnancy as a medical condition
- In 1970s, pregnancy cut from health insurance coverage
- Mandatory for companies with 15+ employees
Americans with Disabilities Act of 1990 (ADA), as Amended in 2008
Civil Rights Act of 1991
- Compensatory damages
- Monetary damages awarded by the court that compensate the injured person for losses.
- Includes future pecuniary loss, emotional pain, suffering, loss of enjoyment of life.
- Punitive damages
- Monetary damages awarded by the court that are designed to punish an injuring party that has intentionally inflicted harm on others.
- Payments beyond the actual damages suffered, intended to punish employers for intentional discrimination.
- After 1964 CRA, many companies created and used hiring/promotion quotas, made explicitly illegal by the 1991 act.
- Compensatory damages
Race norming:
- When different groups of people have different scores designated as “passing” grades on a test for employment
- Race-norming, more formally called within-group score conversion and score adjustment strategy, is the practice of adjusting test scores to account for the race or ethnicity of the test-taker. In the United States, it was first implemented by the Federal Government in 1981 with little publicity, and was subsequently outlawed by the Civil Rights Act of 1991.
Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA)
- Ensures reemployment for deployed military members
- Employees are entitled to “escalation”: Any job or pay/benefits increase they would have attained had they not left.
Veterans Benefits Improvement Act of 2004 (VBIA).
- Amends USERRA
- Extends requirement that employers maintain health coverage for employees serving active duty from 18 months to 24 months (2 years).
- Requires employers to post a notice of benefits, duties, and rights under USERRA/VBIA in a visible place.
- Amends USERRA
Title II of the Genetic Information Nondiscrimination Act of 2008 (GINA)
- Prohibits use of genetic info in employment
lilly Ledbetter Fair Pay Act of 2009 (LLFPA) - Extends time to file compensation discrimination suits
- Prohibits use of genetic info in employment
Immigration Laws Relating to Employment and Equal Opportunity:
- Immigration and Nationality Act of 1952 (INA)
- Skilled immigrant workers given H-1B visa
- In certain specialty occupations (engineers, teachers, programmers, doctors, etc.)
- There are annual limits to the number of workers who can apply for these work visas.
- Skilled immigrant workers given H-1B visa
- Immigration Reform and Control Act of 1986 (IRCA)
- Employers, only hire individuals authorized to work in the United States (use affirmative defense)
- Immigration and Nationality Act of 1952 (INA)
Equal Employment Opportunity Commission (EEOC)
What Does the EEOC Do?
- Investigate and resolve through conciliation or litigation
- Gather and compile info on complaints
- Run programs on what constitutes illegal discrimination
Other EEOC Enforcement Actions
- Act directly against companies if systemic discrimination is suspected
Employee and Employer Rights, Retaliation, and Constructive Discharge Definitions of
- Retaliation: A situation where the organization takes an “adverse employment action” against an employee because the employee brought discrimination charges against the organization or supported someone who brought discrimination charges against the company.
- Adverse employment action: Any action such as firings, demotions, schedule reductions, or changes that would harm the individual employee.
- Constructive discharge: When an employee is put under such extreme pressure by management that continued employment becomes intolerable and, as a result, the employee quits, or resigns from the organization.
- If this can be proven, an individual is eligible for all employee rights associated with involuntary termination
Sexual Harassment
How Common Is Sexual Harassment?
- 33% of women, 8% of men
Types of Sexual Harassment
- Quid pro quo harassment
- Harassment that occurs when some type of benefit or punishment is made contingent upon the employee submitting to sexual advances.
- Direct and aimed at an individual, most commonly aimed from a superior to a subordinate.
- Hostile work environment
- Behavior makes it difficult to work
- Role of the “reasonable person.”
- The “average” person who would look at the situation and its intensity to determine whether the accused person was wrong in their actions.
- Quid pro quo harassment