Human Resource Management Notes

Human Resource Management (HRM)

Overview

  • HRM is the management of human resources, recognizing the unique importance of humans within an organization's resources and capabilities.
  • The HRM process involves:
    • Attracting a talented workforce.
    • Developing this workforce through training.
    • Maintaining a talented and energetic workforce to support the organization's mission, vision, and specific objectives.
  • HRM addresses the central question: what kind of people do we need to attract, train, and incentivize to fulfill our mission, vision, and strategy?
  • HRM is relevant to strategic management and crucial to an organization's strategy.

Historical Context: The Human Relations Movement

  • HRM emerged as a discipline from the human relations movement, kickstarted by Elton Mayo.
  • This movement was significantly influenced by the Hawthorne studies.
  • Following the First Industrial Revolution, the question arose of how to manage a large workforce.
  • During the Second Industrial Revolution, the focus was on improving production, exemplified by Fordism and Taylorism.
  • The Hawthorne studies inquired into how to improve human production.

The Hawthorne Studies

  • Conducted at Western Electric's Hawthorne Works in Chicago during the 1920s, involving 40,000 employees.
  • Focused on determining how illumination affects worker efficiency.
  • Observed that output improved regardless of changes to lighting conditions.
  • Concluded that being observed improved productivity.
  • Pushed theorists to view organizations as social systems with humans, not just input-output production systems.

Impact of the Human Relations Movement

  • Shifted focus to the power of natural groups and the need for two-way communication.
  • Recognized the importance of leadership and employee motivation.
  • Brought a move away from the classical top-down approach of management.

Relevance of HRM

  • Important to understand the HRM process, as individuals will likely be hired and involved in the hiring process.
  • HRM can be framed as a special case of the resource acquisition process, which starts with the organization's vision, mission, and objectives.
  • HRM involves reviewing human resources needs, comparing them with current resources, and correcting surpluses or gaps.
  • HRM differs from other processes of resource management because it deals with humans, who are more than just objects.

Core Functions of HRM

  • Attract, develop, and maintain an effective workforce.
  • This is an ongoing cycle that aligns with the company's strategy.

Attracting a Talented Workforce

  • Involves activities designed to attract a qualified pool of job applicants to the organization to meet job specifications.
  • Begins by advertising a job vacancy.
  • Preliminary contact with potential job candidates.
  • Screening to identify a qualified pool of applicants.

Structure of Job Advertisements

  • Job analysis: descriptive information about the job (what, when, where, how, why).
  • Job descriptions: duties and responsibilities.
  • Job specifications: characteristics sought in candidates (skills).

External vs. Internal Recruitment

  • External sources: ads, campus recruitment, employee exchanges, contractors, company mergers, etc.
    • Advantages: broadens horizons in terms of skills and perspectives.
    • Disadvantages: sends the message that career progression isn't easy, can be expensive.
  • Internal recruitment
    • Advantages: less expensive, employees are already aware of the company’s vision, builds loyalty and motivation.
    • Disadvantages: may not bring in fresh perspectives or specific expertise
  • Recommend recruiting externally when required talent cannot be found internally.

Selection Process

  • Formal application: rejection due to not meeting qualifications.
  • Interview: rejection due to insufficient ability, ambition, or poor interpersonal capabilities.
  • Testing:
    • Tests for intelligence, aptitudes, personality, or interests.
    • Tests should be reliable (consistent results) and valid (measuring what it claims to measure).
    • Rejection due to failing tests.
  • Reference checks: rejection due to negative feedback.
  • Physical exam: rejection if unfit for the job.
  • Analysis and decision: selecting the best candidate from the remaining pool.

Developing an Effective Workforce

  • Begins with socialization into the community of coworkers.
  • Involves understanding the real expectations of the job, appropriate behavior, and general attitude.
  • Orientation: formal way to introduce socialization and familiarize employees with jobs, coworkers, policies, and services.
  • Training: essential for ongoing employee development.

Types of Training

  • On-the-job training: learning while doing the job.
  • Off-the-job training: outside of the work setting (e.g., a food safety course).
  • Coaching: experienced person offering advice to a less experienced person.
  • Mentoring: ongoing coaching where someone coaches someone in the long term.
  • Modeling: demonstrating expected job performance through actions.

Management Development

  • Beginning managers: focus on leadership abilities.
  • Middle managers: broaden perspective beyond their area of expertise.
  • Top managers: sharpen decision-making and negotiating skills, expand awareness of high-level strategy.

Performance Appraisals

  • Setting standards, assessing results, and planning for the next round of appraisal.
  • Purpose: evaluation and development.
  • Can be objective (sales quota) or subjective (qualitative feedback).

Maintaining an Effective Workforce

  • Incentivizing employees to stay in the organization and perform at the expected level.

Wages and Benefits

  • Base remuneration (salary): attracts higher quality employees.
  • Bonus remuneration: extra payment for reaching or exceeding targets.
  • Fringe benefits: non-monetary incentives (e.g., access to library resources).
  • Flexible benefits program: option to pick benefits.
  • Work-life balance: important motivator.
  • Intrinsic benefits: enjoyment of the work itself.
  • Career options: chance of progressing through the ranks.

Terminology for Not Maintaining

  • Termination: fixed-term contract ends.
  • Layoff: for economic reasons.
  • Dismissal: due to inappropriate behavior or poor performance.
  • Resignation: employee leaves for a better offer.

Motivation in HRM

  • Motivation fuels HR behavior in an organizational context.
  • Driven by wages, benefits, and intrinsic incentives.

Content Theories of Motivation

  • Focus on what motivates people and their needs.
  • Humans have needs, and they act to satisfy them.
  • Understanding these needs helps motivate people and improve company performance.
Maslow's Hierarchy of Needs
  • Progression through needs occurs in a specific order:
    • Physiological: food, water, warmth, rest
    • Safety: security
    • Belonging and love
    • Esteem: feeling accomplished
    • Self-actualization: achieving one’s full potential
Alderfer's ERG Theory
  • Collapses Maslow’s hierarchy into three categories:
    • Existence (basic needs)
    • Relatedness (psychological needs)
    • Growth (self-actualization needs)
  • Introduces the concept of regression if a need is frustrated.
Herzberg's Two-Factor Theory
  • Aspects of a job that cause satisfaction are different from those that cause dissatisfaction.
  • Job dissatisfaction is influenced by:
    • Working conditions, relationships with coworkers, policies, quality of supervision, base wage (hygiene factors).
  • Job satisfaction is influenced by:
    • Achievement, recognition, responsibility, intrinsic enjoyment, advancement, personal growth (motivator factors).
McClelland's Acquired Needs Theory
  • Focuses only on acquired needs:
    • Need for affiliation (belonging)
    • Need for achievement
    • Need for power (personal vs. social).
  • The mix of these needs determines the fit for a specific position.
McGregor's Theory X vs. Theory Y
  • Theory X:
    • People are reluctant to work.
    • Incentivize via rewards and punishments, authoritarian.
  • Theory Y:
    • Workers are enthusiastic and love to work.
    • Empower them, give responsibility and freedom.

Process Theories of Motivation

  • Focus on how people are motivated.
Adam's Equity Theory
  • People compare their rewards for the same output and adjust behavior to reduce perceived inequities.
  • Valid in cases of negative perceived inequity.
  • Often see the need to solve inequities even in cases where there is a perceived advantage.
Vroom's Expectancy Theory
  • Explores what determines the willingness of an individual to work hard.
  • Motivation is determined by:
    • Expectancy: belief that effort leads to higher performance.
    • Instrumentality: belief that higher performance will be rewarded.
    • Valence: belief that the reward is valuable.
  • Motivational equation is: Motivation = Expectancy \times Instrumentality \times Valence
Locke's Goal-Setting Theory
  • Maximizing expectancy involves:
    • Selecting workers with the right abilities, training them, supporting their efforts, and clarifying performance goals.
  • Addressing instrumentality problems requires:
    • Clarifying the psychological contract, communicating performance outcome possibilities, and demonstrating that rewards are contingent upon performance.
  • Maximizing valence means:
    • Identifying individual needs and adjusting rewards to match them.
Bandura's Self-Efficacy Theory
  • Self-efficacy: the belief that you can do something.
  • Self-efficacy improves performance.
  • Self-efficacy can be developed through:
    • Past experience, vicarious experience, social persuasion, and physiological/psychological state.

Hot Topics in HRM

Discrimination

  • The question of when it is okay to discriminate and on which basis is complex to navigate.
  • In New Zealand, specific bases for discrimination are prohibited (age, race, sex, sexual orientation, disability).

Workplace Bullying

  • Bullying is a repeated and unreasonable behavior.
  • Can be physical, verbal, or relational/social (excluding, ignoring).

Remote Work (Work from Home)

  • Benefits: more control over schedule, flexibility, reduced turnover.
  • Risks: no clear delineation of work and home, potential for abuse of flexibility.

International Human Resource Management

  • Involves adapting HRM practices to the expectations of diverse individuals across the world.
  • Successful strategies involve local staff in the creation of zone-specific HRM policies.