HRM - Introduction

Reminders

• Speak your mind to learn from and with each other.
• Be punctual.
• Put mobile phones on silent and step out discreetly for calls.

Contents

1. Introduction to Human Resource Management (HRM)
   • What is HRM?
   • Challenges to human resources management
   • The trends shaping HRM
   • Role of the new Human Resource Manager
2. Human Resource Management Strategy and Analysis
   • The strategic management process
   • Types of strategies
   • Strategic HRM
   • HR Metrics, Benchmarking and Data Analytics

Learning Objectives

• Explain human resource management and its relation to the management process.
• Discuss the important trends influencing human resource management.
• Describe “distributed HR” and other important aspects of human management today.
• List important human resource manager competencies.
• List the main types of strategies.
• Define strategic human resource management and give an example.

Introduction to Human Resource Management

• What is HRM?
• The trends shaping HRM
• Role of the new HR Managers

Key Terms

• Organization: A group of people with formally assigned roles working together to achieve goals.
• Manager: Someone responsible for accomplishing the organization’s goals by managing the efforts of its people.
• Managing: Performing five basic functions: planning, organizing, staffing, leading, and controlling.
• Management process: The four basic functions of planning, organizing, leading, and controlling.

Management Process Details

• Planning: Establishing goals and standards, developing rules and procedures, developing plans and forecasts.
• Organizing: Giving each subordinate a specific task, establishing departments, delegating authority, establishing communication channels, coordinating work.
• Staffing: Determining the type of people to hire, recruiting, selecting employees, setting performance standards, compensating, evaluating, counseling, training, and developing employees.
• Leading: Getting others to get the job done, maintaining morale, motivating subordinates.
• Controlling: Setting standards, checking performance against standards, taking corrective action.

Overview on Human Resources

• Definition of human resources: All employees working in an organization; resources of each human being, including physical and mental resources.
• Human Resources Management: A system of philosophies, policies, and functional activities for attracting, training, developing, and sustaining people to achieve optimal results for both the organization and employees.

What is HRM?

Human resource management (HRM) is the process of acquiring, training, appraising, and compensating employees, and of attending to their labor relations, health and safety, and fairness concerns.

• Conducting job analyses (determining the nature of each employee’s job).
• Planning labor needs and recruiting job candidates.
• Selecting job candidates.
• Orienting and training new employees.
• Managing wages and salaries (compensating employees).
• Providing incentives and benefits.
• Appraising performance.
• Communicating (interviewing, counseling, disciplining).
• Training employees, and developing managers.
• Building employee relations and engagement.

Functions of HR Management

• Attracting Human Resources: Ensuring the organization has sufficient employees in terms of quantity and quality.
  • Plan Human resources
  • Analyze and design jobs
  • Design strategy of HR management
  • Recruit, select and allocate Human resources
• Training and Developing HR: Enhancing the capacity of staff to ensure their skills and qualifications needed to complete their work and to facilitate their development.
• Maintaining HR: Includes performance appraisal, remuneration for employees, and maintaining good working relationships in the enterprise.

Importance of HRM to all Managers

Avoiding:

• Employees not doing their best.
• Hiring the wrong person.
• Experiencing high turnover.
• Having the company in court due to discriminatory actions.
• Company cited for unsafe practices.
• Lack of training undermining department effectiveness.
• Committing unfair labor practices.

Line and Staff Aspects of Human Resource Management

• Authority: The right to make decisions, direct work, and give orders.
• Line authority: Gives managers the right to issue orders to other managers or employees (superior-subordinate relationship).
• Line manager: Authorized to direct the work of subordinates and responsible for accomplishing tasks.
• Staff authority: Gives a manager the right to advise other managers or employees (advisory relationship).
• Staff authority: Assists and advises line managers.

Line Managers’ Human Resource Management Responsibilities

• Placing the right person in the right job
• Starting new employees in the organization (orientation)
• Training employees for jobs that are new to them
• Improving the job performance of each person
• Gaining creative cooperation and developing smooth working relationships
• Interpreting the company’s policies and procedures
• Controlling labor costs
• Developing the abilities of each person
• Creating and maintaining departmental morale
• Protecting employees’ health and physical conditions

The Human Resource Management Department

• In small organizations: line managers may carry out all these personnel duties unassisted.
• When the organization grows, line managers usually need the assistance, specialized knowledge, and advice of a separate human resource staff.
• In larger firms: the human resource department provides such specialized assistance

Basic Functional Groups of HR Management

• Attract Human Resources
• Maintain Human Resources
• Train and develop Human Resources

Challenges to Human Resources Management

• Organizational restructuring in companies
• Global competition
• The diversity of the workforce
• Demands of employees

Organizational Restructuring

• "Restructuring" is the process of re-organizing and rearranging the enterprise to create a better "status" for the enterprise to achieve its goals.
• A comprehensive restructuring program will cover most areas such as organizational structure, human resources, management and administration mechanisms; activities and processes; other resources of the business.

Global Competition & HR Challenges

Enterprises are facing the following problems of human resources :

• Strategy of HR Management: The goal of rival enterprises is to create jobs for employees
• Loyalty: Employees could be attracted by the rival’s policy.
• Decision-making: Complicated because of the conflicts between the desires of partners and business rivals.
• Unfriendliness among employees
• Communication becomes limited
• Information could be impeded
• Remuneration: Not satisfied due to the differences among employees of the partners.

Diversity of the Workforce

The changing nature of the working environment consists of:

• Core variables (age, social trend, ethnicity, race, physical capability and gender)
• Minor variables (job, income, marital status, religion, education and geographic location)

Demands of Employees

• For job and working condition: Safety, excitement and demonstrating personal skills. Recruitment and working conditions are reasonable.
• Personal benefits and salary: Evaluated and respected, reasonable remuneration …
• Promotion opportunities: Opportunity to learn new skills, get equal promotion, participate in training and developing programs…

Fulfilling Social Objectives

• Organizations tend to be part of the promotion of achieving the goals of society
• The regulations of the Labor Code have increasingly facilitated the work of human resources management in organizations.

Trends Shaping HRM

• Working cooperatively with line managers, HR managers have:
  • long helped employers hire and fire employees,
  • administer benefits,
  • and conduct appraisals.
• Trends are occurring in the environment of HRM changing how employers get their HRM tasks done.
• These trends include:
  • workforce trends,
  • trends in how people work
  • technological trends,
  • and globalization and economic trends.

Workforce Demographics and Diversity Trends

More diverse with more:

• women,
• minority group members,
• and older workers in the workforce.

Diversity Management

Diversity means being diverse or varied and at work means having a workforce composed of two or more groups of employees with various racial, ethnic, gender, cultural, national origin, handicap, age, and religious backgrounds

• Potential Threats to Diversity:
  • Stereotyping
  • Discrimination
  • Tokenism
  • Ethnocentrism
  • Gender-role stereotypes

Managing Diversity

• means maximizing diversity’s potential benefits while minimizing the potential problems—such as prejudice—that can undermine cooperation.
• involves both compulsory and voluntary actions.
• However, compulsory actions can’t guarantee cooperation.
• Managing diversity therefore usually relies on taking voluntary steps to encourage employees to work together productively

Five sets of voluntary organizational activities:

• Provide strong leadership
• Assess the situation
• Provide diversity training and education
• Change culture and management systems
• Evaluate the diversity management program

Trends in How People Work

• Work has shifted from manufacturing jobs to service jobs in North America and Western Europe.
• On-demands workers Eg:
• Today over two-thirds of the U.S. workforce is employed in producing and delivering services, not products
• By 2020, service- providing industries are expected to account for 131 million out of 150 million ($\%87$) of wage and salary jobs overall.
• So in the next few years, almost all the new jobs added in the United States will be in services, not in goods- producing industries.

Globalization Trends

• Globalization refers to companies extending their sales, ownership, and/or manufacturing to new markets abroad.
• Free trade areas—agreements that reduce tariffs and barriers among trading partners—further encourage international trade.
• Globalization vastly increased international competition.
• More globalization meant more competition, and more competition meant more pressure to be “world class”—
  • to lower costs,
  • to make employees more productive,
  • and to do things better and less expensively.

Economic Trends

• Slow growth and labor unbalances à more pressure on employers (HR managers and line managers) to get the best efforts from their employees
• An unbalanced labor force:
  • in some occupations (such as high-tech) unemployment rates are low,
  • others unemployment rates are still very high;
• recruiters in many companies can’t find candidates, while in others there’s a wealth of candidates;
• many people working today are in jobs “below” their expertise

Technology Trends

Five main types of digital technologies are driving this transfer of functionality from HR professionals to automation

• Social Media
• Mobile Applications
• Cloud Computing
• Data Analytics
• Talent Analytics

Role of the New HR Manager

• To create strategic plans, the human resource manager must understand:
  • strategic planning,
  • marketing,
  • production,
  • and finance.
• As companies merge and expand abroad, HR managers:
  • must be able to formulate
  • and implement large-scale organizational changes,
  • drive employee engagement,
  • and redesign organizational structures and work processes

Competencies of HR Manager

The behaviors or competencies SHRM says today’s HR manager should be able to exhibit:

• Leadership & Navigation The ability to direct and contribute to initiatives and processes within the organization.
• Ethical Practice The ability to integrate core values, integrity, and accountability throughout all organizational and business practices.
• Business Acumen The ability to understand and apply information with which to contribute to the Organization’s strategic plan.
• Relationship Management The ability to manage interactions to provide service and to support the organization.
• Consultation The ability to provide guidance to organizational stakeholders.
• Critical Evaluation The ability to interpret information with which to make business decisions and recommendations.
• Global & Cultural Effectiveness The ability to value and consider the perspectives and backgrounds of all parties.
• Communication The ability to effectively exchange information with stakeholders.

HRM Strategy and Analysis

• The strategic management process
• Types of strategies
• Strategic HRM
• HR Metrics, Benchmarking and Data Analytic

The Strategic Management Process

The basic management planning process:

• setting objectives,
• making basic planning forecasts,
• reviewing alternative courses of action,
• evaluating which options are best
• choosing and implementing your plan.

What is Strategic Planning?

• Strategic plan
  • The company’s plan for how it will match its internal strengths and weaknesses with external opportunities and threats in order to maintain a competitive advantage
• Strategy
  • A course of action the company can pursue to achieve its strategic aims.
• Strategic management
  • The process of identifying and executing the organization’s strategic plan by matching the company’s capabilities with the demands of its environment.

Types of Strategies

• The Corporate Strategy
  • “What businesses will we be in?”
  • identifies the portfolio of businesses that, in total, comprise the company and the ways in which these businesses relate to each other.
• Competitive (Business Unit) Strategy
  • “What basis will each of our businesses compete?”
  • Identifies how to build and strengthen the business’s long-term competitive position in the marketplace.
• Functional (Department) strategy
  • identifies the broad activities that each department will pursue in order to help the business accomplish its competitive goals.

Strategic HRM

• Formulating and executing human resource policies and practices that produce the employee competencies and behaviors the company needs to achieve its strategic aims (include sustainability goals)

Strategic human resource management tools

• Strategy map
  • Shows the “big picture” of how each department’s performance contributes to achieving the company’s overall strategic goals.
• HR Scorecard
  • A process for assigning financial and nonfinancial goals or metrics to the HRM– related chain of activities required for achieving the company’s strategic aims and for monitoring results
• Digital dashboard
  • Presents the manager with desktop graphs and charts, and so a computerized picture of where the company stands on all those metrics from the HR scorecard process

HR Metrics, Benchmarking and Data Analytics

• Human resource metrics
  • The quantitative gauge of a human resource management activity, such as employee turnover, hours of training per employee, or qualified applicants per position
• Benchmarking
  • A measurement of the quality of an organization's policies, products, programs, strategies, etc., and their comparison with standard measurements, or similar measurements of its peers.
• The objectives of benchmarking:
  • (1) to determine what and where improvements are called for,
  • (2) to analyze how other organizations achieve their high performance levels,
  • (3) and to use this information to improve performance.
• Benchmarking provides one perspective on how your company’s HRM system is performing; shows how your HRM system’s performance compares to the competition
• HR audit
  • An analysis by which an organization measures where it currently stands and determines what it has to accomplish to improve its HR functions.