Chapter 1: Managing Human Resource Management Today
Human Resource Management and the Management Process
Definition of Human Resource Management (HRM): HRM is the process of acquiring, training, appraising, and compensating employees, and of attending to their labor relations, health and safety, and fairness concerns.
The Management Process: HRM is intrinsically related to the management process, which consists of five basic functions: * Planning: Establishing goals and standards; developing rules and procedures; developing plans and forecasts. * Organizing: Giving each subordinate a specific task; establishing departments; delegating authority to subordinates; establishing channels of authority and communication; coordinating the work of subordinates. * Staffing: Determining what type of people should be hired; recruiting prospective employees; selecting employees; setting performance standards; compensating employees; evaluating performance; counseling employees; training and developing employees. * Leading: Getting others to get the job done; maintaining morale; motivating subordinates. * Controlling: Setting standards such as sales quotas, quality standards, or production levels; checking to see how actual performance compares with these standards; taking corrective action as needed.
The Importance of Human Resource Management to Managers
Avoiding Personnel Mistakes: Effective HRM helps managers avoid various pitfalls, including: * Hiring the wrong person for the job. * Experiencing high turnover. * Having people not doing their best. * Wasting time with useless interviews. * Having the company taken to court because of discriminatory actions. * Having the company cited under federal occupational safety laws for unsafe practices. * Allowing a lack of training to undermine a department’s effectiveness. * Committing any unfair labor practices.
Improving Profits and Performance: Effective HRM ensures that employees are productive, which directly impacts the organization’s bottom line.
Career Preparation: Even if not an HR professional, an individual may spend time as an HR manager or will likely act as their own human resource manager if they are a small business owner.
Line and Staff Authority in HRM
Authority Definition: The right to make decisions, direct the work of others, and give orders.
Line Authority: Gives a manager the right to issue orders to other managers or employees. It creates a superior-subordinate relationship.
Staff Authority: Gives a manager the right to advise other managers or employees. It creates an advisory relationship.
Line Manager’s HR 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 policies and procedures. * Controlling labor cost. * Developing the abilities of each person. * Creating and maintaining departmental morale. * Protecting employees’ health and physical conditions.
New Approaches to Organizing the Human Resource Department
Traditional Structure: Historically, the HR department is organized under a Human Resource Director with typical job titles such as Compensation Manager, Training and Development Manager, and Recruitment Manager (Source: Pinellas County Human Resources).
Four Modern Organizational Approaches: * Shared Services (Transactional) HR Teams: These are centralized HR units whose services and advice (on matters like discipline problems) are shared by all the company’s departments. They often leverage technology to handle routine transactions. * Corporate HR Teams: These operate within a company to assist top management in high-level issues, such as developing the personnel aspects of the company’s long-term strategic plan. * Embedded HR Teams: These involve HR generalists (also known as "relationship managers" or "HR business partners") assigned to specific functional departments like sales or production to provide localized selection and assistance. * Centers of Expertise: These function as specialized HR consulting firms within the company, providing deep expertise in specific areas like organizational change.
Environmental Trends Influencing HRM
Workforce Demographics and Diversity Trends: The workforce is becoming more diverse, with increasing numbers of women, minority group members, and older workers. The labor force is aging and becoming more multi-ethnic.
Trends in Jobs People Do: * Shift to Service Sector: Work has shifted from manufacturing to service jobs. Currently, over of the workforce is employed in producing and delivering services rather than products. * The Gig Economy: In companies such as Grab and Food Panda, many workers are freelancers or independent contractor-gig workers. * High-Tech Jobs: More positions are becoming "high tech," requiring managers to adopt different management styles for specialized workers.
Globalization Trends: Companies are extending sales, ownership, and manufacturing to international markets. Examples include Toyota building Camrys in Kentucky and Apple assembling iPhones in China. This is bolstered by free-trade agreements like NAFTA (North American Free Trade Agreement) and the EU (European Union).
Economic Trends: * The period between and saw a boom in Gross National Product (GNP). * Home prices rose by as much as per year during the peak, and unemployment was stable at approximately . * Between and , the economy crashed; GNP fell, home prices dropped by or more, and unemployment rose to over . * Currently, the labor force is growing more slowly, and demand for workers is unbalanced, making talent management a top concern for senior HR officers.
Technological Trends in HRM
Automation Driver: Digital technologies are transferring functionality from HR professionals to automated systems. There are six main types: * Social Media: Tools like Twitter, Facebook, and LinkedIn are used for recruiting instead of traditional employment agencies. * Mobile Applications: Used to monitor employee location and provide digital photos at facility clock-in locations for identification. * Cloud Computing: Enables monitoring and reporting on team goal attainment and provides real-time evaluative feedback. * Data Analytics: Uses statistical techniques, algorithms, and problem-solving to identify relationships in data (e.g., identifying traits of ideal candidates or predicting which employees are likely to quit). * Artificial Intelligence (AI): Using computers to perform tasks in human-like ways. * Augmented Reality (AR): Transforms large amounts of data and superimposes digital summaries and images onto the physical world.
Diversity Management Programs
Top-Down Diversity Management: To handle the challenges of an older and multi-ethnic workforce, companies use 5-step programs: 1. Provide Strong Leadership: The CEO must champion the cause of diversity to establish a reputation. 2. Assess the Situation: Use tools such as equal employment hiring and retention metrics, employee attitude surveys, management/employee evaluations, and focus groups. 3. Provide Diversity Training and Education: Combine education with concrete steps for organizational change. 4. Change Culture and Management Systems: Align education with systemic shifts in the organization. 5. Evaluate the Diversity Management Program: Assess effectiveness since many programs fail to produce results.
The Six Pillars of Modern Human Resource Management
Distributed HR: HR tasks are being redistributed from a central department to line managers and even employees via technology.
Strategic Human Resource Management: This means formulating and executing human resource policies and practices that produce the employee competencies and behaviors the company needs to achieve its strategic aims (e.g., the strategy used by L.L.Bean).
HR and Performance Measurement: HR managers use three levers to spearhead performance: * Department Lever: Ensuring the HR function is efficient. * Employee Cost Lever: Managing costs associated with labor. * Strategic Results Lever: Ensuring HR activities produce the performance outcomes that help the company succeed. * Evidence-Based HRM: The use of data, facts, analytics, scientific rigor, and critically evaluated research/case studies (actual measurements, existing data, or research studies) to support HR decisions. * Adding Value: Helping the firm and its employees improve in a measurable way as a result of HR actions.
Sustainability and HRM: Measuring success not only through profit maximization but also through environmental and social performance.
Employee Engagement and HRM: Promoting a state where employees are psychologically involved in, connected to, and committed to getting their jobs done.
Ethics and HRM: Establishing the standards used to decide what one's conduct should be.
Human Resource Manager Competencies and Certification
The New HR Manager Skills: Managers must be able to "speak the CFO's language" by defending HR plans in measurable and financial terms.
SHRM Competency Model: The Society of Human Resource Management (SHRM) developed the SHRM Body of Competency and Knowledge, which itemizes the functional areas and behaviors a manager must exhibit.
Certification Programs: * HRCI (Human Resource Certification Institute): Offers the PHR (Professional in Human Resources) and SPHR (Senior Professional in Human Resources). * SHRM: Provides its own competency and knowledge-based testing.
Manager’s HR Philosophy: A manager’s approach is influenced by their initial philosophy based on experiences, education, values, assumptions, and background.