Human Resource Management

13th Edition

Chapter 1
STRATEGIC HUMAN RESOURCE
MANAGEMENT:
AN OVERVIEW

Copyright © [2014] Pearson Education 4-1

 Learning Objectives
• Describe employer branding and define human
resource management.
• Identify the human resource management functions.
• Identify the external environmental factors that affect
human resource management and describe the trend
for increased mobility of tasks performed by HR
professionals.
• Explain why corporate culture is a major internal
environment factor.
• Explain who performs human resource management
tasks.
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 Learning Objectives (Cont.)
• Describe how human resource management activities
may be different for small businesses.
• Describe the various human resource classifications,
including executives, generalists, and specialists.
• Describe the evolution of human resource
management and explain the evolving HR
organization.
• Describe the professionalization of human resource
management.
• Explain the possible hurdles of managing human
resources across different country’s culture.
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 Corporate Culture
• Corporate culture: System of shared
values, beliefs, and habits within an
organization that interacts with the formal
structure to produce behavioral norms
• Throughout text the importance of various
topics related to corporate culture will be
described
• Employer Branding is the first topic

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HRM in Action: Corporate Culture
and Employer Branding
• Employer branding: Firm’s
corporate image or culture created
to attract and retain the type of
employees the firm is seeking
• Companies want a brand that will
entice individuals to join and remain
with the firm
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Human Resource Management (HRM)

• Utilization of individuals to achieve

organizational objectives
• Concern of all managers at every
level
• Face a multitude of challenges

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HRM Functions

Human
Resource
1
Management

Safety and
Health

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 Staffing
Process of ensuring the organization
always has:
• Proper number of employees
• Employees with appropriate skills
• Employees in the right jobs at the right
time
• Involves job analysis, human resource
planning, recruitment, and selection
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 Job Analysis

• Systematic process of determining

skills, duties, and knowledge required
for performing jobs in organization
• Impacts virtually every aspect of HRM

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 Human Resource Planning
• Matching internal and external supply
of people with anticipated job
openings over specified period of time
• Sets the stage for recruitment or other
HR actions

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 Recruitment and Selection
Recruitment: Attracting individuals
to apply for jobs
• Must be timely
• Applicants need appropriate qualifications
• Need sufficient number of applicants
Selection: Choosing individual best suited
for a particular position and the organization

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Human Resource Development
Major HRM function; includes:
– Training
– Development
– Career planning
– Career development
– Organization development
– Performance management
– Performance appraisal
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 Training and Development

Training: Providing learners with

knowledge and skills needed for their
present jobs
Development: Offering learning that
goes beyond present job
• Long-term focus

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Career Planning and Development

Career planning: Ongoing process.

• Individual sets career goals
• Identifies means to achieve them
Career development: Formal
approach used by the organization.
• Ensures a pipeline of people with proper
qualifications and experiences
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 Organization Development

Planned and systematic attempt to:

–Make the organization more
effective
–Create positive behavioral
environment

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 Performance Management

Goal-oriented process to ensure

organizational processes are in
place to maximize productivity
• Applies to employees, teams, and
ultimately, the organization

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 Performance Appraisal

Formal system of review and

evaluation
– Individual
– Team

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 Compensation

All rewards that individuals receive

as a result of their employment

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 Financial Compensation

Direct: Pay employee receives in form

of wages, salaries, bonuses, or
commissions
Indirect: Benefits employee receives
•Paid vacations, sick leave, holidays,
medical insurance

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 Nonfinancial Compensation

Satisfaction that person receives from:

–Job itself
–Psychological and/or physical
environment

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 Safety and Health

Safety: Protecting employees from

injuries caused by work-related
accidents
Health: Employees' freedom from
illness and their general physical and
mental well-being

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 Labor Unions and Collective
Bargaining
• Businesses are required by law to
recognize a union and bargain with it
in good faith if firm’s employees want
union to represent them
• Human resource activity with a union
is often referred to as industrial
relations
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 Internal Employee Relations

HRM activities associated with the

movement of employees within the
organization. Examples:
– Promotions
– Demotions
– Terminations
– Resignations
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 Interrelationships of HRM
Functions

• All HRM functions are interrelated

• Each function affects the others

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Environment of Human Resource Management

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 Legal Considerations

• Federal, state, and local legislation

• Court decisions
• Presidential executive orders

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 Labor Market

• Potential employees located

within certain geographic area
• Always changing

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 Society
Firm must accomplish its purpose while
complying with societal norms
Ethics: Deals with what is good and bad,
or right and wrong, and with moral duty
and obligation
Corporate social responsibility:
Implied, enforced, or felt obligation of
managers to serve or protect interests of
groups other than themselves
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 Unions

• Group of employees who

have joined together to
collectively bargain with
their employer
• Become a third party when
dealing with the company

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 Shareholders

• Owners of corporation
• Have invested money in firm
• May at times challenge programs
considered by management to be
beneficial to organization

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 Competition

• In product or service and labor

markets
• Firms must maintain a supply of
competent employees
• Bidding war often results

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 Customers
• People who actually use firm’s
goods and services
• Employment practices should not
antagonize members of the market
the firm serves
• Workforce should be capable of
providing top-quality goods and
services
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 Trends & Innovations: Mobile HR:
Is the Cloud the Limit?
• Trend: Increased mobility of tasks
performed by HR professionals
• Mobile applications are available for
many HR functions
• Cloud computing: Means of providing
software and data via the Internet

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 HR Technology

Rapid technological changes provide:

• Increased sophistication
• Ability to design more useful human
resource information systems (HRIS)

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 HRIS

• An organized approach for obtaining

information on which to base HR
decisions
• An umbrella for merging the various
subsystems
• Mainstay HR responsibilities need an
HRIS
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 Economy

• When economy is booming, it is

often more difficult to recruit
qualified workers
• In economic downturn, more
applicants are typically available

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 Unanticipated Events

• Unforeseen occurrences in external

environment
• Require a tremendous amount of
adjustment with regard to HRM

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Corporate Culture as a Major Internal
Environment Factor

• Gives people a sense of how to

behave and what they ought to
be doing
• Topics related to corporate
culture are presented throughout
this text

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 HR’s Changing Role: Questions

• Can some HR tasks be performed more

efficiently by line managers or outside
vendors?
• Can some HR tasks be centralized or
eliminated?
• Can technology perform tasks that were
previously done by HR personnel?
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 Who Performs Human
Resource Management Tasks?
• Human resource managers
• HR outsourcing
• HR shared service centers
• Professional employer organization
(employee leasing)
• Line managers
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 Human Resource Manager
• Historically, the HR manager was
responsible for each of the five HR
functions
• Acts in advisory or staff capacity
• Works with other managers to help them
deal with human resource matters
• Today, HR departments continue to get
smaller
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 HR Outsourcing

• Transfers responsibility to an
external provider
– Discrete services
– Business process outsourcing (BPO)

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 Discrete Services

• Single set of high-volume repetitive

functions is outsourced to a third
party
• Typically transactional HR activities
• Example: 401(k) administration

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Business Process Outsourcing
(BPO)

• Majority of HR services are

transferred to third party
• Largest HR outsourcer is IBM
• Kraft Foods Inc. and IBM signed
a multi-year BPO agreement

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 Recruitment Process Outsourcing
(RPO)
• As recession slowed and firms began
to hire, some companies realized that
they had lost their recruiting skills
• Many had not kept up with the rapidly
changing technology
• RPO companies are stepping in to fill
void in recruitment skills
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 HR Shared Service Centers
(SSCs)

• Takes routine, transaction-based

activities that are dispersed and
consolidates them in one location
• Provide an alternative to HR
outsourcing

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 Professional Employer
Organization (Employee Leasing)
Company that leases employees to other
businesses
Advantages:
– Economies of scale
– Greater job mobility for workers
– Job security through leasing company
– PEO can handle compliance requirements
of programs
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 Line Managers Performing
HR Tasks
• Line managers: Individuals directly
overseeing the accomplishment of the
organization’s primary goals
• Involved with human resources by nature
of their jobs
• Now performing some duties typically
done by HR

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 Human Resource Management in
Small Businesses

• Many college graduates obtain jobs in

small businesses
• Same HR functions must be
accomplished
• Manner in which they are
accomplished may be altered

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Evolution Of Human Resource
Management

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 Traditional Human Resource
Function in Large Firm
• Included separate sections
• Sections were placed under an HR
manager
• Each HR function may have a
supervisor and staff
• HR manager works closely with top
management in formulating policy
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 The Evolving HR Organization

• HR outsourcing
• HR shared service centers
• Professional employer organization
• Line manager
• HR becoming more strategic

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 A Possible Evolving HR
Organization Example
President
and CEO

Vice
Director
Vice President, Vice Vice
of Safety
President, Strategic President, President,
and
Operations Human Finance Marketing
Health
Resources

Training & Compensation Staffing (Line Managers, use of

Development (Shared Service Applicant Tracking Systems)
(Outsourced) Centers)
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 Professionalization of Human
Resource Management

Profession: A vocation characterized

by a:
– Common body of knowledge
– Procedure for certifying members of
profession

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 Society for Human Resource
Management (SHRM)
• Largest national professional organization
for HR management individuals
• Basic goals of the society:
– Defining, maintaining, and improving
standards of excellence in the practice of
human resource management
– Publishes HRMagazine

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 Human Resource Certification
Institute (HRCI)
• Recognizes HR professionals through
certification program
• Offers three certifications for HR
professionals:
– PHR (Professional in Human Resources)
– SPHR (Senior Professional in Human
Resources)
– GPHR (Global Professional in Human
Resources)
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American Society for Training and
Development (ASTD)

• World’s largest association dedicated

to workplace learning and
performance professionals
• ASTD Certification Institute has the
Certified Professional in Learning and
Performance (CPLP) credential

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 WorldatWork
• Focused on compensation, benefits,
work–life effectiveness, and integrated
total rewards
• Certification of professionals
• Strategies to attract, motivate, and retain
an engaged and productive workforce

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A Global Perspective: Country Culture as a
Possible Barrier to Global Business
• Country’s culture: Set of values,
symbols, beliefs, languages, and
norms that guide human behavior
within the country
• Cultural differences between
countries are a major factor
influencing global business
• Cultural misunderstandings are
common
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Copyright © [2014] Pearson Education 1-60