CHAPTER 1: HRM - INTRODUCTION

CONTENTS
1. Introduction to Human Resource Management (HRM)
1.1. What is HRM?
1.2. The trends shaping HRM
1.3. Role of the new Human Resource Manager
2. Human Resource Management Strategy and Analysis
2.1. The strategic management process
2.2. Types of strategies
2.3. Strategic HRM
2.4. HR Metrics, Benchmarking and Data Analytic
3. Case Studies
 LEARNING OBJECTIVES OF CHAPTER 1
 Explain what human resource management is and how it relates to the
management process.
 Briefly discuss and illustrate each of the important trends influencing human
resource management.
 Briefly describe “distributed HR” and other important aspects of human
management today.
 List at least four important human resource manager competencies.
 List the main types of strategies.
 Define strategic human resource management and give an example of strategic
human resource management in practice.
 1.INTRODUCTION TO HUMAN RESOURCE MANAGEMENT

1.1. What is HRM?

1.2. The trends shaping HRM
1.3. Role of the new HR Managers
An organization?
A manager?
Managing?
 An organization
A group consisting of people with formally assigned roles who work together to
achieve the organization’s goals.
A manager
Someone who is responsible for accomplishing the organization’s goals, and who
does so by managing the efforts of the organization’s people.
Managing
To perform five basic functions: planning, organizing, staffing, leading, and
controlling.
Management process
The five basic functions of planning, organizing, leading, and controlling.
 Management process
• 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
 1.1. 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.
 Why is HRM important to all Managers?
Avoiding:
 To have your employees not doing their best.
 To hire the wrong person for the job.
 To experience high turnover.
 To have your company in court due to your discriminatory actions.
 To have your company cited for unsafe practices.
 To let a lack of training undermine your department’s effectiveness.
 To commit any unfair labor practices.
Line and Staff Aspects of Human Resource Management
 Authority is the right to make decisions, to direct the work of others, and to give
orders.
Managers usually distinguish between line authority and staff authority.
 Line authority traditionally gives managers the right to issue orders to other managers or
employees.
 A line manager - who is authorized to direct the work of subordinates and is responsible for
accomplishing the organization’s tasks.
 creates a superior (order giver) – subordinate (order receiver) relationship
 Staff authority gives a manager the right to advise other managers or employees.
 A staff authority - who assists and advises line managers.
 creates an advisory relationship
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
1.2. THE 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.
 1.2. THE TRENDS SHAPING HRM
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
 Diversity Management

Managing diversity Five sets of voluntary organizational activities:

 means maximizing diversity’s potential benefits  Provide strong leadership
while minimizing the potential problems—such  Assess the situation
as prejudice—that can undermine cooperation.
 Provide diversity training and education
 involves both compulsory and voluntary
actions.  Change culture and management systems
 However, compulsory actions can’t guarantee  Evaluate the diversity management program
cooperation.
 Managing diversity therefore usually relies on
taking voluntary steps to encourage employees
to work together productively
 1.2. THE TRENDS SHAPING HRM
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.
 1.2. THE TRENDS SHAPING HRM
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.
1.2. THE TRENDS SHAPING HRM
Economic Trends

Slow growth and labor unbalances  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
1.2. THE TRENDS SHAPING HRM
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
(Read: Chapter 1.Reffile1)
 1.3. 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
1.3. ROLE OF THE NEW 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.
2. HRM STRATEGY AND ANALYSIS

2.1. The strategic management process

2.2. Types of strategies
2.3. Strategic HRM
2.4. HR Metrics, Benchmarking and Data
Analytic
 2.1. THE STRATEGIC MANAGEMENT PROCESS
The Management Planning 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.
 2.1. THE STRATEGIC MANAGEMENT PROCESS
What is Strategic Planning?

Strategic plan Strategic management

 The company’s plan for how it will  The process of identifying and
match its internal strengths and executing the organization’s
weaknesses with external strategic plan by matching the
opportunities and threats in order company’s capabilities with the
to maintain a competitive demands of its environment.
advantage
Strategy
 A course of action the company
can pursue to achieve its strategic
aims.
2.1. THE STRATEGIC MANAGEMENT PROCESS
 2.2. 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.
2.2. TYPES OF STRATEGIES
 2.3. STRATEGIC HRM

Strategic human resource Strategic human resource management tools

management Strategy map
Formulating and executing Shows the “big picture” of how each department’s performance contributes
human resource policies and to achieving the company’s overall strategic goals.
practices that produce the
HR Scorecard
employee competencies and
behaviors the company needs to A process for assigning financial and nonfinancial goals or metrics to the
achieve its strategic aims HRM– related chain of activities required for achieving the company’s
(include sustainability goals) 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

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Balanced Scorecard
 2.4. HR Metrics, Benchmarking and Data Analytics

Human resource metrics Benchmarking

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