Introduction to Human Resource Management

*The HR manager and the HR department act as the "right arm of the top executive" to ensure that line managers implement the organization's HR objectives, policies, and procedures.*

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Metrics Chart

Slide 22 - Presentation A

Strategic Management Process Chart

Slide 5 - Presentation B

Steps in Using the HR Scorecard:

Step 1: Define the Business Strategy: Organization executives begin by translating the organization's strategic plan into actionable strategic goals. Step 2: Outline the Organization's Value Chain: To achieve the organization's goals, employees engage in specific goal-directed activities. Managers need to understand these activities and the way each activity creates value for the organization. Step 3: Identify the Strategically Required Organizational Outcomes: To achieve the organization's strategic goals, the organization identifies the end state or the strategic organizational outcomes. Step 4: Identify the Required Workforce Behavior and Competencies: Identify the key employee behaviors to be exhibited in the organization to produce the desired strategic outcomes. Step 5: Identify the Strategically Relevant HR System Policies and Activities: HR identifies the activities and policies that will assist in employees obtaining the identified competencies. For example, what types of training or organizational development interventions are needed to improve or update employee competencies? Step 6: Design the HR Scorecard Measurement System: Those metrics and measures are defined that will be used to verify if the outcomes have been achieved. If the outcomes are achieved, these metrics and measures will help identify the levels of the outcomes. Step 7: Evaluate the Measurement System: HR periodically evaluates measures and links to make sure that they are still valid.

Strategic Management Process:

Step 1: Defining the current business and developing a mission Step 2: Performing internal and external strength, weaknesses, opportunities, and threats Step 3: Formulating new business direction Step 4: Translating the mission into strategic goals Step 5: Formulating strategies or course of action to achieve strategic goals Step 6: Implementing the strategies Step 7: Evaluate performance

Mission Statement

Summarizes the answer to the question, "What business are we in?"

Classifiers

The HR role that specializes in conducting job analysis and classifying jobs according to various systems.

Functional authority

The authority exerted by an HR manager as coordinator of personnel activities.

Geographic Expansion strategy

The company grows by entering new territorial markets, for instance, by taking the business abroad.

Concentration (single business) corporate strategy

The company offers one product or product line, usually in one market.

Consolidation Strategy

The company reduces its size

Management Process

The five basic functions of planning, organizing, staffing, leading, controlling.

Human capital

The knowledge, education, training, skills, and expertise of a firm's workers.

In formulating an HR strategy, you must address three basic challenges:

The need to support corporate productivity and performance improvement efforts The expanded role of employees in employers' performance improvement efforts The need for HR to be more involved in designing—not just executing—the organization's strategic plan

Manager

The person responsible for accomplishing the organization's goals, and who does so by managing (planning, organizing, staffing, leading, and controlling) the efforts of the organization's people.

Human Resource Management (HRM)

The process of acquiring, training, appraising, and compensating employees, and of attending to their labor relations, health and safety, and fairness concerns.

Strategic Management

The process of identifying and executing the organizations strategic plan, by matching the companies capabilities with the demands of its environment.

Human Resource Metric

The quantitative gauge of a human resource management activity such as employee turnover, hours of training per employee, or qualified applicants per position.

Authority

The right to make decisions, to direct the work of others, and to give orders. Managers usually distinguish between line of authority and staff authority.

Globalization:

The tendency of firms to extend their sales, ownership, and/or manufacturing to new markets abroad.

Evidence-based Human Resource Management

The use of data, facts, analytics, scientific rigour, critical evaluation and critically evaluated research/case studies to support human resource management proposals, decisions, practices and conclusions.

Job offshoring

having employees abroad do jobs that Americans formerly did--illustrates this threat.

Adding Value

helping the firm and its employees improve in a measurable way as a result of the human resource manager's actions *high-performance work system is one way to add value

Data mining:

is the set of activities used to find new, hidden, or unexpected patterns in data.

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. *An outline of how an organization will match its internal strengths and weaknesses with external opportunities and threats in order to maintain a competitive advantage.*

Talent Management

the goal-oriented and integrated process of planning, recruiting, developing, managing, and compensating employees. - it involves instituting a coordinated process process for identifying, recruiting, hiring, and developing high-potential employees.

The size of the human resource department reflects...

the size of the employer.

Generation X

those born roughly 1965-1976 (and who themselves were the children of, and followed into the labor force, the Baby Boomers, born just after the Second World War, roughly 1944-1960)

Engaged employees

those who are mentally and emotionally invested in their work and in contributing to an employeer's success. - less than a third of the U.S Force is engaged

Computerized Scorecard process helps the manager quantify the relationship between:

(1) The HR activities (amount of testing, training, and so forth) (2) The resulting employee behavior (customer service for instance) (3) The resulting firm wide strategic outcomes and performance (such as customer satisfaction and profitability)

Examples of human resource management specialties include:

* Recruiters: Search for qualified job applicants. * Equal employment opportunity (EEO) coordinators*. Investigate and resolve EEO grievances; examine organizational practices for potential violations; and compile and submit EEO reports. * Job analysts:* Collect and examine information about jobs to prepare job descriptions. * Compensation managers:* Develop compensation plans and handle the employee benefits program. * Training Specialists:* Plan, organize, and direct training activities. * Labor relations specialists:* Advise management on all aspects of union-management relations.

New Approaches to organizing HR:

* Transactional HR group: Uses centralized call centers and outsourcing arrangements (such as with benefits advisors) to provide support for day-to-day transactional activities (such as changing benefits plans and employee assistance counseling). -75% of respondents said their firms use this. * Corporate HR group: Focuses on assisting top management in "top level" big picture issues such as developing and explaining the personnel aspects of the company's long-term strategic plan. * Embedded HR unit: Assigns HR generalists (also known as "relationship managers" or "HR business partners") directly to departments like sales and production. They provide the localized human resource management assistance the departments need. * Centers of Expertise: Are like specialized HR consulting firms within the company--for instance they provide specialized assistance in areas such as organizational change.

Managers use several competitive strategies to achieve competitive advantage:

*Cost Leadership:* means become the low-cost leader in an industry. It maintains its competitive advantage through its satellite-based distribution system, careful (usually suburban) site location, and expert control of purchasing and sales cost. *Differentiation:* The firm seeks to be unique in its industry as well as its dimensions that are widely valued by buyers. *Focusers:* Carve out a market niche (Ferrari). They compete by providing a product or service that their customers cannot get from generalist competitors.

Key Factors in Setting Up an HR Department

*Number and geographical disbursement of employees:* How large is the organization? In how many locations does the organization have employees? *Complexity of the organization:* Is this a one-of-a-kind organization, or are there other companies that have successfully managed similar functions and operations? *Types of employee skills:* How specialized are the skills and competencies that will be needed for the mission-critical positions in the organization? *Union involvement* How does union involvement change relationships between the management and employees? *Countries the organization is operating in* In the various countries where the organization is represented, which different laws govern HR policies? *Nature of work* Is the work hazardous, or does it have any unusual job requirements?

Steps in the recruiting and hiring process:

*Specify the Qualifications:* Line managers specify the qualifications employees need to fill specific positions. *Contact Sources:* The HR staff then contacts sources of qualified applicants and conducts initial screening interviews. *Administer Tests:* The HR staff administers the appropriate tests and coordinates this activity with the line managers by subsequently referring to best applicants to the line managers who interview and select the suitable applicants they want. *Begin the Hiring Process:* After a selection is made, HR handles the hiring process.

HR helps the top management formulate strategies in a variety of ways, for example, by:

*Supplying competitive intelligence that may be useful in the strategic planning process *Supplying information regarding the organization's internal human strengths and weaknesses *Building a persuasive case that shows how—in specific and measurable terms—the organization's HR activities can and do contribute to creating value for the organization

Investigate some key HR staff roles.

*Talent managers* Define what competencies are needed and search for qualified job applicants. Equal employment opportunity (EEO) coordinators *Equal employment opportunity (EEO) coordinators* Investigate and resolve EEO grievances, examine organizational practices for potential violations, and compile and submit EEO reports. Job analysis *Job analysis* Collect and examine information about jobs to prepare job descriptions. Change agents *Change agents* Work with managers and staff to lead change initiatives and development activities to assist staff through major changes. Classifiers *Classifiers* Specialize in conducing job analysis and classifying jobs according to various systems. Compensation managers *Compensation managers* Develop compensation plans and handle the employee benefits program. Training specialists *Training specialists* Plan, organize, and direct training activities. Labor relation specialists *Labor relation specialists* Advise management on all aspects of union-management relations. Learning officers *Learning officers* Drive change and work so that employees want to learn on the job and grow instead of wanting to be trained.

Firms that assign HR's exclusive control:

- 60% of firms assign HR the exclusive responsibility for preemployment testing - 75% assign it college recruiting -80% assign it insurance benefits administration

HR's role in job interviews:

- In 25% of firms, HR's alone handles interviewing. - In 60% of firms, HR and the other hiring departments are both involved in interviewing.

HRM's role in facilitating a merger:

- Manage the deal cost - Manage the messages - Secure the top team and key talent - Define and implement an effective HR delivery strategy - Develop a workable change management plan - Design and implement the right staffing model - Aligning total rewards

Globalization's benefits and threats:

- Treat: For consumers it means lower prices and higher quality on products - Benefit: For workers it means the prospect of working harder and perhaps less secure jobs. - Treat: Rising shipping and labor costs abroad to occasional poor quality goods and intellectual property theft abroad. - Benefit: For business owners, globalization means (potentially) millions of new consumers, but also new and powerful global competitors at home.

Competencies needed for different positions in the organization. *Employee skills* Unusual job requirements or potentially hazardous work. *Nature of the work* Considering the number of locations in which the organization has employees. *Geographical disbursement of employees*

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Component of Strategy-Oriented HR -HR policies -HR professionals -Employee competencies Not a Component of Strategy-Oriented HR -Employee attitudes

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Coordinate functions These involve overseeing mid-level employees to make sure that HR initiatives are being carried out. Line functions These are activities that involve day-to-day operations, such as directing staff, giving trainings, and ensuring safety. Staff functions These involve monitoring and encouraging a high level of performance within the company.

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HR creates value by engaging in activities that cultivate the employee behaviors that the organization needs to achieve its strategic goals.

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Human Resource Competencies Chart (Pg. 21)

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Human resource (HR) departments date back to the late nineteenth and early twentieth centuries when factory workers began forming unions in response to unfair wages and long hours.

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Managers are required to have metrics in order to measure the activities and results involved while making the HR scorecard.

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Role of HRMs -Employee relations -Recruitment -Payroll and benefits Not a Role of HRMs -Analytics

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HR Score steps

1 Define the business strategy. 2 Outline the value chain. 3 Identify the required workforce behavior and competencies. 4 Identify the system policies and activities. 5 Design the HR scorecard measurement system. 6 Evaluate the measurement system.

Human Resource Manager's 3 distinct functions:

1) *A Line function:* The Human resource manager directs the activities of the people in his or her own department and perhaps in related areas (like the plant cafeteria). 2) *A coordinative function:* The human resource manager also coordinates personnel activities, a duty often referred to as functional authority ( or functional control). Here he or she ensures that line managers are implementing the firm's human resource polices and practices (for example, adhering to its sexual harassment polices). 3) *Staff (assist and advise) functions:* Assisting and advising line managers in the heart of the human resource manager's job. He or she advises the CEO so the CEO can better understand the personnel aspects of the company's strategic options. HR assists in hiring, training, evaluating, rewarding, counseling, promoting, and firing employees. It administers the various benefit programs (health and accident insurance, retirement, vacation, and so on). It helps line managers comply with equal employment and occupational safety laws, and plays an important role in handling grievances and labor relations. *It carries out an innovator role, by providing up-to-date information on current trends and new methods for better utilizing the company's employees (or "human resources"). It plays an employee advocacy role, by representing the interests of employees within the framework of its primary obligation to senior management.*

Line Managers' Human Resource Duties of a major company

1) Placing the right person in the right job 2) Starting new employees for jobs that are new to them 3) Training employees for jobs that are new to them 4) Improving the job performance of each person 5) Gaining cooperation and developing smooth working relationships 6) Interpreting the company's policies and procedures 7) Controlling labor costs 8) Developing the abilities of each person 9) Creating and maintaining department morale 10) Protecting employees' health and physical condition

5 Functions involved in Managing:

1) Planning: Establishing goals and standards; developing rules and procedures; developing plans and forecasting. 2) Organizing: Giving a subordinate a specific task ; establishing departments; delegating authority to subordinates; establishing channels of authority and communication; coordinating subordinates work. 3) Staffing: Determining what type of people you should hire; recruiting prospective employees; selecting employees; training and developing employees; compensating employees. 4) Leading: Getting others to get the job done; maintaining morale; motivating subordinates. 5) 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.

Companies expand abroad (globalize) for several reasons:

1) Sale expansion 2) Manufactures seeking new foreign products and services to sell and cut the labor costs.

Vision Statement

A general statement of the firm's intended direction that shows, in broad terms, "what we want to become."

Staff Managers

A manager who assists and advises line managers. -Typical in managing departments that are advisory and supportive like purchasing and human resource management

Line Manager

A manager who is authorized to direct the work of subordinates and is responsible for accomplishing the organization's tasks. -Typical in managing departments that are critical to survival like sales and production

Appraising

A process of assessing individual employee performance.

High performance work system

A set of human resource management policies and practices that promote organizational effectiveness.

Labor Relations Specialist

A staff role responsible for advising management on all aspects of union-management relations.

Strategic Map

A strategic planning tool that shows the "big picture" of how each department's performance contributes to achieving the company's overall strategic goals.

Competitive Strategy

A strategy that identifies how to build and strengthen the business's long-term competitive position in the marketplace.

Functional Strategies

A strategy that identifies the broad activities that each department will pursue in order to help the business accomplish its competitive goals.

High-Performance Work System

A strategy-oriented HR system plays an important role in developing high performers in an organization. Therefore, creating and maintaining a high-performance work system is HR's major strategic execution role. As part of this strategy, HR should align and cascade goals for all employees so that they are aware of the organization's mission. A way to ensure that the organization is working toward the same goals is to develop competency models. These models explain the requirements for effective performance to help ensure that employees focus on the relevant tasks. Such models help companies align internal behaviors and skills with the strategic direction of the organization. Also important for a sound strategy-oriented HR system is the need for the HR director to review the major HR policies and directives and ensure that they are updated and aligned with the business strategy and strategic goals.

Generation Y

Also known as Millennials, the generation of employees roughly born around 1977-2002

To create an HR Scorecard, an HR manager must:

Be aware of the organization's strategy Understand the causal links between the organization's performance and HR activities, employee behaviors, and organizational outcomes Have metrics to measure all the activities and results involved

Corporate-wide Strategic Planning:

Business Unit (or Competitive) Strategic Planning: "How will we compete?" Functional (or departmental) Strategic Planning: "How do we support the business's competitive strategy?"

*The underlying goal of a company's HR department is to effectively evaluate performance.*

CEOs and managers need to know where employee performance falls in terms of company cost. As an HR manager, you need to show your company that your department is encouraging positive growth through its policies or revising their approach as needed.

After the key factors are identified, the management needs to:

Determine what role HR and other managers will play in the five basic management functions: planning, organizing, staffing, leading, and controlling. Ensure that the HR department has the expertise, policies, procedures, and systems in place to carry out these functions. Ensure that HR is properly staffed to provide the support and coordination of all HR functions throughout the organization.

Plan of this book

First, *Practical Tools for every Manager* Human resource management is for every manager. Second, *HR as a profit center* we've seen that employees need human resource management practices that add value. Third, *The Strategic Context* We've seen that companies such as L.L Bean, Strategic Human Resources Management means formulating and executing human resource policies and practices that produce the employee competencies and behavior the company need to achieve its strategic aims. Fourth, *Evidence-based HR* The intensely competitive nature of business today mean human resource managers must defend their plans and contributions in measurable terms.

The basic process of aligning HR strategies and actions with business strategy entails four steps:

Formulate the business strategy. Identify the workforce—employees'—behaviors and competencies needed to produce the outcomes that will help the organization achieve its strategic goals. Formulate HR strategic policies and actions to cultivate these employee behaviors. Develop measures—metrics—to evaluate the HR department's performance.

Staff Authority

Give a manager the right to advice other managers or employees. It creates an advisory relationship.

Line Authority

Give managers the right to issue orders to other managers or employees. Line authority therefore creates a superior (order giver)- subordinate (order receiver) relationship.

A *strategy-oriented HR process consists of three basic components*, which comprise what some experts refer to as an organization's basic HR architecture:

HR professionals who have strategic and other skills HR policies and activities that comprise the HR system Employee behaviors and competencies that the organization's strategy requires

Defining HRM

HRM is the process of managing people by selecting, recruiting, training, appraising, developing, and compensating employees and attending to their labor relations, health and safety concerns, and fairness concerns. *HR creates value by engaging in activities that cultivate the employee behaviors an organization needs to achieve its strategic goals.* - Has Functional Control ---------------------

Diversification corporate strategy

Implies that the firm will expand by adding new product lines.

In order to explain the requirements for effective performance to help ensure that the employees focus on the relevant tasks, companies can develop *competency models*.

In order to translate strategies into policies and procedures, HR needs to identify the *HR scorecard metrics* that will be used to measure the extent to which its new HR initiatives support the management's strategic goals.

Good Metrics of Performance -Human capital -Turnover costs

Inadequate Metrics of Performance -Seniority -Days in office

Key Functions of HRM can be categorized into:

Line Functions Coordination Functions Staff Functions

For the metrics, the HR Scorecard will include the following key measures:

Number of quality hires Turnover rate of current and new hires Increase in sales, which would be dependent on training effectiveness—Step 6.

Organization

People with formally assigned roles who work together to achieve the organization's goals.

Line managers' HRM responsibilities are as follows:

Placing the right person on the right job Orienting new employees in the organization Training employees for jobs new to them Improving the job performance of each person Gaining creative cooperation and developing smooth working relationships Interpreting the organization's policies and procedures Controlling labor costs Developing the abilities of each person Creating and maintaining department morale Protecting employees' health

Many organizations have begun to cascade organizational goals from the CEO, through managers and supervisors, down to the employee level.

True

Corporate-Level Strategy

Type of strategy that identifies the portfolio of businesses that, in total, comprise the company and the ways in which these businesses relate to each other.

Strategy

a course of action the company can pursue to achieve its strategic aims.

HR Scorecard

a process for assigning financial and nonfinancial goals or metrics to the human resource management-related chain of activities required for achieving the company's strategic aims and for monitoring results.

HR Audit

an analysis by which an organization measures where it currently stands and determines what it has to accomplish to improve its HR function. * HR audit job characteristic chart pg. 89

Competitive Advantage

any factors that allow an organization to differentiate its product or service from those of its competitors to increase market share

Vertical Integration Strategy

means are firm, expands by perhaps producing its own raw material, or selling its products direct.

Benchmarking

means comparing the practices of high- performing companies to your own, in order to understand what they do that makes them better.

Strategic Human Resource Management

means formulating and executing human resource policies and practices that produce the employee competencies and behaviors the company needs to achieve its strategic aims.

Ethics

means the standard someone uses to decide what he or her conduct should be.

Strategy-based Metrics

metrics that specifically focus on measuring the activities that contribute to achieving a company's strategic aims.

Globalization means more competition and

more competition means more pressure to be "world-class"--to lower costs, to make employees more productive, and to do things better and less expensively.

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.

Higher productivity enables manufacturers to

produce more with fewer workers.