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Human Resource Management ELEVENTH EDITION 1

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Introduction to Human Resource Management

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									                                          Human Resource
                                           Management
                                             ELEVENTH EDITION
        1
                                            GARY DESSLER
                                            BIJU VARKKEY

                                                          Part 1 | Introduction

 Chapter 1


  Introduction to Human Resource Management

© 2009 Dorling Kindersley (I) Pvt. Ltd.
All rights reserved.
After studying this chapter, you should be able to:

 1. Explain what human resource management is and how
    it relates to the management process.
 2. Give at least eight examples of how all managers can
    use human resource management concepts and
    techniques.
 3. Illustrate the human resources responsibilities of line
    and staff (HR) managers.
 4. Provide a good example that illustrates HR’s role in
    formulating and executing company strategy.
 5. Write a short essay that addresses the topic: Why
    metrics and measurement are crucial to today’s HR
    managers.
 6. Outline the plan of this book.
© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.   1–2
                               The Management Process

                                                               Planning




         Controlling                                                           Organizing




                             Leading                                      Staffing




© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.                                1–3
Human Resource Management at Work
 • What Is Human Resource Management
   (HRM)?
           The policies and practices involved in carrying out
               the ―people‖ or human resource aspects of a
               management position, including recruiting,
               screening, training, rewarding, and appraising.




© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.      1–4
        Human Resource Management at Work

                                                               Acquisition




                       Fairness                                                       Training

                                                                 Human
                                                                Resource
                                                               Management
                Health and
                                                                 (HRM)                  Appraisal
                  Safety




                                 Labor Relations                             Compensating




© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.                                        1–5
Personnel Aspects of a Manager’s Job
 •      Conducting job analyses
 •      Planning labor needs and recruiting job candidates
 •      Selecting job candidates
 •      Orienting and training new employees
 •      Managing wages and salaries
 •      Providing incentives and benefits
 •      Appraising performance
 •      Communicating
 •      Training and developing managers
 •      Building employee commitment



© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.   1–6
Personnel Mistakes
 •      Hire the wrong person for the job
 •      Experience high turnover
 •      Have your people not doing their best
 •      Waste time with useless interviews
 •      Have your company in court because of discriminatory actions
 •      Have your company cited by OSHA for unsafe practices
 •      Have some employees think their salaries are unfair and
        inequitable relative to others in the organization
 •      Allow a lack of training to undermine your department’s
        effectiveness
 •      Commit any unfair labor practices



© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.           1–7
Basic HR Concepts
 • The bottom line of managing:
      Getting results
 • HR creates value by engaging
   in activities that produce the
   employee behaviors that the
   company needs to achieve
   its strategic goals.




© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.   1–8
Line and Staff Aspects of HRM
 • Line manager
           A manager who is authorized to direct the work of
               subordinates and is responsible for accomplishing
               the organization’s tasks.
 • Staff manager
           A manager who assists and advises line managers.




© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.       1–9
Line Managers’ HRM Responsibilities
 1. Placing the right person on the right job
 2. Starting new employees in the organization (orientation)
 3. Training employees for jobs that are new to them
 4. Improving the job performance of each person
 5. Gaining creative cooperation and developing smooth working
    relationships
 6. Interpreting the firm’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


© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.     1–10
               Human Resource Managers’ Duties

                            Line Function                                            Coordinative
                              Line Authority                                          Function
                             Implied Authority                                     Functional Authority




                                                               Functions of
                                                               HR Managers




                                                               Staff Functions
                                                                 Staff Authority
                                                                   Innovator
                                                               Employee Advocacy


© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.                                              1–11
                           Human Resource Specialties


                                                                Recruiters

                   Employment/
                                                                                            Human
                    Industrial
                                                                                           Resource
                    Relations
                                                                                          Development
                    Specialist                                   Human                     Specialists
                                                                Resource
                                                               Specialties
                      Training
                                                                                          Job Analysts
                     Specialists


                                             Compensation                      Employee
                                               Managers                      Welfare Officers




© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.                                             1–12
FIGURE 1–1
HR Organization Chart
for a Large Organization




Source: www.hr.wayne.edu/orgcharts.php. Accessed May 6, 2007.
© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.    1–13
FIGURE 1–2                     HR Organizational Chart (Small Company)




© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.             1–14
FIGURE 1–3                     Employment and Recruiting—Who Handles It?
                               (Percentage of All Employers)




                               Note: Length of bars represents prevalence of activity among all surveyed employers.

Source: HR MAGAZINE, BNA/Society for Human Resource Management, 2002.
Reproduced with permission via Copyright Clearance Center.
© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.                                                          1–15
                       The Changing Environment of
                       Human Resource Management


                                                                   Globalization Trends


                                                                   Technological Trends
                Changes and Trends
                in Human Resource
                    Management
                                                                Trends in the Nature of Work


                                                               Workforce Demographic Trends




© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.                                   1–16
FIGURE 1–4                     Employment Exodus: Projected Loss of Jobs and Wages




Source: Michael Schroeder, ―States Fight Exodus of Jobs,‖ Wall Street Journal, June 3, 2003,
p. 84. Reproduced with permission of Dow Jones & Co. Inc. via Copyright Clearance Center.
© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.                                   1–17
                          The Changing Role of
                       Human Resource Management

                                                                Strategic Human
                                                                    Resource
                                                                  Management



         Managing with the                                           New            Creating High-
          HR Scorecard                                         Responsibilities   Performance Work
             Process                                           for HR Managers         Systems




                                                           Measuring the HRM
                                                           Team’s Performance




© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.                                         1–18
TABLE 1–1                 Technological Applications for HR


   Application Service Providers (ASPs) and technology outsourcing
   Web portals
   PCs and high-speed access
   Streaming desktop video
   The mobile Web and wireless net access
   E-procurement
   Internet- and network-monitoring software
   Bluetooth
   Electronic signatures
   Electronic bill presentment and payment
   Data warehouses and computerized analytical programs




© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.         1–19
High-Performance Work System Practices
 •      Employment security
 •      Selective hiring
 •      Extensive training
 •      Self-managed teams/decentralized decision making
 •      Reduced status distinctions
 •      Information sharing
 •      Contingent (pay-for-performance) rewards
 •      Transformational leadership
 •      Measurement of management practices
 •      Emphasis on high-quality work



© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.   1–20
Benefits of a High-Performance
Work System (HPWS)
 • Generate more job applicants
 • Screen candidates more effectively
 • Provide more and better training
 • Link pay more explicitly to performance
 • Provide a safer work environment
 • Produce more qualified applicants per position
 • Hiring based on validated selection tests
 • Provide more hours of training for new employees
 • Conduct more performance appraisals
© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.   1–21
FIGURE 1–5                           Five Sample HR Metrics
HR Metric*                            How to Calculate It

Absence rate                                                          # of days absent in month
                                                                                                                                                                 × 100
                                        Average # of employees during month × # of workdays


Cost per hire                               Advertising + agency fees + employee referrals + travel cost of
                                           applicants and staff + relocation costs + recruiter pay and benefits
                                                                                               Number of hires


HR expense                                                          HR expense
factor                                                  Total operating expense


Time to fill                           Total days elapsed to fill job requisitions
                                                                   Number hired


Turnover rate                                              Number of separations during month
                                                                                                                                                                 × 100
                                                  Average number of employees during month
Sources: Robert Grossman, ―Measuring Up,‖ HR Magazine, January 2000, pp. 29–35; Peter V. Le Blanc, Paul Mulvey, and Jude T. Rich, ―Improving the Return on Human Capital: New Metrics,‖
Compensation and Benefits Review, January/February 2000, pp. 13–20; Thomas E. Murphy and Sourushe Zandvakili, ―Data and Metrics-Driven Approach to Human Resource Practices: Using
Customers, Employees, and Financial Metrics,‖ Human Resource Management 39, no. 1 (Spring 2000), pp. 93–105; [HR Planning, Commerce Clearing House Incorporated, July 17, 1996;]
SHRM/BNA 2000 Cost Per Hire and Staffing Metrics Survey; www.shrm.org. See also, SHRM Research ―2006 Strategic HR Management Survey Report,‖ Society for Human Resource Management..
© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.                                                                                                                          1–22
Measuring HR’s Contribution
 • The HR Scorecard
           Shows the quantitative standards,
               or ―metrics‖ the firm uses to
               measure HR activities.
           Measures the employee behaviors
               resulting from these activities.
           Measures the strategically relevant
               organizational outcomes of those
               employee behaviors.




© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.   1–23
The Human Resource Manager’s
Proficiencies
 • New Proficiencies
           HR proficiencies

           Business proficiencies

           Leadership proficiencies
           Learning proficiencies




© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.   1–24
FIGURE 1–6                Effects CFOs Believe Human Capital Has on Business Outcomes




Source: Steven H. Bates, ―Business Partners,‖ HR Magazine, September 2003, p. 49. Reproduced
with permission of the Society for Human Resource Management via Copyright Clearance Center.
© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.                                   1–25
The Human Resource Manager’s
Proficiencies (cont’d)
 • Managing within the Law
           Equal employment laws (US)
           Occupational safety and health laws
           Labor laws

 • Managing Ethics
           Ethical lapses
           Sarbanes-Oxley in 2003
           Securities and Exchange Board of India (SEBI)
           Ministry of Corporate Affairs (MCA)

© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.   1–26
The Plan of This Book: Basic Themes
    • HRM is the responsibility of every manager.
    • HR managers must defend their plans and
      contributions in measurable terms.
    • All personnel actions and decisions have strategic
      implications.
    • All managers rely on information technology.
    • Virtually every personnel decision has legal
      implications.




© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.   1–27
FIGURE 1–8                Strategy and the Basic Human Resource Management Process




© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.                         1–28
                                                   KEY TERMS

   management process                                          globalization
   human resource management                                   human capital
      (HRM)                                                    strategy
   authority                                                   strategic plan
   line manager                                                metrics
   staff manager                                               HR Scorecard
   line authority                                              outsourcing
   staff authority                                             ethics
   implied authority                                           strategic human resource
   functional control                                             management
   employee advocacy                                           high-performance work system




© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.                                  1–29
                                          Human Resource
                                           Management
                                             ELEVENTH EDITION
        1
                                            GARY DESSLER
                                            BIJU VARKKEY

                                                          Part 1 | Introduction

 Chapter 1 Appendix


              Evolution and Challenges Faced in India

© 2009 Dorling Kindersley (I) Pvt. Ltd.
All rights reserved.
HRM in India
    In the 1970s and 1980s typical HRM functions in organization included:
         •   Personnel and administration
         •   Industrial relations
         •   Labor welfare
    Up to the mid-80s human resource management in Indian
        organizations grew through various phases under the
        influence of the following factors:
             •         A philanthropic viewpoint about doing good for workers
             •         A legislative framework
             •         Government policies
             •         Trade unions
             •         Emerging trends/concepts in management
             •         Changes in the economy

© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.                    1–31
Management Challenges for Indian CEOs
    A study among Indian CEOs identified the
        following challenges:
                      Creating a high-performance culture
                      Retaining talent
                      Recruiting
                      Moving from a patriarchic and hierarchical
                       management style to a more team-based, informal
                       organizational culture
                      Linking training with performance
                      Compensating knowledge workers
                      Building interpersonal relationships/managing
                       conflict
                      Going global
Source: Aneeta Madhok, ―Similar Challenges‖ cited by Robert J. Grossman in ―HR’s Rising Star in
India,‖ available at http://www.shrm.org/india.
© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.                                      1–32
Shift to Human Resource Development
Orientation

             The 1980s saw the large-scale introduction of
              the developmental concept in Indian
              organizations
             Udai Pareek and T. V. Rao, faculty of IIM
              Ahmedabad, introduced the human resource
              development (HRD) concept in India




© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.   1–33
Total Human Resource Management
              Opening up of the Indian economy created a
               demand for talent and the traditional organizations
               (both in public and private sectors) became talent
               sources.
              Development of the Information Technology sector
               mobilized a vast pool of technically trained people.
              Massive staffing requirements saw recruitment
               evolving as very specialized function, separate
               from but closely interlinked with the other HRM
               functions.
              Arrival of the ―knowledge worker‖—well-skilled,
               individualistic, and ambitious about career caused
               attrition to become common.
© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.     1–34
Total Human Resource Management (Contd.)
              Introduction of IT-supported solution, particularly
               ERP-based human resource information
               systems
              Introduction of innovative HR practices.
              Rise of IT-enabled services (ITES), gave
               employment opportunities to the young English
               speaking, educated population.
              HRM function assumed a strategic role in Indian
               organizations, responding to business
               requirements in an appropriate way.




© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.         1–35

								
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