Human Resource Management


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The basic concept of human resource and how it is managed in an industry

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  • The quality and effectiveness of the organization is determined by the quality of the people that are employed. Success for most organizations depends on finding the employees with the skills to successfully perform the tasks required to attain the company’s strategic goals. Management decisions and processes for dealing with employees are critical to ensure that the organization gets and keeps the right staff. In order to get the most out of staff, human resource management integrates all processes, programs, and systems in an organization designed to ensure that employees are acquired and used in an effective way.
  • These are the key HR processes in an organization. You will note that these processes do not function in isolation: HR management functions within the culture of the organization . And of course, the organization is impacted by its environment. By paying careful attention to these facts, an organization can recruit competent, high-performing employees who are capable of sustaining their performance over the long term. You will also see that many factors introduced in Chapter 1 (for example, globalization, technology, and demographics) directly affect all management practices, but their effect is probably greatest in the management of human resources. This is because that whatever happens to an organization ultimately influences what happens to its employees.
  • 7 Once managers know their staffing needs, they can begin to look for capable people to fill those needs. The process to do this is called recruitment. It is a process that locates, identifies, and attracts capable candidates for the work. For many organizations, this has become a critical activity. As the business demands change, so do the skills required. And there are some skill sets that are in high demand which means organizations have to have a good plan to locate the people with the unique skills.
  • 8 But where do companies go to recruit employees? Many companies are finding new employees through the Internet. Organizations that are looking for people with a high-level of technological skills may focus their recruitment efforts by using the Internet. The web sites of organizations frequently have a link for enabling the browser to submit a resume. The source that is used should reflect the labour market, the type or level of position, and the size of the organization. Are certain recruiting sources better than others? Recent studies have demonstrated that employee referrals generally produce the best candidates. This is because current employees screen applicants before referring them. Second, current employees believe that their reputations with the firm will be reflected in the candidates that they recommend; so, they refer only those who they believe will not make them look bad. Employee referrals, however, may not generate the diversity and mix of employees that is desirable.
  • 10 After the completion of the recruitment process, the manager needs to decide who to hire. Selection is essentially both a prediction exercise and a decision-making exercise. In the prediction exercise, the manager is predicting which applicant will be successful on the job is hired. The manager is also undertaking a decision-making exercise--choosing among choices. It is important to always keep in mind that the manager is selecting the person who can best meet the needs of the organization.
  • There are two general types of interviews: non-directive and structured. Non-directive interviews provide the maximum latitude to the person being interviewed--questions are broad and open-ended. Within structured interviews, there are panel, situational and behavioural description. The panel interview has a number of people involved each observing and making notes. The situational interview focuses on asking applicants about hypothetical situations. For example, “It is the end of your shift and someone calls in sick. What would you do?” The behavioural description interview, on the other hand, focuses on asking the applicant about a situation that they have experienced. For example, “Describe a time that you had a customer screaming at you. What did you do and what was the outcome?”
  • Reference checks occur when a potential employer contacts previous employers to verify information that the applicant has provided. It is important to ask good questions in order to get the information necessary to make a good hiring decision.
  • 15 Managers can use a number of selection techniques to make good hiring decisions. The most widely-used selection tool is the interview. However, interviews are often neither reliable nor valid. Therefore, the person with the best interview skills often gets the job, even though he or she may not be the most qualified. Interviews are valuable for assessing an applicant’s intelligence, level of motivation, and interpersonal skills. Unstructured interviews are conducive to interviewer biases: favouring applicants who share their values, giving undue weight to negative information, and allowing the order in which applicants are interviewed to influence evaluations. Structured interviews provide standardized sets of questions, uniform methods of recording information, and standardized ratings of the qualifications of applicants. If interviews are not well structured and standardized, they can be biased. There have been a number of research findings on interviews which can be summarized as follows: Prior knowledge about the applicant will bias the interviewer. Interviewers hold stereotypes about what represents “good” applicants. Interviewers favour applicants who share their own attitudes. The order in which applicants are interviewed affects assessments of candidates. Negative information is given unduly high weight. Interviewers determine an applicant’s suitability in the first five minutes of the interview. Interviewers forget much of an interview’s content within minutes after it has been ended. Interviews are most valid in determining an applicant’s intelligence, motivation, and interpersonal skills. Structured, well organized interviews are more effective than those that are loosely organized.
  • 17 Besides having the requisite knowledge, skills, and abilities to perform on the job, new hires must be socialized to the organization’s culture (orientation) and trained to do the job (training). Orientation is a process whose major objectives are to reduce the anxiety level that all new employees feel; to familiarize them with the job, the work unit, and the organization; and to embed organizational values, beliefs, and accepted behaviours. Successful orientation maximizes new hire on-the-job success and minimizes turnover.
  • Training and development is important to ensure that people continue to learn skills, etc. to help the company be successful. Employee training is a learning experience that seeks a relatively permanent change in employees such that their ability to perform at their current job improves. This may mean changing what employees know, how they work, or their attitudes toward their jobs, co-workers, managers, and the organization. Management is responsible for deciding when employees are in need of training and development and what form it should take.
  • 18 However, before any training takes place, and organization should determine is training is the appropriate intervention. Managers can be alerted to training needs by numerous signals: for instance, productivity related signals like decreases in output and quality or increases in accidents; and, future elements like jobs that have been redesigned or technological breakthroughs. Most training takes place on the job. Such training is convenient and cost effective. But, on-the-job training can disrupt the workplace, and some skills are too complex to learn on the job. In such cases, training should take place outside of the work setting.
  • 20 It is important for managers to help their employees achieve the results expected. This is done through managing the performance of the employees the manager is responsible for. In managing performance, the manager identifies and communicates the expected performance standards and then evaluates or measures the performance against the standard. There are a variety of ways to assess a person’s performance which we will review next.
  • 21 There are several ways in which managers can evaluate or measure the performance of their employees. Written essays that describe an employee’s performance and suggestions for improvement require no complex forms or extensive training. But a good or bad appraisal may depend as much on the writing skill of a manager as on the actual performance of an employee. With the critical incidents method, the appraiser writes down what an employee did that was especially productive or counterproductive. The key is to cite specific and key behaviours. With graphic rating scales , performance factors are listed such as quantity and quality of work, depth of knowledge, or initiative. The appraiser then rates each factor on an incremental scale. This method cannot provide the depth of information of essays or critical incidents, but it is less time consuming to develop and administer, and yields results that can be quantified. Behaviorally anchored rating scales BARS combine the critical incidents and graphics rating scale approaches. The appraiser rates employees on items along a continuum. The points along the scale are examples of actual on-the-job behaviour rather than general descriptions or traits. Multiperson comparisons are relative measuring devices. Group order ranking requires the rater to place employees into a particular classification, such as the top one-fifth. Individual ranking orders employees from best to worst. Paired comparisons rank each employee with all other employees and rates each as either the weaker or superior member of the pair. MBO, which was discussed in Chapter 5, assesses employees on how well they accomplish a specific set of objectives that have been determined to be critical in the successful completion of their jobs. Because MBO emphasizes ends rather than means, this method allows managers to choose the best path for achieving their goals. A 360-degreereview seeks feedback for the person being rated from a variety of sources: such as peers, supervisors, and customers. Research shows that 360-degree appraisals offer more accurate feedback, empower employees, reduce subjective factors in evaluation, and develop leadership in an organization.
  • If an employee not meeting the performance goals, the manager needs to determine what is going on. It could be because the employee is mismatched for the job or because the training was insufficient. If this is the case, the manager can either reassign the person to more suitable work or to train the person. However, if the problem results from the person not desiring to do the job, then it is a discipline problem. If the employee has a discipline problem , the manager can rely on employee coaching and disciplinary action. A process intended to help an employee overcome performance-related problems, employee coaching attempts to discover and remedy the reasons for poor performance. Employee coaching can benefit both the company and the employee. But, if the worker either cannot or will not accept help, then management must use discipline to enforce the expected performance or acceptable behaviours and actions of the organization.
  • 23 How does management decide who will get paid $12.65 an hour and who will receive $325,000 per year? The answer lies in compensation administration : the process of determining a cost-effective pay structure that attracts and retains competent employees, provides incentives for hard work, and ensures that pay levels will be perceived as fair. The primary determination of pay is the kind of job an employee performs: that is, the higher the skills, knowledge, and abilities—and the greater the authority and responsibility—the higher the pay. Other factors which influence employee compensation are the nature of the business, the environment surrounding the job, geographic location, and employee performance levels and seniority. Regardless of these factors, there is one other most critical factor: management’s compensation philosophy. Some organizations don’t pay employees any more than they have to while other organizations want to pay people above are salary levels.
  • There are a number of factors that can influenced compensation levels. This slide (Exhibit 9-7) displays the various factors. For example, private-sector jobs typically provide higher rates of pay than comparable positions in public and not-for-profit jobs. Likewise, employees who have been with an organization for a long time may have had a salary increase each year. Because skill levels tend to affect work efficiency and effectiveness, many organizations have implemented skill-based or competency-based pay systems. These types of systems reward employees for the job skills and competencies they can demonstrate. These systems also tend to mesh nicely with the changing nature of work and today’s work environment. But the most critical factor is management’s compensation philosophy.
  • Both employers and employees have an obligation to follow health and safety legislation. There is a growing concern for safety on the job because no organization is immune from workplace violence. Companies want to prevent violence from occurring. But because the circumstances of each incident are different, a specific plan of action for companies is difficult to detail. However, several suggestions can be made. First, the organization must develop a plan to deal with the issue. Furthermore, organizations must train managers to identify troubled employees before the problem results in violence. Organizations should also implement stronger security measures.
  • Labour relations refers to the relationship that exists between an organization and a union. It has evolved over time and is governed by legislation. The role of the union is to be the voice of employees, particularly during collective bargaining. Collective bargaining produces a collective agreement which is a legal document outlining the terms and conditions of employment. If an employee or union feels that the company is violating the collective agreement, a grievance may be initiated.
  • Human Resource Management

    1. 1. SRC, HU701 1Human ResourceManagementThe integration of all processes,programs, and systems in anorganization that ensure staff areacquired and used in an effectivewayThe process of attracting,developing and maintaining atalented and energetic workforce tosupport organisational mission,objectives and strategies.
    2. 2. SRC, HU701 2Human as ResourceL C Megginson- HR can be thought of as“ the total of knowledge, skills, creative abilities,talents and aptitudes of an organizationsworkforce, as well as the value, attitudes andbeliefs of the individuals involved”Its resource not a liability of the concern need tobe explored, not to be exploited.
    3. 3. SRC, HU701 3FinancialsubsystemTechnologysubsystemMarketingsub systemProduction& MaterialsubsystemHRsub-systemOrganisation system
    4. 4. SRC, HU701 4Nature of Human Resource ManagementHuman Resource (HR) ManagementThe design of formal systems in anorganization to ensure effective and efficientuse of human talent to accomplishorganizational goals.
    5. 5. SRC, HU701 5Strategic Human ResourceManagementHR planningRecruitmentSelectionOrganizational andwork designTraining anddevelopmentPerformance reviewCompensationLabour relations
    6. 6. SRC, HU701 6Human Resources as a CoreCompetency Strategic Human Resources ManagementOrganizational use of employees to gain orkeep a competitive advantage againstcompetitors. Core CompetencyA unique capability in the organization thatcreates high value and that differentiates theorganization from its competition.
    7. 7. SRC, HU701 7Possible HR Areas for Core Competencies
    8. 8. SRC, HU701 8 HR StrategiesThe means used to anticipate and managethe supply of and demand for humanresources. Provide overall direction for the way in which HRactivities will be developed and managed.OverallOverallStrategic PlanStrategic PlanHuman ResourcesHuman ResourcesStrategic PlanStrategic PlanHR ActivitiesHR Activities
    9. 9. SRC, HU701 9Human Resources Management
    10. 10. SRC, HU701 10Factors That Determine HR Plans
    11. 11. SRC, HU701 11Human Resource Planning Human Resource (HR) PlanningThe process of analyzing and identifying theneed for and availability of human resourcesso that the organization can meet itsobjectives. HR Planning ResponsibilitiesTop HR executive and subordinates gatherinformation from other managers to use in thedevelopment of HR projections for topmanagement to use in strategic planning andsetting organizational goals
    12. 12. SRC, HU701 12HR Planning Process
    13. 13. SRC, HU701 13Internal Assessment of theOrganizational Workforce Organizational Capabilities InventoryHRIS databases—sources of informationabout employees’ knowledge, skills, andabilities (KSAs)Components of an organizational capabilitiesinventory Workforce and individual demographics Individual employee career progression Individual job performance data
    14. 14. SRC, HU701 14Forecasting HR Supply and Demand ForecastingThe use of information from the past andpresent to identify expected future conditions. Forecasting MethodsJudgmental Estimates—asking managers’ opinions, top-downor bottom-up Rules of thumb—using general guidelines Delphi technique—asking a group of experts Nominal groups—reaching a group consensus inopen discussion
    15. 15. SRC, HU701 15ForecastingMethods
    16. 16. SRC, HU701 16Forecasting HR Supply and Demand Forecasting the Demand for Human Resources Organization-wide estimate for total demand Unit breakdown for specific skill needs by number andtype of employee Develop decision rules (“fill rates”) for positions to be filledinternally and externally. Develop additional decision rules for positions impacted bythe chain effects of internal promotions and transfers. Forecasting the Supply for Human Resources External Supply Internal Supply
    17. 17. SRC, HU701 17Recruitment The process by which a jobvacancy is identified andpotential employees arenotified. The nature of therecruitment processis regulated and subjectto employment law. Main forms of recruitmentthrough advertising innewspapers, magazines,trade papers and internalvacancy lists.
    18. 18. SRC, HU701 18RecruitmentSourcesPresentpermanentemployeesConsultantsData BankemploymentemploymentexchangeexchangeProf.associationsAdvertisementsCampusCampusrecruitmentrecruitmentPresenttemporaryemployeesRetiredemployeesDependents ofdeceased ,disabledemployeesCasualapplicantsTrade UnionsExternalInternal
    19. 19. SRC, HU701 19Recruitment techniques Promotion Transfer Scouting Advertising Walk-in Consult-in Head hunting Body shopping Business alliance Tele recruitment
    20. 20. SRC, HU701 20Selection- a negative process Prediction exercise Thus, Not Perfect Decision-making exercise Purpose is to hire theperson(s) best able tomeet the needs of theorganization Tied Back to Strategy
    21. 21. SRC, HU701 21Selection The process of assessing candidates andappointing a post holder Applicants short listed –most suitable candidates selected Selection process –varies according to organisation:
    22. 22. SRC, HU701 22Steps in scientific selection processDevelopment bases for selectionApplication/CVWritten examPrelim interviewBusiness games/GDTestsCore/Final interviewMedical exam & reference checksLine manager’s decisionEmploymentAptitude testsAchievement testsSituational testsInterest testsPersonalitytests
    23. 23. SRC, HU701 23Selection Interview – most common method Psychometric testing – assessing the personalityof the applicants – will they fit in? Aptitude testing – assessing the skillsof applicants In-tray exercise – activity based around what theapplicant will be doing, e.g. writing a letter to adisgruntled customer Presentation – looking for different skillsas well as the ideas of the candidate
    24. 24. SRC, HU701 24Common Types of Interviews Non-directive Most Latitude Questions are open ended This can get you into trouble Behavioural Description As about a situation you have experienced. Structured Panel Situational Why is a Situational Analysis Good.
    25. 25. SRC, HU701 25Reference Checks Potential employer seeks to verifyinformation Important to have well-constructedquestions Can you Outsource This? How far can you dig?
    26. 26. SRC, HU701 26The Effectiveness of Interviews Prior knowledge about an applicant Attitude of the interviewer The order of the interview Negative information The first five minutes The content of the interview The validity of the interview Structured versus unstructured interviews
    27. 27. SRC, HU701 27Your Hired Now What? Most Important Stage
    28. 28. SRC, HU701 28Familiarization to Organization and its ValuesImproved Success On the JobMinimizes TurnoverOrientation/Induction Process to introduce new employees toorganization Familiarize new employee to job and workunit Help employee to understand values,beliefs, and acceptable behaviours
    29. 29. SRC, HU701 29Training and Development Learning experience that seeks relativelypermanent change Involves changing skills, knowledge,attitudes or behaviours Training tends to be done for current job Develop usually means acquiring skills forfuture work
    30. 30. SRC, HU701 30Employee TrainingWhat deficiencies, if any,does job holder have interms of skills, knowledge,abilities, and behaviours?What behaviours arenecessary?Is there aneed fortraining?What arethe strategicgoals of theorganization?What tasks mustbe completedto achievegoals?
    31. 31. SRC, HU701 31Training methodsON THE JOB OFF THE JOB•Job rotation•Coaching•Job Instruction training•Committee assignments•Multiple management•Vestibule training•Role playing•Lecture methods•Conference•Programmedinstruction•Simulation•Sensitivity training•In-basket method
    32. 32. SRC, HU701 32Performance Management Integration of management practices thatincludes a formal review of employeeperformance How often should this take place? Includes establishing performance standardsand reviewing the performance Means to ensure organizational goals are beingmet
    33. 33. SRC, HU701 33Multi-personGraphicRating ScalesCriticalIncidentsWrittenEssayBARSPerformance Review Methods360-DegreeReviewMBO
    34. 34. SRC, HU701 34If Performance Falls Short Train Discipline Coach Out the Door
    35. 35. SRC, HU701 35Compensation Management Process of determiningcost-effective paystructure Designed to attract andretain Provide an incentive towork hard Structured to ensurethat pay levels areperceived as fair
    36. 36. SRC, HU701 36Factors That Influence CompensationUnionizationLevel ofCompensationandBenefitsEmployee’stenure andperformanceKind of jobperformedSize ofcompanyManagementphilosophyKind ofbusinessGeographicallocationLabour- orcapital-intensiveCompanyprofitabilitySource: Management, Seventh Canadian Edition, by Stephen P. Robbins, MaryCoulter, and Robin Stuart-Kotze, page 274. Copyright © 2003. Reprinted by permissionof Pearson Education Canada Inc.
    37. 37. SRC, HU701 37Health and Safety Employers are responsible for ensuring ahealthy and safe work environment Employees are required for followinstructions and any legal requirements Workplace violence is a growing concern
    38. 38. SRC, HU701 38Labour Relations Relationship between union and employer Union functions as the voice of employees Collective bargaining is a process to negotiateterms and conditions of employment Bargaining produces a written document called acollective agreement