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Human Resources Management
![Human Resource Management
13th
Edition
Chapter 1
STRATEGIC HUMAN RESOURCE
MANAGEMENT:
AN OVERVIEW
Copyright © [2014] Pearson Education 4-1](https://image.slidesharecdn.com/mondyhrm13inppt01-150216192935-conversion-gate01/85/Mondy-hrm13-inppt01-ppt-1-320.jpg)
![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
environmental factor.
• Explain who performs human resource management
tasks.
1-2Copyright © [2014] Pearson Education](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
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Mondy hrm13 inppt01.ppt
- 1. Human Resource Management 13th Edition Chapter 1 STRATEGIC HUMAN RESOURCE MANAGEMENT: AN OVERVIEW Copyright © [2014] Pearson Education 4-1
- 2. 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 environmental factor. • Explain who performs human resource management tasks. 1-2Copyright © [2014] Pearson Education
- 3. 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 cultures. 1-3Copyright © [2014] Pearson Education
- 4. 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 the text, the importance of various topics related to corporate culture will be described beginning with Employer Branding 1-4Copyright © [2014] Pearson Education
- 5. 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 1-5Copyright © [2014] Pearson Education
- 6. Human Resource Management (HRM) • Utilization of individuals to achieve organizational objectives • Concern of all managers at every level • Face a multitude of challenges 1-61-6Copyright © [2014] Pearson Education
- 7. HRM Functions 1-71-7 1 Human Resource Management Hum an Resource Developm ent Compensation Staffing Employeeand LaborRelations Safety and Health Copyright © [2014] Pearson Education
- 8. 1-81-8 Staffing Process of ensuring the organization always has: •Required number of employees •Employees with appropriate skills •Employees in the right jobs at the right time •Constant job analysis, human resource planning, recruitment, and selection Copyright © [2014] Pearson Education
- 9. 1-9 Job Analysis • Systematic process of determining skills, duties, and knowledge required for performing jobs in an organization • Impacts virtually every aspect of HRM Copyright © [2014] Pearson Education
- 10. 1-101-10 Human Resource Planning • Matching internal and external supply of people with anticipated job openings over a specified period of time • Sets the stage for recruitment and other HR actions Copyright © [2014] Pearson Education
- 11. 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 1-11Copyright © [2014] Pearson Education
- 12. Human Resource Development Major HRM functions include: – Training – Development – Career planning – Career development – Organization development – Performance management – Performance appraisal 1-12Copyright © [2014] Pearson Education
- 13. 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 1-13Copyright © [2014] Pearson Education
- 14. 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 1-14Copyright © [2014] Pearson Education
- 15. 1-15 Organization Development Planned and systematic attempt to: –Make the organization more effective –Create positive behavioral environment Copyright © [2014] Pearson Education
- 16. Performance Management Goal-oriented process to ensure organizational processes are in place to maximize productivity •Applies to employees, teams, and ultimately, the organization 1-161-16Copyright © [2014] Pearson Education
- 17. 1-17 Performance Appraisal Formal system of review and evaluation –Individual –Team Copyright © [2014] Pearson Education
- 18. 1-181-18 Compensation All rewards that individuals receive as a result of their employment Copyright © [2014] Pearson Education
- 19. 1-191-19 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 Copyright © [2014] Pearson Education
- 20. 1-20 Nonfinancial Compensation Satisfaction that employees receive from: –Job itself –Psychological and/or physical environment Copyright © [2014] Pearson Education
- 21. 1-211-21 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 Copyright © [2014] Pearson Education
- 22. 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 a union to represent them • Human resource activity with a union is often referred to as industrial relations 1-22Copyright © [2014] Pearson Education
- 23. 1-23 Internal Employee Relations HRM activities associated with the movement of employees within the organization. Examples: –Promotions –Demotions –Terminations –Resignations Copyright © [2014] Pearson Education
- 24. 1-241-24 Interrelationships of HRM Functions • All HRM functions are interrelated so that each function affects the others Copyright © [2014] Pearson Education
- 25. 1-251-25 Environment of Human Resource Management Copyright © [2014] Pearson Education
- 26. 1-261-26 Legal Considerations • Federal, state, and local legislation • Court decisions • Presidential executive orders Copyright © [2014] Pearson Education
- 27. Labor Market • Potential employees located within certain geographic area • Always changing 1-271-27Copyright © [2014] Pearson Education
- 28. 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 1-281-28Copyright © [2014] Pearson Education
- 29. 1-291-29 Unions • Group of employees who have joined together to collectively bargain with their employer • Become a third party when dealing with the company Copyright © [2014] Pearson Education
- 30. Shareholders • Owners of a corporation • Have invested money in the firm • May at times challenge programs considered by management to be beneficial to organization 1-301-30Copyright © [2014] Pearson Education
- 31. 1-311-31 Competition • In product or service and labor markets • Firms must maintain a supply of competent employees • Bidding war often results Copyright © [2014] Pearson Education
- 32. 1-321-32 Customers • People who actually use firm’s goods and services • Employment practices should not antagonize members of the market that the firm serves • Workforce should be capable of providing top-quality goods and services Copyright © [2014] Pearson Education
- 33. 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 1-331-33Copyright © [2014] Pearson Education
- 34. 1-341-34 HR Technology Rapid technological changes provide: •Increased sophistication •Ability to design more useful human resource information systems (HRIS) Copyright © [2014] Pearson Education
- 35. 1-351-35 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 Copyright © [2014] Pearson Education
- 36. Economy • When economy is booming, it is often more difficult to recruit qualified workers • In economic downturn, more applicants are typically available 1-361-36Copyright © [2014] Pearson Education
- 37. 1-371-37 Unanticipated Events • Unforeseen occurrences in external environment • Require a tremendous amount of adjustment with regard to HRM Copyright © [2014] Pearson Education
- 38. 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 1-38Copyright © [2014] Pearson Education
- 39. 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? 1-391-39Copyright © [2014] Pearson Education
- 40. Who Performs Human Resource Management Tasks? • Human resource managers • HR outsourcing • HR shared service centers • Professional employer organization (employee leasing) • Line managers 1-401-40Copyright © [2014] Pearson Education
- 41. 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 1-411-41Copyright © [2014] Pearson Education
- 42. HR Outsourcing • Transfers responsibility to an external provider –Discrete services –Business process outsourcing (BPO) 1-421-42Copyright © [2014] Pearson Education
- 43. 1-431-43 Discrete Services • Single set of high-volume repetitive functions is outsourced to a third party • Typically transactional HR activities • Example: 401(k) administration Copyright © [2014] Pearson Education
- 44. 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 1-441-44Copyright © [2014] Pearson Education
- 45. 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 the void in recruitment skills 1-45Copyright © [2014] Pearson Education
- 46. 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 1-461-46Copyright © [2014] Pearson Education
- 47. 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 1-471-47Copyright © [2014] Pearson Education
- 48. 1-481-48 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 Copyright © [2014] Pearson Education
- 49. 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 1-49Copyright © [2014] Pearson Education
- 50. 1-501-50 Human Resource Executives, Generalists, and Specialists Copyright © [2014] Pearson Education
- 51. Evolution Of Human Resource Management 1-511-51Copyright © [2014] Pearson Education
- 52. Traditional Human Resource Function in Large Firm • Included separate sections • Sections were placed under an HR manager • Each HR function had a supervisor and staff • HR manager worked closely with top management in formulating policy 1-521-52Copyright © [2014] Pearson Education
- 53. The Evolving HR Organization • HR outsourcing • HR shared service centers • Professional employer organization • Line manager • HR becoming more strategic 1-531-53Copyright © [2014] Pearson Education
- 54. 1-541-54 A Possible Evolving HR Organization Example President and CEO Vice President, Operations Vice President, Strategic Human Resources Vice President, Finance Director of Safety and Health Training & Development (Outsourced) Compensation (Shared Service Centers) Staffing (Line Managers, use of Applicant Tracking Systems) Vice President, Marketing Copyright © [2014] Pearson Education
- 55. Professionalization of Human Resource Management Profession: A vocation characterized by a: –Common body of knowledge –Procedure for certifying members of profession 2-552-55Copyright © [2014] Pearson Education
- 56. 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 2-56Copyright © [2014] Pearson Education
- 57. 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) 2-57Copyright © [2014] Pearson Education
- 58. 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 2-58Copyright © [2014] Pearson Education
- 59. 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 2-592-59Copyright © [2014] Pearson Education
- 60. 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 1-601-60Copyright © [2014] Pearson Education
- 61. 1-61
Editor's Notes
- Corporate culture is the system of shared values, beliefs, and habits within an organization that interacts with the formal structure to produce behavioral norms.Throughout this text the importance of various topics related to corporate culture will be described. The first topic related to corporate culture, employer branding, is discussed next.
- Employer branding is what the company stands for in the public eye. As such, the focus on employer branding is becoming increasingly important for organizations. Brands imply what employees will get from working there, and why working for the company is a career and not just a job. As more Gen Y-ers enter the workforce, firms may need to alter their brand in order to attract and retain these young people, who view having fun in an engaging work environment as important as a good salary. An employer brand embodies the values and standards that guides employee behavior. Through employer branding, people get to know what the company stands for, the profiles it hires, the fit between jobs and people, and the results it recognizes and rewards. Every company has a brand which could be the company of choice or the one of last resort. A robust employment brand attracts people and makes them want to stay. In fact, most workers want to belong to an organization that embraces the ideas and principles they share.
- Managers in organizations get things done through the efforts of others. Consequently, managers at every level must concern themselves with Human Resource Management, or HRM. Individuals dealing with human resource matters face a multitude of challenges, ranging from a constantly changing workforce to ever-present government regulations, technology changes, and economic conditions. Furthermore, global competition has forced both large and small organizations to be more conscious of costs and productivity. Taken together, these factors make effective HRM more critical than ever before.
- The five functional areas associated with effective HRM are: staffing, human resource development, compensation, safety and health, and employee and labor relations.
- Staffing is the process through which an organization ensures that it always has the right number of employees, with the appropriate skills, in the right jobs at the right time, to achieve organizational objectives. The staffing process involves job analysis, human resource planning, recruitment, and selection.
- Job analysis is the systematic process of determining the skills, duties, and knowledge required for performing the jobs in an organization. It impacts virtually every aspect of HRM, including planning, recruitment, and selection.
- Human resource planning is the systematic process of matching the internal and external supply of people with the job openings that are anticipated for the organization. The data collected as part of the human resource planning enables the recruitment process and other HR actions.
- Recruitment is the process of attracting enough qualified people to apply for jobs with an organization. Selection is the process of identifying which of these applicants are best suited for particular positions and for the organization in general.
- Human resource development is a major HRM function consisting of training and development; career planning and related development activities; organization development; and performance management, and appraisal.
- Training is designed to provide employees with the knowledge and skills they need to be effective in their present roles. Development involves long-term learning and professional growth that goes beyond the employees’ current jobs.
- Career planning is an ongoing process whereby individuals set career goals and identify ways to achieve them. Career development is a formal approach used by the organization to ensure that people with the proper qualifications and experiences are available for promotion or reassignment when needed.
- Organization development (OD) is a planned and systematic attempt to make the organization more effective, typically by creating a more positive behavioral environment. OD efforts are usually used to influence an entire system, such as a company or a plant.
- Performance management is a goal-oriented process that is directed toward ensuring that organizational processes are in place to maximize the productivity of employees, teams, and ultimately, the organization.
- Performance appraisal is a formal system of review and evaluation of individual performance. Sometimes it also includes team performance. It affords employees the opportunity to receive feedback on their strengths and areas for development. Performance appraisal helps employees stay on track, which often leads to greater satisfaction and productivity.
- The question of what constitutes a fair day’s pay has concerned management, unions, and workers for a long time. A well-thought-out compensation system provides employees with adequate and equitable rewards for their contributions to meeting organizational goals. Compensation consists of direct financial compensation, indirect financial compensation, and nonfinancial compensation.
- Organizations provide two types of financial compensation to employees. Direct compensation is the pay that an employee receives in the form of wages, salaries, commissions, or bonuses. Indirect compensation is often referred to as benefits, and includes things such as paid vacations, sick leave, holidays, and medical insurance.
- Nonfinancial compensation includes the things that an employee receives or derives from the job or the organization that do not have cost for the organization. These could include the satisfaction that an employee receives from doing the job itself, the psychological well-being an employee feels from working on a team, or enjoyment of the physical environment in which the employee works.
- Employees who work in a safe environment and enjoy good health are more likely to be productive. The higher productivity, coupled with lower long-term healthcare costs, benefits the organization. Today, federal and state legislation reflects societal concern, and most organizations have become attentive to their employees’ safety and health.
- Businesses are required by law to recognize a labor union and bargain with it in good faith if the firm’s employees want the union to represent them. In the past, this relationship was an accepted way of life for many employers, but most firms today would rather have a union-free environment. When a labor union represents a firm’s employees, the human resource activity is often referred to as industrial relations, which handles the job of collective bargaining.
- Internal employee relations are the HRM activities associated with the movement of employees within the organization, such as promotions, demotions, terminations, and resignations.
- All HRM functions are highly interrelated and management must recognize that decisions in one area affect other areas. For instance, a firm that emphasizes recruiting top-quality candidates but neglects to provide satisfactory compensation is wasting time and money. If a firm pays below-market wages, the firm will always be hiring and training new employees, only to see the best leave for higher wages.
- The firm often has little, if any, control over how the external environment impacts the task of managing its human resources. External factors include the legal considerations, labor market, society, political parties, unions, shareholders, competition, customers, technology, the economy, and unanticipated events. Each factor, either separately or in combination with others, can enable or hinder the accomplishment of HRM tasks within the firm.
- A significant external force affecting HRM relates to federal, state, and local legislation and the court decisions interpreting this legislation. In addition, presidential executive orders have a major impact on HRM. These legal considerations affect virtually the entire spectrum of human resource policies.
- Potential employees located within the geographic area from which employees are recruited comprise the labor market. The labor market is always changing, and these shifts inevitably cause changes in the workforce which can affect the way management must deal with the workforce.
- The public does not accept, without question, the actions of firms in the business world today. To remain acceptable to the general public, a firm must accomplish its purpose while acting ethically and responsibly. Ethics is the discipline dealing with what is good and bad, or right and wrong, and with moral duty and obligation. Corporate social responsibility is the implied, enforced, or felt obligation of managers, acting in their official capacities, to serve or protect the interests of stakeholders inside and outside the organization.
- A union is comprised of employees who have joined together for the purpose of dealing collectively with their employer. In a unionized organization, the union—rather than the individual employee—acts as a third party to negotiate work agreements with management. Wage levels, benefits, and working conditions for millions of employees reflect decisions made jointly by unions and management.
- The owners of a corporation are called shareholders. Because shareholders have invested money in the firm, they may at times challenge decisions made by management. Shareholders wield increasing influence, and management may be forced to justify the merits of a particular program in terms of how it will affect future projects, costs, revenues, profits, and even how it will benefit society as a whole.
- Firms may face intense competition in both their product or service and labor markets. Unless an organization is in the unusual position of monopolizing the market it serves, other firms will be producing similar products or services. To compete effectively, a firm must also compete for and retain competent employees.
- Customers are the people who actually use a firm’s goods and services. Because sales are crucial to a firm’s survival, management has the task of ensuring that its employment practices enhance the ability of its workforce to provide top-quality goods and services. This capacity is directly related to the skills, qualifications, and motivation of the organization’s employees.
- A rapidly developing trend is the increased mobility of tasks performed by HR professionals. Cloud computing and the use of mobile devices are changing the way HR work is performed and the change is moving at an amazing pace. With the cloud there is no more expensive, capital-intensive hardware and infrastructure and no more expensive, time-consuming, staff-intensive upgrades. Cloud computing permits businesses to buy and use what they need, when they need it.
- The world has never before seen the rapid rate of technological change that is occurring today. While the development of technology has created new roles for HR professionals, it also places additional pressures on them to keep abreast of new HR technology. With the increased sophistication of technology has come the ability to design more useful human resource information systems (HRIS).
- A HRIS is any organized approach for obtaining relevant and timely information on which to base human resource decisions. HRIS are used to obtain and track relevant information for human resource decisions. Primary HR responsibilities, such as recruitment, selection, oversight of legal and regulatory compliance, benefits administration, and the safeguarding of confidential employee information, cannot be carried out effectively without an integrated HRIS.
- The economy, on the whole and in its various segments, is a major environmental factor affecting HRM. Generally speaking, when the economy is booming, it is more difficult to recruit qualified workers. On the other hand, when a downturn is experienced, as with the recent recession, more applicants are typically available. To complicate this situation even further, one segment of the country may be experiencing a downturn and another a boom. This variation in supply and demand is also true for obtaining qualified workers in different industry and professional areas.
- Unanticipated events are occurrences in the external environment that cannot be foreseen. These events cause major modifications in the performance of many human resource functions in the affected firms. Every disaster, whether man-made or natural, requires a tremendous amount of adjustment with regard to human resource management. On a global level, think of the many different ways HR was affected when major earthquakes struck Japan, Haiti, and Chile.
- Culture gives people a sense of how to behave and what they ought to be doing. Each individual gradually forms such perceptions over a period of time as the person performs assigned activities under the general guidance of a superior and a set of organizational policies. The culture existing within a firm influences the employees’ degree of satisfaction with the job, as well as the level and quality of their performance. The assessment of how desirable the organization’s culture is may differ for each employee. One person may perceive the environment as bad, and another may see the same environment as good. An employee may actually leave an organization in the hope of finding a more compatible culture.
- The people who perform the HRM tasks have changed dramatically in recent years, and today there is no longer a typical HR department. Many organizations continue to perform the majority of HR functions internally, but not always by the HR department itself. As internal operations are examined, questions are raised, such as: Can some HR tasks be performed more efficiently by line managers or outside vendors? Can some HR tasks be centralized or eliminated altogether? Can technology perform some of the tasks that were previously done by HR personnel? One apparent fact is that all functions are being scrutinized for efficiency and are subject to cost-cutting, including HR.
- In light of the changing needs of organizations, the HR profession continues to evolve. Many HR departments continue to get smaller because others outside the HR department are now performing certain HRM functions. HR outsourcing, shared service centers, professional employer organizations, and line managers now assist in many traditional human resource activities.
- Historically, the human resource manager was responsible for all HR functions and acted in an advisory capacity, working with line managers to help them deal with their areas’ human resource matters. The HR manager was primarily responsible for coordinating the management of human resources to help the organization achieve its goals. There was a shared responsibility between line managers and human resource professionals. Frequently, the line manager went to HR for guidance in topics such as selection, training, promotion, and taking disciplinary action.
- HR outsourcing is the process of hiring external HR professionals to do the HR work that was previously done internally. The key to HR outsourcing success is to determine which functions to outsource, the extent to which they should be outsourced, and which functions to keep in-house. HR outsourcing focuses primarily on routine, transaction-oriented processes and clerical work. This permits HR to focus on more strategic areas. HR outsourcing is done basically in two ways: discrete services and business process outsourcing.
- With discrete services, one element of a business process or a single set of high-volume repetitive functions is outsourced to a third party. Benefits such as retirement plan administration is one of the HR tasks most likely to be outsourced.
- Business process outsourcing (BPO) represents the transfer of the majority of HR services to a third party. For example, Kraft Foods and IBM have a BPO agreement in which IBM performs workforce administration, compensation, and performance reporting for all of Kraft’s 98,000 employees spread across 72 countries.
- As the recent recession wound slowly down and firms began to hire again some companies realized that they had lost their recruiting skills. Many had not kept up with the rapidly changing technology that is currently needed to successfully recruit in this new environment. To fill this gap, Recruitment Process Outsourcing companies are stepping in to fill this void in recruitment skills. The RPO market has grown rapidly, reaching $ 1.45 billion in 2011.
- A Shared Service Center takes routine activities dispersed throughout the organization and consolidates them in one place. Shared service centers provide an alternative to HR outsourcing and can often provide the same cost savings. The most common HR functions that use SSCs are benefits administration, payroll, recruitment, global training and development, succession planning, and talent retention.
- A professional employer organization (PEO) is a company that leases employees to other businesses. When a decision is made to use a PEO, the company releases its employees, who are then hired by the PEO. The PEO then manages the administrative needs associated with employees, pays their salaries, and manages their benefits. The PEO typically charges a fee based on the number of leased employees. Because the PEO is the employees’ legal employer, it has the right to hire, fire, discipline, and reassign an employee. However, the client company maintains enough control so it can run the day-to-day operations of its business. PEOs have a number of advantages for employees. Because they provide workers for many companies, they often enjoy economies of scale that permit them to offer a wider selection of benefits at considerably lower costs because of the large numbers of employees in their pools. In addition, workers frequently have greater opportunities for job mobility. In addition, if a client organization suffers a downturn, the leasing company may be able to transfer employees to another client, avoiding both layoffs and loss of seniority. A potential disadvantage to the client is erosion of employee loyalty. Regardless of any shortcomings, use of employee leasing is growing.
- Individuals directly overseeing the accomplishment of the organization’s primary goals are line managers. As organizations change, line managers are performing some duties typically done by human resource professionals. This has been simplified by the automation of processes that require a manager’s approval, record-keeping, or input, and processes that support the manager’s job. Everything from recruitment and selection to performance appraisal and employee development can be automated to assist line managers.
- Typically the same HR functions previously identified must be accomplished by small business but the manner in which they are accomplished may be altered. Small businesses often do not have a formal HR unit or an HRM specialist. Rather, line managers often handle the HR functions. The focus of their activities is generally on hiring and retaining capable employees. Some aspects of HR functions may actually be more significant in smaller firms than in larger ones. For example, a staffing mistake in hiring an incompetent employee who alienates customers may cause the business to fail. In a larger firm, such an error might be much less harmful.
- Various designations are used within the human resource profession to differentiate roles and levels of responsibility. An executive is a top-level manager who reports directly to the CEO or to the head of a major division. A generalist performs tasks in many or all of the five HRM functions for dedicated client groups. A specialist is typically concerned with only one of the five functional areas of HRM. In this example, the vice president of industrial relations specializes primarily in union-related matters, and is both an executive and a specialist. An HR vice president is both an executive and a generalist who is responsible for a wide variety of functions. The compensation manager is a specialist, as is the benefits analyst.
- It seems appropriate, as the 13th edition of Human Resource Management is published, to see how HR management has evolved over the past 30 plus years.
- Traditionally, separate functions, such as staffing, training and development, compensation, safety and health, and labor relations, were created and placed under the direction of a human resource executive. Large firms might have had a manager and staff for each HR function that reported to the HR executive.
- As we have seen, line managers, HR outsourcing, HR shared service centers, and professional employer organizations are now handling many of the traditional HR tasks. HR managers can tell you that there is no set pattern for how human resource tasks are now achieved. The only certainty is that the five previously identified HR functions must still be accomplished. Each company must choose the appropriate vehicle for doing these tasks based on its specific needs and goals.
- A possible example of an evolving HR organization is presented here. The company has outsourced training and development, and the compensation function is now performed at a shared service center. Safety and health has been removed from HR and, because of its importance in this particular firm, reports directly to the CEO. Staffing activities remain under the strategic vice president for human resources, but many activities have been automated, and line managers are now more involved in the selection process.
- A profession is a vocation characterized by a common body of knowledge and a procedure for certifying proficient members. Most professions have representative organizations that establish performance standards and permit members to exchange ideas of mutual concern. Several well-known organizations that serve the HR profession are the Society for Human Resource Management, the Human Resource Certification Institute, the American Society for Training and Development, and WorldatWork.
- The largest national professional organization for individuals involved in human resource management is the Society for Human Resource Management. Its goals include defining, maintaining, and improving standards of excellence in the practice of human resource management. Founded in 1948, SHRM presently represents more than 250,000 individual members in over 140 countries, and has a network of more than 575 affiliated chapters in the United States.
- One of the more significant developments in the field of HRM has been the establishment of the Human Resource Certification Institute, an affiliate of SHRM. Founded in 1976, HRCI created a certification program to establish standardized levels of training and work experience in the profession. HRCI offers three certifications for HR professionals—PHR (Professional in Human Resources), SPHR (Senior Professional in Human Resources), and GPHR (Global Professional in Human Resources).
- The American Society for Training and Development is the world’s largest association dedicated to workplace learning and performance professionals. The ASTD Certification Institute has the Certified Professional in Learning and Performance credential to provide a way for professionals to establish a standard level of proficiency and knowledge of the field.
- WorldatWork, originally founded in 1955 as the American Compensation Association (ACA), is a professional association focused on compensation, benefits, work–life effectiveness, and total rewards. These are the strategies that organizations use to attract, motivate, and retain an engaged and productive workforce. The WorldatWork Society of Certified Professionals certifies human resource professionals in the disciplines of compensation, benefits, and work–life.
- Cultural differences among countries are a major factor influencing global business. This borderless world adds dramatically to the difficulty of managing human capital. Cultural differences are often the biggest barrier to doing business in the global market. A country’s culture is the set of values, symbols, beliefs, languages, and norms that guide human behavior within the country. Companies operating in the global environment recognize that national cultures differ and that such differences cannot be ignored. For example, a businessperson who travels from Switzerland to Italy goes from a country where meetings tend to be highly structured and expected to start on time, to one where meetings can be more informal and punctuality is less important. Recognizing the cultural differences present in a workplace can help managers achieve maximum effectiveness.