The document provides an overview of key concepts in human resource management (HRM). It defines HRM as the policies and practices involved in recruitment, training, rewarding, and managing employees. The goals of HRM are to attract, retain, and motivate employees to help achieve organizational goals. Core HR activities include strategic planning, staffing, training, compensation, health and safety, and employee relations. Challenges to modern HRM include globalization, technology changes, and managing a diverse workforce. The role of HRM is shifting from administrative to more strategic involvement in organizational decision-making.

1. Human Resource Management
Chapter 1

2. Management of Human Capital
in Organizations
• Human Capital
– The collective value of the capabilities, knowledge,
skills, life experiences, and motivation of an
organizational workforce.
– Also known as intellectual capital.
• Core Competency
– A unique capability that creates high value and
differentiates an organization from its competition.
– HR competencies: a source of competitive advantage.

3. Human Resource Management
• Meaning
– 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.
– The design of formal systems in an organization to ensure
effective and efficient use of human talent to accomplish
organizational goals.
– The policies, practices, and systems that influence
employees’ behavior, attitudes, and performance.
3

4. • Meaning
– The policies, practices, and systems that influence
employees’ behavior, attitudes, and performance.
– HRM is viewed as a means of moving people along to
achieve
organisational
goals
through
staffing,
performance, change management and administrative
objectives.
• HR creates value by engaging in activities that produce the
employee behaviors that the company needs to achieve its
strategic goals.

5. Goals of HRM
• Attract, retain, and motivate employees
• Direct employee efforts toward goals of
organization
• Assist in the development of the strategic
direction of the organization
• Provide the organization a source of
competitive advantage
• Help ensure legal compliance
5

6. HR Activities
•
•
•
•
•
•
•
Strategic HR Management
Equal Employment Opportunity
Staffing
HR Development
Compensation and Benefits
Health, Safety, and Security
Employee and Labor Relations

7. HR Activities

8. HRM in Large v. Small Firms
Large
• Designated HR professionals
and HR department
• Formal HR policies; HR
manual; job descriptions
Small
• HR duties combined with
other administrative
functions (e.g. accounting)
or performed by line
managers.
• Less formal HR policies, less
likely to have HR manual,
job descriptions
8

9. HR Functions
9

10. Human Resource Management Functions
Human
Resource
1
Management
Safety and
Health
10

11. i. Staffing
• Staffing
– Process through which an organization ensures it always
has the proper number of employees with appropriate
skills in right jobs at right time to achieve organizational
objectives
• Job analysis
– Systematic process of determining skills, duties, and
knowledge required for performing jobs in an organization
• Human resource planning
– Systematic process of matching the internal and external
supply of people with job openings anticipated in the
organization over a specified period of time .
11

12. Staffing (Cont.)
• Recruitment
– Process of attracting individuals on a timely basis, in
sufficient numbers, and with appropriate qualifications,
to apply for jobs with an organization
• Selection
– Process of choosing from a group of applicants the
individual best suited for a particular position and the
organization
12

13. ii. Human Resource Development
• Training
• Development
• Career Planning
• Career Development
• Organizational Development
• Performance Management
• Performance Appraisal
13

14. Human Resource Development (Cont.)
• Training
– Designed to provide learners with knowledge and
skills needed for their present jobs
• Development
– Involves learning that goes beyond today's job; it has
more long-term focus
• Career planning
– Ongoing process whereby individual sets career goals
and identifies means to achieve them
• Career development
– Formal approach used by organization to ensure that
people with proper qualifications and experiences are
available when needed
14

15. • Organization development
– Planned process of improving organization by
developing its structures, systems, and processes to
improve effectiveness and achieving desired goals
• Performance management
– Goal-oriented process directed toward ensuring
organizational processes are in place to maximize
productivity of employees, teams, and ultimately,
the organization
• Performance appraisal
– Formal system of review and evaluation of individual
or team task performance
15

16. iii. Compensation
• Compensation
– All rewards that individuals receive as a result of their
employment
• Direct Financial Compensation
– Pay that person receives in form of wages, salaries, bonuses,
and commissions.
• Indirect Financial Compensation (Benefits)
– All financial rewards not included in direct compensation such
as paid vacations, sick leave, holidays, and medical insurance.
• Nonfinancial Compensation
– Satisfaction that person receives from job itself or from
psychological and/or physical environment in which person
works.
16

17. iv. Safety and Health
• Employees who work in a safe environment and
enjoy good health are more likely to be productive
and yield long-term benefits to organization.
• Safety
– Involves protecting employees from injuries caused by
work-related accidents
• Health
– Refers to employees' freedom from illness and their
general physical and mental well being
17

18. v. Employee and Labor Relations
• Business is required by law to recognize a union and
bargain with it in good faith if the firm’s employees
want the union to represent them
• Human resource activity is often referred to as
industrial relations
• Most firms today would rather have a union-free
environment
18

19. HR Management Challenges
• Globalization of Business
– Outsourcing and increased competition
• Economic and Technological Changes
– Occupational shifts from manufacturing and
agriculture
to
service
industries
and
telecommunications
– Pressures of global competition causing firms to adapt
by lowering costs and increasing productivity
• Technological Shifts and the Internet
– Growth of information technology
Copyright © 2005 Thomson
Business & Professional
Publishing. All rights reserved.
1–19

20. HR Management Challenges
• Workforce Availability and Quality Concerns
– Inadequate supply of workers with needed skills for
“knowledge jobs”
– Education of workers in basic skills
• Growth in Contingent Workforce
– Increases in temporary workers, independent
contractors, leased employees, and part-timers
caused by:
• Need for flexibility in staffing levels
• Increased difficulty in firing regular employees.
• Reduced legal liability from contract employees

21. HR Management Challenges
• Workforce Demographics and Diversity
– Increasing Racial/Ethnic Diversity
– More Women in the Workforce
• Single-parent households
• Dual-career couples
• Domestic partners
• Working mothers and family/childcare
– Significantly Aging Workforce
• Age discrimination

22. HR Management Challenges
• Organizational Cost Pressures and Restructuring
– Mergers and Acquisitions
– “Right-sizing”—eliminating of layers of management,
closing facilities, merging with other organizations,
and outplacing workers
• Intended results are flatter organizations, increases in
productivity, quality, service and lower costs.
• Costs are “survivor mentality”, loss of employee loyalty, and
turnover of valuable employees.
– HR managers must work toward ensuring cultural
compatibility in mergers.

23. HR Management Roles
• Administrative Role
– Clerical and administrative support operations
(e.g., payroll and benefits work)
• Technology is transforming how HR services are
delivered.
• Outsourcing HR services to reduce HR staffing costs
• Operational and Employee Advocate Role
– “Champion” for employee concerns
• Employee crisis management
• Responding to employee complaints

24. Changing Roles of HR Management
Note: Example percentages are based on various surveys.
Figure 1–5

25. Strategic Role for HR
• Strategic Role
– “Contributing at the Table” to organizational results
– HR becomes a strategic business partner by:
• Focusing on developing HR programs that enhance
organizational performance.
• Involving HR in strategic planning at the onset.
• Participating in decision making on mergers, acquisitions,
and downsizing.
• Redesigning organizations and work processes
• Accounting and documenting the financial results of HR
activities.

26. Operational to Strategic Transformation of HR
Figure 1–6

27. New Approaches to HR Management
• Collaborative HR
– The process of HR professionals from several
different organizations working jointly to address
shared business problems.
• Firms benefit from the expertise of other firms, without
having the time and expense of developing some of
their own HR practices.

28. HR Technology
• Human Resource Management System (HRMS)
– An integrated system providing information used by
HR management in decision making.
– Purposes (Benefits) of HRMS
• Administrative and operational efficiency in compiling HR
data
• Availability of data for effective HR strategic planning
– Uses of HRMS
• Automation of payroll and benefit activities
• EEO/affirmative action tracking
• HR Workflow: increased access to HR information
– Employee self-service reduces HR costs.