chapter twelve
Human Resource
Management
McGraw-Hill/Irwin
Contemporary Management, 5/e
Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Human Resource Management
Human Resource Management (HRM) – the
process of acquiring, training, appraising,
and compensating employees and
attending to their labor relations, health
and safety, and fairness concerns.
or
The usage of people to achieve
organizational objectives
**All managers at every level must
concern themselves with HRM**
Human Resource Management
“People – not buildings, equipment, or
brand names – make a company”
What do you think of this quote?
Does HRM Really Matter?
• Organizations that invest money to have
quality HR programs perform better than
those who don’t: 59% vs. 11% Return on
Investment (ROI) over a 5-year period!
HRM Must Balance the Needs of
the Company & the Employee
Forward-thinking to assist the company in
maintaining competitive advantage.
Concerned with the total cost of its function
and for determining value added to the
company.
Being a representative of and advocate for
employees.
Driving policies and practices that
employees and future employees desire
HRM is about playing both
“Offense” and “Defense”!
Playing Defense:
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Not hiring the wrong person
Minimizing turnover
Preventing poor results
Eliminating useless interviews
Avoiding court actions!
Avoiding safety citations
Ensuring salaries aren’t unfair
Preventing poorly trained employees
Avoiding unfair labor practices
Four Basic HRM Functions
1. Staffing
2. Training &
Development
3. Motivation
4. Maintenance
Crucial Slide!!
Four Basic HRM Functions…with
simplistic definitions
1. Staffing – Hiring people
2. Training & Development – Preparing
them
3. Motivation – Stimulating them
4. Maintenance – Keeping them
Staffing
Staffing - Process through which an
organization ensures that it always has
the right number of employees with the
right skills in the right jobs at the right
time to achieve the organization’s
objectives
Staffing = HR Planning + Writing Job
Descriptions + Recruiting + Selection
Staffing: 4 Components
1.HR Planning
2.Writing Job Descriptions
3.Recruitment
4.Selection
1. HR Planning
HR Planning – determining how many jobs and
what types of jobs will be needed for a specific
period of time
1. Forecast HR Requirements – Estimate the numbers and
kinds of employees the organization will need at future
dates (for example: Next year)
2. Determine whether the firm will be able to secure the right
number and types of employees with the necessary skills
and from what sources (inside & outside the company)
3. Put a plan in place to deal with a shortage or surplus
2. Writing Job Descriptions
Job description - A document that provides
information regarding the tasks, duties, and
responsibilities of the job as well as the job
specification elements (see below).
Job specification - A part of the job
description specifying the minimum
acceptable qualifications that a person should
possess in order to perform a particular job.
Writing Job Descriptions
Job Analysis: The procedure for determining the
duties and skill requirements of a job and the
kind of person who should be hired for it.
– Analysis is of the Job, not the person!
A Job Analysis produces the information used to
write job descriptions
Items Typically Included in Job
Descriptions
1.
2.
3.
4.
Major duties performed
Percentage of time devoted to each duty
Performance standards to be achieved
Working conditions and possible
hazards
5. Number of employees performing the job
and who they report to
6. The machines and equipment used on
the job
7. Job Specification (minimum acceptable
qualifications)
3. Recruiting
Recruiting – Finding the right people likely to say
yes. There are challenges:
– Hard to find
– Must have the right skills and fit in
– Some companies aren’t attractive places
Q. Can you name some sources from inside the
company (“internal sources”) used to fill
open positions?
Recruiting
Internal Sources
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Promotions
Lateral Moves – for personal interest or
career development
Job Postings
Rehiring former workers
Referrals
Q. What are some of the Pro’s and Con’s of
filling a job with an internal candidate?
Recruiting: Filling jobs with
Internal Candidates
PRO’s
 Known commodity
 Usually more loyal
 Can trigger a series of moves  developmental
opportunities and improved morale
CON’s
 Can decrease morale among those not selected
 Can result in “inbreeding” = status quo
Q. What are some sources Outside the
organization (“external sources”) used to fill
open positions?
Recruiting
External Sources
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Employment agencies
Headhunters for higher level positions
Employee Referrals
Competitors
Advertising
Internet
Educational institutions
Recruiting
Recruiters must understand the Law:
• Equal Employment Opportunity Commission
(EEOC) – Agency responsible for enforcing laws
regulating employment practices
• Prohibits discrimination based upon race, color,
religion, sex, and national origin
• Covers all employers w/15+ employees
• Includes recruiting, hiring, firing, paying, etc.
• Premise is that everyone has the right to work
and the right to earn a fair wage based solely
upon performance
Recruiting
One final point about recruiting…
Managers must build their bench!
4. Selection
Selection – Process through which the organization
chooses the individual best suited for the
company and the position from all those who
have been recruited
Includes
• Application Form
• Preliminary Interview (“Screening”)
• Interview process
• Testing (when relevant)
• Investigations
• Physical exams
Selection
Why Careful Selection Is Important:
 A manager’s performance depends on the
performance of subordinates
 The cost to recruit and hire is high
 Incompetent selection can result in negligent
hiring litigation
Recruiting and Selecting: The
Yield Pyramid
New hires
Offers made (2 : 1)
Interviewed (3 : 2)
Invited (4 : 3)
Leads generated (6 : 1)
2. Training & Development (T & D)
Training & Development - Activities in HRM concerned
with assisting employees to develop up-to-date skills,
knowledge, and abilities
• Orientation and socialization help employees to adapt
• 4 components of training and development
1. Employee training – improve individual’s skills for current job
2. Employee development – improve individual’s skills for future
positions
3. Career development – identify potential career paths for
individuals, plan, and provide support
4. Organization development – impact attitudes & values
company-wide
3. Motivation
Motivation - Activities in HRM concerned with
helping employees to maximize their work
efforts.
• Managing motivation includes:
 Understanding job design – technology, tools, & work
environment
 Setting performance standards and orchestrating the
performance review processes
 Understanding and applying motivational theories
 Establishing and managing effective compensation &
benefits programs (next slide)
More about Compensation & Benefits
Compensation - Money that a person
receives for performing a job
Benefits - Rewards other than compensation
which have a monetary value
Nonfinancial Rewards – Job satisfaction,
pride, work environment, time off,
recognition
Q. Which of these 3 forms of employee
“rewards” do you think is most
important?
4. Maintenance
Maintenance - Activities in HRM concerned with
maintaining employees’ commitment and
loyalty to the organization.
– Health - employees' freedom from illness and
their general physical and mental well-being
– Safety - protecting employees from injuries
caused by work-related accidents
– Communications programs - 2-way communication to
ensure that employees are well informed and that
their voices are heard.
– Employee assistance programs – such as stress or
abuses
Interrelationships of the 4 HRM
Functions
 All HRM functions are
interrelated
Examples:
 Benefits impact
recruiting efforts
 Selection impacts
training needs
 Performance Appraisals
impact pay
Q. What’s the best advice you’ve ever
been given in preparing for an
interview?
What they don’t tell you in
Interviewing School
 Everyone likes to hear themselves talk
 Never follow child or animal acts
 Adjust your energy level
 The interviewer may be more nervous than
you
 Most interviewers are unskilled &
unprepared
 Prepare 3 questions: Culture, Leadership,
Work/Life Balance, Career Paths, Typical Day
What they don’t tell you in
Interviewing School
 Schedule a dress rehearsal or two
 Some interviewers intentionally create
stress
 Request feedback after rejections
 Process, pause, and deliver
 First and last impressions are
disproportionate
 You are there to solve the company’s
problems, not vice-versa!
What problems can you solve?
You must completely change your paradigm -- Your
problems do not matter to the company/interviewer:
 You need money and/or benefits
 You need stimulation, challenge, change or selfactualization
 You need to get in the door so you can climb
You are there to solve Their problems:
 The company makes money by hiring/using the right
person
 The work needs to get done to meet customer needs
 Employees need an effective manager and leader
 The company needs smart ideas, innovation, &
teamwork