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: • • • • • • • • • 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 • • • • • 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 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