Chapter 1

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Human Resource Management
Chapter 1: Introduction to
Human Resource Management
Ass. Prof. Ipek Kalemci TUZUN
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Personnel Management Approach
Human Resource
Management Approach
Manpower centered
Pragmatic
Job oriented
Resource centered
Strategic
Staff oriented
•Employee-organization relations
by HRM approach
•HRM is a term for what historically was referred as personnel administration
or personnel management. In today’s arena, HR managers are sometimes
called “people managers” and employees are refereed as “our associates”.
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The Management Process
 Planning
 Organizing
 Staffing
 Leading
 Controlling
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The evolution of HRM
Decade
Major Business Ideas
Common
HR titles
No “HR” people
Pre-1900’s
Small business and
worker’s guilds
1900’s
Large-scale enterprise Labor relations,
growth
personnel
1920’s
Depression, first labor
legislation
Industrial
relations,
personnel
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Decade
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Major Business Ideas
Common
HR titles
1940’s
WW II, growth of large
diversified enterprises
1960’s
Civil rights and compliance Personnel
1980’s
Growing impact of
Personnel,
globalization and
Human
technology; human capital; Resources
emergency of the
knowledge/service
economy
Personnel
administration
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Decade
2000’s
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Major Business Ideas
Modern organizations,
organization effectiveness,
strategic HR planning
Common
HR titles
Human
Resource
Management
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Management Process
 Planning
 Goals and standards
 Rules and procedures
 Plans and forecasting.
 Organizing
 Tasks
 Departments
 Delegating
 Authority and communication
 Coordinating
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Management Process
 Staffing
 Hiring
 Recruiting
 Selecting
 Performance standards
 Compensation
 Evaluating performance
 Counseling
 Training and developing
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Management Process
 Leading
 Getting the job done
 Morale
 Motivation
 Controlling
 Setting standards
 Comparing actual performance to standards
 Corrective action
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Human Resource Management
Human Resource Management is the process of acquiring, training,
appraising, and compensating employees and attending to their labor
relations, health and safety, and fairness concerns.
Human Resource Management can be defined as the implementation of the
strategies, plans and programs required to attract, motivate, develop,
reward and retain the best people to meet the organizational goals and
operational objectives of the organization.
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HRM Functions Include:
 Conducting job analyses
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(determining the nature of each
employee’s job)
Planning labor needs and
recruiting job candidates
Selecting job candidates
Orienting and training new
employees
Managing wages and salaries
(compensating employees)
Providing incentives and
benefits
Appraising performance
 Communicating (interviewing,
counseling, disciplining)
 Training and developing
managers
 Building employee commitment
 Building loyalty
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HHRM is Important to all Managers.
 ** In order to decrease turnover
 The wrong person, High
turnover(**)
**(turnover rate; number of replacement * 100
average number of employee
 Low effectiveness and
efficiencies
 Useless interviews
 Poor training
 Unfair labor practices
rate;
 Better advancement
opportunities
 More training
 Flexible schedules
 İmproved benefits
 Greater employee
involvement in operations
 Recognition programs
 Good communication of
rules and regulations
 Resolving employee
complaints
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So,
 Human Resources are the people in the organization
 Human Resource Management is a series of activities and
decisions carried out by all line managers that help employees
get the job done and achieve their objectives
 Human Resource Department consist of specially trained
professionals who help managers carry out human resource
management responsinsibilities
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Line and Staff Aspects of HRM
 Authority is the right to make decisions, to direct the work
of others, and to give orders
 Line Managers are authorized to direct the work of
subordinates. They are always someone’s boss. In general
they are in charge of accomplishing of the group’s goals
 Staff Managers

are authorized to assist and advise line managers
in their goals. They aid line managers in areas like
recruiting, hiring and compensation
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Line Manager’s HRM Jobs
 1. Placing the right person on
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the right job
2. Starting new employees in
the organization (orientation)
3. Training employees for jobs
that are new to them
4. Improving the job
performance of each person
5. Gaining creative cooperation
and developing smooth working
relationships
 6. Interpreting the company’s
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policies and procedures
7. Controlling labor costs
8. Developing the abilities of
each person
9. Creating and maintaining
department morale
10. Protecting employees’ health
and physical condition
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FIGURE 1–3 Employment and Recruiting—Who Handles It?
(Percentage of All Employers)
Note: Length of bars represents prevalence of activity among all surveyed employers.
Source: HR MAGAZINE, BNA/Society for Human Resource Management, 2002.
Reproduced with permission via Copyright Clearance Center.
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As a company grows, line
managers need the assistance as
well as the specialized
knowledge and advice of a
separate HR staff
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HRM DEPARTMENT
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Line authority The authority exerted by a personnel manager by directing the activities of the
people in his or her own department and in service areas (like the plant cafeteria).
Implied authorityThe authority exerted by a personnel manager by virtue of others’ knowledge that
he or
she has access to top management (in areas like testing and affirmative action).
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Functional controlThe authority exerted by an HR manager as coordinator of personnel activities.
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Employee advocacyHR must take responsibility for clearly defining how management should be
treating employees, make sure
employees have the mechanisms required to contest unfair practices, and represent the interests of
employees within the framework of its primary obligation to senior management.
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Human Resource Managers’
Duties
Coordinative
Function
Line Function
Line Authority
Implied Authority
Functional Authority
Functions of
HR Managers
Staff Functions
Staff Authority
Innovator
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Human Resource Specialties
Recruiters
Labor Relations
Specialists
Training
Specialists
Human
Resource
Specialties
EEO
Coordinators
Job Analysts
Compensation
Managers
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Typical HR Positions
 Recruiters; maintain contact with community and search for
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qualified job applicants.
Job analysts; Collect and examine information about jobs to
prepare job descriptions and job specifications
Compensation managers; Develop compensation plans and
handle the employee benefits program.
Training specialists; Plan, organize, and direct training
activities.
Labor relations specialists. Advise management on all
aspects of union–management relations.
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FIGURE 1–1
HR Organization Chart
for a Large Organization
Source: www.hr.wayne.edu/orgcharts.php. Accessed May 6, 2007.
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FIGURE 1–2 HR Organizational Chart (Small Company)
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The changing role of HR
 Effective HRM selection, training, pay and employee
fairness practices are crucial to capitalizing on
technology and remaining competitive
 HR departments must move away from a
housekeeping focus to strategic maneuvering – HRM
must evolve to remain dynamic
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The new HR manager
 Provides efficient operational services including
outsourcing service when necessary
 Supports top management’s strategic planning efforts
 Acts as the company’s “internal consultant” for
identifying and institutionalizing changes that
enhance employees skills allowing them to
contribute to the company’s success
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The Changing Environment of
Human Resource
Management
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Globalization Trends
Changes and Trends
in Human Resource
Management
Technological Trends
Trends in the Nature of Work,
Human Capital
Workforce Demographic Trends
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The Changing Environment of Human
Resource Management
 Globalization; tendency of firms to extend their sales and
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manufacturing to new markets abroad
Technological advances; technology has been forcing and
enabling firms to become more competitive (skilled employee,
empowerment)
The nature of work; Human capital(knowledge, education,
training, skills and expertise of a firm’s worker) provides
competitive advantage
The workforce diversity; increased diversity provide
challenges for HR management: Older, more multi-ethnic
workforce,Nontraditional workers,
“Generation Y”,Retirees
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The Changing Role of
Human Resource Management
Strategic Human
Resource
Management
Managing with the
HR Scorecard
Process
New
Responsibilities
for HR Managers
Creating HighPerformance Work
Systems
Measuring the HRM
Team’s Performance
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Important HRM issues
 Strategic human resource management
 HR’s use of technology
 Managing ethics
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What is strategic HRM?
 A strategy is a company’s plan for matching internal
strengths and weakness with external opportunities
and threats
 Strategic HRM is the formulation and execution of HR
policies and practices that produce competent
employees with the behaviors needed to achieve the
company’s strategic goals
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FIGURE 1–8 Strategy and the Basic Human Resource
Management Process
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HR and technology
 Self-service
 Call centers
 Productivity
improvement
 Outsourcing
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Some Ways HR Managers Use Technology
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Issues related to HR ethics
 Workplace safety
 Security of employee records
 Employee theft
 Affirmative action
 Comparable work
 Employee privacy rights
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High-Performance Work System
Practices
 Employment security
 Selective hiring
 Extensive training
 Self-managed teams/decentralized decision making
 Reduced status distinctions
 Information sharing
 Contingent (pay-for-performance) rewards
 Transformational leadership
 Measurement of management practices
 Emphasis on high-quality work
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Benefits of a High-Performance
Work System (HPWS)
 Generate more job applicants
 Screen candidates more effectively
 Provide more and better training
 Link pay more explicitly to performance
 Provide a safer work environment
 Produce more qualified applicants per position
 Hiring based on validated selection tests
 Provide more hours of training for new employees
 Conduct more performance appraisals
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FIGURE 1–5 Five Sample HR Metrics
HR Metric*
Absence rate
How to Calculate It
# of days absent in month
Average # of employees during month × # of workdays
Cost per hire
× 100
Advertising + agency fees + employee referrals + travel cost of
applicants and staff + relocation costs + recruiter pay and benefits
Number of hires
HR expense
factor
Time to fill
HR expense
Total operating expense
Total days elapsed to fill job requisitions
Number hired
Turnover rate
Number of separations during month
Average number of employees during month
× 100
Sources: Robert Grossman, “Measuring Up,” HR Magazine, January 2000, pp. 29–35; Peter V. Le Blanc, Paul Mulvey, and Jude T. Rich, “Improving the Return on Human Capital: New Metrics,”
Compensation and Benefits Review, January/February 2000, pp. 13–20; Thomas E. Murphy and Sourushe Zandvakili, “Data and Metrics-Driven Approach to Human Resource Practices: Using
Customers, Employees, and Financial Metrics,” Human Resource Management 39, no. 1 (Spring 2000), pp. 93–105; [HR Planning, Commerce Clearing House Incorporated, July 17, 1996;]
SHRM/BNA 2000 Cost Per Hire and Staffing Metrics Survey; www.shrm.org. See also, SHRM Research “2006 Strategic HR Management Survey Report,” Society for Human Resource Management..
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Measuring HR’s Contribution
 The HR Scorecard
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Shows the quantitative
standards, or “metrics” the firm
uses to measure HR activities.
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Measures the employee
behaviors resulting from these
activities.
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Measures the strategically
relevant organizational
outcomes of those employee
behaviors.
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The Human Resource Manager’s
Proficiencies
 New Proficiencies
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HR proficiencies
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Business proficiencies
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Leadership proficiencies
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Learning proficiencies
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