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introduction to Human Resource Management (notes)
The planning function of human resource management involves two major activities: strategic planning, and short- and medium-range planning. the process of planning and synchronizing HR needs with the strategic mission of the firm strategic objectives- includes increasing market share, revenue growth, product or service diversity, and profit margins, as well as planning for financial obligations and other eventualities. HR planning- will help the organization better understand how many and what type of employees the organization will need in the future. HR planning also addresses how the firm obtains and trains future human capital Staffing involves → recruiting job applicants (also known as candidates), and then selecting the most appropriate applicants for the available jobs. It should be noted that staffing applies both to external candidates (those not currently employed by the firm) and internal candidates (those currently employed by the firm). Common selection techniques→ include obtaining completed application forms, interviewing candidates, reviewing education and formal training verifications, and administering various formal and informal tests to determine fit and potential with the organization. All selection procedures must comply with various items of federal and state human rights legislation. The goal of the selection process should be to identify a match between a candidate's ability and the requirements of the job. employees are generally rewarded on the basis of the value of the job, their personal contributions, and their performance rewards based on performance can increase an employee's motivation to perform, other forms of compensation are given simply for being a member of the organization. Those rewards that are directly linked to performance on the job are often referred to as direct compensation. On the other hand, compensation that is given simply for being a member of the organization is often referred to as indirect compensation. A performance appraisal - (also known as a performance review, performance evaluation, or career development discussion) is a method by which an employee's job performance is evaluated. important for both measuring and monitoring an employee's contribution.
Performance appraisals are frequently the basis for promotions, trainings, and raises, as well as for terminating employees Several studies even suggest that many millennials entering the workforce today are more concerned with the ability to grow and develop personally than they are with their direct compensation. In today's global and chaotic environment, many firms use training and development activities to remain competitive. Finally, in order to help the firm achieve its organizational and strategic goals, human resource (HR) policies and practices must be congruent with the organization's overall strategy. performance in one activity often depends on the performance of another. It should be noted that in most work environments, all HR functions and activities operate within the constraints of the internal and external environments strategic and competitive advantage is directly impacted when the employees' work environment is poor. Functions of human resource management
- planning human resource needs within the organization,
- staffing the organization to fulfill needs,
- compensating and motivating employees,
- appraising employee behavior and providing effective feedback,
- enhancing human potential within the firm,
- improving the workplace environment and using the human resource capital within the organization to reach strategic goals,
- maintaining effective work relationships among employees, and
- globalizing the human resource management function within the firm. The basic functions of HR management include planning, organizing, staffing, leading, and controlling Role of Top Management Top management often determines how important HRM will be within the organization. when top management relies on HR to help make strategic and other important decisions within the firm, line managers and others will follow, allowing HR the opportunity to help
- labeling and modeling ethical behavior,
- creating a well-defined code of ethics,
- establishing an open-door policy, and
- providing an employee assistance program (EAP) The word ethics comes from the Greeks, who used the word "ethos" to describe someone’s character. Ethics provides the foundation for what is good and bad in decision-making and is concerned with the kinds of values and morals that society finds desirable and appropriate. Because ethics is based on the character of individuals, it is also concerned with the virtue of individuals and their motives. An ethical dilemma arises when the actions of a person or organization might negatively influence or impact another individual Business ethics- therefore, can be described as the values and principles that are used to evaluate whether the collective behavior of members of an organization is appropriate. Ethical theories divided into two categories→ first category is consequentialist theories-which focus on the consequences of managers' actions Consequentialist ethics focuses on the consequences, or result, of an action. managers can decide what course of action to take by analyzing the results of each possible decision and choosing the option that has the most desirable results Deontological theories-which focus on the rules or duties of managers. looking instead at whether an action is good in and of itself. Strategy-refers to how an organization is going to compete. In other words, strategy describes the process by which an organization. decides on which products or services to market and sell, which industries to enter, and how the organization is going to reach its desired goals in the marketplace A strategy, for example, will inform employees about many organizational concerns including short- vs. long-term focus, quality vs. quantity, high risk vs. low risk, flexibility vs. rigidity, independent vs. dependent behavior, and conformity vs. autonomy
Six major trends have been identified that represent the major events that influenced the growth and importance of HRM in society and in the world of work:
- increased competition,
- the costs and benefits associated with HR utilization,
- productivity changes (resulting from changes in technology, capital investment, the 2008 - 2014 recession, capital utilization, outsourcing, and government policies),
- the increasing pace and complexity of social, cultural, legal, demographic, and educational changes,
- the symptoms of dysfunction in the workplace, and
- societal trends of the 21st century. The internal environment includes factors that the organization controls. For example, the organization's culture, product development, mission, and strategy are all part of the internal environment. On the other hand, the external environment includes those factors that are outside of the organization's control. The corporate culture represents the organization's value system. The culture identifies peoples' values and assumptions about their willingness to work, their ethics, and the way they should be treated. Culture is often reflected in the company's HR policies and practices. Technology generally refers to the equipment and knowledge used to produce goods and services. As technology use has increased, organizational structures have become flatter and flatter. A "flat" structure is one that has fewer managers or a smaller management hierarchy. A useful tool to assess a firm's internal capacities along with forces in the external environment is the SWOT analysis. (strengths, weaknesses, opportunities, and threats.) sometimes referred to as strategic assessment tools and are commonly used to establish a level of understanding needed for a successful plan. Conducting an environmental scan involves collecting external and internal information to assist the organization in focusing on the appropriate short- and long-term goals. environmental scan and a SWOT analysis can help confirm or refute common perceptions about where a company stands in relation to its competitors
HR generalists usually provide guidance, support management, and serve as a source of help and information on human resource matters. In small firms, HR generalists are often responsible for all human resource management functions within the organization. Additionally, HR generalists often:
- administer various human resource plans for the firm,
- participate in developing goals and objectives for the department,
- administer compensation programs,
- perform benefits administration,
- develop and maintain affirmative action programs,
- conduct recruitment efforts,
- handle employee relations,
- participate in administrative staff meetings,
- assist in the evaluation of reports and decisions,
- maintain human resource information system records,
- ensure compliance with federal and state regulations.
- Training and Development : As will be discussed later in the course, training and development includes activities that attempt to improve an employee's current or future performance by increasing his or her ability to perform. The success of any training can be gauged by the amount of learning that occurs and is transferred to the job. HR generalists must be actively engaged in improving and increasing training and development within the firm.
- Compensation and Benefits : Compensation is concerned with creating programs that attract and retain qualified job applicants, including those individuals who are most likely to help the organization achieve its strategic
goals and objectives. HR generalists must be familiar with the various forms of compensation and understand the importance of employee benefits. Furthermore, HR generalists must be able to evaluate and improve current compensation and benefit programs within the firm.
- Employee and Labor Relations : HR generalists should understand labor relations systems as well as the various complex union-management relationships that exist in many firms. Furthermore, HR generalists should have a solid understanding of the labor relationship system and how it is influenced by economic, political, legal, and social pressures.
- Recruiting and Selecting Employees : Recruiting and selecting employees is one of the most important areas of HR. Without successful recruitment and selection, the firm will be unable to reach its strategic goals. As such, HR professionals must understand how to recruit and obtain sufficient numbers of highly qualified applicants and then set up processes to ensure that the organization selects the most appropriate people to fill organizational jobs.
- Health Safety and Security : Because employees have the right to work in a safe environment, HR generalists should understand how to minimize safety risks. Even when the nature of the work is dangerous, employees should be aware of the associated risks. Employees, managers, and HR professionals should work together to minimize accidents. HR specialists are responsible for specific human resource management functions within the organization. For example, HR specialists may concentrate in employment and recruiting, labor and employee relations, training and development, job analysis, compensation and benefits, or other specialty areas. Specialists are far more common in large organizations than in small organizations The HR managers should be at the top of the hierarchy.
or adversely affect his or her status as an employee because of their race, color, religion, sex, or national origin.
- Equal Pay Act of 1963 (EPA) , which protects men and women who perform substantially equal work in the same establishment from sex-based wage discrimination.
- Age Discrimination in Employment Act of 1967 (ADEA) , which protects individuals who are 40 years of age or older from employment discrimination based on their age.
- Americans with Disabilities Act of 1990 (ADA) , Title I and Title V, and its 2008 Amendments (ADAAA), which prohibit disability discrimination in the private sector.
- Rehabilitation Act of 1973 , Sections 501 and 505, which prohibit discrimination against a qualified individual with a disability in the federal government.
- Civil Rights Act of 1991 , which allows for compensatory and punitive damages for violations of Title VII.
- Uniformed Services Employment and Re-Employment Rights Act (USERRA) , which protects military personnel from employment discrimination.
- Genetic Information Nondiscrimination Act of 2008 (GINA) , which prohibits the use of genetic information in employment decisions. In 1978, Congress enacted an amendment to Title VII, known as the Pregnancy Discrimination Act (PDA). The PDA prohibits employment discrimination on the basis of pregnancy, childbirth, or related medical conditions. Under the PDA, women who are
pregnant or affected by pregnancy-related conditions must be treated in the same manner as other applicants or employees “similar in their ability or inability to work. In 1963, a year before the passage of Title VII, the Equal Pay Act (EPA) was enacted to require employers to pay women and men equally for the same work Age discrimination is the unfair treatment of someone based on age Age Discrimination in Employment Act of 1967 (ADEA). The stated purpose of ADEA was to protect workers from 40 to 65. Eventually, however, the upper age limit was eliminated altogether. The Age Discrimination in Employment Act applies to public and private employers, and to unions with more than 20 employees.
Types of Mandatory Retirement Allowed
- Public safety officers such as firefighters and police department employees;
- Bona fide occupational qualification ( BFOQ ). The BFOQ exception is narrow and requires a company to demonstrate that the age limit is necessary to the essence of the business operation. For example, a company hiring an actor to play the role of a teenager would have a BFOQ for specifying an age range in the job posting;
- Company executives in a "bona fide executive or high policymaking position." This applies to a small number of corporate executives who have carried substantial discretionary authority for at least two years and will have pension benefits of at least $44,000 per year. Employers of these persons may, in certain circumstances, establish a mandatory retirement age. Older Workers Benefit Protection Act of 1990 (OWBPA). Under OWBPA provisions, employers may offer retirement incentives to older workers as long as the terms and restrictions of the incentives are fully explained, and assurances are given that another
group, or 3) associates with a person from that group. For example, Bob, a dark-haired employee from Boise, Idaho, may be the victim of nation of origin discrimination if his employer discriminates against him because the employer believes Bob is from the Middle East. The ADA's definition of a disability includes the following:
- a physical or mental impairment that substantially limits one or more major life activities;
- a record of such impairment; or
- being perceived as having such an impairment. reasonable accommodation Any change to a job, the work environment, or the way things are customarily done that enables a person with a disability to enjoy equal employment opportunities. Under the ADA, if an employer is considering two equally qualified applicants for a job, one disabled and the other not, the employer will have violated the ADA if he chooses not to hire the disabled person because of the disability or because of the requirement that an accommodation be made. Affirmative action (AA) is any action taken by an employer to overcome discriminatory effects of past or current practices or policies that create barriers to equal employment opportunity. While Title VII also applies to federal government contractors, AA provides for sanctions and enforcement by way of administrative action; Title VII does not. For example, without having to file lawsuits, the federal government may suspend or cancel contracts with non-complying contractors and/or forbid them from bidding on future government contracts. An AA plan is a government contractor's formal plan for establishing employment placement goals and time tables for hiring more women and minorities. The Code of Federal Regulations governing the issue states:
In 1969, President Nixon authorized the implementation of the Philadelphia Plan. The Plan, for the first time, required contractors to establish specific goals and timetables for correcting imbalances in employment practices. Later, in 1965, President Johnson issued Executive Order 11246, which required that contractors and their subcontractors doing business with the federal government have a nondiscrimination clause in contracts and abide by its terms Subsequently, in 1961, President Kennedy introduced the term "affirmative action" (AA) for the concept of redressing the effects of persistent discriminatory employment practices. Specifically, Kennedy signed Executive Order 10925, which mandated that managers of federally-funded projects "take affirmative action" to eliminate bias in employment practices. On June 25, 1941, President Franklin D. Roosevelt issued Executive Order 8802, which declared full participation in national defense programs by all U.S. citizens, regardless of race, creed, color, or national origin. Human resource planning, also known as HR planning or HRP, is one of the first steps in creating an effective human resource management program. HRP involves forecasting the human resource needs of the organization and planning steps to meet those needs. The purpose of human resource planning is to:
- Reduce costs by helping management anticipate shortages or surpluses of human resources and correct imbalances before they become unmanageable and expensive.
- Provide a better basis for planning employee development, making optimum use of workers' strengths.
- Improve the overall business-planning process.
- Provide more opportunities for women and minority groups in the future growth and strategic plans of the organization.
- What are the competition's organizational strengths? How does our organization compare?
- What are the top two areas of focus we must address to reach our goals in the next 8 to 12 months?
- What are the four to six core competencies we must attain to capture our markets?
- What is required to know before executing the organization's strategy?
- What types of talents and positions will be required, and which ones will no longer be needed?
- What talents should we foster internally, and which should we acquire externally? Human resource planning typically includes four phases:
- Gathering, analyzing, and forecasting data to develop an HR supply and demand forecast
- Establishing HR objectives and policies and gaining approval and support for them from top management
- Designing and implementing plans and action programs in such areas as recruitment, training, and promotion, that will enable the organization to achieve its HR objectives
- Controlling and evaluating HRM plans and programs to facilitate progress toward HR objectives The first phase of HR planning involves developing data through efficient analysis, which can be used to determine corporate objectives, policies and plans, as well as other HR objectives and policies. HR analysis begins with taking inventory of both the current workforce and the jobs within the organization. Forecast results can be given in approximations, rather than in absolutes or certainties. The quality of the forecast depends on the accuracy of information and the predictability of events.
Two common forecasting techniques are used to project the organization's demand for human resources: judgmental forecasts and conventional statistical projections. Judgmental forecasting is done by experts who assist in preparing the forecasts. The most common method of estimating HR demand is managerial estimates Managerial estimates are typically made by top management, which means they are a top- down approach Delphi Technique. At a Delphi meeting, many experts take turns presenting a forecast statement and assumptions. A related method is the nominal grouping technique (or nominal group technique). In the nominal grouping technique, several people sit around a conference table and independently list their ideas on a sheet of paper. After ten to twenty minutes, they take turns expressing their ideas to the group. The most common statistical projection procedures are simple linear regression and multiple linear regression analyses. In simple linear regression, a projection of future demand is based on a past relationship between the organization's employment level and a variable related to employment, such as sales. For example, if a relationship can be established between the level of sales and the level of employment, predictions of future sales can be used to make predictions of future employment
. An organizational learning curve can usually be determined by logarithmic calculations. Once the learning curve has been determined, a more accurate projection of future employment levels can be established. Multiple linear regression analysis is an extension of simple linear regression analysis. However, in multiple linear regression, instead of relating employment to just one variable, multiple variables are used. For example, instead of using only sales to predict employment demand, productivity and equipment-use data may also be used. Because it incorporates several variables related to employment, multiple linear regression analysis may produce more accurate demand forecasts than simple linear regression analysis.
Demand Judgmental Techniques (^) Managerial Estimates Delphi Technique Nominal Grouping Technique Statistical Techniques (^) Linear Regression Multiple Linear Regression Productivity Ratios Time Series Analysis Stochastic Analysis the purpose of HR planning is to understand the firm's human capital needs (demand) and then determine who is available to fill those needs (supply HR should take an active role in determining the organization's goals, plans, and objectives, and thus determine the links that exist between corporate and HR policies. A link between HR planning and strategy is vital, because it fosters HR strategies that support the firm's business plans Employee characteristics and HR policies vary depending on the organization's strategy. For example, employee characteristics and HR policies will be different if a firm adopts an entrepreneurial strategy instead of a rationalization/maximize-the-profit strategy. In the case of entrepreneurial strategy, the organization needs to adopt HR policies that lead employees to take risks and be innovative. After an assessment of an organization's needs, action programming must be developed to serve those needs action programs may be designed to increase the supply of the right employees in the organization (if forecasts suggest that demand exceeds supply). Alternatively, an action program may be designed to decrease the number of current employees (if a forecast suggests
that supply exceeds demand). We will now review two examples of such programs: attraction and reduction Workable structures serve the objectives of planning and programming, which include attracting, retaining, and motivating employees Redundancy planning-HR planning associated with the process of laying off employees who are no longer needed. Involved in this planning should be outplacement counseling, buy-outs, job skill retraining, and job transfers The final phase in human resource planning includes controlling and evaluating HR plans and programs. Efforts in controlling and evaluating HR plans and programs are essential to the effective management of human resources. The collection of data should occur at the end of each year and at fixed intervals during the year. When possible, evaluations should occur at the same time to hasten revisions of existing forecasts and programs. If used correctly, the revisions should influence short-, intermediate-, and long-term forecasts. Possible criteria and/or standards for evaluating HRP include the following:
- Actual staffing levels vs. established staffing requirements
- Productivity levels vs. established goals
- Actual HRM flow rates vs. desired rates
- Programs implemented vs. action plans
- Program results vs. expected outcomes (examples include improved applicant flows, reduced quit rates, and improved replacement ratios)
- Labor and program costs vs. budget
- Ratios of program results (benefits) to program costs one of the key roadblocks to executing HRP has been the lack of top-management support. Human resource management can help overcome this roadblock with data and bottom-line numbers that demonstrate the impact of HR planning. A second roadblock to HR planning is
