Human Capital Chapter 1 STRATEGIC HUMAN RESOURCE MANAGEMENT: AN OVERVIEW Human Capital - ch.1 - wam 1-1

Learning Objectives Describe employer branding and define human resource management. Identify the human resource management functions. Identify the external environmental factors that affect human resource management and describe the trend for increased mobility of tasks performed by HR professionals. Explain why corporate culture is a major internal environmental factor. Explain who performs human resource management tasks. 1-2 Human Capital - ch.1 - wam

Learning Objectives (Cont.) Describe how human resource management activities may be different for small businesses. Describe the various human resource classifications including executives, generalists, and specialists. Describe the evolution of human resource management and explain the evolving HR organization. Describe the professionalization of human resource management. Explain the possible hurdles of managing human resources across different cultures. 1-3 Human Capital - ch.1 - wam

Corporate Culture Corporate culture: System of shared values, beliefs, and habits within an organization that interacts with the formal structure to produce behavioral norms Throughout the text, the importance of various topics related to corporate culture will be described beginning with Employer Branding 1-4 Human Capital - ch.1 - wam

HRM in Action: Corporate Culture and Employer Branding Employer branding: Firm’s corporate image or culture created to attract and retain the type of employees the firm is seeking Companies want a brand that will entice individuals to join and remain with the firm 1-5 Human Capital - ch.1 - wam

Human Resource Management (HRM) Utilization of individuals to achieve organizational objectives Concern of all managers at every level Face a multitude of challenges 1-6 Human Capital - ch.1 - wam

HRM Functions Human Resource Management Human Resource Development Compensation Staffing Employee and Labor Relations Safety and Health Human Capital - ch.1 - wam

1-8 Staffing Process of ensuring the organization always has: Required number of employees Employees with appropriate skills Employees in the right jobs at the right time Constant job analysis, human resource planning, recruitment, and selection Human Capital - ch.1 - wam

1-9 Job Analysis Systematic process of determining skills, duties, and knowledge required for performing jobs in an organization Impacts virtually every aspect of HRM Human Capital - ch.1 - wam

1-10 Human Resource Planning Matching internal and external supply of people with anticipated job openings over a specified period of time Sets the stage for recruitment and other HR actions Human Capital - ch.1 - wam

Recruitment and Selection Recruitment: Attracting individuals to apply for jobs Must be timely Applicants need appropriate qualifications Need sufficient number of applicants Selection: Choosing individual best suited for a particular position and the organization 1-11 Human Capital - ch.1 - wam

Human Resource Development Major HRM functions include: –Training –Development –Career planning –Career development –Organization development –Performance management –Performance appraisal 1-12 Human Capital - ch.1 - wam

Training and Development Training: Providing learners with knowledge and skills needed for their present jobs Development: Offering learning that goes beyond present job Long-term focus 1-13 Human Capital - ch.1 - wam

Career Planning and Development Career planning: Ongoing process. Individual sets career goals Identifies means to achieve them Career development: Formal approach used by the organization. Ensures a pipeline of people with proper qualifications and experiences 1-14 Human Capital - ch.1 - wam

1-15 Organization Development Planned and systematic attempt to: –Make the organization more effective –Create positive behavioral environment Human Capital - ch.1 - wam

Performance Management Goal-oriented process to ensure organizational processes are in place to maximize productivity Applies to employees, teams, and ultimately, the organization 1-16 Human Capital - ch.1 - wam

1-17 Performance Appraisal Formal system of review and evaluation –Individual –Team Human Capital - ch.1 - wam

1-18 Compensation All rewards that individuals receive as a result of their employment Human Capital - ch.1 - wam

1-19 Financial Compensation Direct: Pay employee receives in form of wages, salaries, bonuses, or commissions Indirect: Benefits employee receives Paid vacations, sick leave, holidays, medical insurance Human Capital - ch.1 - wam

1-20 Nonfinancial Compensation Satisfaction that employees receive from: –Job itself –Psychological and/or physical environment Human Capital - ch.1 - wam

1-21 Safety and Health Safety: Protecting employees from injuries caused by work-related accidents Health: Employees' freedom from illness and their general physical and mental well-being Human Capital - ch.1 - wam

Labor Unions and Collective Bargaining Businesses are required by law to recognize a union and bargain with it in good faith if firm’s employees want a union to represent them Human resource activity with a union is often referred to as industrial relations 1-22

1-23 Internal Employee Relations HRM activities associated with the movement of employees within the organization. Examples: –Promotions –Demotions –Terminations –Resignations Human Capital - ch.1 - wam

1-24 Interrelationships of HRM Functions All HRM functions are interrelated so that each function affects the others Human Capital - ch.1 - wam

1-25 Environment of Human Resource Management Human Capital - ch.1 - wam

1-26 Legal Considerations Federal, state, and local legislation Court decisions Presidential executive orders Human Capital - ch.1 - wam

Labor Market Potential employees located within certain geographic area Always changing 1-27 Human Capital - ch.1 - wam

Society Firm must accomplish its purpose while complying with societal norms Ethics: Deals with what is good and bad, or right and wrong, and with moral duty and obligation Corporate social responsibility: Implied, enforced, or felt obligation of managers to serve or protect interests of groups other than themselves 1-28 Human Capital - ch.1 - wam

1-29 Unions Group of employees who have joined together to collectively bargain with their employer Become a third party when dealing with the company Human Capital - ch.1 - wam

Shareholders Owners of a corporation Have invested money in the firm May at times challenge programs considered by management to be beneficial to organization 1-30 Human Capital - ch.1 - wam

1-31 Competition In product or service and labor markets Firms must maintain a supply of competent employees Bidding war often results Human Capital - ch.1 - wam

1-32 Customers People who actually use firm’s goods and services Employment practices should not antagonize members of the market that the firm serves Workforce should be capable of providing top-quality goods and services Human Capital - ch.1 - wam

Trends & Innovations: Mobile HR - Is the Cloud the Limit? Trend: Increased mobility of tasks performed by HR professionals Mobile applications are available for many HR functions Cloud computing: Means of providing software and data via the Internet 1-33 Human Capital - ch.1 - wam

1-34 HR Technology Rapid technological changes provide: Increased sophistication Ability to design more useful human resource information systems (HRIS) Human Capital - ch.1 - wam

1-35 HRIS An organized approach for obtaining information on which to base HR decisions An umbrella for merging the various subsystems Mainstay HR responsibilities need an HRIS Human Capital - ch.1 - wam

Economy When economy is booming, it is often more difficult to recruit qualified workers In economic downturn, more applicants are typically available 1-36 Human Capital - ch.1 - wam

1-37 Unanticipated Events Unforeseen occurrences in external environment Require a tremendous amount of adjustment with regard to HRM Human Capital - ch.1 - wam

Corporate culture as a Major Internal Environment Factor Gives people a sense of how to behave and what they ought to be doing Topics related to corporate culture are presented throughout this text 1-38 Human Capital - ch.1 - wam

HR’s Changing Role: Questions Can some HR tasks be performed more efficiently by line managers or outside vendors? Can some HR tasks be centralized or eliminated? Can technology perform tasks that were previously done by HR personnel? 1-39 Human Capital - ch.1 - wam

Who Performs Human Resource Management Tasks? Human resource managers HR outsourcing HR shared service centers Professional employer organization (employee leasing) Line managers 1-40 Human Capital - ch.1 - wam

Human Resource Manager Historically, the HR manager was responsible for each of the five HR functions Acts in advisory or staff capacity Works with other managers to help them deal with human resource matters Today, HR departments continue to get smaller 1-41 Human Capital - ch.1 - wam

HR Outsourcing Transfers responsibility to an external provider –Discrete services –Business process outsourcing (BPO) 1-42 Human Capital - ch.1 - wam

1-43 Discrete Services Single set of high-volume repetitive functions is outsourced to a third party Typically transactional HR activities Example: 401(k) administration Human Capital - ch.1 - wam

Business Process Outsourcing (BPO) Majority of HR services are transferred to third party Largest HR outsourcer is IBM Kraft Foods Inc. and IBM signed a multi-year BPO agreement 1-44 Human Capital - ch.1 - wam

Recruitment Process Outsourcing (RPO) As recession slowed and firms began to hire, some companies realized that they had lost their recruiting skills Many had not kept up with the rapidly changing technology RPO companies are stepping in to fill the void in recruitment skills 1-45 Human Capital - ch.1 - wam

HR Shared Service Centers (SSCs) Takes routine, transaction-based activities that are dispersed and consolidates them in one location Provide an alternative to HR outsourcing 1-46 Human Capital - ch.1 - wam

Professional Employer Organization (Employee Leasing) Company that leases employees to other businesses Advantages: –Economies of scale –Greater job mobility for workers –Job security through leasing company –PEO can handle compliance requirements of programs 1-47 Human Capital - ch.1 - wam

1-48 Line Managers Performing HR Tasks Line managers: Individuals directly overseeing the accomplishment of the organization’s primary goals Involved with human resources by nature of their jobs Now performing some duties typically done by HR Human Capital - ch.1 - wam

Human Resource Management in Small Businesses Many college graduates obtain jobs in small businesses Same HR functions must be accomplished Manner in which they are accomplished may be altered 1-49 Human Capital - ch.1 - wam

1-50 Human Resource Executives, Generalists, and Specialists Human Capital - ch.1 - wam

Evolution Of Human Resource Management 1-51 Human Capital - ch.1 - wam

Traditional Human Resource Function in Large Firm Included separate sections Sections were placed under an HR manager Each HR function had a supervisor and staff HR manager worked closely with top management in formulating policy 1-52 Human Capital - ch.1 - wam

The Evolving HR Organization HR outsourcing HR shared service centers Professional employer organization Line manager HR becoming more strategic 1-53 Human Capital - ch.1 - wam

1-54 A Possible Evolving HR Organization Example President and CEO Vice President, Operations Vice President, Strategic Human Resources Vice President, Finance Director of Safety and Health Training & Development (Outsourced) Compensation (Shared Service Centers) Staffing (Line Managers, use of Applicant Tracking Systems) Vice President, Marketing Human Capital - ch.1 - wam

Professionalization of Human Resource Management Profession: A vocation characterized by a: –Common body of knowledge –Procedure for certifying members of profession 1-55 Human Capital - ch.1 - wam

Society for Human Resource Management (SHRM) Largest national professional organization for HR management individuals Basic goals of the society: –Defining, maintaining, and improving standards of excellence in the practice of human resource management –Publishes HRMagazine 1-56 Human Capital - ch.1 - wam

Human Resource Certification Institute (HRCI) Recognizes HR professionals through certification program Offers three certifications for HR professionals: –PHR (Professional in Human Resources) –SPHR (Senior Professional in Human Resources) –GPHR (Global Professional in Human Resources) 1-57 Human Capital - ch.1 - wam

American Society for Training and Development (ASTD) World’s largest association dedicated to workplace learning and performance professionals ASTD Certification Institute has the Certified Professional in Learning and Performance (CPLP) credential 1-58 Human Capital - ch.1 - wam

WorldatWork Focused on compensation, benefits, work–life effectiveness, and integrated total rewards Certification of professionals Strategies to attract, motivate, and retain an engaged and productive workforce Human Capital - ch.1 - wam

A Global Perspective: Country Culture as a Possible Barrier to Global Business Country’s culture: Set of values, symbols, beliefs, languages, and norms that guide human behavior within the country Cultural differences between countries are a major factor influencing global business Cultural misunderstandings are common 1-60 Human Capital - ch.1 - wam