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Chapter 1
Changing Nature of Human Resource Management
CHAPTER OBJECTIVES
1. Identify four major challenges currently facing organizations and managers.
2. List and define each of the seven major categories of HR activities.
3. Identify the three different roles of HR management.
4. Discuss the three dimensions associated with HR management being a strategic contributor.
5. Explain why HR professionals and operating managers must view HR management as an
interface.
6. Discuss why ethical issues and professionalism affect HR management.
SUMMARY OF THE CHAPTER
Human resource (HR) management deals with the design of formal systems in an organization
to ensure the effective and efficient use of human talent to accomplish organizational goals. The
management of human resources means that they must be recruited, compensated, trained, and
developed.
Todays HR management faces challenge and change across a wide range of issues. The most
commonly recognized challenges include:
Organizational restructuring
A major economic change involves the shift of jobs from manufacturing and agriculture to
service industries and telecommunications. Pressures from global competitors has had significant
impact on U.S. employers. Finally, the explosive growth of information technology, particularly
the influence of the Internet on business and in our personal lives, has forced many changes in the
business community.
Todays significant workforce shortages have created new pressures on HR professionals to
effectively recruit and train workers. Employers are often unable to find enough qualified workers
for the growing number of knowledge jobs. Educational systems, especially those serving
minorities, fail many times to meet the basic literacy and mathematical skills needs of todays
workforce. To meet this challenge, HR management must actively partner with public school
systems, more accurately assess current and future knowledge and skills requirements, ensure
training opportunities are available for all employees, not just managers and professionals, and
increase the use of technology and other individualized training methods.
Contingent workers are a major part of todays workforce. This new reliance on contingent
workers, i.e., temporary workers, independent contractors, lease employees, and part-timers,
significantly changes the way human resources are managed.
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Employees today are more diverse than ever. Women are in the workforce in much greater
numbers. The average age of the workforce is considerable older than before and the racial/ethnic
mix is undergoing rapid change. Asian and Hispanic workers are increasing in greater numbers
than African-Americans and all of the so-called minority workers are increasing in greater
numbers than whites.
All of these changes create new pressures on HR professionals to ensure that diverse groups
are managed and treated equitably in organizations. Diversity training has become an essential part
of an organizations training efforts rather than the nice to have category it once had. All of the
classic HR functions now need realignment in order to effectively respond to changing workforce
needs. Other workforce changes include the aging of the workforce, balancing work and family,
and redefining the traditional family.
Organizational restructuring include issues such as downsizing, rightsizing, mergers,
reengineering, and job redesign. The dichotomy of todays workforce is seen in the fact whereas
many large firms have cut jobs and reduced their workforces, many smaller firms have continued
to create jobs. This environment creates a new HR challenge much discussed in todays media:
how to deal with the human consequences of change.
The central focus of HR management is enhancing organizational performance through
activities focusing on productivity, service, and quality. The productivity of human resources in an
organization is affected significantly by management efforts, programs, and systems. The quality
of products and services also affects an organizations long-term success and because people
produce an organizations products and services, HR management considerations must be
included when identifying service blockages and operational processes.
HR management consists of several groups of interlinked activities which are:
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*2
Staffing
*3
HR Development
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Additionally, external environmental forces such as legal, political, economic, social, cultural,
and technological also are important.
HR management is undergoing transition because organizations themselves are changing.
Even terminology is changing. Personnel has, for the most part, become human resources
management. Traditionally, HR has been viewed as the employee advocate in organizations
with little understanding of the organizations business realities.
In fact, HR plays a valuable role as the champion for employees and employee issues. HR
professionals spend considerable time on HR crisis management dealing with both work and
non-work related employee problems. An important facet of employee advocacy is the assurance
of fair and equitable treatment regardless of a persons background or circumstances. Absent this
perspective, organizations would face even more lawsuits and regulatory problems than they do
now.
HR management has three roles in an organization: administrative, operational, and strategic.
The administrative role focuses heavily on processing and record keeping. While this role must be
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performed efficiently, it sometimes leads to the conclusion that HR is simply a paper shuffler.
HRs operational activities are tactical in nature. They address compliance requirements,
interviewing and selection, training, safety, and wage and salary administration among other
things. HR professionals typically must be able to design and implement operational policies and
programs in an organization.
Organizational human resources have grown as a strategic emphasis because the effective use
of people in an organization can provide a competitive advantage, both domestically and abroad.
HRs strategic role emphasizes people as valuable resources representing significant organizational
investments. It focuses on the longer-term implications of HR issues.
One of the most important shifts in the past few years has been the recognition of HR as a
strategic business partner. This role has several facets including enhancing organizational
performance, involvement in strategic planning, decision making on mergers, acquisitions, and
downsizing, organizational redesign, and financial accountability for HR results. To be strategic
contributors, HR professionals must measure what their activities produce as organizational
results, specifically as a return on its HR investments.
Another goal for those focusing on HR management, as well as operating executives and
managers, is to enhance the human capital of the organization, that is, the total value of human
resources to an organization. HRs role is to ensure that all people, regardless of their
circumstances or backgrounds, are provided opportunities to develop their capabilities.
As a strategic business partner, HR is responsible to ensure an adequate supply of people with
the capabilities needed to fill organizational jobs. As skills shortages increase, the ability to attract
people with the requisite skills to the organization requires more creative planning. Also, HR
activities in organizations must be revised in order to retain employees. These activities include
developing existing human resource capabilities, identifying and rewarding performance,
delivering cost-effective compliance systems, ensuring legal compliance, and demonstrating
administrative efficiency.
HR management, as a specialized function, began its formal emergence in organizations
shortly before 1900. As organizations grew, functions such as purchasing and personnel began to
be performed by specialists. The passage of several major labor laws in the 1930s led to the
growth of labor unions which expanded the responsibilities of the personnel function in many
organizations. During the 1940s and 1950s, personnels s staff functions continued to increase.
Between the 1960s and the 1980s, increased social legislation forced dramatic changes in HR.
Organizational restructuring and benefits cost containment issues had a profound effect on HR. in
the 1990s, the change is toward increased strategic roles for HR. Economic pressures, skilled
labor shortages, and other complex HR challenges lie ahead.
Cooperation between people who specialize in HR management and other managers is critical
to organizational success. This cooperation requires contact, or interface, between the two
groups. HR management is a concern of both the managers and the HR unit in an organization.
As an organization grows, so does the need for a separate HR department. In a growing
number of organizations, some specialty HR activities are being contracted to outside providers
and consultants.
Ethical issues in HR management have proliferated, and must be faced in all types and sizes of
organizations. Ethical issues are ones that pose fundamental questions about fairness, justice,
truthfulness, and social responsibility.
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The effective management of human resources requires professionals. There are several levels
of HR jobs ranging from executive to clerical in nature. Preparation for a career in HR includes
broad and specialized education, experience, professional involvement, and certification.
CHAPTER OUTLINE
Learning Objectives
HR Transitions: HR Management Contributes to Organizational Success
HR MANAGEMENT CHALLENGES
Economic and Technological Change
Occupational Shifts
Global Competition
Workforce Availability and Quality
Workforce Quality Deficit
Growth in Contingent Workforce
Demographics and Diversity
Racial/Ethnic Diversity
Aging of the Workforce
Balancing Work and Family
Organizational Restructuring
HR MANAGEMENT ACTIVITIES
HR Planning and Analysis
Equal Employment Opportunity
Staffing
HR Development
Compensation and Benefits
Health, Safety, and Security
Employee and Labor/Management Relations
HR MANAGEMENT IN TRANSITION
HR as Employee Advocate
Administrative Role of HR Management
Operational Role of HR Management
Strategic Role of HR Management
HR MANAGEMENT AS STRATEGIC BUSINESS CONTRIBUTOR
Enhancing Organizational Performance
Involvement in Strategic Planning
Decision-Making on Mergers, Acquisitions, and Downsizing
Redesigning Organizations and Work Processes
Ensuring Financial Accountability for HR Results
Expanding Human Capital
Attracting and Retaining Human Resources
HR Perspective: Workforce AvailabilityTight Now and Getting Worse
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d.
e.
f.
g.
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Outsourcing
Compensation
Strategic role
Human Resource Management
k. Downsizing
l. Human capital
m. Ethics
1. Managers attempt to anticipate forces that will impact the future supply of and demand for
employees.
2. The design of formal systems to ensure the effective and efficient use of human talent to
accomplish organizational goals.
3. Areas of contact between the HR unit and managers within the organization.
4. Rewards people for performing organizational work through pay, incentives, and benefits.
5. The total value of organizational human resources.
6. The fundamental rethinking and redesign or work to improve cost, service, and speed.
7. An HR practitioner with responsibility for performing a variety of activities.
8. An HR practitioner with in-depth knowledge and expertise in a limited area.
9. Emphasizes that the people in an organization are valuable resources representing a significant
investment of organizational efforts.
10. Activities that are tactical in nature.
11. A strategy to reduce costs, most often through a reduction in payroll.
12. Deals with what ought to be done.
13. Contracting with another organization to provide operations that were previously handled
internally.
True/False Questions
1. The strategic role of HR management emphasizes that the people in an organization are
valuable resources representing significant organizational investments.
2. Ways to prepare for a career in HR include higher education, experience, professional
involvement, and certification.
3. Staffing emphasizes the recruitment and selection of the human resources for an organization.
4. Unit labor costs have risen dramatically since the advent of downsizing.
5. Concern about employee rights and privacy protection must be incorporated into HR policies
and practices.
6. Ethics is not a major concern for HR Managers.
7. Cost savings associated with outsourcing often are over estimated.
8. Equal employment compliance affects all HR activities.
9. HR specialists are more often found in small organizations.
10. Outplacement is a concept whereby small organizations contract out their HR activities to a
firm of consultants.
11. Enlightened managers do not regard employees as human resources because this would
dehumanize people.
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12. HRs responsibility for ensuring legal compliance includes the area of health benefit portability.
13. Increased legal requirements and constraints have had very little impact on HR departments.
14. Liking to work with people is a major qualification necessary for success in HR.
15. Human resource management is often seen as concerned only with administrative activities.
16. HR management is a concern of both the managers and the HR unit in an organization.
Matching
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h
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i
11. k
True/False
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T
6.
F
11. F
16. T
2.
7.
12.
g
j
m
3.
8.
13.
b
c
d
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e
f
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a
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T
T
T
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8.
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F
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F
F
F
5.
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15.
T
F
T
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2. A point of contact on HR activities between the HR unit and the managers within the
organization is a(n)
a. dualism.
b. definition of personnel management.
c. interface.
d. idea.
3. _____ deals with the design of formal systems to ensure the effective and efficient use of
human talent to accomplish organizational goals.
a. Employee relations
b. Personnel management
c. Human resource management
d. Organizational development
e. Labor relations
4. _____ is the fundamental rethinking and redesign of work processes to improve cost, service,
and speed.
a. Downsizing
b. Outsourcing
c. Restructuring
d. Reengineering
e. Outplacement
5. A person responsible to perform a variety of HR activities is considered a(n)
a. personnel manager.
b. HR specialist.
c. personnel consultant.
d. HR generalist.
e. human relations specialist.
6. HR management began its growth as a specialized function in organizations about
a. 1900.
b. 1920.
c. 1940.
d. 1960.
e. 1980.
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17. _____ are (is) the foundation for the staffing function.
a. Job specifications
b. Job descriptions
c. Orientation
d. Recruiting
e. Job analysis
18. The HR professionals legal compliance responsibilities do NOT include
a. sexual harassment prevention.
b. safety and health management.
c. pension compliance reporting.
d. new employee orientation.
e. union contract grievances.
19. Attracting and retaining human resources is an application of HRs _____ role.
a. administrative
b. strategic
c. operational
d. functional
e. business
20. HRs training and development responsibilities begin with
a. job-skill training.
b. employee development.
c. retraining.
d. orientation
e. counseling
21. The traditional family represent only _____ or less of todays U.S. households.
a. 50%
b. 40%
c. 30%
d. 20%
e. 10%
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22. It is projected that by 2020, about _____ of the U.S. population will be 65 or older.
a. 10%
b. 20%
c. 30%
d. 40%
e. 50%
23. _____ is the total value of human resources to the organization.
a. Human capital
b. Human resources
c. Labor relations
d. Employee relations
e. None of the above
24. The responsibility for the effective use of human resources is integral to
a. the HR manager.
b. all managers
c. HR consultants.
d. staffing specialists.
e. none of the above.
25. According to your text, the HR function least likely to be outsourced is
a. pension administration.
b. pre-employment testing.
c. recruiting.
d. background/reference checks.
e. training and development.
26. According to Human Resources for the Next Century, the traditional HR function of _____
will shift to _____ as an emerging practice.
a. strategic, administrative
b. proactive, reactive
c. people as investments, people as expenses
d. production focus, service focus
e. none of the above
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3. Distinguish between HR managements operational and strategic roles. Why are they both
important in todays organizations?
4. Define the interface concept, and explain its use as it applies to HR management.
5. List and describe the seven HR management activities. Discuss how these activities may be
performed differently in settings other than large private-sector organizations.
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ANSWER KEY
Matching
1.
h
6.
i
11. k
True/False
1.
T
6.
F
11. F
16. T
2.
7.
12.
g
j
m
3.
8.
13.
b
c
d
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e
f
5.
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l
a
2.
7.
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T
T
T
3.
8.
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T
T
F
4.
9.
14.
F
F
F
5.
10.
15.
T
F
T
Idea Completion
1. administrative; operational; strategic
2. operating managers; HR unit.
3. code of ethics; training programs
4. HR planning and analysis; equal employment opportunity; staffing; HR development;
compensation and benefits; health, safety, and security; employee and labor/management
relations
5. contract workers; consultants; temporary workers
Multiple Choice
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