BDS 204 : Human Resource Management

CHAPTER 1

Intro to Human Resource Management

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Topic Outlines

1.1 Definition of Human Resource Management (HRM) 1.2 Why Study HRM 1.3 Core Competencies 1.4 Functions of a HR Manager 1.5 Management 1.6 Functions of Management 1.7 Is HRM Part of Management? 1.8 Authority 1.9 Factors Influencing the Changing HRM 2.0 Measuring HRs Contribution 2.1 An Emphasis on Performance 2.2 HR Metrics 2.3 HR Scorecard 2.4 The High Performance Work System (HPWS) 2.5 The NEW HR Manager 2.6 Need to know Employment Law 2.7 Equal Employment Opportunity (EEO)
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Topic Outlines

2.8 Diversity Management 2.9 Affirmative Action 3.0 Diversity Management versus Affirmative Action

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Chapter Aims

This chapter aims to:

1. 2.
3. 4. 5. 6.

Define human resources management Understand the importance of human resources as a competitive advantage Illustrate the HR management responsibilities of line and staff (HR) managers Provide good examples that illustrate HRs role in formulating and executing company strategy Understand the importance of metrics and measurement to HR managers Explain what is Equal Employment Opportunities, Diversity Management and Affirmative Action Programs

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1.1

Definition of Human Resource Management (HRM)

Process of acquiring, training, appraising and compensating employees, and attending to their labor relations, health and safety and fairness concerns.

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1.2

Why Study HRM

People are the key to building an organizations competitive advantage The knowledge, skills and abilities of its employees are the ingredients of the organizations core competencies.

Knowledge

Abilities

Skills

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1.3

Core Competencies

Core competencies are the integrated knowledge in an organization that distinguish it from its competitors and deliver value to customers Organizations can achieve sustained competitive advantage through people if they are able to meet the following criteria: Resources must be of value Resources must be rare Resources must be difficult to imitate Resources must be organized

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1.4

Functions of a HR Manager

Strategic Partner HR Research Staffing

Functions Employee & Labor Relations HR Development

Safety & Health

Compensation & Benefit

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Staffing

A process where an organization ensures that its existing workforce is sufficient and has the necessary skills to achieve its organizations objectives. Staffing involves job analysis, human resource planning, recruitment and selection. It is vital for an organization to have a workforce that is personorganization fit.

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Human Resource Development

Purpose of the activities under HRD are: developing and motivating employees improving employees productivity and job satisfaction achieve the organizations mission and vision Activities under HRD are: 1. training and development, 2. individual career planning and development activities, 3. organization development and 4. performance appraisal

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Compensation and Benefits

A comprehensive compensation system that provides employees with sufficient and fair rewards Rewards such as pay and benefits

Pay

Benefits - Car

Benefits Medical Insurance

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Safety and Health

Develop a safe and healthy working environment for employees Protect employee from injuries caused by work-related accidents and diseases

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Employee and Labor Relations

When a labor union represents a firms employees, this human resource activity is known as industrial relations. Collective bargaining will be conducted between the Trade Union and employer on issues such as wages, employees benefits and grievance handling.
Trade Union Rep Employers Rep.
That is impossible but we are willing to offer a 4% pay rise

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Human Resource Research

Major source in revising new HRM policies. For instance, research on job safety may identify the causes of certain work-related accidents in the industry. Therefore, HR can take steps to avoid such accidents in the organization.

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Strategic Partner

Participate in formulating strategies by supplying information on the companys external and internal environment. Identify HR practices that would ensure the success of the strategy via selecting and utilizing the right people and leveraging other resource

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1.5

Management

Process of getting things done, efficiently and effectively, through and with other people. Efficiency means doing things right at the minimum cost Effectiveness means doing the right thing.

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1.6

Functions of Management

Planning: Define goals, establish strategies and develop plans to implement the strategies and achieve the goals Organizing: Determine the tasks, who does them, how they are done, and responsibilities for decisions and follow-up Leading: Motivate employees, direct the activities of others, select the most effective communication channels, or resolve conflicts among group members Controlling: Monitor and compare performance with goals and address performance shortfalls.

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1.7

Is HRM Part of Management?

Management

HRM Functions

Planning

Human Resource Research; Strategic Partner; HR Development

Organization structure; HR related manuals, job analysis Employee and labor relations, line manager, compensation & benefits Monitor HR strategies, policies and practices on a regular basis

Organizing

Leading

Controlling

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1.8

Authority

Authority is the right to decide, give orders and direct the work of others Two types of authority i.e. Line authority is given to line managers who direct the work of the subordinates in order to achieve the organizations basic goals Staff authority refers to the authority given to staff managers to assist and advise line managers in accomplishing the organizations basic goals

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Are All Managers Also HR Managers?

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Answer: Yes

The HRM responsibilities of line managers are as follows: Placing the right person on the right job Starting new employees in the organization (orientation) Training employees for jobs that are new to them Improving the job performance of each person Gaining creative cooperation and developing smooth working relationships Interpreting the companys policies and procedures Controlling labor costs Developing the abilities of each person Creating and maintaining department morale Protecting employees health and physical condition
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1.9

Factors Influencing the Changing HRM

Globalization Technological Advances Outsourcing Jobs Nature of Work Workplace Demographics

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Globalization

Definition: Firms expanding their sakes, ownership or operations to new markets in other countries Effect on HR: Employees need to increase their productivity and efficiency. As such, organizations would need to provide training and development

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Technological Advances

The rapid technology advancement has reduced the demand of unskilled jobs and increased the demand for jobs that require considerable skill. Effect on HR : Employees require retraining in order to handle their new responsibilities and role.

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Outsourcing Jobs

Intense competition and the pursuit of lower costs and higher efficiency have prompted more employers to outsource their jobs abroad. Effect on HR: The HR Department needs to understand the culture of other countries and develop compensation, staffing and selection and training policies to meet the requirements of each country.

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Nature of Work

Among the changes to the nature of work due to the ever-changing technology are as follows: An increase in knowledge-intensive high tech manufacturing industries An increase shift of manufacturing jobs to low-wage countries An increase in integrated supply chains An increase demand in skilled workers in manufacturing jobs A shift towards part-time workers, independent contractors, flexi hours working arrangements and job sharing arrangements

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 Effect on HR : There is a high need for knowledge workers and human capital. Human capital refers to the knowledge, education, training, skills and expertise of a firms workers. This means continuous training and development as well as career planning for employees.

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Workforce Demographics

The workforce demographics in Malaysia is becoming more diverse today as more women and foreign workers enter the workforce. Effect on HR: The HR Department needs to be aware of the different needs of their different employees. They need to be aware of the latest policy in recruiting foreign workers and provide some family-friendly benefits

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2.0

Measuring HRs Contribution

Strategy The companys long-term plan for how it will balance its internal strengths and weakness with its external opportunities and threats to maintain a competitive advantage

Peo ple

Perf or ma nce

Stra teg y

Point A

Point B

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 HR mangers today are more involved in partnering with their top managers in both designing and implementing their companies strategies Top management wants to see, precisely, how the HR managers plans will make the company more valuable

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2.1

An Emphasis on Performance

Need to increase productivity HR manager needs to adapt their HR systems to: suit the organizations strategic needs manage these changes effectively

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2.2

HR Metrics

A set of quantitative HR performance measures Examples include: Workers compensation cost per employee, turnover rate, turnover costs, etc. Top management expects more forward-looking information such as How will the new incentive compensation plan assist the organization in improving the profitability of the organization?.
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2.3

HR Scorecard

The HR Scorecard measures the HR functions effectiveness and efficiency in producing employee behaviors needed to achieve the organizations strategic goals.

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 The HR Scorecards answers two questions: Do HR policies and practices create value to an organization? Does it help the organization in achieving its objectives?

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 Service levels and process measures such as cost per recruit, number of learning plans implemented and number of projects completed are used to measure employees performance. These measures will be used to gauge and measure their employees more effectively.

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2.4

The High Performance Work System (HPWS)

Its main purpose is to maximize the competencies and abilities of all employees in the organization, thus, achieving the following: Generate more job applicants Employee screening is more effective Better training Linking pay more explicitly to performance Safer and healthier working environment

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2.5

The NEW HR Manager

The HR manager today needs to be proficient in the following areas: Leadership Proficiencies Learning Proficiencies HR Proficiencies Business Proficiencies

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2.6

Need to know Employment Law

Types of HR-related Law in Malaysia are as follows: Employment Act 1955 Industrial Relations Act 1967 Trade Unions Act 1959 Occupational Health and Safety Act 1994 Immigration Act Employees Provident Fund Act 1991 Human Resources Development Act 1992 Ethics Law such as Sarbanes-Oxley Act 2003

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2.7

Equal Employment Opportunity (EEO)

Equal employment opportunity (EEO) refers to the fair and nonbiased treatment of individuals in all aspect of employment regardless of age, gender, colour, national origin and race. This means practicing workplace rules, policies, practices and behaviors that do not discriminate people.

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2.8

Diversity Management

Diversity management focuses on managing the difference within an organizations workforce, capitalizing on the benefits of diversity and minimizing on workplace challenges.

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Organizational activities that would ensure the success of these programs:

Provide Strong Leadership Assess the Situation Provide Diversity Training and Education to Employees Change Culture and Management Systems. Evaluate the Diversity Management Program

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2.9

Affirmative Action

Affirmative action aims at eliminating the current effects of past discrimination by hiring and promoting the minority group Steps taken by employers are: Issue a written EEO policy and a statement indicating the employers commitment to affirmative action Appoint a top official to direct and implement the program

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 Publicize the policy and affirmative action commitment Conduct a survey on the present minority and female employees to determine their suitability for promotion Establish goals and timetables to improve the utilization of minorities, males and females in each identified area Develop and implement specific programs to achieve these goals Develop an internal audit and reporting system for monitoring and evaluating the progress of the programs Build support for the program both internally and externally

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3.0

Diversity Management versus Affirmative Action

Diversity Management Voluntary Focuses on productivity, efficiency and quality Includes all elements of diversity

Affirmative Action Mandatory Focuses on legal, social and moral justifications Includes only race, gender and ethnicity
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Diversity Management versus Affirmative Action

Diversity Management

Affirmative Action Emphasizes changing the mix of people Offers a perception of preference Short-term and limited Is grounded in assimilation

Emphasizes changing systems and operation Offers a perception of equity

Long-term and ongoing Is grounded in individuality

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