Kramar5e ch18

CHAPTER 18
EVALUATING AND
IMPROVING THE HUMAN
RESOURCE FUNCTION
Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd; Kramar, Bartram, De Cieri, Noe, Hollenbeck, Gerhart,
Wright, Human Resource Management: Strategy, People, Performance, 5e 18-1
Learning objectives
LO 18.1 Understand the reasons why
many companies are trying to measure
HR
LO 18.2 Explain the approaches to
evaluating the effectiveness of HR
practices
LO 18.3 Discuss the issues related to
measuring and evaluating the HR
function
continued
Learning objectives
LO 18.4 Discuss how outsourcing HR
activities may improve service delivery
efficiency and effectiveness
LO 18.5 Relate how process re-
engineering is used to review and
redesign HR practices
LO 18.6 Consider future directions for the
HR function
Key definitions
• Corporate governance: how decisions
are made about the deployment of an
organisation’s resources and the
resolution of conflicts among its
stakeholders
continued
Key definitions
• Corporate social responsibility or
corporate sustainability: the
continuing, voluntary commitment by
companies to establish and maintain a
systematic approach to the
management of environmental, social,
economic and governance issues
continued
Key definitions
• Triple bottom line: the combination of
economic, social and environmental
performance indicators for an
organisation
Sustainability report
• A company report presenting
information on the economic,
environmental and social dimensions of
its activities, products and services
• Synonymous with social report,
citizenship report, triple bottom line
report, corporate social responsibility
report
Measuring corporate
sustainability
– Negative screening:
 companies are assessed as non-
‘socially responsible investments’
(SRIs) for a variety of reasons,
including their environmental
records, their products or their
company policies
continued
Measuring corporate sustainability
– Positive screening:
 companies are judged SRIs based
on factors such as a good
environmental or social record
– Best-of-sector approach:
 making investments by selecting
the ‘least-worst’ performer in that
industry
Categories of HR activities
• Transactional activities:
– day-to-day transactions such as pay
administration, maintaining human
resource information systems and
employee services
• Traditional activities:
– include performance management,
learning, recruiting, selection,
compensation and industrial relations
continued
Categories of HR activities
• Transformational activities:
– include knowledge management,
management development, cultural
change, and strategic redirection and
renewal
Approaches for evaluating HR
effectiveness
• Audit approach:
– involves a review of customer
satisfaction or key indicators (e.g.
turnover rate, average days to fill a
position) related to an HR activity (e.g.
staffing)
• Analytic approach:
– involves determining the impact of, or
the financial costs and benefits of, a
program or practice continued
Improving HR effectiveness
through process redesign
• Re-engineering:
– review and redesign of work processes to
make them more efficient and improve
the quality of the end product or service
• Involves four steps:
– identify the process to be re-engineered
– understand the process
– redesign the process
– implement the new process
Summary
• The roles required of the HR function
have changed as people have become
recognised as a true source of
competitive advantage
• Strategic management of the HR
function will determine whether HR will
transform itself into a true strategic
partner or simply disappear
continued
Summary
• The HR function must deliver
transactional, traditional and
transformational services and activities
to the firm, and it must be both efficient
and effective
• Restructuring, re-engineering and
outsourcing may be appropriate in
some circumstances, but require
careful planning, attention to detail in
implementation and ongoing evaluation
continued
Summary
• Multiple performance outcomes for the
HR function should be considered,
including financial terms and social
terms
• New technology has allowed
companies to find more effective, not
simply more efficient, ways of operating
to improve productivity

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CHAPTER 18

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