Human Resource Management

1
ELEVENTH EDITION

GARY DESSLER BIJU VARKKEY

Part 1 | Introduction

Chapter 1

Introduction to Human Resource Management

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After studying this chapter, you should be able to:

1. Explain what human resource management is and how it relates to the management process. 2. Give at least eight examples of how all managers can use human resource management concepts and techniques. 3. Illustrate the human resources responsibilities of line and staff (HR) managers. 4. Provide a good example that illustrates HRs role in formulating and executing company strategy. 5. Write a short essay that addresses the topic: Why metrics and measurement are crucial to todays HR managers. 6. Outline the plan of this book.
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The Management Process

Planning

Controlling

Organizing

Leading

Staffing

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Human Resource Management at Work

What Is Human Resource Management (HRM)?
 The policies and practices involved in carrying out

the people or human resource aspects of a management position, including recruiting, screening, training, rewarding, and appraising.

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Human Resource Management at Work

Acquisition

Fairness Human Resource Management (HRM)

Training

Health and Safety

Appraisal

Labor Relations

Compensating

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Personnel Aspects of a Managers Job

Conducting job analyses Planning labor needs and recruiting job candidates Selecting job candidates Orienting and training new employees Managing wages and salaries Providing incentives and benefits Appraising performance Communicating Training and developing managers Building employee commitment

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Personnel Mistakes
Hire the wrong person for the job Experience high turnover Have your people not doing their best Waste time with useless interviews Have your company in court because of discriminatory actions Have your company cited by OSHA for unsafe practices Have some employees think their salaries are unfair and inequitable relative to others in the organization Allow a lack of training to undermine your departments effectiveness Commit any unfair labor practices

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Basic HR Concepts
The bottom line of managing: Getting results HR creates value by engaging in activities that produce the employee behaviors that the company needs to achieve its strategic goals.

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Line and Staff Aspects of HRM

Line manager
 A manager who is authorized to direct the work of

subordinates and is responsible for accomplishing the organizations tasks.

Staff manager
 A manager who assists and advises line managers.

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Line Managers HRM Responsibilities

1. Placing the right person on the right job 2. Starting new employees in the organization (orientation) 3. Training employees for jobs that are new to them 4. Improving the job performance of each person 5. Gaining creative cooperation and developing smooth working relationships 6. Interpreting the firms policies and procedures 7. Controlling labor costs 8. Developing the abilities of each person 9. Creating and maintaining department morale 10. Protecting employees health and physical condition

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Human Resource Managers Duties

Line Function
Line Authority Implied Authority

Coordinative Function
Functional Authority

Functions of HR Managers

Staff Functions
Staff Authority Innovator Employee Advocacy

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Human Resource Specialties

Recruiters Employment/ Industrial Relations Specialist Human Resource Development Specialists

Training Specialists

Human Resource Specialties

Job Analysts

Compensation Managers

Employee Welfare Officers

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FIGURE 11 HR Organization Chart for a Large Organization

Source: www.hr.wayne.edu/orgcharts.php. Accessed May 6, 2007. 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.

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FIGURE 12

HR Organizational Chart (Small Company)

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FIGURE 13

Employment and RecruitingWho Handles It? (Percentage of All Employers)

Note: Length of bars represents prevalence of activity among all surveyed employers.
Source: HR MAGAZINE, BNA/Society for Human Resource Management, 2002. Reproduced with permission via Copyright Clearance Center. 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved. 115

The Changing Environment of Human Resource Management

Globalization Trends

Changes and Trends in Human Resource Management

Technological Trends

Trends in the Nature of Work

Workforce Demographic Trends

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FIGURE 14

Employment Exodus: Projected Loss of Jobs and Wages

Source: Michael Schroeder, States Fight Exodus of Jobs, Wall Street Journal, June 3, 2003, p. 84. Reproduced with permission of Dow Jones & Co. Inc. via Copyright Clearance Center. 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved. 117

The Changing Role of Human Resource Management

Strategic Human Resource Management

Managing with the HR Scorecard Process

New Responsibilities for HR Managers

Creating HighPerformance Work Systems

Measuring the HRM Teams Performance

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TABLE 11

Technological Applications for HR

Application Service Providers (ASPs) and technology outsourcing Web portals PCs and high-speed access Streaming desktop video The mobile Web and wireless net access E-procurement Internet- and network-monitoring software Bluetooth Electronic signatures Electronic bill presentment and payment Data warehouses and computerized analytical programs

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HighHigh-Performance Work System Practices

Employment security Selective hiring Extensive training SelfSelf-managed teams/decentralized decision making Reduced status distinctions Information sharing Contingent (pay-for-performance) rewards (pay-forTransformational leadership Measurement of management practices Emphasis on high-quality work high-

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Benefits of a High-Performance HighWork System (HPWS)

Generate more job applicants Screen candidates more effectively Provide more and better training Link pay more explicitly to performance Provide a safer work environment Produce more qualified applicants per position Hiring based on validated selection tests Provide more hours of training for new employees Conduct more performance appraisals
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FIGURE 15 HR Metric* Absence rate

Five Sample HR Metrics How to Calculate It # of days absent in month Average # of employees during month # of workdays 100

Cost per hire

Advertising + agency fees + employee referrals + travel cost of applicants and staff + relocation costs + recruiter pay and benefits Number of hires

HR expense factor

HR expense Total operating expense Total days elapsed to fill job requisitions Number hired

Time to fill

Turnover rate

Number of separations during month Average number of employees during month

100

Sources: Robert Grossman, Measuring Up, HR Magazine, January 2000, pp. 2935; Peter V. Le Blanc, Paul Mulvey, and Jude T. Rich, Improving the Return on Human Capital: New Metrics, Compensation and Benefits Review, January/February 2000, pp. 1320; Thomas E. Murphy and Sourushe Zandvakili, Data and Metrics-Driven Approach to Human Resource Practices: Using Customers, Employees, and Financial Metrics, Human Resource Management 39, no. 1 (Spring 2000), pp. 93105; [HR Planning, Commerce Clearing House Incorporated, July 17, 1996;] SHRM/BNA 2000 Cost Per Hire and Staffing Metrics Survey; www.shrm.org. See also, SHRM Research 2006 Strategic HR Management Survey Report, Society for Human Resource Management..

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Measuring HRs Contribution

The HR Scorecard
 Shows the quantitative standards,

or metrics the firm uses to measure HR activities.

 Measures the employee behaviors

resulting from these activities.

 Measures the strategically relevant

organizational outcomes of those employee behaviors.

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The Human Resource Managers Proficiencies

New Proficiencies
 HR proficiencies  Business proficiencies  Leadership proficiencies  Learning proficiencies

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FIGURE 16

Effects CFOs Believe Human Capital Has on Business Outcomes

Source: Steven H. Bates, Business Partners, HR Magazine, September 2003, p. 49. Reproduced with permission of the Society for Human Resource Management via Copyright Clearance Center. 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved. 125

The Human Resource Managers Proficiencies (contd)

Managing within the Law
 Equal employment laws (US)  Occupational safety and health laws  Labor laws

Managing Ethics
 Ethical lapses  Sarbanes-Oxley in 2003 Sarbanes Securities and Exchange Board of India (SEBI)  Ministry of Corporate Affairs (MCA)
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The Plan of This Book: Basic Themes

HRM is the responsibility of every manager. manager. HR managers must defend their plans and contributions in measurable terms. All personnel actions and decisions have strategic implications. All managers rely on information technology. Virtually every personnel decision has legal implications.

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FIGURE 18

Strategy and the Basic Human Resource Management Process

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KEY TERMS
management process human resource management (HRM) authority line manager staff manager line authority staff authority implied authority functional control employee advocacy globalization human capital strategy strategic plan metrics HR Scorecard outsourcing ethics strategic human resource management highhigh-performance work system

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Human Resource Management

1
ELEVENTH EDITION

GARY DESSLER BIJU VARKKEY

Part 1 | Introduction

Chapter 1 Appendix

Evolution and Challenges Faced in India

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HRM in India
In the 1970s and 1980s typical HRM functions in organization included: Personnel and administration Industrial relations Labor welfare

Up to the mid-80s human resource management in Indian organizations grew through various phases under the influence of the following factors:
A philanthropic viewpoint about doing good for workers A legislative framework Government policies Trade unions Emerging trends/concepts in management Changes in the economy
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Management Challenges for Indian CEOs

A study among Indian CEOs identified the following challenges:
   

   

Creating a high-performance culture Retaining talent Recruiting Moving from a patriarchic and hierarchical management style to a more team-based, informal organizational culture Linking training with performance Compensating knowledge workers Building interpersonal relationships/managing conflict Going global
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Source: Aneeta Madhok, Similar Challenges cited by Robert J. Grossman in HRs Rising Star in India, available at http://www.shrm.org/india. 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved.

Shift to Human Resource Development Orientation

 The 1980s saw the large-scale introduction of

the developmental concept in Indian organizations  Udai Pareek and T. V. Rao, faculty of IIM Ahmedabad, introduced the human resource development (HRD) concept in India

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Total Human Resource Management

 Opening up of the Indian economy created a

demand for talent and the traditional organizations (both in public and private sectors) became talent sources.  Development of the Information Technology sector mobilized a vast pool of technically trained people.  Massive staffing requirements saw recruitment evolving as very specialized function, separate from but closely interlinked with the other HRM functions.  Arrival of the knowledge workerwell-skilled, individualistic, and ambitious about career caused attrition to become common.
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Total Human Resource Management (Contd.)

 Introduction of IT-supported solution, particularly

ERP-based human resource information systems  Introduction of innovative HR practices.  Rise of IT-enabled services (ITES), gave employment opportunities to the young English speaking, educated population.  HRM function assumed a strategic role in Indian organizations, responding to business requirements in an appropriate way.

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