Introduction to Human Resource ManagementProfessor Mohammad Khasro MIAH Ph.D.*MBA BUS 601 KsM1*

MBA BUS 601 KsM

Introduction to HR The 1980s and 90s saw Human Resource Management(HRM) replace Personnel Managementfashionable termre-organisation of work of personnel departmentdistinctively different with new management approachLong term rather than short term perspectivePsychological contract of commitmentSelf-control rather than external controlsManagement integrationMaximum utilisation of resource

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Human Resource ManagementHRM is the organizational function that deals with issues related to people such as hiring, training, promotion, performance management, compensation, organization development, safety, wellness, benefits, employee motivation, communication, administration and Industrial relations.

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Therefore, human resource management can be defined as a specific combination of HR practices, work structures, and processes that maximizes employee knowledge, skill, commitment, and flexibility. It composed of many interrelated parts that complement one another to reach the goals of an organization, large or small.

Set of activities directed at attracting, developing, and maintaining an effective workforce capable of achieving the firms objective.

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The main activities of human resource management

The areas that we would list are as follows: recruitment and selection learning and talent development human resource planning provision of contracts provision of fair treatment provision of equal opportunities managing diversity motivating workers to achieve improved performance employee counseling

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redundancy negotiationencouraging involvement and engagementadding valueethics and corporate responsibility knowledge managementchange managementmanaging cross-cultural issues or international HRM.

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talent managementemployee wellbeing payment and reward of employeeshealth and safetydisciplining individualsdealing with grievancesdismissal

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Historical Turning Points in HR 1793 Samuel Slater father of Industrial Revolution in US 1886 American Federation of Labor (AFL) 1st union in US 1890 Sherman Antitrust Act - balance power of mgmt & labor 1907 Immigration Act of 1907 slowed labor growth 1909 Frederick Winslow Taylor scientific mgmt

1911 Triangle Shirt Waist Company fire attention to employee Safety

1913 Henry Ford 5$ day; systematic tng; tenure-based outcomes 1914-1918 World War I systems approach to empl. testing;

1926 Railway Labor Act 1st govt policy to encourage unions,

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Historical Turning Points in HR 1930s Early HR Research Hawthorne Experiments (1927-1932) Maslows Need Hierarchy (1939-1943) McGragors Theory X & Y (1960) Herzbergs Motivators and Satisfiers (1960) George Odiornes Management By Objectives (1965)

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Historical HR (cont) 1932 Norris-LaGuardia Act yellow-dog contracts were unenforceable 1935 Social Security Act beginning of social welfare 1935 National Labor Relations Act prohibits employer unfair practice, NLRB 1938 Fair Labor Standards Act minimum wage, exempt/nonexempt, overtime 1941-1945 World War II women in workforce, health care introduced 1946 Numerous labor strikes 1947 Taft-Hartley Act unfair labor practices for unions/outlaws closed shop 1954 Brown vs. Topeka Board of Education integrates schools 1964 Civil Right Act of 1964 creates EEOC 1965 Equal Employment Opportunity Commission (EEOC) enf EEO 1970 Occupational Safety and Health Act (OSHA) ERISA (1974), others 1977 Human Resources Planning Society (now SHRM) 1979 Office of Personnel Management personnel function more visibility

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Historical HR (cont) 1980s Stock option developed for high level execs 1981 Professional Air Traffic Controllers (PATCO) strike decline of unions 1985 Sperry Rand & Burroughs merge to form Unisys First of mergers and acquisitions Corporate downsizings 1987 PeopleSoft Inc first HR management software 1980s (late) Global competition increases 1991 Clarence Thomas-Anita Hill hearings - sexual harassment 1994 Monster Board online recruiting 1999 BP Amoco and Exult $600M outsourcing arrangement (1st for HR) 2001 World Trade Center attack security on everyones job 2001 Fraud at Enron govt reform - SOX 2006 IBM permanently stop defined benefit pensions decline of benefits 2008 Government provides TARP funds to bankrupt businesses

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Hard and Soft HRM 'Storey (1989) has distinguished between hard and soft forms of HRM, typified by the Michigan and Harvard models respectively. 'Hard' HRM focuses on the resource side of human resources. It emphasizes costs in the form of 'headcounts' and places control firmly in the hands of management. Their role is to manage numbers effectively, keeping the workforce closely matched with requirements in terms of both bodies and behaviour. 'Soft' HRM, on the other hand, stresses the 'human' aspects of HRM. Its concerns are with communication and motivation. People are led rather than managed. They are involved in determining and realizing strategic objectives.'

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Hard and Soft HRMHard HRM: A different view of HRM is associated with the Michigan Business School (Fombrun, Tichy and Devanna, 1984). There are many similarities with the Harvard 'map' but the Michigan model has a harder, less humanistic edge, holding that employees are resources in the same way as any other business resource. People have to be managed in a similar manner to equipment and raw materials. Thay must be obtained as cheaply as possible, used sparingly, and developed and exploited as much as possible.

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The Michigan model is also known as the 'matching model' or 'best-fit' approach to human resource management. In essence, it requires that human resource strategies have a tight fit to the overall strategies of the business. As such, it limits the role of HR to a reactive, organizational function and under-emphasizes the importance of societal and other external factors. For example, it is difficult to see how the current concern for worklife balance could be integrated into this model.

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Harvard ModelA large part of this section is devoted to the Harvard 'map' of HRM. This is probably the most seminal model of HRM and has had a major influence on academic debate on the subject. 'We noted that the Harvard Business School generated one of the most influential models of HRM. The Harvard interpretation sees employees as resources. However, they are viewed as being fundamentally different from other resources - they cannot be managed in the same way. The stress is on people as human resources. The Harvard approach recognizes an element of mutuality in all businesses, a concept with parallels in Japanese people management, as we observed earlier. Employees are significant stakeholders in an organization. They have their own needs and concerns along with other groups such as shareholders and customers.'

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The Harvard Map or model outlines four HR policy areas:1 Human resource flows - recruitment, selection, placement, promotion, appraisal and assessment, promtion, termination, etc. 2 Reward systems - pay systems, motivation, etc. 3 Employee influence - delegated levels of authority, responsibility, power 4 Work systems - definition/design of work and alignment of people.

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Which in turn lead to the 'four C's' or HR policies that have to be achieved: Commitment Congruence Competence Cost effectiveness

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Soft and Hard HRM

Soft HRM emphasizes the importance of high commitment, learning, enlightened leadership; human resources are valuable assets, not variable costs.

Models and theories focus on tapping the human potential, based on organizational behavior theories (e.g. Maslow,1954; Herzberg, 1966; McGregor, 1960; Miah and Bird 2007)

Hard HRM emphasizes the calculative, quantitative and strategic management aspects ( Strategy, Structure, System) and of managing the workforce in a rational way (Storey, 1989).*MBA BUS 601 KsM1*

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Evolution of HRM

Human resource management has changed in name various times throughout history.Industrial welfare was the first form of human resource management (HRM).

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Evolution of HRM

In 1833 the factories act stated that there should be male factory inspectors. In 1878 legislation was passed to regulate the hours of work for children and women by having a 60 hour week. During this time trade unions started to be formed. In 1868 the 1st trade union conference was held. This was the start of collective bargaining.

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Evolution of HRM

In 1916 it became compulsory to have a welfare worker in explosive factories and was encouraged in arms factories.

The armed forces focused on how to test abilities and IQ along with other research in human factors at work.

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Evolution of HRM

1917-18: 1st formal personnel department created to deal with tight labor market, high turnover, waste andinefficiency, widespread strikes, union growth,government intervention, takeovers

1920s: HR used to win worker cooperation, through ensuring job security, benefits, etc.

1930-50s: Human Relations recognizes that there are psychological and social influences to workersatisfaction, cooperation, performance; first focus ongroups (not teams).*MBA BUS 601 KsM1*

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Evolution of HRM1960s: Work design, rather than communication and cooperation in groups, is the key to increasing worker motivation. Small work group design leads to greater employee effort, group work provides opportunities for self-actualization; work is more interesting and fulfilling.

1970s: Quality of Work Life (QWL): emphasis on the value of human resources. PM becomes HR.

1990s-Present: TQM, reengineering, globalization, strategic HR, new technologies, diversity, contingency models, holistic approaches to HR. HRM models include high involvement, high commitment, high performance work system, innovative work practices. HR becomes HRM.*MBA BUS 601 KsM1*

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The Management Process*MBA BUS 601 KsM1*

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Human Resource Management at Work*MBA BUS 601 KsM1*

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Personnel Aspects of a Managers JobConducting job analyses Planning labor needs and recruiting job candidatesSelecting job candidatesOrienting and training new employeesAppraising performanceManaging wages and salariesProviding incentives and benefitsCommunicating Building employee commitment*MBA BUS 601 KsM1*

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DIFFERENCES BETWEEN TRADITIONAL AND NEW HRM1*MBA BUS 601 KsM

FactorsTraditional HRNew HRM ConceptResponsibility of HRStaff specialistsLine managersFocusEmployee relations Partnership with internal and external customers and stakeholdersRole of HRTransactional, change follower and respondentsTransformational, change leader and initiatorInitiativesSlow reactive, fragmentedFast, proactive, integratedTime HorizonsShort termShort, median and long as necessary ControlBureaucratic- rules, policies, proceduresOrganic- flexible, whatever is needed to succeedJob DesignTight division of labor, independence, specialization Broad, flexible, cross-training Key InvestmentCapital, ProductsPeople, knowledge AccountabilityCost centre Investment centre

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Basic HR ConceptsThe bottom line of managing: Getting resultsHR creates value by engaging in activities that produce the employee behaviors that the company needs to achieve its strategic goals.*MBA BUS 601 KsM1*

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Line and Staff Aspects of HRMLine managerA manager who is authorized to direct the work of subordinates and is responsible for accomplishing the organizations tasks.Staff managerA manager who assists and advises line managers.*MBA BUS 601 KsM1*

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Human Resource Managers Duties*MBA BUS 601 KsM1*

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Line Managers HRM ResponsibilitiesPlacing the right person on the right jobStarting new employees in the organization (orientation)Training employees for jobs that are new to themImproving the job performance of each personGaining creative cooperation and developing smooth working relationshipsInterpreting the firms policies and proceduresControlling labor costsDeveloping the abilities of each personCreating and maintaining department moraleProtecting employees health and physical condition

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Human Resource Specialties*MBA BUS 601 KsM1*

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A Systems View of Human Resource Management*MBA BUS 601 KsM1 - *

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Goals of Human Resource Management*MBA BUS 601 KsM1 - *

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Human Resource Management as a Center of Expertise*MBA BUS 601 KsM1 - *

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FIGURE 11 HR Organization Chart for a Large Organization*MBA BUS 601 KsM1*Source: www.hr.wayne.edu/orgcharts.php. Accessed May 6, 2007.

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FIGURE 12HR Organizational Chart (Small Company)*MBA BUS 601 KsM1*

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FIGURE 13Employment and RecruitingWho Handles It? (Percentage of All Employers)*MBA BUS 601 KsM1*Source: HR MAGAZINE, BNA/Society for Human Resource Management, 2002. Reproduced with permission via Copyright Clearance Center.Note: Length of bars represents prevalence of activity among all surveyed employers.

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The Changing Environment of Human Resource Management*MBA BUS 601 KsM1*

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FIGURE 14Employment migration: Projected Loss of Jobs and Wages*MBA BUS 601 KsM1*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.

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The Changing Role of Human Resource Management*MBA BUS 601 KsM1*

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TABLE 11Technological Applications for HR*MBA BUS 601 KsM1*Application Service Providers (ASPs) and technology outsourcingWeb portalsPCs and high-speed accessStreaming desktop videoThe mobile Web and wireless net accessE-procurementInternet- and network-monitoring softwareBluetoothElectronic signaturesElectronic bill presentment and paymentData warehouses and computerized analytical programs

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High-Performance Work System PracticesEmployment securitySelective hiringExtensive trainingSelf-managed teams/decentralized decision makingReduced status distinctionsInformation sharingContingent (pay-for-performance) rewardsTransformational leadershipMeasurement of management practicesEmphasis on high-quality work*MBA BUS 601 KsM1*

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Benefits of a High-Performance Work System (HPWS)Generate more job applicantsScreen candidates more effectivelyProvide more and better trainingLink pay more explicitly to performanceProvide a safer work environmentProduce more qualified applicants per positionHiring based on validated selection testsProvide more hours of training for new employeesConduct more performance appraisals*MBA BUS 601 KsM1*

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FIGURE 15Five Sample HR Metrics*MBA BUS 601 KsM1*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..

HR Metric*How to Calculate ItAbsence rate# of days absent in month 100Average # of employees during month # of workdays

Cost per hireAdvertising + agency fees + employee referrals + travel cost of applicants and staff + relocation costs + recruiter pay and benefitsNumber of hires

HR expense factorHR expenseTotal operating expense

Time to fillTotal days elapsed to fill job requisitionsNumber hired

Turnover rateNumber of separations during month 100Average number of employees during month

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Measuring HRs ContributionThe HR ScorecardShows 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.*MBA BUS 601 KsM1*

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The Human Resource Managers ProficienciesNew ProficienciesHR proficienciesBusiness proficienciesLeadership proficienciesLearning proficiencies*MBA BUS 601 KsM1*

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FIGURE 16Effects CFOs Believe Human Capital Has on Business Outcomes*MBA BUS 601 KsM1*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.

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HR CertificationHR is becoming more professionalized.Society for Human Resource Management (SHRM)SHRMs Human Resource Certification Institute (HRCI)SPHR (senior professional in HR) certificatePHR (professional in HR) certificate*MBA BUS 601 KsM1*

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FIGURE 172004 SHRMLearning SystemModuleDescriptions*MBA BUS 601 KsM1*

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The Human Resource Managers Proficiencies (contd)Managing within the LawEqual employment lawsOccupational safety and health lawsLabor lawsManaging EthicsEthical lapsesSarbanes-Oxley in 2003*MBA BUS 601 KsM1*

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*MBA BUS 601 KsM1*An integrated approach to people resourcing

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*MBA BUS 601 KsM1*HR strategy: the integration of HR activities to manage performance

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*MBA BUS 601 KsM1*HRM in the twenty-first century?

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K E Y T E R M Smanagement process human resource management (HRM) authority line manager staff manager line authority staff authority implied authority functional control employee advocacyglobalizationhuman capitalstrategystrategic planmetricsHR Scorecardoutsourcingethicsstrategic human resource managementhigh-performance work system*MBA BUS 601 KsM1*

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