MTHR 1

Mathis&

Jackson

Mathis&

Jackson

f o u r t h e d i t i o n

PowerPoint Presentation by Charlie CookThe University of West Alabama

PowerPoint Presentation by Charlie CookThe University of West Alabama

© 2007 Thomson/South-Western.All rights reserved.© 2007 Thomson/South-Western.All rights reserved.

HUMAN RESOURCE MANAGEMENTESSENTIAL PERSPECTIVES

Chapter 1

Changing Nature of Human

Resource Management

Chapter 1

Changing Nature of Human

Resource Management

© 2007 Thomson/South-Western. All rights reserved. 1–2

Managerial Perspectives on HRManagerial Perspectives on HR

1.1. Why must HR management transform from Why must HR management transform from being primarily administrative and operational to being primarily administrative and operational to become a more strategic contributor?become a more strategic contributor?

2.2. Describe how economic and workforce changes Describe how economic and workforce changes are affecting organizations in which you have are affecting organizations in which you have worked, and give specific examples of how worked, and give specific examples of how these changes should be addressed.these changes should be addressed.

3.3. What steps can HR professionals take to What steps can HR professionals take to overcome the view that what HR accomplishes overcome the view that what HR accomplishes is not measurable?is not measurable?

1–2


HR ActivitiesHR Activities

• Global Forces and HR ManagementGlobal Forces and HR Management• Strategic HR ManagementStrategic HR Management• Equal Employment OpportunityEqual Employment Opportunity• StaffingStaffing• HR DevelopmentHR Development• Compensation and BenefitsCompensation and Benefits• Health, Safety, and SecurityHealth, Safety, and Security• Employee and Labor RelationsEmployee and Labor Relations


FIGURE 1.FIGURE 1.11 HR Management ActivitiesHR Management Activities


HR In OrganizationsHR In Organizations

• Human CapitalHuman Capital The collective value of the capabilities, knowledge, The collective value of the capabilities, knowledge,

skills, life experiences, and motivation of an skills, life experiences, and motivation of an organizational workforce.organizational workforce. Also known as Also known as intellectual capitalintellectual capital..

How to measure the strategic value of human assets?How to measure the strategic value of human assets?

• Core CompetencyCore Competency A unique capability that creates high value and A unique capability that creates high value and

differentiates an organization from its competition.differentiates an organization from its competition. HR competencies: a source of competitive advantage.HR competencies: a source of competitive advantage.


Cooperation of HR with Operating Cooperation of HR with Operating ManagersManagers• HR UnitHR Unit

Develops legal, effective Develops legal, effective interviewing techniquesinterviewing techniques

Trains managers in Trains managers in conducting selection conducting selection interviewsinterviews

Conducts interviews and Conducts interviews and testingtesting

Sends top three applicants Sends top three applicants to managers for final reviewto managers for final review

Checks referencesChecks references Does final interviewing and Does final interviewing and

hiring for certain job hiring for certain job classificationsclassifications

• ManagersManagers Advise HR of job openingsAdvise HR of job openings Decide whether to do own Decide whether to do own

final interviewingfinal interviewing Receive interview training Receive interview training

from HR unitfrom HR unit Do final interviewing and Do final interviewing and

hiring where appropriatehiring where appropriate Review reference Review reference

information information Provide feedback to HR unit Provide feedback to HR unit

on hiring/rejection decisionson hiring/rejection decisions


HR Management ChallengesHR Management Challenges

• Globalization of BusinessGlobalization of Business Outsourcing and increased competitionOutsourcing and increased competition

The threat of terrorismThe threat of terrorism

• Economic and Technological ChangesEconomic and Technological Changes Occupational ShiftsOccupational Shifts

Workforce Availability and Quality ConcernsWorkforce Availability and Quality Concerns

Growth in Contingent WorkforceGrowth in Contingent Workforce

Technological Shifts and the InternetTechnological Shifts and the Internet



• Workforce Demographics and DiversityWorkforce Demographics and Diversity Increasing Racial/Ethnic DiversityIncreasing Racial/Ethnic Diversity

More Women in the WorkforceMore Women in the Workforce Single-parent householdsSingle-parent households

Dual-career couplesDual-career couples

Domestic partnersDomestic partners

Working mothers and family/childcareWorking mothers and family/childcare

Significantly Aging WorkforceSignificantly Aging Workforce Loss of the experience and talents of older workersLoss of the experience and talents of older workers



• Organizational Cost Pressures and Organizational Cost Pressures and RestructuringRestructuring Mergers and AcquisitionsMergers and Acquisitions ““Right-sizing”—eliminating of layers of management, Right-sizing”—eliminating of layers of management,

closing facilities, merging with other organizations, closing facilities, merging with other organizations, and outplacing workersand outplacing workers Intended results are flatter organizations, increases in Intended results are flatter organizations, increases in

productivity, quality, service and lower costs.productivity, quality, service and lower costs. Costs are “survivor mentality”, loss of employee loyalty, and Costs are “survivor mentality”, loss of employee loyalty, and

turnover of valuable employees.turnover of valuable employees.

HR managers must work toward ensuring cultural HR managers must work toward ensuring cultural compatibility in mergers.compatibility in mergers.


FIGURE 1.FIGURE 1.22 Changing Roles of HR ManagementChanging Roles of HR Management


HR Management RolesHR Management Roles

• Administrative RoleAdministrative Role Processing and record keepingProcessing and record keeping

Technology is transforming how HR services are delivered.Technology is transforming how HR services are delivered. HR services are being outsourcing to reduce HR staffing HR services are being outsourcing to reduce HR staffing

costs, utilize vendor expertise and technology, and increase costs, utilize vendor expertise and technology, and increase focus on strategic HR activities.focus on strategic HR activities.

• Operational and Employee Advocate RoleOperational and Employee Advocate Role Identify and implement programs and policiesIdentify and implement programs and policies ““Champion” for employee issues and concernsChampion” for employee issues and concerns


Strategic Role for HRStrategic Role for HR

• Strategic RoleStrategic Role ““Having a seat at the table” by contributing to Having a seat at the table” by contributing to

organizational results and success.organizational results and success. HR becomes a strategic business partner by:HR becomes a strategic business partner by:

Focusing on developing HR programs that enhance Focusing on developing HR programs that enhance organizational performance.organizational performance.

Involving HR in strategic planning at the onset.Involving HR in strategic planning at the onset. Participating in decision making on mergers, acquisitions, Participating in decision making on mergers, acquisitions,

and downsizing.and downsizing. Redesigning organizations and work processesRedesigning organizations and work processes Accounting and documenting the financial results of HR Accounting and documenting the financial results of HR

activities.activities.


HR TechnologyHR Technology

• Human Resource Management System (HRMS)Human Resource Management System (HRMS) An integrated system providing information used by An integrated system providing information used by

HR management in decision making.HR management in decision making. Purposes (Benefits) of HRMSPurposes (Benefits) of HRMS

Administrative and operational efficiency in compiling HR Administrative and operational efficiency in compiling HR datadata

Availability of data for effective HR strategic planningAvailability of data for effective HR strategic planning

Uses of HRMSUses of HRMS Automation of payroll and benefit activitiesAutomation of payroll and benefit activities EEO/affirmative action trackingEEO/affirmative action tracking HR Workflow: increased access to HR informationHR Workflow: increased access to HR information

– Employee self-service reduces HR costs.Employee self-service reduces HR costs.


Ethics and HR ManagementEthics and HR Management

• Firms with High Ethical StandardsFirms with High Ethical Standards Are more likely to reach strategic goals.Are more likely to reach strategic goals. Are viewed more positively by stakeholders.Are viewed more positively by stakeholders. Are better able to attract and retain human resources.Are better able to attract and retain human resources.

• HR plays a key role in fostering ethical behavior HR plays a key role in fostering ethical behavior through ethics programs and its support of: through ethics programs and its support of: A written code of ethics and standards of conductA written code of ethics and standards of conduct Training on ethical behavior for all employeesTraining on ethical behavior for all employees A means for employees to obtain ethical adviceA means for employees to obtain ethical advice Confidential reporting systems for ethical misconductConfidential reporting systems for ethical misconduct


HR Management as a Career FieldHR Management as a Career Field

• HR GeneralistHR Generalist A person with responsibility for performing a variety of A person with responsibility for performing a variety of

HR activities.HR activities.

• HR SpecialistHR Specialist A person with in-depth knowledge and expertise in a A person with in-depth knowledge and expertise in a

limited area of HR.limited area of HR.


FIGURE 1.FIGURE 1.33 Strategic HR Management ProcessStrategic HR Management Process


Nature of Strategic HR ManagementNature of Strategic HR Management

• Cost LeadershipCost Leadership Competition on the basis of Competition on the basis of

low price and high quality of low price and high quality of product or serviceproduct or service

Relies on “building” Relies on “building” employees to fit specialized employees to fit specialized needsneeds

Requires a longer HR Requires a longer HR planning horizon approachplanning horizon approach

• DifferentiationDifferentiation Competition on the basis of Competition on the basis of

either offering distinctively either offering distinctively different products or different products or services or establishing an services or establishing an exclusive image for quality exclusive image for quality products and servicesproducts and services

Relies on hiring needed Relies on hiring needed skills.skills.

Needs a shorter planning Needs a shorter planning time frame in order to be time frame in order to be responsive to dynamic responsive to dynamic environmentsenvironments

Relationship of Organizational and HR StrategiesRelationship of Organizational and HR Strategies


Dimensions of Organizational Dimensions of Organizational EffectivenessEffectiveness

Organizational Organizational CultureCulture

Organizational Organizational CultureCulture

Organizational Organizational ProductivityProductivity

Organizational Organizational ProductivityProductivity

Financial Financial ContributionsContributions

Financial Financial ContributionsContributions

Service and Service and QualityQuality

Service and Service and QualityQuality

Organizational Organizational EffectivenessEffectiveness

Organizational Organizational EffectivenessEffectiveness


Nature of Strategic HR Management Nature of Strategic HR Management (cont’d)(cont’d)• Organizational Productivity and HR EffortsOrganizational Productivity and HR Efforts

HR ProductivityHR Productivity Unit labor cost: computed by dividing the average cost of Unit labor cost: computed by dividing the average cost of

workers by their average levels of output.workers by their average levels of output. Low unit labor costs can be a basis for a strategy focusing on Low unit labor costs can be a basis for a strategy focusing on

human resources. human resources. Productivity and unit labor costs can be evaluated at the Productivity and unit labor costs can be evaluated at the

global, country, organizational, or individual level.global, country, organizational, or individual level.

• Organizational Effectiveness and FinancialOrganizational Effectiveness and FinancialContributions of HRContributions of HR Linking with financial executives to ensure HR’s Linking with financial executives to ensure HR’s

financial contribution to organizational effectiveness.financial contribution to organizational effectiveness.


Nature of Strategic HR Management Nature of Strategic HR Management (cont’d)(cont’d)• Customer Service and Quality Products Linked Customer Service and Quality Products Linked

to HR Strategiesto HR Strategies High quality products and services are the results of High quality products and services are the results of

HR-enhancements to organizational performance.HR-enhancements to organizational performance.

• Organizational Culture and Organizational Organizational Culture and Organizational EffectivenessEffectiveness Organizational cultureOrganizational culture—t—the shared values and beliefs he shared values and beliefs

in an organizationin an organization Strategy and culture must be compatible and aligned for the Strategy and culture must be compatible and aligned for the

organization to be effective.organization to be effective. Culture affects recruitment and retention of employees.Culture affects recruitment and retention of employees.


Human Resource PlanningHuman Resource Planning

• Human Resource (HR) PlanningHuman Resource (HR) Planning The process of analyzing and identifying the need for The process of analyzing and identifying the need for

and availability of human resources so that the and availability of human resources so that the organization can meet its objectives.organization can meet its objectives.


FIGURE 1.4FIGURE 1.4 HR Planning ProcessHR Planning Process


HR Planning ProcessHR Planning Process

• HR StrategiesHR Strategies The means used to anticipate and manage the supply The means used to anticipate and manage the supply

of and demand for human resources.of and demand for human resources. Provide overall direction for the way in which HR activities will Provide overall direction for the way in which HR activities will

be developed and managed.be developed and managed.

Overall Overall Strategic PlanStrategic Plan

Human Resources Human Resources Strategic PlanStrategic Plan

HR ActivitiesHR Activities


Scanning the External EnvironmentScanning the External Environment

• Environmental ScanningEnvironmental Scanning The process of studying the environment of the The process of studying the environment of the

organization to pinpoint opportunities and threats.organization to pinpoint opportunities and threats.

• Environmental Changes Impacting HREnvironmental Changes Impacting HR Governmental influencesGovernmental influences Economic conditionsEconomic conditions Geographic and competition issuesGeographic and competition issues Workforce compositionWorkforce composition


Assessing the Internal WorkforceAssessing the Internal Workforce

• Jobs and Skills Audit Jobs and Skills Audit What jobs exist now?What jobs exist now? How many individuals are performing each job?How many individuals are performing each job? What are the reporting relationships of jobs?What are the reporting relationships of jobs? How essential is each job?How essential is each job? What jobs will be needed to implement future What jobs will be needed to implement future

organizational strategies?organizational strategies? What are the characteristics of anticipated jobs?What are the characteristics of anticipated jobs?


Assessing the Internal Workforce Assessing the Internal Workforce (cont’d)(cont’d)• Organizational Capabilities InventoryOrganizational Capabilities Inventory

HR databases—sources of information about HR databases—sources of information about employees’ knowledge, skills, and abilities (KSAs)employees’ knowledge, skills, and abilities (KSAs)

Uses of KSA inventoriesUses of KSA inventories RecruitingRecruiting SelectionSelection HR developmentHR development Capabilities of future workforceCapabilities of future workforce


Forecasting HR Supply and DemandForecasting HR Supply and Demand

• ForecastingForecasting The use of information from the past and present to The use of information from the past and present to

identify expected future conditions.identify expected future conditions.

• Forecasting PeriodsForecasting Periods Short-range: six months to one yearShort-range: six months to one year Intermediate-range: up to five yearsIntermediate-range: up to five years Long-range: more than five yearsLong-range: more than five years


HR ForecastingHR Forecasting


Forecasting HR Supply and Demand Forecasting HR Supply and Demand (cont’d)(cont’d)• Forecasting the Demand for Human ResourcesForecasting the Demand for Human Resources

Organization-wide estimate for total HR demandOrganization-wide estimate for total HR demand Top-down forecast of specific opening likely to occur due to Top-down forecast of specific opening likely to occur due to

promotions, transfers and terminationspromotions, transfers and terminations

• Forecasting the Supply of Human ResourcesForecasting the Supply of Human Resources External SupplyExternal Supply Internal SupplyInternal Supply


Factors Affecting External HR SupplyFactors Affecting External HR Supply

Net migration for an areaNet migration for an area

Individuals entering and leaving the workforceIndividuals entering and leaving the workforce

Individuals graduating from schools and collegesIndividuals graduating from schools and colleges

Changing workforce composition and patternsChanging workforce composition and patterns

Economic forecastsEconomic forecasts

Technological developments and shiftsTechnological developments and shifts

Actions of competing employersActions of competing employers

Government regulations and pressuresGovernment regulations and pressures

Other circumstances affecting the workforceOther circumstances affecting the workforce


FIGURE 1.5FIGURE 1.5 Estimating Internal Labor Supply for a Given UnitEstimating Internal Labor Supply for a Given Unit


Forecasting HR Supply and Demand Forecasting HR Supply and Demand (cont’d)(cont’d)• Forecasting Internal HR SupplyForecasting Internal HR Supply

Effects of promotions, lateral moves, and terminationsEffects of promotions, lateral moves, and terminations

• Succession PlanningSuccession Planning The process of identifying a longer-term plan for the The process of identifying a longer-term plan for the

orderly replacement of key employees.orderly replacement of key employees.

• Managing a Human Resources SurplusManaging a Human Resources Surplus Workforce Reductions and the Worker Adjustment Workforce Reductions and the Worker Adjustment

and Retraining Notification (WARN Act)and Retraining Notification (WARN Act) Requires employers to give 60-day notice to employees and Requires employers to give 60-day notice to employees and

the local community before a layoff or facility closing involving the local community before a layoff or facility closing involving more than 50 people.more than 50 people.


Forecasting HR Supply and Demand Forecasting HR Supply and Demand (cont’d)(cont’d)

• HR Planning in Mergers and AcquisitionsHR Planning in Mergers and Acquisitions Communicating decisionsCommunicating decisions Revising the organization structureRevising the organization structure Merging HR activitiesMerging HR activities


Measuring HR EffectivenessMeasuring HR Effectiveness

• HR MetricsHR Metrics Specific measures tied to HR performance indicators.Specific measures tied to HR performance indicators.

Development and use of metrics that can better demonstrate Development and use of metrics that can better demonstrate HR’s value and track its performance.HR’s value and track its performance.

• Measures of Strategic HR EffectivenessMeasures of Strategic HR Effectiveness Full-time equivalent (FTE)Full-time equivalent (FTE)

A measure equal to one person working full-time for a year.A measure equal to one person working full-time for a year.


Measuring HR Effectiveness (cont’d)Measuring HR Effectiveness (cont’d)

• Measures of Strategic HR Effectiveness (cont’d)Measures of Strategic HR Effectiveness (cont’d) Return on Investment (ROI)Return on Investment (ROI)

A calculation showing the value of expenditures for HR A calculation showing the value of expenditures for HR activities and how long it will take for the activities to pay for activities and how long it will take for the activities to pay for themselves.themselves.

Economic Value Added (EVA)Economic Value Added (EVA) A firm’s net operating profit after the cost of capital (the A firm’s net operating profit after the cost of capital (the

benchmark for minimum return) is deducted.benchmark for minimum return) is deducted.

HR and the Balanced ScorecardHR and the Balanced Scorecard Financial Financial Internal business processesInternal business processes CustomerCustomer Learning and growthLearning and growth


Measuring HR Effectiveness (cont’d)Measuring HR Effectiveness (cont’d)

• HR Measurement and BenchmarkingHR Measurement and Benchmarking BenchmarkingBenchmarking

Comparing specific measures of performance against data Comparing specific measures of performance against data on those measures in other organizations.on those measures in other organizations.

• HR AuditHR Audit A formal research effort that evaluates the current A formal research effort that evaluates the current

state of HR management in an organization.state of HR management in an organization. Audit areas:Audit areas:

StaffingStaffing CompensationCompensation Health and SafetyHealth and Safety

MTHR 1

Documents

Transcript of MTHR 1