Human Resource Management

Lecturer: Olivia Edge

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Lecture Outline

Defining HRM

Environmental Factors affecting HRM

Activity Areas in HRM

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Defining HRM

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“HRM is a distinctive approach to employment management which seeks to achieve competitive advantage through the strategic deployment of a highly committed and capable workforce, using an array of cultural, structural and personnel techniques”(Storey, 2007)

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Key Objectives of HRM Staff Objective

• Ensure business is appropriately staffed

Performance Objective• Ensure appropriate standards of performance

are achieved through training, development• Management control systems

Change Management• Effective management of change• Structural, cultural adjustments

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So, how does HRM contribute toward the attainment of competitive advantage?

Take note of the 3 main issues discussed in class1. ?2. ?3. ?

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HRM Activities HR Alignment

Human Resource Planning

Recruitment

Selections

Pay and Benefits

Performance Management

Training and Development7

HR Alignment

Overcoming Challenges

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Key HR Challenges for Key HR Challenges for ManagersManagers

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Key HR Challenges: Key HR Challenges: EnvironmentalEnvironmental

Rapid ChangeThe Internet RevolutionWorkforce DiversityGlobalizationLegislationEvolving Work and Family RolesSkill ShortagesRise of the Service SectorNatural Disasters

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Key HR Challenges: Key HR Challenges: OrganizationalOrganizational

Competitive PositionDecentralizationDownsizingOrganizational RestructuringSelf-Managed Work TeamsOrganizational CultureTechnology Internal and Data SecurityOutsourcing

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Matching People and Organizations

Ethics and Social Responsibility

Productivity

Empowerment

Brain Drain

Job Insecurity

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Key HR Challenges: Key HR Challenges: IndividualIndividual

HR Planning

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Human Resource Planning

HR Planning is an effort to anticipate the future demands of the organisation and match those demands with suitable personnel

Stages of HR Planning• Demand Analysis

¯ Through an understanding of the Org Strategy, the HR function must forecast the demand for personnel by

– Assessing future HR needs– Assessing the quality and quantity of employee needed

• Supply Analysis¯ An analysis of the supply both internally and externally

of the labour currently available to determine if they can meet the org needs

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Human Resource Planning

contd. Estimating Deficits/Surplus

• This is the process of comparing the demands with the supply to establish if the supply meets the demands

• A deficit in supply could result in the org recruiting from overseas, automate activities, outsource activities

Action Plan• The action plan should detail how the HR function

will align the demands of the org with the supply available to the org

• It should detail selection, recruitment, training etc. to ensure that the orgs requirements are met with competent staff 15

Strategic HR Policies: BenefitsStrategic HR Policies: Benefits

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Encouraging Proactive Behavior

Communicating Company Goals

Stimulating Critical Thinking and Ongoing

Examination of Assumptions

Identifying Gaps Between Current Situation and

Future Vision

Encouraging Line Managers’ Participation

Identifying HR Constraints and Opportunities

Creating Common Bonds

Strategic HR Policies: Strategic HR Policies: ChallengesChallenges

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Maintaining a Competitive Advantage Reinforcing Overall Business Strategy Avoiding Excessive Concentration on Day-to-Day

Problems Develop HR Strategies Suited to Unique

Organizational Features Coping with the Environment Securing Management Commitment Translating the Strategic Plan into Action Combining Intended and Emergent Strategies Accommodating Change

Strategic HR: ChoicesStrategic HR: Choices

Work FlowsStaffingEmployee SeparationsPerformance AppraisalTraining and Career DevelopmentCompensationEmployee RightsEmployee and Labor RelationsInternational Management

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Selecting HR StrategiesSelecting HR Strategies

To increase firm performanceHR strategies should fit with other

aspects of the organization

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HR Strategies: HR Strategies: Fit with Organizational Fit with Organizational

StrategiesStrategiesCorporate StrategiesEvolutionarySteady State

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Porter’s Business Unit Strategies Cost leadership Differentiation Focus

Miles and Snow’s Business Strategies

Defender Prospector

HR Strategies:HR Strategies: Fit with Environment Fit with Environment

Degree of Uncertainty Magnitude of Change Complexity Volatility

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HR Strategies: HR Strategies: Fit with Organizational Fit with Organizational

CharacteristicsCharacteristics

Production Process Firm’s Market PostureFirm’s Overall Managerial PhilosophyFirm’s Organizational StructureFirm’s Organizational Culture

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HR Strategies:HR Strategies:Fit with Org. CapabilitiesFit with Org. Capabilities

Distinctive Competencies• Give firm competitive edge

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HR Strategies should Help firm exploit its competencies

Assist the firm to help use its HR skills

Recrutiment

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Recruitment This refers to attracting candidates to the organisation

with the view to taking up employment Recruitment can occur Internally or Externally There are 2 key stages in the recruitment process

1. Background Stage¯ This refers to analysis of the job description with the

person specification in order to achieve a fit between the job and the candidate.

– job description (statement of the tasks &responsibilities of the role)

– with the person specification (details skills, competencies, qualifications, experience required from the candidate)

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MATCHING

JOB DESCRIPTION

Job titlePlace of workReporting to whom?Subordinates?Purpose of positionKey dutiesObjectives/targets

PERSONAL SPECIFICATION

Physical attributesEducation/trainingGeneral intelligence Special aptitudes Personal Interests PersonalityBackground

Job analysis: an overview

Recruitment contd.2. Recruitment Stage

¯ This refers to the process of attracting candidates by– Internal Recruitment –transfers, promotions– External Recruitment – media advertisements,

agencies , colleges, FAS, Professional bodies

Various methods can be used to attract candidates¯ Internal Job Posting – posted within the company¯ External Job Posting – posted to external sources e.g.

Newspapers, Internet Job Pages, Colleges postings¯ Employment Agencies – the use of specialist agencies

to shortlist from a large pool of candidates. This can be expensive.

¯ Employee Referrals – this is when an employee refers a friend for a position

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Selection

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Selection The selection process effectively begins when

application forms/CVs have been received This involves selecting the right candidate

from the pool of candidates that have been shortlisted• Interviews• Reference Checks• Selection Tests

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Interviews Most commonly used selection technique

e.g.1:1,group or panel The objective of the interview is to

• Gain info about the candidate to determine suitability• Sell the role and the org to the candidate

There are two main types of interviews• Structured – set questions are asked of all candidates to

compare performance• Unstructured – the interviewer has a general set of

questions but its at the interviewers discretion as to what is asked

Common Interviewing Errors1. Inadequate preparation2. Premature Judgement3. Lack of Rapport4. Interviewer Dominance5. Structural Rigidity

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Selection contd. Reference Checks

• Once interviewing has been completed candidates are placed on shortlist and references are checked

• Reference checks seek to validate the information supplied by the candidate

• They also gather additional details on how the employee reacted with other staff, management, customers etc.

Selection Tests• These can be used with interviews to reduce bias and

increase correct selection¯ Intelligence Tests – tests their mental capacity ¯ Aptitude Tests – test special aptitudes that may be

necessary to performing the job¯ Proficiency Tests – these test specific skills e.g.

Typing, presentation skills, language skills

Pay and Benefits

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Pay & Benefits An organisation’s reward system is a powerful

indicator of its philosophy and approach to workforce management

The primary function of pay and benefits are employee retention and motivation

Rewards can be financial / non-financial• Intrinsic rewards - spring from the job itself and

include autonomy, responsibility an challenge• Extrinsic rewards - more tangible in nature and

include pay, job security and working conditions

There are 3 parts to a compensation system1. Payments2. Benefits3. Rewards & Motivation

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Pay & Benefits contd.1. Payment Flat rate only or Flat rate+

• fixed hourly, weekly, monthly rate +/or bonus by results

Merit Rating• Receive bonus based on their performance

Commission – • individual earns a % of each sale they make

Profit \ Gain Sharing –• employees get a bonus related to improved

company performance Piecework –

• employees are paid for each item they produce

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Pay & Benefits contd.2. Benefits There are 2 main types of benefits employees

receive in addition to salary• Benefits-in-kind – these are benefits that can’t be turned

into cash but have a value e.g. Company car, preferential loans, health ins

• Other Benefits – vouchers, holidays, bus tickets, childcare subsidies, canteen subsidies, mobile phones, education

3. Rewards & Motivation Employees are also motivated by non financial

rewards • Reward and Recognition Awards• Grooming for Promotion e.g. Coaching, specialist training• Greater responsibility• More enriching work

Assessment & Appraisal

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Performance Appraisal Assessing the work of employees is a key function of

human resource management It can be seen as a periodic assessment of the

performance of the individual Its concerned with

• Establishing performance objectives and standards• Measuring performance against standards• Providing timely feedback to the employee

There are a number of different objectives in performance appraisal

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Performance Appraisal contd. There are 2 main appraisal systems

1. Graphic Rating Scales• This is where various aspects of the

employees performance are measured against a scale

• Scales are common to all employees thus making comparisons easy

2. 360◦ Feedback• This involves collecting feedback from a

variety of people you work with in the org• The strength of this review is that its viewed

from many different perspectives • This type of review encourages the employee

to pay attention to all work relationships

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Performance Appraisal contd. There are 2 main appraisal systems

1. Graphic Rating Scales• This is where various aspects of the

employees performance are measured against a scale

• Scales are common to all employees thus making comparisons easy

2. 360◦ Feedback• This involves collecting feedback from a

variety of people you work with in the org• The strength of this review is that its viewed

from many different perspectives • This type of review encourages the employee

to pay attention to all work relationships

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Performance Appraisal contd. Effective Performance Appraisals

• Reviews the goals and standards of the employees responsibilities• Summarises the employees overall performance with positive and

negative feedback• Discuss the causes of weak performance and provide the

employee the opportunity to discuss this and adapt this through e.g. Training

• Agree a set of activities that the employee must focus on and agree a time to review progress

• End on a good note!

Ineffective feedback• When performance measures are not clear and then the

employee is punished during review• When is it not timely thus preventing the employee the

opportunity to address it before it became problematic• If it is not constructive and is used negatively against the

employee

Training and Development

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Training & Development A major aspect of HR is developing career path

opportunities for employees through org development activities

There is a clear distinction between the concepts of training and development

Training refers to a planned effort to modify or develop knowledge, skills and attitudes through learning experiences

Development is a broader concept referring to general growth of an individuals skilled and abilities through conscious and unconscious learning

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Training & Development Methods

1. On the job training• Job rotation, coaching, mentoring, buddying• Attending internal briefings and

presentations

2. Customer and supplier visits3. External formal, professional training

courses• Part time, sabbatical, fixed periods

4. Secondment to another department, business unit

Summary and Summary and ConclusionsConclusions

There are many challenges in HRMPlan and Implement HR Strategic

• Policies and procedures should be congruent

Select strategies that increase performance

HR department and management are an important partnership

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