1

The Nature
of Human
Resource
Management
Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
 LEARNING OUTCOMES
1. Describe contemporary human resource perspectives;
2. Trace the evolution of the human resource function in
organizations;
3. Identify and discuss the goals of human resource
management;
4. Discuss the setting for human resource management;
5. Describe the job of human resource managers from the
perspectives of professionalism and careers.

SLIDE 3
 HUMAN RESOURCE MANAGEMENT
• HUMAN RESOURCES (HR): People employed to
carry out various jobs, tasks, and functions.
•Remunerated via wages, salaries, and other rewards

SLIDE 4
 HUMAN RESOURCE MANAGEMENT
(HRM)
• Comprehensive set of managerial activities
and tasks that help develop and maintain a
qualified workforce.
 HRM FUNCTION
– Requires professionals who can balance
ethical and legal concerns with organizational
needs

– Properly managed human resources can

provide a competitive advantage
CONTEMPORARY HRM PERSPECTIVES
• HRM function:
– Requires professionals who can balance ethical and
legal concerns with organizational needs
– Can provide a competitive advantage
• Shrinking of the traditional HR manager role
– Outsourcing : Process of hiring external firms to
handle basic HRM functions
Evolution of the Human Resource
Function

2–8
 Evolution of the Human Resource
Function
– Scientific management: Concerned with
structuring individual jobs to maximize efficiency
and productivity
– Frederick Taylor-father of scientific management
– Frank and Lilian Gilbreth-time and motion studies
ORIGIN OF THE HUMAN RESOURCE
FUNCTION
– Businesses such as GM, Bethlehem Steel (1899),
Ford Motor company (1903), Boeing (1916) grew
into big companies
– BF Goodrich was first company to establish a
corporate employment department—employee
concerns.
ORIGIN OF THE HUMAN RESOURCE
FUNCTION
– National Cash Register 1902—employee
grievances, wages and salaries, and record
keeping.
– Ford Employment Department
Both military and major suppliers became
interested in better matching people with jobs.
ORIGIN OF THE HUMAN RESOURCE
FUNCTION
– Hawthorne studies: Instigated the human
relations era and helped develop other
theories to understand employee character
(Roethlisberger and Mayo)
• Hierarchy of human needs (Abraham Maslow)
• Theory X and Theory Y (Douglas McGregor)
 ORIGIN OF THE HUMAN RESOURCE
FUNCTION
• Personnel management: Grew from the recognition
that human resources needed to be managed
– Personnel departments: Specialized organizational
units for hiring and administering human resources
– Personnel manager-the manager who ran the
department.
Evolved during World War II 1930’s-1940s
 ORIGIN OF THE HUMAN RESOURCE
FUNCTION
– Both military and major suppliers became interested in
better matching people with jobs; psychologists were
consulted to develop selection tests;
– 1950’s-post-war lessons were adapted by private industry;
– Lead to new and more sophisticated techniques in the
area of testing, reward and incentive systems; presence of
labor unions;
– Role of HR Manager has grown into the role of strategic
partner in response to new technological innovations.
 Human Resource Management in the
Electronic Age
• Electronic systems:
– Employees use of a digital tool to comment on
each other’s work (Washington-based living social)
– Find candidates directly via LinkedIn
– Crowdsourcing (glassdoor, careerbliss, careerleak,
and JobBite
 Human Resource Management in the
Electronic Age
• Electronic systems:
– Enable ease of surveillance and
communication
– Pose legal concerns regarding ethics and
privacy
 Human Resource Management in the
Electronic Age
• Increased need for knowledge workers
– Employees whose jobs are concerned with the
acquisition and application of knowledge;
– Contribute through specialized knowledge and
application of that knowledge .
 Emerging Human Resource Challenges
• New challenges are faced on a daily basis
– Determining how and when to initiate layoffs
– Managing the effect of world events on existing and
potential employees
• Measures taken
– Adopting corporate social responsibility
– Indulging in conscious capitalism or triple bottom line
Human Resource Management Functions
• Recruiting and selecting
• Training and developing
• Compensation and benefits
• Performance appraisal and career management
• Managing Labor relations
 RECRUITMENT and SELECTION
• Used to attract and hire new employees who
have the abilities, skills, and experiences that
will help an organization achieve its goal.
TRAINING and DEVELOPMENT
– Ensures that organizational members develop the
skills and abilities that will enable them to
perform their jobs effectively in the present and
the future;
– Changes in technology and the environment
require that organizational members learn new
techniques and ways of working.
COMPENSATION and BENEFITS
– Rewarding high performing organizational
members with raises, bonuses and
recognition.
• Increased pay provides additional incentive.
• Benefits, such as health insurance, reward
membership in firm.
 PERFORMANCE APPRAISAL and
FEEDBACK
– Provides managers with the information they
need to make good human resources decisions
about how to train, motivate, and reward
organizational members;
– Feedback from performance appraisal serves a
developmental purpose for members of an
organization.
MANAGING LABOR RELATIONS
– Steps that managers take to develop and
maintain good working relationships with the
labor unions that may represent their
employees’ interests.

12-24
 GOALS OF HUMAN RESOURCE
MANAGEMENT
• Facilitating organizational competitiveness
• Enhancing productivity and quality
• Complying with legal and social obligations
• Promoting individual growth and development
– HRM is viewed as part of a psychological contract with
employees .
 HRM as a STAFF versus LINE FUNCTION
• Line managers: Directly responsible for creating
goods and services.

• Staff managers: Responsible for an indirect or

support function that would have costs
– Bottom-line contributions are less direct
 Recent trend
– HRM activities are carried out by line
managers .

– Some firms have HR departments structured

around centers of excellence
 HR DEPARTMENTS in SMALLER versus LARGER
ORGANIZATIONS
• Smaller organizations
– Require line managers to handle their basic HR functions
– Employees receive less training
– Exempt from many legal regulations
• Larger organizations
– Separate HR unit is a necessity
– Require one full-time manager and a secretary
– HR functions have specialized subunits
 Trends Shaping Human Resource
Management
• Workforce Demographics and Diversity Trends
• Trends in how people work
• Technological trends
• Globalization
• Economic Trends
 Workforce Demographics and Diversity
Trends
• The composition of the workforce will continue to become
more diverse with
• More women
• Minority group members
• Older workers in the workforce
 TRENDS ON HOW PEOPLE WORK
• On-Demand Workers --freelancers and
independent contractors who work when they
can & what they want to work on, or when the
company needs them.
• Human Capital --employers giving emphasis on
their workers’ knowledge, education, training,
skills, and expertise.
 Globalization Trends
• Free flow of trade among countries increased
international competition;
• More globalization means more competition;
• More competition meant pressure to be
“world class”
 ECONOMIC TRENDS

• Labor force trends

• The unbalanced labor force
 TECHNOLOGY TRENDS
• Employers use social media for recruiting employees
• New mobile applications for monitor location
• Gaming support
• Cloud computing
• Data analytics—talent analytics
 HUMAN RESOURCE MANAGEMENT
SYSTEM
• Integrated and interrelated approach to managing human resources
– Recognizes interdependence among various tasks and functions that
must be performed
• HRM subsystems affect and are affected by other organizational sub-
systems
– Utility analysis: Attempts to measure the impact and effectiveness of
HRM practices in terms of metrics such as a firm’s financial
performance
 CHARACTERISTICS of CONTEMPORARY HR
MANAGERS
• Understand different specialized areas such as:
– Legal environment
– Process of change management
– Labor relations
• Possess general management abilities that reflect
conceptual, diagnostic, and analytical skills
 LO 5
Figure 1.4 Human Resource Management as a
Center for Expertise

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 CAREERS in HUMAN RESOURCE
MANAGEMENT
• Obtain a degree in Human Resource
Management
– Provides an entry-level employment opportunity as an HR
manager
• Line management can be used as a route to
HRM
– Enabled via rotation of managers through the HR function
END OF CHAPTER 1
 5
Information
for Making
Human
Resource
Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
 LEARNING OUTCOMES
1. Describe human resource planning as a source of
information for decision making
2. Discuss strategy as a source of information for making
human resource decisions
3. Discuss economic conditions as a source of information
for making human resource decisions

SLIDE 3
4. Describe job analysis as a source of
information for making human resource
decisions
5. Discuss the job-analysis process and identify
and summarize common job-analysis methods
 LO 1
Figure 5.1 The Human Resource Planning Process

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 Forecasting the Supply of Human
Resources
• Managers can use several mechanisms while
forecasting
– Observe trends in the organization
– Check the extent to which people leave jobs voluntarily or
involuntarily
• Human resource information system
– Integrated and increasingly automated system for
maintaining a database regarding the employees in an
organization
 Labor Force Trends and Issues
• Reasons for diversity in the workforce
• Aging of the baby boom generation
• Declining birth rates for the post–baby boom
generation
• Improved health and medical care
• Mandatory retirement ages
• Gender differences
• Changing ethnicity
Labor Force Trends and Issues (Continued)
• Usage of external data to predict supply of
labor
• Immigration patterns
• Mathematical trend models
• Executive succession: Systematically
planning for future promotions into top
management positions
Forecasting the Demand for Human
Resources
• Can be assessed by viewing the firm’s
strategic plans regarding anticipated:
• Growth
• Stability
• Decline
• Requires managers to consider larger,
broader trends in the economy
 Strategy as a Source of Information
Growth strategy

• Indicates growing sales, increasing demand, and expanding

operations for the organization

Stability strategy

• Organizations implement programs that help reduce turnover

among current employees, making stability easier to maintain
Reduction strategy

• Alternative to terminations and layoffs is early retirement

Economic Conditions as a Source of LO 3

Information
Rate of unemployment
• Calculated by the Bureau of Labor Statistics as the
percentage of individuals looking for and available for work
who are not currently employed
Market wage rates

• Prevailing wage rate for a given job in a given labor market

Human capital investments

• Investments people make in themselves to increase their

value in the workplace
Job Analysis as a Source of Information
• Job analysis: Process of gathering and
organizing detailed information about
various jobs within an organization
• Knowledge, skills, and abilities (KSA):
Fundamental requirements necessary to
perform a job
 LO 4
Figure 5.3 Job Analysis and Other Human Resource
Functions

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 LO 5
Figure 5.4 Steps in Job Analysis

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Different Methods to Collect Information LO 5

• Job analysts: Individuals who perform job analysis in

an organization
• Subject matter expert (SME): Individual who is
highly knowledgeable about a particular job
• Provides data for job analysis
• Occupational Information Network (O*NET):
Database that provides both basic and advanced job-
analysis information
 Job-Analysis Techniques LO 5

Narrative job analysis

• One or more SMEs prepare a written

narrative or text description of the job
Fleishman job-analysis system

• Defines abilities as enduring attributes of

individuals that account for differences in
performance
Job-Analysis Techniques (Continued 1) LO 5

Task-analysis inventory

• Family of job-analysis methods where each has

unique characteristics
Functional job analysis

• All jobs can be described in terms of level of

involvement with people, data, and things
Job-Analysis Techniques (Continued 2)
Position analysis questionnaire (PAQ)

• Consists of 194 items that reflect work behavior, working

conditions, and job characteristics that can be generalized
across a wide variety of jobs
Management position description
questionnaire (MPDQ)
• Contains 197 items that focus on analyzing managerial
jobs in terms of 13 essential components
Critical incidents approach

• Focuses on critical behaviors that distinguish effective

from ineffective performers
Job-Analysis Techniques (Continued 2) LO 5

Position analysis questionnaire (PAQ)

• Consists of 194 items that reflect work behavior, working

conditions, and job characteristics that can be generalized
across a wide variety of jobs
Management position description questionnaire
(MPDQ)
• Contains 197 items that focus on analyzing managerial jobs in
terms of 13 essential components
Critical incidents approach

• Focuses on critical behaviors that distinguish effective from

ineffective performers
Job Descriptions and Job Specifications LO 5

Job description

• Lists the tasks, duties, and responsibilities for a

particular job
Job specification

• Focuses on the individual who will perform the job

• Indicates the knowledge, abilities, skills, and other
characteristics that one must possess
Modeling Competencies and the End ofLO 5
the Job
• Concept of a job is becoming obsolete
• Traditional job-analysis methods cannot be applied
in modern organizations
• Competency
• Broader than abilities
• Exists at a deeper level and underlies abilities
• Competencies are identified by a team of top
managers who work with consultants
 Legal Issues in Job Analysis LO 5

• Federal guidelines on selection include:

• Discussion of the appropriate ways to conduct job
analysis
• Careful analysis before establishing the job
relatedness of a selection instrument
• Issues regarding accuracy of job-analysis information
• Gender discrimination
• Creation of autonomous work teams
THANK YOU!
 6
Human
Resource
Decision
Making in
Organizations
Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
LEARNING OUTCOMES
1. Discuss the role of ethics in human resource
decision making
2. Describe the concept of rightsizing and identify
organizational strategies for rightsizing
3. Describe how to manage termination and
retention
4. Describe the elements of voluntary turnover
5. Discuss the key human resource issues during
mergers and acquisitions

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 Ethics and Human Resource
Management
• Ethics: Individual’s beliefs about what is right and
wrong and what is good and bad
• Formed by the societal context in which people and organizations
function
• May or may not coincide with the law
• Business ethics is complicated in the global environment of
business
• Different countries and different cultures have different values and
norms
 RIGHTSIZING
• Monitoring and adjusting the composition of
the organization’s workforce to its optimal size
• Managing the workforce size involves:
• Layoffs or early-retirement programs
• Retention programs
• Using temporary workers as a bridge between the
current state of affairs and growth or reduction
 Dealing with Increased Demand for
Employees
• Overtime: Hours worked above the normal 40-hour
workweek, for which there is usually a pay premium
• Fair Labor Standards Act stipulates compensation
at a rate of one and a half times the normal hourly
rate
• Unionized organizations have contracts that specify
decision rules to be followed
• Could lead to increased fatigue and anxiety
 Dealing with Increased Demand for
Employees - Employee Leasing
• Paying a fee to a leasing company to provide a pool
of employees who are available on a temporary basis
• Employees are:
• Required to handle most of the organization’s work
needs in specific areas
• Temporarily available and cost more
• More likely to be less committed and attached to
the firm
 Dealing with Increased Demand for
Employees - Part-Time Workers
• Individuals who are regularly expected to
work less than 40 hours a week
• Usually do not receive benefits
• Provide scheduling flexibility to the
organization that hires them
 Dealing with a Declining Need for
Employees
• Cutting back on the contingent workforce and
retaining only permanent members
• Works best in cyclical industries
• Early retirement and natural attrition
• Provide incentives for other employees to retire
early
• Plans must be voluntary
• Failure to do so could elicit legal actions
 STRATEGIES FOR LAYOFFS
• Layoffs lead some employees to:
• Sue the organization for wrongful termination
• React aggressively or violently toward those
perceived responsible
• Employee’s perception of the justice involved
in the layoff process is a critical determinant
of his/her reaction
Types of Justice Related to Layoff Reactions
Distributive justice

• Perceptions that the outcomes a person faces are fair

when compared to the outcomes faced by others
Procedural justice

• Perceptions that the process used to determine the

outcomes were fair
Interactional justice

• Quality of the interpersonal treatment people receive

when a decision is implemented
Table 6.1 Critical Dimensions of Procedural Justice

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 Effectiveness of Downsizing LO 2

• Most studies suggest that downsizing is an ineffective

strategy
• Strategy preferred by stockholders
• Downsizing results in negative effects on stock prices and
other financial indexes
• Survivor syndrome
• Existing employees’ morale and commitment drop
dramatically
• Alternatives to layoffs may result in job loss
 Managing Involuntary Turnover
• Involuntary turnover: Terminating employees whose
services are no longer desired
• Represents a failure in the HR system
• Managers should always start with an effort to rectify
the problem before termination
• Employee assistance programs (EAPs)
• Help employees and reduce the costs associated with lost
workdays and poor productivity
 Progressive Discipline
• Designed to try to improve performance through the
use of punishment and discipline
• Progressive disciplinary plans: Severity of
punishment increases over time or across the
problem
• Steps involved include verbal warnings, written
warnings, suspension, and termination
 Employment at Will
• Employer can terminate any employee, at any
time, for any reason, or for no reason at all
• Key to successful termination is documentation
• Some firms use positive discipline
• Emphasizes positive changes instead of
punishment
 Employee Retention
• Ways of reducing the voluntary turnover of
desired employees
• HR analytics plays an important role
• Regular employee satisfaction survey and exit
interviews provide valuable information
 LO 3
Figure 6.1 A Model of the Turnover Process

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 Job Dissatisfaction
• Feelings of being unhappy with one’s job
• Major cause of voluntary turnover
• Increasing job satisfaction is complicated
• Economy and labor market play a role
• Causes
• Nature of work
• Pay and benefits
• Supervisors and co-workers
Effects of Job Dissatisfaction
Organizational commitment

• Degree to which an employee identifies with an

organization and is willing to exert effort on behalf
of the organization
Organizational citizenship behaviors
(OCBs)
• Employee behaviors that are beneficial to the
organization but are not formally required as part
of an employee’s job
 Measuring and Monitoring Job
Satisfaction
• Attitude surveys
• Job descriptive index (JDI) - Assesses satisfaction
with specific job aspects
• Usage of instruments that include questions
about desired versus experienced levels of
satisfaction
• Example - Faces scale
 Retention Strategies
• Job enrichment
• Making work meaningful and giving more autonomy
and opportunity to use skills
• Realistic job previews: Pre-employment previews
that provide accurate and realistic information to the
job applicant
• Stock options: Rights given to employees to
purchase a certain number of shares of stock at a
given price
 Managing HR during Mergers and
Acquisitions
• Employees are concerned with job security
• Mergers and acquisition threaten a worker’s self-
identity and core beliefs
• HR managers can serve as the center of
communication
• Important to build employee identification with the
new corporate identity