CHAPTER 1

Human Resource Management

in Organizations
SECTION 1 Environment for Human Resource Management

©
© 2011
2011 Cengage
Cengage Learning.
Learning. All
All rights
rights reserved.
reserved. May
May not
not be
be
scanned,
scanned, copied
copied or
or duplicated,
duplicated, or or posted
posted to
to aa publicly
publicly PowerPoint
PowerPoint Presentation
Presentation by
by Charlie
Charlie Cook
Cook
accessible
accessible Web
Web site,
site, in
in whole
whole or
or in
in part.
part. The
The University
University of
of West
West Alabama
Alabama
 Chapter Objectives

After you have read this chapter, you should be able to:
• Define human capital and identify the seven categories
of HR activities.
• Discuss how organizational culture and HR are related
and identify four areas that are part of these relationships.
• Explain how organizational ethical issues affect HR
management.
• Provide an overview of six challenges facing HR today.
• Describe how the major roles of HR management
are being transformed.
• Explain the key competencies needed by HR
professionals and why certification is important.
© 2011 Cengage Learning. All rights reserved. May not be scanned,
copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–2
 Nature of Human Resource Management
• Human Resource (HR) Management
 Designing management systems to ensure that
human talent is used effectively and efficiently to
accomplish organizational goals.
• Who Is an HR Manager?
 In the course carrying out their duties, every operating
manager is, in essence, an HR manager.
 HR specialists design processes and systems that
operating managers help implement.

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–3
 Types of Organizational Assets

Assets

Physical Financial Intangible Human

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–4
 FIGURE 1–1 Core Competencies in Possible HR Areas

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–5
 Human Capital in Organizations

Human Capital Core Competency

The collective value of the A unique capability that

capabilities, knowledge, creates high value and
skills, life experiences, and differentiates an organization
motivation of an from its competition.
organizational workforce.

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–6
 FIGURE 1–2
HR Management
Functions

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–7
 HR Management: Interlinked Functions
1. Strategic HR Management
2. Equal Employment Opportunity
3. Staffing
4. Talent Management and Development
5. Total Rewards: Compensation and Benefits
6. Risk Management and Worker Protection
7. Employee and Labor Relations

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–8
 Organizational Culture and HR
• Organizational Culture
 Is the shared values and beliefs in an organization.
 Is the internal “climate” of the organization that
employees, managers, customers, and others
experience.
 Positively affects service and quality, productivity,
and financial results when aligned with HR values
and organizational goals.
 Is affected by differences in cultural dimensions from
country to country and even within countries.

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–9
 Hofstede’s Dimensions of Culture

Individualism/
Inequality
Group
of Power
Orientation

Culture

Long-term/
Masculinity/
Short-term
Femininity
Orientation

Uncertainty
Avoidance

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–10
 Organizational Productivity

Productivity Unit Labor Cost

A measure of the quantity A measure of HR productivity

and quality of work done, computed by dividing the
considering the cost of average cost of workers by
the resources used. their average levels of
output.

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–11
 FIGURE 1–3 Approaches to Improving Organizational Productivity

Restructuring the Organization Re-Designing Work

• Revising organizational structure • Changing workloads and combining
jobs
• Reducing staff
• Reshaping jobs due to technology
• Aiding in mergers and acquisitions changes

Goals
• Increase
organizational
productivity
• Reduce unit
labor costs

Aligning HR Activities
Outsourcing
• Attracting and retaining employees
• Using domestic vendors/contractors
• Training, developing, and evaluating
instead of employees
employees
• Outsourcing operations
• Compensating employees and other
internationally
HR activities

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–12
 Social Responsibilities and HR
• HR Advantages and Social Responsibilities
 Attracting and retaining employees
 Achieving sustainability in dealing
with economic challenges
 Creating a “green culture”

• Global Social Responsibility and HR

 Results in higher organizational images globally,
better employee morale and loyalty, and more
competitive advantages with consumers

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–13
 Customer Service and Quality Linked to HR

• Linking HR to social responsibility, customer

service, and quality significantly affects
organizational effectiveness.

Human Resource Management

Social Customer
Quality
Responsibility Service

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–14
 Employee Engagement and HR Culture
• Employee Engagement
 Is the extent to which individuals feel linked to
organizational success and how the organization
performs positively.
• Social Networking
 Involves communicating to other employees, nonwork
friends, community contacts, and others.
 Has evolved from personal contacts and oral
communications to include:
 E-mail and text messages
 Twitters
 Blogs
© 2011 Cengage Learning. All rights reserved. May not be scanned,
copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–15
 FIGURE 1–4 Business Ethics and HR Management Consequences

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–16
 Ethical Behavior and Organizational Culture

Ethics Program
Elements

Written code Employee Advice to Confidential

of ethics and training on employees reporting of
standards of ethical on ethical ethical
conduct behaviors situations problems

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–17
 HR’s Role in Organizational Ethics

Legal Question Ethical Question

• Does the behavior or • Does the behavior or

result meet all result meet both
applicable laws, organizational standards
regulations, and and professional
government codes? standards of ethical
behavior?

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–18
 FIGURE 1–5 Examples of HR-Related Ethical Misconduct Activities

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–19
 HR Ethics and Sarbanes-Oxley (SOX)
• Reduce the likelihood of illegal and unethical
behaviors by:
 Having a written code of ethics and conduct standards
 Providing ethical behavior training and advice
 Establishing confidential reporting systems for ethical
misconduct
 Providing whistle-blower protection
 Supporting HR’s role as “keeper and voice” of
organizational ethics

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–20
 Current HR Management Challenges

Organizational Cost Economics

Pressures and and
Restructuring Job Changes

Human
Resource
Management

Globalization of Workforce
Organizations Demographics
and HR and Diversity

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–21
 Economics and Job Changes

Future
Job Change
Concerns

Workforce Growth in
Occupational Talent
Availability and Contingent
Shifts Management
Quality Workforce

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–22
 FIGURE 1–6 Fastest Growth in Job Changes to 2016

Source: U.S. Bureau of Labor Statistics, www.bls.gov.

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–23
 FIGURE 1–7 Hourly Compensation Costs for Manufacturing
Production Workers

Source: U.S. Bureau of Labor Statistics, www.bls.gov.

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–24
 HR Technology
• Human Resource Management System (HRMS)
 An integrated system providing information used by
HR management in decision making.
• Purposes of HRMS Data Collection
 Administrative and operational efficiency in :
 Automation of payroll and benefit activities
 EEO/affirmative action tracking
 Web-based communication with employees
 Availability of data for HR strategic planning

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–25
 Uses of a Web-Based HRMS

HRMS on
the Internet

Bulletin Data Employee Extended

Boards Access Self-Service Linkage

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–26
 Smaller Organizations and HR Management

HR Issues

Shortage of Increasing Government

Qualified Costs of Rising Taxes Regulation
Workers Benefits Compliance

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–27
 HR Cooperation with Operating and Line Managers
• HR Unit • Managers
 Develops legal, effective  Advise HR of job openings
interviewing techniques  Decide whether to do own
 Trains managers in final interviewing
conducting selection  Receive interview training
interviews from HR unit
 Conducts interviews and  Do final interviewing and
testing hiring where appropriate
 Sends top three applicants  Review reference
to managers for final review information
 Checks references  Provide feedback to HR unit
 Does final interviewing and on hiring/rejection decisions
hiring for certain job
classifications
© 2011 Cengage Learning. All rights reserved. May not be scanned,
copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–28
 FIGURE 1–8 Typical Division of HR Responsibilities: Recruiting

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–29
 HR Management Roles

HR Management Roles

Operational and
Administrative Employee Strategic
Advocate

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–30
 FIGURE 1–9 Roles of HR Management

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–31
 HR Management Competencies
and Careers

Strategic
Contribution

Business Knowledge

HR
HR Delivery
Competencies

HR Technology

Personal Credibility

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–32
 HR Management as a Career Field

HR Generalist HR Specialist

A person who has A person who has in-

responsibility for depth knowledge and
performing a variety expertise in a limited
of HR activities. area of HR.

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–33
 FIGURE 1–10
HR Certifications
at a Glance
* In addition to meeting the
exam eligibility requirements,
successful exam candidates
usually have the above work
experience.

© 2011 Cengage Learning. All rights reserved. May not be scanned,

copied or duplicated, or posted to a publicly accessible Web site, in
whole or in part. 1–34