Human Resource Management

Global Edition
13th Edition

Chapter 1
STRATEGIC HUMAN
RESOURCE MANAGEMENT:
AN OVERVIEW

edited by E. Rizk
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 Learning Objectives
• Describe employer branding and define human resource
management.
• Identify the human resource management functions.
• Identify the external environmental factors that affect human
resource management and describe the trend for increased
mobility of tasks performed by HR professionals.
• Explain why corporate culture is a major internal
environmental factor.
• Explain who performs human resource management tasks.

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 Learning Objectives (Cont.)
• Describe how human resource management activities may be
different for small businesses.
• Describe the various human resource classifications including
executives, generalists, and specialists.
• Describe the evolution of human resource management and
explain the evolving HR organization.
• Describe the professionalization of human resource management.
• Explain the possible hurdles of managing human resources across
different cultures.

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 Human Capital

Human capital development is the process of improving an

organization's employee performance, capabilities and
resources. ... If they can become more productive on an
individual level through development, the organization in turn
will begin seeing productivity gains.

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 Human Capital vs Resources
Human capital management is a relatively new way of thinking
about employees. While the field of human resources has been
around for over 100 years, the phrase human capital emerged in
the 1960s during an age of automation. Instead of looking at
workers as expendable people who just completed the low-level
tasks a business assigned to them, companies began viewing
employees as valuable assets

After all, the term capital refers to economic value — which

employees can bring to an organization if it provides them with
the right framework, resources, compensation, and support.
Employees deliver economic value through their education, skills
and expertise, personal values and beliefs, networks and
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connections, and their physical and mental health
 Corporate Culture
• Corporate culture: System of shared values, beliefs, and
habits within an organization that interacts with the formal
structure to produce behavioral norms

• Throughout the text, the importance of various topics related

to corporate culture will be described beginning with
Employer Branding

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HRM in Action: Corporate Culture and Employer
Branding
• Employer branding: Firm’s corporate image or culture
created to attract and retain the type of employees the
firm is seeking
• Companies want a brand that will entice individuals to join
and remain with the firm

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 Human Resource Management
(HRM)

• Utilization of individuals to achieve organizational objectives

• Concern of all managers at every level
• Face a multitude of challenges

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 HRM Functions

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 Staffing

Process of ensuring the organization always has:

• Required number of employees
• Employees with appropriate skills
• Employees in the right jobs at the right time
• Constant job analysis, human resource planning, recruitment,
and selection

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 Job Analysis

• Systematic process of determining skills, duties, and

knowledge required for performing jobs in an organization
• Impacts virtually every aspect of HRM

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 Human Resource Planning

• Matching internal and external supply of people with

anticipated job openings over a specified period of time
• Sets the stage for recruitment and other HR actions

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 Recruitment and Selection

Recruitment: Attracting individuals to apply for jobs

•Must be timely
•Applicants need appropriate qualifications
•Need sufficient number of applicants
Selection: Choosing individual best suited for a particular
position and the organization

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Human Resource Development

Major HRM functions include:

– Training
– Development
– Career planning
– Career development
– Organization development
– Performance management
– Performance appraisal

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 Training and Development

Training: Providing learners with knowledge and skills needed

for their present jobs
Development: Offering learning that goes beyond present job
•Long-term focus

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 Career Planning and Development

Career planning: Ongoing process.

• Individual sets career goals
• Identifies means to achieve them

Career development: Formal approach used by the organization.

• Ensures a pipeline of people with proper qualifications and
experiences

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 Organization Development

Planned and systematic attempt to:

– Make the organization more effective
– Create positive behavioral environment

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 Performance Management

Goal-oriented process to ensure organizational processes

are in place to maximize productivity
•Applies to employees, teams, and ultimately, the
organization

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 Performance Appraisal
Formal system of review and evaluation
– Individual
– Team

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 Compensation

All rewards that individuals receive as a result of their

employment

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 Financial Compensation

Direct: Pay employee receives in form of wages, salaries,

bonuses, or commissions
Indirect: Benefits employee receives
•Paid vacations, sick leave, holidays, medical insurance

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 Nonfinancial Compensation

Satisfaction that employees receive from:

– Job itself
– Psychological and/or physical environment

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 Safety and Health

Safety: Protecting employees from injuries caused by work-related

accidents
Health: Employees' freedom from illness and their general
physical and mental well-being

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 Labor Unions and Collective Bargaining

• Businesses are required by law to recognize a union and

bargain with it in good faith if firm’s employees want a union
to represent them
• Human resource activity with a union is often referred to as
industrial relations

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 Internal Employee Relations

HRM activities associated with the movement of employees

within the organization. Examples:
– Promotions
– Demotions
– Terminations
– Resignations

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 Interrelationships of HRM Functions

• All HRM functions are interrelated so that each function affects

the others

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Environment of Human Resource Management

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 Labor Market

• Potential employees located within certain geographic area

• Always changing
– High Turnover not healthy
– High Turnover costs a lot of time and money

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 Society

Firm must accomplish its purpose while complying with

societal norms
Ethics: Deals with what is good and bad, or right and
wrong, and with moral duty and obligation
Corporate social responsibility: Implied, enforced, or felt
obligation of managers to serve or protect interests of
groups other than themselves

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 Unions

• Group of employees who have joined together to collectively

bargain with their employer
• Become a third party when dealing with the company

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 Shareholders

• Owners of a corporation
• Have invested money in the firm
• May at times challenge programs considered by
management to be beneficial to organization24

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Stakeholders

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 Competition

• In product or service and labor markets

• Firms must maintain a supply of competent employees
• Bidding war often results

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 Customers

• People who actually use firm’s goods and services

• Employment practices should not antagonize members
of the market that the firm serves
• Workforce should be capable of providing top-quality
goods and services

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Trends & Innovations: Mobile HR - Is the Cloud
the Limit?

• Trend: Increased mobility of tasks performed by HR

professionals
• Mobile applications are available for many HR functions
• Cloud computing: Means of providing software and data via
the Internet

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 HR Technology

Rapid technological changes provide:

•Increased sophistication
•Ability to design more useful human resource
information systems (HRIS)

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 HRIS
• An organized approach for obtaining information on which to
base HR decisions
• An umbrella for merging the various subsystems
• Mainstay HR responsibilities need an HRIS

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 Economy
• When economy is booming, it is often more difficult to
recruit qualified workers
• In economic downturn, more applicants are typically
available

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 Unanticipated Events

• Unforeseen occurrences in external environment

• Require a tremendous amount of adjustment with regard to
HRM

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Corporate culture as a Major Internal
Environment Factor

• Gives people a sense of how to

behave and what they ought to
be doing
• Topics related to corporate
culture are presented throughout
this text

Copyright © 2014 Pearson Education 1-40

 HR’s Changing Role: Questions

• Can some HR tasks be performed more

efficiently by line managers or outside
vendors?
• Can some HR tasks be centralized or
eliminated?
• Can technology perform tasks that were
previously done by HR personnel?
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 Who Performs Human
Resource Management Tasks?

• Human resource managers

• HR outsourcing
• HR shared service centers
• Professional employer organization (employee leasing)
• Line managers

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 Human Resource Manager

• Historically, the HR manager was responsible for each of the

five HR functions
• Acts in advisory or staff capacity
• Works with other managers to help them deal with human
resource matters
• Today, HR departments continue to get smaller

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 HR Outsourcing

• Transfers responsibility to an external provider

– Discrete services
– Business process outsourcing (BPO)

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 Discrete Services

• Single set of high-volume repetitive functions is outsourced to

a third party
• Typically transactional HR activities

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 Business Process Outsourcing (BPO)

• Majority of HR services are transferred to third party

• Largest HR outsourcer is IBM
• Kraft Foods Inc. and IBM signed a multi-year BPO
agreement
• The story of IBM: Samuel Palmisano succeeding Louis
Gerstner

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 Recruitment Process Outsourcing (RPO)

• As recession slowed and firms began to hire, some companies

realized that they had lost their recruiting skills
• Many had not kept up with the rapidly changing technology
• RPO companies are stepping in to fill the void in recruitment
skills

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 HR Shared Service Centers (SSCs)

• Takes routine, transaction-based activities

that are dispersed and consolidates them
in one location
• Provide an alternative to HR outsourcing

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 Line Managers Performing
HR Tasks
• Line managers: Individuals directly overseeing the
accomplishment of the organization’s primary goals
• Involved with human resources by nature of their jobs
• Now performing some duties typically done by HR

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Human Resource Executives, Generalists, and
Specialists

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 A Possible Evolving HR
Organization Example

President
and CEO

Vice
Director
Vice President, Vice Vice
of Safety
President, Strategic President, President,
and
Operations Human Finance Marketing
Health
Resources

Training & Compensation Staffing (Line Managers, use of

Development (Shared Service Applicant Tracking Systems)
(Outsourced) Centers)
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 WorldatWork
• Focused on compensation, benefits,
work–life effectiveness, and integrated
total rewards
• Certification of professionals
• Strategies to attract, motivate, and retain
an engaged and productive workforce

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