Chapter 10 Managing Human Resource

CHAPTER
10
HUMAN
RESOURCE
MANAGEMENT
LEARNING OUTLINE
• Explain why Human Resource is Important.
• Discuss current Issues in Human Resource Management.
• Human Resource Planning; Recruitment/ Decruitment; Selection;

Orientation; Training.
• Explain how an organization’s human resources can be a

significant source of competitive advantage.
• List eight activities necessary for staffing the organization and

sustaining high employee performance.
The Importance Of Human Resource
Management (HRM)
• As a necessary part of the organizing function of management

• Selecting, training, and evaluating the work force
• As an important strategic tool
• HRM helps establish an organization’s sustainable competitive
advantage.
• Adds value to the firm
• High performance work practices lead to both high individual
and high organizational performance.
THE HRM PROCESS
• Functions of the HRM Process

• Ensuring that competent employees are identified and
selected.
• Providing employees with up-to-date knowledge and skills to
do their jobs.
• Ensuring that the organization retains competent and high-
performing employees who are capable of high performance.
EXHIBIT HUMAN RESOURCE MANAGEMENT PROCESS
MANAGING HUMAN RESOURCES
• Human Resource (HR) Planning

• The process by which managers ensure that they have the
right number and kinds of people in the right places, and
at the right times, who are capable of effectively and
efficiently performing their tasks.
• Helps avoid sudden talent shortages and surpluses.
MANAGING HUMAN RESOURCES
• Human Resource (HR) Planning

• Two Steps in HR planning:
• Assessing current human resources
• Assessing future needs for human resources
• Developing a program to meet those future needs

CURRENT ASSESSMENT
1. Human Resource Inventory
• A review of the current Human resource inventory.
• Inventory including information on employees such as name,

education, training, prior employment, languages spoken,
special capabilities, and specialized skills.
• Good HR planning helps managers to identify the people they

need.
CURRENT ASSESSMENT (CONT’D)
2. Job Analysis
• An assessment that defines a job and the behaviors necessary to perform the job
• Using information from job analysis, managers develop or revise job description
and job specifications.
• Job Description : A written statement of what the job holder does, how it is done,
and why it is done.
• Job Specification: A written statement of the minimum qualifications that a
person must possess to perform a given job successfully.
MEETING FUTURE HUMAN RESOURCE NEEDS
Supply of Employees Demand for Employees
Factors Affecting Staffing

Strategic Goals
Forecast demand for products and services
Availability of knowledge, skills, and abilities
RECRUITMENT AND DECRUITMENT
• Recruitment
• The process of locating, identifying, and attracting capable applicants to an
organization
• Decruitment
• The process of reducing a surplus of employees in the workforce of an
organization
• E-recruiting
• Recruitment of employees through the Internet
• Organizational web sites
• Online recruiters
EXHIBIT MAJOR SOURCES OF POTENTIAL JOB CANDIDATES
SELECTION
• Selection Process
• The process of screening job applicants to ensure that the most appropriate
candidates are hired.
• What is Selection?
• An exercise in predicting which applicants, if hired, will be (or will not be)
successful in performing well on the criteria the organization uses to evaluate
performance.
• Selection errors:
• Reject errors for potentially successful applicants
• Accept errors for ultimately poor performers
EXHIBIT SELECTION DECISION OUTCOMES
EXHIBIT SELECTION DEVICES
• Application Forms
• Written Tests e.g. Intelligence
• Performance Simulations (Testing an applicant’s ability to perform actual
job behaviors, use required skills, and demonstrate specific knowledge of
the job)
• Interviews (Although used almost universally, managers need to approach
interviews carefully).
• Background Investigations (Verification of application data and Reference
check).
• Physical Examinations (Useful for physical requirements and for insurance
purposes related to pre-existing conditions).
SUGGESTIONS FOR INTERVIEWING
1. Structure a fixed set of questions for all applicants.

2. Have detailed information about the job for which applicants are
interviewing.
3. Minimize any prior knowledge of applicants’ background, experience, or
other characteristics.
4. Ask behavioral questions that require applicants to give detailed accounts
of actual job behaviors.
5. Use a standardized evaluation form.
6. Take notes during the interview.
7. Avoid short interviews that encourage premature decision making.
OTHER SELECTION APPROACHES (CONT’D)
• Realistic Job Preview (RJP)

• The process of relating to an applicant both the positive
and the negative aspects of the job.
• Encourages mismatched applicants to withdraw.
• Aligns successful applicants’ expectations with

actual job conditions; reducing turnover.
ORIENTATION
• Transitioning a new employee into the organization.

• Work-unit orientation
• Familiarizes new employee with work-unit goals
• Clarifies how his or her job contributes to unit goals
• Introduces he or she to his or her coworkers
• Organization orientation
• Informs new employee about the organization’s objectives, history, philosophy, procedures,
and rules.
• Includes a tour of the entire facility
TYPES OF TRAINING
Type Includes
General Communication skills, computer systems application and
programming, customer service, executive development,
management skills and development, personal growth, sales,
supervisory skills, and technological skills and knowledge
Specific Basic life/work skills, creativity, customer education,

diversity/cultural awareness, remedial writing, managing
change, leadership, product knowledge, public
speaking/presentation skills, safety, ethics, sexual harassment,
team building, wellness, and others
EMPLOYEE TRAINING METHODS
• Traditional • Technology-Based
Training Methods Training Methods
 On-the-job  CD-ROM/DVD/videotapes/
audiotapes
 Job rotation
 Videoconferencing/
 Mentoring and coaching
teleconferencing/
 Experiential exercises satellite TV
 Workbooks/manuals  E-learning
 Classroom lectures
Employee Performance Management
• Performance Management System
• A process of establishing performance standards and

appraising employee performance in order to arrive at
objective HR decisions and to provide documentation
in support of those decisions.
ADVANTAGES AND DISADVANTAGES OF PERFORMANCE APPRAISAL METHODS
Method Advantage Disadvantage
Written Simple to use More a measure of evaluator’s writing
essays ability than of employee’s actual
performance
Critical Rich examples; behaviorally Time-consuming; lack quantification
incidents based
Graphic Provide quantitative data; less Do not provide depth of job behavior
rating scales time-consuming than others assessed
BARS Focus on specific and Time-consuming; difficult to develop

measurable job behaviors
Multiperson Compares employees with Unwieldy with large number of employees;
comparisons one another legal concerns
MBO Focuses on end goals; results Time-consuming
oriented
360-degree Thorough Time-consuming
appraisals
COMPENSATION AND BENEFITS
• Benefits of a Fair, Effective, and Appropriate Compensation System
• Helps attract and retain high-performance employees
• Impacts on the strategic performance of the firm
• Types of Compensation
• Base wage or salary
• Wage and salary add-ons
• Incentive payments
• Skill-based pay
• Variable pay
CAREER DEVELOPMENT
• Career Defined
• The sequence of positions held by a person during his or her lifetime.
• Career Development
• Individuals are responsible for designing, guiding, and developing their
own careers.
• Boundaryless Career
• A career in which individuals, not organizations, define career progression and
organizational loyalty
CURRENT ISSUES IN HRM
• Managing Downsizing
• The planned elimination of jobs in an organization
• Provide open and honest communication.
• Provide assistance to employees being downsized.
• Reassure and counseling to surviving employees.
• Managing Work Force Diversity
• Widen the recruitment net for diversity
• Ensure selection without discrimination
• Provide orientation and training that is effective
CURRENT ISSUES IN HRM (CONT’D)
• Sexual Harassment
• An unwanted activity of a sexual nature that affects an
individual’s employment.
• An offensive or hostile environment in which a person is
affected by elements of a sexual nature.
• Workplace Romances
• Potential liability for harassment
• Work-Life Balance
• Employees have personal lives that they don’t leave behind
when they come to work.
• Organizations have become more attuned to their employees
by offering family-friendly benefits:
• On-site child care
• Job sharing
• Summer day camps
• Leave for personal matters
• Flextime
• Flexible job hours
• Controlling HR Costs
• Employee health-care
• Encouraging healthy lifestyles
• Financial incentives
• Wellness programs
• Charging employees with poor health habits more for benefits
• Employee pension plans
• Reducing pension benefits
• No longer providing pension plans

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Chapter 10 Managing Human Resource

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CHAPTER

• Explain why Human Resource is Important.

• Discuss current Issues in Human Resource Management.

• Human Resource Planning; Recruitment/ Decruitment; Selection;

• Explain how an organization’s human resources can be a

• List eight activities necessary for staffing the organization and

• As a necessary part of the organizing function of management

• Functions of the HRM Process

• Human Resource (HR) Planning

• Human Resource (HR) Planning

• Developing a program to meet those future needs

• A review of the current Human resource inventory.

• Inventory including information on employees such as name,

• Good HR planning helps managers to identify the people they

Supply of Employees Demand for Employees

Factors Affecting Staffing

1. Structure a fixed set of questions for all applicants.

• Realistic Job Preview (RJP)

• Aligns successful applicants’ expectations with

• Transitioning a new employee into the organization.

Specific Basic life/work skills, creativity, customer education,

• Performance Management System

• A process of establishing performance standards and

BARS Focus on specific and Time-consuming; difficult to develop

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