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HRM – MGMT3017
UNDERSTANDING HRM
• Model, Philosophy & Objectives
MGMT 3017 - Dion Greenidge, Lecturer 1
• Distinguishing HRM from Personnel
Management
• Understanding the Strategic Focus
Learning Objective this Unit
By the end of this Unit, you should be able to:
1. Clearly articulate the HRM philosophy.
2. Describe the difference between HRM and 2. Describe the difference between HRM and
Personnel Management.
3. Give concise definitions for HRM.
4. Describe the various models/maps of HRM.
5. Know the history behind HRM.
MGMT 3017 - Dion Greenidge, Lecturer 2
Learning Objective this Unit
1. Define the key phases of HRM and detail the various HR activities involved.
5. Link HRM to the strategic planning process.
6. Understand the unitarist perspective of 6. Understand the unitarist perspective of HRM and how it differs from the pluralist perspective.
7. State the major HRM objectives.
MGMT 3017 - Dion Greenidge, Lecturer 3
What is Human Resource
Management?
What makes it Unique?
MGMT 3017 - Dion Greenidge, Lecturer 4
“HR should not be defined by what it does but by what it
delivers – results that enrich the organization’s value to
customers, investors, and employees”
MGMT 3017 - Dion Greenidge, Lecturer 5
customers, investors, and employees”
David Ulrich
What and Where are the Origins of
HRM?
• Has origins in USA back in the 1950’s but
did not gain wide recognition until
beginning of 1980’s.beginning of 1980’s.
• UK came on board in late 1980’s.
MGMT 3017 - Dion Greenidge, Lecturer 6
Beardwell & Holden (1997)
Why did HRM evolve?
• Pressures in Product markets in USA during
recession of 1980-82.
• Growing recognition in the USA that Trade
Union influence in collective employment Union influence in collective employment
was reaching fewer employees.
• US economy challenged by Japan and
others.
MGMT 3017 - Dion Greenidge, Lecturer 7
Beardwell & Holden (1997)
Why did HRM evolve?
• Attempting to cope with unsatisfactory
productivity in USA and UK.
• Need to create a work situation free of
conflict in which both employees and
employer worked toward the same goals
(unitarist perspective).
MGMT 3017 - Dion Greenidge, Lecturer 8
Beardwell & Holden (1997)
The Unitarist vs Pluralist Debate on
HRM…
• Unitarist Perspective – Employee and
employer share common goals in the
workplace. Conflict is not a normal event in workplace. Conflict is not a normal event in
the workplace.
• Pluralist Perspective – Employee and
employer do not have common goals and
conflict is accepted as a normal activity in the
workplace. Results from competing interests.
MGMT 3017 - Dion Greenidge, Lecturer 9
HRM Definitions
�The concept of fit with the strategic thrusts
of the organisation
�HR strategies exist to ensure that the
culture, values, structure and processes of
MGMT 3017 - Dion Greenidge, Lecturer 10
culture, values, structure and processes of
the organisation, and the quality, flexibility,
motivation and commitment of its members
to contribute fully to the achievement of its
objectives… should match the business
strategy Cooke 1990
HRM Definitions
�The attainment of business objectives
through the contribution it makes to the
creation of an environment in which people
commit themselves to and effectively
MGMT 3017 - Dion Greenidge, Lecturer 11
commit themselves to and effectively
accomplish the tasks assigned to them.(Nurse)
HRM Definitions
� Strategic HRM is largely about integration; to
ensure that HRM is fully integrated into
strategic planning; that HRM policies cohere
across policy areas and across hierarchies and across policy areas and across hierarchies and
that HRM practices are accepted and used by
line managers as part of their everyday work. (David Guest)
MGMT 3017 - Dion Greenidge, Lecturer 12
Why Is HR Management Important to
All Managers?
Personnel mistakes you don’t want to make:
• Having your employees not performing at
peak capacity
• Hiring the wrong person for the job • Hiring the wrong person for the job
• Experiencing high turnover
• Finding employees not doing their best
• Having your company taken to court because
of your discriminatory actions
13MGMT 3017 - Dion Greenidge, Lecturer
Why Is HR Management Important to
All Managers? (cont.)
Personnel mistakes you don’t want to make:
• Having your company cited under federal
occupational safety laws for unsafe practices
• Allowing a lack of training to undermine your • Allowing a lack of training to undermine your
department’s effectiveness
• Committing any unfair labor practices
14MGMT 3017 - Dion Greenidge, Lecturer
HRM OBJECTIVES…
• Employee job satisfaction, self-actualisation
and motivation
• Employee effectiveness and efficiency
• Improved quality (innovation & Creativity)• Improved quality (innovation & Creativity)
• Cost-effectiveness and competitiveness
• Labour flexibility
MGMT 3017 - Dion Greenidge, Lecturer 15
(Ivancevich)
HRM OBJECTIVES…
• Employee commitment
• Increased competence (training &
development)
• Participation and autonomy• Participation and autonomy
• Creating readiness for change
MGMT 3017 - Dion Greenidge, Lecturer 16
(Ivancevich)
HRM OBJECTIVES…
• Rewards and incentives linked to
performance
• More organic structures
• Recognition of human resource or people • Recognition of human resource or people
issues at the strategic level
MGMT 3017 - Dion Greenidge, Lecturer 17
(Ivancevich)
Five Key Phases of HRM…
MGMT 3017 - Dion Greenidge, Lecturer 18
Continuous Environmental Scanning and
Analysis
• Interpreting and analysing changes in the
environment and developing the appropriate
HR policies and strategies
MGMT 3017 - Dion Greenidge, Lecturer 19
Acquisition
• HR Planning
• Internal and External Staffing
• Employee Orientation and Socialisation
MGMT 3017 - Dion Greenidge, Lecturer 20
Development
• Training of Employees
• Management Development
• Career Development
• Knowledge Management• Knowledge Management
MGMT 3017 - Dion Greenidge, Lecturer 21
Motivation
• Job Design
• Performance Management
• Rewards and Compensation
• Job Evaluation• Job Evaluation
• Discipline
MGMT 3017 - Dion Greenidge, Lecturer 22
Maintenance/Retention
• Commitment
• Employee safety and Health
• Employee Relations
• Industrial Relations• Industrial Relations
MGMT 3017 - Dion Greenidge, Lecturer 23
Human
Human Resource Management Functions
1
Human
Resource
Manageme
nt
Safety and
Health
24MGMT 3017 - Dion Greenidge, Lecturer
Staffing
• Job Analysis
• Human Resource Planning
• Recruitment• Recruitment
• Selection
1-25MGMT 3017 - Dion Greenidge, Lecturer
Staffing (Cont.)
• Staffing - Process through which organization ensures it always has proper number of employees with appropriate skills in right jobs at right time to achieve organizational objectivesobjectives
• Job analysis - Systematic process of determining skills, duties, and knowledge required for performing jobs in organization
26MGMT 3017 - Dion Greenidge, Lecturer
Staffing (Cont.)
• Human resource planning - Systematic process of
matching internal and external supply of people
with job openings anticipated in the organization
over specified period of time
• Recruitment - Process of attracting individuals on
a timely basis, in sufficient numbers, and with
appropriate qualifications, to apply for jobs with
an organization
27MGMT 3017 - Dion Greenidge, Lecturer
Staffing (Cont.)
• Selection - Process of choosing from a group
of applicants the individual best suited for a
particular position and the organization
28MGMT 3017 - Dion Greenidge, Lecturer
Measuring Quality of Hire in Today’s
Environment
• How do you measure quality of hire and set
standards for new-hire performance?
• Quality of hire is stressed these days
• Developers of automatic tracking systems are • Developers of automatic tracking systems are
actively involved in trying to come up with the
answer to the question of “quality of hires”
• In a few years, some standards will emerge on how
you measure and represent your talent management
29MGMT 3017 - Dion Greenidge, Lecturer
Human Resource Development
• Training
• Development
• Career Planning
• Career Development• Career Development
• Organizational Development
• Performance Management
• Performance Appraisal
30MGMT 3017 - Dion Greenidge, Lecturer
Human Resource Development (Cont.)
• Training - Designed to provide learners with
knowledge and skills needed for their present
jobs
• Development - Involves learning that goes • Development - Involves learning that goes
beyond today's job; more long-term focus
• Career planning - Ongoing process whereby
individual sets career goals and identifies
means to achieve them
31MGMT 3017 - Dion Greenidge, Lecturer
Human Resource Development (Cont.)
• Career development - Formal approach used
by organization to ensure that people with
proper qualifications and experiences are
available when neededavailable when needed
• Organization development - Planned and
systematic attempts to change the
organization, typically to a more behavioral
environment
32MGMT 3017 - Dion Greenidge, Lecturer
Human Resource Development (Cont.)
• Performance management - Goal-oriented process directed toward ensuring organizational processes are in place to maximize productivity of employees, teams, and ultimately, the of employees, teams, and ultimately, the organization
• Performance appraisal - Formal system of review and evaluation of individual or team task performance
33MGMT 3017 - Dion Greenidge, Lecturer
Compensation
Compensation - All
rewards that
individuals receive individuals receive
as a result of their
employment
1-34MGMT 3017 - Dion Greenidge, Lecturer
Compensation
• Direct Financial Compensation - Pay that person receives in form of wages, salaries, bonuses, and commissions
• Indirect Financial Compensation (Benefits) - All financial rewards not included in direct financial rewards not included in direct compensation such as paid vacations, sick leave, holidays, and medical insurance
• Nonfinancial Compensation - Satisfaction that person receives from job itself or from psychological and/or physical environment in which person works
35MGMT 3017 - Dion Greenidge, Lecturer
Safety and Health
Employees who work in
safe environment and
enjoy good health are enjoy good health are
more likely to be
productive and yield
long-term benefits to
organization.
1-36MGMT 3017 - Dion Greenidge, Lecturer
Safety and Health
• Safety - Involves protecting employees from
injuries caused by work-related accidents
• Health - Refers to employees' freedom from
illness and their general physical and mental illness and their general physical and mental
well being
37MGMT 3017 - Dion Greenidge, Lecturer
Employee and Labor Relations
• Business is required by law to
recognize union and bargain with it in
good faith if firm’s employees want
union to represent them union to represent them
• Human resource activity is often
referred to as industrial relations
• Most firms today would rather have
union-free environment
38MGMT 3017 - Dion Greenidge, Lecturer
Human Resource Research
• Human resource
research is not
separate function.separate function.
• It pervades all HR
functional areas.
1-39MGMT 3017 - Dion Greenidge, Lecturer
Interrelationships of HRM Functions
• All HRM functions are
interrelated
MGMT 3017 - Dion Greenidge, Lecturer 1-40
interrelated
• Each function affects
other areas
HR’s Changing Role
• The metamorphosis of personnel into human
resource management reflects the fact that in
today’s business environment, highly trained
and committed employees are often a firm’s and committed employees are often a firm’s
main real sustainable competitive advantage.
41MGMT 3017 - Dion Greenidge, Lecturer
HR’s Changing Environment
• Globalization
– refers to firms’ tendency to extend their sales,
ownership, and/or manufacturing to new markets
abroad abroad
42MGMT 3017 - Dion Greenidge, Lecturer
HR’s Changing Environment
• Technological advances
• Nature of work
– service jobs
– outsourcing – outsourcing
– human capital
43MGMT 3017 - Dion Greenidge, Lecturer
HR’s Changing Environment
• Growing emphasis on “knowledge workers”
and human capital
• Human capital• Human capital
– refers to the knowledge, education, training, skills,
and expertise of a firm’s workers
44MGMT 3017 - Dion Greenidge, Lecturer
Environment of Human Resource Management
EXTERNAL ENVIRONMENT
INTERNAL ENVIRONMENT
OperationsMarketing
Legal Considerations
Tech
nology
SocietyUnions
Unanticip
ated Events
1-45
1
Human
Resource
Management
Other
Functional
Areas
Finance
Economy
Shareh
olders
Customers Competition Labor Market
Safety and
Health
Unanticip
ated Events
MGMT 3017 - Dion Greenidge, Lecturer
Labor Market
• Potential employees
located within
geographic area from geographic area from
which employees are
recruited
• Always changing
1-46MGMT 3017 - Dion Greenidge, Lecturer
Legal Considerations
• Federal, state and
local legislation
• Court decisions• Court decisions
• Presidential
executive orders
1-47MGMT 3017 - Dion Greenidge, Lecturer
Society• No longer content to accept, without
question, the actions of business
• Ethics - Discipline dealing with what is
good and bad, or right and wrong, or
with moral duty and obligation
MGMT 3017 - Dion Greenidge, Lecturer 1-48
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
Unions
• Group of employees who
have joined together for
purpose of dealing
collectively with their
MGMT 3017 - Dion Greenidge, Lecturer 1-49
collectively with their
employer
• Becomes a third party
when dealing with the
company
Shareholders
• Owners of corporation
• Because they have invested money in
firm, they may at times challenge
MGMT 3017 - Dion Greenidge, Lecturer 1-50
firm, they may at times challenge
programs considered by
management to be beneficial to
organization
Competition
• Firms may face intense competition in both their product or service and labor markets
• Must maintain a supply
MGMT 3017 - Dion Greenidge, Lecturer 51
• Must maintain a supply of competent employees
• Bidding war often results
Customers
• People who actually use firm’s
goods and services
• Management has task of
ensuring its employment
MGMT 3017 - Dion Greenidge, Lecturer 52
practices do not antagonize
members of market it serves
• Workforce should be capable
of providing top-quality goods
and services
Technology
• The world has never before seen
technological changes occur as rapidly as
they are today.
• Created new roles for HR professionals
MGMT 3017 - Dion Greenidge, Lecturer 53
• Additional pressures on them to keep
abreast of technology
• In 2008 survey of CEOs worldwide, 83%
ranked change as most important issue
confronting their organization
Cyberwork
• Possibility of never-ending workday
• BlackBerrys, cell phones, text messaging, and e-mail create endless possibilities for
MGMT 3017 - Dion Greenidge, Lecturer 54
endless possibilities for communication
• Some workers believe their employer wants them available 24/7
Economy
• In general, when economy
is booming, it is often more
difficult to recruit qualified
workers.
MGMT 3017 - Dion Greenidge, Lecturer 55
workers.
• When a downturn is
experienced, more
applicants are typically
available.
Unanticipated Events
• Occurrences in external environment that could not be foreseen
• Every disaster, whether
MGMT 3017 - Dion Greenidge, Lecturer
• Every disaster, whether manmade or by nature, requires a tremendous amount of adjustment with regard to human resource management
56
Demographic and Workforce Trends
• Labor force growth is not expected to keep
pace with job growth
• Labor force is getting older
• Shift to nontraditional workers • Shift to nontraditional workers
57MGMT 3017 - Dion Greenidge, Lecturer
Gen Y
• May be “the most high maintenance
workforce in the history of the world”
• Their capacity for using information • Their capacity for using information
technology will also make them the most
high-performing
58MGMT 3017 - Dion Greenidge, Lecturer
The Strategic Role of
Human Resource Management
• Main responsibility facing human resource
managers is to institute policies and practices
that produce the employee competencies and
behaviors the company needs to achieve its behaviors the company needs to achieve its
strategic goals
59MGMT 3017 - Dion Greenidge, Lecturer
The Strategic Role of
Human Resource Management (cont.)• Strategy
– the company’s plan for how it will balance its
internal strengths and weaknesses with external
opportunities and threats in order to maintain a
competitive advantage competitive advantage
60MGMT 3017 - Dion Greenidge, Lecturer
HR’s Role in Executing Strategy
• Study found that mergers and/or acquisitions
in which the human resource teams had been
involved were more likely to have been
successful successful
61MGMT 3017 - Dion Greenidge, Lecturer
Strategy and HR – Albertson’s
• Albertson’s human resource management team
chose a computer system from Unicru of Portland,
Oregon that collects and analyzes the information
entered by applicants online.
• It ranks applicants based on the extent to which they
exhibit the customer-focused traits that predict
success in retail jobs and helps track candidates
throughout the screening process.
62MGMT 3017 - Dion Greenidge, Lecturer
Two Strategic Human Resource
Challenges
1. Focus on boosting competitiveness, reducing
costs, and improving employee performance
2. Be more involved in both formulating and
implementing company strategy implementing company strategy
63MGMT 3017 - Dion Greenidge, Lecturer
Corporate Strategy
64MGMT 3017 - Dion Greenidge, Lecturer
Basics of Strategic Planning
• Corporate-level strategy
– identifies the portfolio of businesses that
comprise the company and the ways in which
these businesses relate to each otherthese businesses relate to each other
65MGMT 3017 - Dion Greenidge, Lecturer
Basics of Strategic Planning
• Business-level/competitive strategy
– identifies how to build and strengthen the
business’s long-term competitive position in the
marketplacemarketplace
66MGMT 3017 - Dion Greenidge, Lecturer
HR and Competitive Advantage
• Competitive advantage
– “any factors that allow an organization to
differentiate its product or service from those of
its competitors to increase market share” its competitors to increase market share”
67MGMT 3017 - Dion Greenidge, Lecturer
Basics of Strategic Planning
• Functional strategies
– identify the basic courses of action that each of
the business’s departments will pursue in order to
help the business attain its competitive goals help the business attain its competitive goals
68MGMT 3017 - Dion Greenidge, Lecturer
HRM MODELS/MAPS
MGMT 3017 - Dion Greenidge, Lecturer 69
A LOOK AT SOME APPROACHES…
1. Devanna et al.
2. Beer et al.
3. David Guest
MGMT 3017 - Dion Greenidge, Lecturer 70
The Matching Model of HRM
Political
Forces
Cultural
ForcesEconomic
ForcesMission &
Strategy
MGMT 3017 - Dion Greenidge, Lecturer 71
Forces
Economic
ForcesEconomic
Forces
Strategy
Devanna et al.
Stakeholder
Interest•Shareholders•Management•Employees•Government•Community•Unions
Situational
HRM Policy•Employee influence•HR flow•Rewardsystems
HR Outcomes
•Commitment•Competence•Congruence•Cost-effectiveness
Long-Term
Consequences
•Individual well-being•Org.effectiveness
Map of the HRM Territory
MGMT 3017 - Dion Greenidge, Lecturer 72
Situational
Factors•Workforce Characteristics•Business strategy•Management philosophy•Labour market•Unions•Task environment•Laws/social values
systems•Worksystems
effectiveness effectiveness•Societalwell-being
Beer et al.
David Guest HRM Process
E'VIRO'ME'T OF BUSI'ESS
Strategy Integration High Commitment
MGMT 3017 - Dion Greenidge, Lecturer 73
E'VIRO'ME'T OF BUSI'ESS
High Quality Flexibility
The Human Resource Cycle
Rewards
MGMT 3017 - Dion Greenidge, Lecturer 74
Selection Performance Appraisal
Training
Fomburn, Tichy, & Devanna (1984)
A Model of Human Resources as a Source
of Sustained Competitive Advantage
Human
resource
practices
MGMT 3017 - Dion Greenidge, Lecturer 75
Human
Capital
pool
Human
resource
behaviour
Sustained
competitive
advantage
Wright, McMahon, & McWilliams (1994)
Distinguishing HRM from Personnel
Management
MGMT 3017 - Dion Greenidge, Lecturer 76
Addresses Issues Related to…
1. Beliefs and Assumptions
2. Strategic Aspects
3. Line management3. Line management
4. Key levers
MGMT 3017 - Dion Greenidge, Lecturer 77
HRM Philosophy…
• People as a critical resource to be developed
for future benefit to the organisation
• A resource to be invested in, not controlled.• A resource to be invested in, not controlled.
MGMT 3017 - Dion Greenidge, Lecturer 78
PM philosophy…
• People as an expense to be controlled to
ensure profitability of organisation.
• Is operational in focus and scope.• Is operational in focus and scope.
MGMT 3017 - Dion Greenidge, Lecturer 79
Strategic Human Resource
Management
• Strategic human resource management
– formulating and executing HR systems that
produce the employee competencies and
behaviors the company needs to achieve its behaviors the company needs to achieve its
strategic aims
80MGMT 3017 - Dion Greenidge, Lecturer
Linking Corporate and HR Strategies
81MGMT 3017 - Dion Greenidge, Lecturer
HR’s Role in Formulating Strategy
• HR participates by supplying information
regarding the company’s internal human
strengths and weaknesses
82MGMT 3017 - Dion Greenidge, Lecturer
High-Performance Work System
• High-performance work system
– an integrated set of human resource management
policies and practices that together produce
superior employee performancesuperior employee performance
83MGMT 3017 - Dion Greenidge, Lecturer
Seven Interdependent Environmental Forces that have
Driven and Directed Change in HRM
Skill supply
Training and retraining
“The HR Responses”
•Competitive Restructuring
•Decentralisation
MGMT 3017 - Dion Greenidge, Lecturer 84
Training and retraining
Organisational restructuring
Review of work systems
Cultural management
Selection and Retention
Employee relations
Rewards Management
•Decentralisation
•Interrnationalisation
•Acquisitions and Mergers
•Quality Focus and Processes
•Technological Change
•New Concepts of Service
management
Business Strategy
�Defines the direction in which the business is
going to achieve sustainable competitive
advantage… and focuses on activities that will
lead to the achievement of [Vision], Mission,
MGMT 3017 - Dion Greenidge, Lecturer 85
lead to the achievement of [Vision], Mission,
meet expectations of owners, manage changes
imposed by the external and internal
environments, add value through effective use
of resources and capitalise on distinctive
competences of the organisation. (Cooke 1990)
Human Resource (HR) Strategies
�Creating a strategic focus
�Developing more integration of activities via project teams
�Achieving flexibility in response to change
MGMT 3017 - Dion Greenidge, Lecturer 86
�Achieving flexibility in response to change
�Developing a climate of trust and co-operation
�Need to formalise systems and processes as business grows in size and complexity
Human Resource (HR) Strategies
�Unified remuneration system
�Achieving appropriate balance between the
flexible and informal approach necessary in a
rapidly developing and innovative
MGMT 3017 - Dion Greenidge, Lecturer 87
rapidly developing and innovative
organisation
�Creating career development
�Continuous system of training employees
�Clarifying new roles and responsibilities
Key Strategies for successful
businesses in the Future
�Recognising the value of HR
�Missioning and Co-missioning
Career centred and motivational systems
MGMT 3017 - Dion Greenidge, Lecturer 88
�Career centred and motivational systems
�Homeostasis: Internal and external balance
Draper (1991)
Key Strategies for successful
businesses in the Future
�Appropriate culture
�Conditions to develop and train each
valuable employee
MGMT 3017 - Dion Greenidge, Lecturer 89
valuable employee
� Strategic focus of HRM and HRD
� Focus on high quality and excellence
A Model of Strategic Change and
HRM…
• Hendry and Pettigrew (1990) developed a
model of strategic change & HRM.
• Model addresses issues of external • Model addresses issues of external
environmental influences on business
organisations, and the impacts on the practice
of HRM.
MGMT 3017 - Dion Greenidge, Lecturer 90
Hendry/Pettigrew
Key Aspects of Model…
• The Outer Context – Socio-economic.
Technical, political-legal & competitive
factors/forces.
• Inner Context – Culture, structure, politics, • Inner Context – Culture, structure, politics,
leadership, task-technology & business
outputs.
• Business Strategy Content – Objectives,
product-market, strategy & tactics.
MGMT 3017 - Dion Greenidge, Lecturer 91
Hendry/Pettigrew
Key Aspects of Model…
• HRM Context – Role, Definition,
Organisation & HR outputs.
• HRM Content – HR flows, work systems,
reward systems & employee relations.
MGMT 3017 - Dion Greenidge, Lecturer 92
Hendry/Pettigrew
Linking Forward…
• Next lecture we will link this section to the HR
Acquisition Phase, and look at the topic of HR
planning in organisations.
• This will be covered over a period of two
weeks.
MGMT 3017 - Dion Greenidge, Lecturer 93
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