Professional Documents
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CHAPTER 1 INTRODUCTION TO HUMAN RESOURCE MANAGEMENT As human resources have become viewed as more critical to organizational success, many organizations have realized that it is the people in an organization that can provide a competitive advantage. Throughout the book it will be emphasized that the people as human resources contribute to and affect the competitive success of the organization. Human Resource (HR) management deals with the Design of formal systems in an organization to ensure the effective and efficient use of human talent to accomplish organizational goals. In an organization, the management of human resources means that they must be recruited compensated, trained, and developed. A basic concept of management states that manager works in organizations. Organization has three basic components, people, purpose, and structure. Human resource management is the process of acquiring, training, appraising, and compensating employees and of attending to their labor relations, health and safety and fairness concern. Lets see what is meant by the three key term:- human, resource, and management. Human (employees working in an organization) Resources (Human, Physical, Financial, Technical, Informational etc) Management (Function of Planning, Organizing, Leading & Controlling of organizational Resources to accomplish goals efficiently and effectively)
What is human resource management? As we said that HRM is the management of people working in an organization, it is a subject related to human. For simplicity, we can say that it is the management of humans or people. HRM is a managerial function that tries to match an organizations needs to the skills and abilities of its employees. Human Resource Management is responsible for how people are managed in the organizations. It is responsible for bringing people in organization helping them perform their work, compensating them for their work and solving problems that arise.
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THE VALUE OF PEOPLE Managers ad economists traditionally have seen human resource management as a necessary expense, rather than a source of value to their organization. Economic value is usually associated with capital equipment technology and facilities. However in the changing corporate environment more and more organizations are awakening to the importance of human capital as the next competitive advantage. (Competitive advantage is a position of a company in a competitive landscape that allows the company earning return on investments higher than the cost of investments. Competitive advantage should be relevant, unique, and sustainable there are two
main types of competitive advantages: comparative advantage and differential advantage. Comparative advantage, or cost advantage, is a firm's ability to produce a good or service at a lower cost than its competitors, which gives the firm the ability sell its goods or services at a lower price than its competition or to generate a larger margin on sales. A differential advantage is created when a firm's products or services differ from its competitors and are seen as better than a competitor's products by customers).human capital (an organizations employees, described in terms of their training
experience judgment, intelligence, relationships and insight) people are crucial to organizational success and the human and intellectual capital of an organizations workforce provides an opportunity for substantial competitive advantage. As the resident people experts HR leaders are ideally suited to advice their organization on the best
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Hrm is critical to the success of an org, because human capital has certain qualities that make it valuable. In terms of business strategy, an org can succeed if it has a sustainable competitive advantage (is better than competitors something and can hold that advantage over a sustained period of time) therefore we can conclude that org need the kind of resources that will give them such an advantage. HR have these necessary qualities: HR are valuable. High quality employees provides a needed service as they performance many critical functions HR are rare in the sense that a person with high levels of the needed skills and knowledge is not common. an org might spend months looking for a talented and experienced manager or technician He cant be imitated. to imitate hr at a high performing competitor, you would have to figure out which employees are providing the advantage and how. Then you would have to recruit people who can do precisely the same thing and setup the systems that enable those people to imitate your competitor. HR have no good substitutes. When people are well trained and highly motivated, they learn, develop their abilities and care about customers. it is difficult to imagine another resource that can match committed and talented employees.
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The HR activities for which a brief overview follows are: FUNCTIONS AND RESPONSIBILITIES OF HRM DEPARTMENT In all but the smallest organizations a HR department is responsible for the functions of HRM. on average an organization has one HRM staff person for every 100 employees served by the department however this ratio may vary widely across organizations. Another general guideline is that a specialized HRM role is often created when an organization has reached the size of approx. 40 employees.table1.1 details the responsibilities of HRM department these responsibilities include the practices introduced in fig 1.1 plus two areas of responsibility that support those practices 1) establishing and administering HRM policies 2) Ensuring compliance with legal requirements. Although the HRM dept has responsibility for these areas many of requirement are performed by supervisors or other inside or outside the organization. no two HRM dept have precisely the same roles ,because of differences in org sizes and characteristics of the workforce, the industry and managements values. in some companies., the HRM dept handles all the activities listed in table1.1.in others it may share the roles and duties with managers and supervisor of other depts such as finance operations or information tech. when managers and supervisor actively perform a
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1. ANALYZING AND DESIGNING JOBS To produce their given product or service (or set of products or services) companies require that a number of tasks to be performed. the tasks are grouped in various combination to form jobs, ideally the tasks should be grouped in a ways that help the organization to operate efficiently and to obtain people with the right qualifications to do the jobs well. This function involves the activities of job analysis and job design.
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2. Recruiting and hiring employees On the basis of job analysis and job design an organization can determine the kinds of employees it needs. With this knowledge it carries out the function of recruiting and hiring employees. Recruitment is the process through which the org seeks applicants for potential employment. Selection refers to the process by which the org attempts to identify applicants with the necessary knowledge skills abilities and other characteristics that will help the org achieve its goals. an org makes selection decisions in order to add employees to its workforce, as well as to transfer existing employees to new positions. at At some organizations the selection process may focus on specific skills such as experience with a particular programming language or types of equipments. At others selection may focus on general abilities such as the ability to work as a part of a team or find creative solutions. The focus an org favors will affect many choices, from the way the org measures ability ,to the questions it asks in interviews, to the places it recruits. Table 1.2 lists employability skills, attitudes and behaviors needed to participate and progress in todays dynamics world of work.HRM professionals also provide guidance related to redeploying employees, termination and outplacement. TABLE 1.2
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to negotiate an
employment contract with union members. The HRM dept also maintains communication with union representatives to ensure that issues are resolved as they arise.
7. ESTABLISHING AND ADMINISTERING HRM POLICIES All the HRM activities described so far are require fair and consistent decisions and most require substantial record keeping. Orgs depends on their HRM dept to help establish policies related to hiring, discipline and promotions and benefits and the other activities of HRM
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8. ENSURING COMPLIANCE WITH FEDERAL AND PROVINCIAL LEGISLATION Some gov have laws and regulations concerning the treatment of employees. These laws govern such matters as human rights and employment equity, employees safety and health, employees compensation and benefits and employee privacy. Most managers depend on HRM professionals to help them keep up to date and on track with these requirements. Ensuring compliance with laws requires that HRM professionals keep watch over a rapidly changing legal landscape. HR Management in Transition The field of HR management is undergoing transition because organizations themselves are changing. As a result, the terminology in the field is in transition. Traditionally called personnel departments, many of these entities have been renamed Human Resources Departments. But more than the name has changed as HR Management continues to be the people focus in organizations. HR as Employee Advocate Traditionally, HR has been viewed as the employee advocate in organizations.9 As the voice for employee concerns, HR professionals traditionally have been seen as company morale officers who do not understand the business realities of the organizations and do not contribute measurably to the strategic success of the business. Some have even suggested dismantling HR departments totally because they contribute little to the productivity and growth of organizations.10 Despite this view, HR plays a valuable role as the champion for employees and employee issues. One example is the stress that many employees feel when balancing work and family pressures. HR professionals must be the advocate for employees, recognizing that they have other lives besides work, and ensuring that organizational policies and practices consider
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in some organizations these administrative functions are being outsourced to external providers, rather than being done inside the HR departments. Also, technology is being used to automate many of the administrative tasks
Operational Role of HR Management Operational activities are tactical in nature. Compliance with equal employment opportunity and other laws must be ensured, employment applications must be processed, current openings must be filled through interviews, supervisors must be trained, safety problems must be resolved, and wages and salaries must be administered. In short, a wide variety of the efforts performed typically are associated with coordinating the management of HR activities with the actions of managers and supervisors throughout the organization. This operational emphasis still exists in some organizations, partly because of individual limitations of HR staff members and partly because of top managements resistance to an expanded HR role. Typically, the operational role requires HR professionals to identify and implement Operational programs and policies in the organization. They are the major implementers of the HR portion of organizational strategic plans
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HR Management Challenges The environment faced by HR management is a challenging one; changes are occurring rapidly across a wide range of issues. A study by the Hudson Institute, entitled Workforce 2020, has highlighted some of the most important workforce issues. From that and other sources, it appears that the most prevalent challenges facing HR management are as follows: 1. Economic and technological change 2. Globalization of business 3. Workforce availability and quality concerns 4. Demographics and diversity issues 5. Organizational restructuring The environment faced by human resource is challenging one; changes are occurring rapidly across a wide range of issues. It appears that the most prevalent challenges facing HR management are as follows: 1. Economic and technological change:
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3. Workforce Availability and Quality In many parts of the United States today, significant workforce shortages exist dueto an inadequate supply of workers with the skills needed to perform the jobs being added. In the last several years news reports have regularly described tight labor markets with unemployment rates in some locales below 3%. Also, continuously there are reports by industries and companies facing shortages of qualified, experienced workers. Jobs with extreme supply shortages for several years have included specialized information systems technicians, physical therapists, plumbers, air
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5. Organizational Restructuring Many organizations have restructured in the past few years in order to become more competitive. Also, mergers and acquisitions of firms in the same industries have been made to ensure global competitiveness. The mega-mergers in the banking, petroleum, and telecommunications industries have been very visible, but mergers and acquisitions of firms in many other industries have increased in recent years. As part of the organizational changes, many organizations have right sized either by (1) eliminating layers of managers, (2) closing facilities, (3) merging with other organizations, or (4) out placing workers. A common transformation has been to flatten organizations by removing several layers of management and to improve productivity, quality, and service while also reducing costs. As a result, jobs are redesigned and people affected. One of the challenges that HR management faces with organizational restructuring is dealing with the human consequences of change. The human cost associated with downsizing has been much discussed in the popular press: a survivors mentality for those who remain, unfulfilled cost savings estimates, loss of loyalty, and many people looking for new jobs. Whereas many large firms have cut jobs by reducing their workforces, many smaller firms have continued to create jobs. This is particularly true in high technology industries, such as software development. These entrepreneurial firms are faced with growth, while trying to attract sufficient workers with flexible capabilities and to conserve financial resources. More discussion on HRs role in organizational restructurings is found in Chapter 2, focusing on strategic HR planning. Consequently, in both large and small organizations the management of HR activities is crucial.
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