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Chapter 1 Changing Nature of Human Resource Management
CHAPTER OBJECTIE!
1. Identify four major challenges currently facing organizations and managers. 2. List and define each of the seven major categories of HR activities. 3. Identify the three different roles of HR management. . !iscuss the three dimensions associated "ith HR management #eing a strategic contri#utor. $. %&plain "hy HR professionals and operating managers must vie" HR management as an interface. '. !iscuss "hy ethical issues and professionalism affect HR management.
!"MMAR# O$ THE CHAPTER
Human resource (HR) management deals "ith the design of formal systems in an organization to ensure the effective and efficient use of human talent to accomplish organizational goals. *he management management of human resources means that they must #e recruited+ compensated+ trained+ and developed. *oday,s HR management faces challenge and change across a "ide range of issues. *he most commonly recognized challenges include•
%conomic and technological change
•
or/force availa#ility and 0uality concerns
•
!emographics and diversity issues
•
rganizational restructuring
major economic change involves the shift of jo#s from manufacturing and agriculture to service industries and telecommunications. ressures from glo#al competitors has had significant impact on 4.5. employers. 6inally+ the e&plosive gro"th of information technology+ particularly the influence of the Internet on #usiness and in our personal lives+ has forced many changes in the #usiness #usiness communit community y. *oday,s significant "or/force shortages have created ne" pressures on HR professionals to effectively recruit and train "or/ers. %mployers are often una#le to find enough 0ualified "or/ers for the gro"ing num#er of 7/no"ledge jo#s8. %ducational systems+ especially those serving minorities+ fail many times to meet the #asic literacy and mathematical s/ills needs of today,s "or/force. *o meet this challenge+ HR management must actively partner "ith pu#lic school systems+ more accurately assess current and future /no"ledge and s/ills re0uirements+ ensure training opportunities are availa#le for all employees+ not just managers and professionals+ and increase the use of technology and other individualized training methods. Contingent "or/ers are a major part of today,s "or/force. *his ne" reliance on 7contingent "or/ers8+ i.e.+ temporary "or/ers+ independent contractors+ lease employees+ employees+ and part9timers+ significantly changes the "ay human resources are managed.
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%mployees today are more diverse than ever. omen are in the "or/force in much greater num#ers. *he average age of the "or/force is considera#le older than #efore and the racial:ethnic mi& is undergoing rapid change. sian and Hispanic "or/ers are increasing in greater num#ers than frican9mericans and all of the so9called minority "or/ers are increasing in greater num#ers than "hites. ll of these changes create ne" pressures on HR professionals to ensure that diverse groups are managed and treated e0uita#ly in organizations. !iversity training has #ecome an essential part of an organization,s training efforts rather than the 7nice to have8 category it once had. ll of the classic HR functions no" need realignment in order to effectively respond to changing "or/force needs. ther "or/force changes include the aging of the "or/force+ #alancing "or/ and family+ and redefining the 7traditional8 family. rganizational restructuring include issues such as do"nsizing+ rightsizing+ mergers+ reengineering+ and jo# redesign. *he dichotomy of today,s "or/force is seen in the fact "hereas many large firms have cut jo#s and reduced their "or/forces+ many smaller firms have continued to create jo#s. *his environment creates a ne" HR challenge much discussed in today,s mediaho" to deal "ith the human conse0uences of change. *he central focus of HR management is enhancing organizational performance through activities focusing on productivity+ service+ and 0uality. *he productivity of human resources in an organization is affected significantly #y management efforts+ programs+ and systems. *he 0uality of products and services also affects an organization,s long9term success and #ecause people produce an organization,s products and services+ HR management considerations must #e included "hen identifying service #loc/ages and operational processes. HR management consists of several groups of interlin/ed activities "hich are;<
HR lanning and nalysis
;1
%0ual %mployment pportunity
;2
5taffing
;3
HR !evelopment
;
Compensation and =enefits
;$
Health+ 5afety+ and 5ecurity
;'
%mployee and La#or:>anagement Relations
dditionally+ e&ternal environmental forces such as legal+ political+ economic+ social+ cultural+ and technological also are important. HR management is undergoing transition #ecause organizations themselves are changing. %ven terminology is changing. 7ersonnel8 has+ for the most part+ #ecome 7human resources management8. *raditionally+ HR has #een vie"ed as the 7employee advocate8 in organizations "ith little understanding of the organization,s #usiness realities. In fact+ HR plays a valua#le role as the 7champion8 for employees and employee issues. HR professionals spend considera#le time on HR 7crisis management8 dealing "ith #oth "or/ and non9"or/ related employee pro#lems. n important facet of employee advocacy is the assurance of fair and e0uita#le treatment regardless of a person,s #ac/ground or circumstances. #sent this perspective+ organizations "ould face even more la"suits and regulatory pro#lems than they do no". HR management has three roles in an organization- administrative+ operational+ and strategic. *he administrative role focuses heavily on processing and record /eeping. hile this role must #e
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performed efficiently+ it sometimes leads to the conclusion that HR is simply a paper shuffler. HR,s operational activities are tactical in nature. *hey address compliance re0uirements+ intervie"ing and selection+ training+ safety+ and "age and salary administration among other things. HR professionals typically must #e a#le to design and implement operational policies and programs in an organization. rganizational human resources have gro"n as a strategic emphasis #ecause the effective use of people in an organization can provide a competitive advantage+ #oth domestically and a#road. HR,s strategic role emphasizes people as valua#le resources representing significant organizational investments. It focuses on the longer9term implications of HR issues. ne of the most important shifts in the past fe" years has #een the recognition of HR as a strategic #usiness partner. *his role has several facets including enhancing organizational performance+ involvement in strategic planning+ decision ma/ing on mergers+ ac0uisitions+ and do"nsizing+ organizational redesign+ and financial accounta#ility for HR results. *o #e strategic contri#utors+ HR professionals must measure "hat their activities produce as organizational results+ specifically as a return on its HR investments. nother goal for those focusing on HR management+ as "ell as operating e&ecutives and managers+ is to enhance the human capital of the organization+ that is+ the total value of human resources to an organization. HR,s role is to ensure that all people+ regardless of their circumstances or #ac/grounds+ are provided opportunities to develop their capa#ilities. s a strategic #usiness partner+ HR is responsi#le to ensure an ade0uate supply of people "ith the capa#ilities needed to fill organizational jo#s. s s/ills shortages increase+ the a#ility to attract people "ith the re0uisite s/ills to the organization re0uires more creative planning. lso+ HR activities in organizations must #e revised in order to retain employees. *hese activities include developing e&isting human resource capa#ilities+ identifying and re"arding performance+ delivering cost9effective compliance systems+ ensuring legal compliance+ and demonstrating administrative efficiency. HR management+ as a specialized function+ #egan its formal emergence in organizations shortly #efore 1?<<. s organizations gre"+ functions such as purchasing and personnel #egan to #e performed #y specialists. *he passage of several major la#or la"s in the 1?3
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*he effective management of human resources re0uires professionals. *here are several levels of HR jo#s ranging from e&ecutive to clerical in nature. reparation for a career in HR includes #road and specialized education+ e&perience+ professional involvement+ and certification.
CHAPTER O"T(INE
Learning #jectives HR Transitions: HR Management Contributes to Organizational Success HR MANA)EMENT CHA((EN)E! Economic an* Techno+ogica+ Change
ccupational 5hifts Alo#al Competition ,orforce A.ai+a/i+it0 an* ua+it0
or/force Buality !eficit Aro"th in Contingent or/force 2emographics an* 2i.ersit0
Racial:%thnic !iversity ging of the or/force =alancing or/ and 6amily Organi3ationa+ Restructuring HR MANA)EMENT ACTIITIE! HR P+anning an* Ana+0sis E4ua+ Emp+o0ment Opportunit0 !taffing HR 2e.e+opment Compensation an* Benefits Hea+th5 !afet05 an* !ecurit0 Emp+o0ee an* (a/or6Management Re+ations HR MANA)EMENT IN TRAN!ITION HR as Emp+o0ee A*.ocate A*ministrati.e Ro+e of HR Management Operationa+ Ro+e of HR Management !trategic Ro+e of HR Management HR MANA)EMENT A! !TRATE)IC B"!INE!! CONTRIB"TOR Enhancing Organi3ationa+ Performance
Involvement in 5trategic lanning !ecision9>a/ing on >ergers+ c0uisitions+ and !o"nsizing Redesigning rganizations and or/ rocesses %nsuring 6inancial ccounta#ility for HR Results E7pan*ing Human Capita+
ttracting and Retaining Human Resources HR Perspective: Workforce Availabilit!Tig"t #o$ an% &etting Worse
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!eveloping Human Resource Capa#ilities Identifying and Re"arding erformance 2e+i.ering Cost-Effecti.e Comp+iance !0stems %nsuring Legal Compliance !emonstrating dministrative %fficiency MANA)IN) HR ACTIITIE! E.o+ution of HR Management
1?3anagement Costs !ecentralizing HR ctivities utsourcing HR ctivities HR Perspective: Researc" on HR Outsourcing Ethics an* HR Management
hat Is %thical =ehavior D=E- %thics policyF Responding to %thical 5ituations HR Perspective: SHRM Co%e of 't"ics %thical Issues in HR >anagement HR MANA)EMENT COMPETENCIE! AN2 CAREER! 9no:+e*ge of Business an* Organi3ation Inf+uence an* Change Management !pecific HR 9no:+e*ge an* E7pertise
rofessional Involvement Certification !"MMAR# REIE, AN2 2I!C"!!ION "E!TION! TERM! TO 9NO, Using the Internet: Outsourcing Case: Remedy for HR Management NOTE! !T"2# "E!TION!
Matching uestions
>atch the /ey term from the list #elo" "ith its most appropriate definition. a. perational activities h. HR planning and analysis #. Interfaces i. =usiness process reengineering c. HR specialist j. HR generalist
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d. e. f. g.
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utsourcing Compensation 5trategic role Human Resource >anagement
/. !o"nsizing l. Human capital m. %thics
1. >anagers attempt to anticipate forces that "ill impact the future supply of and demand for employees. 2. *he design of formal systems to ensure the effective and efficient use of human talent to accomplish organizational goals. 3. reas of contact #et"een the HR unit and managers "ithin the organization. . Re"ards people for performing organizational "or/ through pay+ incentives+ and #enefits. $. *he total value of organizational human resources. '. *he fundamental rethin/ing and redesign or "or/ to improve cost+ service+ and speed. G. n HR practitioner "ith responsi#ility for performing a variety of activities. @. n HR practitioner "ith in9depth /no"ledge and e&pertise in a limited area. ?. %mphasizes that the people in an organization are valua#le resources representing a significant investment of organizational efforts. 1<. ctivities that are tactical in nature. 11. strategy to reduce costs+ most often through a reduction in payroll. 12. !eals "ith "hat 7ought8 to #e done. 13. Contracting "ith another organization to provide operations that "ere previously handled internally.
True6$a+se uestions
1. *he strategic role of HR management emphasizes that the people in an organization are valua#le resources representing significant organizational investments. 2. ays to prepare for a career in HR include higher education+ e&perience+ professional involvement+ and certification. 3. 5taffing emphasizes the recruitment and selection of the human resources for an organization. . 4nit la#or costs have risen dramatically since the advent of do"nsizing. $. Concern a#out employee rights and privacy protection must #e incorporated into HR policies and practices. '. %thics is not a major concern for HR >anagers. G. Cost savings associated "ith outsourcing often are over estimated. @. %0ual employment compliance affects all HR activities. ?. HR specialists are more often found in small organizations. 1<. 7utplacement8 is a concept "here#y small organizations contract out their HR activities to a firm of consultants. 11. %nlightened managers do not regard employees as 7human resources8 #ecause this "ould dehumanize people.
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12. HR,s responsi#ility for ensuring legal compliance includes the area of health #enefit porta#ility. 13. Increased legal re0uirements and constraints have had very little impact on HR departments. 1. 7Li/ing to "or/ "ith people8 is a major 0ualification necessary for success in HR. 1$. Human resource management is often seen as concerned only "ith administrative activities. 1'. HR management is a concern of #oth the managers and the HR unit in an organization. Matching 1. h '. i 11. /
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I*ea Comp+etion uestions
1. *here are three roles associated "ith the management of human resources in organizations. *hese roles are + + and . 2. *he interface concept recognizes that HR management is a concern of #oth the and the in an organization. 3. s a response to ethical situations+ many organizations have esta#lished a + and conduct for all employees. . HR management is composed of seven groups of interlin/ed activities. *hese groupings are + + + + + + and . $. Increasingly today+ "or/ in an organization is done #y + + + and others "ho are not employees of the organization.
1= a*ministrati.e> operationa+> strategic
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Chapter 1
%= operating managers> HR unit= &= co*e of ethics> training programs '= HR p+anning an* ana+0sis> e4ua+ emp+o0ment opportunit0> staffing> HR *e.e+opment> compensation an* /enefits> hea+th5 safet05 an* securit0> emp+o0ee an* +a/or6management re+ations 8= contract :orers> consu+tants> temporar0 :orers
Mu+tip+e Choice uestions
1. major economic change altering employment and occupational patterns in the 4nited 5tates is the shift of jo#s from to . a. hi tech and defense+ education and research #. telecommunications and small #usiness+ military and manufacturing c. manufacturing and agriculture+ service industries and telecommunications d. education and service industries+ transportation and telecommunications e. service industries and agriculture+ military and research
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2. point of contact on HR activities #et"een the HR unit and the managers "ithin the organization is a(n) a. dualism. #. definition of personnel management. c. interface. d. idea. 3. deals "ith the design of formal systems to ensure the effective and efficient use of human talent to accomplish organizational goals. a. %mployee relations #. ersonnel management c. Human resource management d. rganizational development e. La#or relations . is the fundamental rethin/ing and redesign of "or/ processes to improve cost+ service+ and speed. a. !o"nsizing #. utsourcing c. Restructuring d. Reengineering e. utplacement $. person responsi#le to perform a variety of HR activities is considered a(n) a. personnel manager. #. HR specialist. c. personnel consultant. d. HR generalist. e. human relations specialist. '. HR management #egan its gro"th as a specialized function in organizations a#out a. 1?<<. #. 1?2<. c. 1?<. d. 1?'<. e. 1?@<.
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G. *he strategic role of HR #egan to emerge a#out a. 1?2<. #. 1?<. c. 1?'<. d. 1?@<. e. 1??<. @. or/force diversity projections suggest that #y the year 2<<'+ a#out percent of the 4.5. la#or force "ill #e mem#ers of a racial minority. a. 1< #. 1' c. 2@ d. 3@ e. ?. In the decade leading up to the year 2<<<+ "hich of the follo"ing industries are declining a. health care #. computer processing c. manufacturing d. service e. =oth a. and d. 1<. In order to develop more 7family friendly8 policies and #enefits for their employees+ employers are a. maintaining references on child9care providers. #. permitting "or/9at9home options. c. esta#lishing on9site child9care and elder9care facilities. d. #oth a and c. e. all of the a#ove. 11. ie"ing human resources in the same conte&t as the financial+ technological+ and other resources that are managed #y organizations+ is an e&le of the of HR management. a. operational role #. personnel function c. glo#al nature d. strategic role e. traditional role
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12. *he HR activity most fre0uently outsourced is a. recruiting. #. employee survey. c. %:"ellness program. d. #enefits administration. e. training and development. 13. hich choice #elo" is E* a dimension associated "ith ethical issues as identified in your te&t a. %thical decisions have conse0uences #eyond the decisions themselves. #. arious alternatives e&ist in most decision9ma/ing situations. c. *he conse0uences of decisions "ith ethical dimensions often are not /no"n. d. !ecisions al"ays have legal conse0uences. e. !ecisions often affect the personal lives of employees+ their families+ and others. 1. Recruiting and selecting employees for current openings is an e&le of the role of human resource management activities. a. operational #. personnel c. glo#al d. strategic 1$. *o #e strategic contri#utors+ HR professionals must a. count the activities and tas/s performed. #. develop ne" HR programs. c. measure "hat their activities produce in terms of organizational results. d. ensure compliance "ith legal and regulatory re0uirements. e. implement effective #enefits cost containment procedures. 1'. *he administrative role of HR management includes responsi#ilities for a. compliance "ith e0ual employment opportunity re0uirements. #. filling jo# openings. c. addressing safety pro#lems. d. participating in organizational planning efforts. e. processing #enefits claims.
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1G. are (is) the foundation for the staffing function. a. Jo# specifications #. Jo# descriptions c. rientation d. Recruiting e. Jo# analysis 1@. *he HR professional,s legal compliance responsi#ilities do E* include a. se&ual harassment prevention. #. safety and health management. c. pension compliance reporting. d. ne" employee orientation. e. union contract grievances. 1?. ttracting and retaining human resources is an application of HR,s role. a. administrative #. strategic c. operational d. functional e. #usiness 2<. HR,s training and development responsi#ilities #egin "ith a. jo#9s/ill training. #. employee development. c. retraining. d. orientation e. counseling 21. *he 7traditional family8 represent only or less of today,s 4.5. households. a. $
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22. It is projected that #y 2<2<+ a#out of the 4.5. population "ill #e '$ or older. a. 1
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2G. *he follo"ing guide(s) is (are) suggested as a response to an ethical situationa. !oes the #ehavior or result achieved comply "ith all applica#le la"s+ regulations+ and government codes #. !oes the #ehavior or result achieved comply "ith all organizational standards of ethical #ehavior c. !oes the #ehavior or result achieved comply "ith professional standards of ethical #ehavior d. ll of the a#ove e. a. and #. a#ove. 2@. >any organizations 7rightsize8 #y a. eliminating layers of management. #. closing facilities. c. merging "ith other organizations. d. outplacing "or/ers. e. all of the a#ove.
2?. complete understanding of strategic sources of competitive advantages for human resources must include a. a sophisticated human resource information systems capa#ility. #. a comprehensive sales and mar/eting plan. c. analyses of the internal strengths and "ea/nesses of the organization,s human resources. d. analyses of e&ternal mar/et forces that affect the organization,s #usiness plan. e. a mission+ vision+ and values statement. 3<. aria#le pay programs+ such as gainsharing and team #ased incentives+ a. can #e effective "ithout the need for detailed design and development. #. directly lin/ re"ards to organizational performance goals. c. emphasize #ase pay as a pay component. d. e&clusively feature incentive pay components. e. are designed to recognize length of service over jo# performance.
Essa0 uestions
1. !iscuss some of the major ethical issues faced #y HR management in the 1??
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3. !istinguish #et"een HR management,s operational and strategic roles. hy are they #oth important in today,s organizations . !efine the interface concept+ and e&plain its use as it applies to HR management. $. List and descri#e the seven HR management activities. !iscuss ho" these activities may #e performed differently in settings other than large private9sector organizations.
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AN!,ER 9E#
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I*ea Comp+etion
1. administrative operational strategic 2. operating managers HR unit. 3. code of ethics training programs . HR planning and analysis e0ual employment opportunity staffing HR development compensation and #enefits health+ safety+ and security employee and la#or:management relations $. contract "or/ers consultants temporary "or/ers
Mu+tip+e Choice
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Essa0 Ans:er )ui*e+ines
1. %thics and HR >anagement+ pp 3<932 2. HR >anagement Challenges+ pp 91< 3. HR >anagement in *ransition+ pp 1391' . >anaging HR ctivities+ pp 22932 $. HR >anagement ctivities+ pp 1<913