Chapter 1

Human Resource Human Resource ManagementManagement

TWELFTH EDITION

G A R Y D E S S L E R

B I J U V A R K K E Y

Copyright © 2011 Dorling Kindersley (India) Pvt. LtdAuthorized adaptation from the United States edition of Human Resource Management, 12/e

Introduction to Human Resource ManagementIntroduction to Human Resource ManagementChapter 1Chapter 1

Part 1 | IntroductionPart 1 | Introduction

Copyright © 2011 Dorling Kindersley (India) Pvt. LtdAuthorized adaptation from the United States edition of Human Resource Management, 12/e 1–2

After studying this chapter, you should be able to:After studying this chapter, you should be able to:

1.1. Explain what human resource management is and how it Explain what human resource management is and how it relates to the management process.relates to the management process.

2.2. Give at least eight examples of how all managers can use Give at least eight examples of how all managers can use human resource management concepts and techniques.human resource management concepts and techniques.

3.3. Illustrate the human resources responsibilities of line and Illustrate the human resources responsibilities of line and staff (HR) managers.staff (HR) managers.

4.4. Provide a good example that illustrates HR’s role in Provide a good example that illustrates HR’s role in formulating and executing company strategy.formulating and executing company strategy.

5.5. Write a short essay that addresses the topic: Why metrics Write a short essay that addresses the topic: Why metrics and measurement are crucial to today’s HR managers.and measurement are crucial to today’s HR managers.

6.6. Outline the plan of this book.Outline the plan of this book.


The Management ProcessThe Management Process

Planning

Organizing

Leading Staffing

Controlling


Human Resource Management at WorkHuman Resource Management at Work

• What Is Human Resource Management What Is Human Resource Management (HRM)?(HRM)? The policies and practices involved in carrying out The policies and practices involved in carrying out

the “people” or human resource aspects of a the “people” or human resource aspects of a management position, including recruiting, management position, including recruiting, screening, training, rewarding, and appraising.screening, training, rewarding, and appraising.


Human Resource Management at WorkHuman Resource Management at Work

Acquisition

Training

Appraisal

CompensatingLabor Relations

Health and Safety

Fairness

Human Resource

Management(HRM)


Personnel Aspects of a Manager’s JobPersonnel Aspects of a Manager’s Job

1.1. Conducting job analyses Conducting job analyses

2.2. Planning labor needs and recruiting job candidatesPlanning labor needs and recruiting job candidates

3.3. Selecting job candidatesSelecting job candidates

4.4. Orienting and training new employeesOrienting and training new employees

5.5. Managing wages and salariesManaging wages and salaries

6.6. Providing incentives and benefitsProviding incentives and benefits

7.7. Appraising performanceAppraising performance

8.8. Communicating Communicating

9.9. Training and developing managersTraining and developing managers

10.10. Building employee commitmentBuilding employee commitment


Personnel MistakesPersonnel Mistakes• Hire the wrong person for the jobHire the wrong person for the job

• Experience high turnoverExperience high turnover

• Have your people not doing their bestHave your people not doing their best

• Waste time with useless interviewsWaste time with useless interviews

• Have your company in court because of discriminatory actionsHave your company in court because of discriminatory actions

• Have your company cited by labor inspectors for unsafe practicesHave your company cited by labor inspectors for unsafe practices

• Have some employees think their salaries are unfair and Have some employees think their salaries are unfair and inequitable relative to others in the organizationinequitable relative to others in the organization

• Allow a lack of training to undermine your department’s Allow a lack of training to undermine your department’s effectivenesseffectiveness

• Commit any unfair labor practicesCommit any unfair labor practices


Basic HR ConceptsBasic HR Concepts

• The bottom line of managing: The bottom line of managing: Getting resultsGetting results

• HR creates value by engaging HR creates value by engaging in activities that produce the in activities that produce the employee behaviors that the employee behaviors that the company needs to achieve company needs to achieve its strategic goals.its strategic goals.


Line and Staff Aspects of HRMLine and Staff Aspects of HRM

• Line managerLine manager A manager who is authorized to direct the work of A manager who is authorized to direct the work of

subordinates and is responsible for accomplishing subordinates and is responsible for accomplishing the organization’s tasks.the organization’s tasks.

• Staff managerStaff manager A manager who assists and advises line managers.A manager who assists and advises line managers.


Line Managers’ HRM ResponsibilitiesLine Managers’ HRM Responsibilities

1.1. Placing the right person on the right jobPlacing the right person on the right job

2.2. Starting new employees in the organization (orientation)Starting new employees in the organization (orientation)

3.3. Training employees for jobs that are new to themTraining employees for jobs that are new to them

4.4. Improving the job performance of each personImproving the job performance of each person

5.5. Gaining creative cooperation and developing smooth working Gaining creative cooperation and developing smooth working relationshipsrelationships

6.6. Interpreting the firm’s policies and proceduresInterpreting the firm’s policies and procedures

7.7. Controlling labor costsControlling labor costs

8.8. Developing the abilities of each personDeveloping the abilities of each person

9.9. Creating and maintaining department moraleCreating and maintaining department morale

10.10. Protecting employees’ health and physical conditionProtecting employees’ health and physical condition


Human Resource Managers’ DutiesHuman Resource Managers’ Duties

Functions ofHR Managers

Line FunctionLine Authority

Staff FunctionsStaff Authority

InnovatorEmployee Advocacy

Coordinative Function

Functional Authority


Human Resource SpecialtiesHuman Resource Specialties

Recruiters

Human Resource

Development Specialists

Employment/Industrial Relations Specialist

Training Specialists

Job Analysts

Compensation Managers

Human Resource

Specialties

Employee Welfare Officers


FIGURE 1–1 HR Organization Chart for a Large Organization


FIGURE 1–2 HR Organizational Chart (Small Company)


The Changing Environment of The Changing Environment of Human Resource ManagementHuman Resource Management

Globalization Trends

Technological Trends

Trends in the Nature of Work

Workforce Demographic Trends

Changes and Trends in Human Resource

Management


TABLE 1–2 Technological Applications for HR

Application Service Providers (ASPs) and technology outsourcing

Web portals

PCs and high-speed access

Streaming desktop video

The mobile Web and wireless net access

E-procurement

Internet- and network-monitoring software

Bluetooth

Electronic signatures

Electronic bill presentment and payment

Data warehouses and computerized analytical programs


The Changing Role of The Changing Role of Human Resource ManagementHuman Resource Management

New Responsibilities for HR Managers

Measuring the HRM Team’s Performance

Managing with the HR Scorecard

Process

Creating High- Performance Work

Systems

Strategic Human Resource

Management


High-Performance Work System PracticesHigh-Performance Work System Practices

• Employment securityEmployment security• Selective hiringSelective hiring• Extensive trainingExtensive training• Self-managed teams/decentralized decision makingSelf-managed teams/decentralized decision making• Reduced status distinctionsReduced status distinctions• Information sharingInformation sharing• Contingent (pay-for-performance) rewardsContingent (pay-for-performance) rewards• Transformational leadershipTransformational leadership• Measurement of management practicesMeasurement of management practices• Emphasis on high-quality workEmphasis on high-quality work


Benefits of a High-Performance Benefits of a High-Performance Work System (HPWS)Work System (HPWS)

• Generate more job applicantsGenerate more job applicants

• Screen candidates more effectivelyScreen candidates more effectively

• Provide more and better trainingProvide more and better training

• Link pay more explicitly to performanceLink pay more explicitly to performance

• Provide a safer work environmentProvide a safer work environment

• Produce more qualified applicants per positionProduce more qualified applicants per position

• Hiring based on validated selection testsHiring based on validated selection tests

• Provide more hours of training for new employeesProvide more hours of training for new employees

• Conduct more performance appraisalsConduct more performance appraisals


The Human Resource Manager’s The Human Resource Manager’s ProficienciesProficiencies

• New ProficienciesNew Proficiencies

HR proficienciesHR proficiencies

Business proficienciesBusiness proficiencies

Leadership proficienciesLeadership proficiencies

Learning proficienciesLearning proficiencies


FIGURE 1–8 Effects CFOs Believe Human Capital Has on Business Outcomes

Source: Steven H. Bates, “Business Partners,” HR Magazine, September 2003, p. 49. Reproduced with permission of the Society for Human Resource Management via Copyright Clearance Center.


The Human Resource Manager’s The Human Resource Manager’s Proficiencies (continued)Proficiencies (continued)

• Managing within the LawManaging within the Law

Equal employment laws (US)Equal employment laws (US)

Industrial Disputes Act of 1947Industrial Disputes Act of 1947

Occupational safety and health lawsOccupational safety and health laws

Other labor lawsOther labor laws

• Managing EthicsManaging Ethics

Ethical lapsesEthical lapses

Sarbanes-Oxley in 2003Sarbanes-Oxley in 2003 Securities and Exchange Board of India (SEBI)Securities and Exchange Board of India (SEBI) Ministry of Corporate Affairs (MCA) Ministry of Corporate Affairs (MCA)


The Plan of This Book: Basic ThemesThe Plan of This Book: Basic Themes

• HRM is HRM is the responsibility of every managerthe responsibility of every manager..

• HR managers must defend their plans and HR managers must defend their plans and contributions in measurable terms.contributions in measurable terms.

• All personnel actions and decisions have strategic All personnel actions and decisions have strategic implications.implications.

• All managers rely on information technology.All managers rely on information technology.

• Virtually every personnel decision has legal Virtually every personnel decision has legal implications.implications.


FIGURE 1–9 Strategy and the Basic Human Resource Management Process


K E Y T E R M SK E Y T E R M S

management process management process

human resource managementhuman resource management(HRM) (HRM)

authority authority

line manager line manager

staff manager staff manager

line authority line authority

staff authority staff authority

implied authority implied authority

functional control functional control

employee advocacyemployee advocacy

globalizationglobalization

human capitalhuman capital

strategystrategy

strategic planstrategic plan

outsourcingoutsourcing

ethicsethics

strategic human resource strategic human resource managementmanagement

high-performance work systemhigh-performance work system

Human Resource Human Resource ManagementManagement

TWELFTH EDITION

G A R Y D E S S L E R

B I J U V A R K K E Y

Copyright © 2011 Dorling Kindersley (India) Pvt. LtdAuthorized adaptation from the United States edition of Human Resource Management, 12/e

Evolution and Challenges Faced in India Chapter 1 Chapter 1 AppendixAppendix

Part 1 | Introduction


HRM in IndiaHRM in India

In the 1970s and 1980s typical HRM functions in organization included:

• Personnel and administration • Industrial relations• Labor welfare

Up to the mid-80s human resource management in Indian organizations grew through various phases under the influence of the following factors:

• A philanthropic viewpoint about doing good for workers • A legislative framework• Government policies • Trade unions • Emerging trends/concepts in management• Changes in the economy


Management Challenges for Indian CEOsManagement Challenges for Indian CEOs

A study among Indian CEOs identified the following challenges:

Creating a high-performance culture Retaining talent Recruiting Moving from a patriarchic and hierarchical

management style to a more team-based, informal organizational culture

Linking training with performance Compensating knowledge workers Building interpersonal relationships/managing

conflict Going global

Source: Aneeta Madhok, “Similar Challenges” cited by Robert J. Grossman in “HR’s Rising Star in India,” available at http://www.shrm.org/india.


Shift to Human Resource Development Shift to Human Resource Development OrientationOrientation

The 1980s saw the large-scale introduction of the developmental concept in Indian organizations

Udai Pareek and T. V. Rao, faculty of IIM Ahmedabad, introduced the human resource development (HRD) concept in India


Total Human Resource ManagementTotal Human Resource Management

Opening up of the Indian economy created a demand for talent and the traditional organizations (both in public and private sectors) became talent sources.

Development of the Information Technology sector mobilized a vast pool of technically trained people.

Massive staffing requirements saw recruitment evolving as very specialized function, separate from but closely interlinked with the other HRM functions.

Arrival of the “knowledge worker”—well-skilled, individualistic, and ambitious about career caused attrition to become common.


Total Human Resource ManagementTotal Human Resource Management (continued)(continued)

Introduction of IT-supported solution, particularly ERP-based human resource information systems

Introduction of innovative HR practices. Rise of IT-enabled services (ITES), gave

employment opportunities to the young English speaking, educated population.

HRM function assumed a strategic role in Indian organizations, responding to business requirements in an appropriate way.

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