Strategic Human Resource

Management

• Human Resource Management (HRM)

– Activities that managers engage in to attract
and retain employees and to ensure that they
perform at a high
level and contribute
to the accomplishment
of organizational goals.

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 Strategic Human Resource
Management

• HRM activities
– Recruitment and selection
– Training and development
– Performance appraisal and feedback
– Pay and benefits
– Labor relations

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 Strategic Human Resource
Management

• Strategic Human Resource Management

– The process by which managers design the
components of a HRM system to be
consistent with each other, with other
elements of organizational architecture, and
with the organization’s strategy and goals.

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 Strategic Human Resource
Management

• “Six Sigma” quality improvement plans

– ensure that an organization’s products and
services are as free of errors or defects as
possible through a variety of human
resource-related initiatives

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Components
of a Human
Resource
Management
System

Figure 12.1
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 HRM Components

• Recruitment and Selection

– Used to attract and hire new employees
who have the abilities, skills, and
experiences that will help an organization
achieve its goals.

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 HRM Components

• Training and Development

– Ensures that organizational members
develop the skills and abilities that will
enable them to perform their jobs effectively
in the present and the future
– Changes in technology and the environment
require that organizational members learn
new techniques and ways of working

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 HRM Components

• Performance Appraisal and Feedback

– Provides managers with the information
they need to make good human resources
decisions about how to train, motivate, and
reward organizational members
– Feedback from performance appraisal
serves a developmental purpose for
members of an organization

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 HRM Components

• Pay and Benefits

– Rewarding high performing organizational
members with raises, bonuses and
recognition.
• Increased pay provides additional
incentive.
• Benefits, such as health insurance,
reward membership in firm.

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 HRM Components

• Labor relations
– Steps that managers take to develop and
maintain good working relationships with the
labor unions that may represent their
employees’ interests

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 The Legal Environment of HRM

• Equal Employment Opportunity (EEO)

– The equal right of all citizens to the
opportunity to obtain employment
regardless of their gender, age, race,
country of origin, religion, or disabilities.
– Equal Employment Opportunity Commission
(EEOC) enforces employment laws.

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 The Legal Environment of HRM

• Contemporary challenges for managers

– How to eliminate sexual harassment
– How to make accommodations for
employees with disabilities
– How to deal with employees who have
substance abuse problems
– How to manage HIV-positive employees
and employees with AIDs

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 Recruitment and Selection

• Recruitment
– Activities that managers engage in to
develop a pool of candidates for open
positions.

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 Recruitment and Selection

• Selection
– The process that managers use to
determine the relative qualifications of job
applicants and their potential for performing
well in a particular job.

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The Recruitment and Selection System

Figure 12.2 12-15

 Human Resource Planning

• Human Resource Planning (HRP)

– Activities that managers engage in to
forecast their current and future needs for
human resources.

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 Human Resource Planning

• Demand forecasts
– Estimates the qualifications and numbers of
employees the firm will need given its goals
strategies.
• Supply forecasts
– Estimates the availability and qualifications
of current employees now and in the future,
as well as the supply of qualified workers in
the external labor market.

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 Human Resource Planning

• Outsourcing
– Using outside suppliers and manufacturers
to produce goods and services
– Using contract workers rather than hiring
them.
• More flexible for the firm.
• Provides human capital at a lower cost.

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 Human Resource Planning

• Problems with Outsourcing

– Loss of control over output; outsource
contractors are not committed to the firm.
– Unions are against outsourcing that has
potential to eliminate member’s jobs.

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 Job Analysis

• Job Analysis
– Identifying the tasks, duties and
responsibilities that make up a job and the
knowledge, skills, and abilities needed to
perform the job.
– Should be done for each job in the
organization.

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 Job Analysis

• Job analysis methods

– Observing what current workers do.
– Having workers and manages fill out
questionnaires.

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 Recruitment

• External Recruiting
– Looking outside the organization for people
who have not worked at the firm previously.
• Newspapers advertisements, open
houses, on-campus recruiting, employee
referrals, and through the Internet.

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 Recruitment

• Advantages of External Recruiting

– Having access to a potentially large
applicant pool
– Being able to attract people who have the
skills, knowledge, and abilities an
organization needs
– Bringing in newcomers who may have a
fresh approach to problems and be up to
date on the latest technology

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 Recruitment

• Disadvantages of External Recruiting

– Relatively high costs
– Candidates may lack knowledge about the
inner workings of the organization
– May need to receive more training
– Uncertainty concerning whether they will
actually be good performers

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 Recruitment

• Internal Recruiting
– Managers turn to existing employees to fill
open positions
– Benefits of internal recruiting:
• Internal applicants are already familiar
with the organization
• Managers already know candidates
• Can help boost levels of employee
motivation and morale
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 Honesty in Hiring

• Managers may be tempted to paint

overly rosy pictures of both the open
positions and the organization as a
whole
– Managers may feel that if they are honest,
an applicant may not be willing to work
there.
– Research indicates this is a poor strategy.

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 Honesty in Hiring

• Realistic Job Preview

– Providing an honest assessment of the
advantage and disadvantages of a job and
organization.
• Can reduce the number of new hires who
quit when their jobs and organizations fail
to meet their unrealistic expectations

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 Selection Tools

Figure 12.3 12-28

 The Selection Process

• Selection
process
– Managers find out
whether each
applicant is
qualified for the
position and likely
to be a good
performer

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 The Selection Process

• Background Information
– Helpful to screen out applicants who are
lacking key qualifications
– Determine which qualified applicants are
more promising than others

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 The Selection Process

• Interviews
– Structured interviews where managers ask
each applicant the same job-related
questions.
– Unstructured interviews that resemble
normal conversations.
– Usually structured interviews preferred; bias
is possible in unstructured interviews.

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 The Selection Process

• Paper-and-Pencil Tests
– Ability tests assess the extent to which
applicants possess the skills necessary job
performance
– Managers must have sound evidence that
the tests are good predictors of
performance

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 The Selection Process

• Physical ability tests

– Measures of dexterity, strength, and
stamina for physically demanding jobs
– Measures must be job related to avoid
discrimination.

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 Selection Process

• Performance tests
– Tests that measure an applicant’s current
ability to perform the job or part of the job
such as requiring an applicant to take typing
speed test.
– Assessment centers are facilities where
managerial candidates are assessed on job-
related activities over a period of a few
days.

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 Selection Process

• References
– Knowledgeable sources who know the
applicants’ skills, abilities, and other
personal characteristics
– Many former employers are reluctant to
provide negative information

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 Reliability and Validity

Selection tools must be reliable and valid.

– Reliability is the degree to which the
tool measures the same thing each time
it is used.

– Validity is the degree to which the test

measures what it is supposed to
measure

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 Training and Development

• Training
– Teaching organizational members how to
perform current jobs and helping them to
acquire the knowledge and skills they need
to be effective performers.

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 Training and Development

• Development
– Building the knowledge and skills of
organizational members to enable them to
take on new responsibilities and challenges.

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 Training and Development

• Needs Assessment
– An assessment of which employees need
training or development
and what type of skills
or knowledge they need
to acquire.

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 Training and Development

Figure 12.4

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 Types of Training

• Classroom Instruction
– Employees acquire skills in a classroom
setting.
• Includes use of videos, role-playing, and
simulations.
• On-the-Job Training
– Employee learning occurs in the work
setting as new worker does the job.
• Training is given by co-workers and can be done
continuously to update the skills of current
employees.

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 Types of Development

• Varied Work Experiences

– Top managers have need to and must build
expertise in many areas.
• Employees identified as possible top managers
are assigned different tasks and a variety of
positions in an organization.
• Formal Education
– Tuition reimbursement is common for
managers taking classes for MBA or job-
related degrees.
• Long-distance learning can also be used to
reduce travel and other expenses for managerial
training.
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Performance Appraisal and Feedback

• Performance Appraisal
– The evaluation of employees’ job
performance and contributions to their
organization.
• Performance Feedback
– The process through which managers share
performance appraisal information, give
subordinates an opportunity to reflect on
their own performance, and develop with
subordinates, plans for the future.
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 Types of Performance Appraisal

• Trait Appraisals
– Assessing subordinates on personal
characteristics that are relevant to job
performance.
– Disadvantages of trait appraisals
• Employees with a particular trait may choose not
to use that particular trait on the job.
• Traits and performance are not always obviously
linked
• It is difficult to give feedback on traits.

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Performance Appraisal and Feedback

• Behavior Appraisals
– Assesses how workers perform their jobs—the
actual actions and behaviors that exhibit on the
job.
– Focuses on what a worker does right and
wrong and provides good feedback for
employees to change their behaviors.
• Results appraisals
– Managers appraise performance by the results
or the actual outcomes of work behaviors

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Performance Appraisal and Feedback

• Objective appraisals
– Assesses performance based on facts (e.g.,
sales figures).
• Subjective appraisals
– Assessments based on a manager’s
perceptions of traits, behavior, or results.
• Graphic rating scales
• Behaviorally anchored rating scales (BARS)
• Behavior observation scales (BOS)
• Forced ranking systems

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Subject Measures of Performance:
Graphic Rating Scale

Figure 12.5 12-47

Subject Measures of Performance:
Behaviorally Anchored Rating Scale

Figure 12.5 12-48

Subject Measures of Performance:
Behavioral Observation Scale

Figure 12.5 12-49

 Who Appraises Performance?

Figure 12.6
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 Who Appraises Performance?

• Self
– Self appraisals can supplement manager
view.
• Peer appraisal
– Coworkers provide appraisal; common in
team settings.
• 360 Degree
– A performance appraisal by peers,
subordinates, superiors, and clients who are
in a position to evaluate a manager’s
performance

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 Effective Performance Feedback

• Formal appraisals
– An appraisal conducted at a set time during
the year and based on performance
dimensions that were specified in advance
• Informal appraisals
– An unscheduled appraisal of ongoing
progress and areas for improvement

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 Effective Feedback Tips

• Be specific and focus on behaviors or

outcomes that are correctable and within
a worker’s ability to improve.
• Approach performance appraisal as an
exercise in problem solving and solution
finding, not criticizing.
• Express confidence in a subordinate
ability to improve.
• Provide performance feedback both
formally and informally.
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 Effective Feedback Tips

• Praise instances of high performance

and areas of a job in which a worker
excels.
• Avoid personal criticisms and treat
subordinates with respect.
• Agree to a timetable for performance
improvements.

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 Pay and Benefits

• Pay
– Includes employees’ base salaries, pay
raises, and bonuses
– Determined by characteristics of the
organization and the job and levels of
performance
– Benefits are based on membership in an
organization

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 Pay and Benefits

• Pay level
– The relative position of an organization’s
incentives in comparison with those of other
firms in the same industry employing similar
kinds of workers
• Managers can decide to offer low, average or
high relative wages.
• High wages attract and retain high performers
but raise costs; low wages can cause turnover
and lack of motivation but provide lower costs.

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 Pay and Benefits

• Pay Structure CEO

– The arrangement of
jobs into categories VP VP VP

based on their
relative importance to Director Director
the organization and
its goals, level of
skills, and other Dept Manager

characteristics.

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 Pay and Benefits

• Benefits
– Legally required: social security, workers’
compensation
– Voluntary: health insurance, retirement, day
care
– Cafeteria-style benefits plans allow
employees to choose the best mix of
benefits for them; can be hard to manage.

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 Labor Relations

• Labor Relations
– The activities managers engage in to
ensure they have effective working
relationships with the labor unions that
represent their employees interests.

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 Labor Relations

• Laws regulating areas of employment.

– Fair Labor Standards Act (1938) prohibits
child labor, sets a minimum wage and
maximum working hours.
– Equal Pay Act (1963) men and women
doing equal work will get equal pay.
– Work Place Safety (1970) OSHA mandates
procedures for safe working conditions.

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 Unions

• Unions
– Represent worker’s interests to management in
organizations.
– The power that a manager has over an individual
worker causes workers to join together in unions to
try to prevent this.

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 Unions

• Collective bargaining
– Negotiation between labor and
management to resolve conflicts and
disputes about issues such as working
hours, wages, benefits, working conditions,
and job security.

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