Human Resource Management
Human Resource Management includes all activities used to attract & retain employees and to ensure they perform at a high level in meeting organizational goals.
These activities are made up of
1. Recruitment & selection.
2. Training and development.
3. Performance appraisal and feedback.
4. Pay and benefits.
5. Labor relations.
Components of a HRM System
1. Recruitment & Selection
2. Labor Relations
3. Pay & Rewards
4. Performance, Appraisal & Feedback
1. Component should be consistent with the others,
organization structure, and strategy.
1.1. Recruitment: develop a pool of qualified applicants.
a. Selection: determine relative qualifications & potential for a job.
1.2. Training & Development: ongoing process to develop worker’s abilities and skills.
1.3. Performance appraisal & feedback: provides information about how to train, motivate, and reward workers.
a. Managers can evaluate and then give feedback to enhance worker performance.
1.4. Pay and Benefits: high performing employees should be rewarded with raises, bonuses.
a. Increased pay provides additional incentive.
b. Benefits, such as health insurance, reward membership in
1.5. Labor relations: managers need an effective relationship with labor unions that represent workers.
a. Unions help establish pay, and working conditions.
If management moves to a decentralized structure, HRM should be adjusted as well.
HRM Legal Environment
1. Management of HR is a complex area. There are many
federal, state and local regulations.
1.1 Equal Employment Opportunity (EEO): ensures all citizens have equal opportunity for employment without regard to sex, age, race, origin, religion, or disabilities.
a. Makes effective management of diversity crucial.
1.2. Equal Employment Opportunity Commission (EEOC) enforces laws.
a. Managers must take steps to ensure discrimination does not occur.
Human Resource Planning
HR Planning includes all activities managers do to forecast current and future HR needs.
1. Must be done prior to recruitment and selection
2. Demand forecasts made by managers estimate the number & qualifications the firm will need.
3. Supply forecasts estimate the availability and qualifications of current workers and those in the labor market.
HRM Planning: Outsourcing
1. Outsourcing: managers can decide to contract with outside workers rather than hiring them.
1.1. Outsourcing is more flexible for the firm.
1.2 Outsourcing often provides human capital at a lower cost.
2. Outsource problems: managers lose control over
2.1.Outsource contractors are not committed to the firm.
3. Unions typically are against outsourcing that has potential to eliminate member’s jobs.
HRM Planning: Job Analysis
1. Job analysis determines the tasks, duties and responsibilities of the job.
1.1. A job analysis should be done for each job in the organization.
1.2. Job analysis can be done by:
a. Observe current workers.
b. Questionnaires filled out by worker and managers.
2. Current trends are toward flexible jobs where duties are not easily defined in advance.
1. External recruiting: managers look outside the firm for people who have not worked at the firm before.
1.1. Managers advertise in newspapers, hold open houses,
recruit at universities, and on the Internet.
a. External recruitment is difficult since many new jobs have specific skill needs.
b. A multi-prong approach to external recruiting works best.
2. Internal Recruiting: positions filled within the firm.
2.1. Internal recruiting has several benefits:
a. Workers know the firm’s culture, may not have new ideas.
b. Managers likely already know the candidates.
c. Internal advancement can motivate employees.
Honesty in Hiring
1. Managers may be tempted to over-rate the attractiveness of the job and firm.
1.1. They feel if they are honest, person will not work there.
1.2. Research indicates this is a poor strategy.
2. Realistic Job Preview: provides an accurate overview of the job.
2.1. Avoids having to hire, train and then lose workers.