Principles of Management

Chapter 12: Managing Human Resources

HRM: The Basics
• What is Human Resources engagement: HRM fosters a
Management? positive work environment,
• The process of managing an leading to higher job
organization's workforce, from satisfaction and reduced
recruiting and hiring to turnover.
training, developing, and • Supports strategic goals: HRM
compensating employees. aligns with organizational
• It also involves maintaining a objectives, driving business
positive work environment, success.
ensuring compliance with labor • Manages risk: HRM ensures
laws, and managing employee compliance with labor laws,
relationships. reducing legal issues and
• Why is HRM important? reputational damage.
• Attracts and retains top talent: • Develops a positive employer
Effective HRM helps recruit brand: HRM contributes to a
and retain skilled and positive reputation
• Encourages diversity and
External Factors that Affect the HRM Process
• Labor Market Conditions: workforce planning and
Availability of skilled labor, labor development.
shortages, and competition for • Legal and Regulatory Changes:
talent influence recruitment Changes in employment laws,
strategies and compensation regulations, and government
packages. policies impact HR practices
• Economic Conditions: Economic related to hiring, compensation,
booms or recessions can impact benefits, and employee relations.
budget allocation for HR • Demographic Trends: Shifts in
activities, such as training and demographics, such as an aging
development or hiring freezes. workforce or generational
• Technological Advances: differences, influence recruitment
Automation, artificial intelligence, strategies, succession planning,
and digitalization affect job roles, and diversity initiatives.
skills required, and training
needs, shaping HR strategies for
External Factors that Affect the HRM Process
• Globalization: Expansion into new • Competitive Pressures: Rivalry
markets or operating in multiple with competitors for talent and
countries requires compliance market share drives HR strategies
with diverse labor laws, cultural for employer branding, talent
considerations, and talent acquisition, and retention efforts.
management strategies. • Environmental Factors: Corporate
• Social and Cultural Shifts: social responsibility initiatives
Changing societal attitudes and and sustainability efforts
values regarding work-life influence HR practices related to
balance, diversity, and inclusion employee engagement, corporate
impact HR policies and practices culture, and community
related to flexible work involvement.
arrangements, diversity
initiatives, and employee well-
being programs.
Human Resource Planning
• HR Planning: Ensures the right number and interviews, questionnaires, diaries, job "experts"
kinds of capable people in the right places and at (managers)
the right times. Avoids sudden people shortages • Develops or revises job descriptions (written
and surpluses statement describing a job) & job specifications
• Entails two steps: (minimum qualifications needed to perform a
1. Current Assessment job)
• Inventorying current employees' information. 2. Meeting Future HR Needs
• Uses databases and software programs to easily • Determined by the organization’s mission, goals,
access and analyze information strategies
• Includes job analysis (an assessment that • Demand for employees results from demand for
defines jobs and the behaviors necessary to the organization’s products &services
perform them) to define a job and the behaviors • After assessing current capabilities and future
necessary to perform it needs, managers can estimate areas where the
• Gathers information through direct observation, organization will be: Understaffed or
Overstaffed
Recruitment and Decruitment
• If the organization is facing a staffing imbalance, whether it's
understaffed or overstaffed, the solution lies in Recruitment (to hire
new talent) or Decruitment (to reduce excess staff) strategies,
respectively.

• Recruitment
• The process of attracting, selecting, and hiring new employees to
fill job vacancies or expand the workforce.
• Goal: To find and hire the best candidates to join the organization.
• Decruitment
• The process of reducing the workforce or employee headcount,
usually due to surplus employees or organizational restructuring.
• Goal: To reduce labor costs, adjust to changing business needs, or
improve efficiency.
Recruitment and Decruitment
• Recruiting Sources • Company website:
• Internet: • Advantages: Wide distribution,
• Advantages: Reaches large targeted outreach.
audience, immediate • Disadvantages: Can generate
feedback. unqualified applicants.
• Disadvantages: Generates • College recruiting:
many unqualified candidates. • Advantages: Access to young
• Employee referrals: talent, specific targeting.
• Advantages: Provides insight • Disadvantages: Limited
into organization, strong commitment to organization,
candidates. may lack experience for some
• Disadvantages: May lack positions.
diversity, limited to entry-level
positions.
Recruitment and Decruitment
• Decruitment Options from one position, department,
o Firing: Termination of or location to another within
employment due to the organization.
performance or behavioral o Reduced workweeks: Reducing
issues. employees' work hours while
o Layoffs: Temporary or maintaining their employment
permanent termination of status.
employment due to o Early retirements: Offering
organizational needs, such as employees the option to retire
cost-cutting or restructuring. earlier than they originally
o Attrition: Natural reduction of planned.
the workforce through o Job sharing: Arrangement
voluntary means, such as where two or more employees
resignations, retirements, or share the responsibilities of a
death. single full-time position.
o Transfers: Moving employees
Selection
• Selection: The process of preparing applicants for the
screening job applicants to realities of the job
determine who is best qualified • Importance of Selection
for the job
• Hiring unqualified candidates
• Involves predicting which can have significant
applicants will be successful if implications, such as legal
hired issues and poor customer
• Realistic Job Previews service
• A technique to provide • Effective selection processes
applicants with a balanced view can lead to improved employee
of the job and company retention and performance
• Includes both positive and • Organizations should use a
negative information to variety of selection methods,
manage expectations including valid and reliable
• Helps reduce turnover and tests, to ensure the best
candidates are selected.
Selection
• Common Selection Tools with the job
• Application Forms: • Assessment center: simulate
• Universally used jobs (evaluate managerial
potential)
• Useful for gathering
information • Interviews:
• Can predict job performance, • Universally used
but difficult to create an • Must know what can and
effective one cannot be asked
• Written Tests: • Useful for managerial
• Must be job-related positions
• Include intelligence, aptitude, • Background Investigations:
ability, personality, and • Verify application data
interest tests • Verify reference checks
• Good predictor for supervisory • Physical Examinations:
positions
• For jobs with physical
• Performance-simulation Tests: requirements
Orientation
• The process of introducing a new company's goals, history, and
employee to their job, work unit, policies
and organization • Formal Orientation :
• Helps the new employee structured and comprehensive
understand the company's goals, • Informal Orientation: manager
history, philosophy, procedures, assigns a senior colleague to
and rules introduce the new employee to
• Aims to make the new employee the team and facilities
feel comfortable and adjusted, • Importance of Orientation
reduce poor work performance, • Helps new employees understand
and prevent surprise resignations their role and responsibilities
• Types of Orientation • Encourages open discussion of
• Work Unit Orientation: focuses mutual obligations between the
on the goals and organization and employee
responsibilities of the specific
work unit • Results in a smoother transition,
reduced turnover, and improved
• Organization Orientation:
Training
• What is training? • Helps employees adapt to
• Training is the process of changes in technology,
teaching new employees the processes, and procedures
skills they need to perform • Supports career development
their jobs effectively and advancement
• It involves imparting opportunities
knowledge, skills, and • Boosts organizational
attitudes necessary for competitiveness and success
employees to succeed in their • Encourages a culture of
roles continuous learning and
• Why is Training Important? improvement
• Enhances employee • Helps to address skill gaps and
performance and productivity knowledge deficiencies
• Improves job satisfaction and • Supports compliance with
morale regulations and industry
• Increases employee retention standards
and reduces turnover
Training
• Traditional Training Methods • Technology-Based Training
• On-the-job training: learning Methods
by performing tasks • CDROM/DVD/videotapes/
• Job rotation: working at audiotapes/podcasts: listening
different jobs in a specific area to or watching media to learn
• Mentoring and coaching: • Videoconferencing/
guidance from an experienced teleconferencing/satellite TV:
worker participating in remote training
• Experiential exercises: role- sessions
playing, simulations, and face- • E-learning: interactive online
to-face training learning through multimedia
• Workbooks/manuals: referring simulations
to written materials for • Mobile learning: learning
information delivered through mobile
• Classroom lectures: attending devices
Performance Management
• Performance Management:
• Continuous process to align goals, expectations, and
development.
• Involves setting objectives, providing feedback, coaching, and
recognition.
• Aims to improve individual and organizational performance over
time.

• Performance Appraisal:
• Periodic assessment of employee performance.
• Provides feedback on strengths, weaknesses, and areas for
improvement.
• Helps in decision-making related to promotions, rewards, and
Performance Appraisal Methods
• Written Essay: Provides a detailed complex.
evaluation but may be influenced by the• Multiperson Comparison: Compares
evaluator's writing skills rather than the employees within a work group,
employee's actual performance. providing relative assessments.
• Critical Incident: Focuses on specific However, it becomes challenging with a
behaviors, offering rich examples, but it large number of employees and may
can be time-consuming and lacks raise legal concerns.
quantification. • Management by Objectives (MBO):
• Graphic Rating Scale: Popular for its Evaluates employees based on their
quantitative approach, it lists achievement of specific goals. While
performance factors and uses a scale focusing on results, it can be time-
for ratings. However, it may lack depth consuming to implement.
in assessing job behaviors. • 360-Degree Appraisal: Gathers
• Behaviorally Anchored Rating Scale feedback from supervisors, employees,
(BARS): Combines elements from the and coworkers, offering a
Critical Incident and Graphic Rating comprehensive perspective. However, it
Scale methods, emphasizing specific, requires substantial time and effort to
measurable job behaviors. Developing conduct effectively.
BARS can be time-consuming and
Compensation and Benefits
• Important for attracting and • Job-based (e.g. job title,
retaining talented employees responsibilities)
• Influences employee morale and • Business- or industry-based (e.g.
motivation market rates, industry
standards)
• Can impact organizational strategic
performance • Alternative approaches:
• Includes various types of rewards • Skill-based pay (rewards
and benefits, such as: employees for job skills and
competencies)
• Base wages and salaries
• Variable pay (compensation
• Wage and salary add-ons
contingent on performance)
• Incentive payments
• Goal: establish a fair, equitable, and
• Other benefits and services (e.g.
motivating compensation system to
health insurance, retirement
recruit and retain a talented and
plans)
productive workforce.
• Factors influencing compensation
Contemporary Issues in HRM
• Managing Downsizing: Planned mixed-gender work teams and long
elimination of jobs due to economic hours. Potential for conflicts, sexual
factors or organizational needs. harassment accusations, and hostile
Disruptions expected, leading to stress work environments. Companies adopt
and frustration among employees. flexible policies but educate employees
Strategies to lessen trauma include about potential risks and liabilities,
providing support for affected especially in supervisor-subordinate
employees and survivors. relationships.
• Managing Sexual Harassment: • Work-Life Balance: Companies
Widespread issue in both public and recognize personal lives, offer family-
private sectors, with high costs for friendly benefits. Both genders face
organizations. Definition includes any work-life conflicts due to increased
unwelcome sexual behavior affecting demands. Progressive workplaces
employment or work environment. provide scheduling options for balance.
Organizations must educate Efforts needed to improve work-life
employees, prevent retaliation, and programs. Preferences for scheduling
address workplace romances. options vary, emphasizing diversity.
• Workplace Romances: Common due to