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Human Resource Management B&M readings summary
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Summary of the readings of the book and articles for the Human Resource Management B&M course for FEB Bedrijfskunde 2nd year & FEB Pre-Msc programs.
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Course Code: EBB617B05Semester: 2nd semester, 1st block
Students: 2nd year BSc Bedrijfskunde/Bdk;
Pre-MSc-programma’s FEB Credits (ECTS number): 5 ECTs
Includes chapter 1, 16, 4, 5, 6, 8, 11, 12 & 2.2; also article week 2, 3 & 6
Human Resource Management B&M Readings
Week 1
Chapter 1: What Is Human Resource Management
Human Resources (HR) are the people within an organisation. And are one of the primary means of
creating a competitive advantage for the organization because management of HR directly affects the
company performance. Since organizations all have access to the same practical resources, leaving
people to be their most valuable asset. If we can get our employees fully committed and engaged, we
can make better decisions, increase employee trust and loyalty and improve productivity, and thus
create competitive advantage. Employee engagement is a combination of job satisfaction, ability, and
a willingness to perform for the organization at a high level and over an extended period of time.
In the past, HRM provided limited service to an organization. It was considered a cost center, which is
a division or department within the organization that brings in no revenue or profit for the
organization. We don’t want this, we want revenue centers instead, which are divisions or
departments that generate monetary returns for the organization. HRM departments cannot directly
generate revenue, but they can generate it through an indirect fashion. And thus HRM departments
are now seen as revenue centers.
Present view of HRM
The new normal are productivity centers: a revenue center that enhances the profitability of the
organization through enhancing the productivity of the people within the organization. Productivity is
the amount of output an organization gets per unit of input, with human input usually expressed in
terms of units of time. Productivity is the end results of two components that managers work to
create and continually improve within the organization:
- Effectiveness: a function of getting the job done whenever and however it must be done. “Did
we do the right thing?”
- Efficiency: a function of how many organizational resources were used in getting the job
done. “Did we do the right thing?”
Efficiency is the most important in HRM. We physically use up monetary resources, facility resources
and material resources, but we use up the time available from our people. So how do we make
people more efficient? Technology and people analytics is one way to improve efficiency. Using
technology to gather, analyse and manage large amounts of data. Commonalities can then be found
to create new and more efficient processes.
E.g. Bank of America discovered that more productive workers were those allowed to take their break
together, where they let off steam and shared tips with each other. The bank switched to collective
breaks and performance improved by 23%, and stress lowered by 19%.
New HRM challenges
The combined major challenges are as follows:
, - Upskilling the workforce to manage the AI revolution.
- Extracting value from big data.
- Building critical skills and competences for organizations
- Strengthening current and future leadership.
Labor demographics will significantly change and affect companies in the following years, as
businesses will become more diverse. Thus, managers need to be more culturally aware and able to
deal with individuals with different work ethics, cultural norms and languages.
Knowledge workers are workers who ‘use their head more than their hands’ and who gather and
interpret information to improve a product or process for their organizations.
Four critical dependent variables that managers must control in order to compete in a modern
organization are:
1. Productivity
2. Employee engagement
3. Turnover – permanent loss of workers from the organization. When people quit it is
considered voluntary turnover. When people are fired it is involuntary turnover.
4. Absenteeism – temporary absence of employees from the workplace, which is costly for the
organization.
The basics of strategic HRM are to make organizations more competitive and to create sustainable
competitive advantages, which is a capability that creates value for customers that rivals can’t copy
quickly or easily and that allows the organization to differentiate its products or services from those of
competitors.
Social media is a tool for organizations and can be used for:
- Recruiting and selection
- The onboarding process
- Training and development
- Performance management
HRM Skills
The four major HRM skills HR managers need are:
1. Technical skills: the ability to use methods and techniques to perform a task.
2. Interpersonal skills: the ability to understand, communicate, and work well with individuals
and groups through developing effective relationships. As HR managers have be empathetic.
As empathy is being able to put yourself in another person’s place, to understand not only
what that person is saying but why the individual is communicating that information to you.
3. Conceptual and design skills: The ability to evaluate a situation, identify alternatives and
select a reasonable alternative and make a decision to implement a solution to a problem.
4. Business skills: The analytical and quantitative skills – including in-depth knowledge of how
the business works and its budgeting and strategic planning processes – that are necessary
for a manager to understand and contribute to the profitability of the organization.
Line managers are individuals who create, manage and maintain the people and organizational
processes that create whatever it is that the business sells. They control the operations of the
organization. A line manager may have direct control over staff employees, but a staff manager would
not generally have any direct control of line employees.
,Staff managers are individuals who advise line managers in some form of expertise.
Major HR responsibilities of Line Management are: legal considerations, labour cost controls,
leadership and motivation, training and development, appraisal and promotion and lastly, safety and
security of employees.
The eight major HRM discipline areas are:
1. the legal environment, EEO and Diversity management: this discipline deals with equal
opportunity laws and regulations as well as management of a diverse workforce.
2. Staffing: manages the processes involved in job analysis, recruiting, and selection into the
organization.
3. Training and development: has the responsibility for the training processes within the
organization, for developing curricula and lesson plans, and for delivery of training courses. It
is also involved with development of talent within the company to provide a group of
employees who will be able to move into more senior positions that become vacant.
4. Employee and labour relations: this area involves the coaching, counselling and discipline
processes, along with employee communication and stress management. It is also typically
responsible for the management of job satisfaction and employee management.
5. Compensation and benefits: works with pay of various types and with benefits packages, all
of which are designed to attract and keep the right mix of employees in the organization. It
also deals directly with all of the federal and state compensation laws to ensure compliance.
6. Safety and security: works to ensure that the environment on the job is safe for all workers
so that on-the-job injuries and illnesses are minimized to the greatest extent possible. It also
involves managing the organization’s planning for securing the workforce, both from being
harmed by other people and from natural disasters such as earthquakes or tornados.
7. Ethics and sustainability: this discipline bears responsibility for seeing to it that the
organization acts in an ethical and responsible manner, to minimize harm to the environment
and its various stakeholders. It involves managing the sustainability efforts in the organization
to minimize the organization’s footprint on the environment.
8. People analytics: this allows the HRM manager to identify patters in the work environment.
This will allow a more proactive approach to addressing issues that could pose a potential
risk and harm to the organization.
Professional associations and programs exist as major resources for HRM careers. The Society for
Human Resource Management (SHRM) is the largest and most recognized of the HRM advocacy
organizations in the USA. They advocate for national HR laws and policies, and training and
certification of HR professionals. But there are also other major HR organizations. However it is
important to recognize the professional liability that comes with the job. As HR managers can be held
personally liable for some of the actions that they cake part of their job.
Practitioner’s model for HRM
This model is designed to show the relationships between each of the functions and disciplines within
HRM.
- The first level are items absolutely critical to the organization if it is going to continue to
operate and be stable and successful for a significant period of time.
- The second level includes things that are required to identify the kinds of jobs that must be
filled and then to recruit and select the right types of people into the jobs so the company
can maximize productivity over the long term.
, - The third tier includes the management of the human resources that we selected in the
second level. Such as training, coaching and counselling.
- The fourth tier looks at how to reward and maintain employees through compensations and
benefits to keep employees satisfied and motivated.
- The top tier makes sure that we reward and maintain our workforce to minimize unnecessary
turnover and dissatisfaction. This is done through fair and reasonable compensation
planning, and through the maintenance of a safe and secure workplace.
The latest trends and issues impacting HRM today are:
- Employee experience: employee engagement as well as the totality of other interactions
between individual and their workplace and whether those interactions are negative or
positive overall. A focus has shifted not solely to employee engagement with the totality of all
other interactions in the workplace.
- Continuing worldwide problems with managerial training. It is important to continue to trian
managers to be effective in their roles.
Chapter 16: Global Issues for Human Resource Managers (p.553-561)
Globalization of business and HRM
Globalization benefits foreign trade businesses and countries by creating more jobs globally.
Globalization may require you to interact effectively with people from different cultural backgrounds.
Companies will need global leaders to be successful. Capital and goods flow easily between countries,
and one model identified the four types of capital that flow between countries:
- Natural capital: natural resources such as timber, water and minerals (human welfare).
- Social capital: the social networks that support and efficient, cohesive society and facilitate
social and intellectual interactions among its members. E.g. social trust, norms and networks.
- Manufactured capital: human-made capital such as machines, tools, buildings, infrastructure
used to produce other assets.
- Human capital: the health, well-being and productive potential of individual people.
Businesses might want to take part in globalization as it increases business. It creates a global village:
companies conducting business worldwide without boundaries. The entire world can see and interact
with goods and services that were only available in others in ‘the village’ years ago. But also to
decline trade barriers, and barriers of distance and culture. This resulted in the rise of trade blocs,
which are groups of countries that form and association for the purpose of facilitating movement of
goods across national borders. And lastly, globalization is useful for businesses to remain competitive.
Since Global corporations vs. Domestic organizations = one-sided competition.
In the Global Village, we need a global perspective. Meaning, if we can buy or make better or cheaper
materials, parts or products and make profit in another country, then do so.
There are four stages in corporate globalization:
- Domestic: firms have a one-country market and serve primarily one set of customers. The
firm does not develop products for other countries’ markets, and management does not have
to be culturally sensitive, other than to local customers and employees. (small business in
your hometown)
- International: new firms enter the company’s markets, causing the firm to also search for
new markets. Generally, the company will enter only a few other countries’ markets in this
stage – initially by exporting goods or services from the home country location and at some
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