Human Resource Management:
functions, applications, and skill development
Robert N. Lussier & John R. Hendon
PART I - 21ST CENTURY HUMAN RESOURCE MANAGEMENT STRATEGIC PLANNING
AND LEGAL ISSUES
Chapter 1 - The New Human Resource Management Process
Human resources (HR); the people within an organization.
- Human resources are one of the primary means of creating a competitive advantage for
organizations, because management of human resources affects company performance.
- Most companies of comparable size and scope within the same industry generally have
access to the same materials and facilities-based resources that any other organization
within the industry may have. Therefore, it is difficult to create a competitive advantage
based on material, facility, or other tangible or economic resources.
- If organizations can manage its human resources more successfully than its competitors
do, if it can get its employees involved in working toward the day-to-day success of the
organization, and if it can get them to stay with the organization, then it has a much
greater chance of being successful.
→ Successful is defined as being more productive and more profitable than the
competition.
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.
- A 2009 study showed that companies with high levels of satisfaction and engagement
outperformed those with less engaged employees in return on investment (ROI), operating
income, growth rate, and long-term company valuation.
- Engaged employees are those who understand what they need to do to add value to the
organization and are satisfied enough with the organization and their roles within it to be willing to
do whatever is necessary to operate successfully within an organization and compete
productively.
HRM PAST EN PRESENT
Management of the organization’s human resources has changed more in the past 15-20 years than in
the entire history of organized companies.
HRM in the past
Around the mid-1970s, human resource manager (or personnel manager) was considered an easy
management job.
- Personnel managers were expected to be only paper pushes who would keep all of the personnel
files straight. They had very little to do with the management of the organization’s business
processes.
- Most HR departments provided limited services to the organization - keeping track of job
applicants, maintaining employee paperwork, and filing annual performance resources.
- The HR department was considered to be a cost center.
→ HRM departments are not able to generate revenue directly because of their tasking
within the organization, but they can generate significant revenue and profit in an indirect
fashion.
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,Present view of HRM
In today’s organization, you will most likely work in a team, perform lots of quantitative analysis on
business data, and share in decision making and other management tasks. Modern organizations also
expect significantly greater productivity than occurred in their historical counterparts.
A productivity center is a revenue center that enhances profitability of the organization through enhancing
the productivity of the people within the organization.
- HR managers are no longer running an organizational cost center. Their function is to improve
organizational revenues and profits by enhancing the productivity of the people within the
organization.
- Productivity is the amount of output that an organization gets per unit of input, with
human input usually expressed in terms of unit of time. Productivity is the end result of
two components that managers work to create and improve within the organization:
- Effectiveness - a function of getting the job done whenever and however it must
be done. It answers the question, “did we do the right things?”.
- Efficiency - a function of how many organizational resources we used in getting
the job done. It answers the question, “did we do things right?”.
Most of the time the focus is on efficiency. Our people allow us to be more efficient as an organization if
they are used, and motivated, in the correct manner. HRM is about how to make our people more
efficient.
Technology’s effect of efficiency
Using technology allows us to gather, analyze and manage large amounts of data much more quickly
than we have ever been able to do before. This in turn allows managers - including HR managers - to find
commonalities in the data that can help them create new and more efficient processes.
THE CHANGING WORLD OF HR
The three biggest challenges over the next 10 years, according to HR executives, are:
1. Maintaining high levels of employee engagement;
2. Developing next generation organization leaders;
3. Maintaining competitive compensation and benefits offerings.
The HR competencies that will be the most critical are:
1. Business acumen - ability to understand and apply information to contribute to the organization’s
strategic plan.
2. Organizational leadership and navigation - ability to direct and contribute to initiatives and
processes within the organization.
3. Critical evaluation - ability to interpret information to make business decisions and
recommendations.
4. HR expertise - ability to apply the principles and practices of HRM to contribute to the success of
the business.
Labor demographics
Aging in workforce, skills shortages, and many other factors affect the ability of HR to provide the
organization with the right number and types of employees.
Managers of a 21st century organization will need to be more culturally aware and able to deal with
individuals with significantly different work ethics, cultural norms, and even languages.
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,Knowledge workers and the pace of change
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 organization.
- Knowledge is precious in an organization. However, there is a continuous shortage of knowledge
workers in most countries of the world.
- So, each HR manager is going to be competing with every other HR manager in the
world for the pool of knowledge workers.
UNDERSTANDING HR’S CRITICAL FACTORS
A few factors in successfully managing the organization’s human resources stand out in today’s business
world.
Critical Dependent Variables
Dependent variables are things that managers must control to compete in today’s business environment,
but that they can’t directly manipulate because people have free will.
- Dependent variables can only be affected through indirect means. We have to control some other
variable - called an independent variable - to affect these items in any meaningful way.
Managers bring up the following issues as being among the most important and most difficult things that
they deal with:
1. Productivity;
2. Employee engagement;
3. Turnover - permanent loss of workers from the organization;
4. Absenteeism - temporary absence of employees from the workplace.
All of these issues deal with people. Also, managers have no direct control over these things.
- We have to create conditions in which the employee is willing to or even wants to come to work
and in which they can enjoy their job.
The four dependent variables are interrelated. Absenteeism is costly, is often due to a lack of employee
engagement, and leads to lower productivity. People tend to leave their jobs (turnover) when they are not
engaged with their work; and while they are being replaced and sometimes after, productivity goes down.
The importance of strategic HRM
Strategy and strategic planning look at our organization and environment - both today and in the expected
future - and determine what we as an organization want to do to meet the requirements of that expected
future. We work to predict what this future state will look like and then plan for that eventuality.
Only in the last 30-40 years has HR management really gone from reactive to proactive in nature.
HRM has been redesigned to make our organization more competitive and to create sustainable
competitive advantages. This is the basic of strategic HR.
- A sustainable competitive advantage 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.
- The only place we can consistently create advantages that our rivals can’t quickly match
is through the successful use of our human resources - getting them to be more
productive and more engaged with the organization than are our rival’s human resources.
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, The influence of social media
The emergence of social media is a major tool for the workplace. Social media has changed the way work
is done in HR and other parts of the organization:
- Recruiting and selecting - recruiters scour social media platforms like LinkedIn for talented
individuals whose profile fits a job the recruiter is attempting to fill. On the other hand, many
candidates use social media to check out the potential employer.
- The onboarding process - once the person is selected to join the organization, social media can
be used to assist in many steps needed to get the person up to speed and capable of contributing
to the company.
- Training and development - social media platforms can easily be used to provide training for
current jobs, or developmental information to employees.
- Performance management - social media platforms give companies the means for continuous
feedback to their employees. Many employees respond better to continuing feedback than to
quarterly or annual formal appraisal sessions.
HRM SKILLS
All managers require a mix of technical, interpersonal, conceptual and design, and business skills in order
to successfully carry out their jobs. The set of necessary HR skills is similar to the skills needed by other
management; but, of course, it emphasizes people skills more than some other management positions
do.
Technical skills
Technical skills are the ability to use methods and techniques to perform a task. Being successful as an
HR manager requires many skills, including:
- Comprehensive knowledge of rules, laws, and regulations relating to HR;
- Computer skills;
- Interviewing skills;
- Training knowledge and skills;
- Understanding of performance appraisal processes;
- Cultural knowledge.
Interpersonal skills
Interpersonal skills are the ability to understand, communicate, and work well with individuals and groups
through developing effective relationships. HR managers must be empathetic.
- Empathy is simply being able to put yourself in another person’s place - to understand not only
what he or she is saying but why he or she is communicating that information to you. Empathy
involves the ability to consider what the individual is feeling, while remaining emotionally
detached from the situation.
Interpersonal skills also involve the ability to work well with others in teams; to persuade others; to
mediate and resolve conflicts; to gather information from others; and to jointly analyze, negotiate, and
come to a collective decision.
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