Human Resource Management Book summary
Ch. 1 The New Human Resource Management Process
Human resources = the people within an organisation.
- One of the primary means of creating a competitive advantage for the organisation,
because management of human resources affects company performance.
Because most organisations of comparable size/scope have access to the same
material and facilities-based resources, which makes it difficult to develop
competitive advantages based on material, facility, or other tangible or economic
resources.
If the organisation manages its HR more successfully than its competitors, it has a
much greater chance of being successful.
Employee engagement = a combination of job satisfaction, ability, and a willingness to
perform for the organisation at a high level and over an extended period of time.
- Organisations with high levels of satisfaction and engagement outperform those with
less engaged employees in return on investment, operating income, and more.
- Engaged employees: those who understand what they need to do to add value to the
organisation and are satisfied enough with the organisation and their roles within it
to be willing to do whatever is necessary to see to it that the organisation succeeds.
HRM in the past
- Around the mid-1970s, HR managers were expected to just keep all of the personnel
files straight.
- They maintained organisational records but had very little to do with the
management of the organisation’s business process.
- HRM department as cost centre = a division or department that brings in no revenue
or profit for the organisation (running this function only costs the organisation
money).
Revenue centre = division or department that generates monetary returns for
the organisation.
Present view of HRM
- No longer seen as cost centre.
- Productivity centre = a revenue centre that enhances the profitability of the
organisation through enhancing the productivity of the people within the
organisation.
- Productivity = the amount of output that an organisation gets per unit of input, with
human input usually expressed in terms of units of time. Productivity is the end result
of two components that managers work to create and improve:
Effectiveness = a function of getting the job done whenever and however it must
be done (“did we do the right things?”).
Efficiency = a function of how many organisational resources we used in getting
the job done (“did we do things right?”).
, - This course is about how we make our people more efficient.
We don’t really use up human resources, but we do use their time.
Time is the value that we have in our people.
HR management deals primarily with improving the efficiency of the people within our
organisation, which has an indirect impact on their productivity.
New HRM challenges
HR competencies that will be most critical:
- Business acumen: ability to understand and apply information to contribute to the
organisation’s strategic plan.
- Organisational leadership and navigation : ability to direct and contribute to initiatives
and processes within the organisation.
- Critical evaluation: ability to interpret information to make business decisions and
recommendations.
- HR expertise: ability to apply the principles and practices of HRM to contribute to the
success of the business.
Labour demographics are significantly changing in the 21st century,
- Your workforce will look much older than it has historically, due to a shortage of
skilled labour which sees us use more older employees with high-level skills.
- Your organisation will look more culturally diverse, which means you will have to deal
with a variety of work ethics, cultural norms, and even languages.
Knowledge workers = workers who “use their head more than their hands” and who gather
and interpret information to improve a product or process for their organisations.
- Manage knowledge for the firm.
- Since technology is outpacing our ability to use it, we must make sure that our
workers can work better and quicker than our competitors can.
Creates a sustainable competitive advantage.
Just having better technology does not give a sustainable advantage, since
competitors can copy technologies.
Hiring and training better and more capable employees.
Understanding HR’s critical factors
- HR managers need to learn (1) how to indirectly control their human resources, (2)
where to lead the people resources of the company, and (3) what tools are becoming
more important in creating advantage for one business over another.
Most important and difficult things managers have to deal with:
1. Productivity – previously defined
2. Employee engagement – previously defined
3. Turnover = permanent loss of workers from the organisation.
- Is costly in terms of productivity, performance, competitive advantage, and the
replacement costs (recruiting, training.
Voluntary: when people quit
, Involuntary: when people get fired
4. Absenteeism = failure of employees to report to the workplace as scheduled
- Indirectly costs money: loss of productivity because people have to do extra work to
cover up for the work of the missing person. This can also lead to a decrease in job
satisfaction if people often have to do the work of the missing others.
Sustainable competitive advantage = a capability that creates value for customers that rivals
can’t copy quickly or easily and that allows the organisation to differentiate its products or
services from those of competitors.
- If we create technological advantages, those are quickly imitated.
- Only place to create consistent advantages that our rivals can’t quickly match is
through the successful use of our HR.
Influence of social media:
- Recruiting and selection: Recruiters use platforms like LinkedIn; candidates use social
media to look for potential employers (Indeed).
- The onboard process: Use social media to teach organisational culture; create an FAQ
area to help employees; create “communities” on the intranet.
- Training and development: social platforms can be used to train for current jobs.
- Performance management: organisations are able to provide continuing feedback,
which has proven to be better than quarterly or annual feedback.
HRM skills that an HR manager must develop to be successful
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.
Empathy = the ability 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.
Ability to consider what the individual is feeling while remaining emotionally
detached from the situation.
3. Conceptual and design skills = the ability to evaluate a situation, identify alternatives,
select a reasonable alternative, and make a decision to implement a solution to a
problem.
Conceptual: ability to see the bigger picture; are we doing things that we
shouldn’t be, or are we not successfully doing things that are necessary?
Design: identification of problems that exist + decision making to solve problems
and carrying out the solution.
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
organisation.
Line manager = the individuals who create, manage, and maintain the people and
organisational processes that create whatever it is that the business sells.
The people who control the actual operations of the organisation
, Staff manager = individuals who advise line managers in some field of expertise.
HR responsibilities of line management
Line managers require knowledge of each of the following topics:
- Legal considerations: line managers must know all of the major employment laws so
that they don’t accidentally violate them in their interactions with employees.
- Labour cost controls: line managers have to understand what they are legally and
ethically allowed to do to control labour costs.
- Leadership and motivation: managers are worth less than nothing when they don’t
improve employee performance.
- Training and development: they are the first point of contact to determine whether
or not their workforce needs training or development to perform at a high level.
- Appraisal and promotion: they are the primary individuals who evaluate
subordinates’ work performance and their job is to know their people and each of
their capabilities and limitations.
- Employee safety and security: they have to know the laws to protect their people
from individuals who might want to do them harm.
The eight major HRM discipline areas:
1. The legal environment: Equal Employment Opportunity (EEO) and diversity
management specialists deal with equal opportunity laws and regulations, as well as
management of a diverse workforce.
2. Staffing: Includes all of the things that we need to do to get people interested in
working for our company (job analysis, recruiting, and selection).
3. Training and development: training processes within the organisation, developing
curricula and lesson plans, and delivery of training courses. Also involved with
development of talent within the company so they are able to move into senior
positions.
4. Employee relations: involves the coaching, counselling, and disciplining the
workforce as needed. Also involves leadership and team-building efforts within the
organisation. We also measure and evaluate job satisfaction and employee
engagement as part of employee relations.
5. Labour and industrial relations: works with the laws and regulations that control the
organisation’s relationships with their workforce. This is also the area that manages
any relationships the organisation has with unions, as well as labour relations
activities in non-union businesses.
6. Compensation and benefits: works with pay of various types, setting pay scales and
benefits packages, designed to attract and keep the right mix of employees in the
organisation.
7. Safety and security: managers here might work in the area of occupational safety
and/or health to make sure we don’t injure our people or cause them to become sick
through exposure to some substance they work with.
8. Ethics and sustainability: seeing to it that the organisation acts in an ethical and
socially responsible manner, to minimise harm to the environment and its various
stakeholders.
Sustainability = meeting the needs of today without sacrificing future
generations’ ability to meet their needs.
