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The purpose of this chapter is toexplain what human resourcemanagement is, and why

it’simportant to all managers. We’ll seethat human resource managementactivities

such as hiring, training,appraising, compensating, anddeveloping employees are part

ofevery manager’s job. And we’ll seethat human resource management is also a

separate function, usually witits own human resource or “HR”manager. The main topicswe’llcover include the meaning ofhuman resource management; whyhuman resource

management is important to all managers, globaland competitive trends,

humanresource management trends, andthe plan of this book. The frameworkabove

(which introduces eachchapter) makes this point: That toformulate and apply HR

practiceslike testing and training you shouldunderstand the strategic and legalcontext in

which you’re managing.


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LEARNING OBJECTIVES

After studying this chapter, you will be able to:

1. Explain what human resource management is and how it relates to the

management process.

2. Show with examples why human resource management is important to allmanagers.

3. Illustrate the human resources responsibilities of line and staff managers.


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LEARNING OBJECTIVES

After studying this chapter, you will be able to:

4. Briefly discuss and illustrate each of the important trends influencing human

resource management.

5. List and briefly describe important traits of today’s human resource managers. 6. Define and give an example of evidence-based human resource management.

7. Outline the plan of this book.


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Organizations have been described in various ways. We will focus our early efforts on

understanding an organization as groups of individuals with formally assigned roles.

Note that such individuals generally work together to achieve the common goals of an

organization.


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Understanding the five elements of what managers do (planning, organizing, staffing,

leading, and controlling) will assist you in your career. For example, no matter what

your job, planning involves establishing goals, rules and procedures and attempting to

forecast the future.Planning will enhance your ability to manage people and functions.

For our purposes, we will focus our efforts on basic staffing functions. These include:

•Acquiring talented employees

•Training new hires and existing managers and employees

•Creating and administering effective performance appraisals

•Properly compensating employees, and,

•Attending to concerns about labor relations, health, safety, and fairness


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The HR function is primarily concerned with the “staffing” component of the five

management processes, namely, planning, organizing, staffing, leading, and controlling.

The key elements of staffing include:

• Job analysis

• Planning labor needs• Recruiting

• Orienting and training new employees

• Compensation

• Incentives and benefits

• Performance appraisal

• Communicating

• Training and development, and

• Employee commitment

In addition, HR is responsible for compliance with federal, state and local laws, safety,and handling grievances and labor relations.


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Line and staff managers focus their energies in different yet related and complementary

ways. Let’s talk about the two types of managers and what each does for the firm.


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If you are a line manager, you will hold responsibilities to issue orders, provide

directions and establish rules and procedures. For example, as a sales manager, you will

be responsible for requiring adherence to your rules relative to sales quotas and goals.

On the other hand, an HR manager is a staff manager and, like all staff managers, isresponsible for influencing and advising others. Within the HR department you may be

responsible for establishing goals and giving orders to those in your department thus

serving as a line manager within HR. Your principal duty to the organization as a whole,

however, is that of a staff function, much the same as a purchasing department.

Staff departments may include finance, accounting, and logistics. Sales, production, and

operations departments generally are considered line functions.


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If you are a line manager, your duties and responsibilities concern how well you can

successfully orient and integrate new hires into your unit, maintain their health and

safety, supervise and motivate them, and effectively manage department costs.


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Line managers require support to perform their jobs properly. If you are a line manager,

you will have the help of the people in your HR department. HR professionals ensure

adherence to company policies, provide training, advice on motivating your employees,

and other support as needed.


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In the continuing development of human resource management, there exist various

trends that will help shape its practice and evolution in the coming years. Human

Resource responsibilities have become broader and more strategic over time in

response to a number of trends. The role of HR has evolved from primarily being

responsible for hiring, firing, payroll, and benefits administration to one that is morestrategic.


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Many trends are emerging and will continue to change the shape, size, and function of

HR management. Some of these trends we will discuss shortly include:

• Globalization

• Competition

• Deregulation• Increased indebtedness

• Technological innovation

• More high-tech & service jobs


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In addition, we will discuss other trends such as:

• More knowledge work

• Aging workforce

• Economic downturn

• De-leveraging• Deregulation slowdown

• Slower economic growth


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Globalization refers to the tendency of firms to extend their sales, ownership, and/or

manufacturing to new markets abroad. Dell, for example, is planning to supply PCs to

China. China is expected to become the largest market for computers in the world.

Companies such as Toyota, BMW, and Honda build and sell some of their vehicles here

in the U.S. and even ship them to other countries from the U.S.

The reasons for going global are many including: reaching new markets, selling more

products or services, lower labor costs, forming partnerships, and becoming more

competitive.


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Due to the softening of U.S. banking regulations, many banks were able to offer stocks

and other financial instruments in addition to traditional banking services. Such actions

contributed to increased risks for the average banking customer. Questionable lending

practices led to easy credit for developers and homebuyers alike. Perhaps you have

experienced some of these practices or know of people who have. Like manyAmericans, credit practices have allowed, even encouraged, you and me to buy what

we want when we want it. Such practices encourage spending in excess of what we

may earn.

The U.S. and other countries have imported more than they’ve created and exported.

Such practices are referred to as the balance of payments. Rating firms such as

Standard and Poor’s have threatened to and even lowered the ratings of some debtor

nations. Such steps and other actions have contributed to economic volatility and

changes in the way firms conduct business and employee people.


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The impact and growth in the use of smart phones and tablet computers, such as the

iPad, have opened doors to people and the workplace in a way that previously has

never occurred. The speed of information exchange has contributed to the growth of

social networking sites such as Facebook and LinkedIn. Facebook, for example, offers

Facebookrecruiting which provides a rapid conduit between employers and job-seekers.


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As you enter the workforce or continue in your jobs, you are more likely to enter

commands into a computer than perform dangerous physical labor. The “brawn to

brains” changes have been fueled by moving manufacturing jobs to low-wage

countries. Just-in-time (JIT) manufacturing processes have connected the customer

with the manufacturer and the distributor in real time resulting in more precisescheduling, production and delivery. Another trend, human capital, refers to the

knowledge, education, training, skills, and expertise of a firm’s workers. Today’s (and

tomorrow’s) best jobs will go to the individuals with the best reading, math, and

communication skills. In other words, the best knowledge workers will be hired first.


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Although you are in college now – perhaps some or many of you work as well –

throughout your careers you will need to understand the people around you. One

aspect of the changing nature of the workplace has to do with the age of the people

with whom you work. Other factors include whether those around you come from

other countries and the cultural qualities they represent. Conversely, if you are anontraditional or older worker or come from abroad, understanding the nature of those

around you will enable you to be more productive and make greater contributions.


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According to the Bureau of Labor Statistics, during the twenty-year period between

1998 and 2018, the number of white, non-Hispanic workers will decrease in the United

States. The black and Asian workforce will increase. In fact, those members of the

workforce of Hispanic origin will increase more than 7% while the percentage of

younger workers will decrease. Most telling, perhaps, is that workers over the age of 55will almost double from 12.4% to 23.9%!


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“Generation Y” workers (those born from 1977-2002, also called “Millenials”) have,

according to one expert, “…been pampered, nurtured, and programmed with a slew of

activities….” Consequently, this generation:

• Is considered to be both high-performance and high-maintenance

• Wants fair and direct supervisors who are highly engaged in their professionaldevelopment

• Seeks out creative challenges and view colleagues as vast resources from whom to

gain knowledge

• Wants to make an important impact on Day 1

• Wants small goals with tight deadlines so they can build up ownership of tasks, and

• Aims to work faster and better than other workers

Consider to what extent you identify with any or all of these elements and what they

might mean to those around you who are not of your generation.Keep in mind thesedescriptions are in comparison to baby-boomers and Generation X workers who have

different characteristics.


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According to one survey, 41% of employers are bringing retirees back into the

workplace. Thirty-one percent of employers are offering employment options to attract

semi-retired workers. Many workers hold multiple jobs or work in “contingent”

arrangements such as two people sharing one job.

Technology enables employees to work from home. Technology also has helped create

“co-working” sites where people may be working at a shared site for the same or

different companies or even independently.

One controversial trend involves the granting of H1-B visas for skilled foreign workers

when enough U.S. workers with the proper skills are not available in a given location.

Have you experienced or do you know of family members or friends who have had

experiences with such workers or workplaces? What do such experiences suggest toyou with respect to the role of HR?


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An important measure of U.S. total economic output, the Gross National Product

(GNP), boomed between 2001 and 2008. Home prices soared and unemployment was

low. Economically speaking, somewhere between 2007 and 2008, however, everything

fell off a cliff. Today, unemployment remains at a high and sustained 9.1% while home

prices may have dropped 20% or more.

Financial institutions held enormous amounts of worthless debt on their books while

lending dried up. In effect, the economy tanked. While this situation will improve,

global economic impacts have been felt and will continue to be felt for some time. The

human resource management profession must continually evolve and change keeping

pace with the changes in the global economy.


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Evidence-based human resource management involves the use of the best available

evidence with respect to human resource practices. For example, tracking median HR

expense as a percentage of a company’s total operating costs may average less than

1%. The use of this and similar metrics will help control expenses and contribute to

profits.


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• The shifting role of workers worldwide is connected to the ways in which countries operate, produce,

and distribute the goods and services they provide. The world economy is becoming more

interdependent and interrelated.

• After World War II, the U.S. manufactured and sold almost all durable goods (automobiles, washers,

dryers, etc.) but has now become an information and service-based society. U.S. citizens are now

becoming knowledge workers. Meanwhile, countries such as Japan, China, and others have assumed

global manufacturing roles.

• The recent and continuing economic troubles in the U.S. also have impacted the ways in which

workers are hired and employed by companies. Fewer available jobs may mean broader

responsibilities for the workers within a given firm.

• The deregulation of banks and other financial institutions have contributed to individuals spending

more than they make. Lending and borrowing practices have helped move the U.S. into a “debtor

nation” status.

• Technology has contributed to widespread and rapid distribution of information between employees

and employers. Sites such as Facebook and LinkedIn contribute to the new ways potential employees

get jobs and share information about companies.

• There are more high-tech and service jobs available, and more focus on the knowledge, skills andexperience people bring to the workplace.

• Trends in demographics indicate a growing proportion of Hispanic, Asian, African-American, and non-

traditional workers in the workforce. A large jump in older workers is expected by 2018. The

differences in style and values of such a changing workforce will challenge the role of HR.

• Finally, while the economy is currently “in the tank,” undoubtedly it will improve. HR management

must remain effective during times of economic upheaval yet plan for its future when the economy

turns around.


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Trends such as the ones just discussed will have an impact on employees and how they

are managed. The New Human Resource Managers require the new knowledge and

skills and must demonstrate expected results for the future.


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If you had been working as an HR professional after World War II, your duties would

have been significantly different than they are today. Early in the HR profession, most

work was transactional in nature and involved such things as payroll and benefits

administration and hiring and firing. Today, however, the scope of responsibilities is

vastly different. New responsibilities include finding new ways to get the job done.Getting the job done may include outsourcing routine functions including payroll and

benefits or installing the company’s own internal social networking sites. In addition,

the new HR managers take an integrated “talent management” approach to managing

HR. Managing talent now includes managing ethics, employee engagement, adding

value, having more and varied core competencies, and measuring HR performance and

results.

You may wish to consider what ethics are. Are ethical considerations different for

different people? In what ways should HR be involved in managing ethics?


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Talent management is both a goal-oriented and integrated process of planning,

recruiting, developing, managing, and compensating employees. HR managers also

manage ethics, the standards by which individuals judge their own behaviors.

Engagement is the extent to which employees are emotionally and mentally invested intheir work.

Measurement of the impact of human resource practices on the profitability and

growth of an organization can make a significant difference in productivity. For

example, knowing that a company is able to recruit and hire productive employees 50%

faster than its competition can make a significant difference in efficiency. Using

evidence-based HR practices in addition to actual measurements such as existing data

or outside research will help keep HR an effective strategic planning partner.

In both the long and the short run, HR managers must function as business partners,

stewards of an effective organizational culture, a business ally and strategic partner. As

the profession of HR continues to change, new competencies will be added to the list.


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As a preview of what’s to come, let’s look at the overall plan of the book.


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While not all of you desire or plan on becoming an HR professional, it is the

responsibility of every manager to be proficient in basic HR knowledge and skills. To

enable you to do this, we will emphasize practical material to help you conduct your

day-to-day management duties.

Domestic and international companies today require that HR contributes to the

profitability of the firm, thus we will provide examples of how HR practices add

measurable value.

Companies require HR to create policies and practices that produce employees who

can contribute to the firm’s strategic aims. We provide strategic context features that

demonstrate how this can be accomplished.

Finally, we provide “Evidence-based HR” features in each chapter that will help HRdefend its practices and results in measurable, understandable, and relevant ways.


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In review, you should now be able to:

1. Explain what human resource management is and how it relates to the

management process.

2. Show with examples why human resource management is important to all

managers.3. Illustrate the human resources responsibilities of line and staff (HR) managers.

4. Briefly discuss and illustrate each of the important trends influencing human

resource management.

5. List and briefly describe important traits of today’s human resource managers.

6. Define and give an example of evidence-based human resource management.


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