INTRODUCTION TO MANAGEMENT

UNIT 10 - Human Resource Management

Ref: Daft, R. (2005). Management. 7th ed. Chp 12. Thomson, Southwestern.
 UNIT OBJECTIVES
At the end of this unit students should be able to:
Explain the role of human resource
management in organizational strategic
planning.
Relate legislations and societal trends that
influence human resource management.
The goals of Human Resource Management
Differentiate the various means human
resource managers use to meet their goals
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 UNIT CONTENT
Human resource management and organizational
strategic planning
Local and global legislations
Human resources environmental forces
Changes in the field of human resource management
Recruitment and selection tools
Attracting, developing and maintaining an effective
workforce

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 The Strategic Role
of Human Resource Management
 Human Resource management has shed its old personnel image and
gained recognition as a vital player in corporate strategy

 HRM departments not only support the organization’s strategic

objective but actively pursue an ongoing, integrated plan for furthering
the organization’s performance

●Higher employee productivity

●Stronger financial results
●Achieve organization’s strategic goals
●Key players on management team

Manager’s Challenge: UPS Buffalo, New York

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 Current Strategy Issues
Current strategy issues of interest to managers include:
Becoming more competitive on a global basis
Improving quality, productivity, and customer service
Managing mergers and acquisitions
Applying new information technology for e-business

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UTECH
 Issues /Factors Affecting the Entire
Organization
Globalization
Changing Technology
Shift to knowledge work
Rapid shifts in markets and the external
environment
Societal trends
Government Regulations
Changes in organizational culture
Structure
Strategy and goals

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 The Strategic Management Process

External
Analysis

SWOT Strategic Strategy Competitive

Mission Strategic Choice Implementation Advantage
Analysis
Objectives

Internal
Analysis

• Differentiation Leadership
• Cost Leadership Structural Design
• Focus Human Resources
Information & Control

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 Tools for Putting Strategy into Action
Environment Organization Leadership
• Use persuasion
• Motivation
• Shape culture / values
PE
RF
OR
MA
Structural Design NC
• Design organization chart Human Resources E
• Create teams • Recruit/ select employees
• Manage transfers,
Strategy • Determine centralization/ promotions/ training
Decentralization • Direct layoffs/ recalls
• Arrange facilities, task design

Information and
Control Systems
• Revise pay, reward system
• Change budget allocations
• Implement information
systems
• Apply rules/procedures
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 Human Resource Management in Strategic
Planning
Strategy implementation - putting
strategy into action.
Tools for Implementation:
 Leadership
 Structural design
 Information and Control Systems
 HUMAN RESOURCES.

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 Three Ways HR Is Changing

1 Focus on building human capital

2
Development of
global HR strategies
IHRM

3The use of information

technology
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 Human Capital - IHRM
Human Capital = economic value of the knowledge,
experience, skills, and capabilities of employees

IHRM = addresses the complexity that results from

recruiting, selecting, developing, and maintaining a
diverse workforce on a global scale

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 Information Technology
Human resource information technology = an
integrated computer system designed to provide data
and information used in HR planning and decision
making
Traditional HR to e-HR significantly affected every area
of human resource management
 Some organizations are close to a paperless HRM system –
saves time, money, frees staff

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 Elements of
Human Resource Management

Matching process,
All managers Employees are integrating the
are resource viewed as organization’s
managers assets goals with
employees’ needs

How a company manages its workforce may be single

more important factor in sustained competitive success
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 Legal Considerations
Organizations must ensure that their recruiting
practices conform to the LAW.
Legislation includes the Equal Employment
Opportunity (EEO) Laws which stipulate that
recruiting and hiring decisions cannot be
discriminatory.
Americans with Disabilities Act, which
emphasises the need for well-written job
descriptions and specifications that accurately
reflect the mental and physical dimensions of jobs.
(See notes page below)
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 Federal Legislation
Discrimination = hiring or promoting of applicants
based on criteria that are not job relevant
Affirmative action = policy requiring employers to
take positive steps to guarantee equal employment
opportunities for people within protected groups

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 Major Federal Laws - HRM

Exhibit 12.3
Equal Opportunity/Discrimination Laws
Compensation/Benefits Laws
Health/Safety Laws

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 Local Labour Legislation
Labour laws in Jamaica may be divided into three broad categories:
a) Employment law
b) Industrial relations law
c) Industrial safety law
Employment Law is based largely upon common law concept of the contract of employment. The
Employment (Termination and Redundancy) Payments Act (ETRP) 1974 (Jamaica) covers the
separation payment whenever an employee is being made redundant or terminated.
In Britain employment protection rights, includes sex and race discrimination, unfair dismissal, etc.
Industrial relations law is characterized by the principle of voluntarism. The Trade Union Act,
1919 (amended 1938), Labour Relations & Industrial Disputes Act (LRIDA),1975 provides
legislative framework for recognition, industrial dispute resolution and statutory arbitration.
Industrial Safety Law comprise of the Factories Act, 1943. Under section 12 of this act includes
provision. Therefore, the Building Operations and Works of Engineering Construction Regulations
of 1968 as well as the Docks (Safety, Health and Welfare) Regulations of 1968 provide the
framework for these laws.
In Jamaica there are no comprehensive industrial safety laws in place. However, in Britain the
Health and Safety at Work Act, 1974 provides a guideline for health and safety act. Jamaica is
however drafting legislations for a comprehensive Health & Safety Act.

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 Purposes of Labour Laws in Jamaica
Labour laws are enacted with three purposes:
Protective Legislations
Auxiliary Legislations
Restrictive Legislations

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 Protective Legislations

Primary purpose to protect the workers against unfair

treatment, examples;
Minimum Wage Act, 1938, last amendment in 2011
Factory Act (Occupational Safety and Health Act)
Equal Pay (for Men and Women) Act 1975
Maternity Leave Act
Employment (Termination and Redundancy) Payments
Act

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 Auxiliary Legislations

Auxiliary legislation is intended to support the

establishment of collective bargaining.
Laws that serve to advance the practice collective
bargaining are;
Trade Union Act (1919) is the piece of Jamaican labour
legislation solely devoted to the entrenchment of a trade
union movement.
Labour Relations and Industrial Disputes Act (LRIDA)

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 Restrictive Legislation

Restrictive legislation is directed primarily at trade

unions and is intended to limit the scope of their
activity, particularly as it relates to the disruptive
impact of industrial action, example LRIDA.

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 Human Resource Management
Strategic Goals
HRM Environment
Company Strategy Legislation
Trends in society
International events
Changing
Attract an Effective Workforce technology

HRM planning
Job analysis
Forecasting
Recruiting
Selecting
Maintain an Effective Workforce
Develop an Effective Workforce
Wage and salary
Benefits Training
Labor relations Development
Terminations Appraisal
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 Attracting an Effective Workforce
HR Planning Choose Recruiting Select the
Retirements Sources Candidate Welcome New
Growth Want Ads Application Employee
Resignations Headhunters Interview
Internet Tests

Matching Model
Company’s Needs Employee Contributions
Strategic goals Ability
Current and future competencies Education & experience
Market changes MatchCreativity
With
Employee turnover Commitment
Corporate culture Expertise
Matching Model
Company Inducements Employee’s Needs
Pay and benefits Stage of career
Meaningful work Personal values
Advancement Promotion
Match With aspirations
Training Outside interests
Challenge Family concerns
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 Human Resource Planning
Forecasting of human resource needs and the projected
matching of individuals with expected vacancies
● ? = New technologies emerging

● ? = Volume of business likely next 5-10 years

● ? = Turnover rate, how much is avoidable, if any

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 Matching Model
Attracting an Effective Workforce

An employee selection approach in which the organization and the

applicant attempt to match each other’s needs, interests, and values

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 Recruiting
 Recruiting involves those activities or practices that define
the desired characteristics of applicants for specific jobs
● Internal – promote-from-within policies used by many to
fill high-level positions
● External = recruiting newcomers from outside has
advantage of multiple sources
● E-cruiting = use of Internet - fastest-growing approach to
recruiting

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 Recruiting Methods
1. Internal Recruiting or Promote-from-within (used
to fill high-level positions).
• It is less costly than external search
• Generates higher employee commitment,
development and satisfaction because it offers
opportunities for career advancement to employees
rather than outsiders.
2. External Recruiting – recruiting newcomers from
outside the organization, is advantageous.

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 Sources of Recruits
Advertising
State (government) Employment services
Private employment agencies (headhunters)
Job fairs
Employee referrals

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 Assessing Organizational Needs
Basic building blocks of HRM include:

Job Analysis

Job Description

Job Specification

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 Job Analysis
1. Job Analysis is the systematic process of gathering
and interpreting information about the essential
duties, tasks, and responsibilities of a job, as well as
about the context within which the job is
performed.
• Job analysis helps organizations recruit the right kind
of people and match them to appropriate jobs.
• To perform job analysis, managers or specialists ask
about work activities and work flow, the degree of
supervision given and received in the job, knowledge
and skills needed, performance standards, working
conditions, and so forth.
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 Realistic Job Previews
Job Analysis helps enhance recruiting effectiveness by
enabling the creation of realistic job previews.
A Realistic Job Preview is a recruiting approach that
gives applicants all pertinent and realistic information
about the job and the organization.

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 Job Descriptions & Specifications
After the job analysis is done, a job description is
prepared.
The job description is a clear and concise summary
of the specific tasks, duties and responsibilities.
The job specification outlines the knowledge, skills,
education, physical abilities and other
characteristics needed to adequately perform the
job.

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 Selection
Selection is the process of determining the skills,
abilities, and other attributes a person needs to
perform a particular job.
In the selection process, employers assess applicants’
characteristics in an attempt to determine the “fit”
between the job and applicant characterics.

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 Validity in the Selection Process
Human resource professionals may use a combination
of these devices to obtain a valid prediction of
employee job performance.
Validity refers to the relationship between one’s score
on a selection device and one’s future job
performance.
A valid selection procedure will provide high scores
that correspond to subsequent high job performance.

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 Application Form
The application form is used to collect
information about the applicant’s education,
previous job experience and other background
characteristics.
Avoid including questions that are irrelevant to job
success
The form should not ask questions that will create
an adverse impact on protected groups unless the
questions are clearly related to the job.

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 The Interview
The interview serves as a 2-way communication
channel that allows both the organization and the
applicant to collect information that would
otherwise be difficult to obtain.
The interview is not generally a valid predictor of
job performance. The interview as a selection tool
has high face validity. That is, it seems valid to
employers, and managers prefer to hire someone
only after they have been through some form of
interview, preferably face-to-face.

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 Interviewing An Applicant

Know what you want

Prepare a road map
Use open-ended questions
Do not ask irrelevant questions
Do not rush interview
Do not rely on your memory
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 Reasons For Not Asking About Home
Ownership

● Might adversely affect applicants chances at the job

● Minorities and women may be less likely to own a
home
● Home ownership is probably unrelated to job
performance

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 Interview as Predictor of Success

Interview is not generally a valid predictor of job

performance – has high face validity as a selection
tool
Panel interviews – candidate meets with several
interviewers who take turns asking questions –
increases interview validity
Computer-based interviews - complement traditional
interviewing information

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 Inappropriate or Illegal Questions
Employment Applications and Interviews

 Race-related questions
 Age
 Religion
 Gender
 National origin
 Marital/family status

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 Testing and Assessment

Employment Test = written or computer-based test

designed to measure a particular attribute such as
intelligence or aptitude
Assessment Center = technique for selecting
individuals with high managerial potential based on
their performances on a series of simulated managerial
tasks

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 Types of Interviews
Some organizations put candidates through a series
of interviews, each one conducted by a different
person and each one probing a different aspect of
the candidate.
Panel Interviews where the candidate meets with
several interviewers who take turns asking
questions, to increase interview validity.
Computer-based interviews, to complement
traditional interviewing information. These
typically require a candidate to answer a series of
multiple-choice questions tailored to the specific
job.
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 Employment Test
Employment Tests may include intelligence tests,
aptitude and ability tests, and personality inventories,
particularly those shown to be valid predictors. Many
companies today are interested in personality
inventories that measure such characteristics as
openness to learning, initiative, responsibility,
creativity, and emotional stability.

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 Assessment Center
Assessment centers present a series of managerial
situations to groups of applicants, over, say, two ot
three-day period.
One technique is the in-basket simulation, which
requires the applicant to play the role of a manager
who must decide how to respond to ten memos in
his or her in-basket within a 2-hour period. Panels
of 2 or 3 trained judges observe the applicant’s
decisions and assess the extent to which they
reflect interpersonal, communication and problem-
solving skills.

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 Developing an Effective Workforce
Following selection, next goal of HRM is to develop
employees
Training and Development represent a planned effort
by an organization to facilitate employees’ learning of
job-related skills and behaviours. Organizations spend
nearly $100 billion each year on training.

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 Types of Training
On-the-job Training, where an experienced
employee is asked to take a new employee “under
his or her wing” and show the newcomer how to
perform job duties.
Advantages of OJT include:
Few out of pocket costs for training facilities,
materials or instructor fees
Easy transfer of learning back to the job
Fastest and most effective means of facilitating
learning in the workplace.

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 On the Job Training
Moving people to various types of jobs within the
organization, where they work with experienced
employees to learn different tasks – cross-training.
An employee may be placed in a new position for as
short a time as a few hours or for as long as a year,
enabling the employee to develop new skills and giving
the organization greater flexibility.

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 Types of Training

Mentoring
Orientation Training
Classroom Training
Self-Directed Learning
Computer-based Training

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 Corporate Universities
Corporate University is an in-house training and
education facility that offers broad-based learning
opportunities for employees – and frequently for
customers, suppliers and strategic partners as well –
throughout their careers.

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 Promotion from Within
Another way to further employee development is
through promotion-from-within, which can help
companies retain valuable employees.
This provides challenging assignments, prescribes new
responsibilities, and helps employees grow by
expanding and developing their abilities.

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 Performance Appraisal
Performance Appraisal is the process of
observing and evaluating an employee’s
performance, recording the assessment, and
providing feedback to the employee

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 Steps in Performance Appraisal
Performance Appraisal process comprises of three steps:
1. Observing and assessing performance
2. Recording the assessment
3. Providing feedback to employee
During performance appraisal, skillful managers
give feedback and praise concerning the acceptable
elements of the employee’s performance.
They also describe performance areas that need
improvement.
Employees can use this information to change
their job performance.

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 Performance Appraisal
Performance appraisal can also reward high performers
with merit pay, recognition, and other rewards.
The most recent thinking is that linking performance
appraisal to rewards has unintended consequences.
The idea is that performance appraisal should be ongoing,
not something that is done once a year as part of a
consideration of raises.

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 Performance Appraisal as a Positive Force in
the Organization
1. The accurate assessment of performance through the
development and application of assessment systems
such as rating scales
2. Training managers to effectively use the performance
appraisal interview, so managers can provide feedback
that will reinforce good performance and motivate
employee development.

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 Assessing Performance Accurately

 To obtain an accurate performance rating, managers

acknowledge that jobs are multidimensional and performance
thus may be multidimensional as well.
 If performance is to be rated accurately, the performance
appraisal system should require the rater to assess each relevant
performance dimension.
 A multidimensional form increases the usefulness of the
performance appraisal and facilitates employee growth and
development.

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 360 degree Feedback
This is a process that uses multiple raters, including
self-rating, as a way to increase awareness of strengths
and weaknesses and guide employee development.
Members of the appraisal group may include
supervisors, co-workers and customers, as well as
individual, thus providing appraisal of the employee
from a variety of perspectives.

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 Performance Evaluation Errors
Stereotyping – placing an employee into a class or
category based on one or a few traits or
characteristics.
Halo-Effect – a type of rating error that occurs
when an employee receives the same rating on all
dimensions regardless of his or her performance on
individual ones.
Behaviourally Anchored Rating Scale (BARS) –
a rating technique that relates an employee’s
performance to specific job-related incidents.

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 Behaviorally Anchored Rating Scale
Job: Production Line Supervisor - Work Dimension: Work Scheduling
Have no plan or Make a list of due dates Develop a comprehensive
schedule of work and revise them but are schedule, observe target dates,
and no concept of frequently surprised by and update the status of
realistic due dates unforeseen events operations relative to plans,
making schedule modifications
as quickly as necessary

1 2 3 4 5
Have a sound plan but
neglect to keep trace of Usually satisfy time
target dates or to report constraints, with time and
schedule slippages or other cost overruns coming up
problems as they occur infrequently

Sources: Based on J.P. Campbell, M.D. Dunnette, R.D. Arvey, and L.V. Hellervik, “The Development and Evaluation of behaviorally Based Rating Scales,”Journal of Applied
Psychology 57 (1973), 25-22; and Francine Alexander, ‘performance Appraisals,” Small Business Reports (March 2989), 20-29.
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 Maintaining an Effective Workforce
Compensation
Wage and Salary Systems
Compensation Equity
Pay for Performance

Benefits
Termination

Ethical Dilemma: A Conflict of Responsibilities

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 Compensation
Compensation refers to:
All monetary payments
All goods or commodities used in lieu of money to
reward employees
An organization’s compensation structure includes
wages and/or salaries and benefits such as health,
insurance, paid vacations, or employee fitness centers.

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 Compensation
Developing an effective compensation system is an
important part of HRM because it helps to attract and
retain talented workers.
A company’s compensation system has an impact on
strategic performance
Human Resource managers design the pay and
benefits systems to fit company strategy and to provide
compensation equity.

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 Benefits
Human resource managers know that a compensation
package requires more than money. Although wages
and salaries are important, it is only a part.
Benefits include: health insurance, vacation and
subsidised lunch. Other firms may offer on-site gym,
uniforms and day-care centres for staff children.

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 Termination
Despite the best efforts of line managers and HRM
professionals, the organization will lose employees
Some will retire, others will depart voluntarily for
other jobs, and still others will be forced out through
mergers and cutbacks or for poor performance.

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 Termination
 The value of termination for maintaining an
effective workforce is twofold:
1. Employees who are poor performers can be
dismissed. Productive employees often resent
disruptive, low-performing employees who are
allowed to stay with the company and receive pay
and benefits comparable to theirs.
2. Employers can use exit interviews as a valuable HR
tool, regardless of whether the employee leaves
voluntarily or is forced out.

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 Exit Interview
An exit interview is an interview conducted with
departing employees to determine why they are
leaving.
The value of the exit interview is to provide an
excellent and inexpensive way to learn about pockets
of dissatisfaction within the organization and hence
reduce future turnover.

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 END OF LECTURE
Any questions?

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