Management of the Enterprise
Chapter 12: Human Resource Management: Finding and Keeping the Best Employees
Working with people is just the beginning
- Human resource management (HRM) the process of determining human resource needs and then recruiting,
selecting, developing, motivating, evaluating, compensating and scheduling employees to achieve organizational
Developing the Ultimate Resource
- One reason why human resource management is receiving increased attention is the major shift from traditional
manufacturing industries to service and high-tech manufacturing industries that require highly technical job
- People develop the ideas that eventually become the products that satisfy consumers’ wants and needs.
- For years, the personnel department was more or less responsible for clerical functions such as screening
applications, keeping records, processing the payroll, and finding people when necessary.
- As companies are beginning to shed out-dated processes and unprofitable lines of business, HR is in danger of
extinction if it continues to rely solely on recruiting, employee relations, and compensation and training.
- In the future HR may become the most critical function, in that it will be responsible for dealing with all aspects
of a business’s most critical resource – people.
The Human Resources Challenge
- The changes in the business environment that have had the most dramatic impact on the workings of the free
enterprise system are the changes in the labour force.
- The ability of businesses to compete in international markets depends on new products and services, and new
levels of productivity.
- To create people advantage and overcome some of the human resource challenges identified, the report
suggested five major steps to be taken by companies:
o Understand the external environment
o Understand the internal environment
o Select the most critical human resource topics and set priorities
o Initiate projects with dedicated teams
o Secure support from top management
- Wismer believes that the 3 greatest opportunities facing HR professionals today are:
o to be relentless in ensuring that every undertaking is well sponsored and has positive business
o to be a catalyst for constructive change by building on the strengths of the organization
o to build integrated and aligned people systems that differentiate the organization in the
o and that can be self-managed. Determining your Human resources needs
- Five steps are involved in the human resources planning process
o Preparing a human resources inventory of the organization’s employees.
o Inventory should include ages, names, education, language spoken, capabilities,
training, specialized skills, and other important information.
o Preparing a job analysis
o A job analysis a study of what is done by employees who hold various job
o Such analyses are necessary to recruit and train employees with the necessary
skills to do the job.
o Job Description specifies the objectives of the job, the type of work to be
done, the responsibilities and duties, the working conditions, and the
relationship of the job to require of workers to do a particular job.
o Assessing future human resources demand
o Training programs must be started long before the need is apparent.
o Proactive human resources managers ensure that trained people are available
o Assessing future human resources supply
o The labour force is constantly shifting: getting older, becoming more technically
oriented, attracting more women, etc.
o Like to be an increased shortage of some workers in the future and an
oversupply of others.
o Establishing a strategic plan
o The plan must address recruitment, selection, training and development,
evaluation, compensation, scheduling and career management for the labour
o Must have upper management support for its acceptance and implementation.
Recruiting Employees from a diverse population
- Recruitment the set of activities used to obtain a sufficient number of the right people at the right time.
- Recruiting has become very difficult because:
o Some organizations have policies that demand promotions from within, operate under union
contracts, or offer low wages, which makes recruiting and keeping employees difficult or subject
to outside influence and restrictions.
o There are legal guidelines that surround hiring practices.
o The emphasis on corporate culture, teamwork, and participative management makes it
important to hire people who not only are skilled but also fit in with the culture and leadership
style of the organization.
o Sometimes people with the necessary skills are not available.
- Because recruiting is a difficult chore that involves finding people who are an appropriate technical and social fit,
human resources managers turn to many sources for assistance.
- Internal sources include employees who are already within the firm (any may be transferred or promoted) and
employees who can recommend others to hire.
o Is less expensive than recruiting outside the company o Greatest advantage is that it helps maintain employee morale.
- External sources such as advertisements, public and private employment agencies, school placement offices,
management consultants, professional organizations, referrals, and walk-in applications.
Selecting Employees who will be productive
- Selection the process of gathering information and deciding who should be hired, under legal guidelines, for
the best interests of the individual and the organization.
- Typical selection process involves 5 steps:
o Obtaining complete application forms
o A simple procedure with few complications.
o Legal guidelines limit the kinds of questions that may appear on an application
o All applications are individually screened and only those qualified will be
granted an opportunity to move on to the interview stage of the process.
o Conducting initial and follow-up interviews
o A staff member from the HR department often screens applicants in a first
o If the interviewer considers the applicant a potential employee, the manager
who will supervise the new employee interviews the applicant as well.
o It is important that managers prepare adequately for the interview to avoid
selection decisions they may regret
o Giving employment tests
o Uses tests to measure basic competencies in specific job skills and to help
evaluate applicants’ personalities and interests.
o Such testing is likely to make the selection process more efficient and will
generally satisfy legal requirements.
o Confirming background information
o It is too costly to hire, train, and motivate people only to lose them and have to
start the process over.
o Background checks help an employer identify which candidates are most likely
to succeed in a given position.
o Establishing trial (probationary) periods
o Enables the person to prove his/her worth on the job.
o After a specified probationary period, the firm may either permanently hire or
discharge that employee on the basis of evaluations from supervisors
Hiring Contingent Workers
- Contingent workers workers who do not have regular, full-time employment.
Independent contractors Interns
- Companies in areas where qualified contingent workers are available, and in which the jobs require minimum
training, are most likely to consider alternative staffing options.
- Receive few benefits; rarely offered health insurance, vacation time, or private pensions.
- Many people find that temporary workers offers them a lot more flexibility than permanent employment.
Training and Developing Employees for optimum performance
- A quality training program could lead t higher retention rates, increased productivity, and greater job
satisfaction among employees.
- Training and development all attempts to improve productivity by increasing an employee’s ability to
perform. Training focuses on short-term skills, whereas development focuses on long-term abilities
- Both training and development programs include 3 steps:
o Assessing the needs of the organization and the skills of the employees to determine training
o Designing training activities to meet the identified needs
o Evaluating effectiveness of the training
- Employee orientation The activity that introduces new employees to the organization; to fellow employees;
to their immediate supervisors; and to the policies, practices, values, and objectives of the firm.
May involve such activities as scheduled visits to various departments and required
reading of handbooks.
- On-the-job training Training in which the employee immediately begins his/her tasks and learns by doing, or
watches others for a while and then imitates them, all right at the workplace.
Can be quite effective or disastrous, depending on the skills and habits of the person
Easiest kind of training to implement when the job is relatively simple ore repetitive.
- Apprentice Program Training programs involving a period during which a learner works alongside an
experienced employee to master the skills and procedures of a craft
Workers who successfully complete an apprenticeship earn the classification of
- Off-the-job training Training that occurs away from the workplace and consists of internal or external
programs to develop any of a variety of skills or to foster personal development.
Training is becoming more sophisticated as jobs are becoming more sophisticated
Expanding to include education and personal development
- Online training Training programs in which employees “attend” classes via the internet
Gives employers the ability to provide consistent content that is tailored to specific
employee training needs, at conveninent times, to a large number of employees.
- Vestibule Training (near-the-job training) training done in schools where employees are taught on
equipment similar to that used on the job
Enables employees to learn proper methods and safety procedures before assuming a
specific job assignment in an organization
- Job simulation use of equipment that duplicates a job conditions and tasks so that trainees can learn skills
before attempting them on the job.
o Used because the potential cost of real-world mistake is huge. Management Development
- Management development The process of training and educating employees to become good managers and
then monitoring the progress of their managerial skills over time.
- Most management training programs include :
o On-the-job coaching
o A senior manager will assist a lower-level manager by teaching him or her
needed skills and generally providing direction, advice, and helpful feedback.
o Understudy positions
o Job titles such as undersecretary and assistant are part of a relatively successful
way of developing managers.
o Selected employees work as assistants to higher-level managers and participate
in planning and other managerial functions until they are ready to assume such
o Job rotation
o Managers often given assignments in a variety of departments.
o Through job rotation, top managers gain the broad picture of the organization
necessary to their success.
o Off-the-job courses and training
o Managers periodically go to schools or seminars for a week or more to hone
their technical and human relations skills.
- On a final note, both training and development budgets and initiatives need to be reviewed regularly to ensure
that maximum impact is being achieved and that organizations of all sizes are getting the best return on their
- Directing managers giving explicit instructions to workers, telling them what to do to meet the goals and
objectives of the organization.
- Empowerment giving employees the authority(the right to make a decision without consulting the manager)
and responsibility(the requirement to accept the consequences of one’s actions) to respond quickly to customer
- Enabling giving workers the education and tools they need to make decisions
o Key to success of empowerment.
- Networking The process of establishing and maintaining contacts with key managers in one’s own
organization and other organizations and using those contacts to weave strong relationships that serve as
informal development systems.
- Mentor an experienced employee who supervises, coaches, and guides lower-level employees by introducing
them to the right people and generally being their organizational sponsor.
- Networking is important at all le