Chapter 8 Managing Human Resources – RSM100
Foundations of Human Resource Management
Human resource management (HRM) - Set of organizational activities directed at attracting, developing,
& maintaining an effective workforce
The Strategic Importance of HRM
HRM importance stems from increased legal complexities, the recognition that human resources
are a valuable means for improving productivity, and the awareness of the costs associated with
poor HRM.(IMP for bottom-line performance)
Poor human resource planning can result in spurts of hiring followed by layoffs (costly in terms
of unemployment compensation payments, training expenses and morale)
Human Resource Planning
HRM planning involves job analysis & forecasting the demand/supply of labor.
Job Analysis – A detailed study of the specific duties in a particular job and the human qualities required
for that job.
Job description – The duties of a job, its working conditions, and the tools, materials, and
equipment used to perform it.
Job specification – The skills, abilities, and other credentials needed to do the job.
Knowing about job content and job requirements is necessary to develop appropriate selection
methods and job relevant performance appraisal systems and to set equitable compensation rates.
Forecasting HR Demand/Supply – Planning for the org’s future HR needs
Managers assess trends in past HR usage, future organizational plans, and general economic trends. A
good sales forecast is often the foundation, especially for smaller organizations. Historical data can then
be used to predict demand for different types of employees (i.e. operating employees & sales rep)
Forecasting the supply of labor:
Forecasting internal supply-The number and tpe of employees who will be in the firm at some
Forecasting external supply-The number and type of people who will be avalible for hiring from
the labor market at large
Replacement Charts-An HR technique that lists each important managerial position, who
occupies it, how long he or she will probably stay in it before moving on, and who (by name) is
now qualified or soon will be qualified to move into it. (used in higher levels or orgs)
Skills Inventories-(employee information systems)-Computerized systems that contain
information on each employee’s edu, skills, work exp, and career aspirations. (facilitates
planning & identifying people)
Matching HR Supply/Demand
If short fall, new employees can be hired, present employees can be retrained and transferred into
understaffed areas, individuals approaching retirement can be convinced to stay on, or labor saving
systems can be installed. Staffing the Organization
Top 3 characteristics employers look for: Good work ethic, reliability and willingness to stay on the job.
Recruiting-The process of attracting qualified persons to apply for the jobs that are open.
Internal recruiting-considering present employees as candidates for openings. (promotion can
help build morale, keep HQ employees from leaving)
External recruiting-attracting people outside the organization to apply for jobs.
(newspapers&internet ads-wide audience, campus interviews, employment agencies-
clerical/technical employees, executive search firms-top mgt talent, union hiring halls, referrals,
Internships-short term paid positions where student focus on a specific project.
Validation-the process of detstmining the predictive value of information
Application Forms-1 step in selection. Info on work history, edu background, gender, religion,
national origin. Familiarize b4 interview
Tests-Tests of ability, skill, aptitude or knowledge relevant to a particular job, general
Assessment center-A series of exercises in which candidates perform realistic mgt tasks
under the watch eye of expert appraisers.
Video assessment-Potential hires are shown videos of realistic work situations and are
then asked to choose a course of action to deal with the situation.
Interviews-popular selection device but sometimes a poor predictor of job success because of
Behavior-based interviewing – An approach to improving interview validity by asking
questions which focus the interview much more on behavior than on what a person says.
Physical examination, Polygraph-now illegal.
Most employees need additional training if they are to grow/develop in their jobs.
New Employee Orientation
Orientation – The process of introducing new employees to the company’s policies and programs, the
co-workers and supervisors they will interact with and the nature of their jobs. (help new employees to
feel part of a team and become efficient contributors)
Poor orientationdisenchantment, dissatisfaction, anxiety and turnover.
Training and Development
Employees must be continually train and developed to improve the quality of contributions they make.
1 step in assessing training and development needs: NEEDS ANALYSIS-determining the organization’s
true needs and the training programs necessary to meet them. Two focuses:
1. The organization’s job related needs
2. Capabilities of the current workforce Work-based programs (on the job training)
Work-based programs – A technique that ties training and development activies directly into task
On the job training – The employee is place into the actual work situation and is shown how to
perform a task by a supervisor or an experience employee. (much is informal)
Systematic job rotations and transfers –A technique in which an employee is systematically
roated or transferred from one job to another. Used for lower-level managers/operating
employees being groomed for promotions to supervisory management.
Instructional-Based programs (off the job training)
Off-the-job training – Those development programs in which employees learn new skills at a location
away from the normal work site.
Management development programs- Try to enhance conceptual, analytical and problem-
Lecture or discussion approach (an instructional-based program in which a trainer presents
material in a descriptive fashion to those attending a trainee program) is often used in mgt
Networking – informal interactions among managers for the purpose of discussing mutual
problems, solutions, and opportunities.
Mentoring – Having a more experienced manager sponsor and teach a less exp manager.
Computer-assisted instruction – A trainee sits at a computer and uses software that has been
specifically developed to teach certain material. ADV: self-paced learning & immediate feedback
Vestibule training – A work simulation in which the jobs is performed under conditions closely
simulating the actually work env.
Team building and Group based training
More organizations are using teams as a basis for doing their jobs, they are developing programs
specifically designed to facilitate co-operation among team members.
Evaluating Employee Performance
Performance appraisal- The specific and formal evaluation of employees to determine the degree to
which they are performing effectively.
The Performance Appraisal Process
Conducting the Performance Appraisal
Managers/supervisors conduct performance appraisals
o Other ways: Self evaluation, asking customers
360-degree feedback – gathering information from manager’s subordinates, peers, and
superiors when assessing the manager’s performance.
The most accurate info comes from individuals who have known the person being appraised for
1-3 years. 8-10 people should take part in the evaluation.
Providing Performance Feedback
Next step after performance appraisal is providing: Feedback, coaching, and counseling.(Follow up)
(managers do poor job in this area b/c they don’t understand how to do it properly & is not enjoyable)
Performance appraisal in many organizations tends to focus on negatives. Methods for Appraising Performance
Simple ranking method – Requires a manager to rank-order, from top to bottom or from best to
worst, each member of a work group or department. (based on global/overall performance)
Forced distribution method – Involves grouping employees into predefined frequencies of
performance ratings.(i.e. 10% outstanding, 20% very good, 40% avg, 20% below avg, 10% poor)
Similar to “grade on the curve”
Graphic rating scale – consists of a statement or question about some aspect of an individual’s
job performance (i.e. scale of 1-5, 1=strongly disagree, 5=strongly agree)
Critical incident method – requires the employee to give an example of especially good/poor
Providing Compensation and Benefits
Compensation – refers to the set of rewards that organization provi