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© 2009 Pearson Education South Asia Pte Ltd.All rights reserved.
Gary Dessler and Chwee Huat TanGary Dessler and Chwee Huat Tan
Chapter Chapter 11
Human Resource Human Resource Management:Management:An Asian An Asian PerspectivePerspective(Second Edition)
Introduction to Human Resource Management
© 2009 Pearson Education South Asia. All rights reserved. 1–2
After studying this chapter, After studying this chapter, you should be able to:you should be able to:
1. Explain what HRM is and how it relates to the management process.
2. Discuss how managers can use HR concepts.
3. Compare the HR responsibilities of line and staff managers.
4. Explain the changing role of HR managers.
© 2009 Pearson Education South Asia. All rights reserved. 1–3
After studying this chapter, After studying this chapter,
you should be able to:you should be able to:5. Discuss the changing environment of HRM.
6. Discuss HRM as a profession.
7. Explain how HR practices are influenced by cultural and religious values.
8. Know the plan of this book.
© 2009 Pearson Education South Asia. All rights reserved. 1–4
The Manager’s Human ResourceManagement Jobs
Management process– The five basic functions of planning,
organizing, staffing, leading, and controlling.
© 2009 Pearson Education South Asia. All rights reserved. 1–5
The Manager’s Human ResourceManagement Jobs
Human resource management (HRM)– The policies and practices involved in
carrying out the “people” or human resource aspects of a management position, including recruiting, training, appraising and rewarding.
© 2009 Pearson Education South Asia. All rights reserved. 1–6
HR Aspects Of A Manager’s Job
Conducting job analyses (determining the nature of each employee’s job)
Planning manpower needs and recruiting job candidates
Selecting job candidates Orienting and training new employees
© 2009 Pearson Education South Asia. All rights reserved. 1–7
HR Aspects Of A Manager’s Job
Managing wages and salaries (compensating employees)
Providing incentives and benefits Appraising performance Communicating (interviewing, counseling,
disciplining) Building employee commitment
© 2009 Pearson Education South Asia. All rights reserved. 1–8
HR Aspects Of A Manager’s Job
Understanding employment laws Knowing employee health and safety issues Handle grievances and employment relations
© 2009 Pearson Education South Asia. All rights reserved. 1–9
Personnel Mistakes
Hire the wrong person for the job Experience high turnover Your people not doing their best Waste time with useless interviews Have your company sued for discriminatory
actions
© 2009 Pearson Education South Asia. All rights reserved. 1–10
Personnel Mistakes
Have your company fined for unsafe practices
Some employees think their salaries are unfair and inequitable relative to others in the organization
Allow a lack of training to undermine your department’s effectiveness
Commit any unfair employment practices
© 2009 Pearson Education South Asia. All rights reserved. 1–11
Basic HR Concepts
Getting results– The bottom line of managing
HR creates value by engaging in activities that produce the employee behaviors the company needs to achieve its strategic goals.
© 2009 Pearson Education South Asia. All rights reserved. 1–12
Line and Staff Aspects of HRM
Authority– The right to make decisions, direct
others’ work, and give orders. Staff authority (Advisory)
– The authority gives right to the HR manager to advise other managers or employees.
Line authority (Superior-Subordinate)– The authority of managers to direct
people in his or her own department.
© 2009 Pearson Education South Asia. All rights reserved. 1–13
Line and Staff Aspects of HRM
Line manager (Line Authority)– A manager who is authorized to direct
the work of subordinates and is responsible for accomplishing the organization’s tasks.
Staff manager (Staff Authority)– A manager who assists and advises line
managers.
© 2009 Pearson Education South Asia. All rights reserved. 1–14
Line Managers’ HRM Responsibilities
1. Place the right person on the right job
2. Orientate new employees
3. Train employees for jobs new to them
4. Improve the job performance of each person
5. Gain creative cooperation and developing smooth working relationships
© 2009 Pearson Education South Asia. All rights reserved. 1–15
Line Managers’ HRM Responsibilities
6. Interpret the company’s policies and procedures
7. Control costs
8. Develop the abilities of each person
9. Maintain morale
10.Protect employees’ health and physical condition
© 2009 Pearson Education South Asia. All rights reserved. 1–16
Carries out 3 distinct functions:-1. Line function2. Coordination function3. Staff function
Functions of the HR Manager
© 2009 Pearson Education South Asia. All rights reserved. 1–17
A line function– The HR manager directs the activities of the
people in his or her own department and in related service areas (like the plant cafeteria).
Functions of the HR Manager
© 2009 Pearson Education South Asia. All rights reserved. 1–18
A coordinative function– HR managers also coordinate
personnel activities, a duty often referred to as functional control.
Functions of the HR Manager
© 2009 Pearson Education South Asia. All rights reserved. 1–19
Staff (assist and advise) functions– Assisting and advising line managers
is the heart of the HR manager’s job.
Functions of the HR Manager
© 2009 Pearson Education South Asia. All rights reserved. 1–20
Size of HR Department
Depends on company size– Small Company:
Only a few personnel
– Large Company: Full range of HR specialist for each different
function
© 2009 Pearson Education South Asia. All rights reserved. 1–21
Size of HR Department
Example of HR department in a small company:
© 2009 Pearson Education South Asia. All rights reserved. 1–22
Size of HR Department
Example of HR department in a large company:
© 2009 Pearson Education South Asia. All rights reserved. 1–23
Duties of HR Specialists
Training Specialist– Plan, organize and direct training– Advise managers on training
Job Analyst– Collect information about jobs– Prepare job description
© 2009 Pearson Education South Asia. All rights reserved. 1–24
Duties of HR Specialists
Recruiter– Collect information about jobs– Interview and recommend suitable
candidates EEO (Equal Employment Opportunity)
Coordinator– Investigate EEO grievances– Examine HR practices for potential
violations
© 2009 Pearson Education South Asia. All rights reserved. 1–25
Duties of HR Specialists
Compensation Manager– Develop compensation plans– Handle employee benefits program
Employment relations specialist– Advise managers on ER issues– Negotiate with unions
© 2009 Pearson Education South Asia. All rights reserved. 1–26
Cooperative Line and Staff HR Management
Differentiating HR duties to be carried out by line managers and HR managers:
– No standard rule for all organizations
© 2009 Pearson Education South Asia. All rights reserved. 1–27
Cooperative Line and Staff HR Management
Some common practices:
© 2009 Pearson Education South Asia. All rights reserved. 1–28
The Changing Environment Of HR Management
HR managers must be able to respond to changes that are happening every day
Major changes or trends as follows:– Globalization– Technological advances– Changes in nature of work– Changes in workforce demographics
© 2009 Pearson Education South Asia. All rights reserved. 1–29
The Changing Environment Of HR Management
Globalization– Tendency of companies to extend
sales, ownership, or production to other countries
– More competition more pressure to be “world class” Lower costs and to increase productivity of employees
– E.g. Toyota produces cars in China, Thailand and many other countries.
© 2009 Pearson Education South Asia. All rights reserved. 1–30
The Changing Environment Of HR Management
Technological Advances– Use of internet and information
communication technology (ICT) to increase competitiveness in business
– Enabled businesses to outsource their non-core activities to other countries where costs are lower
– Causes changes in nature of work
© 2009 Pearson Education South Asia. All rights reserved. 1–31
The Changing Environment Of HR Management
Changes in nature of work– Caused by technological advances
as well– From manufacturing jobs to service
jobs– Usage of “non-traditional” workers
staff holding multiple jobs, or part-time staff
© 2009 Pearson Education South Asia. All rights reserved. 1–32
The Changing Environment Of HR Management
Changes in workforce demographics– Diversified workforce staff employed
are of different race, religion, nationality, gender, age and culture
– Challenge for HR managers– E.g. Workers from Bangladesh, China,
India, Indonesia, Pakistan and Thailand in Singapore’s construction sector
© 2009 Pearson Education South Asia. All rights reserved. 1–33
Changes in environment HR managers to take on new responsibilities
HR functions more strategic
The Changing Role Of HR Management
© 2009 Pearson Education South Asia. All rights reserved. 1–34
Strategic Planning– The company’s long-term plan for
how it will balance its internal strengths and weaknesses with its external opportunities and threats to maintain a competitive advantage.
– 3 questions in strategic planning• Current business position• Future business position expected to be• How to get to expected future business
position
The Changing Role Of HR Management
© 2009 Pearson Education South Asia. All rights reserved. 1–35
Strategic HRM– Formulating HR policies and
introducing practices that produce staff competencies and behaviors that the company needs to achieve its strategic goals.
The Changing Role Of HR Management
© 2009 Pearson Education South Asia. All rights reserved. 1–36
Strategic HRM– HR managers today are more involved
in partnering with their top managers in both designing and implementing their companies’ strategies
– Top management wants to see, precisely, how the HR manager’s plans will make the company more valuable.
The Changing Role Of HR Management
© 2009 Pearson Education South Asia. All rights reserved. 1–37
Outsourcing HR Activities– Computer-based systems easy to
outsource HR activities by providing access to service providers to the company’s HR information database
– E.g. Payroll, Benefits, Wellness Programs and Employee Training
The Changing Role Of HR Management
© 2009 Pearson Education South Asia. All rights reserved. 1–38
High Performance Work Systems (HPWS)– Integrated set of HRM policies and
practices that together produce superior staff performance
– Need to focus on performance– No fixed rule of items that comprises
HPWS but should include:• Employment security
The Changing Role Of HR Management
© 2009 Pearson Education South Asia. All rights reserved. 1–39
High Performance Work Systems (HPWS)– No fixed rule of items that comprises
HPWS but should include (cont):• Selective hiring
• Extensive training
• Self managed teams and decentralized decision making
The Changing Role Of HR Management
© 2009 Pearson Education South Asia. All rights reserved. 1–40
High Performance Work Systems (HPWS)– No fixed rule of items that comprises
HPWS but should include (cont):• Reduced status distinctions among managers
and workers• Information sharing among managers• Pay-for-performance rewards• Emphasis on high quality work
The Changing Role Of HR Management
© 2009 Pearson Education South Asia. All rights reserved. 1–41
High Performance Work Systems (HPWS)– Benefits of HPWS
• Generate more job applicants
• Screen candidates more effectively
• Provide more and better training
• Link pay more explicitly to performance
• Provide a safer work environment
The Changing Role Of HR Management
© 2009 Pearson Education South Asia. All rights reserved. 1–42
High Performance Work Systems (HPWS)– Benefits of HPWS (cont)
• Produce more qualified applicants per position
• More employees are hired based on validated selection tests
• Provide more hours of training for new employees
• Higher percentages of employees receiving regular performance appraisals.
The Changing Role Of HR Management
© 2009 Pearson Education South Asia. All rights reserved. 1–43
Measuring HRM Team’s Performance– Employees expect HR teams to
provide measurable proof of the effectiveness of their programs
– Require quantitative measures– Metrics and HR Scorecard are used
The Changing Role Of HR Management
© 2009 Pearson Education South Asia. All rights reserved. 1–44
Measuring HRM Team’s Performance– Metrics
• A set of quantitative performance measures that HR managers use to assess their operations
• E.g. of HR Metrics
– Absence Rate[(Number of days absent in month) ÷ (Average number of employees during mo.) × (number of workdays)] × 100
The Changing Role Of HR Management
© 2009 Pearson Education South Asia. All rights reserved. 1–45
Measuring HRM Team’s Performance– Metrics
• E.g. of HR Metrics (cont)
– Cost per Hire(Advertising + Agency Fees + Employee Referrals + Travel cost of applicants and staff + Relocation costs + Recruiter pay and benefits) ÷ Number of Hires
The Changing Role Of HR Management
© 2009 Pearson Education South Asia. All rights reserved. 1–46
Measuring HRM Team’s Performance– Metrics
• E.g. of HR Metrics (cont)– Health Care Costs per Employee
Total cost of health care ÷ Total Employees
– HR Expense Factor
HR expense ÷ Total operating expense
Sources: Robert Grossman, “Measuring Up,” HR Magazine, January 2000, pp. 29–35; Peter V. Le Blanc, Paul Mulvey, and Jude T. Rich, “Improving the Return on Human Capital: New Metrics,” Compensation and Benefits Review, January/February 2000, pp. 13–20;Thomas E. Murphy and Sourushe Zandvakili, “Data and Metrics-Driven Approach to Human Resource Practices: Using Customers, Employees, and Financial Metrics,” Human Resource Management 39, no. 1 (Spring 2000), pp. 93–105; [HR Planning, Commerce Clearing House Incorporated, July 17, 1996;] SHRM/EMA 2000 Cost Per Hire and Staffing Metrics Survey; www.shrm.org.
The Changing Role Of HR Management
© 2009 Pearson Education South Asia. All rights reserved. 1–47
Measuring HRM Team’s Performance– HR Scorecard
• Measures the HR function’s effectiveness and efficiency in producing employee behaviors needed to achieve the company’s strategic goals
• Concise and simple measurement system
The Changing Role Of HR Management
© 2009 Pearson Education South Asia. All rights reserved. 1–48
Measuring HRM Team’s Performance– HR Scorecard
• Use to measure:– HR activities (testing, training, compensation
and safety)– Employee behaviors resulting from such
activities– Organizational outcomes of those employee
behaviors (higher performance, and company profit)
The Changing Role Of HR Management
© 2009 Pearson Education South Asia. All rights reserved. 1–49
The New HR Manager
New Proficiencies– HR proficiency– Business proficiency– Leadership proficiency– Learning proficiency
© 2009 Pearson Education South Asia. All rights reserved. 1–50
The New HR Manager
© 2009 Pearson Education South Asia. All rights reserved. 1–51
HRM and Professionalism
HR Certification
– HR is becoming more professionalized.
– Professional institutes- Certification
- Upgrading skills and expertise
- Exchange views
- Contribute to community
© 2009 Pearson Education South Asia. All rights reserved. 1–52
HRM and Professionalism
Is HR a profession?
– To look at criteria for a Profession
© 2009 Pearson Education South Asia. All rights reserved. 1–53
HRM and Professionalism
Professional Institutes– Training and education– Up-to-date knowledge and
information– Maintain links with similar
organizations in other countries– Active in regional associations– International conferences– Authority to specify qualification of
members
© 2009 Pearson Education South Asia. All rights reserved. 1–54
HR and Cultural Values
Confucianism– Harmonious relationship– Mutual obligations– Hierarchy– Social order
Sun Tzu’s Art of War– Explains theories of organization, planning,
leadership and strategies– Importance of training, discipline and
loyalty
© 2009 Pearson Education South Asia. All rights reserved. 1–55
HR and Cultural Values
Han Fei Tzu: Reward and Punishment– A leader should:
• Find talented subordinates• Set up a system of rules• Explain these rules to subordinates• Appropriate time and place to deal with problems• Strictly administer reward and punishment
© 2009 Pearson Education South Asia. All rights reserved. 1–56
HR and Cultural Values
Han Fei Tzu: Reward and Punishment– Role of a leader (summarized)
© 2009 Pearson Education South Asia. All rights reserved. 1–57
HR and Cultural Values
Other approaches– Thailand: Buddhist approach– Malaysian cultural values– National Values:
• Indonesia: Pancasila• Malaysia: Rukunegara• Singapore: National Shared Values
© 2009 Pearson Education South Asia. All rights reserved. 1–58
HR and Cultural Values
© 2009 Pearson Education South Asia. All rights reserved. 1–59
The Plan of This Book: Basic Themes
HR management is the responsibility of every manager—not just those in the HR department.
HR managers must be ready to defend their plans and contributions in measurable terms.
An HR department’s performance is measured relative to achieving the company’s strategic aims.
HR managers increasingly rely on IT to help support the company’s strategic aims.
Virtually every HR-related decision managers make has legal implications.
Globalization and diversity are important HR issues today.
© 2009 Pearson Education South Asia. All rights reserved. 1–60
Strategy and the Basic HR Process