Introduction lecture

The Management Process covers:

– Planning
– Organizing
– Staffing
– Leading
– Controlling

HRM is the process of acquiring, training, appraising, and compensating employees, and of attending to
their labor relations, health and safety, and fairness concerns.
Techniques that managers used to do it:
1. Conducting job analyses (determining the nature of each employee’s job).
2. Planning labor needs and recruiting job candidates.
3. Selecting job candidates.
4. Orienting and training new employees.
5. Managing wages and salaries (compensating employees).
6. Providing incentives and benefits.
7. Appraising performance.
8. Communicating (interviewing, counseling, disciplining).
9. Training employees, and developing managers.
10. Building employee relations and engagement.
In addition, what a manager should know about:
1. Equal opportunity and affirmative action.
2. Employee health and safety.
3. Handling grievances and labor relations
Why Is Human Resource Management Important to All Managers?

• To avoid personnel mistakes (Like I hired this person because he is my friend despite the fact he is
lacking in competence)
• To improve profits and performance
• You may spend some time as an HR manager
• You may end up as your own human resource manager

Authority is the right to make decisions, to direct the work of others, and to give orders. Managers usually
distinguish between line authority and staff authority: Line authority gives you the right to issue orders and
Staff authority gives you the right to advise others in the organization
Line Manager’s HR Management Responsibilities:

• Placing the right person in the right job

• Starting new employees in the organization (orientation)
• Training employees for jobs that are new to them
• Improving the job performance of each person
• Gaining creative cooperation and developing smooth working relationships
• Interpreting the company policies and procedures
• Controlling labor cost
 • Developing the abilities of each person
• Creating and maintaining departmental morale
• Protecting employees’ health and physical conditions

ACTIVITIES:
Strategy and organizational culture matters

 HR planning - the process of deciding what positions the firm will have to fill, and how to fill them
 Job analysis - The procedure for determining the duties and skill requirements for a job and the kind
of person who should be hired for it
 HR recruiting - Developing an applicant pool for the specific position to be filled
 HR selection - To select the best candidates for the job from a pool of applicants
 HR orientation - A procedure for providing new employees with basic background information
about the firm.
 HR training and development – the process of teaching employees the basic for the job and
improve an employee’s ability to meet changes and challenges in the future
 HR performance appraisal - evaluating an employee’s current and past performance relative to the
person’s performance standards
 HR career planning and development - a deliberate process through which a person becomes
aware of personal career-related attributes and the lifelong series of stages that contribute to his or
her career fulfillment
 Compensation and benefits - all forms of pay or rewards going to employees and arising from their
employment
A little bit history:
Industrial relations (1920-1960) – as a response to the trade union movement
Personnel management (1960-1980)
Human Resource Management (1980-now???)
Emphasis on the importance of the employees to the success of corporation
HRM is described as “proactive”, “nurturing” and “organic”. It seems as more positive and attractive than
personnel management which is described as “reactive”, “monitoring” and “bureaucratic”.
HRM is a process concerned with the management of human energies and competencies:

• For achieving organizational goals

• Through acquisition, development, utilization and maintenance of a competent and committed
workforce
• in a changing environment

New HRM operates under significant constrains:

– Tight labor markets (fight for talents)

– Regulation (laws related to labor matters)
– The nature of the jobs we do (high-paid, high-skilled professional, managerial, technical jobs)
– Ethical awareness

• Employees are considered as internal customers

• Interest in staff attitude, satisfaction and engagement surveys
• HR practices are more employee focused: 360-degree appraisal system ( 360 Degree Feedback is
a system or process in which employees receive confidential, anonymous feedback from the people who work around them.
This typically includes the employee's manager, peers, and direct reports. ... 360 Feedback can also be a useful development
tool for people who are not in a management role.,) self-managed teams, flexible benefits, etc.
• HR managers “borrow” marketing ideas: employer branding, “segmenting” staff, etc.

Trends:

• Workforce Demographics and Diversity Trends

• Trends in Jobs People Do
 • Globalization Trends
• Economic Trends
• Technology Trends

New approach:

• Technology – adopting new HR technology tools such as online training portals

• Shared Services HR – teams that offer services through intranets or centralized call centers
• Corporate HR – teams within a company that assist top management in top-level issues
• Embedded HR – teams that have a HR generalist (also known as “relationship managers” or “HR
business partners”) assigned to functional department
• Centers of expertise – specialized HR consulting firms within the company

Major components of HRM:

1. Distributed HR and the New Human Resource Management – more human resource
management tasks are being redistributed from a central HR department to company’s employees
and line managers.
2. Strategic Human Resource Management – today’s human resources managers are more involved
in longer-term, strategic “big picture” issues.
3. Performance and Human Resource Management – employers expect their human resources
manager/"people experts” to spearhead employee performance- improvement efforts.
4. Sustainability and Human Resource Management – company’s efforts being measured not only
by performance but also whether they are sustainable.
5. Employee Engagement and Human Resource Management – employee engagement refers to
being psychologically involved in, connected to, and committed to getting one’s jobs done.
6. Ethics and Human Resource Management – ethics means the standards someone uses to decide
what his or her conduct should be.
There are main types of digital technologies driving HR professionals to automation: Social Media, Mobile
Applications, Gaming, Cloud Computing, Data Analytics, Artificial Intelligence.
HR managers can’t just be good at traditional personnel tasks like hiring and training but must “speak the
CFO’s language” by defending human resource plans in measurable terms.
  Parent country – the country in which the company’s corporate headquarters is located
 Host country - the country in which the parent country organization seeks to locate (or has already
located) a facility
 Third country – is a country other than the host or parent country, and the company may or may not
have a facility there.
 Locals – citizens of the country were they are working
 Expatriates – non-citizens of the countries in which they are working. Employees sent by a
company in one country to manage operations in a different country.
 Impatriates – transfere to the parent country as expatriates
 Third-country nationals – citizens of the country other than the parent or the host country
(somehow related, like finance, inputs)

International Human Resource: (HR activities + culture + country)

1. more HR activities
2. a need for a broader perspective
3. more involvement in employees’ personal lives
4. changes of emphasis as the mix of expatriates & locals varies
5. more risk exposure
6. broader external influences
7. International taxation (do they have to pat there?)
8. International relocation & orientation
9. Administrative services for expatriates
10. Host-government relations
11. Language translation services
International relocation:
Arranging for pre-departure training

• Providing immigration & travel details

• Providing housing, shopping, medical care, recreation & schooling information
• Finalizing compensation details such as: ✓ Delivery of salary overseas ✓ Determination of overseas
allowances ✓ Taxation treatment I

International assignments involve family and personal issues (e.g. house, investments)
Different risks to send an employee to foreign country
MNEs fail primarily because of a lack of understanding of the difference in managing human resources in
foreign environments.

 Theory x – we don’t trust employees, so we persuade them

 Theory y – you must respect employees and see not a resource but human
Employees can destroy reputation (hard to gain again) of the company, so It is important to give them
happiness
Important skill: to know the company you are working as a HR Manager cause you are selling your company
to potential employees

Lecture 2
 Strategic management

• Executive role – in this role the HR departments are viewed as the specialists in the areas that
encompass Human Resources or people management.
• Audit role – in this capacity the HR department will check other departments and the organisation to
ensure all HR policies such as Health & Safety, Training, Staff Appraisal etc. are being carried out in
accordance with the company’s HR policy.
• Facilitator role – in this role, the HR department helps or facilitates other departments to achieve the
goals or standards as laid out in the HR policies of the organisation. This will involve training being
delivered for issues that arise in the areas relating to people management.
• Consultancy role – the HR department will advise managers on how to tackle specific managing
people issues professionally.
• Service role – in this capacity the HR department is an information provider to raise awareness and
inform departments and functional areas on changes in policy.
HR – can save money just by hiring the right person (ex. no training required, efficient)
It is important to understand the role of HR in strategic planning
  Strategy - a company’s long-term plan for how it will balance its internal strength and weaknesses
with its external opportunities and threats to maintain a competitive advantage

1 step: Ex. sell beverages

2 step: Environmental scanning based on important internal and external factors
3 step: Where we want to be
4 step: Mission to goal
5 step: Plan (how they have to feel, what you have to do, bad and good, what you have to do in case of…)
1. Corporate Strategy (what company is doing; identifies the portfolio of businesses that, in total,
comprise the company and how these businesses relate to each other.
1. Concentration
2. Diversification
3. Vertical Integration
4. Consolidation
 5. Geographic expansion

2. Competitive Strategy (Focus; a strategy that identifies how to build and strengthen the business’s
long-term competitive position in the marketplace, which is also known as business-
level/competitive strategy)
1. Cost Leadership
2. Differentiation
3. Focus
3. Functional Strategy (each department strategy; a strategy that identifies the broad activities that
each department will pursue in order to help the business accomplish its competitive goals)

 Manager role: Devising the company’s overall strategic plan is top management’s responsibility.
However, few top executives formulate strategic plans without lower-level managers’ input.
Strategic human resource management – means formulating and executing human resource policies and
practices that produce the employee competencies and behaviors the company needs to achieve its strategic
aims.

• HR department’s role is to fit or adapt to the company’s strategy;

• HR department is an equal partner in the strategic planning process.
4 HR role:
AP:
• The traditional component
– Take care of the administration with respect to legal aspects
– Job design
– Analyse and develop competences
– Facilitate personal development
– Design and organize training programs
– Salaries, Benefits and compensation
– Promotion
– Performance appraisal
– Safety
– Trade-unions
ECH:
• A real challenge to maintain a recognized added value
– To make sure executives and employees talk each other (facilitator, pro-active,..)
– To answer a need of talented people (HRM program)
– High potentials
– Personal development (employability, training, new recognition plan)
– Fairness
– Ombudsman (mediation)
SP:
• To match the corporate strategy and the HR policy
• By creating a more efficient organization
 • By creating value (cost management)
• To be sure that the company has the right people in the right place in the right time (training
and recruitment) according to the strategy
• Benchmark against successful companies
• Making sure that the workforce is energized and mobilized (compensation, appraisal system)
CHA:
• To be a key change player and to help others to change
– Being pro-active in change times :
• Provide the communication tools to explain vision and strategies
• Promote internal mobility to get new ways of thinking
– Playing an active role:
• Impact the transformation of the organization on the staff (morale, motivation,..),
culture, structure,..
• Design and implement training on management issues
• Human resource metrics – the quantitative gauge of a human resource management activity.
• Benchmarking – comparing the practices of high-performing companies’ results to your own.
• Data Analytics – using statistical and mathematical analysis to find relationships and make
predictions.
Have a metrics – have a data (standardized, record daily data, visual presentation, goal, and target) – it is a
dream that the program will do everything by itself.
Historical data has to be find the same way as todays to compare hem
The better method to do metrics is to start with target
Workforce demographic:

- Gender
- Tenure
- Age average
- Geography

Recruiting (depend on organization but if a person spent only half of a year in organization it is
misunderstanding problems (in metrics checked with ERROR); if person spent 0.5-1 year – it is manager
fault)

- New hiring
- Moves per year
- Total recruitment
- Total applicants
- 1 place how many recruitment
- Project per recruiter

Training: (Often from e-learning platform)

 - Budget per unit
- Budget per learner
- Planed training
- Unplanned training
- Training hours per learner

Engagement:

- Engagement index (positive average score for set of questions)

- Leadership index
- ENPS (employees net promoter score=promoters/detradors (?))

Organization design:

- Organization layers (Bosses have to be less than 5 or it will be chaos)

- Subordinates assigned per leader
- FTE (position, placement annual
- Headcount (placement in a day)

Employee turnover:

- Turnover rate (can be for specific population, for ex. women)

o Don’t count those who voluntarily resigned

Compensation:

- % bonus considered
- % bonus got
- Average overnight
- Old data vs. new
- Cost increase

HR function:

- Numbers of employees per HR person (60-90)

- HR operation expenses

Benchmark (budget(?)) depends on industry (should be positive)

Compa-ratio – compare to others companies in these positions (no 20% below market average)
THE CONTEXT OF HUMAN RESOURCE MANAGEMENT

 Mistake: To believe that what is working in one country will work in others
PESTLE analysis help to adopt to changes in foreign country. It analysis external environment where
business is operating or want to operate.
Effect on Human Resource Management:
1. Political – Tax policy, fiscal policy
2. Economical – how much to pay, how many workers we can hire based on salary
3. Social-demographic – potential employees, education, how to integrate them
4. Technological – opportunity to organize HR work
5. Legislation – laws about minimum salaries, environment standards, hiring procedure
 6. Environmental – can have impact on working conditions and what we can do to improve working
here
Differences in economic system have influence on HRM
“Culture is the characteristic way of behaving and believing that a group of people have developed over
time”
Core cultures dimensions:

- Hofstede
o Individualism vs. Collectivism
o Power distance
o Indulgence vs. Restraint
o Long-term orientation vs. Short-term orientation
o Masculinity vs. Femininity
o Uncertainty avoidance
- Hall (Low-culture context vs. High-culture context)
- Trompenaars (https://www.mindtools.com/pages/article/seven-dimensions.htm)
o Universalism vs. Particularism
o Individualism vs. Communitarianism
o Specific vs. Diffuse
o Neutral vs. Affective
o Achievement vs. Ascription
o Sequential time vs. Synchronous time
o Internal direction vs. External direction
- GLOBE (Analyze leadership in different cultures) (https://courses.lumenlearning.com/wm-
principlesofmanagement/chapter/dimensions-of-cultural-difference-and-their-effect/)

Layers of the culture:

Surface or explicit culture (we can see)
Hidden culture (when you are more aware of it)
Invisible or implicit culture
Scheine 6 underlying assumptions:
1. Nature of reality & truth (what is real and what is not)
2. Time dimension (how time is defined? Orientation towards future or past? Long or short-term?)
3. Effect of spatial proximity & distance (how is space attributed? What is private, what is public?)
4. Nature of being human (What defines human? Are humans more bad or good?)
5. Type of human activity (are people more passive to their fate or try to actively change it?)
6. Nature of human relationships (what are criteria of social order: age, origins, success? Is team
success or individual one important?)
Why standardize HRM?
Consistency, Transparency, Alignment, common principles (if you use the same measurement for KPI you
can compare) and objectives (company reduce costs by creating efficiency), more convenient manage
Why localize? Respect culture and laws
You have to balance – bring what is good from your culture and try to keep it but at the same time respect
other

MNEs that standardize

• pursue multinational or transnational corporate strategies
• supported by corresponding org structures that are reinforced by a shared worldwide corporate culture
Localization factors:

 Cultural environment more social context → more complete balance of extrinsic & intrinsic rewards
more individual → more extrinsic rewards or fast changing personal & social contexts
 Institutional environment (country-of-origin & HC)
 Mode of operation abroad
Subsidiary role: e.g., global innovator, integrated player, implementer

 Ethnocentrically oriented company (give home people control)

  Polycentric company (Give local people control, because they know better)
 Global company (Just professionals)
 Expats vs locals
 Other solutions
 Offshoring (base some company’s process and services oversees to win by lowering costs)
We don’t want that our employees will go work abroad because we trained them (invested in their education)
and we don’t want to lose this skill, so we have to take him back

When we go international we have domestic and international sale manager

International:
 Dual reporting can cause conflict & confusion
 Many communication channels can create information logjams
 Overlapping responsibilities can produce - turf battles - loss of accountability
 Distance, language, time, & culture barriers make it difficult for managers to resolve conflicts &
clarify confusion
  Merger – two companies become one (like marriage, we are family now)
 Acquisition – know you part of me

Within the first year of a merger, up to 20% of executives may be lost. The percentage lost gets worse over
more than one year after a merger. Personnel issues are often neglected. A large number of M&As fail or do
not produce the intended results

Those companies which involved the HR department early in the process were more successful than others
with late HR involvement. The strongest involvement of HR department took place in the last two phases of
the M&A process.
Barriers to international markets:
1. Not enough working capital to finance exports
2. Inability to identify foreign business opportunities
3. Limited information to locate/analyze markets
4. Inability to contact potential overseas customers
5. Inability to obtain reliable foreign representation
6. Lack of managerial time to handle internationalization
7. Untrained or not enough personnel to go international
8. Difficulty in managing competitors’ prices
9. Lack of home government assistance & incentives
10. Excessive transportation & insurance costs

CASE STUDY 1: Charan

• How is HR related to strategy according to article?
•
• What tendencies in HR field do you notice?
 • Companies don’t like how HR department is working because they don’t try to connect
internal environment with real business world, they have lack of knowledge in how business
works.
Charan suggest how to change the situation: split HR in two teams. One is responsible for compensation and
benefits (CFO is their leader) and second group responsible for leadership and organization (will work on
improving capabilities and report to CEO). In such way HR will gain needed skills
CASE SRUDY: Erin Mayer
• What problems do companies encounter expanding abroad?
• Miscommunication due to culture differences that leads to breakdown of trust
• People split to different groups, there is not us
• It is hard to keep company culture when moving abroad because of foreign culture. (You
don’t need to adapt to local culture only if company culture leads to innovations and you
don’t need to understand local customers)
• How to avoid them?
• Recap orally and in written form what was meant and what was understood. This way they
can better understand others.
• Identify differences, give everyone voice (you have to ensure that every group of culture is
heard), protect your most creative function (let them function on their own), train everyone
(employees local norms and locals company cultures), be heterogeneous everywhere (all
subsidiary have different people) or misunderstanding may arise between subsidiary
JOB ANALYSIS
• Decide what positions to fill
• Build a pool of job candidates
• Obtain application forms
• Use selection tools
• Decide to whom to make an offer
• Orient, train, and develop employees
• Appraise employees
• Compensate employees to maintain their motivation

 Job Analysis – is the procedure through which you determine the duties and skill requirements of a
job and the kind of person who should be hired for it.
 Work activities. Information about the job’s actual work activities, such as cleaning, selling,
teaching, or painting. This list may also include how, why, and when the worker performs each
activity.
 Human behaviors. Information about human behaviors the job requires, like sensing,
communicating, lifting weights, or walking long distances.
 Machines, tools, equipment, and work aids. Information regarding tools used, materials processed,
knowledge dealt with or applied (such as finance or law), and services rendered (such as counseling
or repairing).
 Performance standards. Information about the job’s performance standards (in terms of quantity or
quality levels for each job duty, for instance).
 Job context. Information about the physical working conditions, work schedule, etc.
  Human requirements. Information such as knowledge or skills and required personal attributes.
The reasons to use this info:
1. Recruitment and selection
2. EEO compliance
3. Performance appraisal
4. Compensation
5. Training
How to make it?
1. Identify how will information be used – plan the process
2. Review relevant background information
3. Select representative positions
4. Collect and analyze data
5. Verify
6. Develop job description and job specification
Business Process Reengineering: – Job Redesign – Job Enlargement – Job Rotation – Job Enrichment
Job description: - A list of a job’s duties, responsibilities, reporting relationships, working conditions, and
supervisory responsibilities;
Job specification: - A list of a job’s “human requirements”, that is, the requisite education, skills,
personality, and so on.
Things to keep in mind:
–A joint effort
– Clear questions and process
– Several methods (The interview; Questionnaires; Observation; Participant Diary/Logs; Quantitative job
analysis techniques (e.g. Position analysis questionnaire (PAQ)); Multiple sources of information.)
Types of interview:

 Job analysis interview

 Selection interview
 Appraisal interview
 Termination interview
 Exit interview
Types: – Individual; – Group interview; – Supervisor interview.

 Advantages (+): Relatively simple and quick; The additional information can be collected
(occasional activities, informal contacts); The need for and the functions of job analysis can be
explained.
 Disadvantages (-): Distortion of information; Employees might exaggerate certain responsibilities
 Questions: Structured; – Unstructured;
+: Quick and efficient way to question a lot of employees; Less costly than interview.
-: Expensive and time consuming to develop and test questionnaire.
  A job description is a written statement of what the worker does, how he or she does it, and what
the job’s working conditions are.
Sections:
• Job identification
• Job summary
• Responsibilities and duties
• Authority of the position holder
• Standards of performance
• Working conditions
Summary (Write a brief summary of job.) The person in this position is responsible for selling college
textbooks, software, and multimedia products to professors, via incoming and outgoing telephone calls, and
to carry out selling strategies to meet sales goals in assigned territories of smaller colleges and universities. In
addition, the individual in this position will be responsible for generating a designated amount of editorial
leads and communicating to the publishing groups product feedback and market trends observed in the
assigned territory.
Relationships:

 Inside and outside the organization – Reports to – Supervises – Works with – Outside the company
Primary Responsibilities (List in order of importance and list amount of time spent on task.)
Decision-Making Responsibilities for This Position

 Standards of performance and working conditions: Lists the standards the company expects the
employee to achieve for each of the job description’s main duties and responsibilities.
Improving Performance: HR Tools for Line Managers and Small Businesses Using O*NET
Steps:
1. Review Your Plan Step
2. Develop an Organization Chart Step
3. Use a Job Analysis Questionnaire Step
4. Obtain Job Duties from O*NET Step
5. List the Job’s Human Requirements from O*NET Step
 6. Finalize the Job Description
Job specification: “What human traits and experience are required to do this job effectively?”

 Shows what kind of person to recruit and what qualities you should test that person for.
Trained/experienced people – Length of service – Quality of relevant training – Previous job performance
Untrained people – Specify qualities
The Job-Requirements Matrix:

 A more complete description of what the worker does and how and why he or she does it; it clarifies
each task’s purpose and each duty’s required knowledge, skills, abilities, and other characteristics. A
typical matrix lists the following information, in five columns:
 Column 1: Each of the job’s four or five main job duties
 Column 2: The task statements for the main tasks associated with each main job duty
 Column 3: The relative importance of each main job duty
 Column 4: The time spent on each main job duty Column 5: The knowledge, skills, ability, and
other human characteristics (KSAO) related to each main job duty
Why job analysis is important: Employees may be concerned because of ...

 Possible changes to job duties

 Changes to pay
 Lack of trust of consequences
 The same job title may have different responsibilities and pay rates in different departments
 Recruiting
 Selection
 Performance appraisal
 Training
 Compensation
 Discovering unassigned duties
 Equal employment opportunities
 Recruiting

 Workforce planning and forecasting - The process of deciding what positions the firm will have to
fill, and how to fill them (HR planning)
Employee demand and supply (internal and external)

 Recruiting - developing an applicant pool for the specific position to be filled using recruitment
sources.
 Succession planning -Systematically identifying, assessing, and developing organizational
leadership to enhance performance.
Three steps: – Identify key position needs
Develop inside candidates – Assess and choose those who will fill the key positions
Target group:
• Recruitment strategy
• Communication in recruitment: channels, message, contacts
• Employer attractiveness factors (employer branding)
• People responsible for recruitment
• Measuring success of recruitment
Target group • Recruitment strategy • Communication in recruitment: channels, message, contacts •
Employer attractiveness factors (employer branding) • People responsible for recruitment • Measuring
success of recruitment
Strategic decisions: “MAKE” or “BUY” strategy (MAKE = Internal training, recruiting on entry
level (from inside or outside), look for learning capability.

 BUY = Buy ready made employee in the job market, recruit on all levels, use refined
methods to identify required skills and employ those who have it.)
 External or internal sources
 To use or not to use external help
 Financial resources available
Advantages of recruiting internal workforce:

- the strength and weaknesses of candidate are known

- safer – you already know the skills of the candidate
- insiders are more committed to the company
- morality and motivation will rise
- may require less orientation and training as outsiders

Weakness:

- employees who apply for jobs and don’t get them might be discontented
- you have to live with unpromoted person
- employees might not want to see their colleague as a boss
- the promoted person might have difficulties to shake off the reputation of being “one of the gang”
- when all the managers are promoted from within they might want to maintain the status quo. When
changes, new point of view is needed the candidates are recruited from outside.
Methods (internal workforce):
Job posting – publicizing an open job to employees (often by literally posting it on bulletin boards or
intranet).

 Promotion
 Transfer
 Succession planning
 Re-employment.
External:

 Advertising
 Employment agencies
 Executive recruiters – headhunting
 College recruiting
 Referrals
Advertising media (local newspaper, TV, Internet, special journals etc.);

 Advertisement’s construction. AIDA – attention, interest, desire, action.

Problems with job ads:

 Not appropriate choice of media

 Important information lacking
 Not attractive
 Irealistic job specification
 Focus on organization, not applicant
 Inappropriate information on method of application
 Discrimination, other legal aspects

 HR triad – Manager of organization.

 Other managers:
– HRM specialist
– (Potential) Employee
a labour market characterized by the prevalence of short-term contracts or freelance work as opposed to
permanent jobs.
• Contract Employees
– Employer’s liability
– Don’t treat temporary workers as “employees”