3995-3626 - Dessler - ch1 New

Human Resource
Management
ELEVENTH EDITION
1
GARY DESSLER
BIJU VARKKEY
Part 1 | Introduction
Chapter 1
Introduction to Human Resource Management
© 2009 Dorling Kindersley (I) Pvt. Ltd.

All rights reserved.
After studying this chapter, you should be able to:
1. Explain what human resource management is and how
it relates to the management process.
2. Give at least eight examples of how all managers can
use human resource management concepts and
techniques.
3. Illustrate the human resources responsibilities of line
and staff (HR) managers.
4. Provide a good example that illustrates HR’s role in
formulating and executing company strategy.
5. Write a short essay that addresses the topic: Why
metrics and measurement are crucial to today’s HR
managers.
6. Outline the plan of this book.
© 2009 Dorling Kindersley (I) Pvt. Ltd. All rights reserved. 1–2
The Management Process
Planning
Controlling Organizing
Leading Staffing
Human Resource Management at Work
• What Is Human Resource Management
(HRM)?
 The policies and practices involved in carrying out
the “people” or human resource aspects of a
management position, including recruiting,
screening, training, rewarding, and appraising.
Human Resource Management at Work
Acquisition
Fairness Training
Human
Resource
Management
Health and
(HRM) Appraisal
Safety
Labor Relations Compensating
Personnel Aspects of a Manager’s Job
• Conducting job analyses
• Planning labor needs and recruiting job candidates
• Selecting job candidates
• Orienting and training new employees
• Managing wages and salaries
• Providing incentives and benefits
• Appraising performance
• Communicating
• Training and developing managers
• Building employee commitment
Personnel Mistakes
• Hire the wrong person for the job
• Experience high turnover
• Have your people not doing their best
• Waste time with useless interviews
• Have your company in court because of discriminatory actions
• Have your company cited by OSHA for unsafe practices
• Have 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 labor practices
Basic HR Concepts
• The bottom line of managing:
Getting results
• HR creates value by engaging
in activities that produce the
employee behaviors that the
company needs to achieve
its strategic goals.
Line and Staff Aspects of HRM
• Line manager
 A manager who is authorized to direct the work of
subordinates and is responsible for accomplishing
the organization’s tasks.
• Staff manager
 A manager who assists and advises line managers.
Line Managers’ HRM Responsibilities
1. Placing the right person on the right job
2. Starting new employees in the organization (orientation)
3. Training employees for jobs that are new to them
4. Improving the job performance of each person
5. Gaining creative cooperation and developing smooth working
relationships
6. Interpreting the firm’s policies and procedures
7. Controlling labor costs
8. Developing the abilities of each person
9. Creating and maintaining department morale
10. Protecting employees’ health and physical condition
Human Resource Managers’ Duties
Line Function Coordinative

Line Authority Function
Implied Authority Functional Authority
Functions of
HR Managers
Staff Functions
Staff Authority
Innovator
Employee Advocacy
Human Resource Specialties
Recruiters
Employment/
Human
Industrial
Resource
Relations
Development
Specialist Human Specialists
Resource
Specialties
Training
Job Analysts
Specialists
Compensation Employee
Managers Welfare Officers
FIGURE 1–1
HR Organization Chart
for a Large Organization
Source: www.hr.wayne.edu/orgcharts.php. Accessed May 6, 2007.

FIGURE 1–2 HR Organizational Chart (Small Company)
FIGURE 1–3 Employment and Recruiting—Who Handles It?
(Percentage of All Employers)
Note: Length of bars represents prevalence of activity among all surveyed employers.
Source: HR MAGAZINE, BNA/Society for Human Resource Management, 2002.

Reproduced with permission via Copyright Clearance Center.
The Changing Environment of
Human Resource Management
Globalization Trends
Technological Trends
Changes and Trends in
Human Resource
Management
Trends in the Nature of Work
Workforce Demographic Trends
The Changing Role of
Human Resource Management
Strategic Human
Resource
Management
Managing with the New Creating High-

HR Scorecard Responsibilities Performance Work
Process for HR Managers Systems
Measuring the HRM

Team’s Performance
High-Performance Work System Practices
• Employment security
• Selective hiring
• Extensive training
• Self-managed teams/decentralized decision making
• Reduced status distinctions
• Information sharing
• Contingent (pay-for-performance) rewards
• Transformational leadership
• Measurement of management practices
• Emphasis on high-quality work
Benefits of a High-Performance
Work System (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
• Produce more qualified applicants per position
• Hiring based on validated selection tests
• Provide more hours of training for new employees
• Conduct more performance appraisals
FIGURE 1–5 Five Sample HR Metrics
HR Metric* How to Calculate It
Absence rate # of days absent in month

× 100
Average # of employees during month × # of workdays
Cost per hire Advertising + agency fees + employee referrals + travel cost of
applicants and staff + relocation costs + recruiter pay and benefits
Number of hires
HR expense HR expense
factor Total operating expense
Time to fill Total days elapsed to fill job requisitions

Number hired
Turnover rate Number of separations during month

× 100
Average number of employees during month
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/BNA
2000 Cost Per Hire and Staffing Metrics Survey; www.shrm.org. See also, SHRM Research “2006 Strategic HR Management Survey Report,” Society for Human Resource Management..
Measuring HR’s Contribution
• The HR Scorecard
 Shows the quantitative standards, or
“metrics” the firm uses to measure
HR activities.
 Measures the employee behaviors
resulting from these activities.
 Measures the strategically relevant
organizational outcomes of those
employee behaviors.
The Human Resource Manager’s
Proficiencies
• New Proficiencies
 HR proficiencies
 Business proficiencies
 Leadership proficiencies
 Learning proficiencies
FIGURE 1–8 Strategy and the Basic Human Resource Management Process
KEY TERMS
management process globalization

human resource management human capital
(HRM) strategy
authority strategic plan
line manager metrics
staff manager HR Scorecard
line authority outsourcing
staff authority ethics
implied authority strategic human resource
functional control management
employee advocacy high-performance work system
Human Resource
Management
ELEVENTH EDITION
1
GARY DESSLER
BIJU VARKKEY
Part 1 | Introduction
Chapter 1
Appendix
Evolution and Challenges Faced in India
© 2009 Dorling Kindersley (I) Pvt. Ltd.

All rights reserved.
HRM in India
In the 1970s and 1980s typical HRM functions in organization included:
• Personnel and administration
• Industrial relations
• Labor welfare
Up to the mid-80s human resource management in Indian
organizations grew through various phases under the
influence of the following factors:
• A philanthropic viewpoint about doing good for workers
• A legislative framework
• Government policies
• Trade unions
• Emerging trends/concepts in management
• Changes in the economy
Management Challenges for Indian CEOs
A study among Indian CEOs identified the
following challenges:
 Creating a high-performance culture
 Retaining talent
 Recruiting
 Moving from a patriarchic and hierarchical
management style to a more team-based, informal
organizational culture
 Linking training with performance
 Compensating knowledge workers
 Building interpersonal relationships/managing
conflict
 Going global
Source: Aneeta Madhok, “Similar Challenges” cited by Robert J. Grossman in “HR’s Rising Star in
India,” available at http://www.shrm.org/india.
Shift to Human Resource Development
Orientation
 The 1980s saw the large-scale introduction of

the developmental concept in Indian
organizations
 Udai Pareek and T. V. Rao, faculty of IIM
Ahmedabad, introduced the human resource
development (HRD) concept in India
Total Human Resource Management
 Opening up of the Indian economy created a
demand for talent and the traditional organizations
(both in public and private sectors) became talent
sources.
 Development of the Information Technology sector
mobilized a vast pool of technically trained people.
 Massive staffing requirements saw recruitment
evolving as very specialized function, separate
from but closely interlinked with the other HRM
functions.
 Arrival of the “knowledge worker”—well-skilled,
individualistic, and ambitious about career caused
attrition to become common.
Total Human Resource Management (Contd.)
 Introduction of IT-supported solution, particularly
ERP-based human resource information
systems
 Introduction of innovative HR practices.
 Rise of IT-enabled services (ITES), gave
employment opportunities to the young English
speaking, educated population.
 HRM function assumed a strategic role in Indian
organizations, responding to business
requirements in an appropriate way.

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Human Resource

Introduction to Human Resource Management

© 2009 Dorling Kindersley (I) Pvt. Ltd.

Labor Relations Compensating

Line Function Coordinative

Source: www.hr.wayne.edu/orgcharts.php. Accessed May 6, 2007.

Source: HR MAGAZINE, BNA/Society for Human Resource Management, 2002.

Workforce Demographic Trends

Managing with the New Creating High-

Measuring the HRM

Absence rate # of days absent in month

Time to fill Total days elapsed to fill job requisitions

Turnover rate Number of separations during month

management process globalization

Evolution and Challenges Faced in India

© 2009 Dorling Kindersley (I) Pvt. Ltd.

 The 1980s saw the large-scale introduction of

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