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Westover—Strategic Human Resource Management—1Chapter 1:The Role of Human ResourcesHuman Resource Management Day to DayYou have just been hired to work in the human resourcedepartment of a small company. You heard about the jobthrough a conference you attended, put on by the Society forHuman Resource Management (SHRM). Previously, theowner of the company, Jennifer, had been doing everythingrelated to human resource management (HRM). You can tellshe is a bit critical about paying a good salary for somethingshe was able to juggle all on her own. On your first day, youmeet the ten employees and spend several hours with thecompany owner, hoping to get a handle on which humanresource processes are already set up.Shortly after the meeting begins, you see she has a completelydifferent perspective of what HRM is, and you realize it willbe your job to educate her on the value of a human resourcemanager. You look at it as a personal challenge—both toeducate her and also to show her the value of this role in theorganization.First, you tell her that HRM is a strategic process having todo with the staffing, compensation, retention, training, andemployment law and policies side of the business. In otherwords, your job as human resources (HR) manager will benot only to write policy and procedures and to hire people(the administrative role) but also to use strategic plans toensure the right people are hired and trained for the right jobat the right time. For example, you ask her if she knows whatthe revenue will be in six months, and Jennifer answers, “Ofcourse. We expect it to increase by 20 percent.” You ask,“Have you thought about how many people you will needdue to this increase?” Jennifer looks a bit sheepish and says,“No, I guess I haven’t gotten that far.” Then you ask herabout the training programs the company offers, the softwareused to allow employees to access pay information online,and the compensation policies. She responds, “It looks likewe have some work to do. I didn’t know that humanresources involved all of that.” You smile at her and startdiscussing some of the specifics of the business, so you canget started right away writing the strategic human resourcemanagement plan.What Is Human Resources?LEARNING OBJECTIVES1.2.Explain the role of HRM in organizations.Define and discuss some of the major HRM activities.Every organization, large or small, uses a variety of capital tomake the business work. Capital includes cash, valuables, orgoods used to generate income for a business. For example,a retail store uses registers and inventory, while a consultingfirm may have proprietary software or buildings. No matterthe industry, all companies have one thing in common: theymust have people to make their capital work for them. Thiswill be our focus throughout the text: generation of revenuethrough the use of people’s skills and abilities.What Is HRM?Human resource management (HRM) is the process ofemploying people, training them, compensating them,developing policies relating to them, and developingstrategies to retain them. As a field, HRM has undergonemany changes over the last twenty years, giving it an evenmore important role in today’s organizations. In the past,HRM meant processing payroll, sending birthday gifts toemployees, arranging company outings, and making sureforms were filled out correctly—in other words, more of anadministrative role rather than a strategic role crucial to thesuccess of the organization. Jack Welch, former CEO ofGeneral Electric and management guru, sums up the new roleof HRM: “Get out of the parties and birthdays andenrollment forms. Remember, HR is important in goodtimes, HR is defined in hard times.” [1]It’s necessary to point out here, at the very beginning of thistext, that every manager has some role relating to humanresource management. Just because we do not have the titleof HR manager doesn’t mean we won’t perform all or at leastsome of the HRM tasks. For example, most managers dealwith compensation, motivation, and retention ofemployees—making these aspects not only part of HRM butalso part of management. As a result, this book is equallyimportant to someone who wants to be an HR manager andto someone who will manage a business.Leading Innovative Organizations Series

Westover—Strategic Human Resource ManagementHuman Resource RecallHave you ever had to work with a human resourcedepartment at your job? What was the interaction like? Whatwas the department’s role in that specific organization?The Role of HRMKeep in mind that many functions of HRM are also tasksother department managers perform, which is what makesthis information important, despite the career path taken.Most experts agree on seven main roles that HRM plays inorganizations. These are described in the following sections.StaffingYou need people to perform tasks and get work done in theorganization. Even with the most sophisticated machines,humans are still needed. Because of this, one of the majortasks in HRM is staffing. Staffing involves the entire hiringprocess from posting a job to negotiating a salary package.Within the staffing function, there are four main steps:1. Development of a staffing plan. This plan allows HRM to seehow many people they should hire based on revenueexpectations.2. Development of policies to encourage multiculturalism at work.Multiculturalism in the workplace is becoming more andmore important, as we have many more people from avariety of backgrounds in the workforce.3. Recruitment. This involves finding people to fill the openpositions.4. Selection. In this stage, people will be interviewed andselected, and a proper compensation package will benegotiated. This step is followed by training, retention,and motivation.Development of Workplace PoliciesEvery organization has policies to ensure fairness andcontinuity within the organization. One of the jobs of HRMis to develop the verbiage surrounding these policies. In thedevelopment of policies, HRM, management, and executivesare involved in the process. For example, the HRMprofessional will likely recognize the need for a policy or achange of policy, seek opinions on the policy, write the policy,and then communicate that policy to employees. It is key tonote here that HR departments do not and cannot work alone.Everything they do needs to involve all other departments inthe organization. Some examples of workplace policies mightbe the following: Discipline process policy Vacation time policy Dress code —2Ethics policyInternet usage policyCompensation and Benefits AdministrationHRM professionals need to determine that compensation isfair, meets industry standards, and is high enough to enticepeople to work for the organization. Compensation includesanything the employee receives for his or her work. Inaddition, HRM professionals need to make sure the pay iscomparable to what other people performing similar jobs arebeing paid. This involves setting up pay systems that take intoconsideration the number of years with the organization,years of experience, education, and similar aspects. Examplesof employee compensation include the following: Health Benefits Pay 401(k) (retirement plans) Stock purchase plans Vacation time Sick leave Bonuses Tuition reimbursementRetentionHuman resource people must be aware of all the laws thataffect the workplace. HRM Retention involves keeping andmotivating employees to stay with the organization.Compensation is a major factor in employee retention, butthere are other factors as well. Ninety percent of employeesleave a company for the following reasons:1. The job they are performing2. Challenges with their manager3. Poor fit with organizational culture4. Poor workplace environmentDespite this, 90 percent of managers think employees leaveas a result of pay. [2] As a result, managers often try to changetheir compensation packages to keep people from leaving,when compensation isn’t the reason they are leaving at all.Training and DevelopmentOnce we have spent the time to hire new employees, we wantto make sure they not only are trained to do the job but alsocontinue to grow and develop new skills in their job. Thisresults in higher productivity for the organization. Training isalso a key component in employee motivation. Employeeswho feel they are developing their skills tend to be happier intheir jobs, which results in increased employee retention.Examples of training programs might include the following:Leading Innovative Organizations Series

Westover —Strategic Human Resource ManagementJob skills training, such as how to run a particularcomputer programTraining on communicationTeam-building activitiesPolicy and legal training, such as sexual harassmenttraining and ethics trainingDealing with Laws Affecting EmploymentHuman resource people must be aware of all the laws thataffect the workplace. An HRM professional might work withsome of these laws: Discrimination laws Health-care requirements Compensation requirements such as the minimum wage Worker safety laws Labor lawsThe legal environment of HRM is always changing, so HRMmust always be aware of changes taking place and thencommunicate those changes to the entire managementorganization. Rather than presenting a chapter focused onHRM laws, we will address these laws in each relevantchapter.Worker ProtectionSafety is a major consideration in all organizations.Oftentimes new laws are created with the goal of settingfederal or state standards to ensure worker safety. Unions andunion contracts can also impact the requirements for workersafety in a workplace. It is up to the human resource managerto be aware of worker protection requirements and ensurethe workplace is meeting both federal and union standards.Worker protection issues might include the following: Chemical hazards Heating and ventilation requirements Use of “no fragrance” zones Protection of private employee informationCommunicationBesides these major roles, good communication skills andexcellent management skills are key to successful humanresource management as well as general management.—3those things the company has no direct control over;however, they may be things that could positively ornegatively impact human resources. External factors mightinclude the following:1. Globalization and offshoring2. Changes to employment law3. Health-care costs4. Employee expectations5. Diversity of the workforce6. Changing demographics of the workforce7. A more highly educated workforce8. Layoffs and downsizing9. Technology used, such as HR databases10. Increased use of social networking to distributeinformation to employeesForexample,therecenttrendin flexible work schedules (allowing employees to set theirown schedules) and telecommuting (allowing employees towork from home or a remote location for a specified periodof time, such as one day per week) are external factors thathave affected HR. HRM has to be aware of these outsideissues, so they can develop policies that meet not only theneeds of the company but also the needs of the individuals.Another example is the Patient Protection and AffordableCare Act, signed into law in 2010. Compliance with this billhas huge implications for HR. For example, a company withmore than fifty employees must provide health-care coverageor pay a penalty. Currently, it is estimated that 60 percent ofemployers offer health-care insurance to theiremployees. [3] Because health-care insurance will bemandatory, cost concerns as well as using health benefits as arecruitment strategy are big external challenges. Any manageroperating without considering outside forces will likelyalienate employees, resulting in unmotivated, unhappyworkers. Not understanding the external factors can alsomean breaking the law, which has a concerning set ofimplications as well.One way managers can be aware of the outside forces is toattend conferences and read various articles on the web. Forexample, the website of the Society for Human ResourceManagement, SHRM Online, [4] not only has job postings inthe field but discusses many contemporary human resourceissues that may help the manager make better decisions whenit comes to people management.Awareness of External FactorsIn addition to managing internal factors, the HR managerneeds to consider the outside forces at play that may affectthe organization. Outside forces, or external factors, areLeading Innovative Organizations Series

Westover—Strategic Human Resource ManagementKEY TAKEAWAYS Capital includes all resources a company uses to generaterevenue. Human resources or the people working in theorganization are the most important resource.Human resource management is the process of employingpeople, training them, compensating them, developingpolicies relating to the workplace, and developingstrategies to retain employees.There are seven main responsibilities of HRM managers:staffing,settingpolicies,compensation andbenefits, retention, training, employment laws, and workerprotection. In this book, each of these major areas will beincluded in a chapter or two.In addition to being concerned with the seven internalaspects, HRM managers must keep up to date withchanges in the external environment that may impact theiremployees.Thetrendstoward flexibleschedules and telecommuting are examples of externalaspects.To effectively understand how the external forces mightaffect human resources, it is important for the HRmanager to read the HR literature, attend conferences,and utilize other ways to stay up to date with new laws,trends, and policies.EXERCISES1.2.State arguments for and against the following statement:there are other things more valuable in an organizationbesides the people who work there.Of the seven tasks an HR manager does, which do youthink is the most challenging? Why?[1] Kristen B. Frasch, David Shadovitz, and Jared Shelly, “There’s NoWhining in HR,” Human Resource Executive Online, June 30, 2009, accessedSeptember 24, d 227738167.[2] Leigh Rivenbark, “The 7 Hidden Reasons Why Employees Leave,” HRMagazine, May 2005, accessed October 10, 2010,http://findarticles.com/p/articles/mi m3495/is 5 50/ai n13721406.[3] Peter Cappelli, “HR Implications of Healthcare Reform,” HumanResource Executive Online, March 29, 2010, accessed August 18,2011, http://www.hreonline.com/HRE/story.jsp?storyId 379096509.[4] Society for Human Resource Management, accessed August 18, 2011,http://www.shrm.org/Pages/default.aspx.1.2 Skills Needed for HRMLEARNING OBJECTIVES1.2.Explain the professional and personal skills needed to besuccessful in HRM.Be able to define human resource management and thecertifications that can be achieved in this profession.—4One of the major factors of a successful manager or humanresource (HR) manager is an array of skills to deal with avariety of situations. It simply isn’t enough to have knowledgeof HR, such as knowing which forms need to be filled out. Ittakes multiple skills to create and manage people, as well as acutting-edge human resource department.The first skill needed is organization. The need for this skillmakes sense, given that you are managing people’s pay,benefits, and careers. Having organized files on yourcomputer and good time-management skills are crucial forsuccess in any job, but especially if you take on a role inhuman resources.Like most jobs, being able to multitask—that is, work onmore than one task at a time—is important in managinghuman resources. A typical person managing humanresources may have to deal with an employee issue oneminute, then switch and deal with recruiting. Unlike manymanagement positions, which only focus on one task or onepart of the business, human resources focuses on all areas ofthe business, where multitasking is a must.As trite as it may sound, people skills are necessary in any typeof management and perhaps might be the most importantskills for achieving success at any job. Being able to managea variety of personalities, deal with conflict, and coach othersare all in the realm of people management. The ability tocommunicate goes along with people skills. The ability tocommunicate good news (hiring a new employee), bad news(layoffs), and everything in between, such as changes topolicy, makes for an excellent manager and human resourcemanagement (HRM) professional.Keys to a successful career in HRM or management includeunderstanding specific job areas, such as managing theemployee database, understanding employment laws, andknowing how to write and develop a strategic plan that alignswith the business. All these skills will be discussed in thisbook.A strategic mind-set as an HR professional is a key skill aswell. A person with a strategic mind-set can plan far inadvance and look at trends that could affect the environmentin which the business is operating. Too often, managers focuson their own area and not enough on the business as a whole.The strategic HR professional is able to not only work withinhis or her area but also understand how HR fits into thebigger picture of the business.Leading Innovative Organizations Series

Westover—Strategic Human Resource ManagementEthics and a sense of fairness are also necessary in humanresources. Ethics is a concept that examines the moral rightsand wrongs of a certain situation. Consider the fact that manyHR managers negotiate salary and union contracts andmanage conflict. In addition, HR manage

Westover — Strategic Human Resource Management — vii Leading Innovative Organizations Series Preface The goal with this book is not only to provide the necessary academic background information but a