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C H A P T E R T O n e

1
The Strategic Role of
Human Resource
Management

Lecture Outline
Strategic Overview
The Managers Human Resource Management Jobs
Why is HR Management Important to all
Managers?
Cooperative Line & Staff HRM: An Example
Strategic Planning and HR Management In Brief: This chapter gives an
The Basics of Strategic Planning overview of what HR is, its changing
The Strategic Planning Process environment, the role of HR in
Basic Strategic Trends
strategic planning, and the plan of
Managerial Consequences of the Basic Trends
HRs Strategic Role
this book.
HRs Evolving Role
Strategic Human Resource Management Interesting Issues: A major issue is
HRs Role as a Strategic Partner the changing role of HR in
HR and Technology organizations. Where HR was once a
HR.net clerical function that was relegated to
HR Employee Performance and Commitment
the lower echelons of the
Strategic HR
Is There a One Best Way? organization, today more and more
Research Insight companies have elevated the HR
The Plan of This Book function to an integral part of the
Part II: Recruitment and Placement senior planning team. Having
Part III: Training and Development students research and show these
Part IV: Compensation
types of changes in organizations
Part V: Employee Safety and Security
Part VI: International HRM
may be a useful and important
learning tool.

2
ANNOTATED OUTLINE

I. The Managers Human Resource Management Jobs The Management process

involves the following functions: planning, organizing, staffing (human resource
management), leading, and controlling. HRM involves: conducting job analyses; 1-1
planning labor needs and recruiting job candidates; selecting job candidates; 1-2
orienting and training new employees; managing wages and salaries; providing 1-3
incentives and benefits; appraising performance; communicating; training and 1-4
developing managers; building employee commitment; being knowledgeable about 1-5
equal opportunity, affirmative action, and employee health and safety; and handling 1-6
grievances and labor relations. 1-7
1-8
A. Why Is HR Management Important to All Managers? Managers dont want to 1-9
make mistakes while managing. 1-10
1-11
B. Line and Staff Aspects of HRM Although most firms have a human resource 1-12
department with its own manager, all other managers tend to get involved in 1-13
activities like recruiting, interviewing, selecting, and training. 1-14
1-15
1. Line Versus Staff Authority Authority is the right to make decisions, to direct 1-16
the work of others, and to give orders. Line managers are authorized to 1-17
direct the work of subordinates. Staff managers are authorized to assist and
advise line managers in accomplishing their basic goals. HR managers are
generally staff managers.

2. Line Managers HRM Responsibilities Most line managers are responsible

for line functions, coordinative functions, and some staff functions.

C. Cooperative Line and Staff HR Management: An Example In recruiting and

hiring, its generally the line managers responsibility to specify the qualifications
employees need to fill specific positions. Then the HR staff takes over. They
develop sources of qualified applicants and conduct initial screening interviews.
They administer the appropriate test. Then they refer the best applicants to the
supervisor (line manager), who interviews and selects the ones he/she wants.

NOTES Educational Materials to Use

II. Strategic Planning and Strategic Trends

A. The Basics of Strategic Planning A strategy is the companys plan for how it will 1-18
balance its internal strengths and weaknesses with its external opportunities and 1-19
threats and maintain a competitive advantage. Managers engage in three levels 1-20
of strategic planning: corporate-level strategy, business-level competitive
strategy, and functional strategies.

B. The Strategic Planning Process entails conducting a SWOT analysis to identify its
strengths, weaknesses, opportunities, and threats.

3
 C. Basic Strategic Trends

1. Globalization refers to the tendency of firms to extend their sales, ownership,

and/or manufacturing to new markets abroad. For businesses everywhere, 1-21
the rate of globalization in the past decade has been enormous, and has 1-22
several strategic implications for firms. 1-23
1-24
2. Technological Advances have been forcing, and enabling, firms to become
more competitive.

3. The Nature of Work is changing due to new technological demands.

4. The Workforce demographics are changing as well. Its becoming more

diverse as women, minority-group members, and older workers enter the
workforce.

D. Managerial Consequences of the Basic Trends Managers have to craft

strategies that balance opportunities and threats (like those previously
discussed) with their firms strengths and weaknesses, such as global
expansion and improved competitiveness strategies. These types of strategies
are driving other organizational changes.

NOTES Educational Materials to Use

III. HRs Strategic Role

A. HRs Evolving Role Its the firms workforce that provides the competitive 1-25
advantage for the firm. HRs role is shifting from protector and screener to 1-26
strategic partner and change agent. 1-27
1-28
B. Strategic Human Resource Management refers to improving business 1-29
performance and developing an organizational culture that fosters innovation and 1-30
flexibility by linking HRM with the strategic goals and objectives of the firm.

C. HRs Role As a Strategic Partner can be seen as either adapting individual HR

practices to fit specific corporate and competitive strategies or as an equal
partner in the strategic planning process.

1. HRs Role in Executing Strategy Execution has been HRs traditional

strategic role.

2. HR and Value Chain Analysis Strategy execution usually involves

identifying and reducing costs, and therefore value chain analysis.

3. HRs Role in Formulating Strategy HR management can play a role in

environmental scanning by assisting in identifying and analyzing external
opportunities and threats that may be crucial to the companys success.

4
 D. HR and Technology Technology is strategically changing HR.

1. Basic HR Systems - Most firms have computerized their individual HR tasks.

Have your students visit the website for the international association for 1-31
human resource information management to see a buyers guide that lists 1-32
software vendors by functional category: 1-33
http://www.ihrim.org/marketplace/buyers_guide/buyers_guide_cat.html. 1-34
1-35
2. Human Resource Information Systems (HRIS) refers to interrelated HR 1-36
systems working together to support various human resource management
activities.

3. HR and the Internet The Internet has enabled HR departments to shift

some activities to specialized online HR service providers. The HR.NET
feature shows how the Internet can be used to put some HR services online
with the use of HR portals, so that HR managers can focus on more strategic
issues.

E. HR and Employee Performance and Commitment There is considerable

anecdotal evidence to suggest that HR can have a measurable impact on a
companys bottom line.

1. Strategic HR Dells HR managers have to continuously help Dells top

management execute the firms low-cost leader strategy.

F. Is There a One Best HR Way? While studies suggest that some HR

approaches are applicable to all or most companies, there does not appear to be
one best HR way.

1. Research Insight Two studies have shown that HR practices should be

designed to fit each firms specific strategy, and that HR practices may have
to be modified as the firms strategy is modified.

NOTES Educational Materials to Use

IV. The Plan of This Book

A. Chapter 2: Equal Opportunity and the Law 1-37

1-38
B. Part II: Recruitment and Placement 1-39
1-40
1. Chapter 3: Job Analysis 1-41
2. Chapter 4: Personnel Planning and Recruiting
3. Chapter 5: Employee Testing and Selection
4. Chapter 6: Interviewing Job Candidates

C. Part III: Training and Development

1. Chapter 7: Training and Development

2. Chapter 8: Managing Organizational Renewal
3. Chapter 9: Appraising Performance

5
 4. Chapter 10: Managing Careers and Fair Treatment

D. Part IV: Compensation

1. Chapter 11: Establishing Pay Plans

2. Chapter 12: Pay-for-Performance and Financial Incentives
3. Chapter 13: Benefits and Services

E. Part V: Employee Security and Safety

1. Chapter 14: Labor Relations and Collective Bargaining

2. Chapter 15: Employee Safety and Health

F. Part VI: International HRM

1. Chapter 16: Managing Human Resources in an International Business

NOTES Educational Materials to Use

KEY TERMS
management process The five basic functions of management are: planning, organizing,
staffing, leading, and controlling.

human resource The staffing function of the management process. Or, the
management policies and practices needed to carry out the "people" or human
resource aspects of a management position, including recruiting,
screening, training, rewarding, and appraising.

authority The right to make decisions, to direct the work of others, and to give
orders.

line manager Authorized to direct the work of subordinates-they're always someone's

boss. In addition, line managers are in charge of accomplishing the
organization's basic goals.

staff manager Assist and advise line managers in accomplishing the basic goals. HR
managers are generally staff managers.

line authority The authority to direct the activities of the people in his or her own
department.

implied authority The authority exerted by virtue of others' knowledge that he or she has
access to top management.

functional control The authority exerted by a personnel manager as a coordinator of

personnel activities.

6
employee advocacy HR must take responsibility for clearly defining how management should
be treating employees, make sure employees have the mechanisms
required to contest unfair practices, and represent the interests of
employees within the framework of its primary obligation to senior
management.

strategy The companys long-term plan for how it will balance its internal
strengths and weaknesses with its external opportunities and threats to
maintain a competitive advantage.

globalization The tendency of firms to extend their sales or manufacturing to new

markets abroad.

human capital The knowledge, education, training, skills, and expertise of a firms
workers.

strategic human The linking of HRM with the strategic goals and objectices in order to
resources management improve business performance and develop organizational cultures that
foster innovation and flexibility.

value chain analysis Identifying the primary activities that create value for customers and the
related support activities.

outsourcing Letting outside vendors provide services

commitment An employees identification with and agreement to pursue the

companys or the units mission.

DISCUSSION QUESTIONS

1. Explain what HR management is and how it relates to the management process. There are five
basic functions that all managers perform: planning, organizing, staffing, leading, and controlling. HR
management involves the policies and practices needed to carry out the staffing (or people) function
of management. HR management helps the management process avoid mistakes and to get results.

2. Give several examples of how HR management concepts and techniques can be of use to all
managers. HR management concepts and techniques can help all managers to ensure that they get
results--through others. These concepts and techniques also help you to avoid common personnel
mistakes such as: hiring the wrong person; experiencing high turnover; finding your people not doing
their best; wasting time with useless interviews; having your company taken to court because of
discriminatory actions; having your company cited under federal occupational safety laws 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 departments effectiveness, and commit any
unfair labor practices.

3. Illustrate the HR responsibilities of line and staff managers. Line managers are someone's boss;
they direct the work of subordinates in pursuit of accomplishing the organization's basic goals. Some
examples of the HR responsibilities of line managers are: placing the right person on the 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 companys policies and procedures; controlling labor costs;
developing the abilities of each person; creating and maintaining department morale; and protecting
employees health and physical conditions. Staff managers assist and advise line managers in
accomplishing these basic goals. They do, however, need to work in partnership with each other to
be successful. Some examples of the HR responsibilities of staff managers include assistance in

7
 hiring, training, evaluating, rewarding, counseling, promoting, and firing of employees, and the
administering of various benefits programs.

4. Why is it important for a company to make its human resources into a competitive advantage?
How can HR contribute to doing so? Building and maintaining a competitive advantage is what
allows a company to be successful, and to remain profitable and in business. HR can make a critical
contribution to the competitive advantage of a company by building the organizational climate and
structure that allows the company to tap its special skills or core competencies and rapidly respond to
customers' needs and competitors' moves.

5. Discuss and illustrate HRs role in the strategic planning process? "...the linking of HRM with
strategic goals and objectives in order to improve business performance and develop organizational
cultures that foster innovation and flexibility ..."
The role of HR in the strategic planning process depends on the organization's view of HR. There are
three views detailed in the text which involve HR as an operational function, HR as a "fitting" function,
and HR as an equal partner in the strategic planning process. Obviously, it is our contention that the
latter is the appropriate view. In this view, HR's role would include environmental scanning,
competitive intelligence, internal strengths and weaknesses analysis, and the implementation of the
strategies.

DESSLER COMPANION WEB SITE

We invite you to visit the Dessler homepage (http://www.prenhall.com/dessler) on the
Prentice Hall Web site for the best online business support available. This site
provides professors with a customized course Web site, including new
communication tools, one-click navigation of chapter content, and great resources,
such as Internet Resources, an HRCI Exam Prep Guide, assessment exercises, and
more.

INDIVIDUAL AND GROUP ACTIVITIES

1. Working individually or in groups, develop several lists showing how trends like work force
diversity, technological trends, globalization, and changes in the nature of work have affected
the college or university you are now attending. Present in class. The list might include items
such as the growth of adult (non-traditional aged) students, the use of computer and communications
technology, diversity issues, and others.

2. Working individually or in groups, contact the HR manager of a local bank. Ask the HR
manager how he or she is working as a strategic partner to manage human resources, given
the banks strategic goals and objectives. Back in class, discuss the responses of the
different HR managers. The students should the HR manager to discuss how his/her role as a
strategic partner is improving the banks performance, and if the banks culture is more innovative and
flexible as a result of the strategic partnership.

3. Working individually or in groups, interview an HR manager; based on that interview write a

short presentation regarding HR's role today in building a more responsive organization. The
response here will, of course, depend upon the organization and HR manager interviewed. Hopefully
items such as work force diversity, technological trends, globalization, organizational structures,
empowerment, teams, or employee commitment will be mentioned.

4. Working individually or in groups, bring several business publications such as Business Week
and the Wall Street Journal to class. Based on their content, compile a list entitled, What HR

8
 managers and departments do today. The students should look for articles and advertisements
that deal with any of the following topics: conducting job analyses, planning labor needs and
recruiting job candidates; selecting job candidates; orienting, training, and developing employees;
managing wages and salaries; providing incentives and benefits; appraising performance;
communicating; training and developing managers; building employee commitment; equal
opportunity; affirmative action; employee health and safety; and labor relations.

EXPERIENTIAL EXERCISES & CASES

Experiential Exercise: HRM As A Strategic Partner in Strategic Planning

Examples of possible answers to the critical issues are:

Critical Issue Effect on existing employees Potential HR role(s)
(Example) (Example) (Example)
1. Distance learning Need for better computer skills. Provide greater technical training.
technology
2. Government Less money for raises potential Focus on HR programs that increase
reductions in funding turnover job satisfaction. Improvements in
to higher education productivity.
3. Greater workforce Current employees may have Diversity training needs will increase
diversity communication difficulties;
culture shock
4. More international Greater classroom diversity; Cross cultural training for faculty.
students communication challenge. Orientation for International students.

5. High percentage of More faculty will be needed Recruiting program to attract faculty.
faculty to retire over Retention program for existing faculty.
next decade. Retirement programs for retirees.

Questions:

1. Which environmental trend would have the greatest impact on the human resource needs of
the university? Students will form their own opinions (there is no right answer). Probe students as
to how they reached their decision. Most likely either the reductions in government funding or the
local business will develop its own corporate university.

2. What environmental change will be the most difficult for your HR group to manage? You should
expect a range of responses based on local conditions. Diversity will likely surface as a major issue.
Any of the critical issues could top this chart. Look for good rationale that displays an understanding
of the complications that each one presents for a HR staff.

3. Overall, how will this combination of trends affect your organization? Bright students will
consider issues like the staffing level of the current HR organization. Some may raise the issue of
who trains the trainers? Students should note that in every environmental change, there are some
effect on the HR needs of the organization and therefore on the HR department itself. These
changes will force the organization to become more responsive and proactive to change, and focused
on meeting the competitive challenges of the environment.

9
Application Case: Jack Nelson's Problem

1. What do you think was causing some of the problems in the bank home office and branches?
There is clearly a problem with communication, and the effects are felt in the area of employee
commitment. Additional contributing factors include the lack of consistency in the policies and
procedures of various locations. There is no cohesiveness to the staffing activities of this
organization.
2. Do you think setting up a HR unit in the main office would help? Of course we think it would!
Since there are HR-related problems both in the home office and in the branches, it is clear that if a
personnel office were set up, it would need to help to coordinate the HR activities in the branches.

3. What specific functions should it carry out? What HR functions would then be carried out by
supervisors and other line managers? What role should the Internet play in the new HR
organization? There is room for quite a bit of variation in the answers to this question. Our
suggested organization would include:
HR Unit: job analyses, planning labor needs and recruiting, providing advising and training in the
selection process, orientation of new employees, managing wage and salary administration,
managing incentives and benefits, providing and managing the performance appraisal process,
organization-wide communications, and providing training & developing services.
Supervisors and Other Line Managers: interviewing and selection of job candidates, training new
employees, appraising performance, departmental & personal communications, and training &
development.
Internet and HR: shift some activities to specialized online service portals and/or providers.

Continuing Case: LearnInMotion.com Introduction

1. Would a company like this with just a few employees and independent contractors have any
HR tasks to address? What do you think those might be? Yes, a company like this would have to
address many HR tasks. Some of the HR tasks this company might have to address include, but are
not limited to: job analyses, assessing labor needs, recruiting job candidates, selecting job
candidates, orienting, training, and developing employees, managing wages and salaries, providing
incentives and benefits, and appraising performance.

2. Based on your review of the online catalogs of firms such as Office Max, Staples, HRNext.com,
what basic HR systems would you recommend to Jennifer and Mel? Some examples of the
students should come up with in terms of basic HR systems offer by firms such as Office Max,
Staples, and HRNext.com to recommend to Jennifer and Mel include: recruiting and hiring forms,
employment agreement forms; confidentiality and noncompete agreement forms; employee
background verification forms, personnel data sheets, time records, and performance appraisal
forms.

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CHAPTER 1 POWERPOINTS

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