Chapter 1

Human Resource Management
Gary Dessler, Akram Al Ariss
Chapter 1: Introduction to Human Resource Management
Lecturer:
2 © Pearson Education 2012

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 resource 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.

Introductory Overview of Human Resource
Management

The Management Process
Planning
Controlling Organizing
Leading Staffing

Human Resource Management at Work
The HR function is primarily concerned with the “staffing”

component of the five management processes, namely,
planning, organizing, staffing, leading, and controlling.
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, managing, screening, developing, orienting,

training, rewarding, and appraising employees at work.

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 (key
elements of the staffing function)
Human Resources play a key role in helping companies meet

the challenges of global competition. Strategic objectives to
lower costs, improve productivity, and increase organizational
effectiveness are changing the way every part of the
organization, including the HR department, does business.

Why human resource management is
important to all managers?
• Human resource management can ensure that the company

get results through people, improve profits and performance
by hiring the right people and motivating them
appropriately.
• Another reason is that managers don’t want to make

personnel mistakes

Examples of Personnel Mistakes that Managers
Need to Avoid
• 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 taken to court because of unfair actions
against employees.
• Have your company taken to court for unsafe practices.
• Have some employees think their salaries are unfair 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 is 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 authority
– gives the right to issue orders
• Line manager
– A manager who is authorized to direct the work of
subordinates and is responsible for accomplishing the
organization’s tasks

Examples of Line Managers’ Human Resource
Duties
1. Placing the right person in 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 company’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

Line and Staff Aspects of HRM
• Staff authority
– gives the right to advise others in the organization
• Staff manager
– A manager who assists and advises line managers
– Staff managers are authorized to assist and advise line
managers in accomplishing their basic goals.
– The subordinates of staff managers are generally
involved in work that supports the products or
services, in departments like Purchasing, or Quality
Control
– HR managers are generally staff managers.

Human Resource Managers’ Duties
Line Function Coordinative

Line Authority Function
Implied Authority Functional Authority
Functions of
HR Managers
Staff Functions
Staff Authority
Innovator

Human Resource Specialties
Recruiters
Labor Relations Job Analysts

Specialists
Human
Resource
Specialties
Training Compensation
Specialists Managers

FIGURE 1-1
HR Organization Chart
for a Large Organization

FIGURE 1-2 HR Organizational Chart for a Small Organization

The Changing Environment of Human Resource
Management
• Human Resource responsibilities have become broader and

more strategic over time in response to a number of trends.
Changes are occurring today that are requiring HR
managers to play an increasing central role in managing
companies. These changes or trends include globalization,
changes in the nature of work, and technology.

Management
Globalization Trends
Technological Trends
Changes and Trends
in Human Resource
Management
Trends in the Nature of Work
Workforce Demographic Trends

Management – Globalization and competition
trends
• Companies expand abroad for several reasons.

Globalization refers to the tendency of firms to extend
their sales, ownership, and/or manufacturing to new
markets abroad.
– Dell, for example, is planning to supply PCs to China.
China is expected to become the largest market for
computers in the world.
– Companies such as Toyota, BMW, and Honda build and
sell some of their vehicles here in the U.S. and even
ship them to other countries from the U.S.

Management – Globalization and competition
trends
• The reasons for going global are many including: reaching
new markets, selling more products or services, lower labor
costs, forming partnerships, and becoming more
competitive.
• Globalization of the world economy and other trends has
triggered changes in how companies organize, manage, and
use their HR departments.
• The rate of globalization continues to be high, and has
several strategic implications for firms.
– More globalization means more competition, and more
competition means more pressure to lower costs,
make employees more productive, and do things
better and less expensively.

Management – Technological trends
• Virtual online communities, virtual design environments,
and Internet-based distribution systems have enabled firms
to become more competitive.
• The impact and growth in the use of smart phones and
tablet computers, such as the iPad, have opened doors to
people and the workplace in a way that previously has never
occurred.
• The speed of information exchange has contributed to the
growth of social networking sites such as Facebook and
LinkedIn. Facebook, for example, offers Facebook recruiting
which provides a rapid channel between employers and job-
seekers.
• HR faces the challenge of quickly applying technology to the
task of improving its own operations.

Management – Trends in the nature of work
• Jobs are changing due to new technological demands.

Dramatic increases in productivity have allowed
manufacturers to produce more with fewer employees.
• Nontraditional workers, such as those who hold multiple

jobs, “contingent” or part-time workers, or people working
in alternative work arrangements, enable employers to keep
costs down.
– Service Jobs – Most newly created jobs are and will
continue to be in the service sector.

Management – Trends in the nature of work
(cont.)
– High-Tech Jobs – More jobs have gone high tech,
requiring workers to have more education and skills.
Even traditional blue-collar jobs require more math,
reading, writing, and computer skills than ever before.
– Knowledge Work and Human Capital – This refers to

the knowledge, education, training, skills, and
expertise of a firm’s workers. The HR function must
employ more sophisticated and creative means to
identify, attract, select, train, and motivate the
required workforce.

Management – Workforce demographic trends
• The labor force is getting older and more multi-ethnic.
• The aging labor force presents significant changes in terms

of potential labor shortages, and many firms are instituting
new policies aimed at encouraging aging employees to stay,
or at re-hiring previously retired employees.
• Growing numbers of workers with eldercare responsibilities

and high rates of immigration also present challenges and
opportunities for HR managers.

Management – Workforce demographic trends
(cont.)
• Retirees –nontraditional workers, workers from abroad
– Retirees: Organizations must deal with the large
number of people leaving the workforce. In many
cases the number of younger workers entering the
workforce is not enough to fill all of the vacated
positions.
– Nontraditional Workers: These workers may hold
multiple jobs and may be contigent or part-time
employees. Technology is facilitating these alternate
work arrangement.
– Workers from Abroad: This is one way that
organizations are trying to overcome the large number
of retirees, but the option is sometimes met with
opposition as unemployment increases.

Management – Economic trends
• All of these trends are occurring in a context of challenge

and upheaval. For instance The recent and continuing
economic troubles in the U.S. also have impacted the ways
in which workers are hired and employed by companies.
– Fewer available jobs may mean broader
responsibilities for the workers within a given firm.
• While the economy is currently “in the tank,” undoubtedly it

will improve. HR management must remain effective during
times of economic upheaval yet plan for its future when the
economy turns around.

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

The Human Resource Manager’s Proficiencies
Managing within the Law
• Immigration laws
• Occupational safety and health laws
• Labor laws
Managing Ethics
• Ethical lapses have occurred in major corporations

• Most serious ethical lapses are HR-related
• Arab world ethics are influenced by religion and ethnicity

Ethical issues relate to human resource
management
• Six of the ten most serious workplace ethical issues—

workplace safety, security of employee records, employee
theft, affirmative action, comparable work, and employee
privacy rights—are human resource management related.
• Ethics means the standards someone uses to decide what

his or her conduct should be. For example prosecutors filed
criminal charges against those who violate employment law
by hiring: children younger than 16; or illegal immigrants;
those HR managers are violating ethical standards.

management
• Managers can use personnel activities to support the

employer’s ethics goals.
– Screening out undesirables actually can start before
the applicant applies. This is more likely if the HR
department creates recruiting materials containing
explicit references to the company’s emphasis on
integrity and ethics.
– Interviewing using questions about ethical behavior

and managing other aspects of the selection process
sends signals about the company’s ethical values and
culture.

management
– Ethics training typically plays a big role in helping

employers nurture a culture of ethics and fair play.
Such training usually includes showing employees how
to recognize ethical dilemmas. It also includes how to
use ethical frameworks to resolve problems, and how
to use HR functions in ethical ways.
– The firm’s performance appraisal processes provide

another opportunity to emphasize a commitment to
ethics and fairness. The appraisal can actually
measure employees’ adherence to high ethical
standards.

management
• Managers and organizations need to reward ethical behavior

and penalize unethical behavior. However, care must be
taken in rewarding ethical behavior so as not to undermine
the intrinsic value of behaving in an ethical manner

The Human Resource Manager’s Proficiencies
(cont.)
• Managing With the HR Scorecard Process.

– The HR Scorecard is a concise measurement system,
showing quantitative standards or “metrics” used to
measure HR activities, employee behaviors resulting
from these activities, and to measure the strategically
relevant organizational outcomes of those employee
behaviors.
– The scorecard highlights the causal link between HR

activities, emergent employee behaviors, and the
resulting firm-wide strategic outcomes and
performance.

The New Human Resource Manager
Big Transactional
picture Services
The New
Human
1 Talent
Competencies Resource Management
Managers
Performance,
results,
evidence- Employee Ethics
based practice Engagement
Copyright © 2015 Pearson Education Ltd. 1-25

• Human resource management competences capacity- AS

the human resource management is the process of
acquiring, training, appraising, and compensating
employees, and of attending to their labor relations, health
and safety, and fairness concerns.
• Strategizing, internal consulting, and dealing with outside

vendors and technology call for new human resource
management competencies.

• Human resource managers need to be:

– Talent Managers/Organization Designers: With a
mastery of traditional human resource management
tasks such as acquiring, training, and compensating
employees.
– Culture and Change Stewards: Able to create human
resource practices that support the firm’s culture
values.
– Strategy Architects: With the skills to help establish
the company’s overall strategic plan, and to put in
place the human resource practices required to
support accomplishing that plan.

– Operational Executors: able to anticipate, draft, and

implement the human resource practices (for instance
interviewing, testing, selection, appraising) the
company needs to implement its strategies.
– Business Allies: competent to apply business
knowledge (for instance in finance, marketing, sales,
and production) that enable them to help functional an
general managers to achieve their department goals.
– Credible Activists: With the leadership and other
competencies that make them “both credible
(respected, admired, listened to) and active (offers a
point of view, takes a position, challenges
assumptions)”

Evidence-based human resource management
• Evidence-based human resource management means using

data, facts, analytics, scientific rigor, critical evaluation, and
critically evaluated research/case studies to support human
resource management proposals, decisions, practices, and
conclusions.
• But how can HR managers be scientific? Objectivity,
experimentation, and prediction are the heart of science.
For managers, the point of being “scientific” is to make
better decisions by forcing gather different facts.
• Data such as cost-per-hire are interesting but relatively
useless until converted to information.
– Information- is data presented in a form that makes it
useful for making decisions.

• Evidence-based human resource management involves the

use of the best available evidence with respect to human
resource practices. For example, tracking median HR
expense as a percentage of a company’s total operating
costs may average less than 1%. The use of this and similar
metrics will help control expenses and contribute to profits.
It is the scientific way of doing things.
• Decision making based on objective review of the evidence
is important. Managers today strive to make decisions
based on an analysis of the evidence.

• The key point of being scientific is to make better decisions;

the problem is that what is “intuitively obvious” can be
misleading.
• Managers should use evidence-based human resource

management because unless managers take a healthy,
skeptical, evidence-based approach to human resources,
they may jump to the wrong managerial conclusions.

Important Human Resource Manager
Competencies
Human Resource Manager’s

Competencies
• Strategic positioners
• Credible activists
• Capability builders 1
• Capability builders
• HR innovators and
integrators
• Technology proponents
Copyright © 2015 Pearson Education Ltd. 1-28

Competencies
• Strategic positioners—for instance, by helping to create

the firm’s strategy.
• Credible activists—for instance, by exhibiting the

leadership and other competencies that make them “both
credible (respected, admired, listened to) and active (offers
a point of view, takes a position, challenges assumptions).

Competencies
• Capability builders—for instance, by creating a meaningful

work environment and aligning strategy, culture, practices,
and behavior. Capability builders—for instance, by initiating
and sustaining change.
• HR innovators and integrators—for instance, by

developing talent, and optimizing human capital through
workforce planning and analytics.
• Technology proponents—for instance, by connecting

people through technology.

Review

Key Terms
authority line authority

ethics line manager
functional authority or management process
functional control
metrics
globalization
outsourcing
high-performance work system
staff authority
HR Scorecard
staff manager
human capital
strategic human resource
human resource management management (SHRM)
(HRM)
strategic plan
implied authority
strategy

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Human Resource Management

Gary Dessler, Akram Al Ariss

Chapter 1: Introduction to Human Resource Management

2 © Pearson Education 2012

1. Explain what human resource management is and how it

3 © Pearson Education 2012

4 © Pearson Education 2012

5 © Pearson Education 2012

The HR function is primarily concerned with the “staffing”

What is Human Resource Management (HRM)?

The policies and practices involved in carrying out the ‘people’

Recruiting, managing, screening, developing, orienting,

6 © Pearson Education 2012

Labor Relations Compensating

7 © Pearson Education 2012

Human Resources play a key role in helping companies meet

8 © Pearson Education 2012

• Human resource management can ensure that the company

• Another reason is that managers don’t want to make

9 © Pearson Education 2012

10 © Pearson Education 2012

• The bottom line of managing is getting results.

11 © Pearson Education 2012

12 © Pearson Education 2012

13 © Pearson Education 2012

14 © Pearson Education 2012

Line Function Coordinative

15 © Pearson Education 2012

Labor Relations Job Analysts

16 © Pearson Education 2012

17 © Pearson Education 2012

18 © Pearson Education 2012

• Human Resource responsibilities have become broader and

19 © Pearson Education 2012

Workforce Demographic Trends

20 © Pearson Education 2012

• Companies expand abroad for several reasons.

21 © Pearson Education 2012

22 © Pearson Education 2012

23 © Pearson Education 2012

• Jobs are changing due to new technological demands.

• Nontraditional workers, such as those who hold multiple

24 © Pearson Education 2012

– Knowledge Work and Human Capital – This refers to

25 © Pearson Education 2012

• The labor force is getting older and more multi-ethnic.

• The aging labor force presents significant changes in terms

• Growing numbers of workers with eldercare responsibilities

26 © Pearson Education 2012

27 © Pearson Education 2012

• All of these trends are occurring in a context of challenge

• While the economy is currently “in the tank,” undoubtedly it

28 © Pearson Education 2012

Managing with the New Creating High-

Measuring the HRM

29 © Pearson Education 2012

Managing within the Law

• Ethical lapses have occurred in major corporations

30 © Pearson Education 2012

• Six of the ten most serious workplace ethical issues—

• Ethics means the standards someone uses to decide what

31 © Pearson Education 2012

• Managers can use personnel activities to support the