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Chapter 1
HR Roles, Strategy, and Planning
Chapter Overview
This chapter provides an overview of Human Resource Management by describing twelve
important considerations:
HR as Organizational Core Competency
HR Management as Organizational Contributor
Organizational Ethics and HR Management
Current and Future HR Management Challenges
Managing HR in Organizations
HR Management Roles
HR Management Competencies and Careers
Strategy and HR
Planning for External Workforce Availability
Forecasting HR Supply and Demand
Measuring Effectiveness of HR and Human Capital
Human Resources Audits
Many organizations today are looking at the management of human capital in their organizations.
The importance of measuring the value of human capital and viewing human resources as a core
competency for an organization is explored in the beginning of this chapter. A conceptual model
is presented that shows that HR management is composed of seven interlinked activities that are
significantly impacted by external forces (legal, economic, technological, global, environmental,
cultural/geographic, political, and social). These seven activities are identified and briefly
described:
HR Strategy and Planning
Equal employment opportunity
Staffing
Talent management and development
Rewards
Risk management and worker protection
Employee and labor relations
HR can contribute to organizational results in many ways. Two of the areas of contribution
include organizational culture and organizational productivity. HR management’s contributions
to each of these areas are explored.
Managing HR in organizations is discussed next. All managers engage in HR management but
they are not expected to know the details about HR regulations and HR systems that one would
expect from an HR professional. Smaller organizations (less than 100) typically do not have an
HR department and the owner or another manager usually takes care of HR issues. It is important
that there is cooperation between the operating managers and the HR staff for HR efforts to
succeed. Some of the common negative and positive views of HR are discussed.
The various roles that HR management may undertake are then described and include the
administrative, the operational and employee advocate, and the strategic roles. Next, the HR
competencies needed by all HR professionals and senior HR leaders are identified. Some
discussion of HR careers and various types of certification within the field of HR are also
included.
Current and future HR management challenges are then identified and explored. These include
organizational cost pressures; job changes; skill shortages; globalization of organizations and
HR; workforce demographics and diversity; HR technology; and measuring HR impact through
metrics.
Next, organizational ethics and HR is discussed. The relationship between ethics and
organizational culture and HR’s role in organizational ethics are covered.
This is followed by a discussion of organizational strategic planning including strategy
formulation, the strategic planning process, strategic competencies for HR professionals, and
operationalizing HR management strategies.
Environmental analysis, including both internal and external factors, is presented followed by
global competitiveness and strategic HR issues. Then some strategic challenges are presented:
managing a talent surplus, legal considerations for workforce reductions, and managing a talent
shortage.
The chapter closes with measuring effectiveness of HR initiatives. The development and use of
HR metrics is explored and specific strategic HR effectiveness tools such as benchmarking, the
balanced scorecard, and HR audits are discussed.
Chapter Outline
I. What is Human Resource Management?
Human resource (HR) management is designing formal systems in an organization to manage
human talent for accomplishing organizational goals. Whether a big company or a small
nonprofit organization, those employees must be paid, which means an appropriate and legal
A. Why Organizations Need HR Management
Despite the obvious differences between large and small organizations, the same HR issues
must be dealt with in every organization. In a sense every manager in an organization is an
HR manager. However, it is unrealistic to expect a nursing supervisor to know about the
B. Managing Human Resources in Organizations
Human Resources/human capital who work in organizations may have valuable contributions
they can make to the organization’s mission. But these contributions will occur only if people
In the United States and worldwide, small businesses employ more than half of all private-
sector employees and generate many new jobs each year. In surveys over several years by the
U.S. Small Business Association (SBA), the issues identified as significant concerns in small
organizations were consistent:
Not having enough qualified workers
Payroll taxes
All these concerns have an HR focus, especially when governmental compliance with
Other HR positions are added as specialists as the company grows larger. However, for HR to
be most useful it must remain firmly attached to the operating management of the
organization.
C. Human Resources as a Core Competency
The development and implementation of specific strategies must be based on the areas of
strength in an organization. Referred to as core competencies, those strengths are the
II. Productivity
In its most basic sense, productivity is a measure of the quantity and quality of work done,
considering the cost of the resources used. A useful way to measure the productivity of a
A. Improving Productivity
Productivity at the organizational level ultimately affects profitability and competitiveness in
a for-profit organization and total costs in a not-for-profit organization. Perhaps of all the
resources used in organizations, the ones most closely scrutinized are human resources. Many
HR management efforts are designed to enhance productivity. Among the major ways to
increase employee productivity are:
Organizational restructuring involves eliminating layers of management and changing
Redesigning work often involves having fewer employees who perform multiple job
Aligning HR activities means making HR efforts consistent with organizational efforts
to improve productivity. This alignment includes ensuring that staffing, training and
B. Organizational Culture
Organizational culture consists of the shared values and beliefs that give members of an
organization meaning and provide them with rules for behavior. These values are inherent in
The culture of an organization is seen in the norms of expected behaviors, values,
philosophies, rituals, and symbols used by its employees. Culture evolves over a period of
Culture is important because it tells people how to behave (or not to behave). It is relatively
constant and enduring over time. Newcomers learn the culture from the senior employees;
III. HR Management Functions
HR management is designing the formal systems that are used to manage people in a work
organization. Such systems need to be formal, that is agreed upon and written down for all to see.
Considering the areas where HR typically has to have formal systems yields seven interlocking
functions (Figure 1-1). These functions take place in a unique organizational format that is
IV. Roles for Human Resource Departments
If an organization has a formal HR group there are typically three different roles that group
might play in the organization. The mix of roles is:
Administrative—focusing on clerical administration and recordkeeping, including essential
Operational and employee advocate—managing most HR activities in keeping with the
employee “champion” for employee issues and concerns
Strategic—helping to define the business strategy relative to human capital and its
Although traditionally administrative role has been the dominant role for HR, there is a growing
emphasis on the operational and employee advocate role is growing in most organizations. The
strategic role requires that the HR team has the ability and orientation to contribute to strategic
Some HR administrative functions can be outsourced to vendors. Outsourcing of HR
administrative activities has grown dramatically in HR areas such as employee assistance
HR has been viewed as the “employee advocate” in some organizations. Employee advocacy
In the strategic role, HR is proactive in addressing business realities, focusing on future business
V. Human Resources Management Challenges
As the field of HR management evolves a challenging environment provides pressure for even
Competition keeps pressure on business organizations to keep costs down so that prices will not
A. Competition/Job Changes
An overriding theme facing managers and organizations is to operate in a “cost-less” mode,
which means continually looking for ways to reduce costs of all types—financial, operations,
equipment, and labor. Pressures from global competitors have forced many U.S. firms to:
Close facilities
Use international outsourcing
Increase productivity
Various regions of the United States face significant workforce shortages because of an
inadequate supply of workers with the skills needed to perform the emerging new jobs. It may
B. Global Influences
Critics of globalization cite the extremely low wage rates paid by some international firms
and the substandard working conditions that exist in some underdeveloped countries. Various
advocacy groups have accused global firms of being “sweatshop employers.” As a result,
C. A Changing Workforce
The U.S. workforce is more diverse racially and ethnically, more women are in it than ever
before, and the average age of its members is increasing. As a result of these demographic
For many workers in the United States, balancing the demands of family and work is a
significant challenge. Employers have had to respond to work/family concerns in order to
In many of the more economically developed countries, the population is aging, resulting in a
Contingent workers (temporary workers, independent contractors, leased employees, and part-
timers) now represent about one-fourth of the U.S. workforce. The number of contingent
Another reason for the increased use of contingent workers is that it may reduce legal liability
D. HR Technology
Using technology to support HR activities can increase the efficiency of the administrative
Technology can be used to support every function within human resource management.
Recruiting and selection processes have changed perhaps the most dramatically with
Training is now conducted with the aid of videos, podcasts, Web-enabled training
Employee self-service has simplified benefit enrollment and administration by allowing
Succession planning and career developments are enhanced with real-time information
One of the most important ways in which technology can contribute to organizational
VI. Organizational Ethics and Human Resource Management
Closely linked with the strategic role of HR is the way managers and HR professionals influence
Attention to ethics has grown in the past few years, as evidenced by the corporate scandals at
numerous financial and investment firms in the United States and globally. These scandals
When the following four elements of ethics programs exist, ethical behavior is more likely to
occur:
A written code of ethics and standards of conduct
VII. Human Resources Management Competencies and Careers
The transformation of HR toward being more strategic and professional has implications for the
competencies needed. HR professionals at all levels need the following:
Strategic knowledge and impact
Technology knowledge and usage abilities
A variety of jobs exists within the HR career field, ranging from executive to clerical. As an
organization grows large enough to need someone to focus primarily on HR activities, the role of
A. Human Resource Professionalism and Certification
The broad range of issues faced by HR professionals has made involvement in professional
associations and organizations important.
For HR generalists, the largest organization is the Society for Human Resource
Public-sector HR professionals tend to be concentrated in the International Personnel
Two other prominent specialized HR organizations are:
oThe World atWork Association
The most widely known HR certifications are the Professional in Human Resources (PHR)
The World atWork Association has certifications emphasizing compensation and benefits.
The four certifications are as follows:
Certified Compensation Professional (CCP)
Certified Work-Life Professional (CWLP)
