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Chapter 1: Human Resource Management in Organizations

Chapter 1: Human Resource Management

in Organizations

Table of Contents

Chapter Summary

Learning Objectives

Lecture Outline

Critical Thinking Challenges

Case: Organizational Culture Gone Wrong

Supplemental Cases

Extra Teaching Video

Chapter Summary

Chapter 1 provides an overview of human resource management in today’s organizations. The

chapter defines human resource management and human capital. It describes how human

resource management and employees can be core competencies for organizations. It explains the

Learning Objectives

After students have read this chapter, they should be able to accomplish the following objectives:

• Understand human resource management and define human capital.

• Identify how human resource management and employees can be core competencies for

organizations.

• Name the seven categories of HR functions.

Lecture Outline

1-1. What Is Human Resource Management?

HR Headline: Cool Commitment at Igloo

Igloo brand achieves its competitive advantage through the contribution of its employees.

The CEO, Mark Parrish, adopted a servant leadership approach that focuses on building

trust, withholding judgment, creating a dialogue, empowering employees, and instituting a

culture of collective success. The company measures that collective success in four areas

(in this order): people, quality, service, and cost. Igloo commits to its employees, who

return that commitment through their personal dedication to the company’s success.

Chapter 1: Human Resource Management in Organizations

1-1a. Why Organizations Need HR Management

• Despite the obvious differences between large and small organizations, the same HR

activities must take place in every firm.

Discussion Starter: Ask students how an HR department can foster a positive image.

• The need for HR increases as an organization grows until it evolves into a distinct function

with specialists assigned to specific duties.

1-2. Managing Human Resources in Organizations

1-2a. Human Resource Management as a Core Competency

1-2b. Employees as a Core Competency

HR Perspective: Transforming HR at Popeyes Louisiana Kitchen

The HR department at Popeyes has grown and changed over time to meet the company’s needs

and focus on corporate strategy. Today, the department handles more issues than it ever has.

Servant leadership requires leaders to believe that the needs of the company and the employees

outweigh their own concerns. Although the HR personnel face challenges, corporate

expectations are high.

1. Given the issues at Popeyes, how would you redesign an HR department in any

organization to better tackle a company’s needs?

Students’ answers will vary. They should determine the company’s needs before

changing the HR department’s organization.

2. How might HR processes be redesigned to become more efficient? What technologies

might be used to improve HR processes and provide better service to managers and

employees?

Students’ answers will vary. They should consider technology that automates applicant

tracking, facilitates reporting, and analyzes HR data. Tools such as online surveys that

can provide details on the effectiveness of the HR processes can also be included. Care

should be taken to balance technology and more personal ways to work with employees

in multinational operations.

Chapter 1: Human Resource Management in Organizations

• Organizations must manage the following four types of assets to be successful:

o Physical assets

• Human capital is the collective value of the capabilities, knowledge, skills, life

experiences, and motivation of an organization’s workforce.

Teaching Tip: Figure 1-2 provides details on the ability-motivation-opportunity model.

• Productivity is a measure of the quantity and quality of work done, considering the cost

Teaching Tip: Figure 1-3 identifies four ways to increase organizational productivity and

reduce unit labor costs: organizational restructuring, redesigning work, aligning HR activities,

and outsourcing analysis.

• In addition to productivity, both customer service and quality efforts can significantly

affect organizational effectiveness, making them key areas that HR can emphasize when

developing employees as core competencies.

Discussion Starter: Ask students to describe the culture at different local or national

companies. For example, some companies have reputations for being fun places to work.

1-3. HR Management Functions

HR Competencies & Applications: Building Healthy Organizations

Key Competencies: Leadership & Navigation (Behavioral Competency) and

Organization (Technical Competency)

The HR department can help the company create positive organizational health to

motivate employees and inspire customer loyalty. HR professionals function as

leaders by developing policies, such as management development, performance

feedback, and fair rewards.

1-4c. Strategic Role for Human Resources

• HR is involved in devising and implementing strategy.

1-5. Human Resources Management Challenges

1-5a. Competition, Cost Pressures, and Restructuring

• An overriding theme facing managers and organizations is the need to operate in a

“cost–less” mode, which means continually looking for ways to reduce costs of all

Discussion Starter: Survey the students in the class to determine the most popular industries

for work. Compare the results to the industries represented by the occupations in Figure 1-6.

• Various regions of the United States and different industries face significant workforce

shortages because of an inadequate supply of workers with the skills needed to perform

emerging jobs.

1-5b. Globalization

• The globalization of business has shifted from trade and investment to the integration of

1-5c. A Changing Workforce

1-5d. Human Resources and Technology

• Many organizations are replacing some of their aging HR software with new technology

that automates applicant tracking, facilitates reporting, and analyzes HR data.

Chapter 1: Human Resource Management in Organizations

• The growth of the Internet has led to the creation of numerous platforms in which

individuals can interact.

Discussion Starter: Discuss how information released to the public can affect a company’s

1-6. Organizational Ethics and Human Resource Management

• Closely linked with the strategic role of HR is the way managers and HR staff influence

1-6a. Ethical Culture and Practices

• When the following programs exist, an ethical culture often develops, and ethical

behavior is encouraged:

o Written code of ethics and standards of conduct

HR Ethics: HR Keeps Organization on Straight and Narrow

While most HR professionals are not trained as attorneys, there is a greater expectation that

HR will serve a role as corporate conscience, helping the organization to avoid legal and

ethical problems. Ensuring that compliance programs go beyond mandated requirements and

reflect corporate values makes these programs more meaningful to employees and more

sustainable. Unlike black-and-white legal compliance questions, ethical dilemmas are often

more complex and rely on a philosophical approach rather than a compliance mindset.

Having a code of conduct and ethics policy in place and consistently enforcing them are keys

to setting a tone within the organization where employees are clear on how they should

behave when working on the company’s behalf.

1. How can HR staff ensure that top leaders are held to the same standards of behavior as

line employees? What would you recommend HR staff do to demonstrate consistent

enforcement and application of these standards?

Students’ answers will vary. They should consider the enforcement of a thorough code

of conduct and ethics policy that will be applicable to all the individuals that are a

part of the organization, irrespective of the hierarchy. HR staff can conduct frequent

sessions on issues such as bribery, sexual indiscretions, insider trading, negligence, and

misbehavior. This will create an awareness among employees on what is happening

Chapter 1: Human Resource Management in Organizations

Human Resource Certification Institute (HRCI).

Critical Thinking Challenges

1. Discuss several areas in which HR can affect organizational culture positively or

negatively.

Culture can facilitate high employee job performance. Excellent ideas can be enhanced by

2. Give some examples of ethical issues that you have experienced in jobs and explain how

HR did or did not help resolve them.

3. Why is it important for HR management to transform from being primarily administrative

and operational to a more strategic contributor?

4. Assume you are an HR Director with a staff of seven people. A departmental objective is

for all staff members to become professionally certified within a year. Using the Internet

resources of HR associations, such as www.shrm.org and www.WorldatWork.org, develop

a table that identifies four to six certifications that could be obtained by your staff members

and show the important details for each certification.

5. Your company, a growing firm in the financial services industry, is extremely sensitive to

the issues surrounding business ethics. The company wants to be proactive in developing a

business ethics training program for all employees, both to ensure the company’s

reputation as an ethical organization in the community and to help maintain the industry’s

high standards. As the HR Director and someone who values the importance of having all

employees trained in the area of business ethics, you are in charge of developing the ethics

Chapter 1: Human Resource Management in Organizations

A. What legislative act prompted many U.S. companies to develop internal ethical

policies and procedures?

B. What are key concepts related to business ethics that should be considered in the

development of the ethics training program?

When the following programs exist, an ethical culture often develops, and ethical

behavior is encouraged:

• A written code of ethics and standards of conduct

Case: Organizational Culture Gone Wrong

Wells Fargo Bank pressured employees to cross-sell products to customers by setting unrealistic

sales targets for each employee, which resulted in an outbreak of rampant fraudulent activities in

the organization in an attempt to meet those targets.

1. How did the culture at Wells Fargo become so focused on growing sales through cross-

selling? What might be done in the future to reduce the reliance on single outcomes for

rewarding employees?

2. What steps should an employee take when faced with coworkers who are acting

unethically in order to meet performance objectives? How could HR be informed and

asked to help remedy such situations?

Supplemental Cases

Water Quality Association: Building Competencies with Technology

Chapter 1: Human Resource Management in Organizations

This case describes a company that uses strategic training initiatives such as experiential and

informal learning to ensure that its employees master important competencies and skills. The

company’s use of apprenticeships and technology approaches deliver content in user-friendly

ways to engage employees. (For the case, visit MindTap® at www.cengage.com/login.)

1. How did the Water Quality Association’s use of technology help enhance how employees

acquired important work competencies? Can you think of any other mobile technology

applications that might be used to enhance WQA’s learning activities?

2. What is your opinion of Apprenticeship 3.0? Is it an approach that you would consider

using as an HR manager, or does it need further development?

Rio Tinto: Redesigning HR

This case describes a company that must reduce its workforce due to the 2008 global recession.

The approach used was global in nature, and downsizing efforts were highly coordinated and

1. How did Rio Tinto’s revamping of HR help with minimizing the potential problems with

the reduction in force? What role would an HRIS (also called a Human Resource

Information System) have to play in managing an RIF?

2. Without a consistent philosophy, policies, and approaches to reduction in force (or any

Chapter 1: Human Resource Management in Organizations

other disruptions in the future) what would the likely reactions from employees be?

Phillips Furniture

This case describes a small company that has grown large enough to need a full-time HR person.

You have been selected to be the HR Manager, and you have to decide what HR activities are

1. On what activities would you tell Mr. Phillips you intend to focus? Why?

2. What would be your first actions, and why?

Comments

This case is quite useful in illustrating that personnel management is important in both small

organizations and large corporations. A student should recognize that the interface concept

emphasizes the need for the newly appointed personnel manager and the more experienced

Sysco

Large food services and distribution firm Sysco had to revise its HR management. Review this

1. How does the market-driven approach illustrate that HR has strategic, operational, and

administrative roles at Sysco?

The administrative role is heavily oriented to processing and record keeping. When

Chapter 1: Human Resource Management in Organizations

Sysco’s HR staff enters data into the Virtual Resource Center (VRC) and when they use

technology to calculate cost/benefit analyses, they are performing the administrative role.

2. Discuss what types of HR changes could have affected reductions in workers’

compensation expenses, employee turnover, and increases in customer satisfaction.

The types of HR changes that could have affected reductions in workers’ compensation

expenses, employee turnover, and increases in customer satisfaction include:

• Collection of better data to track workers’ compensation claims

• Improvement in safety training to reduce workers’ compensation claims

HR, Culture, and Success at Google, Scripps, and UPS

This case describes HR’s role in the culture of three different companies. HR’s contribution to

organizational success in each case can be identified and further researched. (For the case, visit

1. How does the integration of HR with the organizational culture contribute to the success of

Google, Scripps, and UPS? To find ideas, go to the appropriate corporate website for each

of them and then search for additional insights.

Overall, HR departments at all three of these companies have integrated HR operations

that are in sync with their culture and HR is considered a strategic partner that will help

the organization meet organizational strategic objectives.

Chapter 1: Human Resource Management in Organizations

HR at Scripps also emphasizes leadership development and the firm has widely used work

variability efforts such as work-life balance and telecommuting.

UPS—HR at UPS is linked with business objectives and uses communication and intranet

programs to ensure employees are kept constantly informed on business objectives and

workforce challenges. HR also plays a major role in promoting corporate integrity.

Established codes of conduct are consistently reviewed with all employees and include

specific examples of actual potential situations employees may face.

2. Discuss how some of the culture facets mentioned compare to ones in employers you have

worked for and explain the difference in the views of those employers.

Extra Teaching Video

On the Job Video: Jet Blue—Intro to HR

This short video will help reinforce key points and may prompt additional discussion from the

class.