All managers in an organization have to perform certain basic functions. Generally, the management process has five basic functions which are planning, organizing, staffing, leading and controlling. Some of the specific activities in each function include:
Planning: Establishing goals, developing rules and procedures, developing plans and forecasting.
Organizing: Assigning a specific task to subordinates, establishing departments, delegating authority to subordinate, establishing channel of authority and communication, coordination among sub ordinates.
Staffing: It includes selecting suitable candidates so as to achieve the aim of an organization. It also involves performance appraisal, counseling employees as well as their training and development.
Leading: To get job done through others, motivating and maintaining moral of sub ordinates.
Controlling: It involves setting standards and then compare the actual performance with these standards. It also involves taking corrective measures.
In this thesis, we focus on personal management also known as human resource management. Human resource management involves acquiring, training, appraising, and compensating employees, and attending to their labor relations, health and safety, and fairness concerns. So in the later part of the thesis we focus on personal aspects of the management job which include
Doing job analysis
Forecasting labor needs and recruiting candidates
Job orientation and training of new recruits
Managing employees compensation
Providing incentives and benefits
Communicating (interviewing, counseling, disciplining)
Training and development
Building employee commitment
Importance of HR management to other managers
There are some mistakes related to personal management which manager would like to avoid in managing. For example, one would not like to:
Hire the wrong person for the job
Notice high turnover in the organization
Have your people not doing their best
Have the company facing legal action for discriminatory practices as well as allow a lack of training as well as commit any unfair labor practices
Have some employees think their salary is unfair relative to others in the organization
So, all the successful organizations try to manage their most expensive assets which is human resource in most effective manner.
Line and staff aspects of HRM
All the managers need to do some HR Managers activities like recruiting, interviewing, selecting and training. Despite of these, HR Department has its own top manager. Line Managers has the authority to supervise the work of sub ordinates. Also, Line managers are in charge of accomplishing the organizations basic goals. Staff Managers assist and advice Line Managers to do these basic goals. Human Resource Managers are staff managers.
Line Managers, HRM responsibilities
All the Line Managers from President to a low level supervisor handle people. For example, one company outlines its Line’s supervisor’s responsibilities for affective HR management under the following general headings:
Placing the right person on the job
Orientation of new employees
Providing training to employees
Improving job performance of employees
Studying the company’s policy and procedures
Controlling labor costs
Maintaining motivation of the employees
Protecting employee’s health and physical condition
Human Resource Management carries out three distinct functions.
1. A line function: The HR Manager is responsible for directing the work of it’s subordinates in the own department.
2. A coordinative function: HR Managers also coordinate personal activities, referred as functional control. Here, HR managers insure that the Line managers are implementing the forms HR objectives, policies and procedures.
3. Staff Functions: The HR Manager helps the CEO of an organization to better understand the personnel aspects of the company’s strategies. For example, he assists in hiring, training, evaluating, rewarding, counseling, promoting and firing employees. So, HR plays an employee advocacy role: it ensures that the management should fairly treat employees, remove unfair practices.
The changing environment of HR management
HR’s Changing Role
The HR department’s role has become broader and more strategic with time. Before their work was limited to hiring and firing of employees or administration of pay role and benefit plans. With the advent of technology in areas like testing and interviewing the personnel department started to play an important role in employee’s selection, training and promotion.
A changing environment
Globalization: It refers to the expansion of a firm’s sale, ownership and manufacturing to new markets abroad. For example, now Dell produces and sales PC’s in China. The increased globalization has resulted in more competition and hence lower costs to and users. One expert said “The bottom line is that the growing integration of the World economy into a single, huge market place is increasing the intensity of competition in a wide range of manufacturing and service industries”. So in Global companies like Dell, managing and designing policies for expatriate employees are a measure HR challenge.
Technological Advances: The forms make improvements in technology through continuous research and development. For example, Carrier Corporation is the World’s largest manufacture of air conditioners and saves an estimated $100 million per year by using the internet. In Brazil, the company handle’s all its transaction with the partners (dealers, retailers, installers) on the web.
Exporting Jobs: Increasing competition and search for lower HR costs promotes the employer to export jobs abroad. For example, in between 2005 and 2015, an estimated of about 3million US jobs, ranging from office support and computer jobs to management, sales, and even legal jobs are likely to move offshore.
The nature of work: The technology advancement is changing the nature of work. Now a day, even the factory jobs have become more technologically demanding. For example, high tech manufacturing jobs in aerospace, computer, telecommunications and medical instruments are replacing factory jobs in steel, auto, rubber and textile. Today, nearly 2/3rd of US work force is employed in producing and delivering services. In between 1998 and 2008, the number of jobs in good producing industry will remain at about 25.5 million while the number in service producing industries will rise from 99 million to 118.8 million. This is mainly due to shift of manufacturing jobs to low wage countries as well as the increased productivity allows a company to produce more products with fewer employees.
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There has been increased trend of using non traditional workers in order to keep costs down. Non traditional workers include part time workers or other workers holding multiple jobs. In US, almost 10 per cent of American workers (13 million fit in this category). Hence for HR managers, this has become a challenge to educate trend and motivate these employees and to get them work more like committed partners.
Work Force Demographics
In the recent times, work force demographics have changed considerably. It is becoming diverse in nature as more women, older workers and minority group members are entering the work force. In between 1992 and 2005, Asian workers saw a jump of over 81 per cent in United States. About 2/3rd of all single mothers (divorced, widowed or never married), are participating in labor force now as are almost 45 per cent of mother’s with children under 3 years old. Also the labor force is getting older in United States and other developed World. This needs new policies for making jobs attractive to aged employees as well as developing suitable pension plans. For example, Aerospace Corporation lets employees continue as a part time worker rather than to retire from the company.
Measuring HR’s contribution: Strategic, Metrics and the HR score card
It is always the aim of HR to evolve services that are in accordance to the company’s strategy. A company’s strategy is it’s plan as how it will balance its internal strength and weaknesses with external opportunities and threats in order to sustain a competitive advantage over others. For example, Ford and Wal-Mart have different HR policies and practices than Ferrari. Now a day with Globalization and increased competition, the HR is being treated as a partner and is being sort after by the top managers in designing and implementing the company’s strategies. So, it is necessary for HR to express its departmental plans and results in measurable terms.
It is a set of quantities performance measures HR managers used to assist their operations. For example, HR can use its expenses as a proportion of company’s total operating costs averaged 1 to 1.1 per cent in early 1990’s, 0.8 to 0.9 per cent in the late 1990’s and 0.8 per cent in 2002 to show its costs affective ness. In this way, HR can measure its efficiency. However, there is another option as to how to defend a new HR program with numbers. For example, how to relate new compensation plan with improved customer services, customer satisfaction and the profitability of each of our sales.
The HR score card
The HR managers involve in vale creation in order to achieve the company’s strategic goals. Manager’s use HR score card to measure the HR functions affective ness and efficiency in producing these employee behaviors and thus accomplishing the company’s strategic goals. The HR score card is a measurement system which shows the metrics the firm used to measure HR activities, employee behavior as a result of these activities, and to measure the strategically relevant outcomes of those employee behaviors.
The high performance work system
All companies need to design a HR system according to their own needs. For example, GE-s appraisal system does not fit into Ford Motor appraisal system. However, all high performing companies share some common things in between their policies. High performance work system attracts large job applicants, select candidates more effectively, provide more and better training, link pay to performance and provide a clean and safe work environment. In relation to measurable outcomes, these HPWS bring more qualified applicants per position, more employees hired based on validated selection tests and high percentage of employees receiving regular performance appraisal. Generally, they maximize the competencies of employees through out the organization.
The new personnel manager
New proficiencies: In today’s world, an HR manager needs to have four types of proficiencies:
HR proficiencies demonstrate an HR manager skill in employee selection, training and compensation while business proficiencies account for the HR professional ability to make profitable enterprise serving customers in a better way. Hence in today’s scenario, HR managers need to have experienced in strategic planning, marketing, production and finance. As now a day, HR managers are responsible to formulate plans in response to arising competitive pressures; they must be able to interpret HR activities in terms of return on investment, payback period and costs per unit of service. The HR manager’s leadership proficiencies are required as they need to act as a change agent in an organization. They need to adopt very quickly the latest technologies as well as new practices.
2. Strategic Human Resource Management and the HR score card
In this chapter of the thesis, is discussed the ways to develop an HR system which is in accordance to the strategic goal of a company.
HR strategic challenges: The main challenge for any human resource department is to develop relevant services which match the company’s strategic plan. The strategic planning is done by introspecting, “where the business is now and where it wants to be?” The managers then design the strategies accordingly. All of the departments like HR, Sales, Finance and manufacturing strategies should help to support a company’s strategic goals. For example, Dell computers strategic plan is to be a low cost leader and to do so, it uses internet and the phone to sell PC’s to it’s customers at a lower price than its competitors. So, it’s the responsible of Dell HR managers to support the firms low costs strategies. For example, Dell has automated most of its HR services. Dell’s intranet has over 30 automated where obligations (including executive search reports, hiring tools and automated employee referrals) and hence the automated HR services help to reduce the personal requirements of the HR department. Also with the help of such facilities, employees can check job openings as well as can easily verify their compensation statements.
HR managers face three basic challenges while designing the human resource strategies.
To support corporate productivity and performance improvement efforts.
Employees play an expended role in employer’s performance improvement efforts.
HR should design – not only execute – the company’s strategic plans.
With increased competition due to globalization, the HR needs to adapt changes frequently and improve an organizational performance. HR should pay more attention in increasing employee’s competencies as well as their performance management and try to build high performing organization. In earlier days, the line managers were responsible for designing company’s strategy but now the HR department is involved in the same. So now a day, it is necessary for human resource personnel to understand basic of strategic planning.
The strategic management process
It includes the strategic planning process and involves four basic tasks.
Examining the firm’s internal and external condition.
Explaining the mission of a business.
Converting the mission into strategic goals.
Deciding the sequence of action.
Step1. Explaining the mission of a business: The strategic managers start by looking into “where the business is right now and where they want their business to get in, with the current opportunities, threats, strengths and weaknesses?” then managers decide the sequence of action. For example, weather to look for newer markets abroad or to buy a competitor firm. Some experts use the term vision and mission to explain the company’s current and future situation. The company’s vision is a broad statement and tells where the company wants to be in next 20 years while the company’s mission is of shorter duration and is more specific in nature. For example, the mission of a company can be decided quarterly i.e. who we are, what we do and where we are headed.
Step2. Perform external and internal audits: In order to decide a strategic plan for a company, the managers need to understand external and internal situations. For example, they need to do SWOT analysis in order to identify company’s strengths, weakness, opportunities and threats.
Fig: A SWOT chart
Step3. Translate the mission into strategic goals: Defining the mission of a company as “to act through partnerships in order to improve distribution system” is one thing; managing operationalizing this mission is another thing as its importance for the managers to decide as what this mission means in next five years, in terms of the types of the partnerships to form and with whom and when?
The business managers need some specific target like for a sales manager of Samsung electronics can be to sign up a suitable number of distributors and attain his sales revenue target on quarterly basis.
Step4. Formulate a strategy to achieve the strategic goals:
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