Introduction to Human Capital and talent Management PDF

INTRODUCTION TO HUMAN CAPITAL
AND TALENT MANAGEMENT
Copyright © 2013 Pearson Education
1-1
1
Rok Pintar - [e-mail]

 New Jersey-1990s’
 Store managers were quitting after a few months
 Lack of constant leadership
 employee turnover rate was 300% (1 position filled 3x in a year)
 Constantly had to find, hire & train new workers
 Brandon the chief executive doubt it was due to pay
 Emphasized on hiring, extensive coaching & opportunities to
earn promotion
 Employee turnover rate fall
1-2Copyright © 2013 Pearson Education

L EARNING OBJECTIVES (1)
 Explain what human resource management
is and how it relates to the management
process.
 Show with examples why human resource
management is important to all managers.
 Illustrate the human resources
responsibilities of line and staff (HR)
managers.
1-3Copyright © 2013 Pearson Education

L EARNING OBJECTIVES (2)
 Briefly discuss and illustrate each of the
important trends influencing human resource
management.
 List and briefly describe important traits of
today’s human resource managers.
1-4Copyright © 2013 Pearson Education

RECOMMENDED READINGS
 Human Resource Management (14th Edition), Gary Dessler –
Chapter 1
 The Impact of Strategic Human Resource Management on
Organizational Performance, Luftim CANIA, Economia: Seria
Management, Vol(17), Issue 2, 2014.
1-5Copyright © 2013 Pearson Education

THE MANAGEMENT PROCESS
1-6Copyright © 2013 Pearson Education
SIX functional areas
• Staffing
•Human Resource Development
•Performance Management
•Compensation
•Safety & Health
•Employee & Labour Relations

1-7Copyright © 2013 Pearson Education
1. STAFFING
 Determining what type of people you should hire;
 recruiting prospective employees;
 selecting employees;
 training and development;
 setting performance standards;
 evaluating performance; counselling performance;
 compensating employees.

Consist not only of training and development but also of career
planning and development activities, organization development,
performance management and appraisal.
 Training: Activities designed to provide learners with the
knowledge
and skills needed for their present jobs.
 Development: Process that involves learning that goes beyond
today’s
job; it has a more long-term focus.
 Career planning: Ongoing process whereby an individual sets
career
goals and identifies the means to achieve them
 Career development: Formal approach used by the organization
2. HUMAN RESOURCE DEVELOPMENT

3. PERFORMANCE MANAGEMENT
A goal-oriented process to ensure organizational processe
are in place to maximize the productivity of
employees,
teams, and ultimately, the organization.
 Performance appraisal: A formal system to review
and evaluate individual or team performance.

4. COMPENSATION
All rewards that individuals receive as a result
of their employment.
 Direct Financial Compensation: Pay that a person receives in
the form of wages, salaries, bonuses, and commissions.
 Indirect Financial Compensation (Benefits): All financial
rewards that are not included in direct compensation such as paid
vacations, sick leave, holidays, and medical insurance.
 Nonfinancial Compensation: Satisfaction that a person receives
from the job itself or from the psychological and/or physical
environment in which the person works.

5. SAFETY AND HEALTH
Employees who work in a safe environment
and enjoy good health are more likely to be productive an
yield long-term benefits to the organization.
 Safety: Activities involved in protecting employees
from injuries caused by work-related accidents.
 Health: Activities involved in securing the employees’
freedom from illness and their general physical and
mental well-being.
1-11Copyright © 2013 Pearson Education

ZIKA VIRUS PLAGUES 38 CONSTRUCTION WORKERS IN
SINGAPORE
HRM A SIA - 30 AUG 2016
1-12Copyright © 2013 Pearson Education
locally-transmitted Zika virus infections in
Singapore, 38 were workers from the Sims
Urban Oasis condominium construction site
in Aljunied

CONSTRUCTION WORKER KILLED BY SWINGING
CHAIN
1-13Copyright © 2013 Pearson Education
the 46th person to die in the
workplace

6. EMPLOYEE AND LABOR
RELATIONS
 Businesses are required by law to recognize a
union and bargain with it in good faith if the
firm’s employees want the union to represent
them.
 Internal employee relations comprise the human
resource management activities associated with
the movement of employees within the
organization such as promotions, demotion,
termination, and resignation.
 All HRM functional area are highly interrelated.
1-14Copyright © 2013 Pearson Education

WHY IS HRM IMPORTANT TO
ALL MANAGERS ?
Copyright © 2013 Pearson Education
1-15

WHY IS HRM I MPORTANT TO ALL MANAGERS ?
(COPY DOWN )
▪ Hire the wrong person for the job
▪ High employee turnover problem
▪ People not doing their best
▪ Waste time with useless interviews
▪ Company sued for discriminatory action
▪ Company fined fore unsafe practices
▪ Staff think that their salaries are unfair
▪ Lack of training that affect staff performance
▪ Unfair unemployment practices
1-16Copyright © 2013 Pearson Education

1-17Copyright © 2013 Pearson Education

WHO PERFORMS HRM
ACTIVITIES?
Copyright © 2013 Pearson Education
1-18

RECENT YEARS
Copyright © 2013 Pearson Education
1-19
 HUMAN RESOURCE MANAGEMENT
PROFESSIONAL—An individual who normally
acts in an advisory (or staff) capacity when working
with other (line) managers regarding human
resource matters.
 LINE MANAGERS—Individuals directly involved
in accomplishing the primary purpose of the
organization. As the traditional work of HR
managers diminishes, line managers are stepping up
and performing some duties typically done by human
resource professionals.

 HR OUTSOURCING—Process of hiring an external
provider to do the work that was previously done
internally.
 HR SHARED SERVICE CENTERS—Take routine,
transaction-based activities that are dispersed
throughout the organization and consolidate them in one
place.
 PROFESSIONAL EMPLOYER ORGANIZATION
(EMPLOYEE LEASING)—Company that leases
employees to other businesses. When a decision is made
to use a professional employer organization, the company
releases its employees who are then hired by the PEO.
Copyright © 2013 Pearson Education
1-20

L INE AND STAFF MANAGERS
Copyright © 2013 Pearson Education
1-21
 Line authority gives
you the right to issue
orders, make
decisions and to direct
work of others.
 Staff authority gives
you the right to advise
others in the
organization

LINE MANAGER ’S HR DUTIES
 First point of contact for any work related
issues...
 Perform some form of HR duties Job placement Orientation Training Improving performance Gaining cooperation Control labor costs Training & development Department morale Protect employees’ health and physical condition
1-22Copyright © 2013 Pearson Education

HUMAN RESOURCES AS A STRATEGIC
BUSINESS PARTNER
Copyright © 2013 Pearson Education
1-23
 CAPITAL: The factors that enable companies to
generate income, increase company stock prices,
economic value, strong brand identity and
reputation.
 HUMAN CAPITAL: As defined by economists,
refers to sets of collective skills, knowledge, and
ability that employees can apply to create
economic value for their employers.

DYNAMIC HUMAN RESOURCE
MANAGEMENT ENVIRONMENT
 LEGAL CONSIDERATIONS—Federal, state, and local
legislation, and the many court decisions interpreting this
legislation have had a major impact on human resource
management.
 LABOR MARKET—Potential employees located within the
geographic area from which employees are normally recruite
 SOCIETY—Society may also exert pressure on HRM
- Ethics: Discipline dealing with what is good and bad, or right and
wrong, or with moral duty and obligation.
- Corporate social responsibility: Implied, enforced, or felt obligatio
of managers, acting in their official capacity, to serve or protect the
interests of groups other than themselves.

 POLITICAL PARTIES—There are two major political
parties in the United States. These parties often have
differing opinions on human resource topics.

 UNIONS—Employees who have come together for the
purpose of dealing collectively with their employer are
collectively called a Union. A union is treated as an
environmental factor because they become a third part
when dealing with the company.

 SHAREHOLDERS—Owners of a corporation are called
shareholders. Because shareholders have invested
money in a firm, they may at times challenge programs
considered by management to be beneficial to the
organization.
Copyright © 2013 Pearson Education
1-25

 COMPETITION—Firms may face intense competition in
both their product or service and labor markets.
 CUSTOMERS—People who actually use a firm’s goods and
services..
 HR <H2>TECHNOLOGY—The world has never before seen
the rapid rate of technological change that is occurring today
-With the increased sophistication of technology has come the abilit
to design more useful human resource information systems (HRIS).
An HRIS is any organized approach for obtaining relevant and
timely information on which to base human resource decisions.
- Cloud computing - providing software and data via the Internet,
and the use of mobile devices are changing the way that HR work i
performed. Social media is also an important HR tool, in particular
for use in recruiting.

 ECONOMY—As a generalization, when the
economy is booming, it is often more difficult to
recruit qualified workers.
 UNANTICIPATED EVENTS—Many of the
human resource functions require modification
when unanticipated events such as major weather
incidents occur.
Copyright © 2013 Pearson Education
1-27

I MPORTANT TRENDS IN
HUMAN RESOURCE
MANAGEMENT
1-28Copyright © 2013 Pearson Education

▪ Technological
Innovation New technologies
TRENDS IN HUMAN RESOURCE MANAGEMENT
 Economic Factors Globalisation, Competition
and Deregulation Economic downturn
1-29Copyright © 2013 Pearson Education
▪ Trends in Workplace High Tech jobs Service jobs Knowledge Work Flexible workplace
▪ Demographic and
Workforce Trends Aging Workforce Generation Y
emergence

GLOBALISATION & ITS IMPLICATION
 Firms extend sales, ownership and manufacturing to
other countries / new markets.
 Reasons for globalization Sales expansion (sale more) Lower labor costs – more productive Forming partnerships Job offshoring
1-30Copyright © 2013 Pearson Education

1-31Copyright © 2013 Pearson Education
Toyota produces cars in China,
Thailand and many other countries.
Haier – Chinese company that
produce fridge in the US.
McDonald's - a successful global
brand
-brings a local flavor, literally, to
different countries
- In 2003, McDonald's introduced the
McArabia, a flatbread sandwich in the
Middle East.

HR IN ACTION
 In 2007, Wipro, India’s thrid biggest
software producer opened an outsourcing
center in the Philippines as higher costs
and shortage of domestic talent began to
drive Indian IT companies to prospect
overseas. The company cited the availability
of skilled professionals and lower costs as
among the advantages offered by Cebu. The
centre will provide customer service as well
as technical and financial accounting
support to Wipro’s global operations.
1-32Copyright © 2013 Pearson Education

ECONOMIC DOWNTURN
1-33Copyright © 2013 Pearson Education
What does it mean for HR ?
Reduce manpower – related cost
e.g. Retrenching staff, reduce training, no hiring

ECONOMIC DOWNTURN
 Keeping Company Goals in Mind
-"Cost cutting" common during recession
- employers are more prone to trim the fat on
budgets
- they still aim to establish a strong work force and
be profitable
- HR find learning opportunities for employees, to
boost their knowledge and improve performance
capability
1-34Copyright © 2013 Pearson Education

ECONOMIC DOWNTURN
 Retaining the Best Employees
- sometimes unavoidable to let marginal
employees
go during tough economic times
- increases the sense of job security for workers.
 Understanding Employee Stresses
- Even in companies managing to avoid layoffs
completely, workers' personal situations might
include spousal or family job losses.
1-35Copyright © 2013 Pearson Education

ECONOMIC DOWNTURN
 Keeping Employees Motivated
- recognition of their efforts
- through gestures like gift card awards or a shout
out in a company newsletter add to overall
employee satisfaction
1-36Copyright © 2013 Pearson Education

TECHNOLOGICAL TRENDS
 Smart phones
 Tablet computers
 Social media recruitment
 Job seeking and selection
1-37Copyright © 2013 Pearson Education
What does it mean for HR ?
Not only must HR be updated…. They also need to follow-up
with the technologies and make use of them.

TRENDS IN THE NATURE OF WORK
Copyright © 2013 Pearson Education
1-38
• High-tech jobs – automation and computerization.
• Service jobs – shifting of manufacturing focus
industry.
• Knowledge work and human capital
- New generation of workers
- Training and upskilling

CHANGES IN WORKFORCE DEMOGRAPHICS
1-39Copyright © 2013 Pearson Education

CHANGES IN WORKFORCE DEMOGRAPHICS
 Gen Y - 1977 to 2002
 Gen X - 1965 to 1976
 Baby Boomers - 1944 to 1960
1-40Copyright © 2013 Pearson Education
Different
Needs
Different
Priorities
Different
Behaviour
s

RETIREES , NONTRADITIONAL
WORKERS , WORKERS FROM ABROAD
 Bringing retirees back
 Non – traditional sources (e.g. mother, ex-
convicts, etc.)
 Contingent workers - multiple jobs
 Workers from abroad
 Key attraction: Alternative work arrangements Using technology
1-41Copyright © 2013 Pearson Education

CORPORATE CULTURE & HUMAN
RESOURCE MANAGEMENT
 As an internal environmental factor affecting human
resource management, corporate culture refers to the
firm’s social and psychological climate.
 Corporate culture - system of shared values, beliefs,
and habits within an organization that interacts with
the formal structure to produce behavioral norms.
 An infinite variety of cultures could exist, so one should
view them as a continuum.
1-42Copyright © 2013 Pearson Education

CORPORATE CULTURE & HUMAN RESOURCE
MANAGEMENT
Other topics include
- diversity management -an inclusive corporate culture which
makes everyone feel welcome.
- involves getting older employees in the
company more active when it comes to social media
- Organizational fit -management’s perception of the degree
to which an individual fits with the culture.
- New employees are offered $2,000 to quit after the
first
week of training if they decide the job isn’t for them.
1-43Copyright © 2013 Pearson Education

CORPORATE CULTURE & HUMAN RESOURCE
MANAGEMENT
Other topics include
- New hire orientation- corporate culture and talent management is
the strategic endeavor to optimize the use of employees to drive short and
long-term organizational results.
- Organizational development- to achieve change in corporate culture.
culture - set of values, symbols, beliefs, languages, and norms
that guide human behavior within the country. It is learned
behavior that develops as individuals grow from childhood to
adulthood.
- British Airways -decided to restructure the entire organization by
reducing its workforce from 59,000 to 39,000, eliminating unprofitable
routes, and modernizing the fleet.
1-44Copyright © 2013 Pearson Education

EMPLOYER BRANDING
 the firm’s corporate image or culture focused on
attracting the type of employees the firm is
seeking.
 Through employer branding, people get to know
what the company stands for, the people it hires,
the fit between jobs and people, and the results it
recognizes and rewards.
1-45

COUNTRY CULTURE & GLOBAL BUSINESS
1-46
• A country’s culture is the set of values, symbols, beliefs, languages, and
norms that guide human behavior within the country.
• Cultural differences between countries are a major factor influencing
global business. This borderless world adds dramatically to the difficulty
of managing employees.
• Cultural differences reveal themselves in everything from the workplace
environments to differences in the concept of time, space, and social
interaction.
• Cultural misunderstandings are common, but they
can be hazards to executives managing global
workforces, creating significant challenges in managing a
firm’s human resources.

HUMAN RESOURCE MANAGEMENT I N
SMALL BUSINESSES
 must be accomplished by small business
 Small businesses often do not have a formal HR
unit or HRM specialists - rather, line managers
handle the HR functions.
 The focus of their activities is generally on hiring
and retaining capable employees. Some aspects of
HR functions may actually be more significant in
smaller firms than in larger ones.
1-47Copyright © 2013 Pearson Education

HRM P ROFESSION
1-48Copyright © 2013 Pearson Education
EXECUTIVE—A top-level manager who reports directly to a corporation’s
chief executive officer or to the head of a major division is called an executive.
GENERALIST—A person who may be an executive and performs tasks in a
variety of HR-related areas is called a Generalist.
SPECIALIST—An individual who may be an HR executive, a human resource
manager, or a nonmanager, and who is typically concerned with only one of
the five functional areas of human resource management.
PROFESSION: Vocation characterized by the existence of a common body
of knowledge and a procedure for certifying members. Professions have
representative organizations. In HR these include the Society for Human
Resource Management, the Human Resource Certification Institute, the
American Society for Training and Development, and WorldatWork.
Opportunities and compensation in this profession are growing.

THE END
Copyright © 2013 Pearson Education
1-49

CLASS ACTIVITY
 Employer branding was discussed in this chapter. On a
scale 1 (Poor) to 5 (Excellent), how valuable are the
following brands? Why do you rate them low or high?
In answering this exercise, use your own opinion regarding each
firm. There are no right or wrong answers.
 Lego
 Ericsson
 Ikea
 Toyota
1-50Copyright © 2013 Pearson Education

 Lego (4)—The company is first on the list of 10 ideal employers for
Danish professionals. The role of its employees is to foster the long
term health of the company and commit the best of themselves to
the organization. The brand also continues to be popular with
children.
 Ericsson (4)—Ericsson has been widely recognized for their efforts
to make organization a great place to work. They received many
awards for “best global brand.” Long-term learning and training of
employees is part of their standard.
 Ikea (5)—They build their image on good design and affordable
furniture all over the world as well as on philanthropic
foundations. They remain a large and popular furniture retailer
with 4.2 million Facebook followers.
 Toyota (1)—They have suffered a loss of reputation because of the
number of faults in their cars over the last decade, which have
prompted a large number of recalls. Sales personnel would be
especially put upon by this.
1-51Copyright © 2013 Pearson Education