CHAPTER
1
CHANGING NATURE OF HUMAN RESOURCE MANAGEMENT
Learning Objectives
After you have read this chapter, you should be able to:
Define human capital and explain its importance.
Identify the seven categories of HR activities.
Describe how the major roles of HR management are
being transformed.
Discuss four challenges facing HR today.
, Identify the purposes and uses of HR technology.
Discuss why ethical issues affect HR management.
Explain the key competencies needed by HR professionals
and why certification is important.
CHAPTER 1: CHANGING NATURE OF HUMAN RESOURCE MANAGEMENT
Chapter Overview
This chapter provides an overview of Human Resource Management by describing eight
important considerations: Human Capital in Organizations, HR Activities, Managing HR in
Organizations, HR Management Roles, Current HR Management Challenges, HR Technology,
Ethics and HR Management, and HR Management Competencies and Careers.
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. A conceptual model is
presented that shows that HR management is composed of seven interlinked activities that
are significantly impacted by external forces (legal, political, economic, social,
cultural/geographic, technological, environmental, and global). These seven activities are
identified and briefly described: (1) strategic HR management, (2) equal employment
opportunity, (3) staffing, (4) talent management and development, (5) total rewards, (6) risk
management and worker protection, and (7) employee and labor relations.
,The relationship of HR within the organization is described. 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.
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, four
significant HR management challenges are discussed: globalization of business, economic
and technological change, workforce demographics and diversity, and organizational cost
pressures and restructuring. Also, the purposes and uses of human resource management
systems (HRMS) are discussed.
Next, HR’s role in organizational ethics, the global differences regarding ethics and the
relationship between ethical behavior and organizational culture are explored. The HR
impact of the Sarbanes-Oxley Act is also discussed.
The chapter concludes with a discussion of the five HR competencies: strategic contribution,
knowledge of business and the organization, delivery of HR activities, HR technology, and
credibility personally and professionally. Some discussion of HR careers and various types of
certification within the field of HR are also included.
Chapter Outline and Instructor Notes
Suggested Content Coverage
For many organizations, talented employees are the cornerstone of a competitive advantage.
Designing systems to effectively manage people with their needs, expectations, quirks, legal
rights, and high potential is a challenge. Human Resource Management focuses on doing just
that.
, HR Headline: Why HR Is Not Always Respected
Many people in organizations do not like the HR Department. Some argue that HR is at best a
necessary evil – at worst a bureaucratic force that enforces silly rules, resists creativity, and
impedes change. Instead of finding the best hires, nurturing the stars, and making a
productive work environment, HR concerns itself with the administration of pay and benefit
plans – which companies are increasingly outsourcing. HR managers seem to worry more
about activities than results.
HR is necessary of course – the blizzard of government regulations is complex and HR must
be cautious. This role of protecting corporate assets against lawsuits puts HR in the role of
being the bad cop. Despite this there is evidence that HR can be done right.
Questions for Discussion:
1. If HR is seen as a necessary evil in an organization, what can HR do to try to change that
image?
Human Resource (HR) management is “designing management systems to ensure that
human talent is used effectively and efficiently to accomplish organizational goals.” In an
environment in which the workforce keeps changing, laws and the needs of employers
1
CHANGING NATURE OF HUMAN RESOURCE MANAGEMENT
Learning Objectives
After you have read this chapter, you should be able to:
Define human capital and explain its importance.
Identify the seven categories of HR activities.
Describe how the major roles of HR management are
being transformed.
Discuss four challenges facing HR today.
, Identify the purposes and uses of HR technology.
Discuss why ethical issues affect HR management.
Explain the key competencies needed by HR professionals
and why certification is important.
CHAPTER 1: CHANGING NATURE OF HUMAN RESOURCE MANAGEMENT
Chapter Overview
This chapter provides an overview of Human Resource Management by describing eight
important considerations: Human Capital in Organizations, HR Activities, Managing HR in
Organizations, HR Management Roles, Current HR Management Challenges, HR Technology,
Ethics and HR Management, and HR Management Competencies and Careers.
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. A conceptual model is
presented that shows that HR management is composed of seven interlinked activities that
are significantly impacted by external forces (legal, political, economic, social,
cultural/geographic, technological, environmental, and global). These seven activities are
identified and briefly described: (1) strategic HR management, (2) equal employment
opportunity, (3) staffing, (4) talent management and development, (5) total rewards, (6) risk
management and worker protection, and (7) employee and labor relations.
,The relationship of HR within the organization is described. 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.
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, four
significant HR management challenges are discussed: globalization of business, economic
and technological change, workforce demographics and diversity, and organizational cost
pressures and restructuring. Also, the purposes and uses of human resource management
systems (HRMS) are discussed.
Next, HR’s role in organizational ethics, the global differences regarding ethics and the
relationship between ethical behavior and organizational culture are explored. The HR
impact of the Sarbanes-Oxley Act is also discussed.
The chapter concludes with a discussion of the five HR competencies: strategic contribution,
knowledge of business and the organization, delivery of HR activities, HR technology, and
credibility personally and professionally. Some discussion of HR careers and various types of
certification within the field of HR are also included.
Chapter Outline and Instructor Notes
Suggested Content Coverage
For many organizations, talented employees are the cornerstone of a competitive advantage.
Designing systems to effectively manage people with their needs, expectations, quirks, legal
rights, and high potential is a challenge. Human Resource Management focuses on doing just
that.
, HR Headline: Why HR Is Not Always Respected
Many people in organizations do not like the HR Department. Some argue that HR is at best a
necessary evil – at worst a bureaucratic force that enforces silly rules, resists creativity, and
impedes change. Instead of finding the best hires, nurturing the stars, and making a
productive work environment, HR concerns itself with the administration of pay and benefit
plans – which companies are increasingly outsourcing. HR managers seem to worry more
about activities than results.
HR is necessary of course – the blizzard of government regulations is complex and HR must
be cautious. This role of protecting corporate assets against lawsuits puts HR in the role of
being the bad cop. Despite this there is evidence that HR can be done right.
Questions for Discussion:
1. If HR is seen as a necessary evil in an organization, what can HR do to try to change that
image?
Human Resource (HR) management is “designing management systems to ensure that
human talent is used effectively and efficiently to accomplish organizational goals.” In an
environment in which the workforce keeps changing, laws and the needs of employers
