CHAPTER 1
Human Resource Management in
Organizations
CHAPTER SUMMARY
Chapter 1 provides an overview of human resource management in today’s organizations.
First, 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 seven human resource management functions and the three roles of human
resource departments. Human resource management faces challenges, which are discussed
next. The role of ethics in human resources is examined. Finally, the necessary
competencies for human resource personnel are identified.
LEARNING OBJECTIVES
After students have read this chapter, they should be able to:
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.
Provide an overview of four challenges facing HR today.
Explain how ethical issues in organizations affect HR management.
Explain the key competencies needed by HR professionals and why certification is
important.
The chapter opens with a feature describing the current trends in human resource
management. Trends include developing human capital, globalization and diversity,
technology, and ethics.
LECTURE OUTLINE
, HR Headline: Entrepreneurial HR Culture at MGM Resorts International
MGM Resorts International, a Las Vegas–based gaming organization, relies on an
entrepreneurial approach to foster innovation in its employees. This approach, which
includes focus groups and information sharing, encourages employees to ask questions
and develop ideas that improve company operations.
1-1. What is Human Resource Management?
Human resource management is designing formal systems in an organization to
manage human talent for accomplishing organizational goals.
1-1a. Why Organizations Need HR Management
The same HR issues must be managed in every organization. In large
organizations, HR specialists form the HR department.
Attitude toward HR can be positive or negative.
Discussion Starter: Ask students how an HR department can foster a positive image.
The need for HR increases as a company grows.
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 put the needs of the company and the
employees above their own needs. 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?
Answers will vary. Students should determine the company’s needs before changing
the HR department’s organization.
2. What needs do you think deserve the most attention given the current trends in
HR?
1-2. Managing Human Resources in Organizations
Human resource management and employees can be core competencies.
1-2a. Human Resource Management as a Core Competency
A core competency is a unique capability that creates high value for a
company.
HR can be a core competency and a key to a company’s competitive
advantage.
, 1-2b. Employees as a Core Competency
Organizations must manage four types of assets: physical, financial,
intellectual property, and human.
Human capital is the collective value of the capabilities, knowledge, skills,
life experiences, and motivation of an organizational workforce. Human
capital is also called intellectual capital.
Use valued rewards and “personal value proposition” to manage human
capital.
Teaching Tip: Figure 1-2 shows that employees can be core competencies in productivity,
organizational culture, and customer service.
Productivity is a measure of the quantity and quality of work done,
considering the cost of the resources used.
Unit labor cost, a way to measure the productivity of human resources, is
computed by dividing the average cost of workers by their average levels of
output.
Teaching Tip: Figure 1-3 identifies four ways to increase employee productivity:
organizational restructuring, redesigning work, aligning HR activities, and outsourcing
analysis.
Productivity, customer service, and quality affect organizational
effectiveness and can be a focus for developing employees as a core
competency.
Organizational culture consists of the shared values and beliefs that give
members of an organization meaning and provide them with rules for
behavior. Culture takes time to develop.
Discussion Starter: Ask students to describe the culture at different local or national
companies. For example, some companies have a reputation for being a fun place 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 develops policies, such as
management development, performance feedback, and rewards, to foster a positive work
environment.
1. How would you encourage the CEO and other top leaders to focus their efforts on
creating a healthy organization culture? What issues do you think deserve the
most attention?
Answers will vary. Students should consider increased profit for a for-profit company
or meeting an organization’s mission goals for a nonprofit organization.
2. In addition to the points already mentioned, what steps would you take to develop
a healthy organization?
Answers will vary. Students should consider the characteristics of a healthy
organization.
HR management is designing the formal systems used to manage people. This yields
seven interlocking functions that are influenced by eight external forces—global,
environmental, geographic, political, social, legal, economic, and technological
forces.
Teaching Tip: Use Figure 1-4 to help students visualize the relationship between HR
functions and the external factors that affect them.
As shown in Figure 1-4, the set of seven HR functions include (1) HR strategy and
planning, (2) equal employment opportunity, (3) staffing, (4) talent management,
(5) rewards, (6) risk management and worker protection, and (7) employee and
labor relations.
Teaching Tip: Explain that each of the seven HR functions is covered in the major sections
of the book.
1-4. Roles for Human Resource Departments
HR can play three different roles: administrative, operational and employee
advocate, and strategic.
Teaching Tip: Use Figure 1-5 to explain that the strategic role has been growing over time
and it will continue to become more important in HR departments of the future.
1-4a. Administrative Role for Human Resource
The administrative role involves processing and keeping information.
Two major shifts include the greater use of technology and outsourcing.
Human Resource Management in
Organizations
CHAPTER SUMMARY
Chapter 1 provides an overview of human resource management in today’s organizations.
First, 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 seven human resource management functions and the three roles of human
resource departments. Human resource management faces challenges, which are discussed
next. The role of ethics in human resources is examined. Finally, the necessary
competencies for human resource personnel are identified.
LEARNING OBJECTIVES
After students have read this chapter, they should be able to:
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.
Provide an overview of four challenges facing HR today.
Explain how ethical issues in organizations affect HR management.
Explain the key competencies needed by HR professionals and why certification is
important.
The chapter opens with a feature describing the current trends in human resource
management. Trends include developing human capital, globalization and diversity,
technology, and ethics.
LECTURE OUTLINE
, HR Headline: Entrepreneurial HR Culture at MGM Resorts International
MGM Resorts International, a Las Vegas–based gaming organization, relies on an
entrepreneurial approach to foster innovation in its employees. This approach, which
includes focus groups and information sharing, encourages employees to ask questions
and develop ideas that improve company operations.
1-1. What is Human Resource Management?
Human resource management is designing formal systems in an organization to
manage human talent for accomplishing organizational goals.
1-1a. Why Organizations Need HR Management
The same HR issues must be managed in every organization. In large
organizations, HR specialists form the HR department.
Attitude toward HR can be positive or negative.
Discussion Starter: Ask students how an HR department can foster a positive image.
The need for HR increases as a company grows.
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 put the needs of the company and the
employees above their own needs. 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?
Answers will vary. Students should determine the company’s needs before changing
the HR department’s organization.
2. What needs do you think deserve the most attention given the current trends in
HR?
1-2. Managing Human Resources in Organizations
Human resource management and employees can be core competencies.
1-2a. Human Resource Management as a Core Competency
A core competency is a unique capability that creates high value for a
company.
HR can be a core competency and a key to a company’s competitive
advantage.
, 1-2b. Employees as a Core Competency
Organizations must manage four types of assets: physical, financial,
intellectual property, and human.
Human capital is the collective value of the capabilities, knowledge, skills,
life experiences, and motivation of an organizational workforce. Human
capital is also called intellectual capital.
Use valued rewards and “personal value proposition” to manage human
capital.
Teaching Tip: Figure 1-2 shows that employees can be core competencies in productivity,
organizational culture, and customer service.
Productivity is a measure of the quantity and quality of work done,
considering the cost of the resources used.
Unit labor cost, a way to measure the productivity of human resources, is
computed by dividing the average cost of workers by their average levels of
output.
Teaching Tip: Figure 1-3 identifies four ways to increase employee productivity:
organizational restructuring, redesigning work, aligning HR activities, and outsourcing
analysis.
Productivity, customer service, and quality affect organizational
effectiveness and can be a focus for developing employees as a core
competency.
Organizational culture consists of the shared values and beliefs that give
members of an organization meaning and provide them with rules for
behavior. Culture takes time to develop.
Discussion Starter: Ask students to describe the culture at different local or national
companies. For example, some companies have a reputation for being a fun place 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 develops policies, such as
management development, performance feedback, and rewards, to foster a positive work
environment.
1. How would you encourage the CEO and other top leaders to focus their efforts on
creating a healthy organization culture? What issues do you think deserve the
most attention?
Answers will vary. Students should consider increased profit for a for-profit company
or meeting an organization’s mission goals for a nonprofit organization.
2. In addition to the points already mentioned, what steps would you take to develop
a healthy organization?
Answers will vary. Students should consider the characteristics of a healthy
organization.
HR management is designing the formal systems used to manage people. This yields
seven interlocking functions that are influenced by eight external forces—global,
environmental, geographic, political, social, legal, economic, and technological
forces.
Teaching Tip: Use Figure 1-4 to help students visualize the relationship between HR
functions and the external factors that affect them.
As shown in Figure 1-4, the set of seven HR functions include (1) HR strategy and
planning, (2) equal employment opportunity, (3) staffing, (4) talent management,
(5) rewards, (6) risk management and worker protection, and (7) employee and
labor relations.
Teaching Tip: Explain that each of the seven HR functions is covered in the major sections
of the book.
1-4. Roles for Human Resource Departments
HR can play three different roles: administrative, operational and employee
advocate, and strategic.
Teaching Tip: Use Figure 1-5 to explain that the strategic role has been growing over time
and it will continue to become more important in HR departments of the future.
1-4a. Administrative Role for Human Resource
The administrative role involves processing and keeping information.
Two major shifts include the greater use of technology and outsourcing.
