CHAPTER 1
The Nature of Human Resource Management
Number range NL1learning OBJECTIVES
After studying this chapter, the student should be able to:
1Number range NL_a. Describe contemporary human resource perspectives.
2Number range NL_a. Trace the evolution of the human resource function in organizations.
3Number range NL_a. Identify and discuss the goals of human resource management.
4Number range NL_a. Discuss the setting for human resource management.
5Number range NL_a. Discuss the job of human resource managers from the perspectives of
professionalism and careers.
Number range NL1CHAPTER OUTLINE
Number range NL1Opening Vignette: Their Most Precious Resource…
Companies such as Southwest Airlines, Whole Foods, The Container Store, and Google are
successful because the managers invest important resources in the effective management of
human resources. Part of this process means making employees feel like important assets in the
organization, which enhances motivation, retentions, and a corporate reputation. The process also
involves developing unique organizational environments for employees in a way that makes the
workplace enjoyable. Consequently, all of these companies have enjoyed enormous economic
success and are considered to be best employers of choice by current and potential workers.
Number range NL1Introduction
An organization’s human resources are the people it employs to carry out various jobs, tasks,
and functions in exchange for wages, salaries, and other rewards. No resources are more vital to
an organization’s success than its human resources.
Human resource management refers to the comprehensive set of managerial activities and tasks
concerned with developing and maintaining a qualified workforce in ways that contribute to
organizational effectiveness. Effective human resource management is becoming a vital strategic
concern for most organizations today.
INumber range NLA. Contemporary Human Resource Management Perspectives
ANumber range NL1. The first major stimulus for the increased importance of human
resource management was the 1964 Civil Rights Act. However, managers realize that
, human resource management has a profound effect on an organization’s performance,
and so the function has grown to have the same importance as other functions.
BNumber range NL1. Most firms now use the term human resource management to
better reflect the strategic role of people management in companies; however, some
firms have created unique titles for human resource managers such as chief knowledge
officer.
Number range NLs1HR in the 21st Century: A Shortage in the Work
Force
The United States is facing a shortage of workers in the next decade, due to retiring baby
boomers; fewer young workers entering the labor pool; no source of new workers such as the
women, welfare recipients, and immigrants that entered the workforce in the 1990s; and an
increasing desire for more leisure and family time. Employers will have to adjust, and workers
with college degrees and technical skills will be in high demand.
CNumber range NL1. The 1980s and 1990s brought changes to the human resource
management function in response to firms’ going out of business, a wave of mergers
and acquisitions, and an era of downsizing, rightsizing, and reengineering that caused
worker displacement and increased the use of outsourcing in human resource
activities. Outsourcing is the process of hiring outside firms to handle basic human
resource management functions, presumably more efficiently than the organization.
DNumber range NL1. The trends that changed the HR function continue today, such as
mergers and acquisitions, which now are often between two firms in different
countries. The post-affirmative action legal climate for human resources is becoming
more complex. A rise in terrorism has made security more difficult too.
IINumber range NLA. Evolution of the Human Resource Function
The industrial revolution sparked business growth and expansion. Large-scale business
operations created the need for professional managers.
The first serious study of management practice was based on scientific management,
which was concerned with structuring jobs for maximum efficiency and productivity. It
helped augment the concepts of assembly-line production, division of labor, and economies
of scale.
ENumber range NL1. Origins of the Human Resource Function
6Number range NL_a. Rapidly expanding companies in the early 1900s created
new specialized units to hire new employees and to help manage the existing
workforce.
7Number range NL_a. The work of Darwin in individual differences and that of
Binet and Simon in intelligence testing (used in WWI) provided new tools to
manage employment processes.
8Number range NL_a. By 1923, Personnel Management, a book by Scott and
Clothier, was spelling out how to match a person’s skills and aptitudes with job
requirements.
, 9Number range NL_a. The human relations era emerged following the
Hawthorne studies in the early 1930s.
aNumber range NL_1_)Human behavior was recognized to relate to worker
performance.
bNumber range NL_1_)Maslow’s hierarchy of human needs and McGregor’s
Theory X and Theory Y were popularized at this time.
FNumber range NL1. Personnel Management
10Number range NL_a. During the 1930s and 1940s, specialized units gradually
became known as personnel departments, which were self-contained and dealt
with basic human resource activities such as hiring, pay, and benefits.
11Number range NL_a. Personnel management became a new type of
management function, mainly concerned with hiring first-line employees and
was directed by the personnel manager.
12Number range NL_a. During World War II, psychologists were consulted to
help develop selection tests to assess individual skills, interests, and abilities in
order to optimize the fit between individuals and jobs.
13Number range NL_a. Wartime lessons in personnel testing were adapted for
use in private industry in the 1950s, and companies also began to experiment
with more sophisticated reward and incentive systems.
14Number range NL_a. The personnel manager’s job also became more complex
as the power of labor unions increased and government legislation expanded.
15Number range NL_a. As late as the 1970s, personnel management was seen as
a routine clerical and bookkeeping function.
7. The Civil Rights Act of 1964 increased the importance of fully understanding the
legal context of human resource management, and subsequent amendments,
executive orders, and legal decisions made hiring and promotion more complex.
CNumber range NL1. Human Resource Management in the Electronic Age
Technology has had a dramatic impact on human resource management.
16Number range NL_a. Automated systems for measurement have made such
tasks easier.
17Number range NL_a. Computers and the Internet have affected the
management of human resources and the delivery of HR systems. Online job
analysis, Web-based recruiting, online testing and training, and employee access
to information through the Internet have revolutionized human resource
management.
18Number range NL_a. While the overall impact has been to make tasks easier,
new challenges are also presented, including new issues of ethics and privacy.
19Number range NL_a. It is unclear whether new technologies have increased
the effectiveness of human resources.
20Number range NL_a. As organizations become more technologically complex,
their need for specialized employees grows. Knowledge workers are employees
whose jobs are primarily concerned with the acquisition and application of
knowledge. They contribute to an organization through what they know and how
they can apply what they know.
, DNumber range NL1. Emerging Human Resource Challenges
21Number range NL_a. The economic downturn has generated some challenges
such as job loss and corporate reorganization.
22Number range NL_a. HR professionals must determine how to effectively
manage downsizing, outplacement, and employee integration after mergers and
acquisitions.
23Number range NL_a. Other issues that challenge HR executives include
managing employee stress driven by workplace uncertainty, increased
government oversight and regulation, and the importance of social responsibility
and environmental awareness.
24Number range NL_a. These changes will likely increase the degree to which
HR professionals influence the management of companies.
IIINumber range NLA. Goals of Human Resource Management
Exhibit 1.1 illustrates the four basic goals of human resource management today.
GNumber range NL1. Facilitating Organizational Competitiveness
25Number range NL_a. The organization needs to employ individuals most able
to help accomplish its goals and help it remain competitive.
26Number range NL_a. The human resource management function must have a
basic goal of clearly understanding how the organization competes, the kinds of
human resources necessary to promote its ability to compete, and the most
appropriate methods for attracting and developing those human resources.
HNumber range NL1. Enhancing Productivity and Quality
27Number range NL_a. Productivity is an economic measure of efficiency that
summarizes and reflects the value of outputs created by an individual,
organization, industry, or economic system relative to the value of inputs used to
create them.
28Number range NL_a. Quality is the total set of features and characteristics of
a product or service that bears on its ability to satisfy stated or implied needs.
29Number range NL_a. Improving productivity and quality takes a major and
comprehensive approach that relies heavily on human resource management in
areas such as selection, training and development, and rewards.
INumber range NL1. Complying with Legal and Social Obligations
30Number range NL_a. Organizations must stay within the relevant legal
boundaries in dealing with employees or risk huge financial penalties, negative
publicity, and damage to internal corporate culture.
31Number range NL_a. More organizations recognize their social obligation
beyond minimum activities needed to comply with legal regulations.
Organizations are responding to pressure to make corporate social responsibility
an important goal.
JNumber range NL1. Promoting Individual Growth and Development
32Number range NL_a. Many organizations go beyond offering basic job-related
training and development by offering basic English, mathematics, or science
courses as well as career development and mentoring programs.
The Nature of Human Resource Management
Number range NL1learning OBJECTIVES
After studying this chapter, the student should be able to:
1Number range NL_a. Describe contemporary human resource perspectives.
2Number range NL_a. Trace the evolution of the human resource function in organizations.
3Number range NL_a. Identify and discuss the goals of human resource management.
4Number range NL_a. Discuss the setting for human resource management.
5Number range NL_a. Discuss the job of human resource managers from the perspectives of
professionalism and careers.
Number range NL1CHAPTER OUTLINE
Number range NL1Opening Vignette: Their Most Precious Resource…
Companies such as Southwest Airlines, Whole Foods, The Container Store, and Google are
successful because the managers invest important resources in the effective management of
human resources. Part of this process means making employees feel like important assets in the
organization, which enhances motivation, retentions, and a corporate reputation. The process also
involves developing unique organizational environments for employees in a way that makes the
workplace enjoyable. Consequently, all of these companies have enjoyed enormous economic
success and are considered to be best employers of choice by current and potential workers.
Number range NL1Introduction
An organization’s human resources are the people it employs to carry out various jobs, tasks,
and functions in exchange for wages, salaries, and other rewards. No resources are more vital to
an organization’s success than its human resources.
Human resource management refers to the comprehensive set of managerial activities and tasks
concerned with developing and maintaining a qualified workforce in ways that contribute to
organizational effectiveness. Effective human resource management is becoming a vital strategic
concern for most organizations today.
INumber range NLA. Contemporary Human Resource Management Perspectives
ANumber range NL1. The first major stimulus for the increased importance of human
resource management was the 1964 Civil Rights Act. However, managers realize that
, human resource management has a profound effect on an organization’s performance,
and so the function has grown to have the same importance as other functions.
BNumber range NL1. Most firms now use the term human resource management to
better reflect the strategic role of people management in companies; however, some
firms have created unique titles for human resource managers such as chief knowledge
officer.
Number range NLs1HR in the 21st Century: A Shortage in the Work
Force
The United States is facing a shortage of workers in the next decade, due to retiring baby
boomers; fewer young workers entering the labor pool; no source of new workers such as the
women, welfare recipients, and immigrants that entered the workforce in the 1990s; and an
increasing desire for more leisure and family time. Employers will have to adjust, and workers
with college degrees and technical skills will be in high demand.
CNumber range NL1. The 1980s and 1990s brought changes to the human resource
management function in response to firms’ going out of business, a wave of mergers
and acquisitions, and an era of downsizing, rightsizing, and reengineering that caused
worker displacement and increased the use of outsourcing in human resource
activities. Outsourcing is the process of hiring outside firms to handle basic human
resource management functions, presumably more efficiently than the organization.
DNumber range NL1. The trends that changed the HR function continue today, such as
mergers and acquisitions, which now are often between two firms in different
countries. The post-affirmative action legal climate for human resources is becoming
more complex. A rise in terrorism has made security more difficult too.
IINumber range NLA. Evolution of the Human Resource Function
The industrial revolution sparked business growth and expansion. Large-scale business
operations created the need for professional managers.
The first serious study of management practice was based on scientific management,
which was concerned with structuring jobs for maximum efficiency and productivity. It
helped augment the concepts of assembly-line production, division of labor, and economies
of scale.
ENumber range NL1. Origins of the Human Resource Function
6Number range NL_a. Rapidly expanding companies in the early 1900s created
new specialized units to hire new employees and to help manage the existing
workforce.
7Number range NL_a. The work of Darwin in individual differences and that of
Binet and Simon in intelligence testing (used in WWI) provided new tools to
manage employment processes.
8Number range NL_a. By 1923, Personnel Management, a book by Scott and
Clothier, was spelling out how to match a person’s skills and aptitudes with job
requirements.
, 9Number range NL_a. The human relations era emerged following the
Hawthorne studies in the early 1930s.
aNumber range NL_1_)Human behavior was recognized to relate to worker
performance.
bNumber range NL_1_)Maslow’s hierarchy of human needs and McGregor’s
Theory X and Theory Y were popularized at this time.
FNumber range NL1. Personnel Management
10Number range NL_a. During the 1930s and 1940s, specialized units gradually
became known as personnel departments, which were self-contained and dealt
with basic human resource activities such as hiring, pay, and benefits.
11Number range NL_a. Personnel management became a new type of
management function, mainly concerned with hiring first-line employees and
was directed by the personnel manager.
12Number range NL_a. During World War II, psychologists were consulted to
help develop selection tests to assess individual skills, interests, and abilities in
order to optimize the fit between individuals and jobs.
13Number range NL_a. Wartime lessons in personnel testing were adapted for
use in private industry in the 1950s, and companies also began to experiment
with more sophisticated reward and incentive systems.
14Number range NL_a. The personnel manager’s job also became more complex
as the power of labor unions increased and government legislation expanded.
15Number range NL_a. As late as the 1970s, personnel management was seen as
a routine clerical and bookkeeping function.
7. The Civil Rights Act of 1964 increased the importance of fully understanding the
legal context of human resource management, and subsequent amendments,
executive orders, and legal decisions made hiring and promotion more complex.
CNumber range NL1. Human Resource Management in the Electronic Age
Technology has had a dramatic impact on human resource management.
16Number range NL_a. Automated systems for measurement have made such
tasks easier.
17Number range NL_a. Computers and the Internet have affected the
management of human resources and the delivery of HR systems. Online job
analysis, Web-based recruiting, online testing and training, and employee access
to information through the Internet have revolutionized human resource
management.
18Number range NL_a. While the overall impact has been to make tasks easier,
new challenges are also presented, including new issues of ethics and privacy.
19Number range NL_a. It is unclear whether new technologies have increased
the effectiveness of human resources.
20Number range NL_a. As organizations become more technologically complex,
their need for specialized employees grows. Knowledge workers are employees
whose jobs are primarily concerned with the acquisition and application of
knowledge. They contribute to an organization through what they know and how
they can apply what they know.
, DNumber range NL1. Emerging Human Resource Challenges
21Number range NL_a. The economic downturn has generated some challenges
such as job loss and corporate reorganization.
22Number range NL_a. HR professionals must determine how to effectively
manage downsizing, outplacement, and employee integration after mergers and
acquisitions.
23Number range NL_a. Other issues that challenge HR executives include
managing employee stress driven by workplace uncertainty, increased
government oversight and regulation, and the importance of social responsibility
and environmental awareness.
24Number range NL_a. These changes will likely increase the degree to which
HR professionals influence the management of companies.
IIINumber range NLA. Goals of Human Resource Management
Exhibit 1.1 illustrates the four basic goals of human resource management today.
GNumber range NL1. Facilitating Organizational Competitiveness
25Number range NL_a. The organization needs to employ individuals most able
to help accomplish its goals and help it remain competitive.
26Number range NL_a. The human resource management function must have a
basic goal of clearly understanding how the organization competes, the kinds of
human resources necessary to promote its ability to compete, and the most
appropriate methods for attracting and developing those human resources.
HNumber range NL1. Enhancing Productivity and Quality
27Number range NL_a. Productivity is an economic measure of efficiency that
summarizes and reflects the value of outputs created by an individual,
organization, industry, or economic system relative to the value of inputs used to
create them.
28Number range NL_a. Quality is the total set of features and characteristics of
a product or service that bears on its ability to satisfy stated or implied needs.
29Number range NL_a. Improving productivity and quality takes a major and
comprehensive approach that relies heavily on human resource management in
areas such as selection, training and development, and rewards.
INumber range NL1. Complying with Legal and Social Obligations
30Number range NL_a. Organizations must stay within the relevant legal
boundaries in dealing with employees or risk huge financial penalties, negative
publicity, and damage to internal corporate culture.
31Number range NL_a. More organizations recognize their social obligation
beyond minimum activities needed to comply with legal regulations.
Organizations are responding to pressure to make corporate social responsibility
an important goal.
JNumber range NL1. Promoting Individual Growth and Development
32Number range NL_a. Many organizations go beyond offering basic job-related
training and development by offering basic English, mathematics, or science
courses as well as career development and mentoring programs.
