Chapter 12 – Building and Managing Human Resources
Strategic Human Resource Management
Human resource management (HRM): Activities that managers engage in to attract and retain employees and
to ensure that they perform at a high level and contribute to the accomplishment of organizational goals.
Strategic human resource management: The process by which managers design the components of an HRM
system to be consistent with each other, with other elements of organizational architecture, and with the
organization’s strategy and goals. The objective of this process is the development of a HRM system that
enhances an organization’s efficiency, quality, innovation, and responsiveness to customers (building blocks
for competitive advantage).
Overview of the Components of HRM
Five major components of an HRM system:
• Recruitment and selection
• Training and development
• Performance appraisal and feedback
• Pay and benefits
• Labour relations
The Legal Environment of HRM
Equal employment opportunity (EEO): The equal right of all citizens to the opportunity to obtain employment
regardless of their gender, age, race, country of origin, religion, or disabilities.
Recruitment and Selection
Recruitment: Activities that managers engage in to develop a pool of qualified candidates for open positions.
Selection: The process that managers use to determine the relative qualifications of job applicants and their
potential for performing well in a particular job.
Before actually recruiting and selecting employees, managers need to engage in two important activities:
human resource planning and job analysis.
Human Resource Planning
Human resource planning: Activities that managers engage in to forecast their current and future needs for
human resources.
Demand forecasts estimates the qualifications and numbers of employees an organization will need given its
goals and strategies.
Supply forecasts estimate the availability and qualifications of current employees now and in the future, as
well as the supply of qualified workers in the external labour market.
Outsource: To use outside suppliers and manufacturers to produce goods and services.
Offsourcing: Outsourcing to other countries.
, Job Analysis
Job analysis is the process of identifying:
• The tasks, duties, and responsibilities that make up a job (the job description)
• The knowledge, skills, and abilities needed to perform the job (the job specifications)
External and Internal Recruitment
When managers recruit externally to fill open positions (external recruiting), they look outside the
organization for people who have not worked for the organization previously.
Advantages: large pool of applicants, being able to attract people who have the skills, knowledge, and abilities
that an organization needs to achieve its goals, and being able to bring in newcomers who may have a fresh
approach to problems and be up to date on the latest technology.
Disadvantage: relatively high costs.
When recruiting is internal, managers turn to existing employees to fill open positions. Employees recruited
internally are either seeking lateral moves (job changes that entail no major changes in responsibility or
authority levels) or promotions.
Advantages: applicants are already familiar with the organization, managers already know the candidates;
they have considerable information about their skills and abilities and actual behaviour on the job, internal
recruiting can help boost levels of employee motivation and morale, both for the employee who gets the job
and for other workers.
Disadvantages: limited pool of candidates and a tendency among those candidates to be set in the
organization’s ways.
Lateral move: A job change that entails no major changes in responsibility or authority levels.
The Selection Process
Selection tools:
• Background information
To aid in the selection process, managers obtain background information from job applications and
from résumés. Such information might include the highest levels of education obtained, college majors
and minors, type of college or university attended, years and type of work experience, and mastery of
foreign languages.
• Interviews
Virtually all organizations use interviews during the selection process. Interviews may be structured or
unstructured.
Structured interview: manager asks each applicant the same questions
Situational interview: scenario questions
Unstructured interview: interviewer feels free to ask probing questions to discover what the applicant
is like and does not ask a fixed set of question determined in advance.
• Paper-and-pencil tests
The two main kinds of paper-and-pencil tests used for selection purposes are ability tests and
personality tests; both kinds of tests can be administered in hard copy or electronic form.
Ability tests assess the extent to which applicants possess the skills necessary for job performance,
such as verbal comprehension or numerical skills.
Personality tests measure personality traits and characteristics relevant to job performance. The use
of personality tests (including honesty tests) for hiring purposes is controversial. Some critics maintain
that honesty tests do not really measure honesty (that is, they are not valid) and can be faked by job
applicants.
Before using any paper-and-pencil tests for selection purposes, managers must have sound evidence
that the tests are actually good predictors of performance on the job in question.
Strategic Human Resource Management
Human resource management (HRM): Activities that managers engage in to attract and retain employees and
to ensure that they perform at a high level and contribute to the accomplishment of organizational goals.
Strategic human resource management: The process by which managers design the components of an HRM
system to be consistent with each other, with other elements of organizational architecture, and with the
organization’s strategy and goals. The objective of this process is the development of a HRM system that
enhances an organization’s efficiency, quality, innovation, and responsiveness to customers (building blocks
for competitive advantage).
Overview of the Components of HRM
Five major components of an HRM system:
• Recruitment and selection
• Training and development
• Performance appraisal and feedback
• Pay and benefits
• Labour relations
The Legal Environment of HRM
Equal employment opportunity (EEO): The equal right of all citizens to the opportunity to obtain employment
regardless of their gender, age, race, country of origin, religion, or disabilities.
Recruitment and Selection
Recruitment: Activities that managers engage in to develop a pool of qualified candidates for open positions.
Selection: The process that managers use to determine the relative qualifications of job applicants and their
potential for performing well in a particular job.
Before actually recruiting and selecting employees, managers need to engage in two important activities:
human resource planning and job analysis.
Human Resource Planning
Human resource planning: Activities that managers engage in to forecast their current and future needs for
human resources.
Demand forecasts estimates the qualifications and numbers of employees an organization will need given its
goals and strategies.
Supply forecasts estimate the availability and qualifications of current employees now and in the future, as
well as the supply of qualified workers in the external labour market.
Outsource: To use outside suppliers and manufacturers to produce goods and services.
Offsourcing: Outsourcing to other countries.
, Job Analysis
Job analysis is the process of identifying:
• The tasks, duties, and responsibilities that make up a job (the job description)
• The knowledge, skills, and abilities needed to perform the job (the job specifications)
External and Internal Recruitment
When managers recruit externally to fill open positions (external recruiting), they look outside the
organization for people who have not worked for the organization previously.
Advantages: large pool of applicants, being able to attract people who have the skills, knowledge, and abilities
that an organization needs to achieve its goals, and being able to bring in newcomers who may have a fresh
approach to problems and be up to date on the latest technology.
Disadvantage: relatively high costs.
When recruiting is internal, managers turn to existing employees to fill open positions. Employees recruited
internally are either seeking lateral moves (job changes that entail no major changes in responsibility or
authority levels) or promotions.
Advantages: applicants are already familiar with the organization, managers already know the candidates;
they have considerable information about their skills and abilities and actual behaviour on the job, internal
recruiting can help boost levels of employee motivation and morale, both for the employee who gets the job
and for other workers.
Disadvantages: limited pool of candidates and a tendency among those candidates to be set in the
organization’s ways.
Lateral move: A job change that entails no major changes in responsibility or authority levels.
The Selection Process
Selection tools:
• Background information
To aid in the selection process, managers obtain background information from job applications and
from résumés. Such information might include the highest levels of education obtained, college majors
and minors, type of college or university attended, years and type of work experience, and mastery of
foreign languages.
• Interviews
Virtually all organizations use interviews during the selection process. Interviews may be structured or
unstructured.
Structured interview: manager asks each applicant the same questions
Situational interview: scenario questions
Unstructured interview: interviewer feels free to ask probing questions to discover what the applicant
is like and does not ask a fixed set of question determined in advance.
• Paper-and-pencil tests
The two main kinds of paper-and-pencil tests used for selection purposes are ability tests and
personality tests; both kinds of tests can be administered in hard copy or electronic form.
Ability tests assess the extent to which applicants possess the skills necessary for job performance,
such as verbal comprehension or numerical skills.
Personality tests measure personality traits and characteristics relevant to job performance. The use
of personality tests (including honesty tests) for hiring purposes is controversial. Some critics maintain
that honesty tests do not really measure honesty (that is, they are not valid) and can be faked by job
applicants.
Before using any paper-and-pencil tests for selection purposes, managers must have sound evidence
that the tests are actually good predictors of performance on the job in question.
