Unit Eleven

1. Unit Eleven Human Resource Management

2. Objectives • Get the students to be familiar with the concept of human resource management. • Cultivate the students’ ability of problem-solving. • Help the students to grasp the techniques for fast reading.

3. Section A • Introduction • Without people, organizations would not exist. While this idea may not be much of a revelation to you, it brings home the point that organizations are made up of people. Successful organizations are particularly adept at bringing together different kinds of people to achieve a common purpose. This is the essence of human resource management (HRM).

4. Pre-reading Before reading the following passage, answer these questions: • 1. What is human resource? • 2. What is the objective of human resource ? • 3. How much do you know about human resource management?

5. TextHuman Resources management • What is human resource management? Human resource management is the area of management concerning itself with the recruitment, selection, training, development, compensation, retention, evaluation, and promotion of the people within an organization. The human resources of an organization consist of the employees. Of the types of organizational capital upon which an organization depends its focus is on the human capital as opposed to the financial capital or the physical capital.

6. Job Analysis • At the heart of human resources is job analysis—a purposeful and systematic process for collecting, describing, and delineating what is done within jobs. Why is job analysis important? Job analysis is important for at least two reasons—(1) in order to increase organizational efficiency and effectiveness and (2) because it is required by the Uniform Guidelines (the guidelines used by the U.S. government to determine what selection and assessment processes are legal). How might job analysis increase organizational effectiveness and efficiency? Job analysis is the systematic study of what is done in a job.

7. By knowing what is supposed to be done within a particular job an organization is able to better look for employees who possess the necessary knowledge, skills, abilities, and other characteristics required for a job that it is seeking to fill. It is also better enabled to evaluate the performance of employees within particular jobs and provide feedback as to how to perform better. Without the systematic study of what SHOULD be done within a job employees involved in the hiring process are more likely to introduce personal bias, prejudices, and other non-job relevant information possibly leading to a less than optimal hiring decision. The lack of a detailed job analysis can then also lead to an organization not providing the training needed to optimize employee performance within jobs.

8. For instance, if my university provided professors and administrative assistants with identical training then it is likely that the performances of both would be sub optimal as they do not require the same sets of talents for both jobs. While there is some overlap—both require that one be able to manage time effectively—typing is likely a more highly valued skill for the administrative assistant while lecturing /teaching/speaking in front of audiences would likely be more important for the professor. Moving on to the evaluation process if we required the administrative assistants be evaluated on their teaching, research, and publishing while professors be evaluated based upon their typing speed then the organization would also be less effective—unless we sent the administrative assistants into the classroom and turn them into professors.

9. Human Resource Planning • Human resource planning is the beginning place for human resource actions just as job analysis is the building block upon which all human resource actions should be based. Human resource planning is where the human resource management strategy and the organization mission come together in determining the numbers and skill sets needed for employees based upon the future plans of the organization. Human resource planning should actually be done along with job analysis as the first step in the human resource management process so that the organization can identify how many employees it needs to employ and the knowledge, skills, abilities, and other characteristics needed for employees based upon the future plans of the organization.

10. Based upon the initial estimates of the types and numbers of employees needed it is job analysis that is used to assess the specific knowledge, skills, abilities, and other characteristics necessary for the organization to accomplish its mission and objectives and it is human resource planning that is used to determine the numbers of employees needed. Human resource planning involves the following six-step process in order to forecast the human resource needs for the organization.

11. Step 1 Environmental Scanning—basically a SWOT analysis for the organization with an emphasis on how it would influence the human resource needs of the organization. • Step 2 Labor Demand Forecast—labor demands many be estimated either qualitatively or quantitatively. • Step 3 Labor Supply Forecast—how many people shall likely have the knowledge, skills, abilities and other characteristics desired for your organization. Both internal and external labor supply should be examined.

12. Step 4 Gap Analysis—difference between labor demand and supply. • Step 5 Action Programming—plan for how you shall hire and place the needed employees. • Step 6 Control and Evaluation—the feedback process—how well did the process actually work at getting the employees needed and how can the process be improved in the future?

13. Compensation • Compensation refers to all forms of financial returns and tangible services and benefits that employees receive as part of the employment relationship. Compensation has long been a topic of interest to employees and employers alike. In fact, the use of compensation as a motivator has been traced to antiquity. The concept of an employment relationship implies that employees work in exchange for some reward, and this reward is often monetary compensation.

14. Compensation systems may themselves have to do with any type of reward or benefit that may be received by employees and include base compensation (whether piece rate, hourly, or salaried), merit pay, pensions, profit sharing, health care, family and medical leave programs, vacation leave, and compensatory leave. Both direct remuneration (pay) and indirect remuneration (benefits) are included. Compensation administration also typically incorporates compliance issues as there are myriad local, state, and federal laws and regulations that must be followed that are related to compensation including minimum wage laws, maximum hours allowed before overtime pay is required, unemployment and disability requirements, and employee health and safety requirements, to name just a few.

15. All good compensation systems should be based upon a detailed job analysis to allow the organization to attract, retain, and motivate needed employees. In relation to compensation systems job analysis examines the internal and external pay rates for jobs in order to allow organizational decision makers to make intelligent compensation decisions that allow for both internal and external equity and match the organization’s ability to pay. This is typically done by an examination of the internal and external pay rates for key jobs in the organization and then creating a hierarchy of position worth based upon the contribution of the job to the mission of the organization.

16. Recruitment • Organizational recruitment is the attraction of employees with the necessary knowledge, skills, abilities, and other characteristics needed for the organization to be able to fulfill its mission and objectives. The recruitment strategy should be based upon the human resource planning estimates as to the numbers, types, and skill sets of employees needed and upon the organizations’ ability to compensate the employees. Based upon the results of the job analyses job advertisements should be written up identifying the skills and experiences of applicants desired. The advertisement should be designed such that it attracts employees with the types of background experiences and skills desired for the job and in the numbers needed by the organization.

17. An important part of recruitment is the determination of where to advertise the job openings. Some organizations only consider external applicants (people not yet employees of the organization) for entry-level positions so in such a situation if seeking more senior employees in such a case the organization needs only advertise internally (for individuals already employed by the organization who may be seeking career advancement). However, this is not the case for most organizations and therefore in most instances the position would be advertised both internally and externally. Internal postings may be done in a variety of ways from newsletters, to e-mail messages, to bulletin boards (both virtual and physical). External postings may also be done electronically, through newspapers, magazines, trade journals, with job placement services, and through word of mouth.

18. Training and Development • Once a new employee has been hired and placed within an organization, the organizational socialization process begins and the employee should be trained. In the United States most new employee training takes place on the job (while the employee is working). In more complicated work the employee may be trained for the job before being hired and then retrained by the organization after beginning paid employment or they may be trained for the job off-site (while not performing the job, but being paid).

19. For example, going back to the bombing crews discussed in the section on selection, modern American bombing crews are trained for their job by the U. S. government before being assigned to a bombing crew and then they are re-trained by the training officers from their squadrons as to what they are supposed to do. They also must then go through refresher courses at predetermined intervals in order to ensure that they remain combat ready and that they do not forget what they were trained to do and how they are supposed to do what they are trained to do.

20. The most common type of training done by organizations is a New Employee Orientation. A New Employee Orientation is done to acquaint new employees with their new organization (organizational culture and history, benefits, etc) and their working environment (what is going to be their physical surroundings while at work, who do they report to, when do they report to work, etc). Training may also be done long after one is hired in order to increase one’s efficiency and effectiveness in the job.

21. While employee training involves making a worker more effective and efficient in his/her current job, employee development involves the preparation of the employee for future positions within the organization. Typically the first type of employee development with which employees become involved is career exploration in which employees decide where they would like to work and what they might like to do in the future.

22. Psychological self evaluations such as the Strong Interest Inventory and the Personal Career Development Profile are two tests which may be very useful for employees trying to decide what they might do in the future as can mission-based goal-setting in which employees develop a mission statement for their life—just as the organization has a mission statement to provide guidance for employees—so to may a personal mission statement provide guidance for employees seeking to decide what type of personal and career development they may desire.

23. Post-reading • Answer the questions on the text: 1. What is Human Resource Management? 2. What is job analysis? 3. What are the steps in human resource planning? 4. What are the components of compensation? 5. What does validity mean? 6. What is the difference between training and development?

24. Section B Reading skills • Making Inferences • Making an inference means making a guess. • Go beyond surface details and “read between the lines” to reach information logically.

25. Speed Reading Task • Let’s have a glimpse of the model for evaluating human resource. Use this reading skill to find out the answers to Exercise 1 as quickly as possible.

26. True or False KEY: T F T F F T F T 1. The four C’s model for evaluating the effectiveness of HRM is competence, commitment, congruence and cost effectiveness. 2. Performance evaluation by managers can help a company determine how to set its strategies. 3. Low levels of trust and common purpose result from a low level of congruence. 4. Employees participation is essential for manages to obtain the data needed to evaluate the impact of HRM practices and policies. 5. High commitment means that employees are versatile in their skills and can take on new roles and jobs as needed. 6. Cost effectiveness means that human resource costs, such as wages, benefits and strikes, are kept equal to or less than those of competitors. 7. It’s unnecessary for managers to meet the needs of employees for learning, self-realization, and personal growth. 8. Job enrichment and job enlargement have been adopted in many organizations to satisfy both the fundamental and personal needs of employees.

27. Section C Case Study Task Study the case and discuss the questions in groups. • Sony • Akio Morita, founder of Sony Corporation, says there is no “magic” in the success of Japanese companies in general and Sony in particular. The secret of their success is simply the way they treat their employees. In this biography, Made in Japan, Morita says: • The most important mission for a Japanese manager is to develop a healthy relationship with his employees, to create a family-like feeling within the corporation, a feeling that employees and managers share the same fate. Those companies that are most successful in Japan are those that have managed to create a shared sense of fate among all employees, what Americans call labor and management, and the shareholders.

28. When Morita was chairman of Sony, he stressed to new employees that each employee had to seek happiness in his or her work and to decide personally whether to spend the rest of his or her working life at Sony. • At Sony, there are few noticeable differences between management and labor. Although management writers sometimes paint a too rosy picture of Japanese management-labor relations, Sony’s management philosophy is that employees should be treated as colleagues and helpers, not merely as means to profits. Investors are important, Morita acknowledges, but they establish only a temporary relationship with the company. Employees are more important because they are a permanent part of the company, just as much as top management.

29. In return for showing loyalty to employees, Morita expected loyalty from his employees. But he urged them not only to use their best efforts on the company’s behalf, but also to question management views. Ironically, Morita’s emphasis on loyalty was partly inspired by his experience with American managers and employees. In its early days, Sony hired many employees in the United States in an effort to keep pace with the remarkable demand for its products. Morita was stunned by an American colleague’s blunt advice about a problem employee: “Fire him.” Morita was equally surprised when an American employee walked into his office one day and announced he was quitting to take a job with a competitor who offered him double his salary.

30. Under Morita, the whole process of recruiting, selecting, training, and appraising employees was built on the premise that employees are most valuable part of the company. Granted, Morita’s policies—especially the idea of life time job security—are not as typical of Japanese companies as Americans were once led to believe. But this does not mean that American management cannot learn a great deal from Morita’s philosophy. • Sony has long been a leader in human resources management in Japan. The company has adopted such American concepts as five-day, 40-hour work week, even though Japanese law still sanctions a maximum of 48 hours, and the average in Japanese manufacturing remains 43 hours per week. Moreover, Sony was one of the first Japanese firms to close its factories for one week every summer to allow all its employees to be off work at the same time.

31. In addition, the Japanese system enforces a different view of recruits. Akio Morita, who believes that a key to success is creating a sense of shared fate among all employees, urges managers to see recruits as rough stones and the managerial job as the task of building a strong and sturdy wall out of these rough stones. The Japanese ideal is to shape and smooth managerial recruits so that they become a cohesive part of the company. Japanese companies, at least the large ones, also have a humane attitude toward dealing with employees in declining industries. Most companies offer retaining—and most workers eagerly accept it. At Sony, workers are retained when their particular jobs become obsolete.

32. Clearly, Akio Morita’s human resource policies accommodate Sony’s overall strategy. By focusing on the shared fate of management and employees, Sony develops among its workers a sense of commitment to the overall goals of the firm. Partly because of this employee commitment, Sony has been able to stay competitive in terms of wages and benefits and to motivate highly competent people to continue to innovate.

33. Questions for Discussion • 1. How do you explain Sony’s management philosophy? • 2. How do you evaluate Morita’s human resource policies? • 3. What is the difference between Japanese companies and their American counterparts concerning loyalty, according to the above case?

34. NOTES • New Employee Orientation • 新员工定位(入职引导)