Strategically Managing the HRM Functions 3 Q
©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
Chapter 16 Strategically Managing the
HRM Function
©McGraw-Hill Education
Learning Objectives 1 of 2
LO 16-1 Describe the roles that HRM plays in firms today
and the categories of HRM activities.
LO 16-2 Discuss how the HRM function can define its
mission and market
LO 16-3 Explain the approaches to evaluating the
effectiveness of HRM practices.
LO 16-4 Describe the new structures for the HRM
function.
©McGraw-Hill Education
Learning Objectives 2 of 2
LO 16-5 Describe how outsourcing HRM activities can
improve service delivery efficiency and
effectiveness.
LO 16-6 Relate how process reengineering is used to
review and redesign HRM practices.
LO 16-7 Discuss the types of new technologies that can
improve the efficiency and effectiveness of HRM.
LO 16-8 List the competencies the HRM executive needs
to become a strategic partner in the company.
©McGraw-Hill Education
Activities of HRM Transactional activities
Day-to-day transactions such as benefits
administration, record keeping, and employee
services
Traditional activities
Performance management, training, recruiting,
selection, compensation, and employee relations
Transformational activities
Knowledge management, management
development, cultural change, and strategic
redirection and renewal
LO 16-1
©McGraw-Hill Education
Figure 16.1 Categories of HRM Activities and
Percentages of Time Spent on Them
Jump to long description in appendix
©McGraw-Hill Education
Strategic Management of the HRM Function
Customer-oriented approach
HRM function as a strategic business unit defined
in terms of the customer base, the customers
needs, and the technologies required to satisfy
customers needs
©McGraw-Hill Education
Figure 16.2 Customer-Oriented Perspective of
the HRM Function
Jump to long description in appendix
©McGraw-Hill Education
Building an HR Strategy 1 of 2
The Basic Process
Scan the environment
Examine strategic business issues or needs
Identify people issues to address
Design HR strategy
Communicate to relevant parties
LO 16-2
©McGraw-Hill Education
Figure 16.4 Basic Process for HR Strategy
©McGraw-Hill Education
Building an HR Strategy 2 of 2
Involving Line Executives
Can increase the quality of information from which
the HR strategy is created
Provide input
Team members
Receive communications
Approve the strategy
©McGraw-Hill Education
Figure 16.7 Approaches to Developing an HR Strategy
Jump to long description in appendix
©McGraw-Hill Education
Measuring HRM Effectiveness 1 of 3
Benefits
Marketing the function
Shows how HR supports the organization
Providing accountability
Shows how HR is meeting its objectives
LO 16-3
©McGraw-Hill Education
Measuring HRM Effectiveness 2 of 3
Audit Approach
Key indicators
Staffing
Equal employment opportunity
Compensation
Benefits
Training
Employee appraisal and development
Succession planning
Safety
Labor relations
Overall effectiveness
©McGraw-Hill Education
Figure 16.9 Comparing HR and Line Executives
Evaluations of the Effectiveness of HRM Roles
Jump to long description in appendix
©McGraw-Hill Education
Figure 16.10 Comparing HR and Line Executives
Evaluations of the Effectiveness of HRM Contributions
Jump to long description in appendix
©McGraw-Hill Education
Measuring HRM Effectiveness 3 of 3
The Analytic Approach
Determines whether the introduction of a program
or practice has the intended effect
Estimates the financial costs and benefits resulting
from an HRM practice
Human resource accounting
Utility analysis
Uses analytic data to increase organizational
effectiveness
©McGraw-Hill Education
Table 16.2 Types of CostBenefit Analyses
Human resource accounting
Capitalization of salary
Net present value of expected wage payments
Returns on human assets and human investments
Utility analysis
Turnover costs
Absenteeism and sick leave costs
Gains from selection programs
Impact of positive employee attitudes
Financial gains of training programs
SOURCE: Based on A. S. Tsui and L. R. Gomez-Mejia, Evaluating HR Effectiveness, in Human Resource Management: Evolving Roles and Responsibilities, ed. L. Dyer (Washington, DC: Bureau of National Affairs, 1988), pp. 1196.
©McGraw-Hill Education
Improving HRM Effectiveness 1 of 6
Improving both the efficiency and effectiveness in
performing each of the activities
Eliminating as much of the transactional work as
possible (and some of the traditional work) to free
up time and resources to focus more on the
higher-value-added transformational work
LO 16-4
©McGraw-Hill Education
Figure 16.11 Improving HRM Effectiveness
Jump to long description in appendix
©McGraw-Hill Education
Improving HRM Effectiveness 2 of 6
Restructuring to Improve HRM Effectiveness
Traditional structured around basic HRM
subfunctions, such as staffing, training,
compensation, appraisal, and labor relations
Generic structure divides the HRM function into
three divisions
The centers for expertise
The field generalists
The service center
©McGraw-Hill Education
Figure 16.12
Old and New
Structures for
the HRM
Organization
Jump to long description in appendix
©McGraw-Hill Education
Improving HRM Effectiveness 3 of 6
Outsourcing to Improve HRM Effectiveness
An outside source may provide a service more
cheaply or more effectively (more expertise) than
doing it internally
Primarily outsource transactional activities and
services
Pensions and benefits administration
Payroll
LO 16-5
©McGraw-Hill Education
Improving HRM Effectiveness 4 of 6
Improving HRM Effectiveness Through Process
Redesign
Reengineering
Identify the process to be reengineered
Understand the process
Redesign the process
Implement the new process
LO 16-6, 16-7
©McGraw-Hill Education
Improving HRM Effectiveness 5 of 6
Improving HRM Effectiveness Through Process
Redesign continued
New technologiesE-HRM
Leveraging technology for the delivery of traditional and
transformational HRM activities
©McGraw-Hill Education
Improving HRM Effectiveness 6 of 6
Improving HRM Effectiveness Through Process
Redesign continued
Recruitment and selection
Online recruiting one out of every eight hires
Enables firms to monitor hiring processes to minimize the
potential for discriminatory hiring decisions
Compensation and Rewards
Training and Development
©McGraw-Hill Education
Improving HRM Effectiveness through New
TechnologiesHRM Information Systems
Three broad functions HRM has used in the past
Transaction processing, reporting, and tracking
Decision support systems
Expert systems
New technologies
Predictive analytics
Customization
©McGraw-Hill Education
The Future for HR Professionals
Four Basic Competencies
Business competence
Professional-technical knowledge
Management of change processes
Integration competence
LO 16-8
©McGraw-Hill Education
The Role of the Chief Human
Resource Officer
Chief HR Officer
Bear the responsibility for leading the HR function
Ensure that HR systems and processes deliver
value to the company
Seven roles
Strategic advisor to the executive team
Talent architect
Counselor/confidante/coach
Leader of the HR function
Liaison to the board
Workforce sensor
Representative of the firm
©McGraw-Hill Education
Figure 16.17 Percentage of Time CHROs
Spend in Each Role
Jump to long description in appendix
©McGraw-Hill Education
Table 16.5 Roles of the CHRO 1 of 2
Strategic advisor to the executive team: activities focused
specifically on the formulation and implementation of the
firms strategy.
Counselor/confidante/coach to the executive team:
activities focused on counseling or coaching team
members or resolving interpersonal or political conflicts
among team members.
Liaison to the board of directors: preparation for board
meetings, phone calls with board members, attendance at
board meetings.
©McGraw-Hill Education
Table 16.5 Roles of the CHRO 2 of 2
Talent architect: activities focused on building and
identifying the human capital critical to the present and
future of the firm.
Leader of the HR function: working with HR team members
regarding the development, design, and delivery of HR
services.
Workforce sensor: activities focused on identifying
workforce morale issues or concerns.
Representative of the firm: activities with external
stakeholders, such as lobbying, speaking to outside
groups, etc.
©McGraw-Hill Education
Appendix of Image Long Descriptions
©McGraw-Hill Education
Appendix 1 Figure 16.1 Categories of HRM Activities and
Percentages of Time Spent on Them
Transformational (5-15 percent)
Knowledge management
Strategic redirection and renewal
Cultural change
Management development
Traditional (15-30 percent)
Recruitment and selection
Training
Performance management
Compensation
Employee relations
Transactional (65-75 percent)
Benefits administration
Record keeping
Employee services
Return to original slide
©McGraw-Hill Education
Appendix 2 Figure 16.2 Customer-Oriented Perspective
of the HRM Function
Customers include line managers, strategic planners, and
employees.
Customers needs include committed employees and
competent employees.
Technology includes staffing, performance management,
rewards, and training and development.
Return to original slide
©McGraw-Hill Education
Appendix 3 Figure 16.7 Approaches to Developing an HR
Strategy An outside-in perspective
Business Driven (5 cases)
Business issues/outcomes
People issues/outcomes
HR strategy
3 Different Inside-Out strategies
Business-linked (5 cases)
Business issues/outcomes
People issues/outcomes
HR strategy
People-linked (7 cases)
People issues/outcomes
HR strategy
HR-focused (3 cases)
People issues/outcomes
HR strategy
Return to slide
©McGraw-Hill Education
Appendix 4 Figure 16.9 Comparing HR and Line Executives
Evaluations of the Effectiveness of HRM Roles
On a scale of 0 to 8, HR managers rated their effectiveness
in 5 areas. Line managers also rated HR managers in
these 5 areas.
Providing HRM services HR mean is 7.3, line mean is 6.1
Change consulting HR mean is 6.2, line mean is 4.7
Business partner HR mean is 6.1, line mean is 5.3
Developing the organization HR mean is 6.5, line mean is
5.2
Tailoring HRM practices to strategy HR mean is 6.8, line
mean is 5.3
Return to original slide
©McGraw-Hill Education
Appendix 5 Figure 16.10 Comparing HR and Line Executives
Evaluations of the Effectiveness of HRM Contributions
On a scale of 0 to 7, HR managers rated their effectiveness in 7 areas.
Line executives also rated HR managers in these 7 areas.
Performing the expected job HR mean is 4.5, line mean is 3.9
Responsive to customer needs HR mean is 5.0, line mean is 4.2
Providing useful information HR mean is 4.8, line mean is 4.3
Enhancing competitiveness HR mean is 5.0, line mean is 3.8
Value-added contribution HR mean is 5.0, line mean is 4.1
Contributing to core competence HR mean is 4.8, line mean is 4.2
Building human capital HR mean is 4.8, line mean is 4.2
Return to slide
©McGraw-Hill Education
Appendix 6 Figure 16.11 Improving HRM
Effectiveness From top to bottom:
Transformational (5-15 percent)
Knowledge management
Strategic redirection and renewal
Cultural change
Management development
Traditional (15-30 percent)
Recruitment and selection
Training
Performance management
Compensation
Employee relations
Transactional (65-75 percent)
Benefits administration
Record keeping
Employee services
On the bottom level are two more categories outsourcing and process redesign, information
technology
Return to original slide
©McGraw-Hill Education
Appendix 7 Figure 16.12 Old and New
Structures for the HRM Organization
Historical structure
At the top is the VP of HRM, followed by a second level with
the directors of staffing, compensation, training and
development, and planning.
New structure
At the top is the VP of HRM, followed by a second level with
3 areas: centers for expertise (rewards, staffing, training and
development, communications). This is labeled
traditional/transformational. Next to this is field staff (HR
generalists), which is labeled transformational/traditional. And
finally service center (information technology, claims
processing), which is labeled transactional.
Return to original slide
©McGraw-Hill Education
Appendix 8 Figure 16.17 Percentage of
Time CHROs Spend in Each Role What percent of your time would you say you spend in each of the
following roles?
Functional leader 22 percent
Workforce sensor 8 percent
Firm representative 5 percent
Talent architect 17 percent
Board liaison 10 percent
Executive coach 17%
Strategic advisor 21%
Other 0%
Return to original slide
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Home>Human Resource Management homework help>Strategically Managing the HRM Functions 3 Q
©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
Chapter 16 Strategically Managing the
HRM Function
©McGraw-Hill Education
Learning Objectives 1 of 2
LO 16-1 Describe the roles that HRM plays in firms today
and the categories of HRM activities.
LO 16-2 Discuss how the HRM function can define its
mission and market
LO 16-3 Explain the approaches to evaluating the
effectiveness of HRM practices.
LO 16-4 Describe the new structures for the HRM
function.
©McGraw-Hill Education
Learning Objectives 2 of 2
LO 16-5 Describe how outsourcing HRM activities can
improve service delivery efficiency and
effectiveness.
LO 16-6 Relate how process reengineering is used to
review and redesign HRM practices.
LO 16-7 Discuss the types of new technologies that can
improve the efficiency and effectiveness of HRM.
LO 16-8 List the competencies the HRM executive needs
to become a strategic partner in the company.
©McGraw-Hill Education
Activities of HRM Transactional activities
Day-to-day transactions such as benefits
administration, record keeping, and employee
services
Traditional activities
Performance management, training, recruiting,
selection, compensation, and employee relations
Transformational activities
Knowledge management, management
development, cultural change, and strategic
redirection and renewal
LO 16-1
©McGraw-Hill Education
Figure 16.1 Categories of HRM Activities and
Percentages of Time Spent on Them
Jump to long description in appendix
©McGraw-Hill Education
Strategic Management of the HRM Function
Customer-oriented approach
HRM function as a strategic business unit defined
in terms of the customer base, the customers
needs, and the technologies required to satisfy
customers needs
©McGraw-Hill Education
Figure 16.2 Customer-Oriented Perspective of
the HRM Function
Jump to long description in appendix
©McGraw-Hill Education
Building an HR Strategy 1 of 2
The Basic Process
Scan the environment
Examine strategic business issues or needs
Identify people issues to address
Design HR strategy
Communicate to relevant parties
LO 16-2
©McGraw-Hill Education
Figure 16.4 Basic Process for HR Strategy
©McGraw-Hill Education
Building an HR Strategy 2 of 2
Involving Line Executives
Can increase the quality of information from which
the HR strategy is created
Provide input
Team members
Receive communications
Approve the strategy
©McGraw-Hill Education
Figure 16.7 Approaches to Developing an HR Strategy
Jump to long description in appendix
©McGraw-Hill Education
Measuring HRM Effectiveness 1 of 3
Benefits
Marketing the function
Shows how HR supports the organization
Providing accountability
Shows how HR is meeting its objectives
LO 16-3
©McGraw-Hill Education
Measuring HRM Effectiveness 2 of 3
Audit Approach
Key indicators
Staffing
Equal employment opportunity
Compensation
Benefits
Training
Employee appraisal and development
Succession planning
Safety
Labor relations
Overall effectiveness
©McGraw-Hill Education
Figure 16.9 Comparing HR and Line Executives
Evaluations of the Effectiveness of HRM Roles
Jump to long description in appendix
©McGraw-Hill Education
Figure 16.10 Comparing HR and Line Executives
Evaluations of the Effectiveness of HRM Contributions
Jump to long description in appendix
©McGraw-Hill Education
Measuring HRM Effectiveness 3 of 3
The Analytic Approach
Determines whether the introduction of a program
or practice has the intended effect
Estimates the financial costs and benefits resulting
from an HRM practice
Human resource accounting
Utility analysis
Uses analytic data to increase organizational
effectiveness
©McGraw-Hill Education
Table 16.2 Types of CostBenefit Analyses
Human resource accounting
Capitalization of salary
Net present value of expected wage payments
Returns on human assets and human investments
Utility analysis
Turnover costs
Absenteeism and sick leave costs
Gains from selection programs
Impact of positive employee attitudes
Financial gains of training programs
SOURCE: Based on A. S. Tsui and L. R. Gomez-Mejia, Evaluating HR Effectiveness, in Human Resource Management: Evolving Roles and Responsibilities, ed. L. Dyer (Washington, DC: Bureau of National Affairs, 1988), pp. 1196.
©McGraw-Hill Education
Improving HRM Effectiveness 1 of 6
Improving both the efficiency and effectiveness in
performing each of the activities
Eliminating as much of the transactional work as
possible (and some of the traditional work) to free
up time and resources to focus more on the
higher-value-added transformational work
LO 16-4
©McGraw-Hill Education
Figure 16.11 Improving HRM Effectiveness
Jump to long description in appendix
©McGraw-Hill Education
Improving HRM Effectiveness 2 of 6
Restructuring to Improve HRM Effectiveness
Traditional structured around basic HRM
subfunctions, such as staffing, training,
compensation, appraisal, and labor relations
Generic structure divides the HRM function into
three divisions
The centers for expertise
The field generalists
The service center
©McGraw-Hill Education
Figure 16.12
Old and New
Structures for
the HRM
Organization
Jump to long description in appendix
©McGraw-Hill Education
Improving HRM Effectiveness 3 of 6
Outsourcing to Improve HRM Effectiveness
An outside source may provide a service more
cheaply or more effectively (more expertise) than
doing it internally
Primarily outsource transactional activities and
services
Pensions and benefits administration
Payroll
LO 16-5
©McGraw-Hill Education
Improving HRM Effectiveness 4 of 6
Improving HRM Effectiveness Through Process
Redesign
Reengineering
Identify the process to be reengineered
Understand the process
Redesign the process
Implement the new process
LO 16-6, 16-7
©McGraw-Hill Education
Improving HRM Effectiveness 5 of 6
Improving HRM Effectiveness Through Process
Redesign continued
New technologiesE-HRM
Leveraging technology for the delivery of traditional and
transformational HRM activities
©McGraw-Hill Education
Improving HRM Effectiveness 6 of 6
Improving HRM Effectiveness Through Process
Redesign continued
Recruitment and selection
Online recruiting one out of every eight hires
Enables firms to monitor hiring processes to minimize the
potential for discriminatory hiring decisions
Compensation and Rewards
Training and Development
©McGraw-Hill Education
Improving HRM Effectiveness through New
TechnologiesHRM Information Systems
Three broad functions HRM has used in the past
Transaction processing, reporting, and tracking
Decision support systems
Expert systems
New technologies
Predictive analytics
Customization
©McGraw-Hill Education
The Future for HR Professionals
Four Basic Competencies
Business competence
Professional-technical knowledge
Management of change processes
Integration competence
LO 16-8
©McGraw-Hill Education
The Role of the Chief Human
Resource Officer
Chief HR Officer
Bear the responsibility for leading the HR function
Ensure that HR systems and processes deliver
value to the company
Seven roles
Strategic advisor to the executive team
Talent architect
Counselor/confidante/coach
Leader of the HR function
Liaison to the board
Workforce sensor
Representative of the firm
©McGraw-Hill Education
Figure 16.17 Percentage of Time CHROs
Spend in Each Role
Jump to long description in appendix
©McGraw-Hill Education
Table 16.5 Roles of the CHRO 1 of 2
Strategic advisor to the executive team: activities focused
specifically on the formulation and implementation of the
firms strategy.
Counselor/confidante/coach to the executive team:
activities focused on counseling or coaching team
members or resolving interpersonal or political conflicts
among team members.
Liaison to the board of directors: preparation for board
meetings, phone calls with board members, attendance at
board meetings.
©McGraw-Hill Education
Table 16.5 Roles of the CHRO 2 of 2
Talent architect: activities focused on building and
identifying the human capital critical to the present and
future of the firm.
Leader of the HR function: working with HR team members
regarding the development, design, and delivery of HR
services.
Workforce sensor: activities focused on identifying
workforce morale issues or concerns.
Representative of the firm: activities with external
stakeholders, such as lobbying, speaking to outside
groups, etc.
©McGraw-Hill Education
Appendix of Image Long Descriptions
©McGraw-Hill Education
Appendix 1 Figure 16.1 Categories of HRM Activities and
Percentages of Time Spent on Them
Transformational (5-15 percent)
Knowledge management
Strategic redirection and renewal
Cultural change
Management development
Traditional (15-30 percent)
Recruitment and selection
Training
Performance management
Compensation
Employee relations
Transactional (65-75 percent)
Benefits administration
Record keeping
Employee services
Return to original slide
©McGraw-Hill Education
Appendix 2 Figure 16.2 Customer-Oriented Perspective
of the HRM Function
Customers include line managers, strategic planners, and
employees.
Customers needs include committed employees and
competent employees.
Technology includes staffing, performance management,
rewards, and training and development.
Return to original slide
©McGraw-Hill Education
Appendix 3 Figure 16.7 Approaches to Developing an HR
Strategy An outside-in perspective
Business Driven (5 cases)
Business issues/outcomes
People issues/outcomes
HR strategy
3 Different Inside-Out strategies
Business-linked (5 cases)
Business issues/outcomes
People issues/outcomes
HR strategy
People-linked (7 cases)
People issues/outcomes
HR strategy
HR-focused (3 cases)
People issues/outcomes
HR strategy
Return to slide
©McGraw-Hill Education
Appendix 4 Figure 16.9 Comparing HR and Line Executives
Evaluations of the Effectiveness of HRM Roles
On a scale of 0 to 8, HR managers rated their effectiveness
in 5 areas. Line managers also rated HR managers in
these 5 areas.
Providing HRM services HR mean is 7.3, line mean is 6.1
Change consulting HR mean is 6.2, line mean is 4.7
Business partner HR mean is 6.1, line mean is 5.3
Developing the organization HR mean is 6.5, line mean is
5.2
Tailoring HRM practices to strategy HR mean is 6.8, line
mean is 5.3
Return to original slide
©McGraw-Hill Education
Appendix 5 Figure 16.10 Comparing HR and Line Executives
Evaluations of the Effectiveness of HRM Contributions
On a scale of 0 to 7, HR managers rated their effectiveness in 7 areas.
Line executives also rated HR managers in these 7 areas.
Performing the expected job HR mean is 4.5, line mean is 3.9
Responsive to customer needs HR mean is 5.0, line mean is 4.2
Providing useful information HR mean is 4.8, line mean is 4.3
Enhancing competitiveness HR mean is 5.0, line mean is 3.8
Value-added contribution HR mean is 5.0, line mean is 4.1
Contributing to core competence HR mean is 4.8, line mean is 4.2
Building human capital HR mean is 4.8, line mean is 4.2
Return to slide
©McGraw-Hill Education
Appendix 6 Figure 16.11 Improving HRM
Effectiveness From top to bottom:
Transformational (5-15 percent)
Knowledge management
Strategic redirection and renewal
Cultural change
Management development
Traditional (15-30 percent)
Recruitment and selection
Training
Performance management
Compensation
Employee relations
Transactional (65-75 percent)
Benefits administration
Record keeping
Employee services
On the bottom level are two more categories outsourcing and process redesign, information
technology
Return to original slide
©McGraw-Hill Education
Appendix 7 Figure 16.12 Old and New
Structures for the HRM Organization
Historical structure
At the top is the VP of HRM, followed by a second level with
the directors of staffing, compensation, training and
development, and planning.
New structure
At the top is the VP of HRM, followed by a second level with
3 areas: centers for expertise (rewards, staffing, training and
development, communications). This is labeled
traditional/transformational. Next to this is field staff (HR
generalists), which is labeled transformational/traditional. And
finally service center (information technology, claims
processing), which is labeled transactional.
Return to original slide
©McGraw-Hill Education
Appendix 8 Figure 16.17 Percentage of
Time CHROs Spend in Each Role What percent of your time would you say you spend in each of the
following roles?
Functional leader 22 percent
Workforce sensor 8 percent
Firm representative 5 percent
Talent architect 17 percent
Board liaison 10 percent
Executive coach 17%
Strategic advisor 21%
Other 0%
Return to original slide
Applied Sciences
Architecture and Design
Biology
Business & Finance
Chemistry
Computer Science
Geography
Geology
Education
Engineering
English
Environmental science
Spanish
Government
History
Human Resource Management
Information Systems
Law
Literature
Mathematics
Nursing
Physics
Political Science
Psychology
Reading
Science
Social Science
Home
Homework Answers
Blog
Archive
Tags
Reviews
Contact
twitterfacebook
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