Human Resource Management – Essential Perspectives

Human Resource (HR) management
designing management systems to ensure that human talent is well used to accomplish organizational goals.
core competency
a unique capability that creates high value and differentiates an organization from its competition.
organizational culture
the shared values and beliefs that give members of an organization meaning and provide them with rules for behavior
productivity
measure of the quantity and quality of work done, considering the cost of the resources used
unit labor cost
computed by dividing the average cost of workers by their average levels of output
organizational restructuring
eliminating layers of management and changing reporting relationships, as well as cutting staff through downsizing, layoffs, and early retirement buyout programs
redesigning work
having fewer employees who work longer hours and perform multiple job tasks
aligning HR activities
making HR efforts consistent with organizational efforts to improve productivity
outsourcing analyses
involves HR in conducting cost-benefit analyses to justify outsourcing
contingent workers
temporary workers, independent contractors, leased employees, and part-timers
expatriate
a citizen of one country who is working in a second country and employed by an organization headquartered in the first country
host-country national
a citizen of one country who is working in that country and employed by an organization headquartered in a second country (local national)
third-country national
a citizen of one country who is working in a second country and employed by an organization headquartered in a third country
human resource management system (HRMS)
an integrated system providing information used by HR management in decision making
strategy
an organization’s proposition for how to compete successfully and thereby survive and grow
strategic planning
the process of defining an organizational strategy, or direction, and making decisions on allocating the resources of the organization (capital and people) to pursue this strategy
incentive compensation
pay-for-performance systems that tie employee rewards directly to successful performance of job responsibilities
training
talent development programs to ensure that all employees have the proper knowledge, skills, and abilities to perform their jobs and to grow with the organization
employee participation
soliciting and using employee ideas and suggestions to give employees a sense of importance and value to the organization
selectivity
setting stringent hiring standards to maintain a high level of quality when bringing employees into the organization
flexible work arrangements
providing alternative work schedules to help employees balance their personal and professional lives
environmental scanning
process used to pinpoint strengths, weaknesses, opportunities, and threats that the organization will face
succession planning
the process of identifying a plan for the orderly replacement of key employees
multinational corporation (MNC)
transnational corporation; corporation that has facilities and other assets in at least one country other than its home country
offshoring
the relocation by a company of a business process or operation from one country to another
due diligence
a comprehensive assessment of all aspects of the business being acquired
alternate work arrangements
nontraditional schedules that provide flexibility to employees, include job sharing and telecommuting
outsourcing
transferring the management and/or routine performance of a business function to an external service provider
HR metrics
specific measures tied to HR performance indicators
Benchmarking
the process of comparing metrics of the business process and outcomes to an industry standard or best practice
return on investment (ROI)
a calculation showing the value of investments in human resources
ROI formula
C/(A+B)
C/(A+B), where A=
operating costs for a new or enhanced system for the time period
C/(A+B), where B=
one-time cost of acquisition and implementation
C/(A+B), where C=
value of gains from productivity improvements for the time period
human capital value added (HCVA)
an adjusted operating profitability figure calculated by subtracting all operating expenses except for labor expenses from revenue and dividing the total full-time head count
HCVA formula
[revenue – operating expense – (compensation + benefit costs)] / Full-time head count
human capital return on investment (ROI)
the amount of profit derived from investments in labor, the leverage on labor cost
ROI formula
[revenue – operating expense – (compensation + benefit costs)] / (compensation + benefit costs)
human economic value added (HEVA)
the wealth created per employee
HEVA formula
(net profit after taxes – cost of capital) / full-time head count
HR audit
a formal research effort to assess the current state of HR practices in an organization