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[Music] different organizations use different terms to refer to the members of their workforce let's take a look at human resource management terms while the terms used by companies may vary we use the term employees to refer to the individuals who work for a company we use the term human resource practices often shortened to HR practices when we refer to HR practices we're not talking about the responsibilities of human resources departments of an organization unless we specifically say so rather we're talking about the practices that a company has put in place to manage its employees we use the term line manager or manager to refer to individuals who are responsible for supervising and directing the efforts of a group of employees to perform tasks that are directly related to the creation and delivery of a company's products or services as more employment related laws were passed many organizations began to assign much of the responsibility for employee management to the human resource department also simply called the HR department a support function within organizations that serves a vital role in designing and implementing company policies for managing employees over time the role of HR departments extended to include a wide variety of tasks including record keeping and payroll compensation and benefits recruitment selection training performance management and regulatory issues now however companies are increasingly recognizing that managing employees is a key organization wide responsibilities not solely the responsibility for the HR department and line managers are being held accountable for how they effectively attract develop and motivate the employees they oversee after all managers are successful only if they're able to get the highest level of quality effort from their employees managers must work with the HR department to design and implement HR practices that maximize the of their employees smart managers understand that people matter and without people you cannot begin to achieve your company's goals as we look at some of the potential costs and benefits you'll begin to understand why managing employees is the job of every manager and not just the job of an HR department a company's competitive advantage is its ability to create more economic value than its competitors companies often considered employees not as a competitive advantage but simply is a cost to minimize after all maintaining a workforce is one of the largest fixed costs for most organizations in addition to compensation costs employers incur costs as a result of the time and effort needed for activities such as recruiting hiring training evaluating mentoring coaching and disciplining employees increasingly however organizations are recognizing that employees and how they are managed may prove to be as important to competitive success as other organizational attributes when employees are mismanaged they are not able or willing to work towards organizational goals if employees do not have the necessary skills for their jobs and are not provided the training to succeed they may not know how to work effectively or efficiently resulting in lower performance and greater costs to the company how employees are managed also influences their attitudes and behaviors employees who feel undervalued or under depreciated will not extend as much effort in performing their jobs unhappy or unmotivated employees may be less likely to be responsive to customer needs which can cost the company customers and money mismanaging employees may lead to higher levels of employee turnover and absenteeism as well as sabotage which can have both direct and indirect costs for the organization an employee who is not properly trained to do a hazardous job may make mistakes that lead to injury for the workers and a lawsuit for the company in con Rast effectively managing employees can lead to improved firm performance when employees have the skills they need they're able to contribute to meeting company goals and when employees feel valued by their organization they're likely to display greater levels of commitment loyalty and morale armed with the skills that they need and greater motivation employees can become more productive greater productivity may then offset the costs associated with managing employees given that we know about the outcomes of effectively managing employees many companies increasingly view employees is more than just a cost to control these organizations know that employees are a potential source of competitive advantage and that their talents must be nurtured keep in mind that there's no single best way to manage employees rather each company is different and must manage employees in a way that's most appropriate given its unique situation the internal organizational demands and the external environment determine the context for setting HR practices the human resource framework shows the relationship between the organization's context both external and internal and the HR activities that the organization needs to use to manage employees to achieve its ultimate goal competitive advantage by understanding the relationship among these components and how to use the HR activities to build on one another managers can equip and position employees to maximize their contribution to company performance which in turn creates a competitive advantage this figure shows that the strategic management of employees centers around three categories of HR activities which occur within the context of three main HR challenges the three primary HR activities are first work design and Workforce Planning which is about designing jobs and planning for the workforce needed to achieve organizational goals second managing employee competencies which includes identifying acquiring and developing employee talent and skills finally third managing employee attitudes behaviors which means encouraging and motivating employees to perform in appropriate ways to contribute to company goals managers carry out these three primary HR activities in the context of three main HR challenges including organizational demands internal factors including strategy company characteristics organizational culture and employee concerns second environmental influences which are external factors including labor force trends globalization technology and ethics and social responsibility third and finally regulatory issues a special subgroup of environmental influences that include federal state and local legislation that protects the rights of individuals and the company with regard to the employment process regulatory issues are critical to employee management human resource departments are responsible for activities spanning a variety of core functions this figure highlights the three primary HR activities first organizations must decide how to design jobs and ensure that employees are where they need to be to meet organizational goals second companies must ensure that employees have the competencies they need to perform those jobs and third employees must be motivated to use their competencies productively work design and Workforce Planning are two critical components of managing employees managers must design jobs in a way that ensures that employees perform tasks and responsibilities that have the most potential to add value to the company managers must also engage in workforce planning to make sure that the right people are in the right place in the company at the right time to meet organizational goals the second primary HR activity is for managers to ensure that employees have the necessary competencies to effectively perform their job tasks competencies are the knowledge skills abilities and other talents that employees possess these competencies directly influence the types of jobs employees are able to perform managing competencies means recruiting and selecting the right people and train them to succeed in their jobs building competencies is critical but keep in mind that it's only part of the equation how well employees perform is a function of the effort they expend as well as their competencies encouraging the right employee attitudes and behaviors requires motivating workers to continually improve their performance this forms our third group of primary HR activities some of the major tools that managers use to guide employee efforts on the job our compensation incentives performance management programs and employee benefits health and wellness programs instead of trying to identify a single way to manage employee attitudes and behaviors it's important to identify the different tools managers have at their disposal to guide and motivate their employees within the unique context of their organization when we discuss alignment we're describing the extent to which the three primary HR activities are designed to achieve the goals of the organization work design and Workforce Planning managing employee competencies and encouraging the right employee attitudes and behaviors must align with each other to be effective alignment can be broken down into two parts internal and external alignment to achieve internal alignment you must first make sure that the specific practice is used within each primary HR activity are consistent with one another as well as aligned across primary HR activities if you've ever been on a sports team you'll know how important it is for all participants to have a common understanding of how to play the game the skills required to play and the desire to win that is the same thing we're talking about here if employees know the goals of the organization and are motivated to work towards those goals but do not possess all of the competencies to do so the results will be diminished employee performance and reduced organizational productivity if employees possess the competencies they need to know and the goals but lack sufficient motivation their contributions to the company's success will be limited if employees are capable and motivated but are limited in what they can do or are short-handed due to an inappropriate or poor job design and Workforce Planning their ability to contribute to the organization will also be limited in addition to internal alignment you must also achieve external alignment by ensuring that the three primary HR activities work in concert with one another as well as with the other HR challenges that organizations face organizational demands are factors within a firm that affect decisions regarding how to manage employees a company's strategy is its plan for achieving a competitive advantage over its rivals strategy drives the activities that a company performs to attract and retain customers relative to its competitors companies realize a competitive advantage when they implement a strategy that has value for customers and that rival firms are unable to duplicate companies have a wide range of strategies from which to choose the strategy that a company chooses influences the types of jobs that must be performed to meet its objectives and consequently influences its primary HR activities companies differ in terms of size and stage of development the challenges associated with managing employees correspond at least in part to the size of the organization smaller businesses often do not have the same amount or type of resources as larger companies and they may not be able to be in a position to provide the same level of pay benefits and training opportunities size also influences the degree of autonomy and discretion that managers may expect employees to display in their jobs as a result the competencies that employees need in small companies versus large ones may differ organizational culture is the set of underlying values and beliefs that employees of a company share what is particularly interesting about organizational culture is that it's unwritten yet understood and often taken for granted each organization has a distinct culture that represents the beliefs of the company's founders decisions of its top managers types of employees who work in the company and the environment in which the organization operates culture influences how employees do their jobs how managers and employees interact and the acceptable practices for executing primary HR activities a positive culture can be a tremendous asset to an organization when a culture is positive and consistent with the organization's objectives employees are likely to have a clear understanding of what they need to do in their jobs to contribute to the company's goals and to have a willingness to engage in those activities such a culture can also be a strategic asset in attracting and retaining employees timely address of employee issues and concerns is a critical component in a company's success environmental influences are pressures that exist outside companies that managers must consider to strategically manage their employees ing to the Bureau of Labor Statistics the labor force is increasingly diverse especially in terms of the number of women and minorities in the age of the labor force itself the changing composition of the labor force influences the primary activities in HR in several ways a diverse workforce requires that managers reevaluate how they recruit and select individuals to make sure that any potential for direct or indirect discrimination is eliminated further employers need to educate employees about the value that different backgrounds and perspectives can bring to organizational performance by directly addressing diversity issues companies are more likely to capitalize on the many benefits associated with a diverse workforce technology continues to shape the nature of competition the increasing prominence of the internet and information technologies has considerable implications for how employees function with companies many employees today must possess a basic level of computer proficiency to perform their jobs information technologies have created new avenues for how employees interact share information and learn from one another technology has also created challenges in terms of privacy issues and has increased the potential for employee misuse an increasingly significant factor companies face in today's environment is the increased globalization of industries the blurring of country boundaries in business activities many organizations are actively competing on an international level setting up production or service facilities in other countries or establishing international joint ventures and partnerships every company operates in a social environment based on the implicit and explicit standards of ethical behavior and social responsibility the importance of ethical behavior has gained renewed prominence in recent years as a result of widely publicized unethical behavior regulatory issue is one of the challenges that has probably had the most direct influence on the management of employees over the past 50 years many presidential executive orders as well as much federal state and local legislation have been specifically concerned with the employment process [Music]