Automatically creating home directories on login

PAM (pluggable authentication modules) allows you to automatically create home directories when a user first logs into a system. This means they will get the skeleton shell init scripts (so e.g. they get a decent prompt).

Add to /etc/pam.d/system-auth (below the pam_deny.so line):

session     required      /lib/security/$ISA/pam_mkhomedir.so skel=/etc/skel umask=0022

That will automatically create a home directory in /home the first time any new user logs into the system.