The Challenge of Human Resource Management

1
The Challenge of Human Resource Management

• Chapter 1
• November 16, 2009

2
Objectives

• Identify how firms gain sustainable competitive
  advantage through people.
• Explain how globalization is influencing human
  resources management.
• Describe the impact of information technology on
  managing people.
• Identify the importance of change management.
• State HRs role in developing intellectual
  capital.
• Differentiate how TQM and reengineering influence
  HR systems.

3
Objectives (cont.)

• Discuss the impact of cost pressures on HR
  policies.
• Discuss the primary demographic and employee
  concerns pertaining to HRM.
• Provide examples of the roles and competencies of
  todays HR managers.

4
Competitive Advantage through People

• Core Competencies
• Integrated knowledge sets within an organization
  that distinguish it from its competitors and
  deliver value to customers.
• Sustained competitive advantage through people is
  achieved if these human resources
• Have value.
• Are rare and unavailable to competitors.
• Are difficult to imitate.
• Are organized for synergy.

5
Overall Framework for Human Resource Management

• COMPETITIVECHALLENGES
• Globalization
• Technology
• Managing change
• Human capital
• Responsiveness
• Cost containment

• HUMAN RESOURCES
• Planning
• Recruitment
• Staffing
• Job design
• Training/development
• Appraisal
• Communications
• Compensation
• Benefits
• Labor relations

• EMPLOYEECONCERNS
• Background diversity
• Age distribution
• Gender issues
• Educational levels
• Employee rights
• Privacy issues
• Work attitudes
• Family concerns

6
Competitive Challenges and Human Resources
Management

• The most pressing competitive issues facing
  firms
• Going global
• Embracing technology
• Managing change
• Developing human capital
• Responding to the market
• Containing costs

7
Going Global

• Globalization
• The trend toward opening up foreign markets to
  international trade and investment.
• Impact of Globalization
• Partnerships with foreign firms
• Anything, anywhere, anytime markets
• Lower trade and tariff barriers
• NAFTA, EU, APEC trade agreements
• WTO and GATT

8
Going Global (contd)

• Impact on HRM
• Different geographies, cultures, laws, and
  business practices
• Issues
• Identifying capable expatriate managers.
• Developing foreign culture and work practice
  training programs.
• Adjusting compensation plans for overseas work.

9
Embracing New Technology

• Knowledge Workers
• Workers whose responsibilities extend beyond the
  physical execution of work to include planning,
  decision making, and problem solving.
• The Spread of E-commerce
• The Rise of Virtual Workers

10
Influence of Technology in HRM

• Human Resources Information System (HRIS)
• Computerized system that provides current and
  accurate data for purposes of control and
  decision making.
• Benefits
• Store and retrieve of large quantities of data.
• Combine and reconfigure data to create new
  information.
• Institutionalization of organizational knowledge.
• Easier communications.
• Lower administrative costs, increase productivity
  and response times.

11
Major Uses ForHR Information Systems
12
Impact of IT on HRM
OperationalImpact
RelationalImpact
HRM
TransformationalImpact
13
A Guide To Internet Sites

• American Management Association
  (http//www.amanet.org/start.htm)AMA membership,
  programs, training, etc.
• Society for Human Resource Management
  (http//www.shrm.org)Current events,
  information, connections, articles.
• HR Professionals Gateway to the Internet
  (http//www.hrisolutions.com/index2.html) Links
  to HR-related web pages.
• Training and Development Homepage
  (http//www.tcm.com/trdev/)Job mart, training
  links, TD electronic mailing list links.

14
A Guide To Internet Sites (contd)

• FedWorld (http//www.fedworld.gov) A gateway to
  many government web sites.
• U.S. Department of Labor(http//www.dol.gov)
  Job bank, labor statistics, press releases,
  grants, contract information.
• Occupational Safety and Health Resources(http//o
  sh.net) OSHA-related sites, government pages,
  resources, etc.
• AFL-CIO(http//www.aflcio.org/home.htm)Union
  news, issue papers, press releases, links to
  labor sites.

HRM 2
15
HRM IT Investment Factors

• Initial costs and annual maintenance costs
• Fit of software packages to the employee base
• Ability to upgrade Increased efficiency and time
  savings
• Compatibility with current systems

• User-friendliness
• Availability of technical support
• Needs for customizing
• Time required to implement
• Training time required for HR and payroll

16
Managing Change

• Types of Change
• Reactive change
• Change that occurs after external forces have
  already affected performance
• Proactive change
• Change initiated to take advantage of targeted
  opportunities
• Formal change management programs help to keep
  employees focused on the success of the business.

17
Managing Change Why Change Efforts Fail

• Not establishing a sense of urgency.
• Not creating a powerful coalition to guide the
  effort.
• Lacking leaders who have a vision.
• Lacking leaders who communicate the vision.
• Not removing obstacles to the new vision.
• Not systematically planning for and creating
  short-term wins.
• Declaring victory too soon.
• Not anchoring changes in the corporate culture.

18
Developing Human Capital

• Human Capital
• The knowledge, skills, and capabilities of
  individuals that have economic value to an
  organization.
• Valuable because capital
• Is based on company-specific skills.
• Is gained through long-term experience.
• Can be expanded through development.

19
Responding to the Market

• Total Quality Management (TQM)
• A set of principles and practices whose core
  ideas include understanding customer needs, doing
  things right the first time, and striving for
  continuous improvement.
• Six Sigma
• A process used to translate customer needs into a
  set of optimal tasks that are performed in
  concert with one another.

20
Responding to the Market

• Reengineering
• Fundamental rethinking and radical redesign of
  business processes to achieve dramatic
  improvements in cost, quality, service, and
  speed.
• Requires that managers create an environment for
  change.
• Depends on effective leadership and communication
  processes.
• Requires that administrative systems be reviewed
  and modified.

21
Containing Costs

• Downsizing
• The planned elimination of jobs (head count).
• Outsourcing
• Contracting outside the organization to have work
  done that formerly was done by internal
  employees.
• Employee Leasing
• The process of dismissing employees who are then
  hired by a leasing company (which handles all
  HR-related activities) and contracting with that
  company to lease back the employees.

22
Downsizing and Upsizing
Percent of companies reporting that they
23
Containing Costs (contd)

• Hidden Costs of Layoff
• Severance and rehiring costs
• Accrued vacation and sick day payouts
• Pension and benefit payoffs
• Potential lawsuits from aggrieved workers
• Loss of institutional memory and trust in
  management
• Lack of staffers when the economy rebounds
• Survivors who are risk-averse, paranoid, and
  political

24
Containing Costs (contd)

• Benefits of a No-Layoff Policy
• A fiercely loyal,more productive workforce
• Higher customer satisfaction
• Readiness to snap back with the economy
• A recruiting edge
• Workers who arent afraid to innovate, knowing
  their jobs are safe.

25
Productivity Enhancements

• ENVIRONMENT
• Empowerment
• Teams
• Leader support
• Culture

Perf f (A,M,E)

• MOTIVATION
• Job enrichment
• Promotions
• Coaching
• Feedback
• Rewards

• ABILITY
• Recruitment
• Selection
• Training
• Development

26
Social Issues and HRM

• Changing Demographics
• Shrinking pool of entry-level workers
• Productivity
• Individual differences
• Retirement benefits
• Social Security contributions
• Skills development
• Use of temporary employees

27
Social Issues and HRM (contd)

• Employer/Employee Concerns
• Job as an entitlement
• Right to work
• Whistle-blowing
• Employment at will
• AIDS
• Comparable worth
• Concern for privacy
• Mandated benefits

28
Social Issues and HRM (contd)

• Attitudes Toward Work and Family
• Day care
• Flextime
• Job sharing
• Alternative work schedules
• Elder care
• Job rotation
• Parental leave
• Telecommuting

29
Labor Force and Racial Distribution
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Labor Force Growth By Race And Hispanic Origin,
Projected 20002010
31
Labor Force Share By Race And Hispanic Origin,
2000 And Projected 2010
32
Labor Force Participation Rate By Sex, 19502000
And Projected 20002010
33
Labor Force Growth By Sex,Projected 20002010
34
Labor Force Share By Sex,1990, 2000, And
Projected 2010
Figure 1.5c
35
EducationPays
36
Why Diversity?
The primary business reasons for diversity
management include
Increased marketplace understanding (80)
Better utilization of talent(93)
Enhanced creativity(53)
Increased quality of team problem solving(40)
Breadth of understanding in leadership
positions(60)
37
Top Issues for Managers in Balancing Work and
Home
Executive recruiters say 75 percent of senior
management candidates and 88 percent of middle
managers raised concerns about balancing work and
home. Top issues
38
Human Resource Competency Model

• BusinessMastery
• Business acumen
• Customer orientation
• External Relations

• Personal Credibility
• Trust
• Personal relationships
• Lived values
• Courage