chapter 01 the challenge of human resources management

Copyright © 2004 South-Western. All rights reserved. 1–2

ObjectivesAfter studying this chapter, you should be able to:

1. Identify how firms gain sustainable competitive advantage through people.

2. Explain how globalization is influencing human resources management.

3. Describe the impact of information technology on managing people.

4. Identify the importance of change management.

5. State HR’s role in developing intellectual capital.

6. Differentiate how TQM and reengineering influence HR systems.


Objectives (cont’d)After studying this chapter, you should be able to:

7. Discuss the impact of cost pressures on HR policies.

8. Discuss the primary demographic and employee concerns pertaining to HRM.

9. Provide examples of the roles and competencies of today’s HR managers.


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.


Overall Framework for Human Resource Management

Presentation Slide 1–1

COMPETITIVECOMPETITIVECHALLENGESCHALLENGES

• GlobalizationGlobalization• TechnologyTechnology• Managing changeManaging change• Human capitalHuman capital• ResponsivenessResponsiveness• Cost containmentCost containment

COMPETITIVECOMPETITIVECHALLENGESCHALLENGES

• GlobalizationGlobalization• TechnologyTechnology• Managing changeManaging change• Human capitalHuman capital• ResponsivenessResponsiveness• Cost containmentCost containment

HUMAN HUMAN RESOURCESRESOURCES

• PlanningPlanning• RecruitmentRecruitment• StaffingStaffing• Job designJob design•Training/developmentTraining/development• AppraisalAppraisal• CommunicationsCommunications• CompensationCompensation• BenefitsBenefits• Labor relationsLabor relations

HUMAN HUMAN RESOURCESRESOURCES

• PlanningPlanning• RecruitmentRecruitment• StaffingStaffing• Job designJob design•Training/developmentTraining/development• AppraisalAppraisal• CommunicationsCommunications• CompensationCompensation• BenefitsBenefits• Labor relationsLabor relations

EMPLOYEEEMPLOYEECONCERNSCONCERNS

• Background diversityBackground diversity• Age distributionAge distribution• Gender issuesGender issues• Educational levelsEducational levels• Employee rightsEmployee rights• Privacy issuesPrivacy issues• Work attitudesWork attitudes• Family concernsFamily concerns

EMPLOYEEEMPLOYEECONCERNSCONCERNS

• Background diversityBackground diversity• Age distributionAge distribution• Gender issuesGender issues• Educational levelsEducational levels• Employee rightsEmployee rights• Privacy issuesPrivacy issues• Work attitudesWork attitudes• Family concernsFamily concerns

Figure 1.1


Competitive Challenges and Human Resources Management• The most pressing competitive issues facing

firms:Going globalEmbracing technologyManaging changeDeveloping human capital Responding to the market Containing costs


Going Global

• GlobalizationThe trend toward opening up foreign markets to

international trade and investment.

• Impact of GlobalizationPartnerships with foreign firms “Anything, anywhere, anytime” marketsLower trade and tariff barriers

NAFTA, EU, APEC trade agreements WTO and GATT


Going Global (cont’d)

• Impact on HRMDifferent 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.


Embracing New Technology

• Knowledge WorkersWorkers 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


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.


Major Uses ForHR Information

Systems

Source: HR and Technology Survey, Deloitte & Touche and Lawson Software, 1998.

HRM 1


Impact of IT on HRM

TransformationalTransformationalImpactImpact

TransformationalTransformationalImpactImpact

OperationalOperationalImpactImpact

OperationalOperationalImpactImpact

RelationalRelationalImpactImpact

RelationalRelationalImpactImpact

HRMHRMHRMHRM


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 Professional’s 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, T&D electronic mailing list links.

HRM 2


A Guide To Internet Sites (cont’d)

• 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://osh.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


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


Managing Change

• Types of ChangeReactive 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.


Managing Change

• Why Change Efforts Fail:1. Not establishing a sense of urgency.

2. Not creating a powerful coalition to guide the effort.

3. Lacking leaders who have a vision.

4. Lacking leaders who communicate the vision.

5. Not removing obstacles to the new vision.

6. Not systematically planning for and creating short-term “wins.”

7. Declaring victory too soon.

8. Not anchoring changes in the corporate culture.


Developing Human Capital

• Human CapitalThe 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.


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 SigmaA process used to translate customer needs into a set

of optimal tasks that are performed in concert with one another.


Responding to the Market

• ReengineeringFundamental 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.


Containing Costs

• DownsizingThe planned elimination of jobs (“head count”).

• OutsourcingContracting outside the organization to have work

done that formerly was done by internal employees.

• Employee LeasingThe 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.


Downsizing and Upsizing

Percent of companies reporting that they:

*All annual readings are for 12 months ending at midyear. Categories are not mutually exclusive.

Source: Gene Koretz, “Hire Math: Fire 3, Add 5,” Business Week Online (March 13, 2000). Figure 1.2


Containing Costs (cont’d)

• Hidden Costs of LayoffSeverance and rehiring costsAccrued vacation and sick day payoutsPension and benefit payoffsPotential lawsuits from aggrieved workersLoss of institutional memory and trust in managementLack of staffers when the economy reboundsSurvivors who are risk-averse, paranoid, and political


Containing Costs (cont’d)

• Benefits of a No-Layoff PolicyA fiercely loyal,more productive workforceHigher customer satisfactionReadiness to snap back with the economyA recruiting edgeWorkers who aren’t afraid to innovate, knowing their

jobs are safe.


Productivity Enhancements

Figure 1.3Presentation Slide 1–2

MOTIVATIONMOTIVATION• Job enrichmentJob enrichment• PromotionsPromotions• CoachingCoaching• FeedbackFeedback• RewardsRewards

MOTIVATIONMOTIVATION• Job enrichmentJob enrichment• PromotionsPromotions• CoachingCoaching

• FeedbackFeedback• RewardsRewards

ENVIRONMENTENVIRONMENT• Empowerment Empowerment •TeamsTeams• Leader supportLeader support• CultureCulture

ENVIRONMENTENVIRONMENT• Empowerment Empowerment •TeamsTeams• Leader supportLeader support• CultureCulture

ABILITYABILITY• RecruitmentRecruitment• Selection Selection •TrainingTraining• DevelopmentDevelopment

ABILITYABILITY• RecruitmentRecruitment• Selection Selection •TrainingTraining

• DevelopmentDevelopment

Perf = Perf = f f (A,M,E)(A,M,E)Perf = Perf = f f (A,M,E)(A,M,E)


Social Issues and HRM

• Changing DemographicsShrinking pool of entry-level workersProductivity Individual differencesRetirement benefitsSocial Security contributionsSkills developmentUse of temporary employees

HRM 4


Social Issues and HRM (cont’d)

• Employer/Employee ConcernsJob as an entitlementRight to workWhistle-blowingEmployment at willAIDSComparable worthConcern for privacyMandated benefits

HRM 4


Social Issues and HRM (cont’d)

• Attitudes Toward Work and FamilyDay careFlextimeJob sharingAlternative work schedulesElder careJob rotationParental leaveTelecommuting

HRM 4


Labor Force and Racial Distribution

Figure 1.4aSource: “Labor Force,” Occupational Outlook Quarterly 45. no. 4 (Winter 2001/2002): 36–41.


Labor Force Growth By Race And Hispanic Origin, Projected 2000–2010

Figure 1.4bSource: “Labor Force,” Occupational Outlook Quarterly 45. no. 4 (Winter 2001/2002): 36–41.


Labor Force Share By Race And Hispanic Origin, 2000 And Projected 2010

Figure 1.4cSource: “Labor Force,” Occupational Outlook Quarterly 45. no. 4 (Winter 2001/2002): 36–41.


Labor Force Participation Rate By Sex,1950–2000 And Projected 2000–2010

Figure 1.5a


Labor Force Growth By Sex,Projected 2000–2010

Figure 1.5b


Labor Force Share By Sex,1990, 2000, And Projected 2010

Figure 1.5c


EducationPays

Source: U.S. Department of Labor. Figure 1.6


Model of Diversity Management Strategy

Figure 1.7Source: Kathleen Iverson, “Managing for Effective Workforce Diversity,” Cornell Hotel and Restaurant Administration Quarterly 41, no. 2 (April 2000): 31–38.


Why Diversity?The primary business reasons for diversity management include…

HRM 5Source: Association of Executive Search Consultants (member survey). Used with permission of the Association of Executive Search Consultants, http://www.aesc.org.


Better utilization of talent(93%)

Better utilization of talent(93%)

Increased Increased marketplace marketplace

understanding understanding (80%)(80%)

Increased Increased marketplace marketplace

understanding understanding (80%)(80%) Enhanced Enhanced

creativitycreativity(53%)(53%)

Enhanced Enhanced creativitycreativity

(53%)(53%)

Increased Increased quality of team quality of team problem solvingproblem solving

(40%)(40%)

Increased Increased quality of team quality of team problem solvingproblem solving

(40%)(40%)

Breadth of Breadth of understanding in understanding in

leadership leadership positionspositions

(60%)(60%)

Breadth of Breadth of understanding in understanding in

leadership leadership positionspositions

(60%)(60%)


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:

Source: Association of Executive Search Consultants (member survey). Used with permission of the Association of Executive Search Consultants, http://www.aesc.org.

Figure 1.8


Qualities of Human Resources Managers

• ResponsibilitiesAdvice and counselServicePolicy formulation and

implementationEmployee advocacy

• CompetenciesBusiness masteryHR masteryChange masteryPersonal credibility


Human Resource Competency Model

Source: Arthur Yeung, Wayne Brockbank, and Dave Ulrich, “Lower Cost, Higher Value: Human Resource Function in Transformation.” Reprinted with permission from Human Resource Planning, Vol. 17, No. 3 (1994). Copyright 1994 by The Human Resource Planning Society, 317 Madison Avenue, Suite 1509, New York, NY 10017, Phone: (212) 490-6387, Fax: (212) 682-6851. Figure 1.9


BusinessBusinessMasteryMastery

• Business acumenBusiness acumen• Customer orientationCustomer orientation

• External RelationsExternal Relations

BusinessBusinessMasteryMastery

• Business acumenBusiness acumen• Customer orientationCustomer orientation

• External RelationsExternal Relations

HRHRMasteryMastery• StaffingStaffing

• Performance appraisalPerformance appraisal• Rewards systemRewards system• CommunicationCommunication

• Organization designOrganization design

HRHRMasteryMastery• StaffingStaffing

• Performance appraisalPerformance appraisal• Rewards systemRewards system• CommunicationCommunication

• Organization designOrganization design

ChangeChangeMasteryMastery

• Interpersonal skillsInterpersonal skillsand influenceand influence

• Problem-solving skillsProblem-solving skills• Rewards systemRewards system

• Innovation and creativityInnovation and creativity

ChangeChangeMasteryMastery

• Interpersonal skillsInterpersonal skillsand influenceand influence

• Problem-solving skillsProblem-solving skills• Rewards systemRewards system

• Innovation and creativityInnovation and creativity

Personal Personal CredibilityCredibility

• TrustTrust• Personal Personal

relationshipsrelationships• Lived valuesLived values

• CourageCourage

chapter 01 the challenge of human resources management

Recruiting & HR

human resources managementthe

pressing competitive

new information

technology survey

overseas work

hr policies

impact of cost pressures

foreign culture