copyright © 2010 pearson education, inc. publishing as prentice hall1-1 human resource management...

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1-1

Human Resource Management

Chapter Two HR Challenges, Strategic

HRM and Competitive Advantage


HR Challenges

Organizational demands—strategy, culture, employee concerns

Environmental influences—labor force trends, globalization, technology, ethics and social responsibility

Regulatory issues—legislation protecting rights of individuals and the company with regard to employment processes


Meeting Organizational Demands

Factors inherent within a company that influence how employees are managed

These include: Strategy Company characteristics Organizational culture Employee concerns


Strategy

A plan for achieving a competitive advantage Influences how employees add value Impacts types of jobs employees perform Affects attitudes and behaviors employees

display


Strategic Human Resources Management

Mission Goals

External Environment Analysis

Strategic Choice

Internal Environment Analysis

HR NeedsSkillsBehavioursCulture

HR PracticesCompensationJob Analysis Job DesignRecruitment&SelectionTraining Performance Labor Relations, employee relations

HR CapabilitySkillsAbilitiesKnowledge

HR ActionsBehavioursResults (Productivity, Absenteesim, Turnover)

PerformanceProductivityQualityProfitability

Stratey FormulationStrategy Implementation

Strateg

y E

valuatio

n

Emergent Strategies


Linking Corporate and HR Strategies Dow Chemical USA: Keith R. McKennon, President

“ To succeed in today’s dynamic environment, we must be good at preparing our people for change- in the marketplace and in the workforce. A diverse team of Dow people must be recruited, trained and mobilized to assure those skills that will best meet customer needs. To do this we will tie our HR plans ever more closely to capital planning and the strategic thrusts of our business”

Shell Oil Company: F.H. Richardson, President and CEO

“The process of HRM is an integral part of our company’s strategic planning efforts. Key business plans, as well as the external environment, are considered in light of hr implications. The process includes strategic evaluation sessions focusing on hr issues.

Chrysler Motors Corporation: Robert A. Lutz, President

“ At Chrysler, we see the role of HR as twofold- to provide leadership and programs that contribute importantly to the direction and performance of the corporation, and to promote a participative work environment that results in enhanced employee job satisfaction and the production of quality goods and services.


Strategic Challenges

Company’s strategy influences types of jobs needed

Low-cost leader, example: Wal-Mart Differentiation, example: Nordstrom Four-star restaurant vs. fast food


Cost Leadership Strategy

Offering the lowest costs for products and services

Focus on efficiencies and cost reductions Minimize overhead and costs Economies of scale are realized Only one cost leader in an industry


Differentiation Strategy

Providing something unique for which customers are willing to pay Unique product may include features, location, innovation, reputation, status, customer service or quality Offering something competing firms do not provide and customers value


Low-Cost Strategy and Managing Employees

Jobs are narrow in focus and emphasize standardized and repetitive actions

Behaviors are fairly well understood Individuals are hired with basic skills Employees trained to understand expectations Employees paid based on jobs they perform


Low-Cost Strategy and Managing Employees

Cost Leadership High concern for quantity

Short term focus

To be comfortable with stability

Risk averse

Relatively repetitive behaviours

Behaviours performed independently

Internal promotion

Worker participation, employee ideas


Differentiation Strategy and Managing Employees

Jobs geared toward creativity or customer service

Employees hired with specific skills and new perspectives

Jobs require cooperation, creativity and knowledge sharing

Pay based on individual potential or team accomplishments


Differentiation Strategy and Managing Employees

Differentiation Creative & cooperative

Long term focus

Tolerance for ambiguity

Risk taker

Find people from outside


HR and Competitive Advantage

Competitive advantage Any factors that allow an organization to differentiate

its product or service from those of its competitors to increase market share. Price Speed Quality Service Innovation

Superior human resources are an important source of competitive advantage


Company Characteristics

Size Resources available Degree of autonomy and discretion Differences in job tasks Employee attitudes and behaviors


Company SizeSmall businesses: Have generated 60-80% of new jobs in past 10

years Hire 40% of high-tech workers Represent over 99% of all employers Have line managers perform the HR functions Are challenged to provide competitive wages,

benefits and training Enable each employee to directly impact

company’s success


Young companies:-focus on growth and survival-face pressure to hire people to help the

company grow Mature companies:

-focus on customer retention and future opportunities-have more resources and established

policies and procedures-are more bureaucratic

Stages of Development


Organizational Culture

Set of underlying values and beliefs employees share

Unwritten yet understood Represents beliefs of company’s founders

and key leaders Influences how employees do their jobs Can assist in attracting and retaining

employees


Organizational Culture

Assumptions, values and beliefs of a company that affect how employees behave

Informal or unwritten Observed in how employees talk to one another Seen in employees’ interaction with customers

• Bureaucratic cultures value rules, formalization, hierarchy

• Entrepreneurial cultures value creativity, knowledge exchange, innovation

• Other cultures value competition, teamwork, cooperation, fun


What Shapes Culture?

Values and beliefs of a company’s founders Important decisions made in company’s history HR practices that signal values and behavior Management practices and actions Mergers and acquisitions Strong cultures provide clear, consistent signals Weak cultures are ambiguous and lack a clear

message


Employee Concerns

Single parents; caring for aging parents Dual career; balancing demands of work and

personal lives Attracted by flexible scheduling, family-

friendly benefits and telecommuting


Employee Concerns

Psychological Contract—Perceived obligations employees believe they owe their company and the company owes them Includes pay, benefits and training in exchange

for commitment and performance Governs how employees evaluate company

decisions and how they act on the job


Work/Life Balance

Demands of work and personal lives 60% of mothers in U.S. workforce have

children under the age of 3 57% of workforce are dual-career households Many caring for older family members or

dealing with traffic and long commutes Flexible work schedules, telecommuting,

family-friendly benefits help attract and retain employees


Justice

Employees expect to be treated fairly:

Distributive justice: Fairness in what individuals receive for their efforts Compensation for time and effort put into jobs

Procedural justice: Determination that the process used to make

decisions, rewards, and resolution of disputes is viewed as fair


Interactional Justice

How employees feel they are treated by managers and supervisors

When employees perceive company is not meeting its obligations, they respond by:

Speaking up Silence Neglect Leaving Destructive behaviors


Environmental Influences


Labor Force Trends

Diverse in race, gender and age Number of women expected to grow 9% from

2006 to 2016 Fastest-growing group: Hispanics and Asians Size of group 55-and-older increasing

dramatically Influences how companies recruit/select


Environmental Influences

Aging Workforce


Aging Workforce

Baby boomers are approaching retirement There is competition for a limited supply of

workers to replace them Some companies are recruiting older

workers who bring experience and skills to workplace


Demographic Diversity

Number of women expected to grow 9% from 2006 to 2016

Fastest-growing group: Hispanics and Asians Foreign-born population in the U.S. has

increased 57% from 1990 to 2000 Companies must manage diversity to

leverage the benefits and eliminate bias and discrimination


Technology

Requires many employees to possess basic computer proficiency

Challenges privacy issues and potential misuse by employees

Broadens access to recruit employees from larger market

Enables virtual workforce


Technology Increased reliance on the Internet Some computer proficiency may be required

in all jobs Broadens recruitment efforts beyond local

market Enables virtual workforce—telecommuting,

videoconferencing, e-mail Can also negatively affect the emotional

connection employees feel to co-workers and the company


Globalization

Blurs country boundaries in business activities

Enables international joint ventures and partnerships

Challenges companies with differences in values and beliefs

Encourages offshoring—sending work once performed domestically to other countries for lower costs


Globalization Influenced by trade agreements: NAFTA,

EU, APEC Blurs country boundaries in business

activities Enables international joint ventures and

partnerships


Managing Employees in a Global Environment

Cultural differences affect HR and management practices and activities

International experiences may benefit companies entering new markets and in building relationships with stakeholders


Ethics and Social Responsibility

Companies and their management being held accountable for ethical behavior

Corporate policies and procedures spell out ethical behavior

Annual training required of employees Social Responsibility takes ethics to a new

level


Ethics and Social Responsibility

Involves how companies behave toward their stakeholders

Includes consistent monitoring of all facets of operations

Can help foster positive reputation and consumer support

Companies rated as best corporate citizens financially outperform their counterparts


Pressure Points for Unethical Behavior


How to Encourage Ethical Behavior

Appoint an “ethics officer” Monitor aspects of company’s value system Provide ethics training Perform background checks on incoming

employees Devote time at meetings to talk about ethics Have a written code of conduct


Regulatory Issues

Employee Health&Safety regulations Turkish Labour Law

copyright © 2010 pearson education, inc. publishing as prentice hall1-1 human resource management...

Documents

pearson education

prentice hall1

hr plans

hr issues

role of hr

strategic hrm

light of hr implications

strategic thrusts