THE HR FRAMEWORK

Session I
MM5002
Model of the link between HRM
and Performance
CIPD
The case for good people management
A Summary of the Research


Human Resource Management Practices


A Conceptual Model of Theoritical
Frameworks for Studying SHRM
HRM Practices
Firm
Strategy
HR Behaviors
HR Capital Pool
(Skills, Abilities)
Institutional/Political
Forces
First-Level Outcomes
(Performance,
Satisfaction,
Absenteeism, etc)
Cybernetic,
Agency/Transaction Costs
Behavioral Approach
Resource
Based
View of
The Firm
Resource Dependence,
Institutional
HR Philosophy; Policies; Programs; Practices
& Processes
An HR philosophy is how the organization regards its human
resources, what role they play in the success of the overall
business, and how they are to be treated and managed.
HR policies provide guidelines for action on people-related business
issues and for the development of HR programs and practices
based on strategic needs.
HR programs are coordinated HR efforts specifically intended to
initiate, disseminate, and sustain strategic organizational change
efforts necessitated by the strategic business needs.
HR practices include customary behaviors that support strategic
needs.
Finally, HR processes is how all other HR activities are identified,
formulated, and implemented.

SHRM: The Evolution of the Field
Theme Description
1 Explaining contingency perspectives and fit (Settings as contingencies
and Competing Frameworks)
2 Shifting from a focus on managing people to creating strategic
contributions (The resource-based view of the firm and strategic
contributions; Human Resource Practices and Strategic contributions;
Human Capital and Strategic contributions; Social Capital and
Strategic Contributions)
3 Elaborating HR system components and structure (HR bundles and
HPWS; HR system architecture)
4 Expanding the scope of SHRM (SHRM outside the focal organization;
SHRM in an international context)
5 Achieving HR implementation and execution
6 Measuring outcomes of SHRM
7 Evaluating methodological issues Lengnick-Hall, Mark et al: SHRM :The Evolution
of the Field, 2009. HRM Review
HPWS
High performance work systems were defined as those
including comprehensive employee recruitment and
selection procedures, incentive compensation and
performance management systems, and extensive
employee involvement and training.

HPWS
Turnover &
Productivity
Financial
Performance
Mediating Variable
Input
Output
1. Employee Recruitment & Selection
2. Incentive compensation and PMS
3. Extensive Employee Involvement
4. Extensive Employee Training
Three Major Subfields of HRM
Micro HRM Strategic HRM International HRM
Covers the subfunctions
of HR Policy & Practices
(HR PP) and consists of
2 categories:
1. Managing individual
& groups
(recruitment,
selection, induction,
Training &
Development,
Performance
Management,
Remuneration).
2. Managing work
organization and
employee voice
systems.
Covers the overall HR
strategies adopted by
Business Units and
Companies and tries to
measure their impacts
on performance
Within this domain both
design and execution
issues are examined
Covers HRM in
Companies operating
across national
boundaries
Lengnick-Hall, Mark L. et. al. Strategic Human Resource
Management: The Evolution of the Field, Human Resource
Management Review 19 (2009), pg. 64.
Theme 1: Contingency Perspectives
and Fit Approach
1984
Strategy typology (Defenders, Prospectors, Analyzers, and Reactors)
match with the specific sets of HR Practices (SHRM means Contingency
Approach meaning that the choice of a particular set of HR Practices
is dependent upon an organizations strategy).
Miles & Snow: Organizational Strategy,
Structure, and Process (1978)
The Story of Survivability,
Effectiveness & Competitiveness
Review C&B:
CEO as Role Model to cut cost
No longer match employees contributions
to their 401(k)
Continue to offer health benefits, tuition
reimbursement,
Stock options, vacation, and retirement
plan
Push Training: Perfect the Art of
Expresso
Work Systems:
Empower Baristas to promote products,
ideas.
Economic
recession 2008
Growth goals =
poor new stores
selection, lost its
focus on coffee
New Strategy::
Refocusing on Coffee
Guiding Principle(s)
To provide a great work environment
and treat each other with respect and
dignity
Strategic Management Process Model
Strategy Formulation Strategy Implementation
HR Practices
Recruiting
Training
Performance management
Labor relations
Employee relations
Job analysis
Job design
Selection
Development
Pay structure
Incentives
Benefits
Firm
Performance
Productivity
Quality
Profitability
Human
Resource
Actions
Behaviors
Results
Human
Resource
Capability
Skills,
Abilities
Knowledge
Human
Resource
Needs
Skills
Behavior
Culture
Strategic
Choice
Goals Mission
External Analysis
Opportunities
Threats
Internal
Analysis
Strengths
Weaknesses
Harvard Model of HRM Stakeholder
Interest
Stakeholders
Management
Employee groups
Government
Community
Unions
HRM Policy
Choices
Employee Influence
Human resource flow
Reward systems
Work systems
Situational
Factors
Work force
characteristics
Business strategy
and conditions
Management
philosophy
Labour market
Unions
Task technology
Laws and
societal values
Long-term
Consequences
Individual
well-being
Organisational
effectiveness
Societal
well-being
HR Outcomes
Commitment
Competence
Congruence
Cost-effectiveness
Able to execute
Operate efficiently
Engage employee
Manage change
=

A MULTIPLE-ROLE MODEL FOR HRM
FUTURE/STRATEGIC
FOCUS
DAY-TO-DAY/OPERATIONAL
FOCUS
PROCESSES
PEOPLE
Management of
Strategic Human
Resources
Management of
Firm Infrastructure
Management of
Transformation
and Change
Management of
Employee
Contribution
A Multiple Roles for Human Resources
Definition of HR Roles
Role/Cell
Deliverable/Outcome Metaphor Activity
Management of
Strategic Human
Resources
Executing strategy Strategic
Partner
Aligning HR and
business strategy :
Organizational
diagnosis
Management of
Firm Infrastructure
Building an efficient
infrastructure
Administrative
Expert
Reengineering
Organization Processes :
Shared services
Management of
Employee
Contribution
Increasing employee
commitment and
capability
Employee
Champion
Listening and responding
to Employees :
Providing resources to
employees
Management of
Transformation
and Change
Creating a renewed
organization
Change Agent
Managing transformation
and change : Ensuring
capacity for change
Customer Need : effective business and
HR strategies
Ownership : 85%line; 15% HR
HR Function : alignment
PM Role : Strategic HR management
PM Competencies :
business knowledge
HR strategy formulation
influencing skills
Customer Need : administrative
processes efficiency
Ownership : 5%line; 95% HR
HR Function : services delivery
PM Role : function manager
PM Competencies :
content knowledge
process improvement
information technology
customer relations
service needs assessment
Customer Need : organizational
effectiveness
Ownership : 51%line; 49% HR
HR Function : change management
PM Role : change agent
PM Competencies :
change management skills
consulting/facilitation/coaching
systems analysis skills
Customer Need : employee
commitment
Ownership : 98%line; 2% HR
HR Function : management support
PM Role : employee champion
PM Competencies :
work environment assessment
management/employee development
performance management

STRATEGIC LONG-TERM
P
R
O
C
E
S
S
P
E
O
P
L
E
OPERATIONAL/DAY-TO-DAY
HP APPLICATION OF HR PROFESSIONAL ROLES
6 Competencies for the HR Profession
Organizational Competitiveness
Increasing attention has been paid to the
organizational components of
competitiveness
Organization as a source of
competitiveness has been defined in terms
of :
the organization itself
the core competencies within the organization
the people within the organization
the organizational culture or shared values
knowledge or learning
Competitive Challenges Influencing US
Companies
G
l
o
b
a
l
i
z
a
t
i
o
n


Expand into
foreign markets
Prepare employees
to work in foreign
locations
T
e
c
h
n
o
l
o
g
y


Change employees
and managers
work roles
Create HPWS
through
integrating
technology and
social systems
Development of e-
commerce and e-
HRM
S
u
s
t
a
i
n
a
b
i
l
i
t
y


Provide a return to
shareholders
Provide high-quality
products, services, and
work experience for
employees
Increased value placed
on intangible assets
and human capital
Social and
environmental
responsibility
Adapt to changing
characteristics and
expectations of the
labor force
Legal and ethical
issues
Effectively use new
work arrangements
How is the HRM Function Changing?
Time spent on administrative tasks is decreasing.
HR roles as a strategic business partner, change
agent, and employee advocate are increasing.
HR managers are challenged to shift focus from
current operations to future strategies and prepare
non-HR managers to develop and implement HR
practices.
This shift presents two important challenges:
Self-service giving employees online access to
information about HR issues
Outsourcing the practice of having another
company provide services to save money and
spend more time on strategic business issues.
The Sustainability Challenge
The Sustainability Challenge
Sustainability includes the ability to:
provide a return to shareholders
provide high-quality products, services and
work experiences for employees
increase value placed on intangible assets
and human capital
social responsibility
Adapt to changing characteristics and expectations of
the labor force
Address legal and ethical issues
Effectively use new work arrangements
The Sustainability Challenge
The changing structure of the economy
Skill demands for jobs are changing
Knowledge is becoming more valuable
Intangible assets -- human capital, customer
capital, social capital, and intellectual capital
Knowledge workers employees who
contribute to the company through a specialized
body of knowledge
Empowerment giving employees
responsibility and authority to make decisions
regarding all aspects of product development or
customer service

Learning organization
The Sustainability Challenge
2 Changes in Employment Expectations:

1. Psychological Contract
2. Alternative Work Arrangements

Concerns with Employee Engagement
Employee engagement - degree to which employees are fully
involved in their work and strength of their commitment.
10 Common Themes of Employee Engagement
1 Pride in employer
2 Satisfaction with employer
3 Satisfaction with the job
4 Opportunity to perform challenging work
5 Recognition and positive feedback from contributions
6 Personal support from manager
7 Effort above and beyond the minimum
8 Understanding the link between ones job and the companys mission
9 Prospects for future growth with the company
10 Intention to stay with the company
The Global Challenge
To survive companies must compete in
international markets.
Be prepared to deal with the global
economy.

Offshoring exporting jobs from
developed countries to less developed
countries
Onshoring exporting jobs to rural parts
of the United States
Technology Challenge
The overall impact of the Internet

The Internet has created a new
business model e-commerce,
conducting business transactions and
relationships electronically
The Technology Challenge
Advances in technology have:
changed how and where we work
resulted in high-performance work
systems
increased the use of teams to improve
customer service and product quality
changed skill requirements
increased working partnerships
led to changes in company structure
and reporting relationships
The Technology Challenge
Advances in technology have increased:

use and availability of Human Resource
Information Systems (HRIS)

use and availability of e-HRM

competitiveness in high performance work
systems
High-Performance Work Systems
Work in Teams
-Virtual Teams
Changes in Skill Requirements
Working in Partnerships.
Changes in Company Structure and Reporting
Relationships.
Increased Use and Availability of e-HRM and
Human Resource Information Systems.


Meeting Competitive Challenges
Through HRM Practices
Managing internal and external environmental
factors allows employees to make the greatest
possible contribution to company productivity
and competitiveness.

Customer needs for new products or services
influence the number and type of employees
businesses need to be successful.
Meeting Competitive Challenges
Through HRM Practices
Managers need to ensure that employees
have the necessary skills to perform current
and future jobs.

Besides interesting work, pay and
benefits are the most important incentives
that companies can offer employees in
exchange for contributing to productivity,
quality, and customer service.
Create pay systems, reward employee contributions and provide benefits
Paradigm Shift for the HR Roles
Operational to strategic
Qualitative to quantitative
Policing to partnering
Short term to long term
Administrative to
consultative
Functionally oriented to
business oriented
Internally focused to
externally and customer-
focused
Reactive to proactive
Activity focused to solutions
focused
this transitions form
to simple
in reality, the roles
are multiple
HR to add value
they must perform
increasingly complex
and paradoxical roles
Paradigm Shift in HR
A LOOK BACK CH01
1. What HR practices do you believe are most critical for
Starbucks to maintain the coffee experience and
customer service its known for?
2. Do you think the culture and HR practices Starbucks is
using during the recession would also help the bottom
line at companies in other industries such as health
care, manufacturing, or R&D? Explain why or why not.
3. Could Starbucks be as successful without its current HR
practices? Explain.
Zappos Faces Competitive Challenges
1. What challenges is Zappos facing that
may derail its attempt to be the best
online retailer? How can human resource
management practices help Zappos meet
these challenges?
Zappos Faces Competitive Challenges
2. Do you think that employees of Zappos
have high levels of engagement? Why?
3. Which of Zappos 10 core values do you
believe that human resource practices
can influence the most? The least? Why?
For each of the core values, identify the
HR practices that are related to it. explain
how each of the HR practice(s) you
identified is related to the core values.
Cutting Work Hours without Cutting Staff
1. Besides being cheaper, for what other
reasons might companies try to avoid
cutting their staffs and laying off
employees during an economic
downturn?
Cutting Work Hours without Cutting Staff
2. What evidence would you or look for to
demonstrate that furloughs, unpaid leave,
and salary or wage freezes are reducing
costs and not negatively affecting the
business?
3. Some companies have a no layoff
policy regardless of economic
conditions. Do you think this is a good
idea? Why or why not?
T H A N K Y O U !
How HR professionals believe they spend
their time
Percentage of time spent on 1999 2006
Maintaining records
Auditing and controlling
Providing HR services
Developing HR systems and
practices
Serving as strategic business
partner
25.9
14.8
36.4

12.6

9.6
13.2
13.3
32.0

18.1

23.5
John W. Boudreau and Peter M. Ramstad: Beyond HR The New Science
Of Human Capital, HBSP, 2007
How HR leaders actually spent their time, 1995-
2004
Percentage of time spent on 1995 2001 2004
Maintaining records
Auditing and controlling
Providing HR services
Developing HR systems and
practices
Serving as strategic business
partner
15.4
12.2
31.3

18.5

21.9
14.9
11.4
31.3

19.3

23.2
13.4
13.4
31.7

18.2

23.3
John W. Boudreau and Peter M. Ramstad: Beyond HR The New Science
Of Human Capital, HBSP, 2007
Employment and RecruitingWho Handles
It? (percentage of all employers)
Source: HR Department Benchmarks and Analysis, BNA/Society for Human Resource Management, 2002.
Note: length of bars represents prevalence of activity among all surveyed employers.
Various Additional Materials
Jenis industri di Indonesia:
Industri Kecil dan Kerajinan Rumah Tangga
(IKKR): 3.218.597 (data tahun 2007)
mempekerjakan 7.289.726 orang tenaga kerja
(2007) dengan nilai produksi Rp 184,233
Triliun Rupiah.
Industri Manufaktur Skala Besar dan
Menengah (IBM) (non Migas): 27.808 unit
(data tahun 2008) mempekerjakan 4.550.277
orang tenaga kerja (2008)
Various Additional Materials
Sektor industri PMA:
Sektor Primer:
Tanaman Pangan & Perkebunan/Food Crops &
Plantation
Peternakan / Livestock
Kehutanan / Forestry
Perikanan / Fishery
Pertambangan / Mining
Sektor Sekunder:

Various Additional Materials
Sektor industri PMA:
Sektor Sekunder:
Industri Makanan / Food Industry
Industri Tekstil / Textile Industry
Ind. Barang Dari Kulit & Alas Kaki / Leather Goods & Footwear Industry
Industri Kayu / Wood Industry
Ind. Kertas dan Percetakan / Paper and Printing Industry
Industi kimia dan Farmasi / Chemical and Pharmaceutical Industry
Ind. Karet dan Plastik / Rubber and Plastic Industry
Ind. Mineral Non Logam / Non Metalic Mineral Industry
Ind. Logam, Mesin & Elektronik / Metal, Machinery and Electronic Industry
Ind. Instru. Kedokteran, Presisi & Optik & Jam / Medical Preci. & Optical Instru,
Watches & Clock Industry
Ind. Kendaraan Bermotor & Alat Transportasi Lain / Motor Vehicles & Other Transport
Equip. Industry
Industry Lainnya / Other Industry


Various Additional Materials
Sektor industri PMA:
Sektor Tersier:
Listrik, Gas dan Air / Electricity, Gas & Water Supply
Konstruksi / Construction
Perdagangan & Reparasi / Trade & Repair
Hotel & Restoran / Hotel & Restaurant
Transportasi, Gudang & Komunikasi / Transport, Storage &
Communication
Perumahan, Kawasan Ind & Perkantoran / Real Estate, Ind.
Estate & Business Activities
Jasa lainnya / Other Services

Various Additional Materials
CATATAN:
1. Diluar investasi sektor Minyak & Gas Bumi, Perbankan, Lembaga Keuangan Non Bank, Asuransi,
Sewa Guna Usaha, Pertambangan dalam rangka Kontrak Karya, Perjanjian Karya Pengusahaan
Pertambangan Batubara, Investasi yang perizinannya dikeluarkan oleh instansi teknis/sektor,
Investasi Porto Folio (Pasar Modal) dan Investasi Rumah Tangga.
Indonesian Workforce according to Employment
Fields (in million people)
Transportati
on,
communicat
ion and
warehouse
Finance Services Agriculture Industry Constructi
on
Trade Others
5.08 2.63 16.65 39.33 14.54 6.34 23.40 1.70
Sources: The Jakarta Post quoting BPS as of August 2011,
Tuesday, February 7, 2012
Indonesian Workforce according to main
Employment status (in million people)
Agriculture Non
agriculture
Family
employment
Business
with non-
permanent
labor
Business
with
permanent
labor
Self-
employed
Labor
5.48 5.64 17.99 19.66 3.72 19.41 37.77
Sources: The Jakarta Post quoting BPS as of August 2011,
Tuesday, February 7, 2012
Indonesian Workforce by Million People
2010
February August
Workfo
rce
Emplo
yed
Unemp
loyed
Workfo
rce
Emplo
yed
Unemp
loyed
116.00 74.61 8.59 116.53 74.94 8.32
32.38 33.27
2011
February August
Workfo
rce
Emplo
yed
Unemp
loyed
Workfo
rce
Emplo
yed
Unemp
loyed
119.4 77.09 8.12 116.53 75.08 7.70
34.19 34.59
= Full employed
= Half employed
Sources: The Jakarta Post quoting BPS as of August 2011,
Tuesday, February 7, 2012