z=” °° © CHAPTER OVERVIEW In he 200 President emi, the American Propet magazine ran on ‘Steument of Present Bus’ ess for ofc bed on as analysis of his nding. Sela Kur of the ‘Grapoogy Cooling Group arly 2 few cuit notes writen y the present tensive to anjone who might det ‘rin wy” nd hat he President nih hve too mich enact” and hat ‘en «person sso much enact is vex tard for thn 0 change Tey sick to wha they bene ican severely | infor with heir exit, produ ‘nd igoion i al sess" She went 09 to deve his handwng a depiing row-mindd or unsere fn tha ean hat he aes i alos ig ele Bat what eared knows ino bi ison making” When shared this assent wit undergrads hana rescues bases ree boot atid of sade out the eration was “lead on acura" Shr hd hwght waste ‘ong and sneer thi i ve an ‘pin a al. Within the hast wou, about Iie sides exrsed ret septic bout the ably oases peso, pst, anything ce impor wing @ pron tandvrtng.K is s eup of dents who ae “aon acre” ‘Reser lly shows hat having is fora vld meso eng anying impoant(sep or oue ands). STRATEGIC HUMAN RESOURCE MANAGEMENT IN A CHANGING ENVIRONMENT “Te assent of preset canises oo only place you will find the we of ad st bods Ie gating, one of Os ont poplar tmopeins fr US. sal ies a & Slay extoing te bent of wing traps to ie manager Te ate Ryo the eof eapbobgy as Sie tee a hte etd os Serum Sond reach in Bama esos manages! (HRM) has ‘Eremied hatconpanics wold do ust Shout wl pking umes oto Bat to mat perce decisions” ‘Seed HEM pecs hep rgmiions wis al ites ee © ‘Sting nl inaing > ete ‘ero, Mier HRM repos ile work in ano ain dyes, a wel eying ‘ecoping wld metods fer elting wt Resch by seemics who sty and teach HRM i deol ening the on festive and eat meats for meting thee HRM responses A ‘reurrng theme of book thatthe toe efective HRA programs, plies, practices are thve thal are ‘developed in deference to research i [HRM Ou view at pati HRM ‘len antes he sound research about pale. pret, people hat saab To feip make decisions. Instead, (gunizaons fen gt an HRM procedure Resa competitors re wing (i wa 2 ‘inthe ofthe I te) "te tor ads conversion with x bxness owner ‘tho had ir is 145:persom sls sal based on roe wpot (t $75 por ep) ad the answer to single question he posed i an trview. When ‘gusto abou the aii f these metas, he seri etre ssa Be had ied oa of esperain fe Ua or market despite lmphoogi’s repr that id the sal wring with estat ected be nay be too inverted for sles ork” He lament tha “ony Tl steed oe Sanding exper: wad bane ting thes Those of ut wh ech atts refer ei ype “reac a "an who ie” When you deus the enerwtetming evidence stoning tht sing eases ‘meer, mone might fer th countragumes tt "7 new ¢ man who smoked te picks day and ined to ‘euch Tate fe gond ways fo do reseach an good trys to aes the lect of programs ad aces. Sound measurement i ey effective management Remember he adage i i ot mated, 43 ak ‘managed, What does someone's handing ese? ‘Many HRM systems and ctiviee ena sabjectd vo tematic measuemen. Many eganizaions do nt tse ier the shor o longterm consequences cf their HRM program or avn Antero thee of or bo ht memarement and accounabity are Key companens to organizational ttfcivenes and competitive advantage. Good ‘menrment lid th snes sis, wil lp ‘razon slot and iron ll of her HRM ‘ves and provide» muh suonger conection between HRM activites and oranrationl effectiveness. Sneed Universiy professor Jey Pieter onder asremen 0 Be one of he keys 1 ‘ongettve advange His book Compe Advantage hough People es mesuemet oon of te 16 HRM patics tat eamiute he most o competitive vantage ite’ views wee eshoos a expand the popular text The Rance Scorecard by Harvid profesor Robert Kapln and conse Divi Norton Kiplin and Norlon ses ta "if copane tet surive and pose in infomation age competion, hey rst mearreent sd management syste dived from tir sais apie” (21). Their "laced wore” empsizes much ote ‘manager tenon to leading instore” of ermance that pric he "gpieg” ell Performance estes To “laos” reflects the ned 0 senna messes, aging and leading inter, {ito nd exer perfomance perspectives. ‘Anew bok etied The Workfowe Scncard by Protons Mark Hei, Bran Berks and Dick Beaty extends eee onthe “bland screen toa “Sompshensie management nd meanest ‘maximize workforce peat” These aus Sbow hat "he tational Gana performance marie sich a8 rear e egy, sck ie, ad eum on lesen he “aging incctos” canbe predicted bythe Way fompanie coat their HR. HR practices ae the ean indica” tht pret sequen Bnei perfomance ments. Unfortunatly, reseach indies "hat oni 4 sal prsnape of HRM propa or fete ar auc to says The good news Ioweve, tht the percentage a st Bone ‘Measurement sett or Amen busines the 2st centr! ‘One prop stay deine te vison of han esos forte 215 centr. HRM sces mt be (esprit ily compete maretplce and al business sevetres, 2) hosel nk to snes ‘sei pam (3) jl conse and implemented by line and HR manager, and (4) focsed on gual omer arc, erpye ele ‘eunuodk, nd work exit. "The sts of HRM improving elie to ther ota soues of eompeiive advange for an ‘Srgnization Profesor Poe eer ia “rant Sours a success espn to market, func tecnologia can sil prods comptive Ieverae, bat toa lemer degre now than in he ps, es ‘ngnztionl cle and capt, ied fn Bow pronl are mined x comparatively more vil "Yu are ily to manage people sme pot our carer Reach shows Hat the matter it which ou conde the human resource esponsiis of your ‘management jb wl ee) Lo your efectveness. We aleve that he knowledge and expericnes provi by ‘hbo wil make you a move eflcive anager THe thei i that he most fete HRM programs, polices, ‘sion a tate pln in min All HRM actin ‘hold be eased his conta sing “eaing {eden prfamance meses. OBJECTIVES ‘Altering this chapter, you shoul be able © 1. Deseribe the fel of HRM and ts potential for creating and sustaining compeive advantage 2. Deserbe derepancles boven actual HEM practices ‘ndreommendation for IRM practice rom 3. Deseribe the major aces of RM. ‘Esplin portant trend relevant to HRM, including lahaiation ofthe economy, new techloy and the Interest increasing rl of regulations andsits th changing demographics of the workforce, and the roving ody of esearch Baking pariular HRM practices to corporate performance. S. Emphasize the importance of measurement for ‘fective and strategie HRM. 6 Understand what i meat by compete advantage, ‘and whys important fo organs. Waar Is Human RESOURCE MANAGEMENT? “The uma resources ofan rzaization consi of all ope who perform is sti. Ina ens al decisions thatthe workforce concem he organzton's HRM fantion. Human resource management cocems the personne polices and managerial prcties and systems {hat influence the workforce. Regardless ofthe sze—or txstence—of a formal HRM or Personae! Department {nan small businesses have no HRM depres [tvs foled in HRM are pervasive toughoat the ‘rgmizaion, Line managers for example, will pend nore than 50 pce of heir me ole ie human re toute activites sich ss hiring, evaluating, dsepiing, ‘tnd scheduling employes. "The effectiveness with which Tine management performs HRM functions with the toos, data, 20d oes provided by HRM seins te Soy [snerlies fom very small businesses to the very Tangest pba etepises Dr. James Spina former head ‘of executive development tthe Tibune Company e- ily put things in perspective abot the ele of HRM. He sid, “The HRM focus should always be maintain ing and, ideally, expanding the customer bate while ‘aatining an, ideally, maximizing profi. HRM has {whole lot oo with his foes epass ofthe size ‘the busines, or the product or Sevies You ay Ing to sel "Thos individuals clawed within an HRM func tional unit prove reduce and services forthe erga ‘alin. These prodots a services may incde the pro ‘ison of of recommendation fr, systems ar proeeses That fcitate organiationalrestucturing. job design, sonnel planing, ecritment, bri, evaluating Trainng. developing. promoting, compensating. en te ‘inating personne Amar goa ofthis book iso peo- ‘de information and experiences tat wil improve te ‘den’ fore involvement and effectiveness in HRM. "Whe HR can crest sd sustain compete ada tage some would argue that HR isen more aweakess than s rong. A recent Fast Company ale sm tae 22005 survey tht only 0 perceat of employees Thought heir companies wre doing a god job reining gh-quality workers and ony 41 perceat hgh pero ance evaluations wee fale A mee 58 percent of espn ens reported the job trsining 38 favorable. A msjoxty ‘si thy nd few opportuntis or edvancement and they rites hom to avance nthe st place. About all ti those surveyed below the manager evel seved eit Companies taka genuine ineret nthe Well eng. IRM and Corporate Performance ‘A goming body of euch hows that progres HRM racine can havea signicant effect on eorporate per Feemance,Stlis now document the reaiorship been ‘pect HR proces and eral outcome measures sich 2s eororate finan performance, producti, product td servie quay and co contr. Many ofthe methods hareterizing these so-called high-perbrmance work ‘ystems (HPWS) have been searched and developed by THe HRM aeadenic communi Figure [I presents um ‘may ofthis research” THWS isa tem sed to describe a collection of HR acto characteristics designed eabance employee ‘Competences and productivity so ta employees can be {reliable source of competitive advantage. Reseach Shows that “im competitiveness can be enhanced by ‘igh: pefonmance work systems A summary of his search Found that one standard deviation of improved. ‘ssesmenton a HPWS meariement tool increased aes premplaye inexces of $1500 per employe, m8 pe ent gin labor pod” Recall ur crcl sematis eae about handwrt ing analysis. Figure I- sates that vadated selection + Large murber oily ques aplomts foeach st pono. «+ Tyee of aiid sic and postin melipocolues Extn ining and depen of nw elas. “Thevoe of frm promnte spss a. management ‘Thou of mats (30 depres) penance ‘prin nd een Timings of mer nce fal praise proces ‘Above openatoa okey pens Hlgn pcp fen wel fcadedn igh tral in py beween igh an ow rertonen «High prongs of wskforcewortng a self manaes + Low pect of loc oer by on Hig rena jb ld om win ‘Sm i) ep _ ee and promotion systems are related o higher produ ity and reduced cots. Te een validated meas hat the ‘method bas actualy een shown to prdit something Important If you ang method to select manages forsee personnel a "vliated” method is + method ‘Shown to actually predict manager oF sles success. ‘While graphology is no way to assess personality, her sre vali methods for predicting future employe poe formance bad on the esesed charters of job candidates Beter taining and developmeat programs and team: sed wor confgons improve pevforance ad jab ‘atnaton and decrease employee tmover.Pariular Incentive and compensation systems lo Weslo igher producti and perfomance. The fur weament of employees rests in higher job satisfaction, which in torn faites higher performance, lower employee tumover reduced costs, and 2 lower Tiklihod of soe- ‘ostlienenpniig. reser demands ae now being made on HRM pre tions to respond io coneporar ends ihe business ‘eizoament Taye mast efecive HRM functions are ‘oncepinized na busines apa. constanl Tous ‘te suaeay of the oyganization andthe coe compete ‘Ges f the erznization, HRM specialists mst show how they cat make fleece forthe empany btm ine ‘Cons and efficiencies area pecnay cites oe erat ng recommendations fom researc a HRM, “Many corporate strategy specials mani that the hay to ssined compeative advange i building apd sustaining cre competencies within he organization and ‘maining Reniblty in order wo react quickly 1 the ‘hanging global mareplace and the adeances Intech ology. One primary role of HRM practitioners shoud be toaeitte ae proves, DISCREPANCIES BETWEEN ACADEMIC RESEARCH AND HRM PRACTICE Wile HRM exccstives and managers are more ed ‘ated and professional thn othe days when hey were In charge of personnel, the level of knowledge in rac- ticing HRM is another story. Many companies hire MBAS for HRM jobs when not even a single HRM soure is regbred inthe typical cusculum for an MBA. The 190,000-member Society for Human Re- Source Management (SHRM, see ww.SHRM.o‘p). which established the Human Resource Certification Insti, formally reeonives human resource profes: ‘Sonal who have demonsrated parcaar expertise in THR.As of 2006, over 70,000 HR professional hold the Professional in Human Resources (PHR), the Senior Professional in Human Resources (SPHR), and the Global Professional in Human Resources (GFHR) designation HRM practitioners need o pay more ateton to ac- ‘emi esearch There ia great deal of cael crate Scademicreeaeh tht hgh teeta to HRM pac fhe: igure 1-2 presenta fw example of discrepancies ‘between the cament ste of HR practice and What the (Quinn anes fren sous wing ld STAFFING Rea job reviews ean rue tamer ‘Wop spleon Maks rice rover Sed, bela oat isterviows ae mere vali ‘Use star el of peton sme meses CGrapology iad and ld ot be wed PERFORMANCE APPRAISAL : Do nt use tts on ating forms “ri a (fer aac, obserson Bi). Make apa process inorant esto manages Es ‘COMPENSATION Mere ned mere sould ate ed int x bas slay ‘ishing i nelle PEP sin, ‘os tan 10% clan lai. Leshan 208 of compas eR ghee jos ‘estan 30% know wu & WAB ses then 1 we 485 of compre stalin, Tes han 3 oe stall mse Les than 30 in ter {ie tan 3 of mange a ned 0 prornance ‘spr More ta 784 te met pay in bs po. stan 5 of compan we where they cou| cade literate clearly recommends. One reeent Sty reine this knoe gap" HR proesion- fle wer given a 35-em ts that assessed the extent of their HR knowledge, The test was scored ca fadings fiom academic esearch, which woud ely be covered inany basic HR couse like this one. ems wore devel- ped where there was itl eno agent on th come tnower within the academic community. The average fade forthe nearly 1,000 HR peoesionals was "D"On Inmerous items, over SO percent of he HR eens fitthe ansner wrong "Throughout the ook, we intend to emphasize the ‘nos lating discrepancies between he way HRM is 30 tually being paced and what academic esearch has to ‘Sy about particular paces. The failure on the prt of [racing HRM personae fo either be aware of th e- ‘Sch or understand ts eeblem tht can ave a ro fou effet onan organization's bottom fin sich a = turn on equ, prof, profit growth, end stock price Althogh ine management plays acta role inte se ‘esl impletenation ond erecuton of HRM progr these programs are typically either develope or pur hated by HRM specials, ‘Many HR activites sich payroll, eaten, and pre-employment sceening are now outsourced to ogai- Pons that specialize is these areas. The number of ‘onsling ngtiztions sealing in HR activities has Web-based HR products and services i almost every ‘major fnetional area and fllSrvice HR online pat tment An organization's HR specialist must have the ‘necessary knowlege ad sk to be able o identi the ‘est and most cost-effective of these HR products and services far aparculr station. HRM profesonale soul possess upo-at know ‘edge about the reatve eeienes of the varius =~ trams and actives tld to HR planing, waiting nd development, compensation, performance manage Inet, sketon inferation syst ual employment ‘ppontnitydversity, labor relations, recuitnent. and hand safety tes. HRM professionals also soul be ‘able of conducting tro esearch 1 evaluat heir [pogroms and progr altermaves, Unfortu) een ‘Sfdence suggest tht HR profesional adopt many eo [Emehated ether onesie marketing rom the petors ‘of vendor sling HR materials and rograns or imply on that other companies a ding. While some conseraton nay be given tot eang indica research deserted in Figure I, grate weight seems to be given to slick ‘naketiog progam and simply what eters ee doing ‘When “boson Tine questions arse Iter as ey Inoitly oH deparimers ae caught off guard be ‘ve coy al eave inefftve pograms have been ‘Moped Acaei sty ofthe roan wh ean es ‘et link otic goals might reveal negligible ono impos. Asin you don"t esr youeas manag it Many HR professionals are not even rand tas the right questions and condoct the appropaate study of & [Bren HR progam or activity The nator had carers fon with 2VP of HR of Fertane S00 company: He had 2 Big-Ten MBA and was convinced tht one partir test was the best way to hire retail sles personel, The ‘sis for his poston was conversations with other poly informed HIRM MBAs who were sing th test. This 0 ttay fo evaluate a selection metho Another HR vice Presiden fora retailer adopted an expensive compute {aed testing program ha the publisher lames wou te tice employe tuoverby 80 percent. The Pdi ote ‘quent the research tat prpated document this flee. {nd ltr amit tha althoogh be wel ae te ‘cision adopt the est, be was unqualified tases the tess wefulnee since e could not even ak Fundamental Imesutemeat questions that shuld be the foes of any ‘ration of such a prduct or serie. fn adn, Tough te retler bal been wing te est For over 80 yeas it pen ver occured im to eat he Exento which he est cally di ede tumoverinhis ongnization.A Connecticut police department usd an Inelgene test to seeen for ofc tr eliminated car ists if thi sere were to high. Tei argument was that highly ineligen officers would get bored ani it. ‘Tey had no evidence to support thet theory and com ede hte leaders were al selected from Within the ‘Senmizaton. Tis hind thoy shold he tested et ind its unitended consequences carefully examined be fore implementation! ‘One ofthe great valves of acai research i the jective evalution af cts or programs using wl onioled experimental desis, which allow for war igus assent of eee Fr example, Burs Men tel Meanurementr Yearbook ism reference source that publishes evans of tess writen by qualified 2c emis who have no vested interest in the tests thew elie Over 2,00 tet have been reviewed and ther tremscan be downloaded fom the Burbs Website for SS er test (htpsronan.edbarenpsearch). Many FHRM professional who adopt tests de aot know hat his ‘yatta text even ext Tue Activities oF HUMAN RESOURCE MANAGEMENT Figure 1-3 present ing ofthe most commonly per formed activites by HRM profesional These HRM ‘sctis fall drive jo domains (1) Organizations Design, (@) Slang, (@) Performance Management and Apis, (4) Employee and Organizational Dewlpent and (5) Reward Sylems, Benefits, nd Compliance ‘Although the actives subsumed ner thew do- rosin ae conceptually interdependent, in prctice of Course thcy are not. Neverthelest many organizations Prue te various actives a ify had 9 mpiains iii ‘ugan ssourve planing bas on sy Sob amayeswok nals Job sign Infrae ese Rec tering hing ‘Airave cafdvesty Promos Ouiplcenen sees Tndncontienion Employ sleon mete ‘PERFORMANCE MANAGEMENT AND APPRAISAL Mangement aprasnageent by objectveateey ‘reargfahmeenen prom CCsomer focused performance spel Matias spon OP, 187) [EMPLOYEE TRAINING AND ORGANIZATIONAL DEVELOPMENT Managenenvperisry development Care pigeon pre clarcrotadreane eipraieny ‘raning deer pine REWARD SYSTEMS, BENEETTS, AND COMPLIANCE Safety pogansOSHA compe {Cmpisnticpary poorer Wea nian \nspayment compen adminis aon esnips [ior aon bing foc any ofthe ther domains, Fr example, many ongni- ‘ations bane rede or cimiated health are heres ‘without cotsidration ofthe impact of the new compen sation pockage on sang and employe retention nd ‘ln, domain acti mus be weighed ete context, ‘ofthe ne global environment and contemporary eps Imerpretation. ‘Acquiring human resoaoe capability should! bein ‘wid organizational design and analysis. Organi ‘onal design involves the wangemeat of work tks ‘sed on the interaction of people, echnoogy and the tusks fo be performed in the costext ofthe mision, {foals and stategic plan ofthe organization. HRM ac tives sch as human fesources planning, job and work analysis, organizational restating, jb design, team building, computerization, and worker-machine inter face als fal er his domain, ‘Organizational and work design issues are almost, sways the fit one hat should be adres whenever Signicam change is necessary because of changing eco- ‘mic conditions, new ecologies, new oportunts, tenia advantages, or enous ital peelems. Desi sues usualy dive the HR dorains soc as ecto, ining. performance management ad compensation "Beonomic downtuas can provide an opportunity fora moe seriou evaluation of the organization's stat- ay and its competitive postion. But there are clearly effective and ineffective approaches to organizational design ‘Corporate downsizing, cusoureing, and reenpineer- Ing efforts often begin with human resource planning in the contest of sti pan aan aaljs of ow the ‘wa is erred, boobs apd work uns relate to one note, and of ours, cost analysis These decisions a [erica forthe longer survival ofa suugaing com pany Resear shows ha laos designed to deve & Short-term “ost savings" may foster an increase in at eae in he shor ron bt tht nestor often lose all ofthis value plus considerably moc We wll cover the Issues of HR design, planning, downsizing, and eruc- ‘arng in Chapters and S. ‘Aer the organization is stactared and jos are clearly defined in terms ofthe necessary Knowledge Sills and abies and how jobs and work relate © one ‘nother, postions must be safe. Recrultmeat, em ployee erenaton, selection, promotion and termination fe among the fancions that ot the tafing dons, (Of the HE actives within this domain, selection ad ee- ‘mination ae probably the wo most Hkly affected bythe ‘egultion an igation we eiscuss in Chaper3.Chaper {will cover the cra! rea of selection, Wel oeas on terization in Chper 1. “The performance management domsin inces assessments of Individual, unit, of other aggregated levels of pesfrmance to mearae, and improve, work perfomance. Chapter 7 will deal with thee subjects, ‘hich, Tike selection, are alto the focus of wamerous Taweuits lawsuit can occur if the organization main: tains tat an employee was terminate, na romted, oF ot given merit alse becuse of performance, and the employee elves the negative personnel action was because fis orherpendet, ace, religion age, ds- tility, oF some other characterise. An employee aso ‘an claim an unlawful discharge based oa an sllogod ‘ontact of implied contract violation and even make 1 claim fo pre-emptive retalation, Obviously, merit ay systems require acurate measures of employee peeformance Employee traning end organizational develop- ment propre ae conered with eatblhing. oserng, ‘nd maining employe sls based on orginizatca