HUMAN RESOURCE

M A N A G E M E N T




A N E X P E R I E N T I A L A P P R O A C H

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The McGraw-Hill Companies, Inc., 1998
1
C H A P T E R
HRM IN A CHANGING ENVIRONMENT
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The McGraw-Hill Companies, Inc., 1998
Chapter 1 Human Resource Management in a Changing Environment

Objectives

1. Increasing importance of HRM

2. Discrepancy between practice and research

3. Activities of HRM in context of eight domains:

4. Employee involvement in HRM programs

5. Trends

6. Measurement in HRM


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Figure 1.1: A Model of the HR-Shareholder Value Relationship
Employee
Skills
Design of Productivity
Business Human Employee Improved Profits Market
and Strategic Resource Motivation Creativity Operating and Value
Initiatives Management Performance Growth
System Job Design Discretionary
& Work Effort
Structures


Source: Becker, B.E., Huselid, M.A., Pickus, P.S. and Spratt, M.F. (1997). HR as a source of shareholder value: Research and recommendations.
Human Resource Management 36, 39-48. Copyright 1997. Reprinted with permission John Wiley & Sons, Inc. 605 Third Ave., New
York, NY 10157-0228.

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Figure 1.2 Sample of Discrepancies Between Academic Research Findings and
HRM Practices

Academic Research Findings HRM Practice

Recruitment
Use of Yield Ratios Less than 5% use yield ratios
Less than 20% know how
Staffing
Realistic Job Previews Less than 5 % use RJP in
high turnover jobs
Weighted Application Blanks Less than 10% know what a
WAB is; less than 1% use
Structured, behavioral, or 18% use structured interviews
situational interviews
Statistical Models Less than 5% use actuarial
No Graphology Use is on the increase


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Figure 1.2 Sample of Discrepancies Between Academic Research
Findings and HRM Practices (continued)

Academic Research Findings HRM Practice
Performance Appraisal
No Traits More than 75% use traits
Train Raters Less than 24% train raters
Accountable for appraisals Less than 30% of managers are evaluated
on appraisals given


Compensation
Merit pay not in base More than 75% tie merit into base pay
Gainsharing Less than 5% use it

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Figure 1.3: Major Domains/Activities of Human Resource Management
Organizational Design

HR planning

Job analysis

Job design

Work teams (Sociotechnical
systems)

Information systems



Staffing

Recruiting/interviewing/hiring

Affirmative action

Promotion/transfer/separation

Induction/orientation

Employee selection methods

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Figure 1.3: Major Domains/Activities of Human Resource Management
(continued)
Employee Training and
Organizational Development

Management/supervisory development
Career planning/development
Employee assistance/counseling
programs
Skill training, nonmanagement
Retirement preparation programs
Attitude surveys

Employer/Employee Relations

Labor relations
Collective bargaining
Employee grievances
Alternative dispute resolution
Attitude surveys
Employee
communications/publications
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Figure 1.3: Major Domains/Activities of Human Resource
Management (continued)
Productivity Improvement Programs

TQM programs

Quality circles

Productivity/enhancement programs

Suggestion systems

Teambuilding


Reward Systems and Benefits

Safety programs/OSHA compliance
Health/medical services
Complaint/disciplinary procedures
Compensation administration
EEO compliance
Wage/salary administration Insurance
benefits administration
Unemployment compensation
administration
Pension/profit sharing plans
Outplacement services
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Figure 1.3: Major Domains/Activities of Human Resource
Management (continued)
Performance Appraisal and
Management

Management appraisal/MBO

Customer-focused performance
appraisal

Health and Safety

OSHA compliance

Accident prevention

Stress reduction

Wellness programs

Employee assistance/counseling
programs


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Figure 1.4: Contemporary Trends That Affect HRM

Trend 1: Concern over productivity

Trend 2: The need to be flexible in response to changing business
environments

Trend 3: Increasing international competition and the expanding global
economy

Trend 4: Increase litigation related to HRM

Trend 5: Changing characteristics of the workforce

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Figure 1.5: Unique Challenges in International Joint Ventures
HR Activity HRM Challenge
Staffing Host country may demand staffing policies contrary to
maximizing profits.
Decision making Conflicts among diverse constituent groups; complexity of
decision processes.
Communication Interpersonal problems due to geographical dispersion and cultural
differences.
Compensation Perceived and real compensation differences.
Career planning Perceptions regarding value of overseas assignments; difficulties
in reentry.
Performance management Differences in standards; difficulties in measuring performance
across countries.
Training Special training for functioning in international joint ventures
(IJV) structure.




Source: Adapted from O. Shenkar and Y. Zeira, Human resource management in international joint ventures: Directions for research. Academy
of Management Review, 12, 1987, 546-557. Reprinted with permission.
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Table 1.1.1 Most Common Private Sector Problems
More common problems in service organizations are marked by an asterisk (*).
Ensuring compliance with regulatory agencies and laws (EEOC, new ADA
requirements, OSHA)
Employee staffing and EEO*
Training management and effectiveness
Effective customer service*
Job dissatisfaction/employee attitudes
Preemployment screening
Need for methods to improve performance*
Lack of employee motivation*
Negligent hiring
Ineffective performance appraisals*
Increasing levels of teamwork
Recruitment and retention*
Health care costs
Establishment of drugfree workplace policy
Pension plans
Effective pay for performance systems*
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Table 1.1.1 (continued)
Most Common Public Sector Problems

Workload increase/workforce freeze and reduction
Excessive health care costs and sick leave
Training program evaluation
EEO compliance --- new ADA regulations
Affirmative action programs --- line management resistance
Computer reporting programs
Competitive salaries
Benefit administration
Computer training
Safety programs
Greater technical skills
Incentive compensation program
Insufficient funding
Child care
Terminating employees
Injury compensation costs
Union demands
Invalid performance appraisals
Ineffective pay for performance
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Chapter 1 Important Terms
Productivity

Productivity growth rate

Malcolm Baldrige National Quality
Awards

Diversity

Structural unemployment

Job skills gap

Organization design


Staffing

Reward systems, benefits, and
compliance

Employee and organizational
development

Performance management

Effectiveness

Efficiency

Effectiveness criteria

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