MANAGING THE

HUMAN RESOURCES
ST
IN 21 CENTURY
Group 5:
-

Nguyen Thi Thanh Huyen

Bui Hong Trang

Chu Ngoc Quang

Ly Hang Chi

Nguyen Huong Thao

Tran Khanh Linh

9.1 THE CHALLENGES OF HUMAN

RESOURCE MANAGEMENT
There is an old joke that goes.. The organization of the future will be so

technologically advanced that it will be run by just one person and

a dog. The person will be there to feed the dog, and the dog will be
there to make sure that the person doesnt touch anything.
In the past, observers feared that machines might one day eliminate the
need for people at work. In reality, just the opposite has been

occurring.
Competitive advantage belongs to companies that know how
to attract, select, deploy, and develop talent.
Competitive Advantage Through People
While people have always been central to organization, today they have taken
on an even more central role in building a firms competitive advantage.
In knowledge-based industries such as software and information services,
success increasingly depends on people-embodied know-how. This
includes the knowledge, skills, and abilities imbedded in an organizations
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1 members.

Competitive Advantage Through People

A firms success is based on establishing a set of core
competenciesintegrated knowledge sets within an organization that
distinguish it from its competitor and deliver value to customers
- Examples:

McDonalds
management efficiency

Federal Express
package routing,
delivery, and
employee relations

Canon Corporation
precision mechanics, fine
optics, and
microelectronics
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Organizations can achieve competitive advantage through people if

they meet the following criteria:
1.

The Resources must be of value Value is increased when

employees find ways to decrease costs, provide something
unique to customers, or some combination of the two.
Empowerment programs, total quality initiative, and continuous
improvement efforts.

2.

The Resource must be rare people are a source of

competitive advantage when their skills, knowledge, and
abilities are not equally available to competitors. Microsoft and
other firms hire and train the brightest employees in order to
gain advantage over competitors.

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Competitive Advantage Through People

3.

The Resources must be difficult to imitate when employee capabilities and

contributions cannot be copied by others. (teamwork)

4.

The Resources must be organized when employees talents can be combined

and deployed to work on new assignments at a moments notice.

Nearly 80% of executives said the importance of HRM in their firms has grown
substantially over the past ten years, and two-thirds said that HR expenditures are
now viewed as a strategic investment rather than simply a cost to be minimized.

Competitive Challenges and Human Resources Management

Going Global

Embracing technology

Managing Change

Developing human capital

Responding to the market

Containing Costs

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Competitive Challenges and Human Resources Management

Challenge 1 Going Global

In order to grow and prosper, many companies are seeking business

opportunities in global markets.

Exporting accounts for more than 956 billion a year. US trade deficit is
now nearly 400B
1.
Impact on Globalization

Globalization trend toward opening up foreign markets to international

trade and investment

Approximately 70% to 85% of the US economy today is affected by

international competition.

Nearly 97% of all US exporters are small and medium-sized companies.

Efforts to lower international barriers:
NAFTA facilitate commerce between Mexico, Canada, and the U.S.
FTAA Will encompass the entire Western Hemisphere and extend from the
tip of Alaska to the bottom of Argentina.

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 EU European Union focuses on the integration of European markets

APEC Asia Pacific Economic Cooperation has helped establish freer
trade among Pacific Rim Countries.
2. Effect on Globalization on HRM

Finding competent individuals that understand, geographies, cultures,

laws, and business practice.

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Challenge 2 Embracing New Technology

The introduction of advanced technology tends to reduce the number of jobs

that require little skill and to increase the number of jobs that require
considerable skills.

This move is from touch labor to knowledge workers, where employees

responsibilities expand to include a richer array of activities such as planning,
decision making, and problem solving.

Today, fully one-third of all courses are devoted to computer skills training
(compared with 25% in 1996)

Influence of Technology in HRM

Today, many firms are using technology to manage their HRM called Human
Resources Information System (HRIS)

HRIS computerized system that provides current and accurate data for
purposes of control and decision making.

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THE CHALLENGES OF HUMAN

RESOURCE MANAGEMENT

Three major components

1.

The operational impact automating routine activities, alleviating the administrative burden, reducing costs, and
improving productivity internal to the HR function itself. (payroll processing, maintaining employee records,
administering benefits programs)

2.

The Relational impact it enhances service by providing line managers and employees with remote access to
HR databases, supporting their HR related decisions, and increasing their ability to connect with other parts of
the corporation. (scanning resumes, tracking application information)

3.

The transformational impact expanding the scope and function of the HR depart. (training, on-line
performance evaluation, employees self-learning)

Challenge 3: Managing Change

Due to technology, the globalization of competition and markets, and workforce
demographics, CHANGE in today's business world is inevitable.
Types of Change
Programs that focused on total quality, continuous improvement, downsizing,
reengineering, outsourcing, and the like are all examples of the means
organizations are using to modify the way they operate in order to be more
successful. Two types of change:

1.

Reactive-change that occurs after external forces have already affected performance

2.

Proactive-change initiated to take advantage of targeted opportunities.

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Challenge 3: Managing Change

Due to technology, the globalization of competition and markets, and
workforce
demographics, CHANGE in today's business world is inevitable.
Types of Change
Programs that focused on total quality, continuous improvement, downsizing,
reengineering, outsourcing, and the like are all examples of the means
organizations are using to modify the way they operate in order to be more
successful. Two types of change:
1.
Reactive-change that occurs after external forces have already affected
performance
2.
Proactive-change initiated to take advantage of targeted opportunities

84% of executives polled said that they have at least one change initiative
going
on in their organizations.
Unfortunately, successful change or change management rarely
occurs naturally or easily. Here is why:
1.
Not establishing a sense or 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
Responsibilities change, job assignments change, work
processes change. And this is a continuous change- a part of the
job rather than temporary.
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Challenge 4: Developing Human Capital

The idea that organizations compete through people highlights the fact
that success increasingly depends on an organizations ability to manage
Human capital.
Human capital the economic value of knowledge, skills, and capabilities.
Human Capital and HRM

Human capital is intangible and elusive and cannot be managed the way
organizations manage jobs, products, and technologies.

One of the reasons for this is that employees, not the organization, own
their human capital.

If valued employees leave a company, they take their human capital with
them, and any investment the company has made in training and developing
those people is lost.

To build human capital in organizations, managers must continue to develop

superior knowledge, skills, and experience within the workforce.

Staffing programs focus on identifying, recruiting, and hiring the best and the
brightest talent available.

Training programs complement these staffing practices to provide skill

enhancement, particularly in areas that cannot be transferred to another
company if an employee should leave. (What is transferable skills?)
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Challenge 5: Responding to the Market

Meeting customers expectations is essential for any organization.

Focusing on internal management issues, managers must also meet

customer requirements of quality, innovation, variety, and
responsiveness.

These standards separate the successful and unsuccessful companies:

1.

Who well does a company understand its customers needs?

2.

How fast can it develop and get a new product to market?

3.

How effectively has it responded to special concerns?

4.

Faster, better, cheaper..

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Organizations use several approaches to address this very crucial issues:

1.

Total Quality Management (TQ M)

2.

Six Sigma

3.

Reengineering

TQM, Six Sigma, Reengineering, and HRM

TQM is 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 Sigma a statistical method of translating a customers needs into
separate tasks and defining the best way to perform each task in
concert with the others.

Reengineering has been described as the fundamental rethinking and

radical redesign of business processes to achieve dramatic
improvements in cost, quality, service and speed. (ISO 9000+)

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Challenge 6: Containing Costs

Investments in reengineering, TQM, human capital, technology, globalization,

and the like are all very important for organizational competitiveness.

Yet, at the same time, there are increasing pressures on companies to

lower costs and improve productivity to maximize efficiency.
Labor costs are one of the largest expenditures of any organization
Organizations have tried a number of approaches to lower costs:

Downsizing, outsourcing and employee leasing, and productivity enhancement.

1) Downsizing the planned elimination of jobs.
Other ways of downsizing besides direct layoffs:

Early retirements

Sweetened voluntary separation program

Sabbaticals

Severance packages

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THE CHALLENGES OF HUMAN

RESOURCE MANAGEMENT
2) Outsourcing contracting outside the organization to have work done that
formerly was done by internal employees.

Some of the most common outsourcing are:

Services of accounting firms

Advertising firms

Law firms

Maintenance such as, security, catering, and payroll

Employee Leasing 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.
Impact on HR: 93% of all HR depts. reported outsourcing some of their
work

Increasing morale especially if you know your work is only temporarily

Increasing productivity level

Managing contracting companies

Legal issues with temporary workers

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3) Productivity Enhancement Productivity can be defined as the

output
gained from a fixed amount of inputs, organizations can increase
productivity
either by reducing the imports (the cost approach) or by increasing the
amount that
employees produce.
Two view points:
View Point #1 managers may cut costs only to find that productivity falls
at even
at ore rapid rate WHY?????????
View Point #2 -Managers may find that increasing investment in
employees
(raising labor costs) may lead to even greater returns in enhanced
productivity. ?
Fact: The US is the worlds most productive nation. However, other can
catch-up
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How to Increase Productivity?

Employee productivity is the result of a combination of employee

abilities, motivation, and work environment. Figure 1.3

When productivity falls off or more positively, when productivity

improves the changes is usually traceable to enhanced skill,
motivation, or a work environment conducive to high performance.

Demographics and Employee Concerns

Demographic Changes among the most significant challenges to managers
are the demographic changes occurring the the US.
The Diversity Challenges figure 1.4
In the year 2010 minorities will make up an even larges share of the US labor
force than they do today.

Blacks will increase their share from 10 to 12 percent

Hispanics from 7 to 12 percent

Asian American from 3 to 6 percent

These groups are expected to account for about 70 percent of labor force.
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Age Distribution of Employees.

Companies are finding that large portions of their workforces are

nearing retirement.

Managers are concerned that the expertise of these employees is

likely to be drained too rapidly from companies.

What are companies dealing with this issue:

Attracting older workers to work for them

Innovative ways of training Old version You cant teach an old

dog new tricks New version You cant teach an old dog the same
way you teach a puppy

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Cultural Changes

The attitudes, beliefs, values, and customs of people in a society are an

integral part of their culture.
Employee Rights
Over the past few decades, federal legislation has radically changed the
rules for management of employees by granting them many specific
rights. Among these are:
1.

Equal Employment Opportunity

2.

Union Representation, if desired

3.

Safe and Healthful Work environment

4.

Pension plan that is fiscally sound

5.

Equal Pay for men and women performing the same job

6.

Employment at will doctrine

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Changing Attitudes Towards Work

Employees today are less likely to define their personal success only
in terms of financial gains.

This trend has been evolving for some time, but observes have
noted that it has peaked since the terrorist attacks of 9/11.

Personal fulfillment and self-expression as well as a balance

between work and family are key factors in a complex array of
job attitudes.

Employees are looking for:

1.

Interesting work

2.

Balancing the challenges and rewards of work with those in their

personal lives

3.

Ways of living that are less complicated but more meaningful

HRM has become more complex than it was when employees were
concerned primarily with economic survival.

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Responsibilities of the Human Resource Manager

1.

Advise and Counsel

2.

Service

3.

Policy formulation and implementation

4.

Employee advocacy

Competencies of the Human Resources Manager

1.

Business mastery

2.

HR Mastery

3.

Change Mastery

4.

Personal credibility

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9.2 CHANGING ROLES OF HR

PRACTITIONERS
Although the current economic climate and business environment
looks gloomy, one of the practices that organisations cannot do
without is HRM.
To achieve joined-up organisations and adapt to constantly
changing business environment easily, HR departments cannot
function in static roles.

Traditional roles

Traditionally. HRM operates in large centralised departments.

HR practitioners consider themselves enablers of change and
keepers of resources.
They believe HR need to be involved in decisions directing
change and the reason for failure or underperformance is due to
social issues, not HR ones.
However, often HR managers cannot effectively cope with
employee isues in the traditional role because they attribute most of
the failure to social reasons. The centralised structure limits their
knowledge and HR managers often lose touch with what is going
outside their offices.

Assistant roles
HR practitioners believe that employees create organisational culture.
Employees need to be informed, guided and trained so that they will
make desirable choices for long lasting motivation and commitment in
self-sufficient way.
They believe that employees have various goals and different needs,
therefore HR department should serve the interest of the origanisation as
a whole and employees need to take responsibility for their actions.
The assistant roles reduce some of the hostility between the
management and employees relationship. It is very likely that informed
and involved employees would be more committed to the organisation
and would be more satisfied at work.

Campaigner Role
1. Characteristics
One of the main characteristic of this role is that HR practitioners
influence employee behavior and guide employees in direction that
they view ass desirable.
HR practitioners are aware that they cannot maintain a successful
organization on their own. They perceive themselves as visionaries
that see what needs to be done and try to influence employees
decisions toward their own desirable direction.
Indeed, an HR practitioner adopting a campaigner role would
view employees as targets rather than resources.

ITS EMPHASIS ON
COMMUNICATION
2. Adventages
Communication between management and employees or
between different heads of departments is often infrequent.

By establishing effective communication between different

groups in the organization in order to promote their own
views, HR practitioners hope to increase their popularity and
credibility.

Great potential to improve employee and organisational

efficency through effective HRM

Changing the traditional bureaucratic structures is vital for

organisations to ensure employee well being and retain
competitive advantage

INVESTING IN HRM FOR

THE SAKE OF IT
Management needs to set clear targets and standards, have a
clear strategy, educate key players and create solid

communication channels to enable on going employee

development

CONCLUSION
HRM practitioners should be aware of their own
responsibolity and the importance of their role in
organisations fully aware that the wellbeing of employees is
dependent on their decisions.
HRM practitioners are the experts in their field and can
challenge and engage with senior management to partner
and improve organisational strategies and decisions.