 Key Human Resource Management

Processes
Maria Paz T . Castro , DBM
CEU - March 12 , 2011
  New Perspectives

Human Resource Management

Trends in the 21 st Century

 Trends in HRM

1 2 34 5
Labor
Force
High
Change in Performanc
e Work
Systems
Focus
on
Strateg
y
Technolog
y Changes
Employee
Relationsh
ip Changes

Multitasking has become a way of life for

many
employees who need to make the most of
every minute .
 1 LABOR FORCE
CHANGES

 Internal labor force – contracted people/employees in

an organization
External labor market – individuals actively seeking

employment
News on Aging Labor Force
The EU’s labor force is expected to shrink by
about 0.2 percent a year between 2000 and
2030. By 2030, there will be 110 million people
over the age of 65 in the EU25, up from 71
million in 2000. This means that as the old
age population grows the working age
population will shrink. By 2030, the working
age population in the EU25 will stand at 280
million compared to 303 million today. The
EU25 would lose an average of one million
workers a year. By 2050, the over 60 years
population in OECD countries will rise from
8% to 19% and the number of children will
drop by 33% below today’s level.

Source: http://
humanscience.wikia.com/wiki/ Employment_trends_in_the_21
Aging Work Force

Composition of labor force

will change because of
shifts in population
ØChange in distribution of
workers by age
Growing youth labor force
(16-24)
Fastest growing age segment
(45-64) as baby boom
generation ages
Overall work
force will be
aging
Aging Work Force

HR professionals will spend

much of their time on
concerns related to

ØRetirement planning
ØRetraining older workers
ØMotivating workers whose
careers have plateaued
ØControl of rising costs of
health care and other
benefits
ØFind ways to attract, retain,
and prepare the youth labor
force
 Changing values
from one generation to the next
when people reach different life stages
Aging Work Force

Generation Y
Born 1976 - 1995
Require companies
Career assumption : frequently change jobs
High value on money and helping others to develop HR
practices
providing
opportunities for
ØIndividual
contribution
ØEntrepreneurship
rdless of age ØFlexibility of
work hours
ulfillment ( use skills & abilities , meet interests & lifestyle
&
work place
on system fair = more committed to their companies
work activities and family life
News on Labor Force
Shortage
World Bank Study estimate that 68 million
European Union immigrants will be needed to meet
labor requirements during the period from 2003-
2050. This has prompted the EU to adopt a goal of
raising labor force participation rates to 70%
and has spurred efforts to increase the
participation of women which saw some progress
from 50.8% in 1997 to 59 % in 2005. The UN
estimates that Japan would need to admit 647,000
immigrants annually for the next 50 years in
order to maintain the size of its working
population at the 2000 level. By 2013, labor-force
growth in the United States will be zero. China
will be short 10 million while India will have a
surplus of 47 million. Significant labor
shortages will develop in OECD countries unless
immigration policies are dramatically liberalized
or large numbers of manufacturing and service
jobs are shifted overseas.
Diverse Work Force

Labor force is growing more

diverse in racial and ethnic
terms.

More women and minority

populations in the paid
labor force
Greater diversity in the work
force challenges employers to
create HRM practices that
ensure they fully utilize the
talents, skills, and values of
all employees.
HRM Practices That Support
Diversity
Management
Activities in Asia

Managing
Cultural Europe

Diversity
Create organizational structure
that values diversity
Ensure HRM systems are bias-free
Encourage career development for
women and minorities
Promote knowledge and acceptance
of cultural differences
Ensure involvement in education America
within and outside the
organization
Deal with employee’s resistance
to diversity
Skill Deficiencies of the Work Force

Shift in skills due to use of

computers to do routine tasks

Physical strength and mastery

of equipment are no longer
important for jobs

Employers are looking for math,

verbal and interpersonal skills
which will enable workers to
handle variety of
responsibilities, interact with
customers, and think creatively
2 HIGH
PERFORMANCE
WORK SYSTEMS
Organizations that have the best


possible fit between their social

system (people and how they interact)
and technical system (equipment and
processes)
HR has a role in
creating the Teamwork

organization ’ s
competitive
advantage Skills

Nature of workforce and

technology available have
changed
Customers are demanding for high
quality and customized products
Employees are seeking flexible
work arrangements
Employers are looking for ways to
tap people’s creativity and
interpersonal skills Knowledge
HR professionals who keep up with
such changes are positioned to
help create high-performance
work systems
Trends in High Performance Work Systems

Reliance on knowledge
workers
Empowerment of employees
to make decisions
Use of teamwork
A . Knowledge Workers
Employeswhainctrbu
,organiztspecldkwuh
,knowledgfcustmrapi
The growth in e-commerce, plus
shift from a manufacturing to a
service and information economy,
has changed the nature of
employees that are most in
demand

High-growth jobs have common

characteristic of specialized
knowledge

Companies are increasingly

trying to attract, develop, and
retain knowledge workers to meet
their human capital needs

They set up rewards for

innovation and for creating and
exchanging knowledge
B. Employee Empowerment
Giving employees responsibility and authority
to make decisions regarding all aspects of
product development or customer service
With this responsibility,
employees must be able to
listen to customers, adapt to
changing needs, and creatively
solve a variety of problems

Employees share the resulting

losses and rewards

HRM practices that ensure

success of employee
empowerment
Performance management
Training
Work design
Compensation
C . Teamwork

The assignment of work to groups of employees

with various skills who interact to assemble a
product or provide a service
One of the ways to increase
employee responsibility and
control is to assign work
to teams

Teamwork can motivate

employees by making work
more interesting and
significant

New teams help raise labor

productivity
3 STRATEGY FOCUS

HR professionals use their knowledge of the

business and of human resources to help the
organization develop strategies and to align
HRM policies and practices with those
strategies
Business Strategy:
Issues Affecting HRM
1. High Quality Standards

Total Quality Management

»Company wide effort to
continuously improve the
ways people, machines, and
systems accomplish work

To promote quality, firms

need an environment that
supports innovation,
creativity, and risk taking
to meet customer demands

One that fosters

communications, problem
solving and team effort
2 . Mergers and Acquisitions
Mergstwocmpani
–
becoming
Acquistonempay
–
buyingaother Failure of merger is
due to “people issues”

HR has a significant
role in carrying out a
merger or acquisition

Differences between
Two firms in one industry businesses involved in
Ex . British Petroleum the deal can create
and Amoco Oil conflicts
Firms across industry lines
Ex . Citicorp banking + Training should include
Traveller ’ s Group insurance development of skills
Global megamergers – mergers in conflict resolution
of big TNCs in different
countries
Case of the Mixed Up Merger
 Downsizing is a permanent
downscaling while a layoff
is a temporary downscaling
where employees may later
be rehired.


Different techniques in


downsizing include:


 providing incentives to
take early retirement
 transfer to subsidiary
companies
 simply terminate the
employment of a
certain number of
people
3. Downsizing

Rightsizing is downsizing
lanedimtofrgP in the belief that an
numbersofplwith enterprise really should
’goalfenhcitrms operate with fewer people.
competivns 
Reasons for Downsizing

1 . Reducing costs – labor is

a large part of a
company ’ s total costs ,
thus downsizing is an
attractive option to cut
costs
3 . Replacing labor with
technology – closing
outdated factories ,
automating , or
introducing technological
changes reduces need for
labor
4 . Mergers and acquisitions
– need less bureaucratic
overhead ; lay off
managers
5 . Moving to more economical
4 . Expanding Global Markets
’Fortdaynmws
,workestalncmf
globawrkfce
Organizations with
international
operations hire at
least some of their
employees in the
foreign countries they
operate
HR practices must take
into consideration Technology is lowering
differences in culture
and business practices the barriers to
overseas operations but
Even hiring at home may the challenge is the
involve selection of
employees from other employee’s lack of
countries familiarity with
technology
 Reengineering


involves reviewing
all the processes
performed by all
the firm’s major
functions are
reviewed when
new technology is
adopted


Employees may


need training for

5. Reengineering their new jobs, or
new recruits are
needed for new
’Acompletrviwfhs
critalwokpes sets of skills
akethmorficnd 
abletodivrhgquy

6. Outsourcing
The practice of having another company ( a
vendor , third - party provider , or consultant )
provide services

Gives the company access

to in-depth expertise and
is often more economical
as well

HR functions commonly
outsourced
Payroll administration
Training
Recruitment
Selection of employees
4 TECHNOLOGICAL
CHANGES

Computerization of processes in an


organization has brought about compelling

changes in the work environment
 HR Information
System
• Large quantities of
employee data (including
training records, skills,
compensation rates, and
benefits usage and cost)
Computer system to can easily be stored on
acquire , store , personal computers and
manipulate , analyze , retrieved at a later time
retrieve , and
distribute
information related • E-HRM applications are
to a firm ’ s HR possible through the use
of computer networking
and the Internet which
enable employees in
different geographic areas
5 EMPLOYEE
RELATIONSHIP
CHANGES

Technology and diversification has



impacted as well on the relationships of

employees in the work place
 Employee
Relationship Changes
• A psychological contract or
what an employee
implicitly expects to
contribute has changed
from the traditional
Layoffs and expectations of employers
bankruptcies have
played a major role (time, effort, skills,
in changing the abilities & loyalty) to new
basic relationship
between employees expectations (quality,
and employers creativity, innovation,
timeliness & skills)
• Alternative work
arrangements or flexible
work schedules for
  New Perspectives

Human Resource

Strategies and Policies

Strategic HRM
,Requirsthnkgadplwyfo
,companytberhdsfil
ndforthemplysba
.thecompany Links three poles: the
environment, human
resource strategy and
the business strategy
HR strategies are
influenced by
contextual variables
such as markets,
technology, national
government policies,
This can affect the way things are
done at a business site, regional bloc
improving everything from hiring policies, trade unions
practices and employee training and other factors
programs to assessment
techniques and discipline
 HR STRATEGIES
The firm must choose one or


more HR strategies available

for handling expected
shortages and surpluses of
labor


Strategic options differ widely



Forecasts for labor in their expense, speed, and

demand and supply
will determine if effectiveness
there will be a
shortage or surplus 

of labor for each job

category at a certain Options for reducing labor

time
surplus cause differing
amounts of human suffering


Options for avoiding a labor


Options for Reducing A Surplus
OPTION SPEED OF AMOUNT OF SUFFERING
RESULT CAUSED
Downsizing
Pay Fast High
reductions Fast High
Demotions Fast High
Transfers Fast Moderate
Work sharing Fast Moderate
Hiring Slow Low
freeze Slow Low
Natural Slow Low
attrition Slow Low
Early
retirement
Retraining
Options for Avoiding A Shortage
OPTION SPEED OF ABILITY TO CHANGE
RESULT LATER
Overtime
Temporary Fast High
employees Fast High
Outsourcing Fast High
Retrained Slow High
transfers Slow Moderate
Turnover Slow Low
reductions Slow Low
New external
hires
Technological
innovation
 HRM POLICIES
HR policies ensure that
employees are aware of a
company's expectations of
its workforce, such as daily
start times or restrictions on
surfing the Internet during
business hours.


HR guidelines hold

Vital in resolving employers accountable for
personnel
issues and finding obeying local and national
HR solutions laws, such as fair hiring
practices and zero tolerance
for sexual harassment.


HR guiding principles link



employee programs to a
HR Policies
Policy Manuals - published
guidelines for employees’ awareness of
the firm's practices. Clarifies the Types of HRM Policies
rules and gives HR consistence in  Attendance Policy
dealing with its workforce.  Recruitment Policy 
 Leave of Absence Policy
Legalities - Formal HR policies
 Performance Planning and Evaluation
reduce legal risks. In the absence of
such a formal policy, a company will Probationary Period
have difficulty defending itself in aCompensation
wrongful termination lawsuit.  Compensatory Leave
 Overtime Leave
Protection - Some policies protect
 Annual Leave
employees' rights (such as the rights
of those with disabilities) while  Educational Leave
others look after the company's
interests (ex. trade secrets).
 COMPETENCY - BASED HRM
The key task of HRM are to:


• Ensure the right staff is

recruited into the
organization
• Retain top performers in the
system
Competency is • Define a career path for
defined as the employees
skills or ability
to do the • Improve non-performers and
designated job
effectively enable them to achieve


The common denominator in



these tasks is competency

 Competency Management
Recruitment - most difficult phase
to judge a candidate due to time
constraints; tests given must be based
on core/specific competencies the firm Core Competency
is looking for
A set of knowledge and skills that make the firm superior to compet
Key Employee Retention – Have a
competency review framework
/evaluation to identify top percentage
of employee performers
Define a Career Path – Competencies are defined for each role,
HR professional should define a career map associated with them.

Improving Non - Performers – Have an institutionalized

competency evaluation and recording system to prevent misfit of
competency or domain expertise of employees
 KNOWLEDGE MANAGEMENT
Advances in technology and
the way we access and share
information have changed the
practice of knowledge
management


An
organization consciously Many enterprises now have


and comprehensively some kind of knowledge

gathers , organizes ,
shares , and analyzes its
knowledge in terms of management framework in
resources , documents , and
people skills place


Knowledge management
involves data mining and some
method of operation
 This major process... Includes these activities....
A knowledge
management plan Gathering Data entry
OCR and scanning
involves a survey of Voice input
corporate goals and Pulling information from various sources
a close examination Searching for information to include

of the tools, both

traditional and Organizing Cataloging
technical, that are Indexing
required for Filtering

addressing the needs Linking

of the company. The

Refining Contextualizing
challenge is to


Collaborating
select or build Compacting

software that fits Projecting

the overall plan and Mining

encourage employees
to share Disseminating Flow
information. Sharing

Alert

Push
 CAREER PLANNING

• The career planning process

is comprised of four steps
• One might seek the services
of a career development
professional to help
A lifelong process , facilitate his or her
which includes
choosing an journey through this
occupation , getting
a job , growing in process
the job , possibly
changing careers , • Whether or not you choose
and eventually
retiring to work with a
professional, or work
through the process on
your own is less important
than the amount of
Steps in Career Planning
1 . Self - Gather information about yourself through a self-
assessment (interests, values, roles, skills/aptitudes, preferred
environments, developmental needs, your realities
2 . Options – Explore the occupations which you are interested in,
research industries where you would like to work, know the
labor market, get specific information thru part time work,
internships, volunteer jobs, interviews, written materials
3 . Match - Identify possible occupations , evaluate them, explore
alternatives, choose both a short term and a long term option
4 . Action – Develop the steps  you need to take in order to reach
your goal, for example: investigating sources of additional
training and education, develop a job search strategy, write
your resume, gather company information, compose cover letters,
prepare for job interviews
 SUCCESSION PLANNING

Intensifying need of firms



to prepare for the

retirement of their leaders
because of
Process of • Aging workforce
identifying and
tracking high • Downsizing thru early
potential employees
who can fill top retirement
management
positions when they • Few middle managers
become vacant
and unprepared for
top-level jobs

Benefits of Succession Planning
Focus is on high - potential employees – those
people the organization believes can succeed in
higher - level business positions

• Regular review of
leadership
talent
• Provides
development
experiences
before
promotion
• Attracts and
retains
Process for Succession Planning

• Forecast how many

and what kinds
of leaders are
needed over a
future time
frame (say 2
years)
• Assess talents of
current
employees
• Develop employees
identified as
having
management
talent through
Case of the Run Away Talent
Talent Management
  Thank you for

Listening
Key HRM Processes

Maria Paz T . Castro , DBM

CEU - March 12 , 2011