The Challenge of Human Resources Management

Managing Human Resources

Bohlander Snell
14th edition
Copyright 2007 Thomson/South-Western. All rights reserved. PowerPoint Presentation by Charlie Cook The University of West Alabama

Objectives

After studying this chapter, you should be able to:

1. Identify how firms gain sustainable competitive advantage through people. 2. Explain how globalization is influencing human resources management. 3. Describe the impact of information technology on managing people. 4. Identify the importance of change management. 5. State HRs role in developing intellectual capital. 6. Differentiate how TQM and reengineering influence HR systems.
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Objectives

(contd) After studying this chapter, you should be able to: 7. Discuss the impact of cost pressures on HR policies. 8. Discuss the primary demographic and employee concerns pertaining to HRM. 9. Provide examples of the roles and competencies of todays HR managers.

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Why Study Human Resources Management

Human Resources Management (HRM)
The process of managing human resources (human capital and intellectual assets) to achieve an organizations objectives.

Why Study HRM?

Staffing the organization, designing jobs and teams, developing skillful employees, identifying approaches for improving their performance, and rewarding employee successesall typically labeled HRM issues are as relevant to line managers as they are to managers in the HR department.

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Competitive Advantage through People

Core Competencies
Integrated knowledge sets within an organization that distinguish it from its competitors and deliver value to customers.

Sustained competitive advantage through people is achieved if these human resources:

Have value. Are rare and unavailable to competitors. Are difficult to imitate. Are organized for synergy.

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Figure 11

Overall Framework for Human Resource Management

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Competitive Challenges and Human Resources Management

The most pressing competitive issues facing firms:
1. Going global 2. Embracing new technology 3. Managing change 4. Managing talent, or human capital 5. Responding to the market 6. Containing costs

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Challenge 1: Going Global

Globalization
The trend toward opening up foreign markets to international trade and investment

Impact of globalization
Anything, anywhere, anytime markets Partnerships with foreign firms Lower trade and tariff barriers
NAFTA, EU, APEC trade agreements WTO and GATT

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Challenge 1: Going Global (contd)

Corporate Social Responsibility
The responsibility of the firm to act in the best interests of the people and communities affected by its activities

Impact on HRM
Different geographies, cultures, laws, and business practices Issues:
Identifying capable managers and workers Developing foreign culture and work practice training programs. Adjusting compensation plans for overseas work

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Challenge 2: Embracing New Technology

Knowledge Workers
Workers whose responsibilities extend beyond the physical execution of work to include planning, decision making, and problem solving.

Knowledge-Based Training
Online instruction Just-in-time learning via the Internet on company intranets

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Influence of Technology in HRM

Human Resources Information System (HRIS)
A computerized system that provides current and accurate data for the purposes of control and decision making. Benefits:

Store and retrieve of large quantities of data. Combine and reconfigure data to create new information. Institutionalization of organizational knowledge. Easier communications. Lower administrative costs, increased productivity and response times.

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Highlights in HRM 2
Most Common HR Information Systems Applications
Payroll Benefits administration Benefits enrollment Recruitingapplicant tracking Personnel administration Training and development Employee self-service Manager self-service Other 76.7% 57.1 41.4 39.1 39.1 31.6 24.8 18.0 3.8

Source: How HR Managers Use Technology Applications to Control HR Department Costs, Human Resource Department Management Report, no. 45 (May 2004).

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HRM IT Investment Factors

Fit of the application to the firms employee base. Ability to upgrade Increased efficiency and time savings Compatibility with current systems Availability of technical support Time required to implement and train staff members to use HRIS Initial and annual maintenance costs Training time required for HR and payroll

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Challenge 3: Managing Change

Types of Change
Reactive change

Change that occurs after external forces have already affected performance Change initiated to take advantage of targeted opportunities

Proactive change

Managing Change through HR

Formal change management programs help to keep employees focused on the success of the business.

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Challenge 3: Managing Change (contd)

Why Change Efforts Fail:
1. 2. 3. 4. 5. 6. Not establishing a sense of urgency. Not creating a powerful coalition to guide the effort. Lacking leaders who have a vision. Lacking leaders who communicate the vision. Not removing obstacles to the new vision. Not systematically planning for and creating shortterm wins. 7. Declaring victory too soon. 8. Not anchoring changes in the corporate culture.

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Challenge 4: Managing Talent, or Human Capital

Human Capital
The knowledge, skills, and capabilities of individuals that have economic value to an organization. Valuable because capital:
is based on company-specific skills. is gained through long-term experience. can be expanded through development.

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Challenge 5: Responding to the Market

Total Quality Management (TQM)
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 process used to translate customer needs into a set of optimal tasks that are performed in concert with one another.

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Challenge 5: Responding to the Market (contd)

Reengineering and HRM
Fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in cost, quality, service, and speed.

Requires that managers create an environment for change. Depends on effective leadership and communication processes. Requires that administrative systems be reviewed and modified.

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Challenge 6: Containing Costs

Downsizing
The planned elimination of jobs (head count). Layoffs

Outsourcing
Contracting outside the organization to have work done that formerly was done by internal employees.

Offshoring
The business practice of sending jobs to other countries.

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Figure 12

Estimated Number and Types of U.S. Jobs Moving Offshore by 2015

Source: Near-Term Growth of Offshoring Accelerating, Forester Research, Inc., May 2004. Copyright 2007 Thomson South-Western. All rights reserved. 120

Challenge 6: Containing Costs (contd)

Employee Leasing
The process of dismissing employees who are then hired by a leasing company (which handles all HRrelated activities) and contracting with that company to lease back the employees.

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Challenge 6: Containing Costs (contd)

Hidden Costs of Layoff
Severance and rehiring costs Accrued vacation and sick day payouts Pension and benefit payoffs Potential lawsuits from aggrieved workers Loss of institutional memory and trust in management Lack of staffers when the economy rebounds Survivors who are risk-averse, paranoid, and political

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Challenge 6: Containing Costs (contd)

Benefits of a No-Layoff Policy
A fiercely loyal,more productive workforce Higher customer satisfaction Readiness to snap back with the economy A recruiting edge Workers who arent afraid to innovate, knowing their jobs are safe.

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Figure 13

U.S. Productivity/Output per Worker

Source: Derived from U.S. Department of Commerce data Copyright 2007 Thomson South-Western. All rights reserved. 124

Figure 14

Productivity Enhancements

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Highlights in HRM 4

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Figure 15

Growth of the U.S. Minority Population

Source: U.S. Census Bureau Copyright 2007 Thomson South-Western. All rights reserved. 127

Figure 16

Labor Force and Gender Distributions

LABOR FORCE PARTICIPATION RATE BY SEX, PROJECTED 19502012 Continuing a historical trend, the labor force participation rate for men will decline as the rate for women increases.

LABOR FORCE GROWTH BY SEX, PROJECTED 20022012 The number of women in the labor force is expected to grow at a higher rate than that for men.
Source: U.S. Department of Labor Copyright 2007 Thomson South-Western. All rights reserved. 128

Figure 17

Education Pays

Source: U.S. Department of Labor Copyright 2007 Thomson South-Western. All rights reserved. 129

Figure 18

Model of Diversity Management Strategy

Source: Reprinted by permission of Elsevier from Managing for Effective Workforce Diversity by Kathleen Iverson from The Cornell Hotel and Restaurant Administration Quarterly 41, no. 2 (April 2000): 3138. Copyright 2007 Thomson South-Western. All rights reserved.

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Highlights in HRM 5

Source: Survey data from Gail Robinson and Kathleen Dechant, Building a Business Case for Diversity, Academy of Management Executive 11, no. 3 (August 1997): 2131; permission conveyed through the Copyright Clearance Center, Inc.

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Cultural Changes

Employee Rights

Concern for Privacy

Cultural Changes

Balancing Work and Family

Attitudes towards Work

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Qualities of Human Resources Managers

Responsibilities
1. Advice and counsel 2. Service 3. Policy formulation and implementation 4. Employee advocacy

Competencies
1. Business mastery 2. HR mastery 3. Change mastery 4. Personal credibility

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Figure 19

Human Resource Competency Model

Source: Arthur Yeung, Wayne Brockbank, and Dave Ulrich, Lower Cost, Higher Value: Human Resource Function in Transformation. Reprinted with permission from Human Resource Planning, Vol. 17, No. 3 (1994). Copyright 1994 by The Human Resource Planning Society, 317 Madison Avenue, Suite 1509, New York, NY 10017, Phone: (212) 490-6387, Fax: (212) 682-6851. Copyright 2007 Thomson South-Western. All rights reserved.

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Key Terms
corporate social responsibility downsizing employee leasing globalization human capital human resources information system (HRIS) human resources management (HRM) knowledge workers managing diversity offshoring outsourcing proactive change reactive change reengineering Six Sigma total quality management (TQM)
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