4 A Definition of Human Resource Management Human Resource Management (HRM) involves all management decisions and practices that directly affect the people who work for the organization.Human Resources the people who work for the organization.
5 Recurring Themes in Human Resource Management Strategic ApproachInternational Human Resource ManagementMaintaining Ethical Policies and BehaviorStakeholdersEthical DutiesBenchmarking, Measuring, and Evaluating Human Resources Results
6 Table 1.1: Top Challenges for Organizations and the HR Profession Sources: Adapted from “More on What CEOs Want from HR,” HRFocus, Vol. 80 (4), 2003, pp.5-6; “New Study Identifies Key Competencies Necessary for HR,” Society for Human Resource Management, June 22, (Available at:
7 Current and Future Challenges to Human Resource Management Corporate ReorganizationsGlobal CompetitionInternational Joint Ventures (IJVs)Cyclical GrowthIncreasing Diversity in WorkplaceEmployee ExpectationsOrganizations as Vehicles for Reaching Societal Goals
8 Why Is Managing Human Resources So Important? Rapid ChangeUncertainty About Basic Business ConditionsRising CostsRapid Technological ChangeMore Limited Supplies of Highly Trained LaborRapidly Changing Government Legislation and RegulationsIncreased Globalization of Industries
11 Transforming HR People Requires: HR transformation linked to organization’s strategic orientationActive participation by HR staff, supported by HR championLine managers involved in defining skills HR needsHR transformation = major change effort by firm
12 Enhancing Administrative Efficiency Increase Efficiency of Current HR PracticesCentralized HR Services -- “One-Stop Shop”Outsourcing
13 The Strategic Planning Process Mission, Goals, and Values StatementsEnvironmental Threats & OpportunitiesOrganizational Strengths & WeaknessesGoals and ObjectivesFormulation of Strategies
14 Fitting HR Practices to Business Strategy and One Another Vertical Fit = the match between HR practices and overall business strategyHorizontal fit = the consistency and interrelationship among HR activitiesExternal fit = how well HR activities match the demands of the external environment
15 HR Fit Requires Right HR Choices StaffingAppraisingCompensatingTraining and DevelopmentEmployee InfluenceWork Systems
16 Developing Partnership Learn about the firm’s businessRespond to and be aware of the firm’s needs and directionShift away from traditional HRM functionsMove toward supportive, collaborative relationships with line managersDemonstrate how HR is critical to business success
24 2008 Forrester Research Study Human resource management (HRM) will be key area of focus in 2009 as companies and government organizations put in place strategies to cope with economic crisis and recovery.The so called "war for talent" is on the backburner; focus shifts to hiring freezes, benefits and compensation cost management, and workforce reductions in the hardest-hit segments.HRM technology solutions can help savvy human resources professionals strategically manage through crisis and prepare as the climate shifts to the upside.
25 2008 Forrester Research Study Trends for 2009Managing and developing talentEmbracing HRM analyticsWeb 2.0 adoptionHR technology strategy
26 CareerBuilder.com 2009 Job Forecast Surveyed 3,259 hiring managers and human resource professionals in private sector companies.Trend No. 1: Bigger paychecks (?)Despite the fact that many employers are looking for ways to cut costs, they don't anticipate trimming salaries as a way to do so. Sixty-six percent of employers plan to increase pay for existing employees and one third of hiring managers estimate increasing salaries on initial offers to new employees in 2009.
27 CareerBuilder.com 2009 Job Forecast Trend No. 2: Flexible work arrangementsCompanies are catching on to the flexible work arrangements that allow employees more freedom in the office. Thirty-one percent of employers say they plan to provide the following options for workers in 2009: alternate schedules (70 percent); telecommuting (48 percent); compressed workweeks (40 days); summer hours (19 percent); job sharing (13 percent); and sabbaticals (7 percent).
28 CareerBuilder.com 2009 Job Forecast Trend No. 3: Green jobsEmployers have tried to gain traction using environmentally friendly policies for a while and the New Year shows more of the same. Last year, one-in-ten hiring managers added "green jobs," which are environmentally conscious positions, compared to 13 percent of employers who plan to add them in 2009.
29 CareerBuilder.com 2009 Job Forecast Trend No. 4: Recruitment toolsAs employers slow down on hiring, recruitment budgets shrink as well. As a result, more employers are using the Internet as an employment medium. Twenty-three percent of employers say that although their hiring budgets will decrease in 2009, they will spend money on the following staffing vehicles: online recruitment sites (19 percent); newspaper classifieds (15 percent); career fairs (12 percent); staffing firms and recruiters (12 percent); and social networking sites (7 percent).
30 CareerBuilder.com 2009 Job Forecast Trend No. 5: Retaining retireesThough baby boomers are approaching retirement age, many are continuing to work -- both out of desire and necessity. Employers are looking at ways to retain these workers; 17 percent say they will likely rehire retirees from other companies in 2009 and 12 percent plan to offer incentives for baby boomers to stay on with the company longer.
31 CareerBuilder.com 2009 Job Forecast Trend No. 6: Diversity recruitmentHiring managers will also focus recruitment efforts on employing diverse workers. Employers said they plan to hire Hispanic, African American and mature workers aggressively in Eighty-eight percent of companies say they will continue to recruit bilingual candidates, as well.
32 CareerBuilder.com 2009 Job Forecast Trend No. 7: Freelance or contract hiringTo continue their cost-cutting efforts, employers are using freelance or contract workers to help support their businesses. Twenty-eight percent of hiring managers expect to utilize these workers in 2009.
33 SHRM Report: Creating People Advantage--How to Address HR Challenges Worldwide Through 2015 Talent and leadership – scarcer than ever beforeWorkforce –growing older and people are having fewer childrenGlobalization - companies are becoming global organizationsEmotional well-being of employees – is more important than ever before
34 SHRM Report: HR Challenges Worldwide Through 2015 8 critical HR challenges identified for the future:Managing talentImproving leadership developmentManaging change and cultural transformationManaging globalizationManaging demographics, especially aging workforceBecoming a learning organizationTransforming HR into a strategic partnerManaging work/life balance.
35 SHRM Report: HR Challenges Worldwide Through 2015 8 critical HR challenges identified for the future:Category 1: Developing and Retaining the Best Employees1 - Managing talent2 - Improving leadership development3 - Managing change and cultural transformationCategory 2: Anticipating Change4 - Managing globalization5 - Managing demographics, especially aging workforce6 - Becoming a learning organization
36 SHRM Report: HR Challenges Worldwide Through 2015 8 critical HR challenges identified for the future:Category 3: Enabling the Organization7 - Transforming HR into a strategic partner8 - Managing work/life balance.
37 SHRM Report: HR Challenges Worldwide Through 2015 5 key steps for making the best decisions:Build an internal capacity to analyze trends in the external environment.Use quantitative and qualitative indicators that give a detailed view of the HR impact on the company's internal environment.Set priorities based on the issues of most critical importance as determined by both external and internal factors.Initiate projects to tackle these priorities with dedicated teams.Perhaps most important, secure support from top management.
38 Adecco Institute Study Survey of 5,000 HR professionals heavily supports Category 2.Top 3 challenges facing corporations today are:GlobalizationDemographic changeTechnical progress (skills shortages)
39 Mercer Consulting Report 60 senior-level HR executives, 70% of whom hold global positionsBiggest Challenge: finding a global service delivery model for the administration of HR and benefitsIncreasingly: HR executives are promoted to carry out global responsibilities.45% of surveyed have taken on global roles within the last two to three years40% of surveyed have assumed such responsibilities within the last 12 months alone
40 Mercer Consulting Report Key drivers of globalization challenge:Rapid employee growth in emerging markets (many companies reported having more than 50% of their workforce located outside of their corporate home country or region)An increase in global workforce mobilityMore stringent governance and compliance requirements that vary dramatically by regionPressure for overall cost savings through process and policy standardization
41 Invest in TechnologyGantry Group Research: U.S. companies plan to allocate 46% of HR IT budgets for to strategic functions such as:Talent ManagementPerformance ManagementLeadership/DevelopmentRecruitment
42 Invest in Technology Adecco Institute Report: Technology will infiltrate the HR function automating transactional servicesHR practitioners will increasingly rely on knowledge management tools to trackSkills, experience, background, interestsFormal/informal feedback on employee performance55% of companies maintain standardized records of business critical knowledge30% publish information about “knowledge holder” in an internal directoryTraditional administrative tasks will be handled by outsourcing, automation and self-service.
43 Going Global: What is IHRM? International HRM (IHRM) is the process of:procuring,allocating, andeffectively utilizing human resourcesin a multinational corporation, whilebalancing the integration and differentiation of HR activities in foreign locations.
44 Domestic HRM vs IHRM Compared to Domestic HRM, IHRM Encompasses more functionsHas more heterogeneous functionsInvolves constantly changing perspectivesRequires more involvement in employees’ livesInfluenced by more external sources, and finallyInvolves a greater level of risk than typical domestic HRM
45 Approaches to IHRM (cont’d) Factors Affecting the Approach to IHRMPolitical Policies and Legal RegulationsManagerial, Educational, and Technological Development in the Host CountryHome and Host Country CulturesInternational Experience of the Firm
46 Approaches to IHRM (cont’d) Factors Affecting the Approach to IHRM (cont’d)Method of Subsidiary FoundingTechnology and the Nature of the ProductStrategic Importance of Particular Employee GroupsOrganizational CultureOrganizational Life Cycle
47 Managing Human Resources in a Foreign Subsidiary Culture and HR Functions within a Foreign SubsidiaryStaffing in the SubsidiaryTraining in the SubsidiaryAppraising Performance of Subsidiary StaffSubsidiary Compensation Systems
48 Global Managers Understand the worldwide business Learn about many culturesWork with many types of peopleCreate cultural synergyAdapt to living in many culturesUse cross-cultural skills dailyTreat foreign colleagues as equalsUse foreign assignments as career development
49 IHRM: Adding Value in the Global Business Environment HR Activities that Should Be Assessed on a “Value-Added” Basis that Are Unique to IHRM:Costs and Benefits of Repatriation ProgramsWhether the Mix of PCN, HCN, and TCN (parent, host and third country nationals) Managers is Optimal for Efficiency and EffectivenessCosts and Benefits of Localization Programs in Foreign SubsidiariesCosts and Benefits of HR Activities Customized for Particular National Cultures and Legal SystemsCosts and Benefits of HR Programs Related to Foreign Taxation and Social Security Systems
50 7 Best Practices For Handling Layoffs And Downsizings (Bayer, 2009) Handling terminations correctly:Helps separated employees make best of bad situationCalms nerves of coworkersSalvages public opinion of organization
51 Terminate with Dignity Many HR professionals aren't using right protocolsMust terminate employees with dignityIf bad appearance, best talent will think twice before applyingNegative word can spread quicklySame care taken when hiring should be taken when terminating
52 I - Put your policy in writing Why, when and howPreparedness is vitalManagers must be trained
53 II - Train managers in realities of hurt Great sensitivity is requiredListen attentively and respond to employee distressHuman lives and futures are at stakeOrganization's image is on line
54 III - Develop positive scripts to help people keep dignity Carefully prepared (flexible), positive scripts are indispensableKindness helps employee maintain confidence needed to find new jobNice words play critical role in keeping dignityIn downsizing or merger, assure it’s a no-fault situation
55 IV - Be up-front about why Be prepared to explainBe sensitive to feelings of the person being singled outBe as open and honest as possibleMore likely to feel empowered if they understand
56 V - Prepare fair severance package & be ready to describe Must allocate severance pay fairlySeverance pay (when possible)Ongoing career coachingIn-house counselingFull explanation of benefits provided at termination
57 VI - Avoid sudden-death discharges Reduces shock and humiliationDon’t create impression that termination is a punishmentConsider option of decompression period:2 weeks of noticeOpportunity to finish tasks, complete projects, etc.
58 VII - Assure employee you'll be a good reference Empower employee and enable to move aheadConvey good news to prospective employersEven poor performers deserve statement of good points
59 “Layoff Survivor Sickness” Other Issues - RIF“Layoff Survivor Sickness”Fear, insecurity and uncertaintyFrustration, resentment and angerSadness, depression and guiltUnfairness, betrayal and distrustExodus? Data confirms it…
60 Stemming Flight“Job embeddedness”: total compensation ($, benefits, childcare, etc.)Procedural justice: policies, ombudsman, grievance, etc.Perception of fairnessOvercommunicate, tell truth, keep lines openDon’t act like it’s the same
61 Other Strategies…On-site counseling, EAPs, outplacementTrain: listening, empathy, skillsInvolve top managersExecutives: do something visibleGive survivors a reason to stayHire-back bonuses
62 SHRM Info SystemsSource: CedarCrestone IT Survey, 2008
63 SHRM Analytics Retiring workforce Skill shortages Retention Employee engagementEscalating benefit costsNon-competitive or unaligned compensationCompensation’s contribution to turnoverMerger/acquisition activityRevenue per employeeSource: CedarCrestone Whitepaper, 2008