07/02/2013

Points to consider The Strategic importance of Managing HR Gaining and sustaining a competitive advantage A Framework for managing HR The HR Triad Looking Ahead Current Issues Case Study: SBC

1. The Strategic Importance of Managing Human Resources Human Resources are: - Assets that need to invest on and managed in line with the organisation’s goals and objectives - Increasing importance nowadays, where (customer) service has possibly become the most important differentiating advantage between one organisation and another in most industries

Satisfying Multiple Stakeholders Any group of people which is affected by the actions of the organisation. Even more, any group of people which affects the organisation by its actions: - Owners / investors - Customers - Society - Other organizations - Employees → Is any of these groups the most important?

Owners and Investors Economic responsibility of the organisation – to be profitable and thus provide (increasing) dividends to owners and investors How does one investor choose one organisation from another? - Tangible assets: inventory, equipment, real estate, financial position - Intangible assets: employer reputation, employee talent and loyalty, innovation, change

Customers Providing opportunities for possibly the most important differentiating advantage between organisations especially in the service sector Customers want: - New and cheaper products that are at the same time of bettering quality - Improved service → Close alignment between the organisation’s ability and the customers’ perspective / needs

Society Milton Friedman believes that the only responsibility of an organisation to the society is to be profitable and thus pay its investors, employees (who will one way or another circulate more money in the society) What about the rest? - Legal compliance - Community relations: what is ‘right’ / ‘wrong’

Other organisations Suppliers: provide raw materials or even completed parts, e.g. a car company buying its tyres from another Unions: represent groups of employees - Productivity - Outsourcing - Health and safety - Compensation / benefits Alliance partners: common goals between organisations not necessarily in the same industry

Organisational Members: Employees The only stakeholder group which is inside the organisation Pay and benefits: - Paid well … fairly? (who is the most appropriate person to judge?) - Health and safety, insurance, sick leave, vacation time - Balance of work life and private life

Organisational Members: Employees Quality of Work Life: - Training and development to improve skills and knowledge - Working alone vs working in teams - Job designs: job rotation and job enrichment programs that allow the employees to use their skills and knowledge in full - Fair selection and promotion systems

Organisational Members: Employees Employability: - Today’s economic crisis, layoffs, downsizings - More and different skills and knowledge (related to all the factors in Quality of Work Life) - Employment security is not equated to job security … what’s the difference?

2. Gaining and Sustaining a Competitive Advantage This is when an organisation has something different / better from other organisations to offer to the customers A sustainable competitive advantage is when: - This different / better aspect is difficult for competitors to copy - Especially when it comes to services / intangible products → What is the difference between a product and a service?

Culture It mostly contributes to organisational success when it has developed over time and its unique to an organisation’s overall approach when doing business E.g. Southwest Airlines: - Employees are empowered to make on-the-spot decisions - Goals and targets for the organisation as a whole instead of setting separate departmental goals

3. A Framework For Managing Human Resources (p.15) Definition: all the people who currently contribute to doing the work of the organisation, as well as those people who potentially could contribute in the future, and those who have contributed in the recent past Activities: - Recruitment - Selection - Compensation - Performance management - Training

A Framework For Managing Human Resources External environment - Local - National - International level → It affects all organisations but its effects are not the same for all Organisational Environment - Culture - Technology - Strategy

A Framework For Managing Human Resources Activities for Managing HR: formal policies and daily practices Stakeholder objectives: - Owners - Customers - Society - Competitors - Employees

4. The Human Resource TRIAD Human Resource professionals: - Strategic understanding - Personal credibility - HR delivery and technology - Business acumen Line managers: (in small companies) - The founder makes all the decisions - Appraisals occur on the spot, - No formal policies

The Human Resource TRIAD The rest of the employees: - More involved in the day-to-day running of the organisation (increased responsibilities?) → Is the role of an HR professional or a line manager more important than a ‘shop floor’ employee?

5. Looking Ahead Managing Teams: the belief that teamwork can achieve outcomes that cannot be achieved by the same number of individuals who work in isolation Managing the Multicultural Workforce: - Religion - Sexual orientation - Family status - Age - Immigration patterns - More women working (in important positions)

Looking Ahead Managing Globalisation: a process in which companies in countries around the world are increasingly linked by their activities and the opportunities they provide each other Managing Ethics: - Doing the right thing - Acting in the best interests of the organisation and the society in general → who’s to say what’s right (similar to pay issues) Managing with Metrics: using numbers to judge how well the organisation is doing

6. Current Issues eHR: - Similar to the Metrics idea - Hardware / Software technology (databases, the internet) Managing Complexity: - Evolving and changing competition - Innovations in products and services - More dynamic political and economic environments - Technology (relates to eHR)

7. Case Study: Aligning HR with the Business at SBC Swiss Bank Corporation (SBC) Read the case study at the end of the chapter (p.32-33) Answer the 4 Case Questions / Discuss in class