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2. Chapter Objectives After studying this chapter, you should be able to
Identify how firms gain a sustainable competitive advantage through people.
Explain how globalization is influencing human resources management.
Describe the impact of information technology on managing people.
Identify the importance of change management.
Describe HR’s role in developing intellectual capital.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.

3. Chapter Objectives (cont’d) After studying this chapter, you should be able to
Explain how TQM, Six Sigma, and reengineering affect HR systems.
Discuss how cost pressures affect HR policies.
Discuss the primary demographic and employee concerns pertaining to HRM.
Provide examples of the roles and competencies of today’s HR managers.
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4. Why Study Human Resources Management
Human Resources Management (HRM)
The process of managing human resources (human capital and intellectual assets) to achieve an organization’s objectives.
“Why Study HRM?”
Staffing the organization, designing jobs and teams, developing skillful employees, identifying approaches for improving their performance, and rewarding employee successes—all typically labeled HRM issues—are as relevant to line managers as they are to managers in the HR department.
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5. Overall Framework for Human Resources Management
FIGURE 1.1
Overall Framework for Human Resources Management
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6. Competitive Challenges and Human Resources Management
The most pressing competitive issues facing firms:
Competing, recruiting, and staffing globally
Embracing new technology
Managing change
Managing talent, or human capital
Responding to the market
Containing costs
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7. Challenge 1: Competing, Recruiting, and Staffing Globally
Globalization
The trend toward opening up foreign markets to international trade and investment
Impact of Globalization
“Anything, anytime, anywhere” markets
Partnerships with foreign firms
Lower trade and tariff barriers
NAFTA, EU, APEC trade agreements
WTO and GATT
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8. Challenge 1…(cont’d) Corporate Social Responsibility (CSR)
The responsibility of the firm to act in the best interests of the people and communities affected by its activities
Globalization’s 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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9. 1 A Guide to HR Internet Sites
HR professionals can access the following Web sites for current information related to human resources.
Codes of Conduct
Asia-Pacific Economic Cooperation Forum Business Code of Conduct (
APECForumBusinessCodeofConduct.html)
Caux Round Table Principles for Business (
Fair Labor Association Workshop Code of Conduct (
Global Sullivan Principles (
ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy (
OECD Guidelines for Multinational Enterprises (
OECD, Principles of Corporate Governance (
Rules of Conduct on Extortion and Bribery in International Business Transactions (International Chamber of Commerce,
United Nations Universal Declaration of Human Rights (
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10. 1 A Guide to HR Internet Sites (cont’d) General
AFL-CIO ( news, issue papers, press releases, links to labor sites.
American Management Association ( membership, programs, training, and so on.
FedWorld ( gateway to many government Web sites.
HR Professional’s Gateway to the Internet ( to HR-related Web pages.
Occupational Safety and Health Resources ( sites, government pages, resources, and so on.
Society for Human Resource Management ( events, information, connections, and articles.
Telecommuting, Telework, and Alternative Officing ( and flexible hours.
Training & Development Resource Center ( mart, training links, and T&D electronic mailing list links.
U.S. Department of Labor ( bank, labor statistics, press releases, grants, and contract information.
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11. 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
Virtual learning
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12. 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:
Automation of routine tasks, lower administrative costs, increased productivity and response times.
Self-service access to information and training for managers and employees
Online recruiting, screening, and pretesting of applicants
Training, tracking, and selecting employees based on their record of skills and abilities
Organization-wide alignment of “cascading” goals
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13. 2 Automation of Talent Management Functions
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14. HRM IT Investment Factors
Fit of the application to the firm’s 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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15. Challenge 3: Managing Change
Types of Change
Reactive change
Change that occurs after external forces have already affected performance
Proactive change
Change initiated to take advantage of targeted opportunities
Managing Change through HR
Formal change management programs help to keep employees focused on the success of the business.
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16. Challenge 3: Managing Change (cont’d)
Why Change Efforts Fail:
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 short-term “wins.”
Declaring victory too soon.
Not anchoring changes in the corporate culture.
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17. Challenge 4: Managing Talent, or 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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18. 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.
HR facilitates organizational development of Six Sigma.
HR helps balance the opposing needs for order and control with the needs for growth and creativity.
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19. Challenge 5: Responding to the Market (cont’d)
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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20. 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 (Global Sourcing)
The business practice of sending jobs to other countries.
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21. Challenge 6: Containing Costs (cont’d)
Hidden Costs of a 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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22. Challenge 6: Containing Costs (cont’d)
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 aren’t afraid to innovate, knowing their jobs are safe.
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23. FIGURE 1.2
Estimated Number and Types of U.S. Jobs Estimated to Move Offshore between 2010 and 2015
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24. Challenge 6: Containing Costs (cont’d)
Employee Leasing
The 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.
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25. Productivity Enhancements
FIGURE 1.3
Productivity Enhancements
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26. Demographic and Employee Concerns
Demographic Changes
More diverse workforce
Ethnic and cultural challenges
Aging workforce
More educated workforce
Necessity of basic skills training
Managing Diversity
Being aware of characteristics common to employees, while also managing employees as individuals
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27. 3
Social Issues in HRM
Changing Demographics: The coming decades will bring a more diverse and aging workforce to developed countries such as the United States. This has major implications for all aspects of HRM because it alters traditional experience and expectations regarding the labor pool. Among the issues in this area are:
• Globalization • Diversity strategies • Shrinking pool of skilled entry-level workers • Social Security and retirement issues • Rising health care costs for employees • Continual skills development and retraining • Outsourcing, offshoring, and the use of temporary and part-time employees
Employer/Employee Rights: This area reflects the shift toward organizations and individuals attempting to define rights, obligations, and responsibilities. Among the issues here are:
• Relationship employment versus transactional-based employment • Concern for the privacy of employees • Whistle-blowing • Comparable worth • Employer-employee ethics • Legal compliance • Mandated benefits
Attitudes toward Work and Family: Because of the increase of working women as well as employee mobility and a growing concern about family issues, there is demand for recognizing and supporting family-related concerns. Among the issues are:
• Day care and elder care • Parental leave • Flextime • Telecommuting • Alternative work schedules • Job sharing • Job rotation
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28. Composition of U.S. Population
FIGURE 1.4
Composition of U.S. Population
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29. Labor Force and Gender Distributions
FIGURE 1.5
Labor Force and Gender Distributions
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30. FIGURE 1.6
Education Pays
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31. Model of Diversity Management Strategy
FIGURE 1.7
Model of Diversity Management Strategy
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32. 4
Why Diversity?
The primary business reasons for diversity management include . . .
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33. Impact of Cultural Changes
Jobs and Organizations
Employee Rights
Concern for Privacy
Attitudes towards Work
Balancing Work and Family
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34. Qualities of HR Managers
Responsibilities
Advice and counsel
Service
Policy formulation and implementation
Employee advocacy
Competencies
Business mastery
HR mastery
Change mastery
Personal credibility
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35. Human Resource Competency Model
FIGURE 1.8
Human Resource Competency Model
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36. Society for Human Resource Management5
SHRM Code of Ethical and Professional Standards in Human Resource Management
Society for Human Resource Management
CODE PROVISIONS
Professional Responsibility
Core Principle
As HR professionals, we are responsible for adding value to the organizations we serve and contributing to the ethical success of those organizations. We accept professional responsibility for our individual decisions and actions. We are also advocates for the profession by engaging in activities that enhance its credibility and value.
Intent
To build respect, credibility and strategic importance for the HR profession within our organizations, the business community, and the communities in which we work.
To assist the organizations we serve in achieving their objectives and goals.
To inform and educate current and future practitioners, the organizations we serve, and the general • public about principles and practices that help the profession.
To positively influence workplace and recruitment practices.
To encourage professional decision-making and responsibility.
To encourage social responsibility.
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37. 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)
© 2010 South-Western, a part of Cengage Learning. All rights reserved.