HRM in a Changing Environment

CHAPTER 1
Management (Recap)
• What is management?
Management is a process of efficiently achieving the
objectives of the organization with and through
people
• What do managers do?
• Plan
• Organize
• Lead
• Control
Introduction
HRM is a subset of management. It has five main
goals:

attract
employees

retain hire
Goals employees
employees
of
HRM

motivate train
employees employees

Strong employees = competitive advantage.

Understanding Cultural Environments

HRM operates in a global business

environment.

Countries have different

 values
 morals
 customs
 political, economic, and legal systems

HRM helps employees understand other countries’

political and economic conditions.
The Impact of Technology

• Has altered the way people work.

• Has changed the way information is created, stored,
used, and shared.
• The move from agriculture to industrialization
created a new group of workers – the blue-collar
industrial worker.
• Since WWII, the trend has been a reduction in
manufacturing work and an increase in service jobs.
The Impact of Technology

• Knowledge Worker - individuals whose jobs are designed

around the acquisition and application of information.
• Why the emphasis on technology:
– makes organizations more productive
– helps them create and maintain a competitive
advantage
– provides better, more useful information
The Impact of Technology

• How Technology Affects HRM Practices

1. Recruiting
2. Employee Selection
3. Training and Development
4. Ethics and Employee Rights
5. Motivating Knowledge Workers
6. Paying Employees Market Value
7. Communication
8. Decentralized Work Sites
9. Skill Levels
10. Legal Concerns
How Technology affects HRM

Recruiting
• Job listing on Internet; online recruitment
agencies (e.g. monster.com)

 Employee Selection
• Internet tools that makes background searches
of applicants quick and easy

 Training and Development

• Web based training, online assessment tools,
teleconferencing facilities, etc
How Technology affects HRM

Ethics and Employee Rights

• Sophisticated surveillance software for employers to monitor
employee behaviors

Motivating Knowledge workers

• Knowledge workers focus on the acquisition and application of
information for decision making
• Many distractions are present for modern knowledge workers

Paying Employees Market Value

• It is becoming increasingly difficult to attract and retain technical
and professional employees
• Various forms of incentives, benefits to attract them
How Technology affects HRM
Communications
• Today’s electronic environment increases timely
communication of information and alters
traditional paths.
• Redefines how meetings, supervisions,
negotiations and water cooler talks are
conducted

 Decentralized Work Sites

• Removes traditional “face time”
• Managers have to establish and ensure
appropriate work quality and on-time completion
• They also have to ensure compensation and
legal projections are appropriate
How Technology affects HRM

 Skill Levels
• Job requirements will increase the need for
technological prepared employee

 A Legal Concern
• HRM must be diligent and must address the
potential for harassment, bias, discrimination and
offensive behaviors
Workforce Diversity

• The challenge is to make organizations more

accommodating to diverse groups of people.
Workforce Diversity
• How Diversity Affects HRM
– Need to attract and maintain a diversified work
force that is reflective of the diversity in the
general population.
– Need to foster increased sensitivity to group
differences.
– Must deal with the different
• Values
• Needs
• Interests
• Expectations of employees
Workforce Diversity
• What Is a Work/Life Balance?
– A balance between personal life and work
– Causes of the blur between work and life
• The creation of global organizations means the world
never sleeps.
• Communication technologies allow employees to work
at home.
• Organizations are asking employees to put in longer
hours.
• Fewer families have a single breadwinner.
The Labor Supply
HR managers monitor the labor supply.

• An activity in an organization aimed at creating

Downsizing greater efficiency by eliminating certain jobs

• Involves fitting company goals to workforce

Rightsizing numbers

• Involves sending work “outside” the

Outsourcing organization to be done by individuals not
employed full time with the organization.
Labor Supply

• Do We Have a Shortage of Skilled Labor?

– The combination of the small Gen-X
population, the already high participation rate
of women in the workforce, and early
retirements will lead to a significantly smaller
future labor pool from which employers can
hire.
Labor Supply

How Do Organizations Balance Labor Supply?

Organizations facing a rapidly changing
environment must be ready to quickly adjust
their workforce – they often build a contingent
workforce made of:
 part-time workers
 temporary workers
 contract workers
Labor Supply
Issues Contingent Workers Create for HRM
 HR managers must make sure that contingent
workers do not perceive themselves as second-
class workers

 Contingent workers may be less loyal, less

committed to the organizations as compared to full
time employees

 Need to have a pull of “virtual” employees available

when needed

HR has to consider orientation, training needs and

compensation philosophy for these workers.
Continuous Improvement Programs

• Continuous improvement - making constant

efforts to provide better products and service
to customers
– External
– Internal
• Quality management concepts have existed
for over 50 years and include the pioneering
work of W. Edwards Deming.
Continuous Improvement Programs

focus
on
customer

concern for
empowerment continuous
of employees continuous improvement
improvement
components

accurate concern for

measurement total quality

HR managers help workers adapt to continuous improvement changes

through retraining, providing answers, and monitoring expectations.
Employee Involvement

• Delegation – having the authority to make decisions in

one’s job
• Work teams – workers of various specializations who
work together in an organization
• HRM must provide training to help empower employees
in their new roles.
• Involvement programs can achieve:
– greater productivity
– increased employee loyalty and commitment
Employee Involvement

It’s all about employee empowerment through

involvement, which increases worker productivity
and loyalty.

Employee Involvement Concepts

delegation • participative management

work teams • goal setting • employer training

See http://workhelp.org/joomla/content/view/284/ for

managerial tips on empowering employees.
Other HRM Challenges

Challenges for HRM:

 The recession has brought layoffs and low

morale.

 Increased offshoring means jobs can move

overseas, even HR.

 Today’s spate of mergers and acquisitions

increase HR’s role.
True or False?

1. HRM should assume all countries have the same cultures.

False!
2. Technology and information technology have little impact on HRM.
False!
3. Today’s workforce is composed of diverse groups.
True!
4. Rightsizing is a strategy companies use to balance their labor supply.
True!
5. Continuous improvement programs eliminate change in an organization.
False!
6. Employee empowerment increases worker involvement and productivity.
True!
7. HRM is affected by the economy.
True!
8. HRM can play a vital role in enforcing ethical codes of conduct.
True!
HRM Functions and Strategy

CHAPTER 2
Importance of HRM

HRM has a dual nature:

.

supports the
organization’s strategy

represents and advocates

for the employees

Strategic HRM provides a clear connection between the

organization’s goals and the activities of employees.
The HRM Functions

HRM has four basic functions:

Training &
Staffing Development
Motivation Maintenance

In other words, hiring people, preparing them, stimulating

them, and keeping them.
The HRM Functions

staffing

 Strategic Human Resource Planning: match prospects’

skills to the company’s strategy needs
 Recruiting: use accurate job descriptions to obtain an
appropriate pool of applicants
 Selection: thin out pool of applicants to find the best choice

Staffing has fostered the most change in HR departments

during the past 30 years.
The HRM Functions

training and
development

 Orientation: teach the rules, regulations, goals, and culture of the

company
 Employee Training: help employees acquire better skills for the job
 Employee Development: prepare employee for future position(s) in
the company
 Organizational Development: help employees adapt to the
company’s changing strategic directions
 Career Development: provide necessary information and
assessment in helping employees realize career goals

The goal is to have competent, adapted employees.

The HRM Functions

motivation

 Theories and Job Design: environment and well-constructed jobs

factor heavily in employee performance
 Performance Appraisals: standards for each employee; must
provide feedback
 Rewards and Compensation: must be link between compensation
and performance
 Employee Benefits: should coordinate with a pay-for-performance
plan
The HRM Functions

maintenance

 Safety and Health: caring for employees’ well-being has a

big effect on their commitment
 Communications and Employee Relations: keep
employees well-informed of company doings, and provide a
means of venting frustrations

Job loyalty has declined over the past decade.

HRM Primary Activities
External Influences on HRM

Dynamic
Environment

Management Laws and

Thought HRM Regulations

Labor
Unions

External influences affect HRM functions.

External Influences on HRM

Employee
Involvement
Teams Decentralized
Work Sites
Globalization
DYNAMIC
Changing Skill ENVIRONMENT Technology
Requirements
Ethics
Continuous
Workforce Diversity
Improvement

“The only constant in life is change.”

External Influences on HRM

LAWS &
REGULATIONS

 legislation has an enormous effect on HRM

 laws protect employee rights to union representation, fair wages, family

medical leave, and freedom from discrimination based on conditions
unrelated to job performance

 The U.S. Equal Employment Opportunity Commission www.eeoc.gov

enforces federal laws on civil rights at work.

 Singapore Ministry of Manpower Employment (MOM) Act: http://

www.mom.gov.sg/employment-practices/employment-rights-conditions/employme
nt-act/Pages/default.aspx
External Influences on HRM

LABOR
UNIONS

 assist workers in dealing with company management

 negotiate wages, hours, and other terms of employment

 promote and foster a grievance procedure between workers and

management

 Singapore MOM Trade Union website: http://

www.mom.gov.sg/employment-practices/trade-unions/Pages/default.aspx

When a union is present, employers can not fire workers for

unjustified reasons.
External Influences on HRM

MANAGEMENT
THOUGHT

Frederick Taylor developed principles to enhance worker productivity

Hugo Munsterberg devised improvements to worker testing, training,
evaluations, and efficiency
Mary Parker Follet advocated people-oriented organizations
Elton Mayo’s Hawthorne Studies: dynamics of informal work groups
have a bigger effect on worker performance than do wage incentives

The Hawthorne Studies gave rise to the human relations movement:

benefits, healthy work conditions, concern for employee well-being.
Structure of the HR Department

There are four areas in a typical nonunion HR

department:

compensation /
employment
benefits

training and employee

development relations

Many HR departments also offer services such as operating the

company’s credit union, making child-care arrangements,
providing security, or running in-house medical or food services.
Structure of the HR Department

promotes staffing activities, recruits new

employment employees, but does not make hiring decision

training and helps workers adapt to change in the company’s

development external and internal environments

compensation/ pays employees and administers their benefits

benefits package

ensures open communication within the company by

employee fostering top management commitment, upward and
relations accurate communication, feedback, and effective
information sources
Careers in HR

HR positions include:

 assistants who support other HR professionals

 generalists who provide service in all four HR functions

 specialists who work in one of the four HR functions

 executives who report to top management and coordinate HR

functions to organizational strategy

Interpersonal communication skills and ambition are two

factors that HR professionals say advance their careers.
Careers in HR

Organizations that spend money for quality HR

programs perform better than those that don’t.
(HCI study)

Quality programs:
 reward productive work
 offer a flexible, work-friendly environment
 properly recruit and retain quality employees
 provide effective communications

Make sure HR services match the overall

organizational strategy.
HR Trends and Opportunities

 more than half of all companies outsource all or some

parts of their HR functions

 Professional Employer Organizations (PEO) help small- to

medium-size companies attract stronger candidates and
handle new laws in HR

 shared services allow organizations with several divisions

or locations to consolidate some HR functions into one
central location while retaining certain functions in
divisional locations
Entrepreneurial, Global, Ethical HR

 HR managers in small businesses perform

the same functions of those in larger
businesses, but on a smaller scale

 international HRM is very involved and

costly
A Look at Ethics

Code of ethics: a formal statement of an

organization’s primary values and the ethical rules it
expects members to follow.

HR managers must take part in enforcing ethics

rules.
Entrepreneurial, Global, Ethical HR

 HR managers in small businesses perform the same

functions of those in larger businesses, but on a smaller
scale

 international HRM is very involved and costly

 recent corporate scandals and resulting legislation (SOX)

have spurred the “corporate ethicist / ombuds” position

See www.ombudsassociation.org for info on the profession.

Match the Fours

Four major HR positions staffing, training, motivation, maintenance

Four HR department environment, laws, labor unions, management

areas thought

Four quality programs employment, training, compensation,

employee relations
Four HRM functions
assistants, generalists, specialists, executives
Four external influences
reward productive work
on HRM
offer a flexible, work-friendly environment
properly recruit and retain quality employees
provide effective communications