Trends affecting HRM Chapter 3 Resource Person: Furqan-ul-haq Siddiqui References: Strategic Human Resource Management by Jeffrey A. Mello Strategic Human Resource Management by Charles R. Greer Resource Person: Furqan-ul-haq Siddiqui

Major Factors Affecting HRM Technological Advancement Demographics and Diversity Strategic HRM Globalization Legislation

“By 1976 Kodak accounted for 90% of film and 85% of camera sales in America. Until the 1990s it was regularly rated one of the world’s five most valuable brands”. In fact, In 1996, Kodak was ranked the world’s fourth most-valuable brand behind Disney, Coca-Cola and McDonald’s…. In 1998, Kodak had 170,000 employees and sold 85% of all photo paper worldwide. Within just a few years, their business model disappeared and they got bankrupt. What happened to Kodak will happen in a lot of industries in the next 10 years – and most people don’t see it coming. Did you think in 1998 that 3 years later you would never take pictures on paper film again?

Software will disrupt most traditional industries in the next 5-10 years. Uber is just a software tool, they don’t own any cars, and are now the biggest taxi company in the world. Airbnb is now the biggest hotel company in the world, although they don’t own any properties. Autonomous cars: In 2018 the first self driving cars will appear for the public. Around 2020, the complete industry will start to be disrupted. You don’t want to own a car anymore. You will call a car with your phone, it will show up at your location and drive you to your destination. Most car companies might become bankrupt. Traditional car companies try the evolutionary approach and just build a better car, while tech companies (Tesla, Apple, Google) will do the revolutionary approach and build a computer on wheels.

Issue for Integrating new Technologies A severance package is pay and benefits an employee receives when he or she leaves employment at a company. 

Impact of Technologies on Organizations Telecommuting, remote work, telework, or teleworking is a work arrangement in which employees do not commute to a central place of work. A person who telecommutes is known as a "telecommuter," "teleworker," and sometimes as a "home-sourced," or "work-at-home" employee.

Workforce Demographic Changes The “Graying” of the Workforce Note: Dates are approximate and there is some overlap because there are no standard definitions for when a generation begins and ends.

Workforce Demographic Changes Baby Boomers (1945–1964) In excess supply in middle management ranks HR challenge is to manage “plateaued” workers Gen X (1961–1981) Are career bottlenecked by the Boomers Who have skills in high demand are doing and will do well Gen Y (1975–1995) Have life-long exposure to technology and constant change Seek self-control, independence, personal growth, creativity Are not focused on job security or long-term employment.

Cabinet division proposes extension in retirement age upto 62 years April 6, 2016 Cabinet division proposes extension in retirement age upto 62 years Islamabad: The cabinet division has decided to send proposal for extension in retirement age by two years to Prime Minister (PM) for approval. According to the purpose if the retirement age  limit is extended upto 62 years it will save at least Rs 200 million in national exchequer. The cabinet division further said that due to retirement of 5000 to 10000 employees, financial burden of Rs 100 million to 150 million is shifted to national exchequer every year. Government has to incur expenses of Rs 100 million on account of payment of salaries to those who are appointed in place of retried employees every year. Government is spending Rs 30 billion on account of salaries and pension of the employees per annum. If approval is accorded  by PM then law will be got enacted from parliament and the announcement in this respect can be made in the budget proposals for next fiscal year 2017.

Negative Aspects of Older Workers Perceived resistance to change by older workers. Increased health-care costs for senior workers Blocking advancement opportunities for younger workers Higher wage and salary costs for senior workers Positive Aspects of Older Workers As productive or more productive than younger workers Have more organizational loyalty than younger workers Possess broader industry knowledge and professional networks

Career Many professionals assume their work path is predetermined by their career choice or by their organization. For example, a person trained to be an accountant may see himself or herself only as an accountant who, after completing their professional training. Following one career path may be limiting for some people. You may find yourself meeting the needs of their employer, but not your own personal career goals.

Traditional Career Stages Exploration Stage- A career stage that usually ends in mid-twenties as one makes the transition from school to work. Involves: trying out different fields discovering likes and dislikes forming attitudes toward work and social relationship patterns Includes school and early work experiences, such as internships

Establishment Stage- Stage in which one begins to search for work and finds a first job. Includes: search for work getting first job getting evidence of “success” or “failure” Takes time and energy to find a “niche” and to “make your mark”. Mid Career Stage- A career stage marked by continuous improvement in performance, leveling off in performance or beginning decline of performance. Person may face threats to his/her position from younger, better-trained and more aggressive employees.

Plateaued mid-career- Plateaued but may not failed in mid career Plateaued mid-career- Plateaued but may not failed in mid career. Even can be more productive, committed, loyal but not ambitious as climbers. Late Career- Stage in which individuals are no longer learning about their jobs nor expected to outdo levels of performance from previous years. Successful “elder states persons” can enjoy being respected for their judgment. Good resource for teaching others. Those who have declined may experience job insecurity. Off the job life increases in importance.

Decline Stage- The final stage in one’s career, usually marked by retirement/death. May be most difficult for those who were most successful at earlier stages. Today’s longer life spans and legal protections for older workers open the possibility for continued work contributions, either paid or volunteer.

Protean Career The career of the 21st century is protean, a career that is driven by the person, not the organization, and that will be reinvented by the person from time to time, as the person and the environment change. The protean career is a process which the person, not the organization, is managing. It consists of all of the person's varied experiences in education, training, work in several organizations, changes in occupational field, etc.

Strategic Implications

New Employee/Workplace Dynamics Emphasis on the Management of Professionals Establishment of separate career tracks Technical/Professional, Managerial /Administrative Use of project teams Less Employee Loyalty, More Loyal to Self Staying with employers for shorter periods; demanding more meaningful work and involvement in organizational decisions Increased Personal and Family Dynamic Effects Nuclear families, dual-career couples, and commuter couples Increased Nontraditional Work Relationships Part-time, consulting, and temporary employment flexibility Outsourcing and entrepreneurial opportunities

Dual-Career Couples - An issue related to increased feminization of the workforce is the number of dual-career families. The number of couples having two wage earners has increased rapidly, having passed the two-thirds point more than a decade ago. In order to accommodate such families, many employers offer support services such as “sick child” care programs and day care. Commuter couples are a subset of dual-career couples who live apart in separate residences while both partners pursue careers. Nuclear Family- a couple and their dependent children, regarded as a basic social unit. Extended family…..?

Managing Workplace Diversity Understanding and Appreciating Diversity Is critical to effectively marketing to ethnic and minority groups Is promoted by having a diverse workforce at all organization levels Helps ensure that hiring and promotion decisions are unbiased by person differences Diversity Management Programs/Initiatives Must be integrated with organization’s mission and objectives Help key decision makers identify diversity’s benefits to the organization Make critical decisions about implementing the optimal program/initiative contingent on the organization and its people, mission and culture.

Legislation April 2014 labor agreement in France means that employees must ignore their bosses' work emails once they are out of the office and relaxing at home – even on their smartphones

Strategic Business Issues Affecting HRM Reengineering- Fundamental rethinking and radical redesign of business process to achieve dramatic improvements in critical measures of performance such as cost, service, and speed.

A subsidiary of Engro Corp A subsidiary of Engro Corp. – Pakistan’s largest private-sector conglomerate – despite a ‘weak performance’ in the last quarter, Engro Foods more than doubled its net profit, which amounted to over Rs3 billion up by a staggering 256% compared to Rs888 million, in financial year ending December 31, 2015, revealed a notice sent to the Pakistan Stock Exchange in January 2016. Its revenue during 2015 improved significantly on the back of higher volumetric flows in Olper’s. The company’s reported Rs50 billion in net sales during 2015, up 17% compared to Rs42.6 billion it grossed in 2014. Published: January 28, 2016 by Express Tribune

A Dutch dairy cooperative is set to buy out a Pakistani food giant with an investment of around $460 million, in what would amount to the largest private sector takeover by a foreign firm in the country’s history. Friesland Campina International Holding BV intends to acquire a 51 per cent stake of Engro Foods Limited, one of the largest listed companies at the benchmark Pakistan Stock Exchange (PSX), a notification on the bourse’s website said Thursday. The deal would bring in a minimum investment of $460 million based on the Pakistani firm’s present stock. “Pakistan is already in the radar range of the world corporate sector and this deal further lifts its image outside,”. If finalized the Dutch takeover would boost Pakistan’s foreign direct investment statistics. Published: March 04, 2016 by Express Tribune

Globalization Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. Challenges for HRM Managing diversity of workforce Managing pressures for more labor rights in third world countries. Management of Laws Across Jurisdictions Managing Outsourced and temporary workforce Downsizing the workforce Coping with flexible working hour Great emphasis on training

Types of Firms International companies are importers and exporters, they have no investment outside of their home country. Multinational companies have investment in other countries, but do not have coordinated product offerings in each country. More focused on adapting their products and service to each individual local market. Global companies have invested and are present in many countries. They market their products through the use of the same coordinated image/brand in all markets. Generally one corporate office that is responsible for global strategy. Emphasis on volume, cost management and efficiency. Transnational companies are much more complex organizations. They have invested in foreign operations, have a central corporate facility but give decision-making, R&D and marketing powers to each individual foreign market.

Expanding into Global Markets Offshoring The International Labor Pool Moving operations from the country where a company is headquartered to a country where pay rates are lower but the necessary skills are available. Hiring at home may may involve selection of employees from other countries. The beginning of the 21st century has seen significant immigration. To survive, companies must compete in international markets. Companies must develop global markets, keep up with competition from overseas, hire from an international labor pool, and prepare employees for global assignments.