Oliver Laasch, Roger N. Conaway, by Center for Responsible Management Education (CRME) and Roger N. Conaway, Tecnológico de Monterrey (ITESM)

After reading this chapter…

Anecdotes of Responsible Human Resources Management at ABB Group Headquartered in Switzerland, operates in more than 100 countries, employs approximately 145,000 people Responsible human resources management activities In Sustainability Performance Report, employee section, illustrates responsible business: Diversity and inclusion Sustainability leaders training Responsible HR Process Ethical issues.

Human Resources and Responsible Management … Traditional perspectives of HR performance seek more efficient management, organizational development, and economic growth Responsible HRM seeks these same goals, but differs because it also integrates responsibility management, sustainability principles, and ethical conduct throughout all aspects of HR.

Figure 11.1 Responsible Human Resources Management Process

THE GOAL: HR-RM SYMBIOSIS HR-RM symbiosis refers to the mutually reinforcing relationship in which responsiblemanagement (RM) needs employees’ engagement in responsible business, and human resources, in turn, benefit from responsible management activities as stakeholders.

Understanding the HR-RM Interdependent Relationship PHASE 0 Understanding the HR-RM Interdependent Relationship

Food for Thought

Human Resources and Responsible Human Resources Management (HRM) Human resources is the function dealing with the management of people employed within the organization. Responsible HRM includes the responsibility to manage the employee stakeholder and HR’s contribution to responsible business performance, and responsibility to the triple bottom line, stakeholder value, and moral excellence.

Understanding Responsible HRM … Key role of HR is to work in partnership with business leaders to embed a culture and practice of CSR HR’s role to embed CSR mindset in any business is critical HR functions as guardian of corporate culture HR has responsibility to be proactive in forming a responsible-business-enabled culture by transforming HRM into responsible HR.

Key areas of Responsible HRM Developing the ability of HRM to develop and maintain an organization’s resource base to support business sustainability Supporting the long-term survival of the organization through HR strategies and activities on employees and external stakeholders Developing mutual trustful ‘resourcing partnerships’ by understanding and considering the specific conditions of human resource development, care and regeneration. Supporting sustaining social legitimacy (the ‘license to operate’). (adapted from Ehnert, 2011)

Norms and Bases of Responsible HRM ILO International Labor Organization (ILO) “Declaration on Fundamental Principles and Rights at Work” SAI Social Accountability International (SAI) SA8000 GPTW Great Place to Work (GPTW) QLB Quality of Life in the Business

Table 11.1 Comparing Subjects of Responsible HRM Norms

The Business Case for Responsible HRM The following are some examples of how HR can adapt its approach to responsible HRM in a way which delivers tangible business benefits: Advancing Diversity Going Green Employee well-being Human Rights

Responsible HRM Leadership and HRM Stakeholders HR Leadership requires the leader to think beyond traditional performance objectives internal to an organization include efficient management development of resources and economic growth. Traditional HR leadership is narrow and serves the interests of two primary internal groups: First, shareholders (represented by management) whose interest lies generally in the short-term financial returns to be gained from a business and Second, the employees, who must achieve a certain level of satisfaction in the working environment in order to continue to contribute and remain with the organization.

The role of the HR Manager in Advancing Responsible Business In line with findings relating to key HR impacts on business strategy and the overall business needs of organizations, this chapter will focus on the following core processes, relevant to any organization of any size, and the ways in which Responsible HRM can enhance sustainable business performance: Process 1: Recruitment Process 2: Training and Development Process 3: Performance Management Process 4: Compensation and Benefits Process 5: Employee Relations and Communication

PHASE 1 recruitment

Central Terms in Recruitment Recruitment refers to refers to the attracting, screening, and selecting personnel. A job description defines the responsibilities associated with a job position. Knowledge, skills, attitudes (KSAs), which often define the basic recruitment profile for new candidates, refer to the attributes of employees required to perform the job. In responsible businesses, this includes the need for employees to align with the business values and uphold responsible and ethical business practices.

Figure 11.2 ABB’s Process of Recruitment, Selection, and Hiring

The Selection Process Typically, successful candidates must pass initial screening process Personal interviews, group interviews, assessment centers (mental ability tests, leadership skills tests, personality traits), practical exercises, or participate in an actual work process.

Hiring in the Responsible Organization Openness and transparency must exist throughout entire process Developing employment contract Company must proactively ensure candidate has all information and terms and conditions in writing Employment contracts offered must be fair and represent interests of employee and company.

Training and Development of Employees PHASE 2 Training and Development of Employees

Food for Thought

Central Terms in Training and Development Training and development refers to educational activities within an organization that aim to increase the fulfillment and performance of employees. Training is a process of changing the performance of employees to better achieve organizational goals and objectives. Employee development is the process of planning and implementing activities to develop employees’ competencies in the medium and long run. Employee orientation is the process of introducing new employees into an organization. Employability describes how well a person is qualified to work. Employee volunteering refers to a voluntary engagement of personnel of an organization.

Figure 11.3 Overview of Phase 2: Training and Development

A Model for Orientation and Socialization Miller characterizes the orientation and socialization transition in three phases: Anticipatory Assimilation, Encounter, and Metamorphosis. Cohen states “the company’s CSR program impacts the ability of all individuals to enter or improve their position in the job market”. Elements which drive these impacts are: Community involvement and investment in education or vocational skills. Employer brand which includes the company’s social and environmental mission. Recruitment proactive reach-out to a diverse pool of potential candidates. "Company responsiveness to queries from potential employees”

Table 11.2 Stages of the Socialization Process and Responsible, Sustainable, and Ethical Principles

Figure 11.4 Roadmap

PERFORMANCE MANAGEMENT PHASE 3 PERFORMANCE MANAGEMENT

Food for Thought

Central Terms in Performance Management Performance management is the process of monitoring and improving employees’ work performance. Core competencies are crucially important, distinct abilities of an individual or an organization.

PERFORMANCE MANAGEMENT is the process of monitoring and improving employees´ work performance. Performance management tools often include some form of Performance Evaluation, which is often serves several purposes. As a process, the Performance Evaluation may contribute to business sustainability as it focuses on performance improvement and alignment of contribution and reinforces sustainable behaviors.

Figure 11.5 Examples of Aspired Competencies at Sodexo

Community Involvement and Environmental Stewardship Activities which had not traditionally been on the HRM radar can provide valuable tools for people development in any organization while delivering a positive benefit for society and the environment. Many of these benefits can be quantified, such as: Employee Job Satisfaction Recruitment Effectiveness Employee Skill Building

Offboarding Offboarding refers to the process which is adopted to manage the way employees leave the company. Offboarding usually includes outplacement programs which support employees' reentry into the job market by providing practical tools such as applying for jobs, writing resumes, interview skills and or personal finances.

COMPENSATION, BENEFITS, AND EMPLOYEE WELLBEING PHASE 4 COMPENSATION, BENEFITS, AND EMPLOYEE WELLBEING

Food for Thought

Central Terms in Compensation, Benefits, and Employee Wellbeing Compensation is the remuneration received by an employee for the work done. Living wage describes the minimum hourly wage necessary for an individual in full-time employment to meet basic needs, including housing, food, utilities, transport, health care, and education.

Types of Compensation Financial compensation includes wages and salaries, and it takes the form of any monetary return to the employee, such as bonuses, commissions, or non-salary benefits, which are valued as part of the overall compensation package. Non-financial compensation may include flexible work schedules, recognition for certain tasks, or company events for employees.

8 Driving Principles of a Responsible Compensation System (1) Compensation should be legal, obeying all laws and regulations in the host country. Compensation should be Fair and Equitable and not discriminate on the basis of gender or other elements of diversity. Compensation should be Supportive for employees by offering wages and benefits beyond minimum wage, fixed standards, or basic working conditions. Engaging compensation plans treat employees as partners in the achievement of company objectives.

8 Driving Principles of a Responsible Compensation System (2) Compensation should be Attractive to employees and future employees who consider working for the company. Compensation should be Flexible, taking into account individual employee needs. A company should be Proactive with its compensation package by annually reviewing what it offers. Finally, and perhaps most importantly, compensation plans should be Transparent.

Employee Relations and Communications Phase 5 Employee Relations and Communications

Food for Thought

EMPLOYEE RELATIONS AND COMMUNICATIONS Employee relations are often associated with a structured approach to freedom of association and unionization and relates to any organized group of employees that work together collectively to promote the interests of their group. Often identified as Labor Unions, the groups engage in collective bargaining to accomplish member goals, and provide a vehicle for employees to ensure their rights are upheld in the workplace.

Union-busting Union busting refers to efforts by employers to disrupt or prevent the formation or expansion of trade unions.

Principles of Responsible Human Resources Management (1) Responsible HRM includes the responsibility to manage the employee stakeholder, and to manage HRs contribution to responsible business performance. The goal of responsible human resources management is a HR-RM Symbiosis refers to the mutually reinforcing relationship in which responsible management (RM) needs employees´ engagement in responsible business, and the other way around, human resources benefit from responsible management activities as stakeholders. For understanding the human resources- responsible business relationship one should consider the main norms for responsible HRM, the business case for responsible human resources management, employee skills for responsible business, and the role of the HR manager. Recruitment in responsible business, involves including employee skills for responsible business into job descriptions, acquiring the adequate candidates with such skills, and selecting them based on the skills.

Principles of Responsible Human Resources Management (2) Training and development begins with new employee orientation, ongoing training for responsible business performance, development of employees and close external stakeholders with the underlying goal of increasing trained peoples´ employability. Performance management includes the evaluation of an employees´ responsible business performance, of core competencies for responsible business. Compensation, benefits and employee wellbeing is based on a responsible and ethical compensation system, that pays at least a decent living wage, and which together with other benefits contributes to employee wellbeing. Employee relations and communications includes the relationship to labor unions, and highlights the importance of effective internal communication channels.

Responsible Human Resources Management Checklist

People in Human Resources, HR-RM Synthesis